Shaun Rein by Fantake via FlickrWhile mostly optimistic about China’s economic future, Shaun Rein warns in Forbes against too lighthearted investments in China’s companies, even when they are listed in the US.
Why? First, Chinese company stock prices remain very volatile, because of hedge funds. There are only several dozen good Chinese companies traded on the New York Stock Exchange and NASDAQ, so hedge funds control an inordinate amount of Chinese equity. If they grow bearish or need liquidity, they might sell stakes quickly. Second, despite some improvement, the transparency of Chinese firms remains questionable… Many Chinese companies keep three sets of books, one for the tax bureau, one for investors and one for senior executives.
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Do you need more advice on where to invest in China? Shaun Rein is a speaker at the China Speakers Bureau and happy to speak at your meeting or conference. Interested? Do get in touch.
