Fredrik Öqvist does some interesting reading of the VIE tea-leaves. The Ministry of Commerce, he suggests, doesn’t like VIEs very much, but they are less likely to outlaw them outright than slowly squeeze them so the structure becomes more headache than benefit.

Further Reading:

VIEs: The Long Resolution (siliconhutong.com)

China Finance

While there are somefairlyvaryingopinions regarding exactly what happened when walmart got conditioned approval for their acquisition of Niu Hai Holdings, one thing at least seems clear: MOFCOM is not overly fond of VIEs.

This certainly won’t be welcomed by foreign investors using VIEs, but its hardly news either. MOFCOM have been the most vocal department when it comes to issues relating to VIEs, for instance in their recent M&A regulations, so a continues negative stance is hardly shocking. What is interesting is how they express their negative views.

They haven’t banned the VIE structure as such, if anything they are acknowledging its existence, but they are limiting the scope under which they will allow it to operate. So far I don’t think this will cause any major issues for Walmart, so from their point of view this is probably a pretty good result.

Other VIEs might want…

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About David Wolf

An adviser to corporations and organizations on strategy, communications, and public affairs, David Wolf has been working and living in Beijing since 1995, and now divides his time between China and California. He also serves as a policy and industry analyst focused on innovative and creative industries, a futurist, and an amateur historian.
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