Re: India's China War

On Tue, 22 Jan 2008 18:02:59 +0530, "William Black"
<william.black@xxxxxxxxxxxxx> wrote:

Especially when your realise that 51% of all 'shares' in Chinese companies
are owned by the central government and all directors are appointed by that
same central government.

Actually its a lot higher percentage than that. The central
Government retains state monopolies in strategic industries such as
petroleum and natural gas, arms manufacturing and sales, banking and
insurance, communications, aviation, railways, megaprojects like large
dams-power generation facilities and other sectors where private
Chinese capital is not available anyway. When shares were issued the
percentage available is so small that the valuation of these companies
are distorted to ridiculous heights. On the lower level of
Provincial and municipal governments they are into property
development, power generation and many of the other capital intensive
industries. The hundreds of thousands of smaller enterprises that
provide the stuff you get from Walmart are mostly privately owned.

which sort of accounts for all those retired People's Army colonels running
companies.

Retired? Not at all. There are no sinecures for retired commie
faithfuls. The most valued chief executives and their managerial teams
are in their 40s to early 50s. There is an army of equally capable
younger managers in the wings groomed to succeed them or to head new
enterprises themselves. Anyone of talent and leadership whether in
civil service or in the militray is eligible to be transferred into
this career track. One can plan one's own career path only in so far
as an office drone can hope to be head of his department or a soldier
head of his military unit. To be in the elite group of managerial
executives for large state enterprises one must be hand picked. These
Government appointed managers and CEOs need to be agile in mind and
in spirit, be of proven leadership through long and faithful
government service. They will be well qualified academically. There
are no short cuts or one act wonders.

The best CEOs are often transferred among the state owned enterprises
to spread their expertise. In the process this builds a core of very
capable chief executives and senior managers who know each other
intimately and know the most intimate details of each and every
business owned by the state. Their strategic planning can draw on
the best information and expertise available. Should a CEO die or be
disgraced (*** happens) there is no crisis in leadership available to
take over. The close knit leadership means no CEO can establish a
private empire and loot the enterprise. No CEO can can pull wool over
the eyes of his fellow CEOs because everyone knows the details of his
business and how to run it. Singapore is the first country to have
set up this system that has been adopted by China. The results are
spectacular. That a tiny country like Singapore can be percieved as
the possible savoir of a few powerful American and UK banks is
evidence of the effectiveness of this civil service CEO model.

Of course CPC party membership is mandatory and they themselves will
be among the top party officials. But even the most powerful CEO is
directly answerable to the state authority. Party membership is no
small matter. Without it access to higher government posts is
blocked. To be expelled from Party membership is worse than any jail
sentence for it permanently wipes out one's career and social status.

CEOs of state enterprises are in substance career Civil Servants. So
new are China's state enterprises run on commercial for profit lines
that there are no known CEO's who have retired yet. Retirement is
mandatory at age 70 for senior leaders. China's top leaders (eg. ex
presidents and politburo members) retire to government apartments and
live on their government pensions. We don't know what kind of
compensation and lifstyle the CEOs can have on retirement. Obviously
that won't do for CEO's used to controlling multibillion dollar
enterprises. But what they will get is still unknown. What they
cannot do in the meantime is accumulate private fortunes.

They are politically reliable and can be relied upon to employ all those
slave labourers from the 're-education camps' without too many questions...


--
William Black

That's what I mean by comic book attitudes. A modern enterprise needs
smart people to run it. Slave labor is good only for mindless
physical labor. Wee willie sees so much of this slave labor
conditions as associated with poverty and a lack of practical
development strategies and investment in India that he thinks it is a
normal condition. Wilie's obsession with cursing China is also
symptomatic why India never got off the launching pad on the road to
modernization. Besides putting out a lot of hot air nothing is
produced.

.

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