|
2019-10-01 China-Japan-Koreas
|
|
Trade war or not, Trump is wise to end Chinese investment
|
 [Washington Examiner] In the latest escalation in the trade wars, the U.S. is contemplating deploying a focused, strategic maneuver that is distinctly asymmetrical in its impact. It’s been essentially all tariffs so far (the issues with Huawei aren’t really trade related), and the move under consideration to block U.S. investment in China, including potentially delisting Chinese companies from American exchanges, would be a major tactical and ideological blow to the anachronistic, mercantilist-esque Chinese economic model.
The thing is, with or without a trade war, this should have happened a long time ago.
U.S.-listed shares of Alibaba and Baidu (the Amazon and Google of China), among others, plunged on the news, and the Yuan weakened to 7.15 against the U.S. dollar. Chinese companies aren’t a trivial amount of American stock exchanges, amounting to about $1.2 trillion of their $43 trillion market capitalization. This reckoning has been a long time coming for a country that refuses to be transparent and reciprocal ‐ its companies unsurprisingly don’t fall far from the tree.
SEC investigations and claims of fraud directed at Chinese companies have been going on for decades. From reverse-merger scams to cooking two sets of books, Chinese companies are notoriously opaque and misleading with their accounting practices. Even well-known behemoths like Alibaba are questioned for accounting methods that obfuscate critical pieces of information from American investors. Jim Chanos of Kynikos Associates casts doubt on the authenticity of the cashflows of this $430 billion company: "What the company is really earning we don’t know. ... My experience with Chinese companies is that what you don’t know is generally not good news."
The impact of this deceit transcends that of just retail and hedge fund investors. Even major U.S. companies have fallen prey to Chinese accounting malpractice. Back in 2012, Caterpillar’s acquisition of ERA Mining Machinery and its subsidiary Siwei, then China’s fourth largest maker of hydraulic roof supports, required a $580 million writedown after unearthing accounting inconsistencies and discovering it essentially lied about its inventory.
Beijing’s repeated, contemptible refusal to enforce competent accounting standards and permit overseas regulators to examine the audit work of domestic firms must be addressed head on with blunt-force tools. Policy wonks like Larry Summers or Yale’s Stephen Roach decry the move and the trade war broadly, giving us simplistic platitudes about "open access to each other's markets" or providing middle-school-tier economics lessons that view tariffs in a painfully naive vacuum. In doing so, they continue to be emblematic of precisely why Beijing has been able to get away with this and so much protectionist hostility for so long. Academically attractive and ever so superficially agreeable, this approach has been demonstrably effete and supine in its effect against an opponent that flat-out dares you to do anything about it. 
|
Posted by Besoeker 2019-10-01 06:53||
||
Front Page|| [14 views ]
Top
File under: Commies
|
|
Posted by g(r)omgoru 2019-10-01 15:18||
2019-10-01 15:18||
Front Page
Top
|
|
Posted by Jack Uloluper3745 2019-10-01 22:08||
2019-10-01 22:08||
Front Page
Top
|
|
Posted by Jack Uloluper3745 2019-10-01 22:12||
2019-10-01 22:12||
Front Page
Top
|
|
Posted by Whiskey Mike 2019-10-01 23:01||
2019-10-01 23:01||
Front Page
Top
|
|
09:24 Huputle+Cherelet4131
09:15 Huputle+Cherelet4131
09:14 Skidmark
09:11 Huputle+Cherelet4131
09:09 Skidmark
09:09 ed in texas
08:58 Huputle+Cherelet4131
08:55 ed in texas
08:51 ed in texas
08:46 ed in texas
08:45 ed in texas
08:33 Itsoktobewhite
08:27 Mullah Richard
08:17 DooDahMan
08:09 NN2N1
08:05 Airandee
07:43 NN2N1
07:33 M. Murcek
07:27 Bobby
07:27 M. Murcek
07:22 Frank G
07:02 Uleremp and Company7042
06:50 Procopius2k
06:48 Procopius2k
|
