The abyss between Hong Kong and mainland people - Zhang Lijia

Zhang Lijia

Western media too easily assume the protests in Hong Kong are supported by many mainland Chinese. Wrong, says author Zhang Lijia. There is a wide dived between mainland Chinese and Hongkongnese, and that is not only because of the media censorship in the mainland, she adds at the South China Morning Post.

Zhang Lijia:

When I travel around the world, people like to guess when I am from. “Hong Kong?” “The mainland,” I like to correct them, and add: “We are all Chinese.” 

Ethnically, we are all Chinese. But mainlanders’ reaction to the Hong Kong protests tells me that there’s a deep divide between the two – a geopolitical one. 

There’s no poll on the carefully censored topic on the mainland. From measuring the pulse on the internet and talking to friends, I sense that there’s indifference, confusion, anger, fascination, and even admiration. Overall, I would say that most are not sympathetic to the protests.

The propaganda has certainly played a role. Some have readily bought the government line that the protests are being fuelled by foreign influence – the black hands. 

A lot of ordinary Chinese simply don’t understand why millions of Hongkongers would take to the street over the extradition law. “They already enjoy a lot more freedom and rights than us. What’s the fuss?” asked my brother-in-law, a small-business owner from Nanjing. 

Interestingly, even some well-educated Chinese who have access to international reports don’t necessarily support the ongoing protests in Hong Kong. 

Nick Shen, an English tutor based in the southern city of Zhuhai, has been following the developments from the very beginning, reading reports from both domestic and international media, partly because he can see Hong Kong from the sea front, a sling shot away from his apartment. 

“These silly young people,” he said in a phone interview. 

“They are wasting their time. They are going to achieve nothing, but to destroy Hong Kong’s economy and ultimately hurt the mainland itself.” 

The problem is that mainlanders and Hongkongers have little understanding of each other since they come from drastically different places.

More at the South China Morning Post.

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Hong Kong loses its clout as a financial market - Jim Rogers

Jim Rogers

Hong Kong's days as a financial market are not yet numbered, but in the long run, the city has tough problems, says celebrity investor Jim Rogers to RT. Rogers is Singapore-based, an island that hopes to benefit from the downturn of Hong Kong as a recession is looming.

RT:

The deteriorating situation has been forcing investors to look for ways to move their money to a more stable place. Capital outflows happen not “because there is any immediate danger, but it indicates in the future that there will be less and less security in Hong Kong,” finance guru Jim Rogers said in an interview to RT. 

According to Rogers, Singapore is one of the main beneficiaries of that capital outflow. It can be explained not only by the fact that it is easier and more convenient to deal with Singapore, as locals speak Chinese, but also by the security issues since countries like Austria or Lichtenstein are not as secure as they used to be, the investor points out. 

“This is already making Hong Kong less of a major financial center because it’s unlikely that people will take their money to Hong Kong now,” the analyst said. “So even if nobody takes their money out of Hong Kong, but people are taking it out, other people will not take their money to Hong Kong.”

Hong Kong is losing its status as a major financial center as investors seek a ‘safe haven’ for their assets in places like Singapore amid rising tensions in the city, legendary investor Jim Rogers told RT.

Weeks of unrest have already taken a toll on tourism, stock and property markets, as well as the entire financial sector. Even before the recent shutdown of the airport by protesters, between July 14 and August 9, bookings to Hong Kong from Asian countries fell by more than 33 percent compared to same period last year. 

The ongoing trade war between Washington and Beijing in addition to the protests affected the economic situation in the autonomous region, bringing the quarterly contraction in GDP to 0.4 percent in the three months to June. If the trend continues and losses extend in the third quarter, the city would technically fall into recession for the first time in decades. 

The deteriorating situation has been forcing investors to look for ways to move their money to a more stable place. Capital outflows happen not “because there is any immediate danger, but it indicates in the future that there will be less and less security in Hong Kong,” finance guru Jim Rogers said in an interview to RT. 

According to Rogers, Singapore is one of the main beneficiaries of that capital outflow. It can be explained not only by the fact that it is easier and more convenient to deal with Singapore, as locals speak Chinese, but also by the security issues since countries like Austria or Lichtenstein are not as secure as they used to be, the investor points out. 

“This is already making Hong Kong less of a major financial center because it’s unlikely that people will take their money to Hong Kong now,” the analyst said. “So even if nobody takes their money out of Hong Kong, but people are taking it out, other people will not take their money to Hong Kong.”

“I expect the Hong Kong dollar to break free of the US dollar once the renminbi [Chinese yuan] is convertible. The Hong Kong dollar will disappear… but that will not happen until the renminbi is completely convertible,” said Rogers.  

Another indicator of the capital outflow is the Hong Kong dollar, which is pegged to its US equivalent and has weakened within the pegged exchange rate over the last month, Rogers believes. He predicts that the local currency will further weaken, untie from the greenback, and eventually disappear.

More in RT.

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Why China cannot miss Hong Kong - Victor Shih

Victor Shih

Hong Kong might have lost much importance as a gateway to mainland China, for the financial markets Beijing still needs a stable Hong Kong, says financial analyst Victor Shih in NTD. The reason Chinese entities are borrowing through Hong Kong is that the financial institutions around the world, including the International Monetary Fund, legally treat Hong Kong as a separate entity, he said.

NTD:

Chinese companies use Hong Kong’s capital markets to attract foreign investors, while international companies use the city as a base to expand into mainland China. Experts warn that Beijing would shoot itself in the foot if it takes an increasingly hard line against protestors, seriously damaging Hong Kong’s standing as a stable financial center. 

There’s $3 trillion in dollar-denominated debt issued by Chinese companies, according to estimates. And Hong Kong, an important source of capital for China, provides roughly a trillion dollars of that amount, according to Victor Shih, a professor of political economy at the University of California–San Diego School of Global Policy and Strategy. 

U.S. banks and investors have lent roughly $180 billion to Chinese banks and Chinese companies mainly through Hong Kong, Shih said in his testimony at a congressional hearing held by the U.S.–China Economic and Security Review Commission on Sept. 4. U.S.-based pension and mutual funds also own additional billions in bonds issued by Chinese entities, he said. 

“When you’re in debt to the tune of $3 trillion, you don’t want your creditors to suddenly compress your credit limit by $1 trillion,” Shih said at the hearing. “That would be a big problem for China. And I think that may be one of the reasons why China thus far has chosen, I would call it, a very moderate and soft-line approach in Hong Kong.” 

The reason Chinese entities are borrowing through Hong Kong is that the financial institutions around the world, including the International Monetary Fund, legally treat Hong Kong as a separate entity, he said. 

The debts are issued by the subsidiaries of Chinese companies headquartered in Hong Kong, allowing them to enjoy lower interest rates compared to debt issued in mainland China.

More in NTD.

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How Twitter, Facebook removed China's fake accounts - Victor Shih

Victor Shih

In a remarkable move Twitter and Facebook removed this week China-based accounts spreading fake news on Hong Kong. Political analyst Victor Shih looks in Politico at the effect of this new policy against Russian-style fake news.

Politico:

The accounts suspended by Twitter and Facebook on Monday were not linked to China’s state-run media organisations. 

Rather they were part of a network of fake accounts whose described tactics appear akin to the Russian misinformation campaigns coordinated to sway American public opinion in the lead-up the 2016 U.S. election. 

“China is copying Russia and has set up a large number of accounts on Facebook and Twitter to pump out anti-protester propaganda filled with factually untrue statements and pictures. [Such accounts are] an attempt to polarise opinion, which Twitter and Facebook have publicly stated they don’t want to do, so they are acting on their new policies,” said Victor Shih, a professor at the University of California, San Diego’s School of Global Policy and Strategy. 

He noted that the platforms had tightened regulations following “blowback” after the 2016 poll. 

“They increased the level and awareness and [changed] the algorithm that they are using to catch manufactured campaigns for a political end, especially a violent political end,” Shih added. 

Facebook on Monday removed seven pages, three groups and five accounts involved in “coordinated inauthentic behaviour as part of a small network that originated in China and focused on Hong Kong”.

More at Politico. Victor Shih is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Foreign brands have to become more political savvy in dealing with China - Shaun Rein

Shaun Rein

Foreign brands got into hot water when describing Hong Kong, Macau and Taiwan as independent countries. Business analyst Shaun Rein explains at the BBC it is not only the government fanning the flames but increasingly nationalistic consumers who boycott foreign brands stepping on political toes.

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What if gambling takes off on Hainan? - Sara Hsu

Sara Hsu

The debate is taking off on whether China would allow gambling on Hainan Island. Financial analyst Sara Hsu explains gambling would diversify the tourism industry on the island, but would also hurt the economy in nearby Macau. Two earlier efforts on Hainan were already aborted for political reasons.

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Why the investors did not buy Xiaomi's valuation - Paul Gillis

Paul Gillis

The Hong Kong IPO of China's success story Xiaomi disappointed greatly. Beida accounting professor Paul Gillis explains at Quartz why the investors did not buy the company's valuation. "I think it is hard for investors to buy the valuation."

Quartz:

What accounts for the listing’s tepid response? One read is that retail investors didn’t buy Xiaomi’s pre-IPO narrative any more than early subscribers did. In the run-up to the IPO, found Lei Jun described the company’s business model as a “new species” and a “triathlon model” with three components—smartphone sales, third-party hardware sales, and “internet service” sales, namely ads and media. While smartphones drive most of the revenue, the company hopes that internet services will eventually drive most of the profit (currently at about 40%)... 

It’s an unprecedented structure with many uncertainties. The Android smartphone business is notoriously unstable and has turned giants like Sony, HTC, and Nokia into casualties. Meanwhile, there has never been a tech company to successfully sell undifferentiated, commodity hardware as a means to boost an internet business unit—which might account for investor skepticism. 

“I think it is hard for investors to buy the valuation. The company has to transform to justify the valuation and there is too much uncertainty about whether it can do that,” says Paul Gillis, who teaches accounting at Peking University in Beijing.

More at Quartz.

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Why Alipay has a hard time cracking Hong Kong - Shaun Rein

Shaun Rein

Alibaba has been successful in cracking China's financial markets, but going global, even to Hong Kong proves to be tough. The difference: innovating in China proved to be long overdue, while Hong Kong had already a well developed financial system, says financial analyst Shaun Rein, author of The War for China's Wallet: Profiting from the New World Order, to the South China Morning Post.

The South China Morning Post:

But AlipayHK faces competition from other providers as well as a mature payments market in Hong Kong, dominated by the city’s home-grown Octopus stored-value card. 

“The Octopus card was very innovative, allowing people to store money on a card and pay for the MTR or 7-Eleven. But this was so popular that it hurt innovation,” said Shaun Rein, managing director of China Market Research Group. 

“Everybody in Hong Kong has a credit or debit card, so there isn’t a pressing need to figure out a new form of payments system, because what they had worked, while Hong Kong is also so convenient that e-commerce hasn’t taken off in any meaningful way, so there also isn’t a need for online or mobile payments to take off,” he said. 

Adding to the difficulty are concerns over data privacy because of a perceived connection between AlipayHK and its mainland China peer Alipay, as AlipayHK discovered in a recent survey it commissioned in Hong Kong. The survey found that only 30 per cent of the 1,049 respondents had experience of mobile payments, while over 55 per cent expressed worries over “personal data leakage”.

More in the South China Morning Post.

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HK auditors: still not up to standards - Paul Gillis

Paul Gillis

Five years ago Hong Kong, once a center of international finance, was demoted by the European Union as a financial regulatory area on a similar footing. Beida accounting professor Paul Gillis applauds that after five years the HK legislators start to move to reform the auditors, but feels the action is far from enough, he writes on his weblog.

Paul Gillis:

Five years ago Hong Kong’s capital markets were dealt a humiliating blow by the European Union (EU). Hong Kong was removed from a list of jurisdictions deemed to have regulatory equivalency with the EU. The move happened because Hong Kong did not have an effective independent audit regulator, since the auditing profession in Hong Kong was self-regulated by the Hong Kong Institute of CPAs.  I have written many times about how the HKICPAs is a feckless regulator, reluctant to take on the big firms and when it is finally forced to enforce the rules, doling out miniscule penalties. 

It has taken five years, but finally Legco is preparing to take action. The Financial Reporting Council (Amendment) Bill of 2018 is working its way through the legislative process in Hong Kong. Unfortunately, the proposal falls far short of what is needed. I fear that the legislators have fallen into the trap of finding themselves up to their ass in alligators while forgetting that their original objective was to drain the swamp. The proposal has the fingerprints of the profession all over it, and has been weakened to the point of being mostly useless. 

There are two key problems from my perspective. The first is the composition of the supervisory board of the FRC. The second is adequate funding to make certain that the FRC can effectively function.

More at the Chinaaccountingblog.

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At last: opening the China markets for IPO's - Shaun Rein

Shaun Rein

Many successful Chinese companies listed in the US, rather than in China, because of the stringent regulations in their own country. Now going IPO in China is at least becoming easier, says business analyst Shaun Rein, author of The War for China's Wallet: Profiting from the New World Order to Harbour Times. And some Chinese companies might come back from the US.

Harbour Times:

Xiaomi filed documents in early May to list in Hong Kong. The company is expected to raise $10 billion from the offering and aimed for a valuation of about $100 billion, despite the head of the company’s top lawyer Zhang Liang said in March 2015 that the company had no plans to list within the next 5 years. 

The application came after the China Securities Regulatory Commission reportedly issued new listing rules in April in hopes of retaining potential technological giants in the home market, by promising fast-tracked approvals and easing regulations, on top of additional incentives. 

The new rules allow non-listed local companies to conduct initial public offerings without meeting the traditional financial requirements, according to reports. 

“Changing the requirements will unlock opportunities for both start-ups and investors and is something that should have been done years ago,” said Shaun Rein, managing director of the China Market Research Group in Shanghai. 

“Many Chinese firms that would prefer to go public in China ended up listed in the US instead because of onerous profit requirements. In fact, many great companies like Amazon never would have been allowed to go public in China if they had been Chinese start-ups.” 

Meanwhile, the pain of losing out on a listing by Chinese e-commerce juggernaut Alibaba in 2014 has also prompted the Hong Kong Exchanges and Clearing (HKEX) to examine new measures.

More at the Harbour Times.

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How KPMG Hong Kong got itself into serious problems - Paul Gillis

Paul Gillis

Beida accounting professor Paul Gillis describes on his weblog how auditor KPMG Hong Kong got itself into trouble for signing off papers on China Medical, a company convicted in 2012 for looting US$400 million from its investors. Problem: KPMG Hong Kong was not really in charge and now the Hong Kong legal system caught up with this omission.

Paul Gillis:

Matt Miller of Reuters has an interesting update on the troubles KPMG is having in Hong Kong with a failed US listed Chinese company. In my view the problems are of its own making. 

KPMG Hong Kong was the auditor of China Medical Technologies Inc., which failed after management was charged by the US Securities and Exchange Commission with looting over $400 million from the company. The company was put into liquidation in 2012 in the Cayman Islands, where it was incorporated. 

Actually, KPMG Hong Kong was not the auditor, and that is the problem. Several years ago I wrote about KPMG’s labeling problem where they had a practice of using Hong Kong letterhead to sign audit opinions on audits done by KPMG Huazhen, KPMG’s China affiliate. To me, this was like a Wenzhou shirt maker sewing a made in Italy tag on a shirt made in China.   ... 

KPMG Hong Kong is in a terrible place. They signed off on an audit without doing one. The Hong Kong Institute of CPAS (HKICPAs), regulator of Hong Kong accountants, should investigate this violation of auditing standards, but I think it is unlikely they will.  The HKICPAs is a feckless regulator and is unlikely to pursue a case against a Big Four firm, especially a case that relates to a company not listed in Hong Kong. There are legislative proposals to strengthen audit regulation in Hong Kong, but the proposals will likely have no effect on this case. 

KPMG was the most egregious at mislabeling their audit work, but all of the Big Four in Hong Kong have had this problem, which I believe came about because the firms failed to recognize the importance of respecting their legal structure. While the China member firms of the Big Four have generally been managed from Hong Kong since the early 2000s, they have always been separate legal entities.

More at the Chinaccountingblog.

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KPMG partners sued over another US accounting spat - Paul Gillis

Paul Gillis

China and the US worked out a deal on the age-old argument where Chinese firm are not allowed to hand over paperwork to US institutions for audits. But the agreement is not valid for Hong Kong, and so close to a hundred current and former KPMG partners got sued over the case of the bankrupt US-listed China Medical, reports Beida accounting professor Paul Gillis last week at his weblog.

Paul Gillis:

It is a bad day for KPMG. Reuters reports that the Hong Kong High Court has issued a contempt summons to 91 current and former KPMG partners for their failure to hand over audit working papers for US listed China Medical. China Medical is in liquidation and the court apparently has been overseeing the liquidation of Hong Kong subsidiaries. The case is a repeat of an earlier spat with EY over working papers for Standard Water, which was resolved when EY “found” the working papers on a server in Hong Kong. 

KPMG says it cannot turn over the working papers without permission from mainland regulators. The US PCAOB reached an enforcement agreement with China that allowed it access to working papers in connection with investigations (but not inspections). Hong Kong has no such arrangements, and this is private litigation. 

China has argued national sovereignty and state secrets concerns trump foreign laws requiring the production of documents on Chinese companies listed abroad or doing business abroad. Hong Kong, while part of China, is being treated the same as the United States, presumably to avoid undermining arguments used against the U.S. I seriously doubt there are any state secrets in these working papers.

More at the Chinaaccountingblog.

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US regulator bans HK accounting firm - Paul Gillis

Paul Gillis

The efforts by the Public Company Accounting Oversight Board (PCAOB)  to get access to Chinese data from US-listed Chinese firms went into a new phase as it banned a Hong Kong accounting firm, reports Beida accounting professor Paul Gillis on his weblog. It could be a new item on Trump's China agenda, he suggests.

Paul Gillis:

The Public Company Accounting Oversight Board (PCAOB) has published disciplinary actions against a small Hong Kong CPA firm, Anthony Kam & Associates and Anthony Kam himself (Kam). Kam and his firm have been fined, censured, and banned from doing audits of US listed companies for at least five years because of shoddy work on Sino Agro Food, Inc (SIAF), a Chinese reverse merger. 

Kam was found to have signed off on the 2012 audit of SAIF without actually conducting an audit. Kam had taken over the audit from another firm and reissued the financial statements without doing any work other than obtaining a representation letter from the client and getting a copy of the prior auditors working papers. Serious deficiencies were found in the 2013 and 2014 audits. 

The PCAOB lamented that it should have inspected KAM at least twice since 2009, but was unable to do so because China blocks access. Somehow the PCAOB was able to pursue this action; possibly it was done under the 2013 Enforcement Cooperation Agreement. If Trump wants to get tough on China, he might start by demanding the Chinese comply with US laws or else delist their companies from US markets.

More at the ChinaAccountingBlog.

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China's financial strategy to take over Hong Kong - Victor Shih

Victor Shih

Hong Kong has been taken over silently by mainland China in financial terms already before the handover by the UK in 1997, says financial analyst Victor Shih to AFP. But what has gone wrong is the lack of tools to control that take-over, especially when Xi Jinping defined corruption as the major evil to be addressed, Shih says.

AFP:

Some analysts say the shopping spree in Hong Kong is also part of Beijing's strategy to tighten its grip on the territory. 

State-owned enterprises began to buy up properties to boost their businesses in Hong Kong in the 1980s, ahead of the 1997 handover from Britain, says Victor Shih, associate professor of political science at the University of California, San Diego. 

"It's to integrate the economies of Hong Kong and that of China, to make the whole process of reunification smoother," he argues... 

Corporate filings reveal a Chinese Communist Party organisation is at the top of the ownership chain of The Center. 

A statement from Li's CK Asset Holdings named the buyer as C.H.M.T. Peaceful Development Asia Property Limited, incorporated under the British Virgin Islands and set up as a "special purpose vehicle" specifically for the acquisition. 

Its largest shareholder is Beijing-based China Energy Reserve and Chemicals Group, according to the South China Morning Post and Wall Street Journal. 

The energy behemoth links back to the party -- one of its four major shareholders, China Hualian International Trade Company, is owned by the China Economic Cooperation Center, corporate filings show. 

The entity, according to various Chinese government sites, is controlled by the International Liaison Department, a Communist Party arm known for handling its foreign affairs. 

Shih said such big deals could challenge the party's internal governance at a time when President Xi Jinping is warning against corruption and profligate spending. 

He points out The Center will generate millions of dollars of rent each year. 

"The challenge for (the party) is whether they have the personnel and the framework to audit and monitor what must be enormous cash flows going through them," says Shih.

Numerous mainland officials, their family members and businesses have set up shell companies in Hong Kong to siphon wealth to an off-shore location to diversify their risks, Shih added, creating a mutual dependency between the two economies. 

"Hong Kong remains one of the biggest loopholes in China's capital control," he said.

More in AFP.

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The fast-growing housing market of Wuxi - Rupert Hoogewerf

Rupert Hoogewerf

Traditionally Shanghai, Beijing and Guangzhou were benchmark cities when looking at the housing market in China. But when you want to know where global wealth is growing fastest, you might have to look at a few unfamiliar names, including Wuxi, overtaking Hong Kong as the most expensive city, says Rupert Hoogewerf, chief researcher of the latest Hurun Report, according to the South China Morning Post.

The South China Morning Post:

Complied by research house Hurun Report, the study highlights growth in global home prices in the 12 months to June 30, with 42 of the 50 cities under the spotlight from 12 countries it examined, being hit with price rises of more that 10 per cent in the period.

The five cities to suffer the fastest growing prices were Toronto, Reykjavík, Wuxi, Hong Kong and Zhengzhou, the provincial capital of Henan Province. 

Six Chinese cities were named in top 10, while that total of 21 makes the country the most listed, followed by the US (Seattle, Orlando, Dallas, Denver, New York, Sacramento and Miami), Germany (Berlin, Hanover, Stuttgart, Frankfurt, Munich and Hamburg), Canada (Toronto, Hamilton, Victoria and Vancouver), Australia (Melbourne, Sydney and Canberra), Ireland and New Zealand with 2 cities each... 

Maybe surprisingly, the eastern Chinese city of Wuxi – around 140 kilometres or a 2-hour drive, west of Shanghai – overtook Hong Kong, recently dubbed “the world’s most expensive housing market”, to become the Chinese city so see the highest growth in home prices, as it is much less known than other major population centres such as Beijing and Shanghai.. 

Wuxi, in the southern Chinese province of Jiangsu, borders two other large cities, Changzhou to the west and Suzhou to the east, and saw a 22. 9 per cent rise in prices in the period, exceeding Hong Kong’s 20.8 per cent rise, according to Hurun Report, which is best-known for its rankings of the richest people in China. 

The other four Chinese cities in top 10 are Zhengzhou, the capital of east-central China’s Henan province (+20.2 per cent), Changsha in Hunan province (+18.5 per cent), Guangzhou (+17.9 per cent) in Guangdong province and Shijiazhuang (+16.1 per cent) in Hebei. 

“Global asset allocation is one of the biggest trends now for China’s high-net-worth individuals, led by real estate,” said Rupert Hoogewerf, chairman and chief researcher of Hurun Report. 

Jinan, Hefei, Wuhan, Xiamen, Hangzhou, Xi’an, Fuzhou, Nanjing, Tianjin, Nanning, Chongqing, Beijing, Qingdao, Nanchang and Shanghai are those ranked outside the top 10 but also among the top 50, said the report.

More in the South China Morning Post.

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Why property will remain a safe investment - Sam Crispin

Sam Crispin

The Chinese government tries to curtail irrational investments, but domestic real estate is certainly not at the hackblock, says real estate expert Sam Crispin in Knowledge GKGSB. The government cannot afford to kill the goose laying golden eggs, he says.

Knowledge GKGSB:

Driving the rapid price increase are investors piling into the market. A dramatic stock market rout in 2015 in particular left many seeing property as one of the few secure investment options available on the Chinese mainland. 

“There are few investments products that offer the same degree of security as real estate,” says Sam Crispin, CEO of ABP Investment Management in Hong Kong. China’s banks also see property as a secure bet. 

About half of all new lending in 2016 went into real estate, largely through mortgages with bank loans to developers and homebuyers totaling RMB 26.68 trillion ($3.87 trillion). This was up 27% from 2015, according to data from China’s central bank. Agricultural Bank of China, the country’s third-largest lender by assets, had 82% of its new loans go to housing... 

Property development and apartment sales are also key sources of revenue for local governments, so they have an incentive to keep land sales going. According to the Chinese business magazine Caixin, income from the sale of land-use rights totaled RMB 3.75 trillion ($551 billion) in 2016, nearly 30% of the combined annual income of local governments, with some areas depending on sales for as much as 50% of their revenue. 

“Property is the goose that lays the golden egg,” says Crispin. “They (governments) are dependent on that revenue stream—if they lose it what will take its place?” 

A tense standoff lasted for months as the government grappled with a precedent that had national implications. In late December, it was announced that the Wenzhou leases would be rolled over free of charge, which kicked the issue down the road but left the core issue of ownership rights unclear. 

Such uncertainty, long-term, is a destabilizing factor. “[A bursting bubble] would be catastrophic for the Chinese state,” says Crispin. “The government is in control of land sales, the government is in control of construction, the government basically sets prices by approving the pricing of sales… so it’s the government’s fault if it goes wrong. They have no mechanism to cope with [a crisis].” 

Measures implemented in recent years have tried to cool down the market. These include raising minimum downpayments, which can be up to 80% in major cities, and outright restrictions on home purchasing, for example by making it illegal in some places to buy a second apartment.

More at Knowledge GKGSB.

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A bold move by Tencent's Pony Ma - Andy Mok

Andy Mok

Tencent's CEO Pony Ma is not very well known for his media appearances. So, when he joined the discussion about Hong Kong's future, it took political analysts like Andy Mok by surprise, he tells Bloomberg.

Bloomberg:

“The typical move is just to keep your head down ahead of July 1 and the Party Congress,” said Andy Mok, managing director for Beijing-based internet consultancy Red Pagoda Resources, referring to a leadership reshuffle later this year. “It could be that Tencent sees this as an internal strategic move to strengthen its dominance in gaming, finance, and it also creates a symbolic meaning of leadership,” he said, calling Ma’s effort “a bold move.” 

Ma’s emergence into the spotlight is highly unusual for a Chinese entrepreneur who shuns media appearances and interviews. He graces at most a couple high-profile events a year, at which he consistently refrains from extensive public pronouncements. It reflects how a new generation of Chinese tech tycoons are fast becoming de-facto ambassadors for their country. Jack Ma is among the most assured of his cohort, jetting around the world to plug his vision of helping small businesses thrive.

More at Bloomberg. Andy Mok is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Jason Ma discusses Chinese diaspora on 9th World Chinese Economic Summit

Jason Ma

Renowned speaker Jason Ma will join two sessions of the 9th World Chinese Economic Summit on 13 and 14 November at the Shangri-La in Hong Kong. He will discuss entrepreneurship and the global Chinese diaspora. The meeting will focus on “Managing Global Uncertainty: Exploring New Opportunities”, and will host a range of famous participants, including politicians and business leaders.

Ma is a Member of both the Employment and Education Taskforce and the SMEs Cross-thematic Group at the Business 20 (B20), the global business advisory council for the G20, the world’s leading economic forum led by the top 20 economies’ heads of state.

He is one of the few influential business and education leaders from the G20 economies appointed perennially as a B20 member through the G20 in Australia, Turkey, China, and currently Germany.

Vincent Lo of the Shui On Group, Ronnie Chan of the Hung Lung Group and H.E. Susilo Bambang Yudhoyono, former president of Indonesia are some of the participants. The full program you can find here. (pdf)

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China's search for global power - Howard French

Howard French

Howard French, author of Everything Under the Heavens: How the Past Helps Shape China's Push for Global Power explains at the Pulitzer Center how China is searching for power at an international stage, and how the global power might change its relationship with Hong Kong and Taiwan.

Howard French is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Disappearance of Xiao Jianhua: a show of power - Victor Shih

Victor Shih

The still unresolved disappearance of billionaire Xiao Jianhua from Hong Kong has sent shivers among the financial elite. Right-fully so, says political analyst Victor Shih to Today. China´s central government wants to show who is in charge.

Today:

On the economic front, the implications are less clear. While confidence in the city could be shaken, talk of capital flight from Hong Kong might be premature, experts say. 

The timing of Mr Xiao’s case ahead of a major party congress later this year suggests an attempt by China to pre-empt any surprises during the meeting. 

“Observers like myself had thought Mr Xiao would be safe because he conducted transactions for multiple political elites in China, which is a good hedging strategy,” Associate Professor Victor Shih of the University of California, San Diego told the Financial Times. 

“If he does not resurface soon, then this hedging strategy will be shown to no longer be a foolproof way of protecting oneself,” noted the expert in Chinese political economy.

More in Today.

Victor Shih is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more strategy experts at the China Speakers Bureau? Do check out this list.  

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