Boulder2Beijing | 砬到北京

More Chinese Overseas Investments in the Mix

2011-07-01T02:24:00.001+08:00

The past week has seen a number of announcements regarding Chinese investments overseas:

New World Hospitality, a Hong Kong-based holding company, acquired Dallas-based Rosewood Hotels for a reported $229.5 million;
Chinese companies executed trade deals with German companies this week worth a total value of $15 billion USD, including a $7.5B order for a (lucky number) 88 Airbus 320s; and
UK and PRC companies signed $2.3 billion worth in deals, including a $1.5B loan from Bank of China to British gas company BG Group.

For comparison, as part of a Sino-Franco deal ceremony, companies from both nations locked in about $20 billion in trade, while the US inked China deals worth $45B back in January. What's more, the PRC also agreed to back off of preferences given to Chinese companies in government contracts, a commitment the PRC leadership seems to have honored today.

Two aspects of these transactions are troubling. First, the lack of money headed towards the United States. Second, at least one of the US deals involves technology transfers of the sort that Siemens and Kawasaki now regret. To sum up, I am more than a little concerned that US companies are more concerned with short-term infusions of cash than long-term viability.

The Chinese are coming!

2011-06-17T01:56:00.000+08:00

As mentioned in early May, I am in the midst of drafting an article on the supposed influx of Chinese investment in the United States predicted by Rosen and Haneman in their report for the Asia Society. In the article, I will focus on the changing nature of Chinese Offshore Direct Investment (ODI) in the US and try to cut through the noise surrounding this supposedly new phenomenon.

In the interim, a delegation from CNC World has visited Denver to discuss investment opportunities in Colorado. According to their website, CNC is a television news network owned and operated by Xinhua News Agency--that is, "CNC and Xinhua's TV Department are the same institution under different names." But in a Denver Post article, a representative from Colorado's Office of Economic Development and International Trade suggested that CNC is considering Colorado as a location for a 300-person production studio. Based upon meeting them while they were here, I am skeptical that CNC actually plans to build such a facility in Denver, but I do hope that whatever form their investment takes, it will involve many return visits to the Centennial State. After all, like Beijing, Denver has some very nice mountains and some good telecom companies to enjoy.

If CNC does invest in Colorado, it would join CNOOC's recent $1.27 billion investment in the Chesapeake Energy's Niobrara shale venture, which straddles Colorado, Nebraska, and Wyoming. Based upon the most recent reports, however, it looks like the number of jobs created by other Asian companies operating Colorado, particularly those headquartered in Japan, still exceeds that of Chinese companies by a long shot. I suppose that leaves a lot of room for growth.

Weiser named the new dean of CU Law

2011-06-01T01:11:00.000+08:00

My mentor and friend, Phil Weiser, has been named the dean at CU Law. It's nice to see that the University of Colorado made the right choice.

So here I was working on a law review article on outbound PRC investments in the United States...

2011-05-05T06:35:00.000+08:00

...when this article in the New York Times popped up. What perfect timing!

It's been a while...

2011-04-26T20:48:00.000+08:00

...but I'm back on the air. As of yesterday, I am now working for a law firm with a China practice, so you can expect more posts on China-related legal matters in this forum. Sorry for the silence.

Maoist Management classes in Business Schools

2010-08-03T03:02:00.000+08:00

In a fit of unacknowledged irony, China's capitalism-oriented business schools are now teaching Maoist management techniques to students. As Gus would say, "what?"

Hilarious!

2010-07-09T23:05:00.001+08:00

Perhaps I am more sensitive to this because my son was just circumcised, but Danwei's article on circumcision in China had me laughing out loud...

Balance of payments

2010-02-24T01:47:00.000+08:00

According to this article in FT's "China Confidential", China reduced its US bond holdings by 4.3 percent last month. This is not looking good, people...

NYT Article on the Olympic Green

2010-02-09T01:47:00.000+08:00

Mike Wines is is clearly not a Panda-hugger, given the not-so-subtle comparisons between the buildings on the Olympic Green and the Chinese real estate market in this article, as well as the smog depicted in the related photograph. Even so, the article is worth reading.

An alternative theory on Google's threatened exit from the PRC

2010-01-14T00:01:00.001+08:00

Google's threatened China exit caught a lot of attention in the American press. (If you have no idea what I am talking about, check out Danwei's coverage of the story and their associated links.) The early commentary hits on (1) Chinese censorship, (2) restrictions on foreign businesses in the PRC, (3) Google's "don't be evil" mantra, or (4) some combination therein. But I would like to suggest, however, that Google is exploiting the hacking incident as a cover for larger problems with their China operations.

Politically, Google knows that the Central Government does not tolerate anything that would undermine single-party rule, including unfiltered search results that include photos of Tank Man. Moreover, recent policy statements from the PRC Politburo repeatedly emphasize the efforts of China's leadership to promote "indigenous innovation" from home-grown Chinese companies.

Economically, sinophiles may recall that Kai-Fu Lee, formerly head of Google's China office, left the company in September of 2009, just four years after Google poached him from Microsoft. Chinese officials have repeatedly used the Great Firewall to block Gmail, Google search, and YouTube. Google itself agreed to censor search results and was even accused of stealing code from Chinese companies. At the same time, a home-grown Google copycat called Baidu has become a Central Government darling, even if it does facilitate rampant IP piracy with an MP3 search right on its homepage. Perhaps most important of all, however, Baidu owns an upward trending 74 percent of the market for search in the PRC, while China probably only accounts for about one percent of Google's revenue.

By hanging their hat on the hacking incident, Sergei and Larry kill two birds with one stone: they curry political favor back home and they obscure the poor performance of their Chinese subsidiaries. Small wonder, then, that this whole story broke on the same day that GOOG announced its Q4 2009 investor results.

Zaosheng hao list

2009-12-31T22:02:00.002+08:00

China Law Blog and the Green Leap Forward posted two interesting articles this morning. Julian Wong of the Green Leap Forward shared what are, in its opinion, the top ten news items involving renewable energy in China. Dan Harris, by contrast, shares an article from law firm O'Melveny & Myers concerning a new rule out of the PRC tax bureau that amounts to a huge, extraterritorial power grab on the part of Chinese authorities over foreign companies with Chinese subsidiaries. Check them out.

That was quick

2009-12-09T00:36:00.002+08:00

Evidently cheap gas and credit constraints caught up with the green tech sector in Colorado this morning. Oversupply in Asia probably didn't help either, but that factor wasn't mentioned in the following item from the Denver Business Journal: Vestas, the wind turbine manufacturer, announced a round of furloughs at its plant in Windsor, Colorado. Perhaps it's just me, but I am having flashbacks to the 90s, when Colorado placed all of its eggs in the software and telecom baskets, only to get severely burned when the bottom dropped out in 2000-2001.

Oh well...

Food

2009-12-02T01:17:00.003+08:00

The Wall Street Journal has a lovely piece on the wonders of food in Boulder. A word to the wise: Salt is okay and has good management, but the food does not compare to what's available two doors down at the Kitchen or at Frasca.

Morning round-up

2009-10-30T21:12:00.004+08:00

There's lots of fun China-related items in the news this morning. The New York Times reports that, as early as next year, the entity responsible for how billions of people enter website addresses--ICANN--will allow website addresses with non-Latin character sets. So rather than requiring users to surf to website addresses like www.zhongguofalu.cn, ICANN will instead allow Chinese users, for example, to type in 中国法律.中国 instead.

Choe Sang-hun, the Times reporter, suggested that the revised character set would allow for website addresses that entirely avoid the Latin alphabet. That may be true for languages like Arabic or Hebrew that use modified keyboard layouts, but entering any Chinese address into a browser will still require the use of a Latin keyboard and an Input Method Editor, or IME. (Granted, some IMEs do not require the use of the Latin alphabet, but most Chinese folks I know rely upon one to get online.)

The Chengdu Evening News reports (h/t: Danwei) that hospitals in Sichuan will go smoke-free by 2012. Just think about what's wrong about that statement, as well as what's wrong with the quotation in the article that suggests that Sichuanese doctors do not know enough about the deleterious effects of smoking.

Finally, American hog farmers can rejoice in the fact that China has decided to ease import restrictions on American pork products. The PRC earlier this year closed the market to American hog farmers over swine flu fears, but has now decided to allow American pork back in. As my favorite (and only) Colombian classmate once said, "in China, porks are stupid."

Tulips

2009-10-22T20:26:00.002+08:00

Remember the tulips? Back in 1637, Dutch tulip contracts sold for ten times the wages of a skilled craftsman, and a tulip speculator offered twelve acres of land in exchange for a single tulip bulb. The ensuing crash of the Dutch tulip market often serves as an example of asset bubbles like the one that the United States recently experienced in real estate.

Now comes Michael Auslin of conservative think tank AEI warning that China may be in the midst of its own tulipmania-style asset bubble. His key reference? That a bottle of wine sold for $93,000 in Hong Kong at a recent auction. To Auslin, this bottle of wine serves as indirect evidence of China's impending economic collapse, as evidenced by a series of previously-made points that he trots out for all to see.

I am not sure that I buy Auslin's argument, although he does make some interesting, albeit resuscitated points: that China has a increasingly nasty gap between rich and poor (it does) that is engendering increasing levels of social unrest, that the Communist Party of China bears striking resemblance to the overly confident Japanese leadership in the 1990s (it does) that likewise seemed infallible just before the bottom fell out, that the United States would be screwed if the Chinese stopped buying U.S. treasury bonds to maintain an artificially low currency (it would), and that a lot of wealth in China is on paper (it is, albeit stuffed in the leaky bathrooms of certain corrupt officials).

That being said, I am somewhat biased, having staked my career in part on China's rise. And I do have some nice wine in the closet.

To quote Dan Harris, "what do you think?"

How long before Evan Osnos gets his e-bike stolen?

2009-09-22T01:13:00.005+08:00

Evan Osnos, of the New Yorker, just bought an extremely nice e-bike in Beijing near the same spot where we almost bought ours about a year ago. In his blog post on the subject, Osnos laments that a love of cars prevents Americans from buying e-bikes.

I disagree with his assertion--I personally believe that when Deng Xiaoping defined prosperity in terms of bicycle ownership, he laid the foundation for an entire citizenry to trade up from acoustic to electric, Dylan-style. For what it's worth, though, Pete's Electric Bikes in Boulder is running an arbitrage play, importing souped-up Chinese e-bikes and selling them at a premium to the Boulder cognoscenti.

M&A in Chinese Steel

2009-09-18T23:18:00.002+08:00

If you don't think that this is a reaction to the BHP Billiton-Rio Tinto situation, you are kidding yourself.

Guest post on Chinese healthcare reform

2009-09-15T01:10:00.004+08:00

FYI: I wrote a guest post on healthcare for the award-winning China Law Blog. The post went up this morning.

Gone but not forgotten

2009-08-15T07:01:00.002+08:00

From Markey in Fort Morgan

I apologize for my silence these last few months.

Why the reduction in posts? Well, I've been helping a Colorado-based company apply for funds made available by the American Recovery and Reinvestment Act for broadband deployment. Since May, I have travelled across Colorado, Nebraska, and the District of Columbia in an effort to muster the support of local governments and elected officials. I set up a PR event in Fort Morgan, Colorado to demonstrate our proposed plans for Congresswoman Markey.

The craziness should let up next week, however, at which point I'll be able to start posting again. Wish me--and our team--luck.

Photographs from Beijing and Kyoto

2009-06-01T10:17:00.001+08:00

Back in Beijing

2009-05-25T09:06:00.002+08:00

We returned to Beijing last Saturday after a nine-month absence. (We'll post videos and pictures tomorrow, when we're in Japan) Despite attempts to defend our dissertations in the United States, either by teleconference or with Chinese law professors doing international exchanges in New York, we had to fly 13 hours for a twenty-minute defense at Peking University. We both passed and we will both receive our degrees in July.

People who visit China intermitently often talk about the amazing changes in the PRC that occur between their visits. For us, however, China seems mostly the same. Internet access stinks. Crushing polution, illegal street vendors, and migrant workers returned with a vengeance once the Olympic whitewash ended. Shops again display pirated DVDs and pirated goods again, including a trademark infringement "two-fer" in the form of fake Crocs with air holes in the shape of Mickey Mouse. Chinglish t-shirts say things like, "Def Foxy," "Ticklish Little Big Chief," and "Color Yourselves Up with Robinhood," while our hotel reservation was for a room with "twin bads." A new-to-China American made fast friends after we showed him how to use the ticket machine in the subway.

In small ways, though, Beijing changed significantly. My old firm laid off four people in Beijing. The video monitors on the subway play music videos about how the 2008 Olympics rocked. Close friends and classmates who defined our experience in China left for other cities. Once oblivious paramilitary guards now stop every entrant to our school's campus and check for student identification, presumably because of Project 6521 and the fact that several transformative social events in China's history, including the Tian'anmen square incident, began at Peking University. "Beijing Review," a magazine left in our hotel room, highlights China's role in ending feudalism in Tibet. An hotel next to the infamously expensive CCTV tower remains a burned-out shell thanks to an errant fireworks display.

The government has also shifted priorities. Due to the H1N1 influenza scare, health ministry staff used infrared technologies to scan all incoming passengers for fevers at the airport at least three times. We completed special immigration forms which asked if we had "been in close contact with pig within the past 1 week." State-owned media seems to have convinced cab drivers throughout Beijing that we brought swine flu into China.

Perhaps because of the continued pollution in Beijing and the risk of unrest, the environment has assumed center stage. CCTV-9 spent at least one third of last night's evening news broadcast on renewable energy stories. A classmate wrote his thesis on China's renewable energy law. China Daily, the English language newspaper in China, contains a number of stories about biomass, solar, and wind farms. The CEO of ABB, appearing on local television, spouted platitude after platitude about government efforts to improve the environment in China.

Overall, our return feels strange. We visited with some friends, classmates, mentors, and former colleagues, but we know that we will not see some of them again. Whereas returning home involves familiar faces, returning to China feels like returning to a high school reunion with half of our class missing.

I hope I feel differently when we next come back.

Accounts

2009-05-15T02:19:00.003+08:00

NYT has an interesting article on Zhao Ziyang's memoir, Prisoner of the State: The Secret Journal of Premier Zhao Ziyang. There's clearly some bias in Zhao's accounts, but it nonetheless sounds like interesting Kindle fodder.

Second star to the left...

2009-05-08T06:08:00.005+08:00

Peking University Law School has not yet approved our dissertation defenses. The government may even deny our visa request, now that Colorado's count of H1N1 cases has risen.

And yet, due to the wonders of 14-day advance purchase rules, we have purchased plane tickets that place us in Beijing from the 23rd through the 26th. Not long, I know, but we also want to spend some time in Kyoto if we're going to be in Asia.

We thought about staying at the Zhongguancun Furama Xpress, for old time's sake, but the Wenjin on Chengfulu looks more appealling these days. Four stars is better than two.

More importantly, however, the Wenjin is across the street from Ganges (best Indian food on the planet, hold the Mumbai) and our favorite Anhui restaurant, not to mention within walking distance of our old stomping ground (and that of every other Haidian laowai), the Bridge Cafe. Who needs the Great Wall when you can eat the Chinese equivalent of shtetl food, "Across the Bridge Noodles"?

Nimen hao, y'all.

China Visa slow-down

2009-05-05T23:50:00.003+08:00

Dan Harris of China Law Blog recently discussed (in two parts) rumors indicating that the PRC has slowed down visa applications due to 6521 fears. In corresponding with the U.S.-China Chamber of Commerce, however, they indicated to me that there were no hold-ups in visa processing applications...until yesterday. But as of yesterday, the Chinese Consulate suspended expedited visa processing and now requires a declaration that shows where you have been in the past two weeks, presumably because of concerns for the swine flu.

The Amazing Race

2009-05-04T09:12:00.001+08:00

I would not watch the Amazing Race if not for the fact that it involves sending a bunch of clueless Americans running around China for three episodes (thus far). It's all there--the frequently evil cab drivers, the inability to speak Chinese, the barber shops, the crazy street food on Wangfujing, the electric bicycles, the PLA, the painful foot massages, Beijing opera, Chinese racism towards people of African descent, the rude foreigners assuming that everyone in the world should speak/understand English, the Bird's Next, the tricycles, the cab drivers refusing to pick up foreigners...what's not to like?

I am SO looking forward to being in Beijing in May.