Understanding China, One Blog at a Time

An American in China

Archive for March 12th, 2011

America Deserves China

Posted by w_thames_the_d on March 12, 2011


I was reading a report that was addressing the fact that although Warren Buffett sunk a ton of cash into a Chinese car company that not surprisingly, has a history of stealing design and technology- allegedly (I will blog this later), the car company may flop internationally. The article was hinting at the fact that it’s one thing to be successful in China where you can literally steal a car design and not be penalized for it. A company who saves the billions of dollars that most companies invest in research and design, will suffer as they go international.
And then it hit me. The decisions of Warren Buffett and all of us in America, show our weakness and why we deserve the disease that is China,- we are apathetic and focus on the short term. Think about it, instead of developing and nurturing supplier relationships, we flock to china where after a ‘foot massage’ with a happy ending, we ink deals worth billions of dollars and our due diligence amounted to nothing more than scoring some expensive poon from the KTVs of Dongguan. Of course our ignorant boards of directors are happy for they see that our COGS has decreased dramatically and thus in a short while they will be able to exercise their options and buy another home.
In the end, Joe American gets the short shrift, or does he? Maybe if Joe Plumber had taken he time to investigate, or put his money where his mouth is and actually complain about what is going on here, or spending the extra buck to buy something not made in the land of smog and fraud- China, then he would earn the right to bitch. But of course, how can he bitch when he just sunk tens of thousands into that new Chinese stock IPO that is certain to go through the roof. Thus, Joe Plumber has become part of the problem. On one hand he demonizes the practices of the chinese and their horrible quality and on the other hand he ties his future retirement plans to the self same folks.
I guess I am just ranting and if you are wise enough or have ADD as well, you can make heads or tails of this, and if you cant , as they say in Spanish, asi es la vida!
Anyway I want some pancakes and sausage, I love greasy American food.

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China Leverages Shanghai “The Whore of the Orient” for Spying

Posted by w_thames_the_d on March 12, 2011


From here
“China has long had a reputation for its use of the honey trap — deploying beautiful women to steal information from foreign countries and companies, something reflected in the recent espionage scandal at the South Korean consulate in Shanghai.

Shanghai’s position as China’s top economic center has made it the key city for Chinese and foreign spies to gather intelligence, especially at places of entertainment such as nightclubs, according to Taiwanese businessmen in that city.

As unwary men may let their guard down easily when they wine and dine with beautiful women, some women use the opportunity to pry or even buy government and business secrets.

The US bimonthly Foreign Policy magazine ranked China’s Ministry of State Security second among the world’s top spy agencies in 2008.

However, a Chinese academic said China does not employ too many trained professional female spies but mainly relies on recruited informers in different fields.

He also pointed out that Chinese women, especially those who came from poor rural regions, may use their sex appeal to entertain foreigners in order to make money or find ways to leave the country.

Weekly Post, a Japanese magazine, also quoted government documents that say China specializes in sex-related spy plots. The magazine said Chinese spies in Japan are disguised as scholars, nightclub hostesses and masseuses, or planted in businesses.

The French government meanwhile is reportedly working on guidelines for its diplomats and companies to prevent them from falling for such stings, as it has found China has often used female spies to lure intended targets.

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Funny Chinglish Sign that is So Very True

Posted by w_thames_the_d on March 12, 2011


the world of wealth and worship in Fuzhou

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Funny Chinese Sign

Posted by w_thames_the_d on March 12, 2011


uncomplimentary bubble bath in Fuzhou hotel

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Funny But True Chinese Sign

Posted by w_thames_the_d on March 12, 2011


xiamen perfection concentration camp --and here they complain about the Japanese?

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China, The Communist Party and Amway

Posted by w_thames_the_d on March 12, 2011


This excerpt speaks to the problems Amway had in coming to China. The communists thought that the FG, the prohibited religion wouild use Amway to spread their religion. And as the communists rule China, this is what they mandated.
from here The Party- (Richard Mcgregor)

When the direct sales industry was reopened, the government ordered each local branch to operate out of a shop, to ensure their trade was done in the open, rather than out of sight in private homes. Sales people could only be compensated for their own sales and not earn commission from recruiting others. For any meetings of more than twenty-five to fifty people (the limit varies from district to district), approval was needed from the police two weeks to one month in advance. The conditions laid down were aimed squarely at preventing them from becoming political Trojan horses outside of state control. The initial fervour of the government crackdown had died down by 2008 and about two dozen foreign firms have been issued licences.

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Chinese Innovation :hoto

Posted by w_thames_the_d on March 12, 2011


china funny pictures, overloaded

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Pig Cart in China

Posted by w_thames_the_d on March 12, 2011


pig cart, china funny pictures

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Read This Report Before You Buy Chinese Stocks Listed in The USA!!

Posted by w_thames_the_d on March 12, 2011


From Reuters here

Chinese companies accused of securities fraud in U.S.

* U.S. lawsuits run into barriers in China

* Plaintiffs accept relatively small settlements

By Carlyn Kolker

NEW YORK, Feb 14 (Reuters Legal) – As more Chinese companies trade on U.S. stock exchanges, investors are increasingly suing them for securities fraud in U.S. courts — and slamming into a host of legal and bureaucratic barriers.

In theory, investors should be having an easier go of it. These Chinese entities, after all, agreed to abide by U.S. securities laws when they went public and gained access to U.S. financial markets. In practice, though, the companies have been able to hide behind a thicket of Chinese laws to avoid significant liability — in large part because evidence in these matters often resides in China, where basic litigation tasks such as gathering evidence are exceedingly difficult. Depositions by private parties are not even allowed in China, and it is nearly impossible to subpoena third-party witnesses there.

The vast majority of all civil securities-fraud suits end in settlement; but with all the impediments to pursuing claims against Chinese companies, plaintiffs’ lawyers often don’t have much leverage, and as a result, cases either drag on or plaintiffs accept relatively small settlements.

To be sure, the hurdles in these cases aren’t exclusive to China — they frequently arise in civil litigation against companies based in non-Western countries with opaque legal systems. But China has emerged as a particularly tempting target. Twelve Chinese companies were sued in 2010, accounting for more than 40 percent of all shareholder suits filed against foreign companies listed on U.S. exchanges. That compares with 14 suits against Chinese companies in the prior three years combined, according to research by Stanford Law School and Cornerstone Research. The lawsuits allege that the companies misled shareholders by all sorts of underhanded means, from grossly inflating revenues reported in securities filings to reporting vastly different earnings to U.S. and Chinese regulatory authorities.

It’s too soon to say how the newest spate of litigation will play out, of course, but if the earlier crop of lawsuits are any indication, shareholders could end up disappointed.

GIGANTIC LOOPHOLE

A 2007 lawsuit against LDK Solar Co. Ltd. (LDK.N), a China-based solar-wafer manufacturer, is fairly typical of the genre. The suit, which settled last year for $16 million, accused the company of grossly overstating its financial performance in filings with the Securities and Exchange Commission. But when the plaintiffs attempted to subpoena documents from LDK’s outside auditor, KPMG Huazhen, they hit a wall: Because KPMG Huazhen is based in China, it is not subject to U.S. discovery rules — even though it is an affiliate of a major accounting firm based in the United States. So the plaintiffs could not obtain the sort of detailed financial information they needed to prove their claims that the company greatly overstated the value of its inventory. James Farrell, a partner at Latham & Watkins who represented LDK, declined comment.

At a hearing last June, U.S. District Judge William Alsup in San Francisco bemoaned this “gigantic loophole” and went so far as to ask the plaintiffs’ lawyer, Herbert Milstein of Cohen Milstein Sellers & Toll, to bring the issue to the attention of the SEC. “SEC ought to say that if somebody is not going to make their work papers available they cannot trade on the national exchanges,” Judge Alsup declared.

Milstein wrote the SEC in September, proposing that it consider a rule requiring companies that issue securities on U.S. exchanges to use auditors who are subject to U.S. jurisdiction. He said he hasn’t heard back. SEC spokesman Kevin Callahan declined to comment. But the agency is well aware of the broader problem: The Wall Street Journal reported in December that the agency has launched a “wide-scale investigation” focused on possible accounting fraud by Chinese companies that have gone public in the United States.

THE CHALLENGE OF COLLECTING

When plaintiffs suing Chinese entities do prevail in court, this hardly means the battle is over. While Chinese law recognizes certain judgments awarded in the United States, legal, bureaucratic and cultural barriers have stymied efforts by U.S. parties to collect on judgments in China. “To date I am not aware of a single case where a United States judgment has been enforced in China,” said Owen Nee, a Jones Day lawyer who has been practicing in China for more than 30 years.

In 2007, shareholders filed a securities-fraud lawsuit against e-commerce company China Expert Technology Inc. (CXTI.PK), claiming it had forged 16 different Chinese government contracts, overstating the value of its revenue in public filings by $131 million. The company never responded to the complaint and was found to be in default in January 2008. Three years later, the plaintiffs still haven’t even attempted to calculate damages and collect, according to the shareholders’ lawyer, Phillip Kim of New York’s Rosen Law Firm. Kim said any effort to collect at this point would be futile, since the company has moved its assets out of jurisdictions accessible to U.S. investors. The company still trades as a penny stock in the United States. Messages sent to a company e-mail address seeking comment bounced back, and phone calls were not answered.

With China Expert out of reach, in October 2009 Kim amended the complaint to add as defendants the company’s auditors, PKF Hong Kong and BDO McCabe Lo Limited. Last week, U.S. District Judge Alvin Hellerstein of the Southern District of New York granted the defendants’ motion to dismiss, finding that the plaintiffs had not adequately demonstrated how the auditing firms violated accounting rules. But he gave the plaintiffs six weeks to re-file.

Kim, whose six-lawyer firm typically files dozens of securities class actions every year, said that despite the hurdles, he believes there will eventually be a big payoff in developing this legal subspecialty — especially as more Chinese companies move into the United States. “It’s not like we were focused on Chinese companies in particular,” Kim said. “This thing just blew up.” (Reporting by Carlyn Kolker of Reuters Legal; Editing by Eric Effron and Amy Stevens) (This article first appeared on Westlaw News & Insight, westlawnews.com)

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Relaxing Day at the Beach in China

Posted by w_thames_the_d on March 12, 2011


crowded beach in china

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