‘The China Hustle’, a finance documentary(marketwatch.com)
marketwatch.com
‘The China Hustle’, a finance documentary
https://www.marketwatch.com/story/finance-documentary-the-china-hustle-revisits-chinese-reverse-mergers-and-activist-short-sellers-2018-03-30
11 comments
It's kind of crazy how people have been talking about this and the real estate and shadow banking and zombie companies for almost an entire decade, but the Chinese economy remains resilient.
I wonder: were people talking about the subprime mortgage crisis that long? Do we just hear about stuff sooner because of the Internet being more mainstream? Is China possibly immune to a downturn just given its sheer size in population, the fact that it's basically a dictatorship, and that it's not affected much by outside money?
I've been bearish on the Chinese economy since 2012. Luckily I didn't bet on it.
I wonder: were people talking about the subprime mortgage crisis that long? Do we just hear about stuff sooner because of the Internet being more mainstream? Is China possibly immune to a downturn just given its sheer size in population, the fact that it's basically a dictatorship, and that it's not affected much by outside money?
I've been bearish on the Chinese economy since 2012. Luckily I didn't bet on it.
I watched the documentary today and it is not about the Chinese economy.
The documentary points out an interesting contrast. Most of these companies were filing correct figures in China. But they were filing fudged figures in US. Because it was difficult to get information out of China, no one bothered to verify. It sounds ridiculous.
But then I read stories about people being encouraged to admit fake data to get more subsidies:
https://asia.nikkei.com/Politics-Economy/Economy/Chinese-loc...
And I understand. The whole place is so opaque that getting actual information requires people on the ground or some whistle blower.
The documentary points out an interesting contrast. Most of these companies were filing correct figures in China. But they were filing fudged figures in US. Because it was difficult to get information out of China, no one bothered to verify. It sounds ridiculous.
But then I read stories about people being encouraged to admit fake data to get more subsidies:
https://asia.nikkei.com/Politics-Economy/Economy/Chinese-loc...
And I understand. The whole place is so opaque that getting actual information requires people on the ground or some whistle blower.
I'm not sure there is any way to know how the Chinese economy is doing. They could be in a serious recession for all we know. The only numbers available are basically state propaganda and can't be trusted.
If China had normal capital flows, their economy would’ve corrected Japanese-style a while ago.
However, they don’t. And like Japan, they have a huge amount of reserves. But it is supressing future growth, probably.
However, they don’t. And like Japan, they have a huge amount of reserves. But it is supressing future growth, probably.
Has Japan ever gotten "correct?" To your point, economies can be weird for a long time.
Seeing how American investors sucked the last drop of blood out of several German companies over the last decade or two by "restructuring" those companies, effectively signing ridiculously expensive consulting contracts with themselves, I can't feel too bad about this. Capitalism gets glorified and justified unless someone else starts beating you at your own game.
Presumably, these restructurings were fraudulent under German/EU law? Otherwise I don't see how your comparison works.
Perhaps his point is that law and morality are not the same thing.
Yes some apparently were. Märklin sued and won iirc.
But even if it were totally legal, restructuring a company with the goal of pumping all the money out of it and then just watching it crash and burn just doesn't sound like it should be. Not any more legal than whats described in this article, in my humble understanding of right and wrong.
But even if it were totally legal, restructuring a company with the goal of pumping all the money out of it and then just watching it crash and burn just doesn't sound like it should be. Not any more legal than whats described in this article, in my humble understanding of right and wrong.
Would you mind giving some examples?
The worst cases that I remember were usually private equity / leveraged buy outs, that usually leads to a transfer of the production to EastAsia. That practice is not exclusive to Amercan companies though.
It will be interesting to see how the new Chinese investments will fear (Kuka) and if the German goverment will adopt a stronger stance on this take overs in the future.
The worst cases that I remember were usually private equity / leveraged buy outs, that usually leads to a transfer of the production to EastAsia. That practice is not exclusive to Amercan companies though.
It will be interesting to see how the new Chinese investments will fear (Kuka) and if the German goverment will adopt a stronger stance on this take overs in the future.
There was a great documentary about it on a German TV channel (Arte) years ago. One name that got stuck is Märklin, since I know people who worked there. It wasn't the worst case though and the company still lives independently, after some rough times.
Not trying to say that either practice is good, but there tends to be a bias in perception, naturally. We're always the good guys and China is the evil 60s SciFi villain who's mostly just evil because he's evil, kind of.
Not trying to say that either practice is good, but there tends to be a bias in perception, naturally. We're always the good guys and China is the evil 60s SciFi villain who's mostly just evil because he's evil, kind of.
Can't watch in outside the US, well going to wait for a torrent then.
For folks living where this is not available ... 07b34e798b700abb19ecdcd81bccaff721838e0b ...
^U in your favourite client, paste this DHT id
I want to comment as a Chinese. All the facts presented in the film are solid and true, but the problems lie in the interpretations and implications.
Lack of law enforcement doesn't mean there's no rule of doing business in China. In fact like an old saying in China, 'no rules, no shapes.' Rules aren't necessarily laws, as mentioned in the film, 'Guanxi' is something you have to build up if you want to do business in China. Larger your 'Guanxi' network, faster and easier you can do things than others. And there's 'Koubei' come into play. It means the trustworthy of an entity, not defined by some auditing companies, but complimented by other fellows in the field. A decent 'Koubei' worth more than any auditing report. Like in the film where a company can buy auditing reports to fraud investors, but a company with decent 'Koubei' but no auditing reports would never do that (at least not to local investors). So the rule here is you have to build your 'Guanxi' network with people of decent 'Koubei', meanwhile maintaining your own decent 'Koubei' so others want to build 'Guanxi' with you.
This is something even Chinese kids would know, but just appears to be difficult for the West to get a grasp of it.
Can't trust the government doesn't mean you can't trust anyone. At least we trust in common interests. There's another saying in China, 'only kids talk justice, adults talk interests.' In a market where you can basically do anything with your 'Guanxi', there's no right or wrong in doing things, what only matter is your profits. (Of course there are red lines you should never cross and none of these were written in the law neither. They are the 'unspoken rules'.)
This is where things get funny when foreign investment firms like Roth Capital entered the market. They know nothing about the rules here, and neither these hungry American investors who wanted so hard to take a bite on the largest pie in the century. And they don't even know how to protect their selves in China. No surprise they will be fooled.
But seriously, who can you blame for? There's another old saying in China, 'you came to the town, you play by the rules.' You should do your research before betting your pensions on some random factories oversea.
The last part of the film made me laugh. They were implying that since these crappy factories are frauds, all Chinese companies including Alibaba and Sinopec are lairs. This just shows how ignorant they are and they still don't understand the Chinese rules. Sinopec is the second largest SOC in China. Their don't even need to have 'Guanxi', they ARE the 'Guanxi'. And Alibaba is like Amazon, YouTube, eBay, PayPal, Yahoo etc. all combined. It's the monopoly in this field in China. It's simply too large to fail. If you are comparing companies like these with random crappy factories out of nowhere, you just don't seem to understand how powerful these companies are in China, and clearly you don't understand how the Chinese market works.
The last part is mainly pathos-based, and full of logical mistakes. But I don't know, since this is basically what they've always been doing, getting people worked up against the companies so they can make money from shorting.
Here are some short reviews from Chinese viewers [1], and I think they represent the mainstream opinion of Chinese people.
[1]: https://movie.douban.com/subject/27115571/comments
Lack of law enforcement doesn't mean there's no rule of doing business in China. In fact like an old saying in China, 'no rules, no shapes.' Rules aren't necessarily laws, as mentioned in the film, 'Guanxi' is something you have to build up if you want to do business in China. Larger your 'Guanxi' network, faster and easier you can do things than others. And there's 'Koubei' come into play. It means the trustworthy of an entity, not defined by some auditing companies, but complimented by other fellows in the field. A decent 'Koubei' worth more than any auditing report. Like in the film where a company can buy auditing reports to fraud investors, but a company with decent 'Koubei' but no auditing reports would never do that (at least not to local investors). So the rule here is you have to build your 'Guanxi' network with people of decent 'Koubei', meanwhile maintaining your own decent 'Koubei' so others want to build 'Guanxi' with you.
This is something even Chinese kids would know, but just appears to be difficult for the West to get a grasp of it.
Can't trust the government doesn't mean you can't trust anyone. At least we trust in common interests. There's another saying in China, 'only kids talk justice, adults talk interests.' In a market where you can basically do anything with your 'Guanxi', there's no right or wrong in doing things, what only matter is your profits. (Of course there are red lines you should never cross and none of these were written in the law neither. They are the 'unspoken rules'.)
This is where things get funny when foreign investment firms like Roth Capital entered the market. They know nothing about the rules here, and neither these hungry American investors who wanted so hard to take a bite on the largest pie in the century. And they don't even know how to protect their selves in China. No surprise they will be fooled.
But seriously, who can you blame for? There's another old saying in China, 'you came to the town, you play by the rules.' You should do your research before betting your pensions on some random factories oversea.
The last part of the film made me laugh. They were implying that since these crappy factories are frauds, all Chinese companies including Alibaba and Sinopec are lairs. This just shows how ignorant they are and they still don't understand the Chinese rules. Sinopec is the second largest SOC in China. Their don't even need to have 'Guanxi', they ARE the 'Guanxi'. And Alibaba is like Amazon, YouTube, eBay, PayPal, Yahoo etc. all combined. It's the monopoly in this field in China. It's simply too large to fail. If you are comparing companies like these with random crappy factories out of nowhere, you just don't seem to understand how powerful these companies are in China, and clearly you don't understand how the Chinese market works.
The last part is mainly pathos-based, and full of logical mistakes. But I don't know, since this is basically what they've always been doing, getting people worked up against the companies so they can make money from shorting.
Here are some short reviews from Chinese viewers [1], and I think they represent the mainstream opinion of Chinese people.
[1]: https://movie.douban.com/subject/27115571/comments
I enjoyed the documentary! I would recommend watching and supporting it.
This happens all over the world, not just China.
Dear Magnolia Pictures,
I would like to watch this documentary and in return give some of my dollars to you. These dollars don't smell and they don't look different. These dollars are all digital and not contagious, you will not catch a virus, I promise. I know that I don't live in USA, but does it make my dollars worth less? You have 18 different streaming options, I tried a few, but all of those sites discriminate me based on my location.
I would like to watch this documentary and in return give some of my dollars to you. These dollars don't smell and they don't look different. These dollars are all digital and not contagious, you will not catch a virus, I promise. I know that I don't live in USA, but does it make my dollars worth less? You have 18 different streaming options, I tried a few, but all of those sites discriminate me based on my location.
Well, it’s not linked on their site, but I did manage to find it for Rent (and Pre-Order) on the iTunes Store for Canada. I tried a few other international stores and couldn’t find it, though. IMDB indicates release dates only for US, Canada ... and Denmark, strangely enough. I presume it will eventually arrive in other markets as the rights are negotiated. It’s perhaps to their best advantage to make a splash in North America first, it may help future negotiations?
Hoxx VPN?!
It's on Netflix.
Can confirm (Netflix in Sweden)
It's on Netflix Singapore
And on Netflix South Africa
Netflix belgium ok
can't find it on netflix usa
it isn't on Netflix in USA. So far I can only seem to rent it on either iTunes, Amazon Prime Video and YouTube rental. $6.99 to rent.
The site didn't even load for me.
Same here.
I tried YouTube, iTunes, Xbox Store and Amazon. None of those worked for me here in Austria.
Well, i was willing to pay, but not any more. I will wait for the Torrent to come out.
I tried YouTube, iTunes, Xbox Store and Amazon. None of those worked for me here in Austria.
Well, i was willing to pay, but not any more. I will wait for the Torrent to come out.
Kind of know the story and fearmongering without watching the film. World invest gigatrillions in China, it is all a scam and innocent mom and pop types lose everything, watch this film now so you can survive the inevitable meltdown that will make 2008 look like a blip, right?
The reviews for this film go back six months and that makes this video already old.
The reviews for this film go back six months and that makes this video already old.
The timing on this documentary is quite off. Though it’s worth mentioning how China has seemingly hustled the West particularly the U.S. on a bigger scale. They have not only usurped the already dwindling middle class but are in the process of destroying the education system wholesale. And I am not just talking about undergraduate and graduate schools. This is happening in K-12. US is effectively using tax dollars to educate millions of Chinese. The only benefit I see is the asset bubbles, namely the housing market, that will help the forthcoming demographic offset (baby boomer retirements).
Can you elaborate on how we’re using tax dollars to educate millions of Chinese?
Over 350K Chinese students in the US every year which implies only three years of churn to reach one million. Increasingly more of these students are in K-12 and in public systems. But private institutions benefit from tax dollars and are often drivers of regional economies which then ties back to tax dollars. Moreover, the top schools across the country have limited seats for both international and domestic students. If these institutions then prefer and accept more Chinese international students who almost always end up paying full tuition instead of domestic students in need of financial aid then it is easy to make such an argument. Anecdotally, go to any nice neighborhoods with good schools and you will more than likely find a house with a single Chinese high school student living in it. I am not saying international (and Chinese) students do not add value to the education system here in the US but when there are so many of them flooding the market effectively pricing out well-deserving domestic students then we clearly have a problem.
At the college level, they pay exorbitant tuition, so there’s no reasonable case that they’re getting taxpayer support. More like the other way around: international students paying enormous tuition subsidize other students.
I know a lot of Chinese people in the US, in wealthy neighborhoods with excellent schools, and I’ve never even heard of high school students living alone in a house like you describe. I’m sure it’s been done, but I’m more than a little skeptical that it happens in any significant number.
I know a lot of Chinese people in the US, in wealthy neighborhoods with excellent schools, and I’ve never even heard of high school students living alone in a house like you describe. I’m sure it’s been done, but I’m more than a little skeptical that it happens in any significant number.
On the surface, you are right, it appears international students help cross-subsidize domestic students and I would even concede that this is true when you look at the immediate impact ceteris paribus. However, I also think you have to consider the fact that NPV of college education even at full tuition is positive. And that NPV actually declines quite a bit as you move down the quality axis which comes back to my point of displacing domestic students who now face lower NPV and lower quality education. Supply is always limited. I understand it cuts both ways but the current dynamic is very much one sided in my view.
Supply isn’t particularly limited. Schools can expand, given enough money. International students pay more than enough.
If international students disappeared, the result wouldn’t be all those spots filling with American students, it would be a bunch of spots disappearing due to lack of resources.
Education is not fundamentally different from any other product here. When China gives Boeing a couple of billion dollars for some airliners, they’re not taking airliners away from Americans.
If international students disappeared, the result wouldn’t be all those spots filling with American students, it would be a bunch of spots disappearing due to lack of resources.
Education is not fundamentally different from any other product here. When China gives Boeing a couple of billion dollars for some airliners, they’re not taking airliners away from Americans.
I saw a bit of it in Orange County which has some of the best schools in CA. It was usually a two-fold scheme. You build a business hosting foreign students in a residential home and providing some ancillary services. They attend local public high school and struggle with English because of the language barrier.
https://www.zerohedge.com/news/2012-12-03/two-years-too-late...