Friday, July 25, 2008

Is China a fad and phasing out as an investment opportunity???

Lately we have been hearing from US and other foreign investors that the China investment opportunity is a Fad and is phasing out. This is substantiated, they say by several reasons:
1) The true hanging fruits were picked already.
2) There is an overcrowding environment; everyone is there already.
3) Too much money too little deals making for high valuations.
4) There are too many Chinese exits, so the novelty is over and will not happen any more.
5) Oh and the most recent one, after the Olympics everything will die out. (who are you kidding)

Well, this, in my opinion is old school, very conservitative thinking and frankly very narrow minded or are these people just trying too hard to be a head of the crowd.

First of all, these investors do not see China as a long term player but only as a novelty, short term opportunity. This, like I said, is very narrow minded and arrogant.

Wake up People, China is here to stay, as a super power and take its rightful place among other super powers. Is the US not a good investment platform? is Europe or even Israel not still tempting, of course they are they are established and still play in the field, China is not even close to being established and let me let you on into a secret, they are not going anywhere.

Second issue, how can 1.3 B people (and growing) be a Fad and fading out? China is what Israel was 20 years ago, just much (much, much) larger, hence more opportunity.

Getting back to investments, it is true that in the Shanghai region, investments are more expensive, less of an opportunity, because smart people came there first. But again the market will stabilize and with success there will be more opportunities, just like the example in western countries.

But China's low hanging fruit are still out there and waiting for those less spoiled investors who are willing to travel 50Km out of town or into the western parts and there what you find can be outstanding.

Mao, who can be blamed for many things is responsible for some very good business decisions as well, which affect China today, even though they might not have been economic related at that time. He founded areas of technological excellence, such as Chengdu (Nuclear center); Xian (Aero space center); (he founded them inland away from the missile threat of Taiwan) and then developed Wuhan (Electro optics center); and more. In these areas very large and serious companies have been developing in the last 20 years derived from the core business of the area. These are not to be neglected. (I might tell you about one of these in the near future)

These areas have not been touched or tapped yet. Yes they are remote, maybe less English speaking, but since when does speaking English, mark a good investment!?

Tuesday, June 10, 2008

The Middle Kingdom (hidden meaning or not)

The name of "China" in Chinese is Zhongguo (中国). The first character zhōng (中) means "middle" while guó (国) means "Country" or "Kingdom" and commonly translated into English as "Middle Country" or "Middle Kingdom".

Some westerners tie to this name hidden meanings: that China considers herself the center of the world; looking at herself as the most important country with superior rights, deriving from this other hidden meanings like China's desire to control the world and more, but as my colleague Kang Jianxi pointed out to me today, there are no hidden meanings or hidden agenda, that the name simply means as the deep meaning of the first character zhōng (中) - taking the middle way, taking the balanced path without going to extremes of left or right, which is actually the core cultural essence of Confucianism and the Chinese culture.

This really got me thinking that our minds are so corrupt with the way of our power struggles that we assume that everyone thinks the same and has the same power desires.

So does China consider her self the center of the universe, a country that is above all others or a country that just wants to take its rightful place among the nations, as Christian Lou (who is usually a China critic from HK) says China just wants to achieve her rightful place of standing as one of the worlds super powers. (Between you and me, it is about time).

It actually makes a lot of sense to me, and that is how I believe the Chinese and their leaders see it and vision it. China does not want to master the World, does not want to conquer additional territories and anyone who read a little history knows that China has never conquered other countries, if anything they were conquered (before you start, yes there is a controversy about Tibet, but that is a different issue, which I will not go into now, and as far as China is concerned, Tibet was always Chinese territory, but again not our discussion). China wants to achieve its standing, to flourish as they should. China is a country which has went through several transitions and has understood that they can do better and be better. We should applaud this, assist in the making and not see it as a threat but as a deserved goal for a country and people that have struggled and worked very hard to achieve this objective.

So shouldn't we just realize that sometimes, some things are just what they are, with no hidden meaning, and should just be understood and taken literally?