More tales from the Red Collar Crime Wave…
When all the lies and deceit finally come to the fore, a lot of very smart people are going to look very, very stupid – or gullible at least. I got this note from a reader working at a high level with both US and Chinese businesses in China. His term to describe the corporate culture – “immature” – strikes me as being perfect.
Sorry I’m not putting this in comments, but I work full-time in China, in the supply chains of a few multinationals, and word gets around fast, especially if it looks like Chinese business is being dissed.
But you are absolutely right: there is no way to find out what is going on in these companies. None. The business “community” is very immature, and they have no incentive to share anything with anyone not part of their “guanxi” network.
I work with real Chinese factories as well as the Tier 1 “transplants”, all over China, developing and financing process upgrade projects. They are happy to see me, and they are good collaborators and innovators. But even they don’t tell me the truth all the time about something as straightforward as energy bills.
There are good companies in China, even great ones, with sharp management, excellent business models, and these are the ones that will lead China’s business practice evolution.
Those great Chinese companies are not publicly traded. In fact, I would say at this point, if a company IS publicly traded, that is pretty much prima facie evidence that they are NOT OK. They are predators with short-term horizons, looking to grab some OPM from stupid US-ians who are naively charmed by a highly manipulated growth story.
Some day this may all be different if they can get through the inevitable greedhead phase, which is complicated by the desire and even the need to conspicuously display one’s wealth. I actually rather like normal Chinese people; but the corrupt bastards at the top and the rich guys are as bad as anything we spawned in the US; maybe worse because they are REALLY good at hiding business details.
Josh here. The rampant fraud in Chinese reverse merger stocks may merely be the loosest and most visible thread – ultimately a big chunk of the garment could unravel. This denouement would take billions in investment capital with it and the repercussions could be felt globally (name a country that isn’t getting rich selling stuff to into the Chinese “miracle”).
We know the why and the how, we simply don’t yet know the when.