With a retrenching U.S. economy and stash of foreign reserve. What's on China's new year shopping list as "Niu (ox)" year approaches? Early indications are that they are not blowing cash on the wall street, like what Japanese did in the nineties. In stead, China keeps her eyes on talent and human resources.
Reports of CIC (China Investment Corp.)'s headhunting in New York has received some media coverage. With much less fanfare, Chinese colleges and universities are making a major push to hire faculties on the U.S. academic market. Record number of schools were present in this year's ASSA meetings (for Economics, Finance, and Social Science). With many of the U.S. markets in hiring freeze and improved incentive packages, they expect better success than previous years. According to a Dean of Beijing University, China has large demand for fiscal theorists now that government surplus creates a happy problem to have, but a problem nevertheless. Even Chinese astronomy observatories are throwing a banquet reception in the field's U.S. annual meetings. Not to be left out, Chinese industries are also quietly making the recruiting push, they don't usually make high-profile noise, but they pop up here and there.
I am not sure this is due to low risk appetite in overseas investing or simply brilliant strategic planning, or, China learning from the experience of the Japanese, but this is not the first time Chinese sophistication surprises me. Cue the Mastercard ads...priceless.
Monday, January 12, 2009
China's New Year Shopping List
Friday, September 26, 2008
Topsey Turvey Economics
funniest news piece about the economy on Sina Finance. Translated into English, it reads:
President of SoHo China, Pan Shiqi, in pleading for government help in the real estate market, warns that suffering of developers would lead to higher housing prices, not lower. Houses, he says, like coal, pork, and baby milk formula, will have higher prices when supply shrinks.
I have to solute him for not mention just one non-durable product, but three as comparison; I'd also solute him for understanding concept of higher price with negative supply sift. However, before doing that, he needs also assume the market for housing, a durable good, is in equilibrium - then why the hell he cries for government again? China has been worrying about an American style meltdown originated from real-estate market, and this quote can be viewed as an empty threat from the troubled developers.
Don't ask Chinese real estate tycoon about economics.
It reminds me of a research paper by Chicago economist. The gist of that thesis is that inequality isn't as bad as previously believed when measured in real consumptions because the rich buys differently. While the poor has enjoyed steady or declining prices as a benefit of Chinese exports, the rich has not been as lucky - the price of luxury cohort of the same goods don't decrease as much.
The consumers of China's contaminated diary products, because they can not afford the more expensive foreign brands, would surely disagree. Related Content of This Rocking Post
Wednesday, September 10, 2008
Behind the Juicy Story
Who would have thought juice would make headline story. An potentially important news that slipped through last few days was that Coke is bidding the takeover of HuiYuan, a dominant Chinese juice make for $2.4B, potentially making it the biggest takeover bid of Chinese firms to date.
The outcome of this take over bid will have much to say about the direction of Chinese global economic policy. Internet opinions, especially those have promoted for domestic name brands, have seen plenty of displeasure of yet another multinational takeover. Do not discount the importance of beverages either; America has been through an similar episode of foreign bid, by a Belgium beer maker, of maker of Budweiser. That deal ended in veil. Chinese fruit juice groups were considering joint opposition to the deal, arguing the proposed takeover, which if successful would give Coke a dominant share of the market, would put them at a competitive disadvantage and threaten their survival. Market awaits to see if the deal can get pass regulator overhang.
But, what is the deeper revelation of this juicy story? The coming takeover touches a nerve of the public, not only the business communities, because foreign capital has permeated many Chinese businesses, many of which, the public believe, have been sold under value. A criticizer would point to high dividend payouts, higher than the IPO take-home of Chinese state banks. Complicating matter is that China is a transition economy from a socialist system, and a lot of the assets sold was accumulated while other parts of the economy was making sacrifice. So, possibly of "sell-out" is always on people's mind.
Yet, such takeover scenarios are inevitable. In particular, current economic structure precisely dictated that, even when Americans are mounting historical deficit against the Chinese. The comparative advantage of the American economy is no longer in manufacturing. In stead, it's more and more in corporate financing, even when its financial markets are in turmoil at home. On the Chinese side, the financiers, mainly banks, have their own bigger moral hazard problem; and for firms, the prospect of property right protection would be higher with foreign capital involvement. It thus creates incentives to sell assets to U.S. capitals seemingly undervalue. Therefore you get the current financial structure. Capital flows from China to the U.S. for low-risk, un-intermediated investments, mainly government bonds, keeping the interest low. Capitals then flow back to China for intermediated investments, snatching up assets. So, for China, the biggest concern is the American inflation; and for American investments, the biggest concern is Chinese growth.
It is a convenient and attractive setup for both sides right now. The real test comes when Chinese economic growth gets stalled, thus amplifying the asset risk. There is a lot of riding, of both sides, on the Chinese economy.
Wednesday, May 21, 2008
Hooters and the cultural deficit
A moment of silence for the perished.
Now something more light-hearted.
If you go to the Beijing Olympics this summer, you can not only taste a slice of China but also find comfort in...hooters, which opened last year. Where else can you find a lame place where waitresses dancing to 80s pop songs like YMCA? Not even in America.
The fact that Beijing has the Hooters and the Hooters hasn't met much objection is not surprising, given the extremely pro-business regulation there and not much else. To quote some Chinese hooters girl, "In China, there aren't many feminists". Besides, sexual content in restaurant and entertainment business isn't exactly new in China's homegrown industry. In fact, I recently find that China has legitimized soft-porn industry too, only under the disguise of fine art nude photography.
I'm a bit surprised that Hooters is able to marketing itself as "American Spirit". But maybe not. The so called cultural deficit has been huge for China. To get a grip on this, you only needs to walk into a Chinese book store and an American Barns&Nobles. The amount of translated American publications along with its original version is huge. The same can't be said about Chinese books. (Hong Huang mentioned about this also in her recent msnbc interview.)
So the real interesting question is: Are they really able to understand the U.S. through watching American TV soaps and going to Hooters? On the second thought, maybe not, seeing how many people think Sex and City represents typical America. Shanghaiist has a very interesting, though a bit old, interview of a Chinese college hooters girl who was encouraged to worked there by her parents, who though hooters represent American value of "passionate and friendly", like..."mayflowers". It confirms also the genius-ness of South Park. Just like in Raisin, customers who want to flirt are encouraged to "come back".
At least, unlike Hooters in America, Hooters Beijing doesn't have DVDs of hooter girls for sale. Then again, they are unlikely to find so many double-Ds in China too. In other words, not much "hooters"*.
*hooters is American slang for breasts.
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