CITIC Group Corporation

Like that is not what anyone is envisioning.

Like this is, you know, we're envisioning a good regulatory regime that facilitates commercial investments, not CITIC making a $1 trillion pledge.

That is not what we're here for.

All right.

McDonald's arrived in Xinjiang in late 2020, opening its first outlet in the region just as the United States and other governments were ramping up scrutiny of China's actions there.

A few years earlier, in 2017, McDonald's sold 80% of its China business, including a controlling stake to entities tied to state-owned conglomerate CITIC, as well as a minority share to private equity giant Carlyle.

The partnership pledged to open 2,000 new outlets, including many in smaller Chinese cities.

In Xinjiang, McDonald's teamed up with Zheng Huang, a local businessman.

ICBC gave, I think it was a very large loan, two billion or so.

And they spoke in these documents, they say quite explicitly that that was so that CITIC, one of the Chinese companies, could get a contract for housing, you know, a project there.

And it happened.

So, you know, then that's also when you go into your question about how do you validate this? And then you see in reality, this is what happens, you know, like, or for example, they go into, they give money to companies in Chile to, you know, to get copper.

So the challenge will be, uh, um, we are seeing more challenge in s- in this, in this type of consolidation because there will be a challenge to the local banks, uh, to the local governments, how to help this new bank to resolve the, uh, legacy bad debts from these, uh, rural banks.

And that will likely involve coordination among both the local governments and some local asset management companies or the national AMCs like Cinda, like CITIC, uh, Financial AMC.

So that, that way is more challenging.

Just a quick follow-up here, Karen, while I have you.