Apr 13, 2025 08:22 PM
China and private equity are cannibalising Britain
https://inews.co.uk/opinion/china-and-pr...in-3639078
EXCERPTS: [...] Behind the depressing decline of British Steel ... lie two profound issues that torment our country. Most obvious is the murky role of China’s dictatorship, determined to defeat democracy and yet aided by a procession of kowtowing British politicians.
But in the background we see again the dark shadow of private equity, a grisly form of vulture capitalism that has such destructive economic and societal impact from the high street through to mental healthcare. Although very different issues, both are exposed by this hasty state intervention – and they should be confronted if Starmer’s bravura rhetoric is remotely rooted in reality.
[...] Bear in mind China is a brutal dictatorship where business, like the military, must be subservient to Communist party interests – as even tech titan Jack Ma found to his cost after criticism of their financial system led him to disappear and lose control of Alibaba.
Its companies are weapons in a fight for global dominance, just like the parts made in its factories for Russian drones killing Ukrainians. From electric car batteries through to solar panels, its manufacturing output is massively subsidised by a state that engages in dumping cheap goods and cyber theft to gain industrial, military and technological advantage over the West. Its trade is neither free nor fair – and sometimes boosted by slave labour. Yet we have seen a succession of Tory and Labour ministers prostrate themselves pitifully before this vile regime.
Just as our politicians fail to stand up to grotesque Communist chiefs in Beijing, so they fail to rein in the damaging excesses of corrosive capitalism exemplified by the rapacious private equity sector. These financial wizards extract wealth by loading up targets with debt to buy them, then cutting costs and staff while flogging off assets in order to sell for a quick profit. This vampiric model leaves a trail of shattered firms, shuttered shops and lost jobs in its wake, while skimming off billions into tax havens. Yet it has been allowed to extend its tentacles even into services for children, defence, elderly care homes, psychiatric hospitals and vets’ practices.
[...] I was in Bedford at the weekend, seeing a town centre still scarred by the closure of Debenhams department store four years ago. This famed retail chain was killed off by the pandemic after more than two centuries – but fatally wounded by a private equity consortium that loaded the firm with debt while pocketing £1.2bn in dividends in less than three years of ownership. One US study suggested healthy companies taken over in these sort of leveraged buyouts are 10 times more likely to go bankrupt within a decade.
Yet the pin-striped vultures of private equity have invested in at least 50,000 firms worldwide, using their immense influence and wealth to stifle political restraints – even over their activities in the most sensitive public services such as fostering of vulnerable children and care of citizens with learning disabilities.
Now we see the collapse of another celebrated British brand, leading to another costly state rescue mission. So will our leaders ever wake up to the cause of such catastrophes that stoke the fires of political populism – and steel themselves to challenge the real villains behind this latest crisis, both at home and abroad? (MORE - missing details)
https://inews.co.uk/opinion/china-and-pr...in-3639078
EXCERPTS: [...] Behind the depressing decline of British Steel ... lie two profound issues that torment our country. Most obvious is the murky role of China’s dictatorship, determined to defeat democracy and yet aided by a procession of kowtowing British politicians.
But in the background we see again the dark shadow of private equity, a grisly form of vulture capitalism that has such destructive economic and societal impact from the high street through to mental healthcare. Although very different issues, both are exposed by this hasty state intervention – and they should be confronted if Starmer’s bravura rhetoric is remotely rooted in reality.
[...] Bear in mind China is a brutal dictatorship where business, like the military, must be subservient to Communist party interests – as even tech titan Jack Ma found to his cost after criticism of their financial system led him to disappear and lose control of Alibaba.
Its companies are weapons in a fight for global dominance, just like the parts made in its factories for Russian drones killing Ukrainians. From electric car batteries through to solar panels, its manufacturing output is massively subsidised by a state that engages in dumping cheap goods and cyber theft to gain industrial, military and technological advantage over the West. Its trade is neither free nor fair – and sometimes boosted by slave labour. Yet we have seen a succession of Tory and Labour ministers prostrate themselves pitifully before this vile regime.
Just as our politicians fail to stand up to grotesque Communist chiefs in Beijing, so they fail to rein in the damaging excesses of corrosive capitalism exemplified by the rapacious private equity sector. These financial wizards extract wealth by loading up targets with debt to buy them, then cutting costs and staff while flogging off assets in order to sell for a quick profit. This vampiric model leaves a trail of shattered firms, shuttered shops and lost jobs in its wake, while skimming off billions into tax havens. Yet it has been allowed to extend its tentacles even into services for children, defence, elderly care homes, psychiatric hospitals and vets’ practices.
[...] I was in Bedford at the weekend, seeing a town centre still scarred by the closure of Debenhams department store four years ago. This famed retail chain was killed off by the pandemic after more than two centuries – but fatally wounded by a private equity consortium that loaded the firm with debt while pocketing £1.2bn in dividends in less than three years of ownership. One US study suggested healthy companies taken over in these sort of leveraged buyouts are 10 times more likely to go bankrupt within a decade.
Yet the pin-striped vultures of private equity have invested in at least 50,000 firms worldwide, using their immense influence and wealth to stifle political restraints – even over their activities in the most sensitive public services such as fostering of vulnerable children and care of citizens with learning disabilities.
Now we see the collapse of another celebrated British brand, leading to another costly state rescue mission. So will our leaders ever wake up to the cause of such catastrophes that stoke the fires of political populism – and steel themselves to challenge the real villains behind this latest crisis, both at home and abroad? (MORE - missing details)