

Investors Spooked by China - tilt
http://allthingsd.com/20111002/investors-spooked-by-china

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mark_l_watson
The title of the article is misleading: it was mostly about Internet companies
in China.

That said, I think any serious predictions about the global economy right now
is silly. Europe could crash (even with more bailouts of Greece, etc.), the
USA could crash (not as likely) or China could crash due to social upheaval,
etc. Everything could be OK for years, who knows, and the interconnected
financial world seems like a study case for chaos theory.

------
hunvreus
"A series of alleged accounting frauds this year at little-known Chinese
companies listed in the U.S. has triggered a sharp shift in sentiment among
investors"

I think the headline and even overall tone are misleading; things are however
not always 100% kosher with accounting in China, hell even when they are legal
and straight according to regulations they are disturbingly messy for any
Western accountant. That being said, big US companies like Groupon commit
their irregularities in broad day light and does not seem to shake investors
that much.

~~~
chugger
Corruption is the norm in China. Pointing out Groupon's problems doesn't
change that fact.

~~~
Volpe
Really, corruption is the norm in China. More so than the rest of the world?
Have any evidence of that? that isn't anti-china agg-prop?

Business is clearly done differently in china, and there is a lot of
protectionism, but that is not unique to China, I am curious why it is called
out so much?

~~~
PakG1
I live here in China right now, and I can safely tell you that a lot of
Chinese citizens don't believe in their own systems due to the corruption. As
one co-worker told me, "If things get really bad, you can always go home. But
we have to stay here."

I think you have to live here to understand the level of fear around
corruption and the lengths to which the government is going in order to stamp
it out (not necessarily successfully). This is a country where an executive
can get the death sentence for tainted food products. It's happened as
recently as this past summer.

~~~
Volpe
My point was about: why is china called out so much. Do U.S citizens feel that
there is no corruption in the U.S?

> I think you have to live here to understand the level of fear around
> corruption

I'm quite familiar with the attitudes within china in relation to corruption,
and have had friends who have been arrested and "disappeared" for corruption.

~~~
eob
> friends who have been ... "disappeared" for corruption

I'm pretty sure this is an answer to your earlier question. Humans are
corruptible, and thus all countries and governments contain corruption. But
the governments that deal with their problems with fiat and secret police are
just throwing gasoline on the fire -- i.e., creating an environment of
mistrust and fear which only breeds further corruption.

But in general, people also tend to more eagerly report problems in rival
groups than in their own. So I think China gets called out more on a primarily
US bulletin board just because of the rival relationship that exists. I'd
expect the same in reverse on a Chinese bbs.

------
chugger
I would never invest my money in China or any chinese-owned company.
Corruption,shady accounting practices,etc.

Justice Department probing Chinese accounting
[http://www.reuters.com/article/2011/09/30/us-china-usa-
accou...](http://www.reuters.com/article/2011/09/30/us-china-usa-accounting-
idUSTRE78S3QM20110930)

~~~
rajpaul
I have a co-worker who's from mainland China. He tells me that many Chinese
feel that the stock market is immature, corrupt, and rigged to work against
the "average joe".

The perception seems to be that unless you know someone and can get inside
information, you can't make money.

Instead, average people put their money into real-estate (1) or put it to work
in private lending (2). And then there are the pig farmers who speculate in
base metals (3). My coworker didn't mention them though.

1: [http://blogs.ft.com/beyond-brics/2011/02/03/chinese-
property...](http://blogs.ft.com/beyond-brics/2011/02/03/chinese-property-
bubble-a-myth/)

2: [http://www.reuters.com/article/2011/09/29/china-economy-
runa...](http://www.reuters.com/article/2011/09/29/china-economy-runaway-
bosses-idUSL3E7KS1B120110929)

3:[http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a...](http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a1B_ZBQfii8Q)

------
rajpaul
Sino-Forest was a $5 billion dollar company that was listed on the Toronto
stock exchange until recently trading was halted on the stock.

<http://en.wikipedia.org/wiki/Sino-Forest_Corporation>

Difficult economic times always expose fraud. If the economic situation
continues to deteriorates I think we'll see more Sino-Forests.

"It's only when the tide goes out that you learn who's been swimming naked."
Warren Buffett

~~~
anamax
> "It's only when the tide goes out that you learn who's been swimming naked."
> Warren Buffett

You do realize that that doesn't make sense, right? (The tide going out
doesn't change the exposure for people who are swimming.)

When the tide goes out, you do find out which boats are anchored in water that
is too shallow, but that doesn't let Buffett be "naughty".

