Sorry, dad

28 November 2008 By John Foley Follow @johnsfoley

The insurer was one of China s most successful private firms until a much touted $2.7bn bet on Fortis backfired. It s one of a string of economic misadventures by Chinese companies. Beijing may be starting to wonder if Western shareholder capitalism is worth the candle.

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Ping An, the Chinese financial group, reported a Rmb15bn ($2.3bn) loss on its investment in Belgian insurer Fortis after marking down its 5% stake on November 28. Ping An has asked the Chinese government for assistance in seeking legal redress, Reuters reported.

Other Chinese firms too have seen notional losses on foreign share purchases. Chinalco, a stateowned Chinese mining company, bought 12% of miner Rio Tinto's UKlisted shares in February for $14bn. The shares had a market value of $3bn on November 27.

China Investment Corp, a stateowned investment vehicle, bought a $3bn stake in Blackstone before the US private equity firm's stock market flotation in June 2007 at $31 a share. Blackstone's shares closed at $6.29 on November 27.

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