‘The China Hustle’, a finance documentary
marketwatch.com
marketwatch.com
https://www.zerohedge.com/news/2012-12-03/two-years-too-late...
I wonder: were people talking about the subprime mortgage crisis that long? Do we just hear about stuff sooner because of the Internet being more mainstream? Is China possibly immune to a downturn just given its sheer size in population, the fact that it's basically a dictatorship, and that it's not affected much by outside money?
I've been bearish on the Chinese economy since 2012. Luckily I didn't bet on it.
The documentary points out an interesting contrast. Most of these companies were filing correct figures in China. But they were filing fudged figures in US. Because it was difficult to get information out of China, no one bothered to verify. It sounds ridiculous.
But then I read stories about people being encouraged to admit fake data to get more subsidies:
https://asia.nikkei.com/Politics-Economy/Economy/Chinese-loc...
And I understand. The whole place is so opaque that getting actual information requires people on the ground or some whistle blower.
However, they don’t. And like Japan, they have a huge amount of reserves. But it is supressing future growth, probably.
The worst cases that I remember were usually private equity / leveraged buy outs, that usually leads to a transfer of the production to EastAsia. That practice is not exclusive to Amercan companies though.
It will be interesting to see how the new Chinese investments will fear (Kuka) and if the German goverment will adopt a stronger stance on this take overs in the future.
Not trying to say that either practice is good, but there tends to be a bias in perception, naturally. We're always the good guys and China is the evil 60s SciFi villain who's mostly just evil because he's evil, kind of.
But even if it were totally legal, restructuring a company with the goal of pumping all the money out of it and then just watching it crash and burn just doesn't sound like it should be. Not any more legal than whats described in this article, in my humble understanding of right and wrong.
Lack of law enforcement doesn't mean there's no rule of doing business in China. In fact like an old saying in China, 'no rules, no shapes.' Rules aren't necessarily laws, as mentioned in the film, 'Guanxi' is something you have to build up if you want to do business in China. Larger your 'Guanxi' network, faster and easier you can do things than others. And there's 'Koubei' come into play. It means the trustworthy of an entity, not defined by some auditing companies, but complimented by other fellows in the field. A decent 'Koubei' worth more than any auditing report. Like in the film where a company can buy auditing reports to fraud investors, but a company with decent 'Koubei' but no auditing reports would never do that (at least not to local investors). So the rule here is you have to build your 'Guanxi' network with people of decent 'Koubei', meanwhile maintaining your own decent 'Koubei' so others want to build 'Guanxi' with you.
This is something even Chinese kids would know, but just appears to be difficult for the West to get a grasp of it.
Can't trust the government doesn't mean you can't trust anyone. At least we trust in common interests. There's another saying in China, 'only kids talk justice, adults talk interests.' In a market where you can basically do anything with your 'Guanxi', there's no right or wrong in doing things, what only matter is your profits. (Of course there are red lines you should never cross and none of these were written in the law neither. They are the 'unspoken rules'.)
This is where things get funny when foreign investment firms like Roth Capital entered the market. They know nothing about the rules here, and neither these hungry American investors who wanted so hard to take a bite on the largest pie in the century. And they don't even know how to protect their selves in China. No surprise they will be fooled.
But seriously, who can you blame for? There's another old saying in China, 'you came to the town, you play by the rules.' You should do your research before betting your pensions on some random factories oversea.
The last part of the film made me laugh. They were implying that since these crappy factories are frauds, all Chinese companies including Alibaba and Sinopec are lairs. This just shows how ignorant they are and they still don't understand the Chinese rules. Sinopec is the second largest SOC in China. Their don't even need to have 'Guanxi', they ARE the 'Guanxi'. And Alibaba is like Amazon, YouTube, eBay, PayPal, Yahoo etc. all combined. It's the monopoly in this field in China. It's simply too large to fail. If you are comparing companies like these with random crappy factories out of nowhere, you just don't seem to understand how powerful these companies are in China, and clearly you don't understand how the Chinese market works.
The last part is mainly pathos-based, and full of logical mistakes. But I don't know, since this is basically what they've always been doing, getting people worked up against the companies so they can make money from shorting.
Here are some short reviews from Chinese viewers [1], and I think they represent the mainstream opinion of Chinese people.
I would like to watch this documentary and in return give some of my dollars to you. These dollars don't smell and they don't look different. These dollars are all digital and not contagious, you will not catch a virus, I promise. I know that I don't live in USA, but does it make my dollars worth less? You have 18 different streaming options, I tried a few, but all of those sites discriminate me based on my location.
I tried YouTube, iTunes, Xbox Store and Amazon. None of those worked for me here in Austria.
Well, i was willing to pay, but not any more. I will wait for the Torrent to come out.
Some of the stuff was hilariously blatant.
The reviews for this film go back six months and that makes this video already old.
I know a lot of Chinese people in the US, in wealthy neighborhoods with excellent schools, and I’ve never even heard of high school students living alone in a house like you describe. I’m sure it’s been done, but I’m more than a little skeptical that it happens in any significant number.
If international students disappeared, the result wouldn’t be all those spots filling with American students, it would be a bunch of spots disappearing due to lack of resources.
Education is not fundamentally different from any other product here. When China gives Boeing a couple of billion dollars for some airliners, they’re not taking airliners away from Americans.