Why China's banking system is in so much trouble

[investor101]

What UBS is saying is nothing new. I have long maintained that the entire Chinese economy at least the prosperous part is largely closed to foreigners.

China has the benefit of a huge market underpinned by the largest population in the world. They also have intelligent people that will continue to erect barriers to entry to foreigners on the prosperous sector.

Is that any different from the Japanese and Korean before their companies were ready to compete with the rest of the world?

Koreans and Japanese societies have a much higher level of integrity and respect towards those who are honest. Corruption levels in those countries are much lower, and corporations there are less likely to cook their books.

A lot of Chinese "fierce competition" is destructive and geared for self-preservation and back-stabbing. It's not the kind of Silicon Vally fierce competition that generally moves people forward and come up with the next Facebook or Twitter or Google.

China's economic strategy for the past decade is nothing new. It's something they have been doing for centuries. Their basic aim is to maintain a trade surplus in their favour by exporting expensive manufactured products, and import mainly raw materials from other countries. They want others to open their markets to Made-in-China, but want to keep their home markets closed to others. When China "opens" up, they don't tell you until it is too late that there are lots of red tape to frustrate you. But they expect you to reduce red-tape for them when they invest in your country. It's pretty much what Japan and Korea do, in order to ensure their own companies can have a safe base in order to take on the world.

[specuvestor]

^^ I beg to differ. The main difference IMHO is Koreans and Japanese are more group think and collective. Even if they rig a stock they will move in and out simultaneously. Internal competition is minimal, even when LG & Samsung are supposedly nemesis.

OTOH as a Chinese I can say Chinese are inherently self interest centred. If they rig a stock, the first thing they will think of is how to front run the others Ditto for Taiwanese.

This difference is crucial when we compare the Japanese/ koreans culture with the Chinese. Chinese if given a free rein are inherently capitalistic