David Oliver_

Strong Work Ethic at BYD, Maker of Electric Cars

I have seen many foreign investors with great track records in their own countries lose a lot of money in China because they wanted to believe the hype.

Try doing a Google search for: foxconn byd

"I have not read about any such patent infringement. Have you seen any information online?"

Strong Work Ethic at BYD, Maker of Electric Cars

Good luck to this guy. China certainly needs to work on alternative energy vehicles and move away from fossil fuels.

However I have heard the story so many times about the Chinese entrepreneur who works 24 x 7 and how wonderful his company is ... most of the time its bulls*%t targeted at people who want to believe it.

China may have 5m graduates a year but many of them are unemployed because they don't have skills useful in the real world. Don't assume that the Chinese definition of engineer is the same as one in the west. My guess is that if you paid an unannounced visit to BYD it wouldn't be quite the hive of activity you were expecting. More likely people sleeping at their desks, something quite common in a lot of Chinese companies.

From what I have read BYD has done a good job of copying and reverse engineering existing technologies. Whether they have the ability to go to the next level and be innovative remains to be seen.

Berkshire's Munger Backs BYD’s Revolutionary e6 Electric Car

Perhaps not everyone is impressed with BYD:

chinastakes.com/Articl...

Everyone Is Working Hard to Increase Global Trade Imbalances

I am always by how expensive many products are here in China. Not just imported products but many everyday products including foodstuffs (unless you go to the fruit & vege markets) also seem to cost more than they do back home. Import duties are one factor, another is VAT tax which can be up to 17%.

Lowering VAT would help stimulate consumption, however import duties for consumer products will probably not be lowered in any meaningful way. Even with a huge trade surplus I doubt if the government could bear to see people buying more "foreign" goods.

Concerns and Opportunities in Focus Media Group

I have noticed that their screens are disappearing from some office lobbies now, and I don't see them in my local supermarket anymore. I find their screens intrusive and are not sad to see them go.

New Rules for Chinese Stock Market Investors

I think this was simply a not-too-subtle attempt by Francorp to plug his company.

Synutra Goes Beyond Government Orders in Infant Formula Recall

Farmers and milk collection agents in China are paid by volume, therefore they can make more money if they add water. Adding melamine falsely raises the protein level during testing covering up the fact that water was added. In many other countries farmers are paid according to milk solids/ components i.e. fat & protein, and so there would be no advantage to adding water.

No Rest for the Chinese Stock Market

How do corporations react (to profits being squeezed)? Maybe by adding melamine to their infant milk powder products ...

Anecdotal Evidence of Risks in China's Banking System

So one scenario is that senior officials at large banks are approving what look like legitimate loans at the going market rate, but that this money is then funneled into the informal banking sector where it can earn a much higher return. A nice business for those who get a cut of the interest rate differential until things go pear shaped ...

China: Inflation or Stagnation?

A small point but price hikes of RMB0.5-1.5 at McDonalds would translate into rises of 7-21 American cents.

Whatever the official inflation figures show the fact is that life is getting more expensive in China, especially for foreigners as the price of imported food products has jumped 50% or more in some cases. Whether that is inflationary pressure, increased import duties or simple price gouging is hard to tell.

Think U.S. Is Volatile? Check Out Shanghai

Wow, thats amazing. All the investors in China are deliberately driving the market lower to try to force the government to intervene.

No one seems to have told my Chinese mother in law who is headed for the exit if there is enough of an upswing for her to get her money back.

Is China's Stock Market Nearing a Bottom?

I would have thought there was potential for the market to go down a lot further. As you yourself have pointed out numerous times inflation is going to be a major issue in the coming year and the government is also trying to bring GDP growth back to a more sustainable level. Raising interest rates and tightening credit are logical ways to do this and would be detrimental to both the stock market and real estate.

A Bull In China: Jim Rogers' Latest Book on China's Growing Importance

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

Bullish on China Digital TV

Maybe the Chinese people don't want digital TV if it means paying more money: cmp.hku.hk/2008/01/03/...

China Digital TV Holding Co. Enters the Bargain Bin

Maybe the Chinese people don't want digital TV if it means paying more money: cmp.hku.hk/2008/01/03/.../