Financial Syphoning Of Hong Kong-Listed Red Chips

Many Hong Kong-listed companies partially owned by the Chinese state, also known as Red Chips, have been used as dumpsters by their Chinese holding companies, which are managed by the Chinese state. The holding company sells lowly profitable, or even unprofitable, subsidiaries to the Red Chip in exchange for cash consideration. Had Chinese authorities not done that for the past years, the performance of Red Chips would have been more remarkable.

1 comment: