CRIMINAL CAPITALI$M

China Fines Alibaba, Tencent Unit Under

Anti-Monopoly Laws

STATE MONOPOLY CAPITALISM NOT COMMUNISM

Coco Liu and Shiyin Chen
Mon, December 14, 2020, 


(Bloomberg) -- China’s antitrust watchdog fined Alibaba Group Holding Ltd. and a Tencent Holdings Ltd. unit over a pair of years-old acquisitions and said it’s reviewing an impending Tencent-led merger, signaling Beijing’s intention to tighten oversight of internet sector deals.

The State Administration for Market Regulation said Monday it’s reviewing the combination of DouYu International Holdings Ltd. with Huya Inc., which could create a Chinese game streaming leader akin to Amazon’s Twitch. It fined Alibaba 500,000 yuan ($76,500) for failing to seek approval before increasing its stake in department store chain Intime Retail Group Co. to 73.79% in 2017, while China Literature Ltd., the e-books business spun off by Tencent, was also censured over a previous deal, according to a statement.

The penalties come after regulators last month declared their intention to increase scrutiny of China’s largest tech corporations with new anti-monopoly rules. Beijing in November unveiled draft regulations that establish a framework for curbing anti-competitive behavior such as colluding on sharing sensitive consumer data, alliances that squeeze out smaller rivals and subsidizing services at below cost to eliminate competitors. Shares in Alibaba and Tencent extended losses and closed down more than 2.5%.

“Investment and takeovers are important means for development and growth of internet companies,” the regulator said in the statement. “The above-mentioned companies have a large influence in the industry, carry out many investments and takeovers, have specialized legal teams and should be familiar with the regulations governing M&A. Their failure to actively declare has a relatively severe impact.”

Beijing’s heightened scrutiny is spurring fears of a broader crackdown on the country’s largest firms. On Monday, shares in No. 3 internet company Meituan plunged 3.8% after the People’s Daily wrote an editorial slamming the industry’s preoccupation with growing traffic and volumes in areas such as grocery delivery, at the expense of real scientific innovation.

China’s two largest corporations are also its most acquisitive, using scores of deals to expand into adjacent fields and groom some of the country’s most promising startups.Alibaba had led a $2.6 billion buyout of Intime as part of efforts to develop new business models that combine e-commerce with brick-and-mortar retailing. China Literature agreed in 2018 to buy New Classics Media for as much as 15.5 billion yuan to expand in filmed content.

The companies had failed to seek approval for the deals, which aren’t deemed anti-competitive, the antitrust regulator said Monday. China Literature said in a statement that it has been actively working with regulators on compliance, while Alibaba representatives didn’t immediately respond to requests for comment.

What Bloomberg Intelligence Says:

Alibaba’s ability to strengthen its domestic e-commerce ecosystem through M&A may be significantly weakened on rising anti-monopoly scrutiny, underlined by a 500,000 yuan fine by the State Administration for Market Regulation on Monday for failing to seek approval for its stake acquisitions of Intime Retail in 2014-18. While the amount is immaterial to Alibaba, retroactive application of new anti-competitive rules announced in November may be a stern warning to toe the line in future.

-- Vey-Sern Ling and Tiffany Tam, analysts

Huya in October agreed to buy DouYu in an all-share deal and Tencent, which currently owns stakes in both companies, was expected to hold about 68% of the merged business’s voting shares. That would have given the WeChat operator control over the leader in the live-streamed gaming market, estimated to generate 30 billion yuan in revenue this year, according to the latest numbers from iResearch.

An affiliate of SF Holding Co. was also fined for not declaring a takeover of a competitor, Monday’s statement showed.

“Despite its relative modest amount, the penalty announced today has a symbolic importance,” said Scott Yu, an antitrust lawyer with Beijing-based Zhong Lun Law Firm. “The announcement, together with the draft antitrust guidance unveiled in November, signals that Beijing will pay close attention to the monopolistic status of Chinese internet companies.”

The Era of State-Monopoly Capitalism - Tribune

Jun 7, 2020 — In the US, the average worker has been no better off than they were in 1979 and inequality has reached near-unprecedented levels. Throughout ...

Chapter 4: On the Concept of State-Monopoly Capitalism

libcom.org › library › economics-politics-and-the-age-...

Jul 28, 2005 — Capitalism is pleaded by monopolies and in large part determined by them. The state, whose function is to protect the social structure, is thus the state of monopoly capital. This is by no means a new phenomenon in capitalist society: it has always been a feature of capitalism, if not as pronounced in the past.

STATE MONOPOLY CAPITALI$M
Toshiba's chairman says wants to stay on, says new directors needed
By Makiko Yamazaki 

REUTERS

 Reuters/KIM KYUNG-HOON FILE PHOTO: The logo of Toshiba Corp. is seen at the company's facility in Kawasaki,

TOKYO (Reuters) -Toshiba Corp's chairman of the board on Monday pushed back against investor calls to resign, saying he wanted to help right the crisis-hit Japanese conglomerate and would bring in new directors.

Toshiba has come under fierce scrutiny after an independent investigation last week revealed management colluded with Japan's powerful trade ministry to block foreign investors from gaining board influence, in what one leading shareholder has called the world's worst corporate scandal in a decade.

In response to the investigation, the once-storied conglomerate said over the weekend it would no longer be putting forward the names of two directors for re-election and that two other executives would also resign.

Those changes were not enough for proxy advisory firm Institutional Shareholder Services Inc (ISS) which on Monday reiterated that Board Chairman Osamu Nagayama should step down - a call that has been echoed by other investors.

At a news conference, Nagayama apologised and said there were lapses in governance, but the former pharma executive said he wanted to stay on and help reconstruct management at Toshiba.

The company needs directors with a "global perspective" and a background managing similar firms, he said, adding Toshiba would call an extraordinary general meeting and speed up plans for a strategic review.

Toshiba said on Sunday the chair of its audit committee, Junji Ota, and another committee member, Takashi Yamauchi, will retire as directors. The audit committee has come under criticism from investors for failing to take action even after its members became aware of the collusion against shareholders.

The two other company executives who will depart allegedly reached out to the Ministry of Economy, Trade and Industry (METI) seeking support in Toshiba's battle against foreign shareholders over board nominees ahead of an annual general meeting last July, according to the investigators' report.

Though oft-battered by scandal, as a manufacturer of nuclear reactors and defence equipment Toshiba remains hugely important to the Japanese government. Japan's trade minister on Friday denied his officials directed an adviser to lean on Toshiba's foreign shareholders.

THE BLAME GAME

The shareholder-commissioned investigation has marked an explosive turn in a long battle between the company's management and foreign shareholders and has renewed concern about governance in the world's third-largest economy and its openness to foreign investors.

Toshiba's second-largest shareholder, 3D Investment Partners - one of the investors that the investigators' report said was targeted by METI - on Sunday also called for the resignation of Nagayama, Ota, Yamauchi as well as another audit committee member, Nobuyuki Kobayashi.

Nagayama blamed Toshiba's former CEO, Nobuaki Kurumatani, for helping pitch the company into crisis.

"There was a somewhat confrontational stance towards shareholders brewing from some time ago," Nagayama said, when asked about the responsibility of the former chief executive.

"That's an underlying cause in one sense for the current state of affairs."

Nagayama on Monday said some of the information detailed in the investigators' report had been previously been mentioned in an earlier internal Toshiba report - an acknowledgement that provoked ire from some investors.

"It rings hollow for Chairman Nagayama...to try and shift the blame to just Kurumatani alone. If anyone should resign to take responsibility over the governance failures in monitoring management, it should be him," said an investor in Toshiba declining to be identified due to the sensitivity of the matter.

Since the push by activist shareholders this year for greater accountability, Toshiba has faced and dismissed a $20 billion bid from CVC Capital. But leading shareholders have called on it to explicitly seek offers from potential suitors.

Nagayama said the company has not received offers from private equity funds since CVC but a planned strategic review committee would be looking at various options including taking Toshiba private.

He added that he wanted to include two of the company's foreign directors in the four- or five-member committee. Toshiba currently has four foreign directors among its 11-member board.

(Reporting by Makiko Yamazaki; Writing by David Dolan; Editing by Edwina Gibbs)

State monopoly capitalism - Wikipedia

https://en.wikipedia.org/wiki/State_monopoly_capitalism

The theory of state monopoly capitalism (also referred as stamocap) was initially a Marxist thesis popularised after World War II. Lenin had claimed in 1916 that World War I had transformed laissez-faire capitalism into monopoly capitalism, but he did not publish any extensive theory about the topic. The term refers to an environment where the state intervenes in the economy to protect larger mon…

NOCs, Not Big Oil, Are Responsible For Most Emissions

THE OLD STATE CAPITALI$M VS MONOPOLY CAPITALI$M TROPE

By Haley Zaremba 

- Jul 31, 2022

Big Oil has caught a lot of flack for its slow decarbonization efforts, but much of the criticism may be misguided.

Emissions from National Oil Companies far outpace those of Big Oil.

Not only do National Oil Companies emit more, but they also rake in more profit and receive much less attention than their private counterparts.


While much of the global pressure toward decarbonization has been directed toward privately owned and operated oil supermajors like BP, ExxonMobil, and Shell, a new report from the Economist suggests that much of this pressure and blame is misguided. It’s not that Big Oil doesn’t need to change its focus, strategy, and commitments in order to cut greenhouse gas emissions quickly and significantly enough to avoid the worst impacts of climate change – it does. The thing is, the emissions of privately owned oil companies pale in comparison to the enormity of state-owned oil enterprises, which are producing most of the oil, emitting most of the greenhouse gases, raking in most of the profits, and receiving much less attention. In fact, the Economist article, titled “State-run oil giants will make or break the energy transition,” says that in comparison to Big Oil, national oil companies (NOCs) are “enormous oil.” Together, NOCs represent three-fifths of the world’s crude oil production, half of global natural gas production, and two-thirds of the world’s remaining proven oil and gas reserves. “Four—Adnoc of the United Arab Emirates (UAE), Saudi Aramco, pdvsa of Venezuela and QatarEnergy—possess enough hydrocarbons to continue producing at current rates for over four decades.”

Taking into consideration the sheer scale of NOCs’ production power, it does make the global attention to these institutions’ climate actions (or rather non-actions) particularly stark and worrying. Especially when you take a look at just how bad most NOCs’ track records are when it comes to going green. To be clear, Big Oil’s track record isn’t stellar either, especially west of the Atlantic, but the greenhouse gas emissions of most supermajors have already stabilized or peaked. By contrast, just two NOCs can say the same: Brazil’s Petrobras and Colombia’s Ecopetrol.

So why aren’t we going after the big fish? The answer, of course, is complicated. Decarbonization is political no matter how you slice it, but pressuring governments themselves to divest of the very industry keeping their state economies afloat and their politicians in office is tricky and divisive business. Many countries with state-run oil companies are volatile nations with monopolized economies and no contingency plan if oil was to go the way of the dodo. What’s more, all too often, petrostates make for oil autocrats with itchy trigger fingers. “No matter how you define a petrostate – whether you look at a state’s oil-derived wealth, its dependence on oil revenues, or its exports and relative importance to world markets – there is strong evidence that petrostates are more likely than other countries to start wars,” Foreign Policy reported last month.

Not all NOCs are created equal, of course. They are as diverse as the nations that house them. Unsurprisingly, richer countries tend to have better run, more ecologically responsible outfits. They also often happen to have more geologically advantageous oil reserves – part of what made them rich in the first place. By contrast, many poor nations’ NOCs are poorly run, with tendencies toward inefficient and dirty practices. “The Algerian and Venezuelan companies emit three to four times as much carbon in oil production as do the more geologically blessed and better-managed firms such as [the United Arab Emirates’] Adnoc and Saudi Aramco, and flare seven to ten times as much methane, another potent greenhouse gas, per barrel as does QatarEnergy,” the Economist reports.

Ultimately, the “easy” tactics of boycotting, protesting, and naming and shaming that have some impact in the private sphere are effectively toothless strategies when it comes to state-run oil companies. Again, many of the NOCs with the dirtiest operations are operating in some of the world’s poorest countries, and no amount of public pressure will change their economic reality. Ultimately, it comes down to climate finance and holding the world’s richest nations accountable for their pledges to financially support the costly decarbonization efforts of the world’s poorest countries – a promise which has so far proven to be an empty one.

By Haley Zaremba for Oilprice.com

MONOPOLY CAPITALI$M

Japan to buy semiconductor materials giant for $6.3 billion

• Dan Primack, author of Axios Pro Rata

ALL CAPITALI$M IS STATE CAPITALI$M

Illustration: Rebecca Zisser/Axios

Japan Investment Corp., a government-backed group, has agreed to buy Tokyo-listed chipmaking materials provider JSR for $6.3 billion.

Why it matters: This is part of a global trend of governments seeking to safeguard their semiconductor supply chains.

By the numbers: Japan Investment Corp. will offer around $30.40 per JSR share via a tender, representing a 35% premium to Friday's closing price.

• JSR has around a 30% global market share share for photoresists, light-sensitive polymers that are used as coatings on semiconductor substrates.

More, per Bloomberg: "Those compounds are needed to make semiconductors used in supercomputers, AI-harnessing data centers and missile control systems, not to mention gadgets including iPhones. Government control over the materials critical to powerful chips would grant Japan greater leverage in a world increasingly divided by an escalating US-China technological rift."

THE NEW COLD WAR

Whoever controls the spice, controls the universe

From missile guidance systems to electric car batteries, China’s domination of rare earths has global implications.

A worker at Xinwangda Electric Vehicle Battery Co Ltd, which 

makes lithium batteries, Nanjing, China, March 2021 

SAFE BECAUSE THEY ARE UNPLUGGED

(STR/AFP via Getty)
Published 14 Jan 2022 

MONOPOLY CAPITALI$M WHINES ABOUT MONOPOLY STATE CAPITALI$M

In the science-fiction classic Dune, the natural resource of “spice” represents the most valuable commodity in the universe, found only on the desert planet of Arrakis. Spice serves various purposes in Dune, but in both movie adaptations of the novel, Baron Harkonnen, former ruler of Arrakis, summarises its importance with the line: “He who controls the spice, controls the universe.”

While Dune has its share of spice, Earth contains its own spice rack, stocked with resources and commodities offering opportunities for those who control them and threats for those who do not. One state that has perhaps taken the words of Baron Harkonnen as encouragement in its resource strategy is China.

Beijing has implemented a long-term strategic plan for maximising the nation’s control over exploration, production, pricing and exports of natural resources that began with the creation of its first Five-Year Plan in 1953 and has allowed the state to “win without fighting”. This strategy still guides Chinese actions in regard to exploiting natural resources, one example being the acquisition of rare earth elements in regions around the world.

Latest figures show the United States relies on China for at least 80 per cent of its rare earths.

China is estimated to mine more than 70 per cent of the world’s rare earths, and is responsible for over 90 per cent of its refining and production. These elements are essential components in myriad forms of technology, including military equipment such as jet engines, missile guidance systems, anti-missile defence systems and satellites. Latest figures show the United States relies on China for at least 80 per cent of its rare earths, with China supplying 81 per cent of the world with its rare earth elements in 2017. China further holds a dominant position in supplying the United States with 21 of the 35 mineral commodities that Washington deems critical for its national security and economy. The United States is still attempting to extricate itself from this dependence on Beijing for critical commodities, a reliance that has led to vulnerabilities for the country and others in the past.

Lithium mine at Bolivia’s Uyuni Salt Flat. Bolivia has been described as the “new Saudi Arabia” (Coordenação-Geral de Observação da Terra/Flickr)

In 2010, Beijing halted rare earth exports to Japan for two months in response to Tokyo’s detainment of a Chinese fishing captain found near disputed East China Sea Islands. In 2021, China suggested halting exports to the United States as a test of how the country would produce fighter jets without rare earth supply and where the supply chain may shift as a result. Australia is relatively insulated from rare earth coercion, holding the sixth-largest reserves of rare earths in the world, much of which is untapped. That doesn’t mean that Australia’s military can’t be affected by poor quality Chinese metal or its reliance on other Beijing resources, such as the 2021 shortage of urea, another form of spice and an ingredient in the fluid needed by diesel trucks and agricultural machines.

China also has a history of creative forms of coercion, such as cutting tourism to certain countries, weaponising trade tariffs, and even halting trash processing. Attempts to diversify supply chains have run into further obstacles. Africa represents an opportunity for the supply of rare earth metals, but Beijing has already multiplied mining investment by Chinese entities on the continent 25 times in the period 2005–15. Much of this access to resources is tied to investment in infrastructure, which in turn links up with China’s ambitious Belt and Road Initiative.

A Chinese firm has a 51 per cent stake in the world’s largest lithium mine in Australia, which is all on top of China’s own large lithium reserves.

As the world moves towards generating sources of renewable energy and combatting climate change, Beijing is one step ahead. In the Democratic Republic of Congo, China has gained access to the largest untapped reserves of the key metal cobalt, an essential component in electric car batteries. Chinese companies have taken ownership of eight of the 14 largest cobalt mines in the country. Similar moves have been made in South America in an area known as the “Lithium Triangle”. The region rests on the borders of three countries into which Beijing has invested billions for the rights to mine lithium: Chile, Argentina and Bolivia, a nation described as the “new Saudi Arabia” for its potential in this component of electric car batteries.

Afghanistan offers a similar treasure trove of lithium, with Chinese firms seeking to take advantage of what may be the world’s largest lithium reserves worth an estimated $1 trillion or more. A Chinese firm has a 51 per cent stake in the world’s largest lithium mine in Australia, which is all on top of China’s own large lithium reserves. This domination of resources has come at the cost of the health of local workers, communities and environments around which their mining operations take place, as well as accusations of widespread graft.

Dependence on supply chains with Beijing at the on/off switch is a dangerous position and one that nations will need to adapt to in order to avoid the vulnerability of coercion. China has put itself ahead of the game in a natural resource strategy that brings to mind words from another classic of science fiction: “intellects vast and cool and unsympathetic, regarded this earth with envious eyes, and slowly and surely drew their plans against us.” RACIST JINGOISM 

MARS IS THE RED PLANET

Alexander Bogdanov’s Secret History of Martian Socialism

Bogdanov’s Mars is an opportunity to create an outside from which to examine the givens that are taken for granted on Earth. On Earth, on the other hand, the division of the whole planet into component parts created an initial blissful ignorance; individual cultures could live without concern for one another.

China's Xi calls for patience as Communist Party tries to reverse economic slump

STATE CAPITALI$M IS STILL CAPITALI$M

JOE McDONALD
Updated Thu, August 17, 2023 

BEIJING (AP) — Chinese leader Xi Jinping has called for patience in a speech released as the ruling Communist Party tries to reverse a deepening economic slump and said Western countries are “increasingly in trouble” because of their materialism and “spiritual poverty.”

Xi’s speech was published by Qiushi, the party’s top theoretical journal, hours after data Tuesday showed consumer and factory activity weakened further in July despite official promises to support struggling entrepreneurs. The government skipped giving an update on a politically sensitive spike in unemployment among young people.

Xi, the country’s most powerful leader in decades, called for China to “build a socialist ideology with strong cohesion” and to focus on long-term goals of improving education, health care and food supplies for China’s 1.4 billion people instead of only pursuing short-term material wealth.

Since taking power in 2012, Xi has called for restoring the ruling party's role as an economic and social leader and has tightened control over business and society since taking power in 2012. Some changes come at a rising cost as successful Chinese companies are pressured to divert money into political initiatives including processor chip development. The party tightened control over tech industries by launching data security and anti-monopoly crackdowns that wiped out billions of dollars of their stock market value.

“We must maintain historic patience and insist on making steady, step-by-step progress,” Xi said in the speech. Qiushi said it was delivered in February in the southwestern city of Chongqing. It is common for Qiushi journal to publish speeches months after they are delivered.

Economic growth slid to 0.8% in the three months ending in June compared with the previous month, down from 2.2% in January-March. That is equivalent to a 3.2% annual rate, which would be among China’s weakest in decades.

A survey in June found unemployment among urban workers aged 16 to 24 spiked to a record 21.3%. The statistics bureau said this week it would withhold updates while it refined its measurement.

The government is trying to reassure uneasy homebuyers and investors about the deeply indebted real estate industry after one of China's biggest developers, Country Garden, failed to make a payment to bondholders and suspended trading of its bonds. A government spokesperson said Tuesday regulators are getting debt under control and risks are “expected to be gradually resolved.”

Beijing also has expanded anti-spying rules and tightened controls on information, leaving foreign and private companies uncertain about what activities might be allowed.

Xi stressed “common prosperity,” a 1950s party slogan he has revived. He called for narrowing China’s yawning wealth gap between a tiny elite and the poor majority and to “regulate the healthy development of capital” but announced no new initiatives.

“Common prosperity for all people” is an “essential feature of Chinese-style modernization and distinguishes it from Western modernization,” Xi said.

Western-style modernization “pursues the maximization of capital interests instead of serving the interests of the vast majority of people,” Xi said.

“Today, Western countries are increasingly in trouble,” Xi said. “They cannot curb the greedy nature of capital and cannot solve chronic diseases such as materialism and spiritual poverty."

People wait outside a restaurant in Beijing, Tuesday, Aug. 15, 2023. Chinese leader Xi Jinping has called for patience in a speech released as the ruling Communist Party tries to reverse a deepening economic slump and said Western countries are "increasingly in trouble" because of their materialism and "spiritual poverty." (AP Photo/Ng Han Guan)

Analysis-China's crackdowns rewrite investors' private sector playbook

 An electronic board shows stock indexes at the Lujiazui financial district in Shanghai

By Samuel Shen and Summer Zhen

Thu, August 17, 2023

SHANGHAI/HONGKONG (Reuters) - Buy the state, sell the capitalist - that's how global investors are trying to play China's latest anti-graft crackdowns as they see private enterprise increasingly sidelined in Beijing's quest for "common prosperity".

China's recent sweep of the medical sector came as a shock to many investors who had thought the end of Beijing's three-year regulatory purge of the property and tech sectors meant there would be no more industry-wide crackdowns as policymakers prioritised economic recovery.

Several government bodies in July launched a year-long anti-corruption campaign into the medical system, making clear that China's drive to deliver affordable housing, education and healthcare to its masses was more important.

That forced many investors to quickly draw parallels with last year's crusade against private tutoring and a long-running one against tycoon Jack Ma's consumer finance firm Ant Group.

The one unanimous conclusion they came to was that Beijing wants a greater state presence in these sectors.

"The underlying principle is that healthcare is kind of like a social service that should principally be in state hands," said Arthur Kroeber, partner and head of research at Gavekal in New York. Kroeber says the crackdowns are about "defining what the state does, what the private sector does, and creating a more limited sandbox for the private sector to play in."

"This links to the idea of common prosperity because it's the state's job to guarantee a level of provision of basic services, whether it's education or healthcare, so it's important for the state to have a role," he said.

That has left investors now picking the state over the private sector.

While the CSI Medical Services Index is down 4.4% this month and 20% so far this year, investors have snapped up shares of state-owned medicine producers such as Beijing Tongrentang Co, which is up 14% this month.

Similarly, the expectation that state-backed property firms will gain better access to funding and bigger market share has seen investors dump private developers' stocks and rush into state-owned developers such as Yuexiu Property and Poly Developments.

Zhang Kexing, general manager of Beijing Gelei Asset Management, expects healthcare companies with strong branding will benefit, as will firms in traditional Chinese medicine, which has political support, such as Beijing Tongrentang.

NATIONAL SERVICE

While President Xi Jinping has made graft busting a priority since 2012, the Chinese Communist Party's (CCP) two-year-old "common prosperity" campaign that targets financial services, private education and healthcare has accelerated that push.

The CCP's July Politburo meeting reinforced the message, with the top policymaking body pledging to put a floor under the property sector, help indebted local governments heal and boost consumer demand.

Investors now believe Xi will be relentless in his social and economic agenda, much of which draws on Mao Zedong's Marxist and socialist thinking.

Thomas Masi, a partner and equity portfolio manager at Boston-based GW&K Investment Management, spoke to heads of several Chinese firms that he reckoned were at the fore of innovation in healthcare.

"Basically the message they were getting from the government was that they should be doing some of this innovation for national service, as opposed to for profitability only. That was a lightbulb for us," said Masi, who was once bullish on healthcare.

"We basically understood...we were not necessarily going to be paid as shareholders."

Xi himself has often said that private companies should be "rich and loving," be "patriotic" and share the fruits of their growth with employees more equitably.

Nuno Fernandes, also a partner and portfolio manager at GW&K, says it is important for investors in China to recognise the power of the state to override private interests, which means companies will need to "make a profit out of whatever circumstances and situation they are given."

That is why Fernandes has slashed his portfolio holdings in Chinese drugmakers.

Huang Yan, general manager of private fund manager Shanghai QiuYang Capital Co, said Beijing will crack down on any sector seen as increasing people's economic burden.

"Whether it's healthcare or tutoring, a crackdown will befall any sector as long as the campaign benefits the majority of people at the cost of the minority," Huang said.

Huang points to inflated liquor prices as an example.

"Using pricey spirit to lubricate business at the banquet increases companies' cost which could be used in better ways. It's possible for this sector to be targeted," he says.

But Beijing may ignore other sectors such as infrastructure, where such excess is less visible, he said.

Kumar Pandit, portfolio manager at Somerset Capital Management's Emerging Markets Dividend Growth Fund in London, is not cutting his China exposure but has an "added layer of scrutiny" around sectors Beijing deems important to common prosperity.

While the probability of wider crackdowns is low, he said making decisions remains challenging.

"It is difficult to say with certainty whether the crackdown will spill into other sectors," Pandit said.

(Additional reporting by Jason Xue in Shanghai and Ankur Banerjee in Singapore; Writing by Vidya Ranganathan; Editing by Sam Holmes)