The ruling Chinese Communist party is using a classic capitalist scheme to raise money: An IPO.
Not that the party (slogan: “Serve the People”) is offering the public shares in itself. But it plans to sell stocks in the online version of its official mouthpiece the People’s Daily.
The website is having a hard time keeping up with the commercial competition, according to its owner People’s Daily Online Co. Ltd. in a preliminary prospectus filed with the China Securities Regulatory Commission. It gets one tenth the visitors than the most popular Chinese Web portal Sina.com, for example.
To rectify this, the company wants to raise $83.5 million through an IPO in Shanghai to “strengthen our marketing and expand our services and products,” the prospectus says. That way it hopes to catch up with Sina, which has tapped international capital markets by listing on the NASDAQ.
The company makes no reference to the fact that the party-owned website may owe its low profile to the stultifying nature of its content. Indeed, it mentions the “People’s Daily journalism tradition” as one of its competitive advantages, which sounds a little dubious.
Another selling point it boasts, though, is the “preferential policy” the website enjoys; this means that the party which owns it also owns the government that makes the rules deciding who else is allowed to disseminate online news in China. Now that is a competitive advantage.