International Law

Seems Like Nationalization is a Global Trend

By Stan

I thought it was just banks in the U.S. and Europe, but apparently this nationalization thing is getting quite popular, even in China:

Privately-owned Chinese airlines that sprouted up during an industry deregulation are now facing nationalization as they suffer a cash crunch and their state-owned counterparts got cash injections to weather the global economic downturn.

State-run Sichuan Airlines Co last month took over United Eagle Airlines Co, the first private airline on the Chinese mainland, by injecting 200 million yuan (US$29.24 million) to expand its stake to 76 percent from 20 percent.

“The nationalization of private carriers will be an increasing trend during the economic downturn,” said Yao Jun, an analyst at Merchants Securities Co. “The move will lead to a pricing monopoly and hurt consumer interests.”

Rather ironic, though, that this is happening in a country that has made significant moves away from public ownership in the past few years.

© Stan for China Hearsay, 2009. | Permalink | No comment | Add to del.icio.us

Full post as published by China Hearsay on April 03, 2009 (boomark / email).