1997 Asian Financial Crisis, Redux? Bamboo Innovator is featured in BeyondProxy.com, where value investing lives

Bamboo Innovator is featured in BeyondProxy.com, where value investing lives:

  • 1997 Asian Financial Crisis, Redux? Aug 28, 2013 (BeyondProxy)


Why $3.4tn in foreign reserves is not China’s escape hatch

Why $3.4tn in foreign reserves is not China’s escape hatch

Guest writer | Aug 28 08:40 | 5 comments | Share

By Paul J. Davies, the FT’s Asia financial correspondent.

After trying to work out how big China’s bad debt problem might be, many people still turn round and point to the country’s mammoth foreign exchange reserves as its great get-out clause. The idea is seductive. On a deliberately gross calculation using the 20 per cent non-performing loan rate found at China’s big banks in the late 1990s, total bad debts would amount to Rmb21tn. A more sensible stab might put the level at roughly half that, or Rmb10tn. These are painfully large numbers – but hang on, China’s central bank has foreign exchange assets of $3.4tn, or Rmb20tn. Perfect – what’s the problem? Read more of this post

Beijing land values surpass US annual GDP

Beijing land values surpass US annual GDP

Staff Reporter


Transaction prices in China’s urban housing market have touched new highs in 2013, such as Beijing, Shanghai, Guangzhou and Hangzhou. In Sunhe, located in the Zhaoyang district in Beijing, Cofco Property, spent 2.36 billion yuan (US$385 million) on July 23 this year to buy an HIJ plot, measuring 33,000 square meters. The floor area was priced at 44,000 yuan (US$7000) per square meter, making it the most expensive plot of land in the capital. On Aug 16, China Resources won the bid for a plot of land in Qianhai, Shenzhen for 10.9 billion yuan (US$1.7 billion), which broke the record for the highest price quoted for a single land transaction. Read more of this post

“China has made too many mistakes, and urbanization in several places is not even real”

Urbanization in parts of China slower than Vietnam

Staff Reporter



Ren Zhiqiang, right, attends a meeting in Hainan. (Photo/Xinhua)

Until China solves its problems of household registration and land issues, urbanization in certain parts of the country will still be slower than those found in Vietnam, said a Beijing party official. “China has made too many mistakes, and urbanization in several places is not even real,” said Ren Zhiqiang, who also doubles as the chairman of Huayuan, a real estate company based in Beijing. Ren suggested that China allows people to have access to all the resources related to urbanization. “First, the industry has to become a free market. Second, the government should give people the right to change their residence,” he said. “Many in China blame real estate companies for resources being unequally allocated. But the government is actually the one to be blamed, because it caused the country’s urbanization to be slower than other Asian countries, Vietnam for example,” he said.


Why Etsy’s brave new economy is crumbling

Why Etsy’s brave new economy is crumbling

By Kevin Morris on August 27, 2013Email

One of the biggest consumer markets in the world resides in a river valley about 200 miles southwest of Shanghai. You can find almost anything you want in Commodity City’s half-million stalls: baby bibs, knitting suppliessundry types of underwear, T-shirts, glitzy jewelry. The market is the literal and figurative heart of Yiwu, a metropolis of 1.3 million people that bustles under the sticky, industrial haze of Zhejiang province. Journalist Tim Phillips has called Yiwu the “Wall Street” of China’s counterfeit goods industry—an accurate, if somewhat narrow, label. The city’s factories flood the shelves of Commodity City and the rest of the world with a lot more than just knock-off iPhones and pirated Hollywood DVDs. They relentlessly pump out the type of cheap consumer goods you’re used to seeing at shopping mall kiosks and street-side trinket stands. Read more of this post

Web Sales Remain Small for Many Retailers

August 27, 2013, 8:31 p.m. ET

Web Sales Remain Small for Many Retailers



Nearly two decades after the Web revolutionized shopping, many big retailers are still struggling to turn the Internet into a big part of their business. Their progress is on display in new correspondence between the Securities and Exchange Commission and a bevy of chains, including Target Corp., TGT -1.36%Wal-Mart Stores Inc., WMT -0.23% PetSmart Inc. PETM -0.48% and Fifth & PacificCos. FNP -2.57%. In the correspondence, the SEC asks the companies—which frequently tout their online prowess—to provide hard details about the amount of goods they sell online. Read more of this post

China’s Transparency Standards, U.S. Investor Expectations Collide; Government Policy Curtails Scrutiny of Links Between Officialdom and Business

Updated August 27, 2013, 1:44 p.m. ET

China’s Transparency Standards, U.S. Investor Expectations Collide

Government Policy Curtails Scrutiny of Links Between Officialdom and Business


SHENZHEN, China—In the almost six years since VisionChina Media Inc.VISN -4.15% raised $115 million in a U.S. initial public offering, the Chinese broadcasting company hasn’t told U.S. investors its co-founder is the daughter-in-law of a senior figure in the Chinese Communist Party. Should it have? The omission is legal. But it illustrates wide differences between China’s transparency standards and U.S. investors’ expectations. The issue of Chinese political interests overlapping with business comes as inconsistencies pile up over how the U.S. and China treat information. Over the past year, Beijing and Washington have butted heads over jurisdiction to regulate auditors and enforce legal rulings. Accusations by U.S. hedge funds that several China-based, U.S.-traded companies engaged in fraudulent accounting have erased billions of dollars in market value, also hitting shares of companies not accused of wrongdoing. More recently in China, one scandal after another has highlighted ties between business and the relatives of politicians. Read more of this post

CBRC Tells Banks to Limit Investment in Local Government Bonds

CBRC Tells Banks to Limit Investment in Local Government Bonds

China’s banking regulator told lenders to be “cautious” when investing in bonds issued by local government financing vehicles as policy makers seek to rein in local borrowing. The China Banking Regulatory Commission has capped at end-2012 levels LGFV loans by banks, which are banned from providing guarantees to the entities’ bonds, Cao Guoqiang, Vice President of China Citic Bank Corp. (998), said at a teleconference. Read more of this post

Baidu Said in Talks to Develop Smart Televisions

Baidu Said in Talks to Develop Smart Televisions

Baidu Inc. (BIDU), China’s largest search engine, is in talks with a Chinese manufacturer to help develop televisions connected to the Internet, according to two people familiar with the matter. The company is discussing working with Huan Technology Ltd. to develop a set-top box or a chip for use in smart TVs, the people said, asking to not be identified because the discussions are private. Huan Technology is a joint venture between Sichuan Changhong Electric Co. and TCL Multimedia Technology Holdings. (1070) TCL is the third-largest flat-panel TV maker in the world by revenue share, researcher DisplaySearch said in June. Read more of this post

China to Place Consumption Tax on More Luxury Goods, Xinhua Says

China to Place Consumption Tax on More Luxury Goods, Xinhua Says

China will widen the scope of its consumption tax to include more luxury goods, the official Xinhua News Agency reported, a sign that some high-end brands may become more expensive for purchasers on the mainland. The Asian nation is also targeting goods that cause heavy pollution or use excessive levels of energy for consumption tax adjustments, Xinhua said on its official microblog today. The news agency cited a report by China’s finance minister Lou Jiwei to the Standing Committee of the National People’s Congress. Read more of this post

China Urban Migrants’ Cost Seen at Least $6.8 Trillion

China Urban Migrants’ Cost Seen at Least $6.8 Trillion: Economy

China must spend at least 41.6 trillion yuan ($6.8 trillion) over two decades to integrate rural workers living in cities and towns so the country realizes benefits of urbanization, a United Nations report said. Spending may exceed 75 trillion yuan in a scenario with a higher rate of investment to improve living conditions and housing quality, according to the report released yesterday in Beijing. The study’s baseline assumptions are for the urban population to rise to 976 million in 2030 from 666 million in 2010 and integrate about 210 million migrant workers. The report quantifies the urbanization challenges faced by Communist Party leaders as they prepare for a November meeting to discuss deepening policy reforms amid an economic slowdown. Officials are considering changes to the hukou residence-registration system that excludes migrant workers from taking advantage of schools and pension benefits in cities. Read more of this post

After mega-LBO boom, a massive private equity cleanup

After mega-LBO boom, a massive private equity cleanup

3:31am EDT

By Greg Roumeliotis

NEW YORK (Reuters) – According to Blackstone Group LP’s (BX.N: QuoteProfileResearchStock Buzz) books, the private equity firm’s investment in Hilton Worldwide Inc was worth 50 percent more this year than when it took the international hotel chain private in 2007. While that might not seem like much compared to private equity’s historical record of doubling or tripling its investments, it is a remarkable turnaround for a $26.7 billion deal that has come to epitomize the leveraged buyout boom and bust of the past decade. Hilton is one of many cleanup acts that have been quietly going on in the world of private equity, as the industry atones for a debt binge in the years before the financial crisis. Many of the largest buyouts from 2005 to 2008 were based on revenue and profit expectations that proved too optimistic when the recession hit. Companies such as casino operator Caesars Entertainment Corp (CZR.O: QuoteProfileResearchStock Buzz) and Texas utility Energy Future Holdings were saddled with huge piles of debt and had difficulty meeting interest payments when business declined. Read more of this post

Suntech Directors Quit Saying Solar Maker Has No Business Plan

Suntech Directors Quit Saying Solar Maker Has No Business Plan

Suntech Power Holdings Co. (STP), the Chinese solar manufacturer whose main unit was pulled into bankruptcy earlier this year, said three directors including the former chairwoman quit saying the company had no business plan. Susan Wang, Julian Worley and Zhizhong Qiu resigned on Aug. 21, saying they weren’t provided with information they needed to fulfill their responsibilities, the Wuxi, China-based company said today in a statement. Michael Nacson replaced Wang as chair, who took the post in March, Suntech said. The resignations highlight the divisions that have plagued the company’s management and come less than six months after Suntech founder Shi Zhengrong was ousted as chairman. Nacson was appointed to the board last month by Suntech’s bondholders. Read more of this post

The small start-ups are as vital as the stars

August 27, 2013 4:37 pm

The small start-ups are as vital as the stars

By Luke Johnson

In the 19th and 20th centuries, Britain and the US were dynamic and open to novelty

Are entrepreneurs freaks of nature? Jim Clifton thinks so. He is the boss of research firm Gallup, and recently wrote about studies it is undertaking to find those especially talented individuals who can build the next Google, Ryanair or Bloomberg. Gallup estimated that such “super-entrepreneurs” number just three out of 1,000 across a sample population. These are the risk-takers capable of founding so-called gazelle companies: the fastest-growing breakthrough organisations that create a high proportion of the new jobs and genuine innovation in an economy. Read more of this post

China companies feel the investment hangover

Last updated: August 27, 2013 5:10 pm

China companies feel the investment hangover

By Simon Rabinovitch in Qujing


Wooden carvings of two elephants and an eagle, meant to symbolise wisdom and prosperity, flank the entrance to the Chinese chemical producer Yunwei. Today, they suggest a very different interpretation: a lumbering debt load and scavengers picking over the company’s scraps. “Lots of Chinese companies rushed to expand, to be the biggest in the world. This was a source of great pride. Now we see it as a headache,” says a soft-spoken Yunwei executive, back from a business trip where he was trying to sell more of the hard black coking coal piled high in the company’s storage facility in Qujing in the southwestern province of Yunnan. Read more of this post

Bulging bad debts give China a new banking dilemma; If China is to rebalance, savers cannot foot the bill

August 27, 2013 5:15 pm

Bulging bad debts give China a new banking dilemma

By Paul J Davies

If China is to rebalance, savers cannot foot the bill

There are two pieces of received wisdom that open and close almost any conversation about China’s banks. Firstly, they face a looming bad debt problem that will make the 2008 US banking bust seem like a bugle before a foghorn. Secondly, this doesn’t matter because the Chinese do things differently – any bad debts can be simply magicked away. China has form on this front. In the late 1990s a piece of apparently costless circular financing took a big chunk of bad debts from the four largest banks and parked them at their original value in four specially created bad banks, or “asset management companies”. These were funded in full mostly by the banks themselves via the Ministry of Finance. Read more of this post

It’s okay to hate small talk

It’s okay to hate small talk

ON AUGUST 27, 2013

Do you hate small talk? If you do, you’re definitely not alone, perhaps not even in the minority, and yet many people feel guilty about disliking meaningless conversation. We are so conditioned to view social behavior as an absolute good that avoiding small talk is considered rude. This is part of something I call “the tyranny of extroverts,” a set of expected behaviors that are assumed to be superior, simply because they are louder or more visible. As someone who despises small talk, I’d like to debunk the myth that it is necessary or even useful. Read more of this post

The One Thing You Need To Know To Be A Great Manager: discover what is unique about each person, and capitalize on it

The One Thing You Need To Know To Be A Great Manager

JENNA GOUDREAU AUG. 27, 2013, 2:53 PM 3,981 3


Marcus Buckingham aimed in 2005 to boil countless professional insights down to one piece of advice for managers, leaders, and individual contributors. His best-selling book, “The One Thing You Need to Know: …About Great Managing, Great Leading, and Sustained Individual Success,” pulled this off, and it holds up remarkably well.  For managers, Buckingham says the most important thing is to discover what is unique about each person, and capitalize on it.  Read more of this post

What Happens When Co-Workers Are Nasty to Each Other; Hostile Work Environments Cost Companies in Productivity, Creativity; Using the ‘No Venting’ Rule

August 27, 2013, 8:07 p.m. ET

What Happens When Co-Workers Are Nasty to Each Other

Hostile Work Environments Cost Companies in Productivity, Creativity; Using the ‘No Venting’ Rule


Workers have new tasks on their to-do list: Say hello to colleagues. Don’t forget to smile. Companies may be reluctant to admit their offices are anything less than pleasant, but incivility—think belittling barbs or gruff responses—can lead to lost productivity, creativity and talent. As employees who are forced to do more work with fewer resources become more stressed, the rudeness is ramping up. So firms are urging staffers to play nice. Read more of this post

Hedge Funders Are All a Little Nuts; Sleepless nights, minds racing, working out both sides of all arguments, second guessing. Stay sane? No gain.

August 27, 2013, 6:56 p.m. ET

Hedge Funders Are All a Little Nuts

Sleepless nights, minds racing, working out both sides of all arguments, second guessing. Stay sane? No gain.


Hedge funders are in the news. Carl Icahn tweets about his dinner with Apple‘sAAPL -2.86% Tim Cook. Dan Loeb tussles with George Clooney. Bill Ackman says Herbalife is a pyramid and shorts the stock; George Soros goes long. If you want to understand the guys who run hedge funds, you first have to realize that they—we—are a little nuts. The trick to running a hedge fund is to drink from the fire hose of information, take it all in, figure out what everyone else knows and then position your portfolio to benefit when everyone else is inevitably wrong. This is no simple feat. Sleepless nights, second guessing, minds racing, almost a split personality working out both sides of all arguments. Read more of this post

Oceans Storing Earth’s Excess Heat in Leaked UN Report

Oceans Storing Earth’s Excess Heat in Leaked UN Report

The oceans are becoming a repository for almost all the Earth’s excess heat, driving up sea levels and threatening coastlines, according to a leaked draft of the most comprehensive United Nations report addressing climate science. Temperatures in the shallowest waters rose by more than 0.1 degrees Celsius (0.18 degrees Fahrenheit) a decade for the 40 years through 2010, the study found. Average sea levels have increased worldwide by about 19 centimeters (7.5 inches) since 1901 and researchers said it’s “very likely” the system of ocean currents that includes the Gulf Stream will slow in the coming decades. Read more of this post

Boy blinded as eyes stolen by a ruthless organ trafficker

Boy blinded as eyes stolen
Wednesday, August 28, 2013


A six-year-old boy had his eyes gouged out, blinding him for life, in a gruesome attack that may have been carried out by a ruthless organ trafficker. Family members found the boy covered in blood some three to four hours after he went missing while playing outside. The child’s eyes were found nearby but the corneas were missing, reports said, implying that an organ trafficker was behind the harrowing attack in Shanxi province. Read more of this post

If the Billabong brand is worth nothing, which brand will be next?

Michael Bleby Reporter

If the Billabong brand is worth nothing, which brand will be next?

Published 28 August 2013 12:17, Updated 28 August 2013 13:25

Not quite washed up – but Billabong has some recovery work to do on its iconic brand. Photo: Glenn Hunt

Billabong is not the only Australian retail brand at risk of going under in an era when online and global competitors are circling the country’s traditional consumer businesses, as even iconic names need to support a business and make it profitable. The surfwear company’s much-reported $636 million writedown this week on the value of brands including Billabong and Element shows how far the business has fallen, even from as recently as May, when Billabong ranked at number #43 in a list of Australia’s 100 most valuable brands by consultancy Brand Finance. Read more of this post

The day Gordon Merchant’s Billabong dream crumbled to nothing

James Thomson Editor

The day Gordon Merchant’s Billabong dream crumbled to nothing

Published 27 August 2013 11:59, Updated 28 August 2013 07:40


Gordon Merchant’s Billabong pain continues to mount. Hidden within Billabong International’s ugly profit result which was announced on Tuesday morning is an awful little fact: Billabong now thinks the flagship surfwear brand that Gordon Merchant started from his kitchen table in 1973 is worth nothing. Billabong lost $859.5 million in 2013 – taking losses in the last two years to $1.13 billion – after writing off $867.2 million from the value of its brands and goodwill. Read more of this post

BMW Owners Vent Anger at Months-Long Wait for Spare Parts

BMW Owners Vent Anger at Months-Long Wait for Spare Parts

South African Neels Kilian was as proud as any BMW owner could be when he got his new 3-Series in May. After getting into an accident a few weeks later and still waiting today for repairs, he’s reconsidering that sentiment. The resident of Gauteng, South Africa, needs a rear fender replaced before the car is driveable again. In the meantime, he’s still making a monthly payment of 8,000 rand ($770) and has to bear additional costs for work travel because he hasn’t been offered a loaner. Read more of this post

Alipay Stops All Offline POS Service Cornered by UnionPay

Alipay Stops POS Service Cornered by UnionPay

08-27 15:25 Caijing

Alipay said last month it will invest 500 million yuan (79.4 billion U.S. dollars) over three years to provide 60,000 POS terminals. Alipay, the online payment arm of China’s e-commerce giant Alibaba Group, announced today it will stop all cash-on-deliver service, implying that the decision was made amid pressure from the China UnionPay, the only domestic bank card organization in the country. “Alipay will stop all offline POS (point-of-sale) businesses because of some reasons as everybody knows,” Alipay said in a post today on its official microblog account on Sina Weibo, “We are sorry for the inconvenience to users and partners, however, we’ll never here in the exploration of innovative payment.” Read more of this post

China SUV Maker Has Great Wall to Climb

August 27, 2013, 11:00 a.m. ET

China SUV Maker Has Great Wall to Climb



China can boast that it is home to the world’s most profitable car maker. But the company may soon run out of open road. Hong Kong-listed Great Wall Motor GWLLY +8.01% has the fattest margins in the auto world, says Sanford C. Bernstein’s Max Warburton. It posted an operating profit margin of 18.4% in the first half of 2013. That tops even Ferrari, which was at 14.9% in the same period. Great Wall’s secret sauce is that sport utility vehicles, which typically yield higher profits, account for half of the autos it sells. In contrast, SUVs on average make about a third of an auto maker’s volumes in North America, according to research firm LMC Automotive. That sector is about a fifth in China. Read more of this post

China’s Top Telecom Operators to Cut Fees with Upcoming Anti-Trust Probe

China’s Top Telecom Operators to Cut Fees with Upcoming Anti-Trust Probe

08-27 11:43 Caijing

The NDRC has delivered a combined fine of roughly 1.5 billion yuan so far this year in a string of anti-trust probes. China’s top telecom operators may further cut mobile and Internet service fees after the lucrative industry became one of the latest targets by the county’s economic planner in its antitrust campaigns. The National Development and Reform Commission (NDRC) will work together with the Ministry of Industry and Information Technology to push downward the country’s telecom charges in the rest months of the year, the Economic Information Daily reported. Read more of this post

Chinese entrepreneurs, unsettled, speak out for reform; Many business owners say they are forced to bribe local party officials to gain patronage and political protection

Chinese entrepreneurs, unsettled, speak out for reform

By Simon Denyer, Published: August 26

BEIJING — When Chinese property magnate Zeng Chengjie was executed for fraud in July, it sent a chill through the business community here. Zeng’s real misstep, according to associates and supporters, was not the crime he was charged with — defaulting on loans from ordinary citizens — but backing the wrong political horse: When his patron, a provincial governor, was jailed for corruption, Zeng found himself stranded, they say, a victim of China’s shifting political sands. Read more of this post

Everbright Accused of Insider Trading

Everbright Accused of Insider Trading

08-27 15:51 Caijing

The Everbright fat finger incident that occurred Aug. 16, which is a first since the inception of China’s capital market, will likely hinder business innovation by domestic dealers.

By staff reporters Qu Yanli and Liu Wenju

The Shanghai Composite Index jumped 5.96 percent in a matter of seconds at around 11 a.m. on Aug. 16, 2013. The unprecedented flash rally drove a number of blue-chip stocks from the banking and oil industries, which have been sluggish for a long time, up by their daily limit. Investors, hoping to get a piece of the action, rushed into the market, amid a series of rumors and speculation over the cause of the spike. Supervisory authorities were soon alerted to the incident. Read more of this post

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