The responses are equally predictable.
On Monday China burned the rulebook that has guided its IPO market up till now. The result, unsurprisingly, was fireworks.
As a new “silicon curtain” crashes down between the technological infrastructure of America and some of its allies and China and the countries in its sphere of influence, there has begun to be talk about restricting flows of capital as well as goods between the two nations. Some have fretted that China might dump its holdings of US treasuries in retaliation for escalating tariffs. Other analysts have speculated that U.S. financial institutions might soon be prohibited from investing in securities in mainland China’s state-owned enterprises. And now Senator Marco Rubio has put the nuclear option on the table with a bill and editorial in the Wall Street Journal, “You Can’t Trust a Chinese Audit,” proposing to potentially boot hundreds of Chinese companies off of U.S. stock markets.
Fraser Howie is one of the most astute observers of China’s banking and financial systems, and his book Red Capitalism: The Fragile Foundations of China’s Extraordinary Rise is required reading for anyone who wants to understand China’s transformation from an impoverished backwater into a powerhouse of authoritarian capitalism. Fraser has spent over two decades trading, analyzing, and writing about Asian stock markets and has worked for companies including Bankers Trust, Morgan Stanley, CICC, and CLSA. He is a regular commentator on Asian financial markets and monetary policy for international print and television outlets.
MarcumBP’s Drew Bernstein caught up with Fraser recently to understand his views on how the economic and business environment is changing and the challenges that Chinese policymakers face.
After months of sparring on twitter, the two opponents were to face off at a recent conference on Fraud in the Bull Market organized by the Berkeley Center for Law and Business. Is activist short selling the best hope for cleansing the stock market of bad actors? Or is a plague of shadowy short-report gunslingers destroying worthy companies and fleecing retail investors?
I thought it would be useful to share key takeaways from the recent Bloomberg Invest Asia conference, an invitation only event for international business leaders to exchange ideas regarding China’s role in the investment community.
Drew Bernstein interviews long-time China expert James McGregor, the author of One Billion Customers - Lessons from the Frontlines of Doing Business in China, on the challenges that multinationals face doing business in China today and the state of U.S.-China trade relations. Currently the Chairman of APCO Worldwide, Greater China, McGregor has spent three decades in the region as a journalist, venture investor, author, and now public affairs consultant to major corporations with operations in China.
Judging from the headlines, you might think Chinese technology companies are on the ropes. The Justice Department has been investigating and indicting telecom giants Huawei and ZTE. Rising U.S. tariffs threaten to displace China’s dominance in the global supply chain for electronics. And Chinese internet Goliaths Alibaba Group (NYSE:BABA) and Tencent saw their market values shaved in 2018 by investor jitters over government policies and a softening economy.
If you only read the newspaper or watched TV, one might think that the economic relationship between China and America was on the verge of an irreparable split. But as I shared in a recent interview on Bloomberg television, I actually remain fairly optimistic that, despite the many bumps in the road, the world’s two biggest economies will continue to find ways to work together and that deals will get done.
The role of a Chief Financial Officer for a Chinese company listed on the U.S. stock market is intensely challenging. While the job of CFO generally has become increasingly complex due to the growth in regulatory oversight and the pressure from institutional shareholders, Chinese CFOs need to also bridge two very different business and legal cultures.