China, Cloaked by Layers of Opaqueness, Might Not Be All It Seems
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Show Notes
Fraser JT Howie is Managing Director of CLSA Singapore and Author of "Red Capitalism", a book which debunks the Chinese economic miracle. He discusses:
- His argument that China is in fact not pursuing a real policy of being an open market;
- That the Chinese government wants the good without the bad: the access to international markets but not the international standards, accountability and discipline;
- The reasons: whether it is a political issue, power issue or all of the above;
- Whether, given the strength of the Chinese Communist Party, China can ever really be open and market-driven;
- That China views this method of governing as more of a traditional, family-like system and whether this make the process of change more difficult;
- How foreign corporations are waking up to this bleak reality;
- That multi-national companies might profit in the short term but could well suffer in the long term. (such as Google)
- How MNCs should alter their strategies when it comes to China;
He also discusses:
- China's many weaknesses in the form of a large number of underperforming sectors, and this is because they compete in highly protected markets that foreign firms cannot compete in, such as the Chinese financial system;
- What some of these 'fragile foundations' in China's banking system are;
- How bad risk management is in Chinese banks;
- Also, China's growth, which has come at the expense of safety, workers’ rights and landowners’ rights;
- This huge massive misallocation of capital -- and what happens when payback time happens with these State-Owned Enterprises;
- What conditions might precipitate a crash;
- And, alternative places to invest, perhaps in the USA
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