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by mustafa_pasi 856 days ago
How does VC work in China? How did he get his money?

Snooping a bit on Wikipedia, it says that he partnered with his cousin who was some kind of banker.

2 comments

For BYD in the 1990s, Family banking.

Specifically within the Hokkien, Cantonese, and Hakka diaspora.

Guangdong+Fujian became a major manufacturing hub because most of the business elite in Taiwan, Singapore, Malaysia, Thailand, Hong Kong, and Phillipines were from the same clans and families in Guangdong and Fujian

Before the 2000s, Manchuria tended to be much richer and industrialized than Guangdong/Fujian because of Russian/Soviet, South Korean, and Japanese FDI along with the fact that it was close to Beijing and was the heartland of the CCP after WW2 so most SOEs were based there.

By the mid-late 2000s, China's financial sector formalized and a IB/PE/VC model similar to that in the US and Israel arose.

Yeah, well

It is, on paper a private company

But you need to understand this is China. BYD is extremely heavily subsidized by the Chinese government. For example, this 2016 article https://www.forbes.com/sites/mclifford/2016/07/26/with-a-lit... mentions

> In the five years ending December 31, 2015, the company reported receiving a total of 2.9 billion yuan ($435 million) in government support.

and that's just the reported support, there are tricks the government can play with for example labor costs, transferring R&D and so forth.

Yeah but that's the same fir any car manufacturer aynwhere. VW is extremely subsidized by Germany, US bailed out their bankrupt manufacturers after 2008, same with France, Japan, Korea. UK didn't do that, or stopped doing that, and their car industry collapsed. Even for countries doing only manufacturing for other nations brands it's so common to heavily subsidize those factories to be able to get local production jobs.

Besides $435 million is practically nothing in government aid terms. Hell, even tiny Hungary have given Audi €113 million in 2016: https://ec.europa.eu/competition/state_aid/cases/253497/2534...

Looks like $2.4 billion from state/local, $300 million from federal, and a $400 million paid back loan from federal for Tesla.

https://subsidytracker.goodjobsfirst.org/parent/tesla-inc