According to the China Economic Weekly: In November last year, Wenzhou businessman Lin Chunping bought an American bank. This bank, which was later renamed "New HSBC", started trial operations on November 11, 2011 - this was a breakthrough for Wenzhou's private capital after ten years of unsuccessful attempts in the financial industry, and also a bitter choice after Wenzhou's private capital encountered policy barriers when trying to enter the banking industry domestically.
Lin Chunping purchased the Atlantic Bank for $60 million.
On February 1st, in Wenzhou, I interviewed Lin Chunping, who acquired the American Atlantic Bank. "It was just an investment of less than 400 million yuan, but I didn't expect so much attention." Lin Chunping, 42 years old, told me that he is from Xiaoshanyang Village, Xianxi Township, Zeya Town, Ou Hai District, Wenzhou. He has had 20 years of experience traveling and running businesses in Western countries. He obtained dual master's degrees in economics and financial law in Singapore and other countries, and has a deep understanding of the rules of the European and American financial industries. According to my further understanding, Lin Chunping has been married twice, and his current wife is the head of the credit department of a certain branch of Minsheng Bank in Wenzhou.
"I have wanted to get involved in the financial industry for a long time, but domestic policy environment did not allow it. Fortunately, my business and activity scope are mainly abroad, so I have always been looking for opportunities abroad," Lin Chunping said, "Before 2008, the European and American banking industry was flourishing, but my financial strength was insufficient. The opportunity came after the subprime crisis in September 2008."
"I learned about the bankruptcy application of the American Atlantic Bank at the beginning of 2009, by chance," Lin Chunping recalled to the reporter, "At that time, my businesses in West Africa (mining) and Singapore (transit trade) were operating well. When I heard this news, I became very interested, so I found some lawyers who knew the industry to go and investigate on-site and began to contact the other party."
Lin Chunping said that the controlling party of the American Atlantic Bank was then in debt of 2 billion US dollars, already insolvent, and their initial asking price was 600 million US dollars. "Fortunately, the bank was already insolvent at the time, and the Delaware state government was eager to revitalize it, so I had leverage to negotiate. Finally, we agreed on a price of 60 million US dollars, but it took us more than two years."
In June 2011, Lin Chunping successfully acquired the American Atlantic Bank in Delaware. On November 11, it was renamed New HSBC and began trial operations. Lin Chunping said, "November 11, 2011" was a carefully chosen date, with "six ones" symbolizing the concept of perpetual operation.
The dream of a bank for Wenzhou businessmen
Zhou Dewen, President of the Wenzhou Small and Medium Enterprises Promotion Association, told reporters that within the country, Wenzhou's private capital has been attempting to use repatriated overseas Chinese funds to establish the Wenzhou Overseas Chinese Bank for the past ten years.
The establishment of the Wenzhou Overseas Chinese Bank was first proposed in 2006. However, the reply from the Wenzhou Supervision Bureau of the China Banking Regulatory Commission at the time was that "the timing was not yet ripe."
The "New 36 Measures" were released on May 13, 2010, and in late August 2010, Chen Guohua, President of the Wenzhou Huashang Association and Chairman of Zhejiang Nuoruo Radiator Co., Ltd., and Weng Yiniao, President of the Wenzhou Overseas Chinese Business Association and Chairman of Zhejiang Kang'erda New Materials Co., Ltd., jointly submitted another application to the State Council, re-submitting the "Report on the Request to Establish the Wenzhou Overseas Chinese Bank."
Zhou Dewen said that this application was submitted in late August 2010 and was not until late October 2011 that they received a response from the State Council, with the final result being the rejection of the application, "without stating the reasons." Zhou Dewen analyzed the reasons, saying, "The problem is not that the threshold is high, the management department does not even tell us where the threshold is, or which conditions we do not meet, but simply will not let us in."
Since the outbreak of the global financial crisis in 2008, the desire of Wenzhou's private capital has become stronger, the reason being that Wenzhou's surplus private capital lacks derivative channels. The increasingly deteriorating business and policy environment has given birth to industrial hollowing out while making this part of the capital more urgently seek value-added channels.
Can the New HSBC promote the liberalization of financial controls?
On the day the reporter went to Wenzhou, Chen Derong, Vice Governor of Zhejiang Province and Secretary of the Wenzhou Municipal Party Committee, revealed at the "World Wenzhou Business Conference" that the Wenzhou Financial Comprehensive Reform Zone plan has been submitted. Following the procedures, the plan is currently with the People's Bank of China, seeking opinions from relevant ministries, and will soon enter the State Council approval process.
Under the premise that there are still no signs of opening up domestic financial policies to private capital, Lin Chunping's New HSBC Bank may become a benchmark for Wenzhou private enterprises to emulate. However, if this happens, the outflow of Wenzhou's private capital will be even more intense. Promoting the relaxation of restrictions on private capital...