Book Review: Jim Rogers' "A Bull in China"

As China has become hot, we've seen a rash of so-called China experts emerging in America’s top business magazines and whose books adorn the shelves of Barnes and Noble. I am always left scratching my head when I read some of these books and wondering how guys who visit China once or twice a year have somehow managed to position themselves as knowing anything about China aside from what the Executive Lounge in a 5-star hotel looks like.

When I was a Teaching Fellow at Harvard many years ago, I always asked my students on the first day of class how they formed their opinions on China. At the time, most China talk was about politics, as the economy still was left ravaged by the remnants of the Cultural Revolution. Now everyone is talking about China’s economy, and no one can get his two cents in fast enough. For example, look at the river of China knowledge flowing from Thomas Friedman, whose own translator in China has criticized him for not getting it.

Apparently uber-investor Jim Rogers now considers himself a China expert too. I have always enjoyed reading his books, like his book on commodities. They are entertaining and one cannot help but like such an outspoken chap who tells it like he thinks it is. And he certainly has some massive investing credentials, having co-founded the Quantum Fund with George Soros.

But Rogers’ latest book, A Bull in China: Investing Profitably in the World's Greatest Market, and declarations on China in interviews and speeches have some glaring weaknesses that make me wonder whether his other books should be read as yarns, rather than real investment advice for everyday retail investors. Any person with even a passing knowledge of China will see Rogers has huge holes in his logic. And for the people who do not notice, they might take some of the investing suggestions to heart, run around in circles and maybe lose money in the process.

First off, Rogers has said in interviews that he is selling all of his USD holdings and buying RMB ones, specifically cash. I have no idea how he does that… at least legally. As Jamil Anderlini in the Financial Times rightly posted in a book review, foreign citizens can only exchange the equivalent of $50,000 USD a year into RMB in cash. If someone can tell me how one can exchange money above $50K legally, I would appreciate it as I would like to get more holdings in RMB. I agree with Rogers that buying more RMB is a good investment choice, but it is just not feasible with the current laws in place.

Now, if one buys real estate one can get approval to exchange larger sums of cash. But in order to curb real estate speculation the Government has been limiting the number of units one can buy in China and one must have lived here for a certain amount of time. Rogers says he won’t buy Chinese real estate, and I am not sure that he actually qualifies to buy based on his lack of living here because he prefers Singapore to China because of the pollution. So I don’t think he is getting RMB by buying homes and thus being allowed to convert cash. And it certainly is not an investment strategy for people living in the US, unless they buy into a real estate fund.

Second, one cannot exchange RMB back into USD legally. So if Rogers has significant if not all of his holdings in RMB somehow, but refuses to live here as he has mentioned, then how can he live outside of China if he does not have any foreign currency? Why would such an astute investor put everything or even a small chunk into a non-convertible currency like the RMB or recommend to others to do so? While buying cash might work for a millionaire or billionaire investor or a hedge fund to allocate some holdings and just leave it there or hope that the currency laws will be eased, that is really bad advice for everyday American retail investors who might need to tap into their holdings at some point. I live in Shanghai and will stay here for many years, so holding RMB is good for me, but not for a retail investor in the US.

Third, although Rogers says he bought stock many years ago, the A-share market in China is pretty much closed off to foreign retail investors. Investing in Hong Kong or Singapore, as Rogers says he does, to take advantage of China’s booming economy is simply not the same as investing in China’s stock market.

Some can get exposure to Chinese stocks through the QFII scheme. But this option really is for only the very largest of investors and mostly for companies. How does Rogers do it then?

I have not spoken to Rogers, but I asked several people who have interviewed him for big publications how he does it for these strategies and recommendations. They all say he says he does it but jumps around the subject and does not give specifics on how to do it. If he cannot do it with his mucho dinero backing him up, how can everyday retail investors do it?

Basically, I agree with Rogers' optimism on China. I am certainly adding more exposure to China right now (as I have mentioned here before), in stocks like Ctrip (CTRP), China Mobile (CHL), and Focus Media (FMCN) that target China’s emerging middle class and which companies will be shielded from a potential recession in the US. These are stocks listed in the US and easily accessible for American retail investors. I also think these stocks will go up based on the appreciation of the RMB and might rise as more mainland Chinese investors can buy mutual funds that buy overseas stocks.

One can also get more exposure by buying companies like DuPont (DD), YUM brands (YUM) or McDonald’s (MCD) that are making money in China in RMB and thus whose bottom-lines will increase with the strengthening of the RMB. Personally, I have been buying Australian dollars for a while now because of the commodities boom, and I do not want all of my holdings in RMB… a non-convertible currency.

Overall, though, it does not really sound like Rogers has any idea of what he is talking about when investing in China. He seems to be talking in broad macro themes rather than on specifics of doing business in China. He sounds very much like that professor or government official or businessman who flies into China a couple times a year and lives at the Portman Ritz Carlton and then positions himself as the China expert, but does not understand the realities of business here.

So while my conclusions on China overall is similar to Rogers’, our theories on how one should go about taking advantage of the opportunities here are very different. Perhaps the difference lies in the fact that one of us has spent more time here in China since the mid 90s than anywhere else， and one of us takes a motorcycle trip through the country every once in a while (which is also difficult to do now since motorcycles are not allowed in downtowns of almost all big Chinese cities).

It takes more than a tourist trip and occasional visits to China to be a China expert. Just as investors need to be choosy and logical about which stocks they buy even in a bull market like China’s, they also need to think carefully about whose advice they listen to when the number of self-proclaimed China experts is growing faster than the Chinese economy.

• Books I like:
  • Operation Yao Ming by Brook Larimer.
  • China’s Leaders: The New Generation by Cheng Li
• Publications that tend to have the best stuff:
  • BusinessWeek
  • Wall Street Journal
  • Economist
• Blogs that I read a lot:
  • www.zonaeuropa.com
  • www.chinaherald.net
  • www.chinalawblog.com
  • www.danwei.org

CMR Analyst Charlotte MacAusland contributed to this article.

Comments

[rlirph]

You can legally convert US$50K each year into RMB. However there is no mechanism that you can convert it back to US$ and be able to wire it out of China.

There are other legal ways you can convert US$ into RMB. This is being done outside China. Your money is stored in a worldwide off shore bank account.

However the daily limit is RMB$20K per account per day. That is you can multiply that limit based upon the number of bank accounts you have. The advantage of this is that you can easily convert the RMB back to US$ and be able to wire to any country in the world.

The capital control process in China is convoluted. That may explain even PetroChina had to sought the help of underground finance companies to get RMB in and out of the country.

---From a US citizen residing in Guangzhou

[keo]

Jim Rogers once mentioned in an interview that he also gets paid in RMB for services in China...

RMB cannot be converted back to foreign currency AT THE MOMENT. Mr Rogers is betting that the RMB will become freely convertible soon and expects it to quadruple in the next decade.

[User 137633]

rlirph, can more be converted in Hong Kong?

[User 142738]

No; the Hong Kong dollar is fully convertible into U.S. dollars because it's both pegged to and backed by U.S. dollars. The Chinese money regime applies to all currencies, not just the U.S. dollar.

[User 106508]

Roger's may well be aiming his lastest book on China to investors like me. I've been investing in China through large, global enterprises that have benefitted from China's growth.

I have followed his investment lead in commodities and read his book when it came out. He outlines why investors like me should consider direct investment in Chinese firms and provides a list by sector with some basic back ground.

I find comparing Roger's book to Peter Navarro's, "China Wars" to be an interesting exercise.

KB

[Alpha Seeker]

Shaun, get off your high Harvard horse and stop trying to win praise by criticizing Rodgers. If you don't like his book and style, don't read it. Rodgers has taught me so much. For the future, start your articles by criticizing someone from your family and then ask questions like: "Why do I often find myself criticizing others in writing? What has happened in my past that caused me to seek fame by putting others down?"

Rob
WallastonInvestments.c...

[GKM]

I think the author answered his questions with most of his own theorizing. Anyone long the AUD, NZD, JPY would have profited significantly not to mention the stock listed, funds, etc. Even an investor with the sizable wealth like Rogers would find enough correlated investments and strategies to essentially get long China.

In fact, the direct China play might be overdone to begin with, particularly given some of the legal or regulatory hurdles outlined. Best to capitalize with the indirect and less obvious instruments. How about trains, planes, and automobiles for instance, commodities, software and hardware, shipping? I'm no where near China but I can still hear a load sucking sound coming from that direction for the foreseeable future.

I would find it hard to quibble with Rogers's strategies and chance of future success. The best predictor of future success is past success. Hitch your wagon to someone with that kind of track record and enjoy the ride. Just figure out your own workable strategies given the individual circumstances.

[ballsschweaty]

Jim Rogers is a self-promoting snake. He comes from the George Soros school. I would be doing the opposite of what they say because I'm quite certain that they like to get the public going into their pre-existing positions and then dump them on the stupid sheeple who are coming late to the party.

Why does Rogers spend so much time writing books and doing interviews? The world's greatest traders keep their mouths shut and are much too busy for such nonsense.

[thaw61]

Not really a comment about the main story, but you mention your favorite pubs as Biz Week, WSJ and Economist. I can agree with the last two, but Biz Week must be one of the worst pubs especially when compared to Fortune.

[blah-blah]

ballsschweaty nailed it

[VladimirSenkov]

Shaun, did you listen to his recent interview where he mentioned EverBank? www.everbank.com/001Wo...
I don't know HOW they do it and IF it really works and I haven't tried it myself, but according to their website (and Rogers who also says that he hasn't used it himself) one can open an account in RMB. I would if it paid interest, but it seems like it does not.
Guys, you can say what you want about Rogers but he is not a trader nor a liar. He is a very special guy who enjoys life, travels the worls, enjoys writing books about himself and his experiences and you should all learn from him if you can. He may be right or wrong from traders' point of view, but again you have to remember that he is a self made individual and he didn't make his money by bribing policy makers. I don't know about you, but I respect that.

[VladimirSenkov]

Shaun, did you listen to his recent interview where he mentioned EverBank? www.everbank.com/001Wo...
I don't know HOW they do it and IF it really works and I haven't tried it myself, but according to their website (and Rogers who also says that he hasn't used it himself) one can open an account in RMB. I would if it paid interest, but it seems like it does not.
Guys, you can say what you want about Rogers but he is not a trader nor a liar. He is a very special guy who enjoys life, travels the worls, enjoys writing books about himself and his experiences and you should all learn from him if you can. He may be right or wrong from traders' point of view, but again you have to remember that he is a self made individual and he didn't make his money by bribing policy makers. I don't know about you, but I respect that.

[VladimirSenkov]

Shaun,

Sorry for double posting, i thought it hung.

Anyways, I forgot to mention that from some of your comments about motorcycle trip, etc. it seems like your understanding of Rogers is a bit dated. Have you actually read the latest book? Have you actually listened to his latest interviews? Doesn't he actually live and work in HK now?
That's not exactly "an occasional trip" now is it?

You say retail investor can't do this retail investor can't do that. I disagree. Retail investor can easily get exposure to both A/B and H via CAF or FXI. Retail investor can easily get exposure to commodities. Retail investor apparently can even get a bank account in RMB now. Retail investor can easily get exposure to the yen. I think it is a very poor excuse to say that what Rogers says isn't doable if you don't listen to what he says. He made very specific references in several interviews and he keeps saying basically the same things over and over: 1) get exposure to commodities 2) get out of USD denominated assets 3) get exposure to yen. that's about all he says and all of it is very easily doable by anyone. If you need him to tell you how to do this specifically i think you have incorrect expectations.

[User 142738]

If you believe China is anything like Western civilization in terms of any kind of freedom, you’re more naïve than you look. Everything — from the stores, to the utility companies, to the television stations, to the Internet service providers — is State–owned and State–controlled. Visit a Chinese fuel station if you don’t believe me: they’ll limit you to CNY 100 worth of gasoline (USD 13.99) — at gunpoint!

Even the money system is ruled by an iron fist. Chinese banks not dealing in Hong Kong dollars will beg for your Aussies, Euros, Greenbacks, Kiwis, and Loonies, but when you try to buy some foreign currency, they’ll treat you like a pervert in a porno shop. That’s why the country has rampant inflation and rampant deflation all at the same time.

And don’t mention the stock market. Conspiracy theorists claim the U.S. government props up the Dow and S&P. Well, in Shanghai, the Chinese government really does prop up the Shanghai Index and Hang Seng! The logic that most people like George Soros and Jim Rogers (who’s been called a hypocrite by other Chinese nationals) use is the same logic used by the shyster investors who nearly collapsed the economy of Great Britain, exploited the corruption in Mexico, and overinflated the Japanese real estate market.

Get out of that five–star penthouse suite in Beijing and take a look around. It’s not a pretty place to live. Add to that the fact that the 2008 Beijing Olympics are being politicized far more than the 1936 Nazi–era Berlin Olympics were, and you’re looking at a time bomb ready to explode. Or a behemoth of lies and deceit about to collapse on itself.

[littlescherzo]

You can convert up to >$1m into RMB under either categories of a. financing your own family, b. paying wages for your employees in China. Both require proving documents. You can also take out all your money out of China as long as you can prove the money is legally yours. So it's not as difficult as you told.

If you are to convert really big sum of money, it'll have to be for approved investment projects or foreign trades, including service trades (but service trade is a hassle to prove).

My impression is that about half of the 'hot money' entered into China by way of the first two categories legally, and a very substantial part there of is through the hundreds of thousands of expats from all over the world and in particular from TW and HK. But the bigger half is illegally disguised as fake or inflated trades. 'Illegal' underground money laundering actually is very small by comparison.

But by and large there isn't a good or reliable way to systematically funnel money into China for investment. Even the legal and reliable ways today may be closed tomorrow. For example, 3 years ago you could remit virtually unlimited amount of fund into China as long as it's for buying real estate properties, and the housing market was just opened for foreigners. But soon after it was closed, and now you have to be a worker, domestically registered business owner, or student for long enough time to buy. But there are loopholes I was told.

With the subprime crisis QFII is greatly dimished in China, and investment in the securities market remains limited to institutions. But with the unfolding of a phase to consolidate and re-organize SOEs directly under SASAC, the government is now seen set to let the stock market doing its steep corrections. Therefore, private investors operating in China today have mostly been gravitating toward cash or cash equivalent.

As much as western market are now starved of liquidity, the battle for liquidity, and in particular bank loan, in China is equally fierce. Therefore, one way to play is to move dollar or euro to banks operating in mainland China, and lend the money with collaterals and settle in RMB before conversion back to original currency.

[User 155221]

I've spent time recently on the web (and library) researching Rogers, as I found his stance on commodities compelling. Many times in interviews he has said he's buying the Chinese currency. Once when asked directly how he does it he replied that by buying Chinese stocks he eventually will own the currency as Chinese companies obviously see their profits in RMB. Also he has stated the RMB will likely float in the fairly near future.

[just.a.guy]

A great investor is a great investor. This article's author is just bitter that Jim Rogers can recognize a good opportunity and get immediate press and recognition attached to his name when he sees it.

The author should build himself a solid 20-30 year track record of investing globally across multiple asset classes, and then feel free to opine on Rogers' misperceptions.

Until then, he just comes across as jealous and petty.

This type of attitude is not an uncommon attitude among academics in economics and finance, who see contemporaries with inferior credentials and analysis striking it rich in finance while they toil over econometrics models.

[Freddy L]

Don't listen to the bashers, this article is on the ball.

[BobinJax]

The day Nixon opened relations with China I was playing
poker with a group of State, CIA and military guys, in fact, one Diplo(spy) had just returned from China. To a
man they thought Nixon was a traitor for dealing with China. My thought was that he had just opened up a vast commercial market to the US. Jim Rodgers has
correctly predicted that China's developement into a
first world coutry will consume a huge amount of the
world's commodities and resources. If you had invested in commodities as Jim advised, you would have already made a nice pile. This boom will continue
for at least another 10 years. The only investments I
have right now are BRIC ETFs, commodities and ags.
I will leave the sub-prime fiasco for the suckers.
Those that dislike Soros do so because he backed Kerry against the Brainless Smirking Chimp. With Jim
its got to be jealousy. I have never known him to be
wrong about investments.
An excellant read are the books by Qiu Xiaolong.
Though fiction, he delves into the high and low life ot
China today.

[LittleTurtle]

Shaun, I know it would be less glamorous for you, but why don't you post all these questions directly to Mr. Rogers? He has a public website and would certainly accept people's emails. Asking these questions to us here is useless and makes you look more inexperienced than you possibly are.

[tasmazoo]

Not a great article. Rogers is far more sophisticated than you are. Taking swipes at big men is for little men.

[dukeb]

Mr. Rein: I'd like to first thank you for the amazing tip on YUM BRANDS. And then I'd like to congratulate you on having been a Teaching Fellow at Harvard. After reading how you "topped" your students on the first day of class with the question regarding their opinions regarding China, I couldn't help but wonder if you posed the same question on the last day of class.

I just finished Mr. Roger's book. I have read each of his books. I read lots of books. A BULL IN CHINA is clearly less a proclamation than an invitation for readers to join in the initial stages of personal discovery and excitement over an emerging region. I read it in the vein of an educated journal with an intelligent margin of investment ideas. Within just the first few pages, I learned quite a bit about China (thanks to a man from Alabama). Whereas reading your "book review" treated me to nothing more than evidence of a complex of conceit--perhaps the result of a lone man in China trying to distinguish himself from billions. But I will not take that to represent the country as a whole. And I hope if you did poll your students on the last day of class, they said the same.

You should consider returning to school, Mr. Rein. As a student. At the elementary level. Because the skills you lack in writing, thinking, and properly regarding others are all very elementary.

[FT Review]

DavidinChina wrote this earlier on another book review on Rogers:

seekingalpha.com/artic...

Perhaps you should also read this FT book review. Mr Rogers may not be all he seems.


New market proves difficult to corner

By Jamil Anderlini

Published: January 10 2008 02:00 | Last updated: January 10 2008 02:00

On this Chinese version of the board game Monopoly . . . it's not a roll of the dice, but a corner on the best information, that will help you pass 'Go'," celebrity investor Jim Rogers asserts in his new book about investment in China.

Rogers is known for helping George Soros establish the Quantum Fund in the 1970s, for writing books such as Investment Biker and Hot Commodities and for predicting the bottoming-out and recovery of the Chinese stock market. Unfortunately, in this book, Rogers does not provide "a corner on the best information".

The title - A Bull in China - is somewhat misleading to start with, since Rogers upped sticks from the US to Singapore, rather than China. When I asked him recently why, if he is so bullish on the country, he doesn't live here, he replied that his family had planned to live in Shanghai until the shocking air pollution made them decide on far-flung Singapore instead.

The book reads like a combination of personal memoir, stock pick listings and historical explanation of the Chinese economic miracle. The style is breezy and intended to entertain but at times gets bogged down in trying to explain the complexities of the Chinese stock market.

The most interesting parts are the author's personal recollections of his first visit to China in the mid-1980s. Rogers provides a great description of buying a single share in a bank over the counter in Shanghai in 1986 before the Chinese stock markets had even been set up. He also describes trips on his motorbike across the country when many roads turned to sand or were washed away by floods.

Sadly, such anecdotes make up a small part of the book.

The underlying hypothesis is indisputable - that China will continue to grow and there will be lots of good investment opportunities in a range of industries - but this revelation comes two and a half years into a bull run in the Chinese stock market that has seen the benchmark index jump six-fold.

During a recent publicity tour Rogers made headlines by announcing that he was selling every US dollar asset he owned and buying China's renminbi assets. But when I asked what exactly he was buying he was less forthcoming. He conceded that prices in the Chinese real estate and stock markets were reaching bubble levels and no one should buy them now, but said he was not making direct investments in factories or unlisted local companies. Pressed a bit harder, he correctly pointed out that any foreigner can open a bank account in China and he was buying cash.

The renminbi is still not a freely convertible currency and, although it used to be much easier to buy renminbi than to exchange it for foreign currencies, in early 2007 the government ordered Chinese banks to restrict individuals' annual purchases of renminbi to the equivalent of $50,000, the same amount that can be changed into foreign currencies each year.

China has a thriving black market and extensive underground banking system but Rogers assured me he has not resorted to illegal means to buy renminbi. As a significant institutional investor, Rogers may be able to structure some sort of offshore, renminbi-based non-deliverable forward contracts with an investment bank but that is hardly an option available for individual investors wanting to get a piece of China.

At times, this book reads like a collection of analyst research notes with each section followed by an incomplete list of Chinese companies with stock codes and a quick blurb. Quite a few of the highlighted companies are domestically listed "A-shares", which individual foreign investors are not yet allowed to buy. At other times, the book reads like a history of China's capital markets. But much of the information is out of date and in some places inaccurate or misleading.

For instance, his explanation of the confusing Chinese stock market contains some key errors, such as an assertion that the proportion of shares in the market owned by the government dropped from 78 per cent in 2002 to less than 50 per cent by mid-2006. In fact, the state directly owned more like 50 per cent of all shares in 2002 and the proportion of state ownership in the market has risen since then following a spate of big state-owned enterprise listings.

To his credit, Rogers clearly believes in the China story he is selling in this book. But it doesn't take a financial wizard to be positive on the country's long term prospects and with the proliferation of books on offer from other old China hands there is little need to bother with this list of stock picks.

Copyright The Financial Times Limited 2008

[FT Review]

This is another review on Rogers book by Paul Woodward

bsgasia.blogspot.com/2...

Thursday, February 14, 2008
Shaun Rein 1, Jim Rogers 0
Shaun Rein seems to me one of the soundest writers on the PRC commercial scene. I find myself agreeing with him more often than not on the development of corporate China.

I have rarely, however, agreed with him more than I do today when I read his intelligent review of the pompous, self-important piffle masquerading as investment advice in Jim Rodgers' book A Bull in China: Investing Profitably in the World's Greatest Market. While Rein (like me) avows great optimism for China's economy and businesses, he pulls no punches when he says:


Overall, though, it does not really sound like Rogers has any idea of what he is talking about when investing in China. He seems to be talking in broad macro themes rather than on specifics of doing business in China. He sounds very much like that professor or government official or businessman who flies into China a couple times a year and lives at the Portman Ritz Carlton and then positions himself as the China expert but does not understand the realities of business here.
When I first travelled to China in 1985 I talked to a very sage American woman who had already been running a business there for several years. I was making my living as a writer then and her advice still sticks with me: "those who stay for a week write a book. If they stay for a month, they might try to write a magazine feature. If they stay for year, they're far too confused to write anything". And it is still so. She, by the way, is still running a China business, now publicly listed and very successful.

[FT Review]

This is another review on Rogers book by Paul Woodward

bsgasia.blogspot.com/2...

Thursday, February 14, 2008
Shaun Rein 1, Jim Rogers 0
Shaun Rein seems to me one of the soundest writers on the PRC commercial scene. I find myself agreeing with him more often than not on the development of corporate China.

I have rarely, however, agreed with him more than I do today when I read his intelligent review of the pompous, self-important piffle masquerading as investment advice in Jim Rodgers' book A Bull in China: Investing Profitably in the World's Greatest Market. While Rein (like me) avows great optimism for China's economy and businesses, he pulls no punches when he says:


Overall, though, it does not really sound like Rogers has any idea of what he is talking about when investing in China. He seems to be talking in broad macro themes rather than on specifics of doing business in China. He sounds very much like that professor or government official or businessman who flies into China a couple times a year and lives at the Portman Ritz Carlton and then positions himself as the China expert but does not understand the realities of business here.
When I first travelled to China in 1985 I talked to a very sage American woman who had already been running a business there for several years. I was making my living as a writer then and her advice still sticks with me: "those who stay for a week write a book. If they stay for a month, they might try to write a magazine feature. If they stay for year, they're far too confused to write anything". And it is still so. She, by the way, is still running a China business, now publicly listed and very successful.

[dukeb]

FT Review:

The "DavidinChina&quo... book review you posted Mar 01 10:12 PM is completely accurate and very informative about Mr. Roger's new book. It is an excellent brief. Anybody who reads that review can make an intelligent decision regarding the suitability of A BULL IN CHINA for their reading list.

However, the "Paul Woodward" book review is simply pathetic and on par with Mr. Rein's book review. Each is worthless and a complete waste of time. Both of those "contributors&quo... should be banned from Seeking Alpha until they can demonstrate an ability to treat the readership here with the respect we deserve. It is not about Mr. Rogers; it is about us, the readership here.

[REVIEW 101]

I urge anyone who reads the above article take one glance at it and consider it garbage. Why? Clearly the author took one peek at that little FT review (from which he then pulled a reference), skimmed through the book on the weekend, made a few assumptions based on generic interviews, and then seemingly regurgitated it to make some sort of pressing deadline. Whatever the case, laughable journalism. I can assure you all that I will be reading far less of Seeking Alpha thanks to Mr. Rein.

I actually read the book, and I can tell you, if you are looking to invest in China or what to profit effectively--read it. As Rogers himself will tell you, his book isn't filled with "hot tips" and investment advice for the retail sector, despite what our above Harvard educated friend above may think. Instead what Rogers does is give you an awesome foundation, shows you how to analyze from a Chinese perspective, and highlights some really eye-opening figures that all those "big publications" and CNBC reports tend to miss. We can all say "go invest in Ctrip," but most of the stuff in this book, you won't find anywhere else. Bottom-line, he makes China digestible and breaks it down so that it's actually investable. I guarantee you will be suprised at the sheer amount of opportunities that exist for the average American.


Reason's Why You Should COMPLETELY Disregard Rein's Review:

1) The man didn't even read the book.
If I had to pick one sentence that proves that the author didn't even read Rogers' book, it would be this: "Third, although Rogers says he bought stock many years ago, the A-share market in China is pretty much closed off to foreign retail investors. Investing in Hong Kong or Singapore, as Rogers says he does, to take advantage of China’s booming economy is simply not the same as investing in China’s stock market."
If the man even read the FIRST CHAPTER he would have ascertained that this is NOT only way to invest in China. In fact, foreigners can even buy "stocks" in the form of B-shares denominated in US or HK dollars and traded on the Chinese stock exchanges. Sooo basic, seriously. Do 5 minutes of research and figure it out. If you are still wondering why you can't buy B-shares through your E-trade account, perhaps you shouldn't be buying them in the first place. But, hey, if the author actually read his book, like he claims, he would have seen that Rogers even lists websites and resources...

2) He didn't do any research.
"Rogers has said in interviews that he is selling all of his USD holdings and buying RMB ones, specifically cash. I have no idea how he does that… at least legally."
First of all, go read Foreign Exchange 101. It seems the author is confused or perhaps simply unaware of the wonders of currency appreciation. Also, stellar move by simply using research from the FT article. If he had done any, perhaps he would be telling the readers that the RMB is predicted to continue to appreciate against the USD by 7-10% per annum...for many to come. And, well, that's just a pretty commonly accepted fact amongst sophisticated investors (FT, Bloomberg, Economist, etc).
But it seems the author is merely grappling with "But how do I do it?" and apparently under the impression that Rogers is telling retail investors to ALSO go exchange all of their USD to RMB as soon fast as possible? This is simply not the case. Obviously, if you can't afford NOT to be liquid because you have to pay your electric bill next month, you shouldn't be holding a unconvertible currency such as the RMB n a long-term investment at this particular point in your "investing career." Furthermore, if he was truely interested in learning about ways he can profit from the appreciation of the RMB, he would have read the book...and he wouldn't have written such an asinine article.

3) He based the entire article on assumptions and flawed facts.
"I agree with Rogers that buying more RMB is a good investment choice, but it is just not feasible with the current laws in place...how does someone $50K legally?"
Perhaps opening a bank account? Yes, it's true, you can hold RMB through Everbank and US citizens can open bank accounts in China. I've done it. Over 100,000 foreign students have done it. It's really not that mysterious. What you have to remember though is with Everbank, you're doing it because you're speculating that the RMB is simply going to appreciate-- you're not doing it to get an interest rate. If you don't plan on heading to China to opening an account, it's a pretty solid alternative. But--in regards to Rogers, he's a long-term investor. If you think he's doing this for a meager short-term exchange rate at the end of the year, like Mr. Rein may be wanting to do for his stint in Shanghai, you're sadly mistaken.

What stellar research. Truly disappointing....mainl... because I hoped Seeking Alpha would hold its writers to higher standards. Needless to say I will now be second guessing the quality of future content.

4) The real estate paragraph is quite possibly the dumbest supporting argument I have ever read.

5) "One cannot exchange RMB back into USD legally."
This would be a great point IF Rogers had any attention of taking all the USD he has now, converting them to RMB, and then convert them back to USD. This further shows that Mr. Rein had no foundation for even understanding the very basics of Rogers investment philosophy. If you still think the only way you can generate a return is if your little profits are returned to you in your home currency--wow. *Thumbs up*

So, to conclude, if you want to really get a glimpse on how you can profit from China...well, beyond that of Mr. Rein's innovative suggestions of "DuPont, YUM, McDonald's," which CNBC covered many moons ago, I highly suggest thinking outside of the box and going beyond Chapter One...you won't be disappointed.

[Louis inShanghai]

Having read through the many responses to Shaun's book review my impression is that many readers are missing his point.

Shaun would seem to agree with Jim Rogers that China will show a lot of promise going forward and I do not think he would argue that the RMB will appreciate as Jim Roger's suggests.

Rather Shaun is pointing out that much of the advice Jim Roger's suggests for investing in China and Chinese currency is not necessarily convenient or easy to implement.

Opening a bank account in China is simple as some respondents have suggested. And pretty much anyone can choose to convert up to 50,000 US dollars into RMB annually but Shaun's point that maintaining convertability is difficult is relevant. Maybe China will ease restrictions, maybe they won't. My bet is that it will be longer than one might think thus making it somewhat impractical for the retail investor.

Jim Rogers is a good man with a great investment track record and he will most likely make a lot of money investing in China, whether that is in buying cash or buying companies that realize RMB profits. However, it is fair to point out that hold RMB reserves is not nearly as easy or as desirable as he makes it out to be.

Holding FXI or carefully choosing strong Chinese stocks may be the better bet in balancing a portfolio and shifting away from US dollars.

[Elliott Ng]

I researching ways for retail investors to move more than the $50k maximum described above. I posted about a new ETN product and am weighing this vs. EverBank vs. other options:
cnreviews.com/china_ec...
In case the long URL breaks, here is a short URL to the post:
urltea.com/2z24
If anyone has any advice or thoughts, please post them here or on my blog. Thanks!

[thechinastory.org]

I am three quatre way through his book. I will write an article in my blog once I finish. For now I will express my view here because there is so much in this book I can't hold back my expression.

I am an ethnic chinese worked and grew up in Europe and now in Hong Kong and lived in Shenzhen regularly. I write a blog about 'the china story' based on my own experience and I think I know something. However I am so surprise how much I am learning about China from a 'Westerner'. He knows a lot about day to day Chinese stuff that I wouldn't think a Westerner would notice or comprehend. In fact he knows a lot more. For example the water problem is a serious one I only know now after asking around. You don't hear about it on the five plus financial channel in Hong Kong. He is very up to date, for example about the 'golden holiday in China', macau gambling business, about how the mainland chinese people think. Reading this book, I am like oh that's why the Beijing Airport share price has been rising eventhough oil is at a record high and that's why people are so crazy about Taiwan stock now since the day Ma won't the election and there is so many new thing I learn. He also mentions about China Aerospace International Holdings 31.HK. There is no mention about military equipment from my data feed but I believe Jim. What does this mean? It means Jim knows something beneath the surface. Maybe research analysts put report on his desk every monday or maybe senior government source tell him during dinner but one thing is sure his information is no BS.

Jim roam China in 1984 that's when the guys start exploring the Silk Road from Japan and China. So he really is the first bunch to explore China.

I think he is very very clever and observant. I travel China and so do million others but I didn't pick up the stuff he notices. Most people only notice the spitting and bad stuff from China but he figures out the whole picture. To be honest I have a problem grasping even after he explains it let alone figuring it out myself.

[thechinastory.org]

BTW let's not try to figure out how Jim invests in China. In his book he tells you he can invest in S, J, H, B shares so here you go.

My question as an investor in HK is how to invest in commodity in Hong Kong. I look at a commodity broker site and you need $8M to open an account. Does any one know how to invest in commodity from HK?

[mediafright]

Maybe Mr Rogers has been fed money by FED to go and pump China and Commodities so that inflation around the world skyrockets and Chinese workers would no longer work on the cheap daily salaries they get paid today. This will increase the costs of manufacturing in China and eventually make US products and services more competetive.

[Silver-Bullet]

All this talk and publicity (the good and the not so good) makes this book too compelling a read to miss.

I just ordered my copy from Amazon, just to check things out for myself.