Changing China
Giant on the move
from George Chen:
Is China Inc still credible?
By George Chen The opinions expressed are the author’s own.
Chinese Premier Wen Jiabao once said there's something even more important and precious than gold -- people's confidence.
In recent weeks, I'm afraid global investors have been losing confidence in Chinese stocks from the New York to Shanghai markets. Sino-Forest Corp became the latest victim of a slump in overseas-listed Chinese companies. The company earlier this week accused short-seller and research firm Muddy Waters of defamation for alleging in a report that it had fraudulently exaggerated its Chinese forestry assets.
Unfortunately, this is just the beginning of the hit to confidence over Chinese stocks, especially small caps listed at home or abroad, for example in Hong Kong, Singapore, New York and even on the second-tier board of the London Stock Exchange.
If you look at yesterday's trading carefully, you may find investors suddenly became more cautious on small-cap Chinese stocks after the Sino-Forest case. There were already signs with the growing dotcom bubble exported by some Chinese Internet companies to Wall Street.
Remember matchmaking website Jiayuan.com, which recently listed on the Nasdaq? These days it's in trouble with investors and users, who say its service may not be as good as its claim to be China's No.1 online matchmaking site suggested. Read my previous column "Is China exporting a dotcom bubble?" here.
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.
There’s much more to Singapore than just casinos! This guide is great for people who are thinking of going there- http://www.whichoffshore.com/city-guides /singapore
No new stimulus? Buy!
Global markets surged on Wednesday, led by the Shanghai stock market’s 6.1 percent gain, on hopes that Chinese Premier Wen Jiabao would announce a new stimulus on top of the 4 trillion yuan ($585 billion) two-year spending plan unveiled in November.
Investors were optimistic that with a bit help from the central government, the economy could turn the corner and start to regain lost ground, heading off a rise in unemployment that officials fear could threaten social stability.
But in his 2-hour report to the annual meeting of parliament, Wen made no mention of the much hoped-for injection.
No matter. Speculators and investors poured back into China’s share market on Thursday, grasping new reasons to be upbeat, and pushing up the index another 1.04 percent.
Wen’s speech was positive enough to support hopes that an economic recovery was starting. He set an ambitious target of 5 trillion yuan in new lending this year, and insisted this year’s 8 percent economic growth target would be met.
Will that be enough to keep investors’ momentum going? Here’s a link to Reuters coverage of the speech and its impact:
Photo captions: Premier Wen Jiabao delivers speech during the opening ceremony of the National People’s Congress at the Great Hall of the People, REUTERS/Jason Lee
Noting China’s joblessness figure (20 million and rising), the Globe and Mail argues that the Asian giant must become more like us, i.e., it needs a “consumer class.” (http://business.theglobeandmail.com/ser vlet/story/RTGAM.20090227.wrcover28/BNSt ory/Business/home) The Stock Research Portal Blog responds that “China sits with U.S.$2 trillion in U.S. Government backed paper, a strong work ethic, and an ideology that currently does not dictate that money be spent on social programs per se.”
Conclusion: “China has both funding and time on its side.”
Via Stock Research Portal (http://www.stockresearchportal.com)
China needs to somehow create more jobs for the unemployed otherwise this could grow into a very big problem for them.
Someone needs to review the Big Four. Reviewing their own audits is not even supposed to come close to ever being something that they are not doing 24 hours a day. And it’s so well known that you can actually print in a Reuters news story that 3 of the Big 4 are merely fee collectors placing auditors with their clients, but don’t even review their audits? How did it get this far?