As one of the biggest and government official-backed private equity funds in U.S., Carlyle may be already used to political pressure. But I couldn't quite understand why it faces so much hurdle in its deal in China.
I remembered cleard a classmate from U.S. once told me the nationalism among Chinese is very dangerous. I was angry to hear that at first, but then found the words had a point. In fact, as Chinese suffered a lot in the war before 1950s, they knew they have to love their nation as much as they can in order to survive. But the fact is that the country becomes bigger now, which means the nation needs to do things to strengthen herself, instead of just protecting herself. But most Chinese still hate Japan, though Japan has taught Chinese a lot of the industrilization and corporate governance. Governments, unfortunately, make use of this kind of nationalist to play on the politics.
Now, it is the same with foreign merge & acquistions in China. Government is afraid that it will lost control on the state-owned companies after selling stakes to foreign investors. So it tells people that it will do harm if foreign investors buy into the company. And then many people protest again, just like they did to the Japanese.
But people should try to investigate before making a judgement. Like Carlyle's deal to Xugong group, one of the biggest heave machine makers in China. Carlyle wants it, Xugong wants it, and even the local government wants it. Then why central government couldn't make a decion in the period as long as three months? Some competitors even said Xugong was sold cheaply. But that's not a reason, isn't it? When foreign investors first came to China in 1990s after Deng Xiaoping made the decision, they also thought China's things are cheap, the reason why they came and buy factories. Why people at that time didn't say the state-owned companies are sold cheap? More important, what Carlyle will bring will be a transparent governance system, which will be much better than a non-transparent company where a lot of bribery will happen?
I am not a Carlyle fun, but just want to make a balance when all the Chinese newspaper which blamed Carlyle all day and when Carlyle hasn't said anything. Today people even argued that Pacific Insurance, in which Carlyle bought a stake a few years before, was also sold cheap. Come on, a bread in China now is sold at least five times expensive compared with years ago, and why couldn't a company? If someone wants to sell and someone wants to buy, the deal should be made, and that's called market economy.