Follow us on TWITTER: http://twitter.com/cnforbiddennews Like us on FACEBOOK: http://www.facebook.com/chinaforbiddennews Over the past decade, the Chinese Communist Party (CCP) has invested heavily in raw materials overseas, but the majority of its trading is losing money. CITIC Pacific invested $10 billion on its Sino Iron project, purchasing an Australian mine producing magnetite iron-ore. Despite costing four-times its initial budget, it may lose hundreds-of-millions of dollars in 2014—after only one year. Experts say the CCP＇s overseas investments give corrupt officials a perfect opportunity to ＇privatize＇ national assets. The Wall Street Journal (WSJ) says the $10-billion mine that＇s taken over eight years to develop in Cape Preston is evidence of just how much has gone wrong with China's decade-long push to buy up raw materials worldwide. Citic Pacific and its contractors made a series of blunders, from thinking they could import workers at Chinese pay levels to a botched bet on currencies that forced the company to seek a $1.5 billion bailout from its parent, reported WSJ. WSJ added, China rushed to buy up global commodities as its economy boomed—both to feed its factories and to ensure it wasn't reliant on Western powers for raw materials. …Investments in resources soared to $53.3 billion last year, from $8.2 billion in 2005, according to an investment database compiled by the American Enterprise Institute and the Heritage Foundation, continued WSJ. The head of China's mining association estimated in 2013 that out of all overseas mining deals, 80% had failed. China came late to the global resources boom and often overpaid for assets Western companies had passed over or wanted to sell, says WSJ, adding; China typically paid one-fifth more for oil-and-gas assets than industry average, estimates Scott Darling, Asian regional head of oil-and-gas research at J.P. Morgan Chase & Co. Prof. Wang Jiangsong, China Institute of Industrial Relations: "China lacks technique in overseas mergers and acquisitions.＂ ＂The West have been doing overseas mergers for hundreds of years, but China has just started; it lacks information on the local policy, laws, management and in social and economic aspects.＂ ＂Rushing into foreign markets and into acquisitions could turn into a financial disadvantage." Prof. Wang says another reason for overseas investment loss is the privatization of state-owned assets by the political elite. Wang Jiangsong: "How did this budget that was more than three-times the initial amount come to be?＂ ＂The overseas acquisitions by state-owned enterprises are not subject to any supervision, like by internal workers, the society, or by legislative bodies.＂ ＂So theoretically, money laundering through overseas acquisitions is possible; it＇s a black hole for sure, as it lacks supervision or any effective regulations." 　 Commentator Yang Hengjun says the CCP＇s investment has, due to lack of supervision, allowed individuals to gain wealth at the cost of national assets. Yang Hengjun, general manager, Sydney Times: "The main reason is the system and the corrupt officials; everyone, including Zhou Yongkang and his oil group, monopolizes overseas oil investments.＂ ＂Larry Yung, the former chairman of CITIC Pacific, was one of his allies; they trust only their own people.＂ ＂The numerous overseas investments have never been led by the Chinese people." Larry Yung is the son of China＇s former Vice President, Rong Yiren. The CCP＇s overseas investments are one primary way for princelings to embezzle state assets, says Yang Hengjun. The project leaders are all corrupt, and being overseas, no one can control them; the accounting is just a mess. 　 Sept. 11—the Hong Kong Securities and Futures Commission (SFC) filed a lawsuit against five former CITIC Pacific chiefs —including Larry Yung—for lying about the company's financial state, which resulted in a loss by equity investors. The Commission sought compensation for 4,500 victims who had lost a combined total of $1.9 billion in investments. 《神韵》2014世界巡演新亮点 http://www.ShenYunPerformingArts.org/

• published: 15 Sep 2014
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