Peter Fuhrman

Investment advisor, ipos, foreign companies, tech
Peter Fuhrman
Investment advisor, IPOs, foreign companies, tech
Contributor since: 2009
Company: China First Capital
On pollution, as godawful as it is in Beijing, it will somewhat undermine your argument to learn pollution is actually far worse in New Dehli. "Oh really?" you say in disbelief, "I didn't know that. The US media never mentions this." Good point and a relevant one. Why is it that the US media focuses so mightily on pollution in China and never really stops to notice it's worse in India? Could it be that a lot of what is packaged as "news" in the US about China, the kind of thing you and other investors may read or rely on, is at best somewhat out of context and at worst, wholly unreliable? If so, what then? What if what you hold to as emphatic truths ain't quite so?
For the record, I live and work in Shenzhen. Not Shanghai.
I note that the weight of words here has been on China, what's wrong or could go wrong, rather than the Big Four.
I was among the first US post-graduate students in China (in 1981) and since then have noted that many, probably most, Western "analysts" and "commentators" have been confidently predicting year after year the certainty and inevitability of a China Crash. So, here we are, 33 years later. Still no crash. It's easy to perceive problems in China's economy and growth model. Easy too to let that form into a negative outlook on the country. But, for my part, I will continue to hold to the view that things in China are just fine. Its problems very manageable. Its prospects quite bright.
Its Western analysts and experts have earned, in many cases, the verdict of: "often wrong but never in doubt".
Thanks, Sam. But, again, I suggest you focus on the content of the article and so eliminate the mistaken idea this deal has anything to do with China, with China buying assets in the US. Shuanghui International is a company controlled by international PE firms, not Shuanghui Development in China. This is an LBO, being done by PE firms.
Sam, you don't understand what's happening so you're just wasting brain cells, and space here. Read again my post, do your own research. Shuanghui Development has nothing to do with this Smithfield takeover. There is, thus, no CSRC approval. Again, reading will set you free.
Conventional wisdom is often wrong, no more so than when it comes to the tens of thousands of published dire predictions on the "end of energy" or the "our planet is being polluted to extinction". It amazes me this stuff keeps getting published, bought, read, and worst, believed.
The situation with the Uyghurs is similarly not as dire as you are perhaps being led to believe. There have been some awful recent outbursts. But, it's not the norm, nor the certain future. China has an occasionally restive Moslem minority population. So does the Philippines and Thailand. Countries with an occasionally restive majority Moslem population in China's neighborhood include Indonesia, Malaysia, Pakistan, Afghanistan, Uzbekistan, Kazakhistan, Kirgizstan, Russia.
Also, the comment on solar and wind -- this is in Xinjiang, as in the rest of the world, largely just a huge cash sink, enormous loss-making activity that would never get off the ground without extensive government subsidies. Solar and wind have no bearing on what's happening in Xinjiang. Again, solar and wind are fundamentally uneconomic and there is no way, anyway, to transport electricity efficiently across China without huge losses. China's energy needs were, are and will be filled primarily by burning coal. Doing it in a smart way, as they are moving to do in Xinjiang, makes business sense and also will create some large new businesses that will be sources of lower-cost petrochemicals for China's and the world's market, lowering overall demand for oil.
My skills as a writer are, I fear, deficient. The thrust of my article is that Xinjiang is NOT going to transport the vast majority of its exploitable basic resources to Eastern China. It is going to use them locally, to make finished products, at costs well below current world market prices. Thus the transport issues become manageable, since you are mainly transporting high-value finished products, including petrochemicals, rather than coal. The market price of these petrochemical products, among projects I'm familiar with, runs to thousands of dollars per ton. The market price of coal in China? A bit over a hundred bucks per ton. Do the math. The Chinese have.
Good analogy, Italy. There are some similarities. Generally speaking, entrepreneurial companies are more innovative, dynamic, responsive to consumer needs than big ones. It's true in China. Italy. US. Japan, and so on.
Thanks for the excellent comments. Entrepreneurs in China are as good, or better, than anywhere else in the world, including Silicon Valley. But, corporate management still has a long way to go. It gets better by the day.
You are right. It could happen more often in the future. Maybe the percentage success rate will, indeed, rise above the paltry 15%. But, my purpose in writing was to focus on the huge disparity between the promise and reality of reverse merger transactions involving Chinese firms, and the very misaligned incentives. The "promoters" (a term I like) are getting rich on these deals, while causing a lot of misery for the firms involved. Sure, you can argue it's the Chinese companies' own fault, to let themselves be snookered. As I said, I choose not to see it that way. I don't think it's acceptable to do bad deals by hiding the reality of just how bad they are, statistically.
DHH, you must draw information and anecdotes from a very different well than I do. In a typical month, I meet bosses of a few dozen larger private Chinese companies. Never once have I had a Chinese boss, including over a dozen who've been recently preyed on by the reverse merger brokers, who are aware of this high failure rate. Just the opposite. The deals are pitched by bankers and advisors as "sure things". My advice: don't blame the victim.
if China stopped buying our bonds (which they won't!) what do you think will happen? interest rates payable on those treasuries would need to go up , probably fractionally, to attract other buyers. this would actually be a good deal for savers, who are stuck earning very, very little when they buy US government obligations. it won't mean global or american economic collapse. it will mean a slight shift in favor of savers, over borrowers.