Buying into a Canadian mountain is a Chinese company with gold-plated political connections.
And it is Grouse Mountain, whose ski slopes famously look down on Vancouver.
The sale of the ski operation by the Canadian McLaughlin family does include 500 hectares of privately owned land even though the Shanghai-based China Minsheng Investment Group (CMIG) isn’t buying the entire mountain of course.
The Globe and Mail last week revealed CMIG’s pending purchase last week.
In the newly formed buyer, GM Resorts Limited Partnership, CMIG was a 40 per cent stakeholder reports on Tuesday said. It would be a “silent investor”, the CBC quoted a CMIG spokesman as saying.
While the symbolic significance is obvious, but well below the threshold for federal foreign investment review, the total asking price was C$200 million (US$159 million).
In what is a literal guiding light that can be seen from just about anywhere in Vancouver, Grouse is like a north star when viewed from below, with its ski slopes floodlit at night.
The nearby Whistler mountain is world-famous and when US-based Vail Resorts bought Whistler Blackcomb Holdings for C$1.4 billion last October, it also recently ended up in foreign hands.
While no one is suggesting that the purchase demonstrably nefarious, the Grouse deal is quite a different proposition to Whistler’s sale, regardless of the “silent investor” protestation when even a cursory examination of what CMIG is all about is made.
In 2014, Chinese Premier Li Keqiang ordered CMIG to be created even as the company is a privately owned firm. Following this, 50 billion yuan (US$7.4 billion) in starting capital was stumped by fifty-nine big Chinese firms.
Therefore, it can be said that market forces were not the reason behind the formation of China Minsheng Investment. Explicitly stated on its corporate website, are those of the state, it serves Chinese government policy, and its goals.
“As a representative of Chinese private capital, CMIG serves the national ‘Belt and Road Initiative’ and ‘Going Global’ strategy, bringing out financial wisdom and industrial strength, focusing the power of capital, building a globalised industrial platform,” it says, namechecking various government policies.
“By fully utilising the technology, brand, and resource advantages of developed countries, and the tremendous opportunities of ‘Going Global and Bringing in’ brought by the development potentials of countries along the ‘Belt and Road Initiative’ route, CMIG guides Chinese private capital to go abroad together, and promotes industrial upgrading and economic transformation.”
Therefore, China Minsheng is not analogous to some US ski company, or to western investment firms that are creatures of supply and demand.
Explaining that it was “90 years ago, thanks to a group of advanced Chinese intellectuals who spread Marxism on Chinese soil with Prometheus-like courage, our nation became independent and prosperous”, CMIG extols the Communist Party on its website.
“In the next stage of our work, we must actively display the vanguard and exemplary spirits of the Chinese Communist Party, realise the core values of ‘Five Concepts, Four Senses and Three Loves advocated by Chairman Dong [Wenbiao], and contribute to the development of China Minsheng Investment, and to the implementation of national strategies.
“With the dream faraway, we are on the way.”
Analysts are viewing the purchase of Grouse as part of a global acquisitions strategy endorsed and guided by the Chinese state and it is different from a private firm, like any other, getting into the ski business.
According to the state-owned China Daily, CMIG now boasts assets of 260 billion yuan and it has been growing at an explosive rate. It seeks a valuation of 1 trillion yuan by 2019, company president Li Huaizhen told the SCMP last year.
A pledge of US$5billion to develop an industrial park in Indonesia and the purchase of Sirius International Insurance Group last year for US$2.6 billion, are among its investments around the world so far. Setting a price record, an 80 per cent stake in an under-construction luxury condo development in San Francisco was bought by it through a subsidiary for US$88 million in May.
Including Societe Generale’s UK headquarters for £84.5 million (US$110 million) in September, CMIG has been buying up property in the financial district of London.
(Adapted from CNBC)