QOTD: China’s Investment



Too funny:

"Nothing says ensured profitability, prosperity and success like giving
up an 8% stake of your firm to communists."

-Kevin Depew, Five Things You Need to Know: What is Private Equity?

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What's been said:

Discussions found on the web:
  1. wunsacon commented on May 21

    On Saturday, I started to wonder if there’s going to be some interplay between:
    (a) the fact that we told China “you’re money’s no good to buy Unocal”,
    (b) those new, anonymous exchanges,
    (c) private equity, and
    (d) China’s decision to diversify into equity funds.

    Working through PE firms would make sense. It might let them invest without the political backlash.

    I don’t know that I would want to draw attention to that possibility by buying a publicly divulged stake in a PE firm. (Well, maybe it’s necessary or it’s a way to test the waters.)

  2. worth commented on May 21

    BR, your “too funny” sums it up perfectly. When did being the dominant Communist geopolitical force transform from the great, dark, evil menace of the world, a status enjoyed from roughly 1917 to 1989, to THE plum investor/investment opportunity to be vigorously sought after by all Western capitalist concerns?

  3. Tom C., Stamford,Ct. commented on May 21

    umm.., when they stopped acting like economically doctrinaire Stalinists? Just a guess..

  4. donna commented on May 21

    Wait til they want Taiwan back. ;^)

  5. David commented on May 21

    Reading over the announcement in the FT this weekend, it struck me that this might be–in time–an almost obscenely bullish development for American stocks. How do others see it?

  6. mhm commented on May 21

    Since they have over one trillion to “diversify” I think this bull market (or bubble) has got a new pair of legs.

  7. mhm commented on May 21

    Extending my thoughts (fwiw) this could be the newest China export: financial market bubbles. Developing countries could prove a much quicker profit than freighting junk to Americas’s WMT.

  8. patu commented on May 21

    too funny!!!!!

  9. Robert Coté commented on May 21

    Wait til they BUY Taiwan back.

    I’m just wondering about board seats. Banging on thetable with a shoe? Don’t communist principles dictate that they not participate in capitialism? Stage a coup… err board takeover? What if god forbid they do something truly communist like pursue the best interests of th stockholders? The ironies are delicious.

  10. wunsacon commented on May 21

    David, yes, I see it as bullish, too.

  11. Frankie commented on May 21

    Of course it’s bullish.

    The “intellectual” case for recession, stagflation, bear market, and economic dislocation is very convincing. Yet the reality (varient argument) will be borne out.

    How can the bears look at the global improvement in the emerging markets’ economies and not see a global boom? I’ll tell you why…they have a pre-concieved notion that this country is f’d.

    God luck to them and their opinion.

  12. peter from oz commented on May 21

    don’t they have a super buffet scale problem in where to place they money outside of treasuries
    don’t you have a problem if you let them
    don’t you have a problem if you don’t and still expect them to adjust their exchange rates up and let you invest anywhere you feel like
    hmmm confucius say if tail begins to think it can wag dog and dog needs tail has dog had its day

  13. touche commented on May 21

    “How can the bears look at the global improvement in the emerging markets’ economies and not see a global boom?”

    I have been bullish on and invested in the global economy while at the same time bearish on the US economy. I think the US economy will continue to slow no matter what the Chinese do. The global economy will suffer some from a US slowdown, but then rebound rather quickly.

    “God luck to them and their opinion.”

    My investments are doing very well, thank you.

  14. ac commented on May 22

    I don’t see it as bullish, just a meaningless move.

    Margin call is getting closer………..

  15. worth commented on May 22

    I believe the Chinese citizens can only invest in their own stock markets/companies, and not NASDAQ or NYSE listings or anything like that. So I guess only the Chinese gov’t gets to benefit from investing in whatever they’d like to, regardless of where it is. If this restriction changes, or if companies start trying to get their stocks listed on the Chinese exchanges for purchase by Chinese citizens, then yes, we’ll once again be partying like it’s 1999.

  16. Sponge Todd Square Pants commented on May 23

    hmmm.. China owns our debt. They are now investing in our equities. Hillary Clinton becomes president.

    America ===> Communist.

    Sweet. I better brush up on my Newspeak.

    “They pretended, perhaps they even believed, that they had seized power unwillingly and for a limited time, and that just round the corner there lay a paradise where human beings would be free and equal. We are not like that. We know that no one ever seizes power with the intention of relinquishing it. Power is not a means, it is an end. One does not establish a dictatorship in order to safeguard a revolution; one makes the revolution in order to establish the dictatorship. The object of persecution is persecution. The object of torture is torture. The object of power is power.”

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