China

[Luke]

So while the west lives in total denial, politics live in total denial and try to find who is guilty for the misery of their economies (true for trump in the US, true for the right wingers in france, netherlands, germany etc), China is increasingly getting ahead while being safer, cleaner, cheaper...while having access to cheap energy and ressources...by regulating their markets so competition achieves the resulting development and superior products...just wait! 

[sfbm21]

7 hours ago, Luke said:

Now you can come up with the same soap opera of "can we trust their numbers" "can we trust the VIE" "wont Xi just steal the money of the companies" "but they have communism right?"...

 

Just have a walk through whats possible in that country: 

 

 

This puts new york to shame. what politics can do to any country. I wonder why chinese folks come to us?

[sfbm21]

I only watched it for few mins.

[sfbm21]

we will need to see to how investors fare overtime.

[Luke]

10 hours ago, sfbm21 said:

This puts new york to shame. what politics can do to any country. I wonder why chinese folks come to us?

They are mainly coming from lower tier cities and poor country side which the government actively tries to tackle to raise living standards there.

[Dinar]

3 hours ago, Luke said:

They are mainly coming from lower tier cities and poor country side which the government actively tries to tackle to raise living standards there.

You have clearly never lived in under communism or a place with no rule of law.  Any common peasant will tell you that rule of law is what matters.  Who gives a damn about a shiny subway if you can be jailed and your property confiscated at any time and for any reason?  Soviet metro was the best the world had ever seen, Soviet educational system was better than the one in US & UK, yet it was the Soviet Union that needed to have an Iron Curtain, lest 50% of the country depart.  

Rather than spout empty platitudes about the superiority of China, (and yes, I live in NYC and our government is insanely inefficient and corrupt), move to China for say five years and start by stating that Xi is an incompetent buffoon in a public square.  Let's see what tune you will sing when you return.  

[Luke]

 

9 minutes ago, Dinar said:

You have clearly never lived in under communism or a place with no rule of law.  Any common peasant will tell you that rule of law is what matters.  Who gives a damn about a shiny subway if you can be jailed and your property confiscated at any time and for any reason?  Soviet metro was the best the world had ever seen, Soviet educational system was better than the one in US & UK, yet it was the Soviet Union that needed to have an Iron Curtain, lest 50% of the country depart.  

Rather than spout empty platitudes about the superiority of China, (and yes, I live in NYC and our government is insanely inefficient and corrupt), move to China for say five years and start by stating that Xi is an incompetent buffoon in a public square.  Let's see what tune you will sing when you return.  

Investors like @Dinar  and their gross misrepresentations of China are the reason why the opportunity in China exists and I am glad for that because its nothing but a gross misrepresentation. 

[Hektor]

17 minutes ago, Dinar said:

move to China for say five years and start by stating that Xi is an incompetent buffoon in a public square.  Let's see what tune you will sing when you return.

One need not go and live in China for 5 years to understand this. Here is a real current example. The brilliant Elon Musk, who is very vocally taking on the POTUS and the VP of USA, is remarkably quiet when it comes to Xi. I wonder why 

[Dinar]

6 minutes ago, Luke said:

 

Investors like @Dinar  and their gross misrepresentations of China are the reason why the opportunity in China exists and I am glad for that because its nothing but a gross misrepresentation. 

You have no idea about China.  If are a Chinese national and China is so great, why do you live in Germany?  If you are a European, why don't you live in Chinese paradise with no rule of law?  If US opened its borders, 100MM+ Chinese would leave.  US universities are full of kids from Beijing, Shanghai, who will do whatever it takes to stay in the US.  If China is so great, why do millions of Chinese from Tier 1 cities flee it every year?  You remind me of talking heads on Soviet TV who reported from Vienna or Paris or London  and talked about how horrible life was in the West compared to Soviet Paradise.  

Investing in a country without a rule of law is gambling.  Exactly the same arguments as you are using were made 20+ years ago about investing in Russia.  I got one word for you - Yukos.  If I can get a pay-off of 50 to 1, I will buy Tencent.  But to make 3x my money in the best case scenario or lose 100% in the worst is idiotic.

Good luck with your Kool-Aid, just spare us the Soviet Propangda - China is great, West sucks.  Hundreds of millions of people in China disagree with you, but you of course know better, that's why you sit in Germany!

[Luke]

2 minutes ago, Dinar said:

You have no idea about China.  If are a Chinese national and China is so great, why do you live in Germany?  If you are a European, why don't you live in Chinese paradise with no rule of law?  If US opened its borders, 100MM+ Chinese would leave.  US universities are full of kids from Beijing, Shanghai, who will do whatever it takes to stay in the US.  If China is so great, why do millions of Chinese from Tier 1 cities flee it every year?  You remind me of talking heads on Soviet TV who reported from Vienna or Paris or London  and talked about how horrible life was in the West compared to Soviet Paradise.  

Investing in a country without a rule of law is gambling.  Exactly the same arguments as you are using were made 20+ years ago about investing in Russia.  I got one word for you - Yukos.  If I can get a pay-off of 50 to 1, I will buy Tencent.  But to make 3x my money in the best case scenario or lose 100% in the worst is idiotic.

Good luck with your Kool-Aid, just spare us the Soviet Propangda - China is great, West sucks.  Hundreds of millions of people in China disagree with you, but you of course know better, that's why you sit in Germany!

Thanks for sharing your limited view! 

[nsx5200]

Have you even been in China, Luke?  Even travelling to autocractic or places where the rule of law is weak can give you a sense of the forces at play, and lets you better understand the type of decisions common people make.  Combine that with economic data, and you would have a fairer presentation of those places.

 

"Don’t tell me how educated you are, tell me how much you have travelled"

- prophet Muhammed

[Luke]

1 hour ago, nsx5200 said:

Have you even been in China, Luke?  Even travelling to autocractic or places where the rule of law is weak can give you a sense of the forces at play, and lets you better understand the type of decisions common people make.  Combine that with economic data, and you would have a fairer presentation of those places.

 

"Don’t tell me how educated you are, tell me how much you have travelled"

- prophet Muhammed

This whole debate about "you can't say anything about China because you don't live in China" is ridiculous. But okay, if you want to go there and "invalidate" anything I say because I have not been there, feel free. I am looking forward to hearing only from people who have been in China on this thread! Have you been in China @nsx5200 and if no, can you stop posting and let people comment who have been in China the last 5 years? Thanks! 

[Luke]

The last time I was in the US was 10 years ago lol. Am I still allowed to say anything about the US from what I have read or not? lol  

 

The letters from Rob Vinall are quite refreshing to have some non-hostile news from the local ground! 

Edited November 3, 2024 by Luke

[Dinar]

3 hours ago, Luke said:

Thanks for sharing your limited view! 

My limited view is based on talking to dozens of kids from China who have received PhD degrees in math, physics, accounting, and operations in the US and who all have chosen to stay either in US or Western Europe.  Not a single one chose to go back to China, including a few that won gold metals at International Math and Physics Olympiads.  And your clearly well informed views are based on talking to millions of Europeans and Americans who have chosen to immigrate to China...  

[Luke]

41 minutes ago, Dinar said:

My limited view is based on talking to dozens of kids from China who have received PhD degrees in math, physics, accounting, and operations in the US and who all have chosen to stay either in US or Western Europe.  Not a single one chose to go back to China, including a few that won gold metals at International Math and Physics Olympiads.  And your clearly well informed views are based on talking to millions of Europeans and Americans who have chosen to immigrate to China...  

Okay! Then it's settled! China is shit and fucked and uninvestable! Cheers! 

[Dinar]

31 minutes ago, Luke said:

Okay! Then it's settled! China is shit and fucked and uninvestable! Cheers! 

No, at the right price, it is.  The right price is when you assume that shares are actually warrants, and you want a pay-off associated with warrants.  

[Luke]

17 minutes ago, Dinar said:

No, at the right price, it is.  The right price is when you assume that shares are actually warrants, and you want a pay-off associated with warrants.  

Okay, boss, you surely will have 50 to 1 pay-off prices in China for the highest quality megacaps at some point! I am just making a huge mistake buying these crap stocks in a communist regime with no rule of law at these relatively expensive prices compared to the immense risk...

[crs223]

I find it amusing. Anybody suggesting that the US is about to be surpassed by North Korea or Cuba would be ignored. Why?  Because it’s “obvious” that North Korea sucks.

 

Yet China garners so much passion.  Why?  My hypothesis: it is “not obvious” that China sucks.  The facts do not speak for themselves and require supplemental naysaying.

 

Disclaimer: I am not a psychologist and I do not know what I’m talking about.

 

[crs223]

Should outsiders be allowed to speak about BRK or FFH on this site?  Would be better if employees and customers were the only commenters.

[james22]

9 hours ago, Luke said:

Thanks for sharing your limited view! 

 

My limited view is based on having sent several young Saudis to China for a three year assignment.

 

They know fucked and they all said China was fucked.

 

 

Oh yeah, and I've read a little History.

[Parsad]

12 hours ago, Luke said:

 

Investors like @Dinar  and their gross misrepresentations of China are the reason why the opportunity in China exists and I am glad for that because its nothing but a gross misrepresentation. 

 

It's actually not a gross misrepresentation at all.  We had a MRI business in conjunction with an army hospital in Beijing.  When they decided to shut the hospital down and move the patients to a larger hospital, they essentially cancelled our contract with them, told us to do what we want with our equipment and that they would not let us be part of a new MRI clinic in the new hospital.  On top of that, the cash we have in Beijing has been impossible to retrieve back to Canada after 7 years of fruitless efforts by us, lawyers, accountants and other representatives we hired to try and help.  We also had no legal recourse to enforce the binding contract we had, as we were told by several lawyers that the Chinese courts would simply side with Beijing.  

 

While this may not be everyone's experience, it certainly was ours.  I've also spoken to numerous other business people and Chinese expats who were in similar situations or have been harassed by various Chinese government groups/individuals in Hong Kong and Canada due to their vocalness regarding Chinese government policies, practices and a lack of property rights or enforcement of binding contracts.  

 

You can certainly invest and make money in China.  But it carries real risks and issues outside the realm of just market risk.  Cheers!

[Parsad]

8 hours ago, Luke said:

This whole debate about "you can't say anything about China because you don't live in China" is ridiculous. But okay, if you want to go there and "invalidate" anything I say because I have not been there, feel free. I am looking forward to hearing only from people who have been in China on this thread! Have you been in China @nsx5200 and if no, can you stop posting and let people comment who have been in China the last 5 years? Thanks! 

 

I have been in China!  It is a beautiful country that has done absolutely remarkable things historically and especially in the last 20 years.  There is an enormous amount to learn there, and the West would benefit from doing so and understanding the people and culture.  Anything you would want here, you can easily get in China.  For those that have money and bow to the autocracy, you can have a very good life!

 

That is very different than understanding the government which effectually eliminates property rights, enforcement of binding contracts, free speech, criticism of Beijing's policies, legal representation or independent rights endowed to Hong Kong or Taiwan.  It's why so many wealthy Chinese live abroad with dual citizenships, but maintain businesses in China.  They've moved as much capital as they can over time to other countries with true democratic principles and respect for the law and property rights.  Cheers!

[Hektor]

On 8/30/2024 at 10:09 AM, Spekulatius said:

The  banks are taking a bath here with lower interest income, possibly followed by cuts in principal later.

@Spekulatius Your forecast seems to be coming true

 

https://www.nytimes.com/2024/11/04/business/china-foreclosures-mortgages.html

 

Foreclosures in China Soar, Threatening to Choke Off Bank Profits

When the housing market was flying high, mortgage defaults were almost nonexistent. But now the legal system is struggling to keep up with evictions.

 

Banks in China are foreclosing on a growing number of apartments after homeowners could not pay their mortgages, as the country’s housing crash threatens the financial system. The roster of homes seized and listed for auction leaped 43 percent last year, according to official data. Numerous Chinese banks have disclosed increases in mortgage defaults during the first half of this year. The downward spiral in apartment prices has since accelerated.

 

The increase in evictions and foreclosures, although still modest by American standards, piles onto pressures on China’s banks. They face other losses related to the real estate meltdown, including on loans to local governments, property companies in default and buyers of unfinished apartments that developers never delivered.

To make matters worse, corporate borrowers in China have long posted real estate holdings as collateral. Bank managers are finding that the collateral is worth much less than when the loans were extended.

[nsx5200]

On 11/3/2024 at 12:46 PM, Luke said:

Have you been in China @nsx5200 and if no, can you stop posting and let people comment who have been in China the last 5 years?

Yes I have.

 

My minor criticism is not with you posting, but rather what you post has been posted in the past, with, IMHO, no real additional new viewpoints or ideas.  Every time new ideas/review/criticism is brought into this forum that might be somewhat critical of China, it bring about a boilerplate-storm that denigrate those posts without actually providing any constructive feedback.  I don't know about others, but that type of behavior lead me to be more hesitant to post anything that might seem critical of China, even though I'd be interested in gaining more perspective or feedback outside of the "that's all wrong, China is awesome".  Again, I value the freely given viewpoints given in the forums, and my minor ask is to reduce the boilerplate storms.  If not, that's okay with me too, as on the grand scheme of things, it's a nothing-burger.

 

Would it be more acceptable if I created a different thread outside of this thread that's titled something along the lines of "China Criticisms" to avoid the type of boilerplate posts?  Let me know.  TIA.

[nsx5200]

15 hours ago, Parsad said:

While this may not be everyone's experience, it certainly was ours.  I've also spoken to numerous other business people and Chinese expats who were in similar situations or have been harassed by various Chinese government groups/individuals in Hong Kong and Canada due to their vocalness regarding Chinese government policies, practices and a lack of property rights or enforcement of binding contracts.  

 

You can certainly invest and make money in China.  But it carries real risks and issues outside the realm of just market risk.  Cheers!

My limited understanding is that to do well in China, you must have buy-in from the people of power (government/party official).  This leads to well known secret to have to grease the wheel(bribes).  https://en.wikipedia.org/wiki/Guanxi matters a lot more in China than in other systems like in the U.S.  I was under the impression that non-Asians actually don't need grease the wheel as much since it would discourage FDI.  I guess based on your experience, that might not be the case anymore.  Thanks for your sharing your experience.