What is Nationalization?
Nationalization is the process of taking over the means of production of private enterprises to state ownership. Nationalization is an important way in the formation of state ownership economy. Usually it refers to the nationalization of private property, but sometimes it also refers to the property of other levels of government (such as municipalities). According to international practice, after the nationalization, appropriate and reasonable compensation shall be given to the damaged foreign investors. Nationalization is also one of the powerful means for third world countries to protect their resources and national industries, and to resist exploitation by developed countries.
- [guó yu huà]
- Nationalization (English: nationalization) is the act of repossessing property to the state. Usually it means
- Nationalization
- Conditions for nationalization: From the perspective of relevant foreign investment laws and practices, nationalization should meet the following conditions:
- Under normal circumstances, the state will pay a certain amount to compensate the original owner, but sometimes this price is much lower than the market price, so it will cause losses to the original owner. The reason for nationalization is often because certain industries, such as public water heating, have important strategic roles. Similarly, the opposite of nationalization is usually
- Compensation for nationalization: giving compensation is considered to be one of the most important conditions for nationalization.
- The international community recognizes that a sovereign State has the right to
Nationalization
- The introduction of foreign capital has always been a major measure for China's economic development. In order to create a legal environment conducive to the introduction of foreign capital, China's Foreign Investment Enterprise Law has clearly stipulated that foreign capital will not be nationalized. The public interest needs to be nationalized, and its compensation standard is "corresponding compensation." This shows that China still has the possibility of nationalization of foreign capital, but in general it does not. There is no clear definition of what appropriate compensation is.
- nationalization
Nationalization of two houses
- The U.S. government announced the takeover of two government-backed mortgage lenders, Freddie Mac and Fannie Mae. In the face of the nationalization of this market economy theme, the financial market immediately responded violently and caused violent fluctuations in the foreign exchange market. As a result, the US dollar index gapped open and the carry trade sector rose sharply across the board. Considering the suddenness of this event and the huge impact on financial markets, investors must carefully review and rationally analyze the impact of this event. Although the event of nationalization can temporarily alleviate people's concerns about the credit crisis's expansion in the short term, and the rebuilding of the market's confidence in the financial market has an immediate impact, at the same time we can also find that the pressure on the US fiscal will increase greatly. Because in addition to paying for the $ 14 billion in losses of the two houses, the US Treasury also has to purchase its related preferred stocks. These two expenditures will undoubtedly increase the pressure on the US fiscal expenditure, and the fiscal deficit will also increase rapidly. Judging from the rise and fall of the foreign exchange market, this move will cause the market to worry about the long-term downside risk of the US dollar. After all, the fiscal deficit is always an important factor that plagues the long-term strength of the US dollar. Of course, the behavior of the U.S. Treasury is good for U.S. stocks in the short term, because at a critical juncture in the absence of financial market functions, this government action will effectively save the market from chaos and the crisis of confidence collapse, giving the market a respite from the decline, but in Before the US house prices really bottomed out, it is still unknown whether administrative intervention is a stimulus or a chronic poison. It can only be preliminarily judged that the financial crisis in the United States is very serious and has reached the point where the US government has to rescue it.
- Europe and the United States: Due to the nationalization of the two houses, the euro opened sharply higher in the early morning and recovered 1.4300 in one fell swoop. In the short term, the euro's bulls are expected to further expand the space and is expected to recover the 1.4500 line.
- US and Canada: Canada's employment data released is better than market expectations
- nationalization
- US and Japan: Driven by the strong rise of the electronic Dow, the US and Japan rose sharply in the short-term and once touched the 109.00 line. According to the trend, in the short term, the possibility of the United States and Japan maintaining a rising trend is greater and has driven the overall carry trade sector to strengthen. Investors can consider buying on dips.
- The Northrop Rock crisis in Britain appears to be ending with the British government temporarily "nationalizing" it. Although the British Chancellor of the Exchequer, Alistair Darling, claimed that Northrock Bank was only temporarily nationalized and that when the financial environment improves in the future, it will still return to the track of privatization. After returning to the privatization track after nationalization, "it may take a long time and there are many uncertainties."
- A helpless move
- Since the crisis at Northrock Bank, the British government has provided it with a variety of support such as capital injections, deposit guarantees, bond plans, and finding private buyers. After entering 2008, two schemes have emerged within the British government to resolve the crisis at Northrock. The first option is to sell the assets and shares of Northrock Bank for financing. Another option is for the British government to take over and nationalize Northrock to avoid the crisis.
Nationalization of banks
- On January 11, 2008, Northrenlock Bank sold 2.2 billion pounds (approximately $ 4.312 billion) of bank assets to JP Morgan Chase to repay loans to the Bank of England. On the 21st, the British government announced that it would convert the loan lent to Northrock Bank into a bond scheme. Some market participants pointed out that this is paving the way for private sector buyers to buy Northrenault Bank. After the deadline for bidding, the British government asked the two bidders, a consortium led by Virgin Group, and the Northrop Grumman management team to increase the final bid price. In the end, the British government, after studying various possibilities for several months, finally announced that it would temporarily nationalize Northron Rock on the grounds of dissatisfaction with the bids of the two bidders due to considerations such as protecting the interests of depositors. When to privatize again
- In a British economy dominated by privatization and a market economy, the British government "nationalized" Northrenlock. In this regard, Guo Tianyong, director of the China Banking Research Center of the Central University of Finance and Economics, said that under the current "abnormal state", the British government has taken the initiative to nationalize banks, which is a way of protecting banks. On the one hand, it can maintain the stability of bank operations; on the other hand, it can avoid greater volatility and risks in Northrenlock Bank and the British financial system.
- The British government explained that the acquisition scheme offered by the private sector did not provide sufficient value to British taxpayers, and therefore adopted a scheme to nationalize Northrock Bank. In the context of market fluctuations and uncertain investor trends, private capital has underestimated the purchase price of Northrock Bank. In addition, the British government does not want bank assets to be sold. These are the important factors that led to the above decision.
- The British Chancellor of the Exchequer Darling also said that temporary nationalization is only a "springboard", and that when the financial environment improves and the value of the bank improves, the bank will be transferred back to private capital.
- However, due to the uncertainties of the subprime mortgage crisis and the bank's own operations, the market is full of doubts about when to re-privatize Northrock Bank. In the early 1970s, British engine maker Rolls
- nationalization
- The future is not clear. This nationalization is not the best way to deal with the banking crisis, which is inconsistent with the laws of market economies in Western countries. However, if a private buyer is allowed to buy shares in Northrenck Bank at this time, it will lead to "sale" and even greater fluctuations in the entire British financial market. "The two powers are naturally less important than others. Although this is indeed inconsistent with the market economy from the perspective of economics and micro-subjects, it is indeed advisable to prevent further spread of the crisis in the short term.
- Regarding the stock price issue during the re-privatization, the British government has adopted a nationalization approach to protect Northrenlock Bank. As long as the bank itself has no major problems, after the crisis passes, it should be able to smoothly satisfy the British government and investors. Price for sale, and re-privatization.
- After nationalization, Northrock Bank may be affected by the management of the British government and cannot operate normally in accordance with marketization laws. Eventually, it will have to find buyers again, and it is really difficult to guarantee the fundamental interests of depositors. Especially when the current subprime mortgage crisis is not over and the financial market is still not recovering, there is a great risk that the British government will adopt a nationalization approach. Therefore, the prospects for Northren Rock are unclear.