According to sources on October 30, it has been revealed that over the past few weeks, more than a dozen employees of the Chinese corporate group, American International Group (AIG), based in Shanghai, have resigned. This is the latest sign of challenges faced by one of China’s largest private enterprises.
American International Group, founded by billionaire and copper magnate Wang Wenyin, is ranked as the 38th largest company in China by revenue on the Fortune 500 list. The company has boasted that its copper imports account for 10% of China’s total copper imports. The departure of these employees, including some top physical and derivative traders within the group, highlights the pressures facing the Chinese metal industry, which has been weakened by a lackluster post-pandemic recovery and government efforts to curb trading by state-owned enterprises.
These employees have resigned from U.S. trading subsidiaries, including China Copper Mineral Resources Co., headquartered in Shanghai. The sources stated that the resignations also include some operations and finance managers. Due to the sensitivity of the information, the sources requested to remain anonymous. The sources mentioned that these two companies, which have been major participants in the Chinese copper market for many years, have been reducing their business activities and unwinding or renegotiating some long-term contracts.
According to four sources, the departures are primarily due to the challenging market environment. Many market participants, including some major banks, have exited China’s metal trading over the past year due to low profit margins and high-profile disputes, including the collapse of Maike Metals International Co., which was once China’s largest copper trader.
Recent debt disputes have led to court-imposed restrictions on the personal spending of Amir Chairman Wang on two occasions in the past few months, further adding to the anxiety of AIG employees. Wang is locally referred to as the “Copper King” of China. Both restrictions were lifted within a day after negotiations with creditors.
In an email response to Bloomberg News, AIG stated that the company’s business has been affected by severe international geopolitical uncertainties and increasing pressures from the global economy. The company said that resignations are a normal part of personnel turnover and added that its production and operational activities will continue as usual.
The company stated that the changes in the structure of its business in Shanghai are a response to the economic and market conditions in China and internationally. According to the email content, further optimization will continue based on market conditions.
Amer, headquartered in Shenzhen, was founded by Wang in the 1990s and has long been listed in the Fortune Global 500. According to Fortune, the company’s annual revenue last year was $90.5 billion, with a profit of $1.5 billion.
As per its website, the group currently owns mines, copper rod and wire manufacturing plants, as well as other investments ranging from semiconductors to marble and jade.
However, its trading division has been a major driver of its revenue. In a rare interview in 2015, a senior official from an American trading company in Shanghai told Bloomberg that the company handled about one-tenth of China’s copper imports.