Asia300: Chinese Companies Face Surging Write-offs (Nikkei Asian Review)

THE SHADOW OF AGGRESSIVE DEALMAKING RETURNS TO HAUNT CHINA INC.

“Are we really good at doing this?”
“If we decide not to do this, what sort of losses will our potential users suffer?”
“If we decide to do this, how much competence will we have in the market?”
 
Pony Ma Huateng, co-founding chairman and CEO of Chinese internet titan Tencent, always asks himself these three questions before he makes an important investment decision. Only when he finds a rational reason to spend money does he decide to go forward.
 
That, at least, is how the story goes regarding the investment approach taken by Ma, who is often compared with another charismatic Chinese entrepreneur — Jack Ma Yun, founder of Alibaba.
 
Nikkei Asian Review’s cover story for the week places a big question mark over Ma’s legendary investment criteria. According to their analysis, Tencent had recently written down the value of its investments by 17.577 billion yuan.
 
Major Chinese players ZTE, ICBC, CRRC, CITIC and BYD also recorded massive impairment losses. Thus, the impression is that the Chinese economy could be more severely damaged by the trade war and bad loans than we had realized. READ MORE

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