Opinion

George Chen

China’s King Edward VIII

George Chen
May 18, 2011 03:58 UTC

By George Chen
The opinions expressed are the author’s own.

Did you miss the biggest breaking news item in China’s investment circle yesterday? I am not talking about another big IPO or M&A deal. I’m talking about Wang Gongquan, an influential veteran private equity investor in Beijing.

Wang was a co-founder and senior partner of CDH Venture Partners, a leading investment firm headquartered in Beijing. Considered one of the early birds in China’s venture capital world, Wang was a general partner with U.S. technology investment heavyweight IDG before he established CDH Venture Partners in 2005.

In March, Qihoo 360 Technology, one of Wang’s investment portfolio companies, went public on the New York stock exchange. As one of the early investors in Qihoo, the maker of the second most popular web browser in China, behind Microsoft’s Internet Explorer, the successful IPO made Wang more famous in China. And of course, the billionaire is getting even richer.

Yesterday, he became a newsmaker in China again, but not for anything related to his investment matters. Wang wrote a brief post on his personal micro-blogging site, to officially announce that he had decided to quit all posts and escape the public eye to enjoy a private life with his significant other.

Given Wang’s high professional reputation and background, his decision quickly drew massive public comments from ordinary people to tycoons such as Pan Shiyi, the top boss of SOHO China and one of China’s leading property developers. By Wednesday Wang’s personal announcement became one of the most actively discussed topics with almost 1 million reposts of it and comments on Sina.com, China’s No.1 portal.

Japan, Australia, if not China?

George Chen
May 17, 2011 02:59 UTC

By George Chen
The opinions expressed are the author’s own.

I am hearing more complaints these days from trader friends about how boring the market is these days. Why boring?

Trading volume is low and there are apparently more risks than opportunities as investors seek clear signals about the central bank’s monetary policy direction and about what global funds think of China for the second half of the year.

With investors uncertain about the outlook for the Shanghai and Hong Kong stock markets, some are beginning to rethink their positions on Japan. Concerns about radiation are easing and I hear more people talking about the big potential for Japan’s market and economy to rebound amid massive reconstruction there. An old and new question then arises: can we bet on the Nikkei, again?

Ex-DE Shaw, Goldman partners launch new fund

George Chen
Mar 2, 2011 05:09 UTC

stock

By George Chen

HONG KONG, March 2 (Reuters) – A former partner of D.E. Shaw and an ex-Goldman Sachs partner are setting up a new firm to raise about $500 million for a China-focused private equity fund to join the growing competition for deals in the world’s No.2 economy, sources told Reuters on Wednesday.

Meng Liang, a partner and Greater China CEO for D.E. Shaw, one of the world’s largest hedge funds, has resigned from the firm to join hands with Kevin Zhang, a former Goldman Sachs partner who was co-head of its Asian Special Situations Group from 2005 to 2009, to launch their own investment firm, said the sources with knowledge of the matter.

Meng and Zhang, both Yale MBA graduates, received some capital commitment for the new fund from some Chinese entrepreneurs whose companies were invested by Meng and Zhang when they were with D.E. Shaw and Goldman, one source said.

Shenzhen, new home for Hong Kongners?

George Chen
Dec 10, 2010 05:53 UTC
When people from the southern Chinese boomtown of Shenzhen began rushing to neighboring Hong Kong to buy cheaper daily necessities just few months ago as mainland inflation rose high and fast, some Hong Kong residents were apparently unhappy. This time, it may be the turn of Shenzhen residents to complain about the buying power of Hong Kong people. For what? Real estate. Hong Kong media including the Chinese-language, pro-Beijing newspaper Wen Wei Po reported that average prices for new properties launched for sale in Shenzhen last month rose more than 16 percent on year, partly driven by buyers from Hong Kong after the former British colony, now led by Chief Executive Donald Tsang, issued special tax in early November aimed at curbing property price rises by targeting short-term speculators. Some Hong Kong housewives have already complained of a surge in local dairy product prices after more Shenzhen parents went to Hong Kong to buy baby formula and  related products. A large package of baby formula may be about 100 yuan (about US$15), but a new apartment in Shenzhen is now worth several million yuan. If you talk about luxury villas, prices are closer to 10 million yuan or even above, yet still much cheaper than the equivalent space and location in Hong Kong. Some people may argue the trend of Hong Kong people going to Shenzhen and other second-tier cities in nearby Guangdong province to buy property is nothing particularly new, but the recent tigtening property policy move in Hong Kong has certainly given the phenomenon greater impetus. Since the new tax policy was implemented, local media have reported a drop in new property transactions in Hong Kong, while the number of Hongkongers going to Shenzhen for property has surged. According to one agent interviewed by local broadcaster Phoenix TV, if you have visited Shenzhen in recent weekends, you are likely to have bumped into many visitors from Hong Kong scouting locations with their property agents. Technically, it could become more difficult for non-mainland Chinese to buy property in Shenzhen as the local government is also planning its own price-curbing policies to ensure affordable flats for local residents. But many sales agents apparently have a different view. Property agents are encouraging rich Hong Kong people to purchase real estates in Shenzhen for one simple reason — as the Hong Kong government is asking for an additional 5-15 percent tax if you sell your property within 6-24 months of purchase, why not just go to Shenzhen to buy something and bet on the fast appreciation of the yuan. In 24 months, how much further will the Chinese currency have risen? And the Hong Kong dollar? Could be a sound strategy? Many Shenzhen developers even organize virtually free weekend trips for Hong Kong people “to enjoy a day in Shenzhen”. You pay just HK$100 (about US$13), basically to cover the bus ticket, and join a group with a professional property guide to tour some of the newest developments in Shenzhen. Post-tour dinner or massage, which the city is really famous for? It’s your call!

China property

By George Chen
The opinions expressed are the author’s own.

When people from the southern Chinese boomtown of Shenzhen began rushing to neighboring Hong Kong to buy cheaper daily necessities just few months ago as mainland inflation rose high and fast, some Hong Kong residents were apparently unhappy. This time, it may be the turn of Shenzhen residents to complain about the buying power of Hong Kong people.

For what? Real estate.

Hong Kong media including the Chinese-language, pro-Beijing newspaper Wen Wei Po reported that average prices for new properties launched for sale in Shenzhen last month rose more than 16 percent on year, partly driven by buyers from Hong Kong after the former British colony, now led by Chief Executive Donald Tsang, issued special tax in early November aimed at curbing property price rises by targeting short-term speculators.

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