Chinese officials are imploring investors not to be tempted by the tips of Mr. Wang (like parents of teenage daughters in the Midwest).
Wang Xiujie (pictured) was arrested in Changchun (Changchun is often called the Paris of the Jilin province) for giving investment tips on his blog Daitou Dage 777. Daitou Dage 777, which stands for “senior big brother” and is also the name of a popular kung fu character, is one of the most popular blogs in China.
Mr. Wang, a former stockbroker, rakes in more than $1 million a year giving advice on his site and delivering “personal messaging services” to clientele. No charges have been filed against the Wanginator and the China Securities and Regulatory Commission (also a popular kung fu character) will not comment.
China’s regulatory bodies are deciding how to randomly oppress the common man in the securities industry and the $50 billion under unlicensed private management. Unlicensed private funds (“hedge funds” in China, and a popular kung fu character) represent almost a third of the private asset management sector.
Chinese blogger held over stock tips [Financial Times]
China
We’re not saying it’s the height of all arrogance to assume that one’s rank as the “world’s most profitable investment bank” would be enough to displace the fact that a would-be Asian CEO-appointee can barely read or write in Chinese, we’re just saying. Goldman Sachs was told that it could not name Richard Ong chief executive officer of its Beijing joint venture on account of Ong’s “knowledge of Chinese [being] too weak.”
Apparently Ong, currently co-head of investment banking in Asia, didn’t write satisfactorily enough to take a mandatory test for senior managers, which China began requiring in 2004 (managers hired before then have until 2009 to pass before losing their positions). Zha Xiangyang, deputy CEO of Goldman Sachs Gao Hua Securities, was promoted instead.
Since December, the China Securities Regulatory Commission as increased enforcement of the language requirement. On November 30, the group said it would “punish” securities firms appointing managers who haven’t passed the exam, but did not detail what the penalty would be. Given the reaction to a little contaminated food, Goldman was probably wise to not push this one.
Ong declined to comment (to the Chinese edition of Bloomberg).
Goldman’s Ong Misses China CEO Job on Language Hitch [Bloomberg]
China isn’t gobbling up foreign assets at a rate that many expected, with overseas acquisitions this year on pace to reach only about 75% of last year’s volume. China more than doubled overseas M&A volume last year, acquiring over $20bn in foreign assets in 2006, up from $9.6bn in 2005. This year China’s overseas deal volume stands at $6.2bn, and most acquisitions have been attempts to bolster existing energy platforms.
One continuing problem with Chinese companies looking to buy abroad is that pesky disclosure and regulatory requirements often get in the way, forcing acquirers to put on a façade of being legit, or at least solvent (and this is before they even attempt to state a value-adding proposition).
For now, India is still the go-to emerging market for foreign deals in Asia. Last year, India barely edged out China in terms of foreign deal volume, with $21.7bn in deals. This year however, India is on pace to double China’s volume with $14.1bn worth of foreign deals completed so far this year.
One reason for this year’s foreign deal lull in China is that Chinese officials are preoccupied with scanning the frescoes of the 1,600 year old Dunhuang caves that served as a religious center and trade hub on the Silk Road during the Sui and Tang dynasties. I don’t know, it sounds like a good reason.
Chinese buyers gun-shy on overseas M&A [Reuters]
China’s 1,600-Year-Old Dunhuang Frescoes Enter the Digital Age [Bloomberg]
A rumor that bananas carry viruses similar to SARS initially spread by text messages is causing a drastic price slump in the Hainan region of China, costing local banana producers over $2.6mm a day. China’s Agricultural Ministry claims that bananas do not carry SARS, and that the malady is instead only caused by the practice of Falun Gong. Perhaps the Comunist Party of China’s hold on ridiculous propaganda is weakening. The free dissemination of ridiculous ideas is the cornerstone of democracy, after all. More, from the BBC:
Hainan bananas had already been subject to rumours they caused cancer, after the banana plantations were hit by blight earlier this year. The banana fears come amid international concerns over tainted Chinese exports, including allegations of poisons in pet food and toothpaste.
As it turns out, Marx had history precisely backwards. Ownership of the means of production are increasingly heading away from the masses toward private pools of private capital. And now that includes the private capital of the clique that runs China:
China will create an agency to invest its immense reserves of foreign currency, now totaling more than $1 trillion, the country’s finance minister announced on Friday.
Skip to next paragraph
China’s finance minister, Jin Renqing, announcing a new agency Friday at the Great Hall of the People in Beijing.
The minister, Jin Renqing, offered no specifics about how much of China’s currency reserves would be under the agency’s control. But whatever the precise figure, analysts say that the agency is certain to begin life as one of the world’s biggest investment funds.
China to Open Fund to Invest Currency Reserves [New York Times]
We’ve never been entirely clear about why financial institutions employ people with the title “chief economist.” It’s not as if the analysts looking at individual stocks or market segments are really influenced by these people. We’ve heard that its mostly “for marketing” purposes—the idea would be that if the bank could show it had some bright academic-type making big prognostications about the macro-economy it would project the image of omniscience, reassuring clients about its micro-analysis.
A story in the New York Post suggests another possibility—they are political players who help their institutions land deals with governments.
A Morgan Stanley economist bragged to his bosses about playing a “key role” in getting the U.S. Treasury to change a key position in its dealings with China, and paved the way for the firm to do more deals in the booming economy, a document obtained by The Post indicates.
An e-mail from Morgan Stanley’s veteran chief economist, Stephen Roach, to senior executives in September 2003 boasts of Morgan Stanley’s role in getting Treasury Secretary John Snow to back off the Bush administration’s vow to pressure China over the value of its currency.
In the e-mail, Roach told Stephan Newhouse and Vikram Pandit, the then bosses of Morgan Stanley’s international and institutional securities units, that “I helped him script rather carefully” key lines of a policy announcement in Beijing.
Roach wrote to Newhouse and Pandit that the Chinese might be very appreciative for the help Morgan Stanley provided in changing Secretary Snow’s mind.
“I do believe we should make every effort to let the Chinese know that we played a decisive role in shaping the outcome on a key issue of great strategic importance for them,” Roach wrote.
Morgan Stanley in Chinese Snow Job [New York Post]
Senators Charles Schumer and Lindsey Graham are long-time China hawks, and most recently have been threatening China with tariff sanctions if it won’t adopt a flexible exhange rate for its currency. Today they are meeting with Treasury Secretary Hank Paulson, who is viewed as friendly toward China. Or, to revert to more typical DealBreaker parlance, Hank’s a China-Hugger.
Presumably, Paulson will ask the Senators to give him more time to negotiate with his Chinese counter-parts.
US senators to meet Paulson on China yuan concern [Reuters]
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