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Beijing tells Evergrande boss to pay firm's debts with own cash: report

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You have to give some props to the Chinese government regulators:

Imagine in 2008 if the SEC said to Goldman Sachs or JP Morgan et al or too many other cases of government bailouts: Pay it out of your own bloated executive salaries.

Moral hazard, personal responsibility; all those terms economic conservative s like to use could finally be put to use with the biggest welfare queens in societies.

6 ( +9 / -3 )

What the Chinese government is doing violates the whole idea of forming limited liability companies, or public corporations. The reason corporations and limited liability companies are allowed by law to exist is to promote risk taking and innovation. It is understood that if directors/owners/corporate officers are shielded from loss of personal wealth they will be more willing to undertake risky ventures that can advance industry and thus a nation's economy. If incorporating is no longer protection from loss of personal wealth, if a government can force an owner or owners to pay cost associated with a corporation out of their personal wealth you will very quickly find nobody is willing to take any risk at all. Innovation and risk taking will cease, and so will economic growth. What Xi is doing is a fools errand but more power to him. Baby Ping Ping seems to be clueless economically, a true acolyte of Mao who will bring China down like his idol did.

4 ( +5 / -1 )

Imagine in 2008 if the SEC said to Goldman Sachs or JP Morgan et al or too many other cases of government bailouts: Pay it out of your own bloated executive salaries.

The salaries of top officers are set by a board of directors who are elected by the share holders. The Government has no say in their recompense. Should they? Perhaps, but changes in tax laws to tax capital gains as regular income would go a long ways towards eliminating the worst abuses. In the US it would be the shareholders, not the corporate officers, who would shoulder any loss as the value of their stocks declined.

1 ( +2 / -1 )

risky ventures that can advance industry and thus a nation's economy

Shorting stocks and commodift8ng mortgage debt: a huge advance to society....

At least Elon Musk is using his wealth to push forward human -AI convergence and space travel.

Cannot say the same about Wall Street and rral estate development firms.

2 ( +4 / -2 )

worth more than $40 billion just a few years ago

Yeah, he can afford it. LOL.

What the Chinese government is doing violates the whole idea of forming limited liability companies.

That's one reason why China doesn't suffer from the crushing financial meltdowns that we do.

-1 ( +3 / -4 )

Mr. Ma must be shaking his head and asking who is the next brilliant entrepreneur to be taken down?

0 ( +2 / -2 )

Xu's personal sacrifice would make much of an impact on Evergrande's liabilities of more than $300 billion, with Bloomberg reporting his fortune at less than $8 billion.

This is what “fair share” means in China for the rich :)

It’s kind of surprising to me that China doesn’t have anti billionaire taxes and laws already, but I guess the CCP can just make it up as they go along.

0 ( +1 / -1 )

Outrageous ruling by the Communist party.

This is why the PRC can never, ever embrace free market capitalism. I hope Mr Jiayin somehow manages to escape China and start up his corporation in the USA.

0 ( +1 / -1 )

The West doesn't really live under a truly capitalist system anymore and that was readily apparent after the financial crisis in 2007

At the end of the day, people won't abandon the liberal story and the capitalist system, because there isn't any alternative. People may give the system an angry kick in the stomach but, having nowhere else to go, they eventually come back.

0 ( +1 / -1 )

DT, I can’t entirely agree with your first post, the Industrial Revolution in the UK was funded by individuals without limited liability, they took risks and made fortunes, some took risks and lost money but that encouraged care in investing and there was none of the moral hazard so prevalent in all too many boardrooms today, taking unconscionable risks with other peoples money for their benefit and no risk or consequence to them selves and seemingly acceptable to far too many.

Your second comment I agree somewhat more with, large corporations around the world have come to be run for the benefit of the hired help at the top, not the owners. The salaries are rarely if ever controlled by a binding vote of the shareholders and as the majority of shares are held through investment firms not individuals they have a vested interest in not rocking the boat lest their own over inflated pay be scrutinised.

0 ( +0 / -0 )

This is COMMUNIST CHINA, there is no such thing as private property! Everything belongs to the people and everyone is equal.

That is the cornerstone of comunism!

People and companies should understand this before investing or doing business with China.

0 ( +1 / -1 )

FINALLY I can agree with something China is demanding!

-1 ( +0 / -1 )

Time to buy gold.

1 ( +1 / -0 )

Time to buy gold.

1 ( +1 / -0 )

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