Changing China

from Global Investing:

Home is where the heartache is…

On a recent trip home to Singapore, I was startled to learn just how much housing prices in the city-state have risen in my absence.

A cousin said he had recently paid over S$600,000 -- about US$465,000 -- for a yet-to-be-built 99-year-lease flat. Such numbers are hardly out of place in any major metropolis but this was for a state-subsidised three-bedroom apartment.

Soaring housing prices have fueled popular discontent -- little wonder as median monthly household incomes have stagnated at around S$5,000.

For its part, the government -- which houses 80 percent of people on the densely populated island -- insists that public housing prices are shaped by 'market forces', pointing to a raft of financing schemes to help first-time buyers.

What's less contentious is that Singapore is only part of a regional real estate boom that has driven property values by as much as 70 percent since the start of 2009 in cities such as Sydney, Hong Kong and Beijing.

Like Singapore, the government in China is acting to cool house prices that have skyrocketed in recent years out of the reach of a large swathe of its middle classes.

Chief among Beijing's policy arsenal is social housing. The government is stepping up construction of public housing, targeting a rollout 36 million affordable homes from now until 2015. At the same time, clampdown on property speculation has also helped ease Chinese housing prices.

from Global News Journal:

‘Stop me before I bet again in Singapore’

A performer holds over-sized deck cards in front of the Resorts World Sentosa casino Feb. 14 (REUTERS/Pablo Sanchez)

At least 264 people in Singapore have asked to be put on a list that would prevent them from entering the city state's newly opened casino. Except for nine housewives and 19 unemployed people, the rest had jobs and probably families that they did not want to hurt with a gambling problem. Family members who think a relative might have a gambling problem can also apply to have them banned.

 The $4.7 billion Resorts World Sentosa opened on Feb. 14, Valentines Day and the first day of the Chinese New Year, which was considered auspicious. It is the first of two casinos resorts (and a Universal Studios theme park) that is meant to help transform Singapore from a manufacturing and shipping center to a global hub city built on financial services and a playground for wealthy visitors. This is quite a change for a country often called the "nanny state" because of its many prescriptions and prohibitions, famously for instance, banning chewing gum for its irksome tendency to land up on sidewalks and onto people's shoes.

For decades Singapore had banned gambling as well, noting a Chinese proclivity towards gambling and its often attendant ruinations on families. But the ban didn't stop folks from taking a bus across the Singapore Strait to neighbouring Malaysia, which sports a hilltop casino in the Genting Highlands.

The government has taken a number of precautions, besides the voluntary exclusion list, to help people hedge their gambling habits. An on-site counselling service is available for problem gamblers, who can also set gaming limits for themselves with the house. You won't find ATM machines in the casinos. But the biggest discoruagement is the US$70 entry fee for Singaporeans and permanent residents. The high rollers won't be bothered, but it will be a strong deterrent to the chap who wanders in with just a a couple of hundred dollars in his pocket.

The precautions don't seem to be hurting business much. Within a week of opening the Resorts World casino had already attracted 128,000 visitors.

Singapore hopes casinos will generate spin-offs like luxury services and increased business for private bankers in a city which many say is fast becoming Asia's premier wealth management center.

How cheap is cheap?

How cheap is cheap?

That was the most frequently asked question among bankers and private equity experts attending a recent forum in Hong Kong, as they swapped strategies about how to pick up stressed assets during the financial crisis. 

When Lehman Brothers collapsed a year ago, everyone shared the same view: The global financial crisis was just beginning.

But one year on, many global markets have bounced off the bottom and some have recovered quite nicely. The Shanghai benchmark index, for instance, has gained more than 50 percent since the beginning of this year. As a result, views among bankers and top investment strategists about ongoing risks to the business outlook have started to diverge.

“Valuation is still a big threat,” said Michael Kim, a former senior Carlyle executive who founded MBK Partners after leaving the U.S. buyout giant.

“If a W-shaped recovery is going to happen, I think it will be a tremendous buying opportunity,” said Kim, referring to the possibility of a “second dip” market correction.

Andy Xie, former chief Asia economist at Morgan Stanley who earned his reputation in the financial industry as one of the most bearish analysts in Asia, forecast that a “second dip” in China’s market could occur next year.

Taiwan’s killer mudslides

After Taiwan’s worst storm in 50 years killed hundreds in massive mudslides last month, the government blamed the freak weather while survivors said the government’s slow response after the Aug. 7-9 storm made matters even worse.

Only recently, with reconstruction under way, have officials in the six-county disaster area begun asking what contributing factors may have caused the steep mountainsides to give way, hurling boulders and walls of mud onto riverside villages below. Nearly 770 people are presumed to have died, most of them buried alive.

In the absence of any official declaration of the underlying causes, residents have filled the void with speculation.

Beijing shopping surprises

I love to shop – I’m not afraid to admit it. And I passionately believe you can never have too many T-shirts, shoes or bags (and that you should never underestimate the power of a good moisturiser either).

One of the great joys of living in China, and especially in Beijing, is the shopping.

Sure, it’s not as sophisticated as Hong Kong or as off-beat as Taipei, and very few places in Asia can trump Bangkok, but China’s smokey capital has its charms when it comes to a bit of retail therapy.

So here is a personal list of my favourite top 5 shopping destinations in Beijing, in reverse order to keep everyone in suspense.  

5) Spin. Pottery’s not sexy, right? Wrong. The master craftmen (and women) behind this store sure know how to whip up a storm with the clay. Simple, clean and understated is the order of the day. And it’s not too expensive. Word on the street is a certain well-kown European fashion designer liked the shop so much he snapped up 20,000 sets of plates during a winter swirl through the city. 

4) The cashmere sweater place. Nobody really seems to know what it’s called, but it’s quite well located near the new Dengshikou subway stop. Simply take in a jumper, hat or other top you want copied, pick a colour, and they will produce a copy for you in softest cashmere. It’s very adictive. “I can’t wear anything that’s not cashmere these days,” another cashmere junkie remarked to me recently. And it’s quite understandable. Not cheap, but then luxury never is.

3) This recommendation isn’t one shop, but the part of Beijing’s famous Panjiayuan, or antique market, where they sell old books. I can spend hours here, picking out hidden little gems printed in China’s Communist heyday. This includes glossy hardback coffee table books, sometimes with English text, on China’s provinces. The two books I’m most proud of finding, and have given me the most pleasure, are a book on the remote and rather mysterious province of Qinghai, and another entitled “New China Builds”, full of the brutalist and minimalist architecture that marked the 1950s, 1960s and 1970s.