Sr. Pessimist

Why I'm Resisting the Urge to Buy Baidu

Currently there are perhaps roughly 300 million in the Chinese workforce, with perhaps 500 million in the rural areas who are awaiting introduction. In the American workforce, we see perhaps a rough 100 million. The Chinese workforce is around 3 times the size, and may ultimately grow to be as much as 8 times the size, of the American one.

The born-rich non-workers don't make productive use of a search engine, because they are non-performers for an economy (they do not contribute despite their consumption). In other words, the only valuable money is that held by the proletariat. I'm trying to imagine the IPO of Baidu as a guess that the Chinese economy will grow to be 4 or 6 times the size of the American economy. That makes sense, because any nation with a nuclear arsenal can steal Arab oil. Anybody with an Internet connection can outsource labor. This is quickly becoming unprofitable. So when it all equalizes out, the only thing that matters is the domestic work force.

China having 4 to 6 times the economic value of the US sounds about right to me, assuming Google was a good investment for a given investment plan. Further, China is less illegitimate than the US. As much as people like to say the government owns everything, it's less so than in the US, because in China you as a business can't survive just by connection. So if Baidu is comparable to Google in terms of functionality, long-term I can see Baidu with comparable prospects. And I agree with the author about the investment quality. Maybe a good investment, but might want to hold off right now.