Fears of a China crash are unfounded

The richest man in Asia is selling everything in China
By Simon Black of Sovereign Man.

Here is a guy you want to bet on – Li Ka-Shing.

Li is reportedly the richest person in Asia with a net worth well in excess of $30 billion, much of which he made being a shrewd property investor.

Li Ka-Shing was investing in mainland China back in the early 90s, way back before it became the trendy thing to do. Now, Li wants out of China. All of it.

Since August of last year, he’s dumped billions of dollars worth of his Chinese holdings. The latest is the $928 million sale of the Pacific Place shopping center in Beijing– this deal was inked just days ago.

Once the deal concludes, Li will no longer have any major property investments in mainland China.

This isn’t a person who became wealthy by being flippant and scared. So what does he see that nobody else seems to be paying much attention to?

China’s credit crunch.

After years of unprecedented monetary expansion which has put the economy in a precarious state, the Chinese government has been desperately trying to reign in credit growth.

The shadow banking system alone is now worth 84% of GDP according to an estimate by JP Morgan. The IMF pegs total private credit at 230% of GDP, jumping by 100% in the last few years.

Historically, growth rates of these proportions have nearly always been followed by severe financial crises. And Chinese leaders are doing their best to engineer a ‘soft landing’.

If they’re successful, the world will only see major drops in global growth, stocks, property, and commodity prices.

If they fail, the spillover could become pandemic.

This isn’t important just for Asian property tycoons like Li Ka-Shing. Even if you don’t know Guangzhou from Hangzhou from Quanzhou, there are implications for the entire world.

Here in Chile is a great example.

Chile is among the top copper producers worldwide, China among its top consumers. With a major slowdown in China, however, copper prices have dropped considerably.

Consequently, the Chilean economy has slowed. The Peso is down nearly 10% against the US dollar in recent months, and the central bank is slashing rates trying to prop up growth.

There are similar situations playing out across the globe.

Not to mention, China could put the entire global financial system on its back just by dumping a portion of its Treasuries in order to defend the Yuan.

Now, you’d think that a major credit crunch with far-reaching consequences in the world’s second largest economy, its largest manufacturer, and its largest holder of US dollar reserves, would be constant front-page news.

But it’s not.

Most traditional investors are unaware that what’s happening in China will likely have far greater implications to their investment portfolios than the policies of Janet Yellen and Barack Obama combined. At least for now.

And folks who don’t see this coming and keep buying at the all-time high may see their portfolios turned upside down. Quickly.

At the same time, some investors who are conservative and cashed up may realize a real ‘blood in the streets’ moment.

Again, using Chile as an example, I’m starting to see over-leveraged property owners coming to the market in droves ready to make a deal. This is great news because my shareholders and I are able to buy far more property with US dollars than we could even just six months ago.

I expect this trend to hold given that China is just at the beginning of its process.

It’s said that the Chinese word for “crisis” is a combination of “danger” and “opportunity”.

This isn’t entirely accurate. ‘Weiji’ can have several meanings, but is probably best translated as ‘dangerous’ and ‘crucial point’.

We may certainly be at that crucial point, and now might be a good time to take another look at your finances and consider selling before a major crash. The richest man in Asia certainly thinks so.


Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man.




http://www.sovereignman.com/trends/the-r...ina-14208/

He is not superman Li for nothing...

(29-04-2014, 10:14 AM)kbl Wrote: The richest man in Asia is selling everything in China
By Simon Black of Sovereign Man.

Here is a guy you want to bet on – Li Ka-Shing.

Li is reportedly the richest person in Asia with a net worth well in excess of $30 billion, much of which he made being a shrewd property investor.

Li Ka-Shing was investing in mainland China back in the early 90s, way back before it became the trendy thing to do. Now, Li wants out of China. All of it.

Since August of last year, he’s dumped billions of dollars worth of his Chinese holdings. The latest is the $928 million sale of the Pacific Place shopping center in Beijing– this deal was inked just days ago.

Once the deal concludes, Li will no longer have any major property investments in mainland China.

This isn’t a person who became wealthy by being flippant and scared. So what does he see that nobody else seems to be paying much attention to?

China’s credit crunch.

After years of unprecedented monetary expansion which has put the economy in a precarious state, the Chinese government has been desperately trying to reign in credit growth.

The shadow banking system alone is now worth 84% of GDP according to an estimate by JP Morgan. The IMF pegs total private credit at 230% of GDP, jumping by 100% in the last few years.

Historically, growth rates of these proportions have nearly always been followed by severe financial crises. And Chinese leaders are doing their best to engineer a ‘soft landing’.

If they’re successful, the world will only see major drops in global growth, stocks, property, and commodity prices.

If they fail, the spillover could become pandemic.

This isn’t important just for Asian property tycoons like Li Ka-Shing. Even if you don’t know Guangzhou from Hangzhou from Quanzhou, there are implications for the entire world.

Here in Chile is a great example.

Chile is among the top copper producers worldwide, China among its top consumers. With a major slowdown in China, however, copper prices have dropped considerably.

Consequently, the Chilean economy has slowed. The Peso is down nearly 10% against the US dollar in recent months, and the central bank is slashing rates trying to prop up growth.

There are similar situations playing out across the globe.

Not to mention, China could put the entire global financial system on its back just by dumping a portion of its Treasuries in order to defend the Yuan.

Now, you’d think that a major credit crunch with far-reaching consequences in the world’s second largest economy, its largest manufacturer, and its largest holder of US dollar reserves, would be constant front-page news.

But it’s not.

Most traditional investors are unaware that what’s happening in China will likely have far greater implications to their investment portfolios than the policies of Janet Yellen and Barack Obama combined. At least for now.

And folks who don’t see this coming and keep buying at the all-time high may see their portfolios turned upside down. Quickly.

At the same time, some investors who are conservative and cashed up may realize a real ‘blood in the streets’ moment.

Again, using Chile as an example, I’m starting to see over-leveraged property owners coming to the market in droves ready to make a deal. This is great news because my shareholders and I are able to buy far more property with US dollars than we could even just six months ago.

I expect this trend to hold given that China is just at the beginning of its process.

It’s said that the Chinese word for “crisis” is a combination of “danger” and “opportunity”.

This isn’t entirely accurate. ‘Weiji’ can have several meanings, but is probably best translated as ‘dangerous’ and ‘crucial point’.

We may certainly be at that crucial point, and now might be a good time to take another look at your finances and consider selling before a major crash. The richest man in Asia certainly thinks so.


Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man.




http://www.sovereignman.com/trends/the-r...ina-14208/

(29-04-2014, 10:58 AM)greengiraffe Wrote: He is not superman Li for nothing...

(29-04-2014, 10:14 AM)kbl Wrote: The richest man in Asia is selling everything in China
By Simon Black of Sovereign Man.

Here is a guy you want to bet on – Li Ka-Shing.

Li is reportedly the richest person in Asia with a net worth well in excess of $30 billion, much of which he made being a shrewd property investor.

Li Ka-Shing was investing in mainland China back in the early 90s, way back before it became the trendy thing to do. Now, Li wants out of China. All of it.

Since August of last year, he’s dumped billions of dollars worth of his Chinese holdings. The latest is the $928 million sale of the Pacific Place shopping center in Beijing– this deal was inked just days ago.

Once the deal concludes, Li will no longer have any major property investments in mainland China.

This isn’t a person who became wealthy by being flippant and scared. So what does he see that nobody else seems to be paying much attention to?

China’s credit crunch.

After years of unprecedented monetary expansion which has put the economy in a precarious state, the Chinese government has been desperately trying to reign in credit growth.

The shadow banking system alone is now worth 84% of GDP according to an estimate by JP Morgan. The IMF pegs total private credit at 230% of GDP, jumping by 100% in the last few years.

Historically, growth rates of these proportions have nearly always been followed by severe financial crises. And Chinese leaders are doing their best to engineer a ‘soft landing’.

If they’re successful, the world will only see major drops in global growth, stocks, property, and commodity prices.

If they fail, the spillover could become pandemic.

This isn’t important just for Asian property tycoons like Li Ka-Shing. Even if you don’t know Guangzhou from Hangzhou from Quanzhou, there are implications for the entire world.

Here in Chile is a great example.

Chile is among the top copper producers worldwide, China among its top consumers. With a major slowdown in China, however, copper prices have dropped considerably.

Consequently, the Chilean economy has slowed. The Peso is down nearly 10% against the US dollar in recent months, and the central bank is slashing rates trying to prop up growth.

There are similar situations playing out across the globe.

Not to mention, China could put the entire global financial system on its back just by dumping a portion of its Treasuries in order to defend the Yuan.

Now, you’d think that a major credit crunch with far-reaching consequences in the world’s second largest economy, its largest manufacturer, and its largest holder of US dollar reserves, would be constant front-page news.

But it’s not.

Most traditional investors are unaware that what’s happening in China will likely have far greater implications to their investment portfolios than the policies of Janet Yellen and Barack Obama combined. At least for now.

And folks who don’t see this coming and keep buying at the all-time high may see their portfolios turned upside down. Quickly.

At the same time, some investors who are conservative and cashed up may realize a real ‘blood in the streets’ moment.

Again, using Chile as an example, I’m starting to see over-leveraged property owners coming to the market in droves ready to make a deal. This is great news because my shareholders and I are able to buy far more property with US dollars than we could even just six months ago.

I expect this trend to hold given that China is just at the beginning of its process.

It’s said that the Chinese word for “crisis” is a combination of “danger” and “opportunity”.

This isn’t entirely accurate. ‘Weiji’ can have several meanings, but is probably best translated as ‘dangerous’ and ‘crucial point’.

We may certainly be at that crucial point, and now might be a good time to take another look at your finances and consider selling before a major crash. The richest man in Asia certainly thinks so.


Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man.




http://www.sovereignman.com/trends/the-r...ina-14208/

If Super man is so urgent in his disposing off China's assets. There might be a opportunity for him to buy back in the next 6 months - 1 year?

(29-04-2014, 11:08 AM)Belg Wrote:

(29-04-2014, 10:58 AM)greengiraffe Wrote: He is not superman Li for nothing...

(29-04-2014, 10:14 AM)kbl Wrote: The richest man in Asia is selling everything in China
By Simon Black of Sovereign Man.

Here is a guy you want to bet on – Li Ka-Shing.

Li is reportedly the richest person in Asia with a net worth well in excess of $30 billion, much of which he made being a shrewd property investor.

Li Ka-Shing was investing in mainland China back in the early 90s, way back before it became the trendy thing to do. Now, Li wants out of China. All of it.

Since August of last year, he’s dumped billions of dollars worth of his Chinese holdings. The latest is the $928 million sale of the Pacific Place shopping center in Beijing– this deal was inked just days ago.

Once the deal concludes, Li will no longer have any major property investments in mainland China.

This isn’t a person who became wealthy by being flippant and scared. So what does he see that nobody else seems to be paying much attention to?

China’s credit crunch.

After years of unprecedented monetary expansion which has put the economy in a precarious state, the Chinese government has been desperately trying to reign in credit growth.

The shadow banking system alone is now worth 84% of GDP according to an estimate by JP Morgan. The IMF pegs total private credit at 230% of GDP, jumping by 100% in the last few years.

Historically, growth rates of these proportions have nearly always been followed by severe financial crises. And Chinese leaders are doing their best to engineer a ‘soft landing’.

If they’re successful, the world will only see major drops in global growth, stocks, property, and commodity prices.

If they fail, the spillover could become pandemic.

This isn’t important just for Asian property tycoons like Li Ka-Shing. Even if you don’t know Guangzhou from Hangzhou from Quanzhou, there are implications for the entire world.

Here in Chile is a great example.

Chile is among the top copper producers worldwide, China among its top consumers. With a major slowdown in China, however, copper prices have dropped considerably.

Consequently, the Chilean economy has slowed. The Peso is down nearly 10% against the US dollar in recent months, and the central bank is slashing rates trying to prop up growth.

There are similar situations playing out across the globe.

Not to mention, China could put the entire global financial system on its back just by dumping a portion of its Treasuries in order to defend the Yuan.

Now, you’d think that a major credit crunch with far-reaching consequences in the world’s second largest economy, its largest manufacturer, and its largest holder of US dollar reserves, would be constant front-page news.

But it’s not.

Most traditional investors are unaware that what’s happening in China will likely have far greater implications to their investment portfolios than the policies of Janet Yellen and Barack Obama combined. At least for now.

And folks who don’t see this coming and keep buying at the all-time high may see their portfolios turned upside down. Quickly.

At the same time, some investors who are conservative and cashed up may realize a real ‘blood in the streets’ moment.

Again, using Chile as an example, I’m starting to see over-leveraged property owners coming to the market in droves ready to make a deal. This is great news because my shareholders and I are able to buy far more property with US dollars than we could even just six months ago.

I expect this trend to hold given that China is just at the beginning of its process.

It’s said that the Chinese word for “crisis” is a combination of “danger” and “opportunity”.

This isn’t entirely accurate. ‘Weiji’ can have several meanings, but is probably best translated as ‘dangerous’ and ‘crucial point’.

We may certainly be at that crucial point, and now might be a good time to take another look at your finances and consider selling before a major crash. The richest man in Asia certainly thinks so.


Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man.




http://www.sovereignman.com/trends/the-r...ina-14208/

If Super man is so urgent in his disposing off China's assets. There might be a opportunity for him to buy back in the next 6 months - 1 year?

Ha-ha !

May I suggest Simon Black (and those who think likewise) to look at the AR of the following companies “controlled” by “Superman” before concluding that he has sold “everything” in China”

1) CKH – Cheung Kong Holdings Limited
2) HWL – Hutchison Whampoa Limited
3) CKI – Cheung Kong Infrastructure Holdings Limited

These companies still hold billions and billions worth of assets in China.

years ago I read a report I think was times newsweek or Asia magazine I can't remember but apparently just before China took back hong kong they directed several notable wealthy businessmen to go after assets acquired by british hongs, I read report Li went after jardine but as we know he didn't get it because they still around.

If Li were to dump everything in china now it would mean an end to his relationship with china.

indeed, after i read the full article, the author is just being pessimistic and state his view.

Big tycoons and SWF can never get out of everything. At most they can only underweight as there will always remain something that they need to keep to feel the pulse of the underlying economy that they exposure in.

Anyway, China remains a closed financial system and even their tech sector is well ring fenced from external world. While the spillover effects will be there, it will be measured.

Falling commodity prices are the result of sharp reduction in speculation on the part of many participants and hence life will continue to go on as long as human race prevails under normal circumstances. Wartimes will then present a different scenario...

(29-04-2014, 11:54 AM)sgd Wrote: years ago I read a report I think was times newsweek or Asia magazine I can't remember but apparently just before China took back hong kong they directed several notable wealthy businessmen to go after assets acquired by british hongs, I read report Li went after jardine but as we know he didn't get it because they still around.

If Li were to dump everything in china now it would mean an end to his relationship with china.

Ya lol! It makes sense. Can Superman Li has the same clout or influence or advantage if all his assets are now in EURO or US? But Hm.... Superman Li timing the CHINA market, maybe? This is different kettle of fish from pulling all his assets out of CHINA.

Temasek to buy stake in HK tycoon's retailer A.S. Watson for $5.7 billion

(Reuters) - Singapore state investor Temasek Holdings has agreed to buy just under a quarter of health and beauty retailer A.S. Watson for about US$5.7 billion (£4.76 billion) in what would be its single biggest investment and one that would boost its exposure to Asia's fast growing consumer sector.

The purchase of the 24.9 percent in A.S. Watson, owned by Asia's richest man Li Ka-shing, is part of Temasek's aggressive reshaping of its $170 billion portfolio to ensure higher returns by increasing its exposure to unlisted companies. The state investor's returns have often lagged its own internal metric in recent years as it focused on blue chip stocks.


http://uk.reuters.com/article/2014/03/21...H020140321

(29-04-2014, 12:13 PM)Temperament Wrote:

(29-04-2014, 11:54 AM)sgd Wrote: years ago I read a report I think was times newsweek or Asia magazine I can't remember but apparently just before China took back hong kong they directed several notable wealthy businessmen to go after assets acquired by british hongs, I read report Li went after jardine but as we know he didn't get it because they still around.

If Li were to dump everything in china now it would mean an end to his relationship with china.

Ya lol! It makes sense. Can Superman Li has the same clout or influence or advantage if all his assets are now in EURO or US? But Hm.... Superman Li timing the CHINA market, maybe? This is different kettle of fish from pulling all his assets out of CHINA.

if he underweight sold some to wait for future opportunities then yes probably but to say he dumped everything is unbelievable because to foster close relationship with beijing took him a long long time he's married to beijing for good and bad times Li is also not some nameless speculator to be able to do that doing so it will stain on his reputation.

sorry the article I read is from the economist, so long ago already I forgotten

Superman versus the hong
Aug 7th 1997 | HONG KONG


AMONG the high-rise canyons of Hong Kong's business district there has long been only one big landlord. Even though China's red flag now flutters above them, some 40% of the offices are still owned by Hongkong Land, an immensely wealthy company that is part of the Jardine Matheson group, the biggest of the British-owned “hongs” and the one that did most to establish the British territory. Although the handover of Hong Kong to China is officially complete, Jardines remains a potent symbol of the former colonial power, and one that China would be happy to see the back of.

This week something happened that might bring Jardines' end closer. On August 5th Li Ka-shing, the former colony's most powerful tycoon and a supporter of the government in Beijing, revealed that he had quietly bought about 3% of both Hongkong Land and Jardine Matheson, the Jardine group's principal holding company. Although Mr Li's stakes are small, they are significant. Hong Kong is abuzz with talk of chiu yan, or “superman” as the locals call Mr Li, launching an outright takeover bid for Jardines. Even if that does not happen, Jardines is unlikely to survive Mr Li's advances intact.

Mr Li likes to shroud his business manoeuvres in mystery. It is entirely plausible that he has not yet decided between a variety of different end-games, any one of which might make him a great deal of money. His aides maintain that buying the shares in Jardines is just another part of Mr Li's expanding portfolio of investments. Some top people in Jardines pretend to believe this. But few other businessmen in Hong Kong reckon that is all there is to it. Jardines could be Mr Li's last big deal.

In the run up to the handover of Hong Kong, Chinese companies and their supporters amassed large shareholdings in a number of British-owned businesses, including Hongkong Telecom, Hongkong Electric, China Light & Power, Cathay Pacific and its sister airline, Dragonair. Others, such as the British-owned Hongkong and Shanghai Bank may yet become targets. But, in symbolic terms, by far the most tempting colonial-era business yet to come under China's control is Jardines.

read the rest of article here
source: http://www.economist.com/node/153623