In a recent study, my colleague and I categorised 377 mainland companies listed on the HKEX between 1972 and 2017 as state-owned enterprises (SOEs) or private enterprises. There were 298 SOEs – 79% of all the red capital companies listed during this period – covering sectors from the extractive industries, energy, machinery, aviation, telecommunications, transport and real estate.
Among these SOEs were centrally owned companies such as China Ocean Shipping Company⋯⋯⋯⋯profits.
Capital as control
China clearly sees the reshuffle of capital in Hong Kong as a political task. Yet, the flow of capital, regardless of its colour, is difficult to control. This means the “redness” of capital from the mainland into Hong Kong comes from the political control these companies are able to wield over their employees and partners.
Finance Street, Central
Finance Street, Central. Photo: Wikicommons.
There are an estimated 80,000 employees in Hong Kong working for companies controlled by Chinese capital. Political influence happens via various mechanisms and at different levels of seniority, from ordinary employees to the executive board level.
In Hong Kong’s 2016 Legislative Council election, recruits from the Bank of China and China Resources Land were instructed to vote for patriotic candidates. The Hong Kong Chinese Enterprise Association also disseminated a list of candidates preferred by Beijing to its members.
Since then, political control has evolved into other types of coercion. Most recently, employees of Chinese companies in Hong Kong were forced to take a stance on Hong Kong’s controversial new security law: support the legislation or leave. Neutrality was not an option.
https://hongkongfp.com/2020/08/09/red-capital-how-chinese-companies-exert-political-influence-over-hong-kong/
