Monkey Man

Two More Myths About Business in China

Shaun, I think it's great that you are so responsive to comments on your article. I skimmed through the other Forbes article you mentioned, and I can agree with that one for the most part, but not sure what that article was meant to refute. I find it funny that those who support your views seem to have very limited knowledge about life in China (i.e. knowledge based on brief visits to China). But then again, I believe your articles are directed more towards companies who not only fail to understand the China market well but are basically clueless and thus would entertain purchasing your firm's market research. Thank you for helping me understand why so many foreigners (companies and individuals) fail to be successful in China: they are often given meaningless advice by "experts" who, while usually well-intentioned, don't really understand doing business in China. My advice to those truly serious about making money out here: learn to BOTH speak and read Mandarin and find out things for yourself.

Two More Myths About Business in China

Regarding "Myth" 4 about savings rate, you are referring to a demographic with relatively limited earnings and thus even if they were to save 40% of their paycheck every month, that wouldn't amount to much anyway. However, when you look at wealthier Chinese (and yes, wealthier Chinese obviously tend to be older on average), the savings culture is definitely not a myth. This begs the question: is this propensity to save a thing of the past and that younger folks today will continue to be big spenders as they grow old (as the author is suggesting)? I think spending will certainly and gradually become more and more liberal going forward but high savings rates will be here to stay for some time (probably longer than the author's target audience will be willing to wait). A key consideration missing from this analysis is that there are practical reasons (ignoring for now Chinese tradition/culture, which surely isn't a myth but is difficult for foreigners to grasp and thus is easily written off as outdated) for why the overall savings rate in China is indeed very high, such as the lack of a social safety net in the form of universal healthcare coverage (China is undergoing healthcare reforms to eventually address this), welfare benefits, etc. that are typically found in more developed countries. The narrow demographic referred to in this article is benefiting from a "safety net" provided by their parents/grandparents but what happens if/when they finally make some real money and decide to get out of the house and create a life for themselves? They're going to start saving like their parents did and like their parents' parents did, and... you get the point.

Regarding "Myth" 5, who cares?

China Trying to Break the Euro?

Interesting idea but not going to happen. A collapse in the Euro would be a major problem for China's exports to the region. Furthermore, China is in close dialogues with the EU (ex-France) regarding working together to combat the crisis; a collapse of the Euro and weaker member nations would exacerbate the global economic crisis.

Opportunity to Buy China Natural Gas Before Nasdaq Listing

I guess you assume people will just take your word for it and believe the company has solid growth and fundamentals? You provide zero analysis here... careful, their Nasdaq listing is far from being a sure thing!

Trouble Brewing for Starbucks in China

While I agree that expat executives and senior level professionals are key target markets for Starbucks in China, you are missing the fact that on any given day a large percentage of people sitting in Starbucks are also young Chinese adults in their early 20's who for the most part live at home with their parents and thus are able to treat most of their paycheck as discretionary spend. This demographic has not been been affected much by the global downturn and thus key for Starbucks is to target these folks as well in order to further drive sales.

China Biotech Smallcaps: Are They for Real?

There usually are good reasons for why many of the names you mentioned trade the way they do...

Savings Not a Top Concern for Chinese, MasterCard Survey Says

I find it funny that you cite the MasterCard report. For MasterCard to release a gloomy report about consumer spending would be similar to McDonald's coming out with a report admitting that KFC is winning the fast food battle because the Chinese consumer prefers chicken over beef... while true, they won't release such reports since it reflects negatively on their business outlook.

There's Still Hope for Focus Media After Sina Acquisition

Agree with Paul Trades and Northvalley. I would get out of Focus. Their only hope now is be able to find a buyer and rumors have certainly been floating around. As a standalone business not very interesting given lack of scale, small/immature online advertising market in China and shrinking ad budgets.

China Med Forecasts Increased Revenues for 2009 Despite Low Q3

Correction: the 10-15% revenue growth refers to 2008 full year revenue, not 2009.

Why I Sold My China Positions

Microcap: Given your exaggerated deflationary figures to make your point, I question whether you're long or short on some of these Chinese names.