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New Years Day -- China "news" (revised)

We had our first meal away from the house in days, it had been a long-planned lunch with some old City friends who, like us retired from the financial markets.

I had the most amazing conversation, our host was a partner in one of the largest private equity firms in the world.  We both know Peter (aka the guy caught in China before Christmas) and my host told me that even in 2019 the writing on the wall.  Just before the pandemic shut down the country, his then-firm had already decided to "shut down or sell" their Chinese business.  

I asked him why?  He said that government access which had been excellent for 15 years, had suddenly ended  They were no longer able to have conversations with the central government.  In addition, the firm's principal Chinese partners (Chinese financial institutions) didn't want them in their new deals anymore and implied it was at the suggestion of Beijing.  

He said that in early 2020 they had conversations with their non-Chinese investors, and recommended that they sell their Chinese investments (including their funds).  They told their clients that the political climate was becoming hostile to foreigners, and they could see issues in managing their China-focused funds.  Once all their non-Chinese investors had sold their Funds the company sold their China-based management division to their local partners.  

In addition, he said, the government has been pressuring foreign-owned companies to divest their Chinese operations, and in early 2023 it became heavy-handed.  He said that all foreign beauty product manufacturers shut down all Chinese operations.  He asked, if was I aware that both Shishedo and Loreal had entirely exited China.  He said, no one is talking about it, few people are even aware of their departure.  For many international brands, China is now too much trouble and not worth the effort.  

Aside from that it was a lovely lunch, we had grouse and a lovely claret.  

Note:  I was not aware that virtually al foreign owned beauty product companies had exited the country.  I even check this evening, and another 10 brands (never heard of them) also quit the country).

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