Shaun Rein

Shaun Rein
Contributor since: 2006
Company: China Market Research Group (CMR)
Yes, the retirement age in China especially in SOEs is far too young. It needs to be extended (just like elsewhere in the world like the US). When you look at retirement ages were implemented and life expectancy at the time, one realize the dates should be delayed a decade or more.
Exactly, one of the reasons why I am bullish on the economy if that the labor market remains tight -- it is still relatively easy to find a decent, low paying job.
I actually think Coach will do well -- it is not considered middle class here... it is a good choice for a woman buying a 2nd or 3rd or 4th bag. It is considered good value for stylish women.
Well, he has been completely wrong, completely, on his analysis of China yet somehow people still listen to him. Have to give him credit, he was able to position himself as a bear, raise money, and take negative positions. Even though the economy certainly was not as sick as he argued, there was some low hanging fruit on the downside. Class short seller play.
I agree that I am quite confident in the next 5-10 year space. There are still lots of improvements to be made in productivity, bringing rural areas into the first world, and cutting back on inefficient regulatory regimes.
Thanks for the kind comments MiaMia. Have a nice day.
Good points Alpine. Indeed, productivity in China is improving. As long as it continues, I expect growth to continue.
Ben Gee: good points on the aging population. Thank you for sharing.
Thanks for sharing Sam. Indeed, VW has positioned itself well for the mid market in China, and they capture the high end now with Audi and Porsche. They also own Rolls Royce so they are able to hit nearly all the price points, styles that Chinese consumers want. They will do well as they have differentiated everything quite well.
Another issue Volvo/ Geeley now will have to overcome in China... there are too many Volvo buses for the brand to be seen as being able to charge the kind of prices it wants for sedans. Sales are indeed sputtering.
I do think being associated as a "cab" brand definitely hurts the image/ brand positioning of companies and selling to taxi fleets is a strategy I would be wary to employ by auto brands. The short-term revenue gain is offset by the damaged longer-term position... unless the brand wants to be seen as cheap.
Hyundai became the de facto taxi brand in BJ 10 years ago which hurt them as they wanted to be seen as a mid-premiumish. That obviously did not work and they sputtered. But now they are seen as cheap in China which is a good price point.
Indeed, those Mercedes cabs did hurt the brand. I often booked them though for airport trips and missed when they got rid of them.
Datadave: I second mh001's tilt of the glass. I agree with much of your analysis, thanks for sharing.
mh001: there is no point in engaging people like BEA. He is attacking Sam and others because of his own limitations of knowledge yet amazingly does not seem interested enough to learn.
He does not, it seems, realize that in China companies pay income tax directly for employees. It is impossible for an employee to pay income tax directly.
We should be happy -- we can always bet against people who are so sure of themselves who have such little knowledge.
BEA: where did I ever say it is legal to evade taxes? For you to continue to argue that I did shows your inability to comprehend basic points. I should not be surprised as the rest of your posts indicate the same manipulation of words.
BEA: I am going to stop responding to you now. I have been very friendly, professional and patient with you but when you make statement like...
"you guys both think it is perfectly legal in china to engage in tax evasion? sounds like you both are discrediting yourselves."
it becomes very obvious that it is a total waste of time trying to engage you/ respond to your questions. Neither Sam nor I said it was legal to evade taxes.
BTW, why do you remain anonymous? I just don't get that.
The underground economy is far larger than any over-reporting... most firms under report in order to minimize tax implications. Sam's analysis below is aligned with my own thinking and research.
KDI: you seem to use facts just fine but I don't see how issues on water currently is going to cause a massive cycle of deaths in China. Nor do I see a growing number of massive riots that are threatening to take down the state. My book End of Cheap China has observations on some riots that I have been involved with... protests tend to be targeted on a fairly micro issue and are not trying to topple the State. Most people still support the direction the govt is taking the country, see Pew Center data on this.
DaLatin/ Sam: rents in Lujiazui are soaring indeed because of limited grade a office space. My firm's rent went up 18% this year... and I felt lucky at the reasonableness...
Sam: agreed. the correction is healthy. One concern point is how if at all the drought in the US will affect exports to China for corn and other crops... especially on food inflation now that overall CPI is around 2.2% which is a very manageable number.
Sam: exactly. the underground is far larger than most economists estimate (that was a major part of my graduate school thesis) which does help explain why China is so expensive. The End of Cheap China has indeed arrived.
A verge of another massive die-off? Where is the data, stats, anything to even come close to entertaining this conclusion/ notion? Please share.
Yes, as I have written extensively, everyday individual retail investors should not be investing China if it is money they are not able to lose. A large part of my business is due diligence for hedge funds... the amount of fraud is unbelievable. Be very careful of investing in Chinese stocks.
Thanks canb888 for the kind comments. Exactly, rental prices are going up and the ultra high end residential units are selling out like crazy. The limits are causing the price softening -- and they should have limits to prevent a bubble -- not lack of money or demand.
The govt needs to get more affordable rental housing available. That is a key area that is weak but not enough to threaten the system.
Water remains a serious issue in China, which is why high polluting, high water usage factories are being pushed out of China. That would mean why I am optimistic w electricity generation drops -- the govt is pushing these factories out in order to conserve electricity production.
Thanks Sam. Indeed, none of these figures would have been a surprise in my mind if folks had been following what the govt said a year ago -- they were going to clamp down on soaring real estate, and non-performing loans at the local level. I am not overly concerned about current economic situation.
I am concerned that too much new money is going into infra projects. There are more useful ways to stimulate the economy.
Thanks Tony for the kind comments. I don't understand these trolls. They often don't seem to use real data points in their analysis. Oh well, just bet against them.
TonyP4: indeed, The End of Cheap China net-net is a positive... both for Chinese in terms of progressive and for the world.... as long as nations and companies can evolve.
Oh, thanks. I thought you were talking about me.
Thank you for the note/ retraction. I respect that.
I would be real real real cautious investing in China equities as an individual retail investor unless you have serious money to do due diligence/ or to lose.
A large part of my firm's business is due diligence for hedge funds. The amount of fraud out there is shocking. Everyday investors are probably better off buying western stocks like Apple, YUM, etc to get a piece of the Chinese growth story.
And the establishment in 2008 said China was going to collapse far worse than the US... I remember being ridiculed by tons of people then. Well, 4 years later, obviously China withstood the financial crisis better than other markets and if you had let the data/ rational thought determine your investing towards China in 2008 rather than fear/ panic from the folks who base investing on erroneous data, you would be rich now.