HANGZHOU – Two brothers and their father were sentenced to death on Monday for cheating 15,000 investors out of over $1.1 billion in east China’s Zhejiang province. Ji Wenhua, president of the Yintai Real Estate and Investment Group, was sentenced to death for the crime
Dan Collins CMR “Gold going to $7,000″, an article today in the Chinese media is going viral and one of the most viewed articles in the financial press. The article references American Jim Rickards and his concept of comparing inflation-adjusted gold prices. Most Chinese economists
It’s not uncommon for the large Wall Street banks to combine in shorting an entire years supply of minded silver in a single day.The same goes for all commodities. Endless paper printing getting funneled to Wall Street has destroyed all real price discovery. Capitalism fails
Chanos is back! His short China thesis is very long in the tooth but as it goes with most ego maniacs he cannot accept failure or that fact that he might be wrong. Being wrong on an entire country where you have never visited and
Dan Collins CMR When I moved to China back in 1998 I was surprised to learn how highly the Chinese thought of America. Of course China was a much poorer place back then but coming from the Detroit area I couldn’t fathom where was all
You have to laugh at the whole “China will collapse crowd” on CNBC and even respected sites like Zero Hedge. Personally, I love the Zerohedge stuff. They understand the ponzi-financial fraud-money printing-welfare state economy that now envelops the West. But China is a real economy,
D.Collins CMR China’s cloud computing market is expected to be worth 37.2 billion yuan (US$6 billion) in 2017 as demand for the service grows, the Chinese-language China Securities Journal reported on Friday. Some American tech companies are watching the largest and fastest I.T. market in
Breaking News today that a Chinese vessel as rammed and sunk a Vietnamese fishing boat. All countries in the South China Sea and East China Sea are using fishing boats in a game of cat-and-mouse to challenge each other on their respective areas. This time
Scared of losing the Chinese tourist dollar, France has relented to China and will allow Chinese police on the streets of Paris. More signs of the benefits of third-world immigration into the West to the point where cultural breakdown has occurred and law and order
Gold has been flowing East for a decade. When the West wakes up to the fact that their gold is gone, they will no longer have sound money with which to back a currency. The world has only been off a gold standard since 1971
From the China Daily… BEIJING – China will lower banks’ reserve requirement ratio (RRR) by 0.5 percentage points starting May 18, the country’s central bank announced Saturday. The cut, the second of its kind this year, will drop the RRR for the country’s large financial
Is China tweaking its numbers on GDP? Probably. For twenty years Chinese GDP roughy came in right on the governments target. This would be an almost magical performance record considering economists in the West can predict absolutely nothing. For years, China most likely lowered GDP
Japan will learn the hard way that destroying your currency is not an viable economic strategy. Shanghai Daily JAPAN posted a record 1.63 trillion yen (US$17.4 billion) trade deficit in January as rising exports trailed surging imports of crude oil and gas due to rising
American GDP: The Fantastic Fiction of American Economic Strength By Dan Collins Is the U.S. economy still the most powerful in the world? That is what we are told as the United States does have by far the world’s largest Gross Domestic Product (GDP). In
Youtube, Facebook, and Twitter are all blocked in China. They have algorithms in place to disrupt Google service as well which makes it very annoying even using Google here. You get many dead links when the algo’s are working. Despite blocking American companies in China,
Greek banks are preparing contingency plans for a possible “bail-in” of
depositors amid fears the country is heading for financial collapse,
bankers and businesspeople with knowledge of the measures said on Friday.
The plans, which call for a “haircut” of at least 30 per cent on deposits
above €8,000, sketch out an increasingly likely scenario for at least one
bank, the sources said.
A Greek bail-in could resemble the rescue plan agreed by Cyprus in 2013,
when customers’ funds were seized to shore up the banks, with a haircut
imposed on uninsured deposits over €100,000. It would be implemented as part
of a recapitalisation of Greek banks that would be agreed with the country’s
creditors — the European Commission, International Monetary Fund and European
Central Bank. “It [the haircut] would take place in the context of an overall
restructuring of the bank sector once Greece is back in a bailout programme,”
said one person following the issue. “This is not something that is going to
Eurozone officials said no decision had been taken to wind up any Greek banks
or initiate a bail-in of depositors, a process that would be started by the
ECB declaring the banks insolvent or pulling emergency loans.
Greece’s banks have been closed since Monday, when capital controls were imposed
to prevent a bank run following the leftwing Syriza-led government’s call for
a referendum on a bailout plan it had earlier rejected. Greece’s highest court
rejected an appeal by two citizens on Friday who had asked for the referendum
to be declared unconstitutional.
Depositors can withdraw only €60 a day from bank ATM cash machines, while
requests to transfer funds abroad have to be approved by a special finance
ministry committee in co-operation with the Greek central bank.
Two senior Athens bankers said the country had only enough cash to keep ATMs
supplied until the middle of next week. This followed the ECB’s decision this
week not to increase Greece’s allocation of emergency liquidity assistance
after the bailout programme ended on June 30.
The outcome of Sunday’s referendum will determine how quickly Greece wraps
up a new bailout agreement with creditors, a top Greek banker said.
Want China Times
With an expected completion of fresh fundraising to the tune of US$2 billion, China’s leading chauffeur services app Didi Kuaidi is preparing to extend its operations to the US, according to JMedia, citing insiders.
JMedia reported that Didi Kaidi is recruiting staff for its projected US operation, which will include an R&D center.
The US project appears to be part of an expansion plan following a last round of fundraising which will bring in upwards of US$2 billion. This is even higher than the US$1.5 billion in fundraising one by Uber, the leading app-based chauffeur service provider worldwide.
The fresh funds are expected to enable Didi Kuaidi to consolidate its leading status in the Chinese market, fending off Uber, which launched its China services in Shenzhen in July 2014 and has extended the span of its service to six cities in total, including Shanghai. “In terms of the number of services, our scale has been 10 times that of our rival in China and three times worldwide,” said Chen Wei, CEO of Didi Kuaidi.
The company’s statistics report that daily orders for its driver services have topped 3 million, up from 1 million in early May, on top of 3 million taxi-hailing services, the latter for 99% market share.
Insiders said that in addition to business expansion, the US project will greatly boost the company’s technological level. On top of its plan to set up an institute of mechanical learning, which will augment its data processing capability, it is also expected to help it provide convenient, efficient and environmentally friendly services.
The global private equity market will expand to about $7 trillion by 2020 from half that in 2013 as investors from sovereign wealth funds to individuals seek alternatives to stocks and bonds, according to the consulting firm PwC.
The industry will reach $6.5 trillion to $7.4 trillion depending on factors such as monetary policy and gross domestic product growth, PwC said in a report being released Monday, compared with $3.6 trillion in 2013. The firm expects alternative assets, which also include real estate and hedge funds, will swell to $13.6 trillion to $15.3 trillion, from $7.9 trillion two years ago.
“It’s really about broadening the client base,” Mike Greenstein, PwC’s global alternatives leader, said in an interview. “That’s in large part fueled by the growth of the sovereign investors and the emerging markets in alternative assets, as well as the retail channel.”
Managers of alternative assets pitch the investments as a way of diversifying holdings and decreasing correlation with stock and bond markets. Blackstone Group LP, the world’s biggest alternatives manager, has expanded assets under management by 18 percent annually for the past three years, in large part by attracting more money from sovereign wealth funds, wealthy individuals and family offices. The largest firms will also benefit from increasingly replacing banks in capital-market activities, according to PwC.
If Blackstone maintains its 2013 market share and alternative assets rise to $15.3 trillion, the New York-based firm will command about $515 billion, compared with $310 billion today.
PwC expects real estate assets to expand to $2.5 trillion to $2.9 trillion from $1.4 trillion in 2013. Hedge funds may swell to $4.6 trillion to $5 trillion, from $2.9 trillion.
The Shanghai Composite closed the day with a 5.5 per cent gain, having
at one point been as much as 5.1 per cent lower. The Shenzhen index
also reversed course to rise 4.8 per cent, while the small-cap ChiNext
board swung from a 8.1 per cent drop in the morning session to finish
6.4 per cent higher.
The gains snap a losing streak that has wiped more than $2tn off the
market capitalisation of companies listed on China’s two stock exchanges
since June 12. Earlier on Tuesday, the Asset Management Association of
China issued a statement titled: “Beautiful sunlight always comes after
wind and rain,” urging members to “seize the investment opportunity”
following a near 25 per cent fall in the Shanghai market over the past
The government itself has also been intervening to soothe fears of a stock
market collapse. Late on Monday, China’s securities watchdog said that an
“excessively fast correction” was not healthy, while the finance and social
security ministries published draft rules that would permit the state
pension fund to buy stocks. Such a move could allow up to Rmb600bn
($97bn) to enter the market.
Industrial Parks, high speed trains, just a few of the many next century
innovations that have passed the U.S. by. We still got Detroit though.
Want China Times
Chinese businesspeople have successfully built industrial parks around the world which have attracted the government’s attention and been integrated into foreign policy making, according to the Economic Observer.
The businesses initially began setting up industrial parks abroad to reduce costs by introducing local production as a means to expand overseas markets, the paper said.
Li Zhipeng, an official at the Ministry of Commerce’s Chinese Academy of International Trade and Economic Cooperation, said Chinese companies set up an industrial trade processing park in Cuba in as early as 1998.
Home appliance maker Haier established its first overseas industrial park in southern California in 1999 and another one in Lahore, Pakistan two years later.
Today, there are over 100 industrial parks set up by Chinese companies in foreign countries, and the 16 largest of these parks contributed over 10 billion yuan (US$1.60 billion) in investment and created over 40,000 jobs as of the end of 2014, data from the Chinese Ministry of Commerce showed.
Overseas industrial parks set up prior to 2005 were mainly individual efforts made by the companies themselves, while more organized expansion began in 2006, after the Ministry of Commerce made the establishment of overseas economic cooperation zones a key task, Li added.
In 2006, Haier’s industrial park in Lahore was renamed the Haier-Ruba Economic Zone and expanded beyond home appliance manufacturers to include the auto, construction materials and textile sectors.
Hu Hai, president of Holley Group’s overseas business, said the industrial park model allows Chinese companies to join forces in their overseas expansions and helps reduce risks.
Holley’s parks in Thailand, Mexico and Egypt demonstrate how Chinese companies have become more adaptive to local cultures and incorporated into local communities, said the report.
“The first generation of parks were only aimed at meeting the demand of businesses setting up plants there,” Hu said. “The second generation of parks are not just about preparing the site, building roads and bringing in water and electricity, but also need to consider integration with local communities.”
By working with local partners, Holley is able to have more influence on the urban planning of governments in Mexico, said the report.
Industrial parks have become a model adopted by the Chinese government in its push for the Silk Road Economic Belt and the 21 Century Maritime Silk Road (Belt and Road) initiatives, said the report.
Belarus and China announced an industrial park to be built in the eastern European country in 2011, the largest economic cooperation project between the two countries. President Xi Jinping marked it as a model for Belt and Road development between China and Europe when he visited the former Soviet nation in May.
China and Russia are also working together on a Silk Road industrial park project, which will place industrial parks in the Chinese province of Shaanxi and Russian city of Skolkovo under a single managing body.
The aggressively nationalistic Chinese tabloid Global Times claims that the Japanese prime minister, Shinzo Abe, allegedly admitted that he was preparing for a war with China, criticized the United States and South Korea, and brushed off the controversy over wartime “comfort women” at a media function earlier this month.
Citing weekly Japanese magazine Shukan Gendai, Global Times said Abe made the “shocking” comments at an informal function attended by domestic media heads at an upmarket hotel in Tokyo at the start of the month.
After downing a glass of red wine, Abe is alleged to have kicked off a candid rant by heavily criticizing opposition leader Katsuya Okada from the Democratic Party of Japan (DPJ), slamming the former deputy prime minister for regularly spewing “pointless nonsense,” before adding that the DJP is “finished.”
Abe is then said to have admitted that his efforts to fully lift Japan’s postwar ban on collective self-defense — the right to go to war to support an ally even if Japan is not under direct threat — was indeed aimed at China, with which Japan is engaged in a territorial dispute over the Diaoyutai islands (Senkaku to Japan, Diaoyu to China) in the East China Sea.
The article claimed that Abe went as far as admitting that he was making plans for a possible war with China, adding that it is part of Tokyo’s strategy to side with the US to target China’s assertive behavior in the South China Sea, where it is embroiled in territorial disputes with several neighbors.
The conservative prime minister was also allegedly full of complaints about President Barack Obama of the US, according to Japanese website Litera, as he expressed anger over Obama’s failure to garner enough votes on June 16 to fast-track the Trans-Pacific Partnership. “I really don’t know what the hell the US is doing, what Obama is doing!” he allegedly said. The Republican-controlled Senate subsequently passed the Trade Promotion Authority bill on June 24 granting the president authority over trade pacts.
On the 50th anniversary since the normalization of postwar ties between Japan and South Korea, Abe allegedly gloated that he was right to wait for Seoul to make the first move to request a meeting of leaders to celebrate the event. Recent polls showed that mutual distrust and dissatisfaction between the two countries was probably at its highest since 1965.
Perhaps the most shocking allegation reported was that Abe remains unrepentent over the issue of compensation for former “comfort women” — the tens, probably hundreds of thousands of women forced into sexual slavery by the Japanese military during World War II — as he was said to have stated that the problem could easily be resolved with 300 million yen (US$2.44 million).
Those in attendance were allegedly asked not to report on Abe’s more “impactful” comments, Litera said, but noted that the news was nevertheless leaked to tabloids and websites.
Regardless of whether they are true or not, the allegations compound what has already been a difficult month for Abe. On June 23, the prime minister was heckled and showered with cries of “Go home!” at a ceremony marking the 70th anniversary of the bloody Battle of Okinawa. Residents of the southern island acrhipelago, which lost a third of its population during the US invasion, have long resented being forced to host thousands of US troops and military facilities occupying nearly a fifth of the main island’s area.
More than a third of automated teller machines across Greece ran out of cash
today before they were replenished as Greeks pulled out there cash. There is
a full on bank-run going on now in the country.
The ECB is being accused of causing the bank-run by issuing a report this week
warning of an “uncontrollable crisis” if there is no creditor deal, followed by
soaring inflation, “an exponential rise in unemployment”, and a “collapse of
all that the Greek economy has achieved over the years of its EU, and especially
its euro area, membership” The ECB is risking another European and possibly a
global contagion as a negotiating tactic.
The Greek government has called a referendum. They have not accepted the bailout
proposal of European creditor power structure. The second Greek programme will
therefore expire midnight on Tuesday. Greece will be without a programme and
without market access from Wednesday.
The European Central Bank will now begin to reduce the liquidity lifeline for
Greece, the so-called Emergency Liquidity Assistance.
So we are very likely to see the forced imposition of capital controls in Greece
and the eventual re-introduction of the Greek Drachma. The problem…who wants
Greeks still have a card they can play. You threaten to introduce an Renminbi
backed Drachma with a fixed exchange rate. You get China to back you on this
plan, which they would love to do. You can be assured, the U.S. would be on the
phone that same day demanding the ECB support Greece instead of throwing them
on the fire of economic destruction in the hopes of buying up Greek companies
and beach apartments on the cheap.
On June 25, a representative from the Shanghai Gold Exchange announced that they are planning on establishing a new physical gold price mechanism by the end of the year that will compete with London and the U.S. Comex. Expected to be denominated in Yuan, this new gold price platform comes less than 10 days after China became the first Asian country invited to be a part of the London gold fix, and unlike the U.S. Comex, will deal in direct physical gold sales rather than in paper futures and derivative contracts.
When the Shanghai Gold Exchange (SGE) opened in 2014, it set out to usurp the West’s control over gold and their pricing of gold through the paper markets. And in less than a year, the SGE has created the world’s largest gold fund, and is now ready to take over pricing and price discovery for the monetary metal. In fact, sources claim that right now premiums on large sales of gold bullion are ranging as high as $600 over the current paper spot price.
China will become the world’s biggest cross-border investor by the end of
this decade, with global offshore assets tripling from $6.4tn now to nearly
$20tn by 2020, according to new research.
While much of the total will be in the form of foreign exchange reserves
and portfolio investment, a growing share will come from direct Chinese
investment in developed western countries, according to a joint report by
the economic research firm Rhodium Group and the Berlin-based Mercator
Institute for China Studies.
Based on the historical experiences of other countries, China’s global stock
of outbound foreign direct investment (OFDI), which includes investing in
corporate mergers, acquisitions and start-ups, will grow from $744bn to as
much as $2tn by 2020.
The report’s projections are valuable because official cross-border OFDI
statistics from China and recipient countries are widely seen as being of
poor quality and do not give an accurate picture of real investment flows.
In barely a decade, Chinese OFDI has gone from virtually nothing to more than
$100bn year, launching it into the top three exporters of direct investment
globally. Europe in particular has welcomed the Chinese largesse with open
arms, especially in the wake of the global financial crisis and sluggish
eurozone economic growth.
But the report warned that surging Chinese investment would also require a
change in attitude from recipient markets and their politicians to take full
advantage of the opportunities and contain the risks.
“Characteristics such as the size, growth and complementarity of the Chinese
economy create unique opportunities for Europe,” the report’s authors said.
“At the same time, some specific concerns that are related to the nature of
China’s political and economic system, for example subsidies, China’s
authoritarian political system and lack of openness to [foreign direct
investment], create particular challenges.”
While early Chinese investments focused on energy and natural resource assets
in developing countries, investors are increasingly looking to the US and Europe
for fresh opportunities. Between 2000 and 2014, Chinese companies spent €46bn
on 1,047 direct investments in the 28 EU countries, with most of the transactions
coming in the wake of the 2008-09 global financial crisis.
The UK is by far the biggest recipient of Chinese direct investment, with a
cumulative total of €12.2bn over that period. Germany is second with €6.9bn and
France third with €5.9bn. Following a drop in 2013 to €6bn, from more than €7bn
each year in 2011 and 2012, Chinese investment in Europe came surging back in
2014, hitting a record high of €14bn for the whole year.
Europe’s energy, automotive, food and real estate sectors attracted the most Chinese
money. Despite the recent sharp rise and heady predictions for Chinese outbound
investment in the future, the country is still playing catch-up.
“China is so unique and important because it is already a major global investor and
it has the potential to become the single most important driver of global FDI growth
over the next decade,” the report said.
While China is the world’s biggest trader of goods, its share of global financial
cross-border assets and liabilities barely reached 3.4 per cent by 2011.
Today, its stock of OFDI as a proportion of GDP stands at just 7 per cent, compared
to 38 per cent for the US, 20 per cent for Japan and 47 per cent for Germany.
One issue that could stymie the rise of Chinese investment is the ongoing difficulty international companies face trying to invest in China. “In terms of formal restrictions
to FDI, China is considered one of the least open countries among the G20 economies,”
the report’s authors said. “Moreover, there is rampant informal discrimination against
foreign companies as well.”
Another problem is that Chinese companies enjoy a range of state-provided subsidies,
including cheap capital and assistance from the Chinese government, when investing
abroad. By contrast, European companies are legally barred from receiving “state aid”
when bidding for assets within Europe.
Since the “state aid” restriction only applies to European companies, many Chinese
investors were able to outbid private European companies in competition for European
assets because of help from Beijing.
Russia was China’s largest supplier of crude oil for the first time on
record in May, as Moscow looks beyond Europe for customers and grows its
ties in the east.
The country leapfrogged Saudi Arabia, the world’s largest oil exporter,
sending almost 930,000 barrels a day to China, up 21 per cent since April,
according to customs data published on Tuesday.
Saudi Arabia dropped from the top spot to number three, below even Angola,
with sales falling to 722,000 b/d, down almost 43 per cent from the month
before. Sino-Russian ties have warmed as sanctions over the conflict in
Ukraine have strained Moscow’s relations with the west.
Analysts said the data were the result of a string of oil-for-loan deals
that China, which is in the process of overtaking the US as the world’s
biggest importer of crude, has signed with Russian oil companies including
“Russian imports are likely to stay high over the next several years as
these long-term crude supply contracts kick in,” said Amrita Sen, head of
oil research at Energy Aspects in London.
“By our records, which started in 2007, this is the first time Russia is
China’s top crude supplier,” she added.
The data can be volatile and still show Saudi Arabia as a major supplier to
China — the Kingdom’s April exports were the highest in three years. But the
latest import numbers illustrate how Russia, the largest exporter outside
the Opec cartel, is gaining ground.
Russian exports to China have more than doubled since 2010. The figures also
show how China is importing more from countries where it can bring its
financial muscle into the equation.
New Eastern Outlook
Why prop up your adversary? In what could be Russia’s next “yuanization”
move, its Finance Ministry has said it my issue Russian bonds denominated
in Chinese Yuan
Russia is about to take another major step towards liberating the Ruble
from the Dollar System. Its Finance Ministry just revealed it is considering
issuing Russian state debt in Chinese Yuan.That would be an elegant way to
decouple from the dependence and blackmail pressures from the US Treasury
financial terrorism operations while at the same time strengthening the
bonds between China and Russia–Washington’s worst geopolitical nightmare.
Russian Deputy Minister of Finance, Sergei Storchak, announced that his
ministry is making a careful study of what would be required to issue Russian
bonds denominated in Chinese Yuan. The latest news is part of a long-term
strategy between Russia and China that goes at the heart of American hegemony—
the role of the dollar as the leading world central bank reserve currency.
The dollar is used in some 60% of central bank reserves today. The second largest
is the Euro. Now clearly China is carefully moving, as the world’s largest trading
nation, to create its Renminbi or Chinese Yuan as another major reserve currency.
That has huge geopolitical implications.
So long as the US dollar is leading reserve currency, the world must de facto buy
US dollar Treasury bonds for its reserves. That has allowed Washington to have budget
deficits since 1971 when the dollar left the gold exchange standard.In effect, China,
Japan, Russia, Germany—all trade surplus countries, finance Washington’s deficits that
allow her to makewars around the world.
It is a paradox that Russia and China at least, are determined to end as soon as
possible. Last year Russia and China signed enormous 30-year energy deals for
delivery of Russian oil and gas to China. The payments will be in local currencies
not in dollars. Already in 2014 settlement in national currencies between China
and Russia in bilateral trade increased nine times over 2013.
Lin Zhi, head of the Europe and Central Asia Department of the Chinese Ministry of
Economic Development announced last November that, “About 100 Russian commercial
banks are now opening corresponding accounts for settlements in yuan.
The list of commercial banks where ordinary depositors can open an account in yuan
is also growing.” Last November 18 Russia’s largest bank, Sberbank became the first
Russian bank to begin financing letters of credit in Chinese yuan.
Business MONEY MATTERS
South China Morning Post
Fujian traders are doing good business in the capital’s newly built Chinatown,
even if locals aren’t exactly welcoming them with open arms
I was on holiday in Madagascar over the past three weeks. There were no herds
of elephants and gazelles traipsing over the savanna. That’s in Tanzania. Neither
were there any lions, zebras, hippos or penguins as shown in the DreamWorks
There are soul-humbling mountains, poverty-stricken yet cheerful Madagascans,
lemurs and many mainland Chinese. In fact, there are more residents from the
mainland than there are lemurs. The island is home to more than 70,000 Chinese,
double the figure less than a decade ago.
In its worn out capital, Antananarivo, there is a “Chinatown” – an area of 20-plus
shopping malls and countless vendors, as well as eager traders and shoppers.
I elbowed my way into one of these malls. It was a maze of box-like shops, selling
all sorts of made-in-China goods – clothing, shoes, cosmetics, 2G mobile phones
for HK$40 and various electronic gadgets.
This poster was made up to show the compassion of animals.
But when you reflect more on it….”A monkey carrying a dog out
of factory explosion”…my friends, something you will only see
in modern day China. hahaha
It reminds me of the trained monkey who would prowl the Ningbo
bar street with his handler. They would charge 10 RMB for a photo
with the monkey. And if you were some drunk tourist who thought they
would be clever by taking a free picture without paying, the monkey
would run over and snatch your phone right out of your hands
and smash it. The locals such as myself knew to keep your phone
in your pocket anytime he walked by.
Asian Hedge Fund Assets Hit Record, Top $177 Billion
Jun 19 2015 | 2:25pm ET
Assets under management at Asian hedge funds reached a record $177 billion in May, according to new data from Eurekahedge.
The tally exceeds the $176 billion managed by funds with an Asia mandate in December 2007, immediately prior the global financial crisis, noted Eurekahedge’s Alexander Mearns in an interview with Bloomberg.
The news comes as the number of hedge and private equity funds registered in China alone has exploded as stocks in the nation surge. The number of private investment funds – which includes securities, PE and venture vehicles – rose by more than 4,000 in just the last three months, according to the Financial Times.
Capital has flowed into Asian-themed funds this year as China’s stock market capitalization has nearly doubled, to $9.6 trillion. If inflows continue, Asia’s hedge fund industry could be managing north of $200 billion relatively soon, noted Mearns.
However, the rise in assets comes as the Shanghai Composite Index’s strong year-long uptrend has withered recently, ending down 13.3% this week alone in its worst showing since the global financial crisis. China is clearly the linchpin on which the trend is based, with approximately 40% of all assets invested in Asia allocated to hedge funds investing in China.
Meanwhile, data from Eurekahedge suggests the focus of Asian hedge funds is shifting as they become more sophisticated. While long/short equity funds accounted for approximately 70% of Asian funds in 2002, they are only estimated to be 39% of the total now.
The difference has been due to the growth of more complicated multi-strategy and macro funds, Eurekahedge noted, as well as the increased ease and low cost of implementing more exotic trading strategies now compared to ten years ago.
Hong Kong’s stock exchange has opened the door to ecommerce group Alibaba
listing on its home market — by returning the debate on controversial dual
On Friday, the exchange said it would re-examine its current bar on China-based
companies having a secondary listing of their shares in the city — a move that
could permit New York-listed groups such as Alibaba, Baidu and JD.com to return
“home” via secondary offerings.
Chinese investors have poured US$353 million into Dubai’s property market over the past two years. The market is already primed in any case, with China as its largest trading partner and 4,200 Chinese enterprises operating in the city, reports the Beijing Youth Daily.
About 3,000 Chinese enterprises have registered in Dubai and many Chinese entrepreneurs have invested in Dubai’s land, houses and office buildings in 2013, nearly double from a year earlier, according to Dubai’s land bureau statistics. About 10% of Dubai’s residents are Chinese.
Many businesspeople from Wenzhou and Taizhou have invested in Dubai properties, especially following the surge of Dubai properties, according to an unnamed Taizhou businessperson in Dubai. Properties have been open for foreign purchase since 2002, boosting the market to its peak in 2008. That was the same year the global financial crisis crashed the market, halving property prices and hammering quite a few Chinese investors, according to the report.
After the financial crisis, Dubai properties recovered, rebounding 56% and rent 41%, from August 2012 to late 2014. They have yet to return to their prime in 2008.
The Dubai government is on the lookout for another property bubble after having introduced a series of price control measures, with its central bank having unveiled new rules for financing property.
In the first half of 2014, foreigners invested more than US$10 billion in Dubai property, with investors from India topping the list at US$2.8 billion. Investors from Pakistan, Russia, the European Union and China ranked among the top buyers.
In Dubai, about 100,000 Chinese residents live in Dragon City, the largest trading center for Chinese goods outside China.
Although Dubai’s property prices have been rising over the past two years, their levels are still relatively low compared with that of Europe, Hong Kong and Singapore. There is little doubt that Dubai’s role as host of the World Expo in 2020 will perk prices further, according to Nakheel, developer of Dragon City.
Surging Dubai properties have nonetheless been fluctuating, with property prices continuing to fall in April. The average price is expected to decline in 2015, according to the forecasts of Jones Lang LaSalle and Standard & Poor’s.
Chinese financial groups have been encircling Europe in recent years.
As a dying, socialist Europe ages and its economic vigor is sapped from
its economic system, country after country is becoming poorer and the fruits
of its economic life are being laid bare for opportunistic firms from
the East. From the Atlantic in the West to the East in Istanbul, Europe’s
financial service companies are now being snatched up by Chinese firms.
We have previously reported on the bids for Portugal’s Novo Banco by Chinese
firms Fosun and Anbang Insurance. This buyout of Novo Banco will represent
China’s largest financial service acquisition yet valued at over $4 billion.
Fosun and Angbang have been busy. Together, these 2 companies represent over
half the deals in Europe for financial service firms. They have been involved
in 11 deals for financial service firms worth more than $2.1 billion.
Angbang insurance is less than ten years old but now has assets worth more
than $120 billion USD. The firm is run by Deng Xiaoping’s grandson-in-law and
has become known in the West as the buyer of the Waldorf-Astoria. The Waldorf is
a huge trophy property in New York frequented by American government leaders
in conferneces. It was reported this week than the American government is now
no longer sending its employees into the hotel in the building over security
Chinese financial investment into Europe has been going full bore, and will only
speed up. The traditional Chinese bank titans, the world’s largest banks are on the
sidelines, but expect them to support Chinese acquisitions through companies like
Fosun and Anganbang.