The 'private' Chinese investment company with a Communist Party mission
Politics, not profits, appear to drive China Minsheng Investment
YUSHO CHO, Nikkei staff writer
SHANGHAI -- On the morning of Dec. 1, Cambodian Prime Minister Hun Sen appeared upbeat as he arrived at a hotel in suburban Phnom Penh to address over 100 visiting Chinese business leaders.
During what was to be a prepared address, the premier -- still looking chipper -- surprised his speechwriters by veering off-script and telling the audience that his government would introduce a visa that would allow them to enter the country an unlimited number of times for three years.
That wasn't the only ad-lib during the 45-minute speech. At one point, he began rhapsodizing about Cambodian golf courses and invited members of the audience to join him on the links for a round.
There was a reason Hun Sen was feeling so giddy. Ahead of the event, Dong Wenbiao, who headed the delegation, unveiled not only a plan to develop an industrial park in suburban Phnom Penh, but also the launch of an infrastructure development fund worth several hundred million dollars.
Hun Sen ducked out of the event early, but he made his appreciation clear by returning later for a signing ceremony for the fund and staying on through dinner, where Chinese music was played in honor of the guests.
Dong led the delegation as a leader China Minsheng Investment Group, where he serves as chairman. It was launched by China Minsheng Banking, a listed company whose investors include member companies of the All-China Federation of Industry and Commerce.
Although China Minsheng Investment describes itself as a private company, that is complicated by the fact that the ACFIC operates under the Chinese Communist Party's United Front Work Department -- an organization often compared to the Japan Business Federation, or Keidanren, Japan's top business lobby.
Essentially, the ACFIC serves as the interface between the party and the private sector. That adds even more context to Hun Sen's behavior that day: He was treating Dong as a representative of the Chinese Communist Party.
Dong's travels have also taken him to Yanchi County, in the eastern part of China's Ningxia-Hui autonomous region, where a 15 billion yuan ($2.17 billion) project is underway to build a large solar power plant with a capacity of 2 gigawatts. One of its investors is a subsidiary of China Minsheng Investment.
It is no accident that Dong's management policy includes a focus on fighting poverty and promoting Beijing's Belt and Road Initiative to develop infrastructure and transport connections to Europe and the Middle East, both of which resonate with party policies.
The loyalty game
But operating so closely with the party carries certain risks.
That was highlighted in late January 2015, when Mao Xiaofeng, then the president of China Minsheng Banking and Dong's junior colleague of 10 years, was detained by the Chinese anti-corruption authorities. Reports attributed the arrest to allegations that Mao was behind favorable treatment provided to the wife of Ling Jihua, a close aide to former President Hu Jintao who was caught in President Xi Jinping's anti-corruption dragnet.
Sometime around 1994, while still in his early twenties, Mao -- then an executive member of the All-China Students' Federation -- is reported to have first approached Ling, who was studying for his MBA at Hunan University. To help Ling complete his studies amid his busy schedule, Mao sent teachers from Hunan University to help him in Beijing, where Ling was living at the time.
China Minsheng Banking and China Minsheng Investment are said to have grown into the major entities they are today thanks to their connections with the Communist Youth League of China, of which Ling was a member.
But with Ling's fall from grace, Mao lost the support of a powerful individual and became an easy target for the anti-corruption authorities.
For Dong, perhaps the biggest takeaway from Mao's detention was to better heed Xi, who has been making moves to rein in the Communist Youth League.
There are signs that the Communist Party is trying to step up its control of China Minsheng Banking. At around the time that Mao was detained, Anbang Insurance Group became one of the bank's biggest shareholders, taking a stake of over 15%. Chairing Anbang, which now has the power to influence the bank's management, is Wu Xiaohui, reportedly the husband of a grandchild of former paramount leader Deng Xiaoping.
When this reporter asked Dong -- who exuded an air of confidence -- how he aims to ensure that his projects are profitable, he merely said that China Minsheng Investment was an unlisted company and that its investments had been approved by its shareholders.
Pressed further, he said the profitability of all projects is considered from a long-term perspective.
Pressed a third time, Dong said it was natural for a Chinese company to act in line with the policy of the Communist Party and the government.