15 ms·

Investors Spooked by China

44 points by tilt 15y ago

mark_l_watson 15y ago
The title of the article is misleading: it was mostly about Internet companies in China. That said, I think any serious predictions about the global economy right now is silly. Europe could crash (even with more bailouts of Greece, etc.), the USA could crash (not as likely) or China could crash due to social upheaval, etc. Everything could be OK for years, who knows, and the interconnected financial world seems like a study case for chaos theory.
chugger 15y ago
I would never invest my money in China or any chinese-owned company. Corruption,shady accounting practices,etc. Justice Department probing Chinese accounting http://www.reuters.com/article/2011/09/30/us-china-usa-accounting-idUSTRE78S3QM20110930 http://www.reuters.com/article/2011/09/30/us-china-usa-accou...
- rajpaul 15y ago
  I have a co-worker who's from mainland China. He tells me that many Chinese feel that the stock market is immature, corrupt, and rigged to work against the "average joe". The perception seems to be that unless you know someone and can get inside information, you can't make money. Instead, average people put their money into real-estate (1) or put it to work in private lending (2). And then there are the pig farmers who speculate in base metals (3). My coworker didn't mention them though. 1: http://blogs.ft.com/beyond-brics/2011/02/03/chinese-property-bubble-a-myth/ http://blogs.ft.com/beyond-brics/2011/02/03/chinese-property... 2: http://www.reuters.com/article/2011/09/29/china-economy-runaway-bosses-idUSL3E7KS1B120110929 http://www.reuters.com/article/2011/09/29/china-economy-runa... 3:http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a1B_ZBQfii8Q http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a...
rajpaul 15y ago
Sino-Forest was a $5 billion dollar company that was listed on the Toronto stock exchange until recently trading was halted on the stock. http://en.wikipedia.org/wiki/Sino-Forest_Corporation http://en.wikipedia.org/wiki/Sino-Forest_Corporation Difficult economic times always expose fraud. If the economic situation continues to deteriorates I think we'll see more Sino-Forests. "It's only when the tide goes out that you learn who's been swimming naked." Warren Buffett
- anamax 15y ago
  > "It's only when the tide goes out that you learn who's been swimming naked." Warren Buffett You do realize that that doesn't make sense, right? (The tide going out doesn't change the exposure for people who are swimming.) When the tide goes out, you do find out which boats are anchored in water that is too shallow, but that doesn't let Buffett be "naughty".
  - deleted 15y ago
    [deleted]
hunvreus 15y ago
"A series of alleged accounting frauds this year at little-known Chinese companies listed in the U.S. has triggered a sharp shift in sentiment among investors" I think the headline and even overall tone are misleading; things are however not always 100% kosher with accounting in China, hell even when they are legal and straight according to regulations they are disturbingly messy for any Western accountant. That being said, big US companies like Groupon commit their irregularities in broad day light and does not seem to shake investors that much.
- chugger 15y ago
  Corruption is the norm in China. Pointing out Groupon's problems doesn't change that fact.
  - Volpe 15y ago
    Really, corruption is the norm in China. More so than the rest of the world? Have any evidence of that? that isn't anti-china agg-prop? Business is clearly done differently in china, and there is a lot of protectionism, but that is not unique to China, I am curious why it is called out so much?
    - PakG1 15y ago
      I live here in China right now, and I can safely tell you that a lot of Chinese citizens don't believe in their own systems due to the corruption. As one co-worker told me, "If things get really bad, you can always go home. But we have to stay here." I think you have to live here to understand the level of fear around corruption and the lengths to which the government is going in order to stamp it out (not necessarily successfully). This is a country where an executive can get the death sentence for tainted food products. It's happened as recently as this past summer.
      - Volpe 15y ago
        My point was about: why is china called out so much. Do U.S citizens feel that there is no corruption in the U.S? > I think you have to live here to understand the level of fear around corruption I'm quite familiar with the attitudes within china in relation to corruption, and have had friends who have been arrested and "disappeared" for corruption.

44 points by tilt 15y ago

The title of the article is misleading: it was mostly about Internet companies in China. That said, I think any serious predictions about the global economy right now is silly. Europe could crash (even with more bailouts of Greece, etc.), the USA could crash (not as likely) or China could crash due to social upheaval, etc. Everything could be OK for years, who knows, and the interconnected financial world seems like a study case for chaos theory.

chugger 15y ago

I would never invest my money in China or any chinese-owned company. Corruption,shady accounting practices,etc. Justice Department probing Chinese accounting http://www.reuters.com/article/2011/09/30/us-china-usa-accounting-idUSTRE78S3QM20110930 http://www.reuters.com/article/2011/09/30/us-china-usa-accou...

rajpaul 15y ago
I have a co-worker who's from mainland China. He tells me that many Chinese feel that the stock market is immature, corrupt, and rigged to work against the "average joe". The perception seems to be that unless you know someone and can get inside information, you can't make money. Instead, average people put their money into real-estate (1) or put it to work in private lending (2). And then there are the pig farmers who speculate in base metals (3). My coworker didn't mention them though. 1: http://blogs.ft.com/beyond-brics/2011/02/03/chinese-property-bubble-a-myth/ http://blogs.ft.com/beyond-brics/2011/02/03/chinese-property... 2: http://www.reuters.com/article/2011/09/29/china-economy-runaway-bosses-idUSL3E7KS1B120110929 http://www.reuters.com/article/2011/09/29/china-economy-runa... 3:http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a1B_ZBQfii8Q http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a...

rajpaul 15y ago

Sino-Forest was a $5 billion dollar company that was listed on the Toronto stock exchange until recently trading was halted on the stock. http://en.wikipedia.org/wiki/Sino-Forest_Corporation http://en.wikipedia.org/wiki/Sino-Forest_Corporation Difficult economic times always expose fraud. If the economic situation continues to deteriorates I think we'll see more Sino-Forests. "It's only when the tide goes out that you learn who's been swimming naked." Warren Buffett

anamax 15y ago
> "It's only when the tide goes out that you learn who's been swimming naked." Warren Buffett You do realize that that doesn't make sense, right? (The tide going out doesn't change the exposure for people who are swimming.) When the tide goes out, you do find out which boats are anchored in water that is too shallow, but that doesn't let Buffett be "naughty".
- deleted 15y ago
  [deleted]

hunvreus 15y ago

"A series of alleged accounting frauds this year at little-known Chinese companies listed in the U.S. has triggered a sharp shift in sentiment among investors" I think the headline and even overall tone are misleading; things are however not always 100% kosher with accounting in China, hell even when they are legal and straight according to regulations they are disturbingly messy for any Western accountant. That being said, big US companies like Groupon commit their irregularities in broad day light and does not seem to shake investors that much.

chugger 15y ago
Corruption is the norm in China. Pointing out Groupon's problems doesn't change that fact.
- Volpe 15y ago
  Really, corruption is the norm in China. More so than the rest of the world? Have any evidence of that? that isn't anti-china agg-prop? Business is clearly done differently in china, and there is a lot of protectionism, but that is not unique to China, I am curious why it is called out so much?
  - PakG1 15y ago
    I live here in China right now, and I can safely tell you that a lot of Chinese citizens don't believe in their own systems due to the corruption. As one co-worker told me, "If things get really bad, you can always go home. But we have to stay here." I think you have to live here to understand the level of fear around corruption and the lengths to which the government is going in order to stamp it out (not necessarily successfully). This is a country where an executive can get the death sentence for tainted food products. It's happened as recently as this past summer.
    - Volpe 15y ago
      My point was about: why is china called out so much. Do U.S citizens feel that there is no corruption in the U.S? > I think you have to live here to understand the level of fear around corruption I'm quite familiar with the attitudes within china in relation to corruption, and have had friends who have been arrested and "disappeared" for corruption.