12 posts categorized "China's Capital Market" Feed

China Overtakes Europe for the First Time in Venture Capital Deal Volume

In 2011, China received VC financing of $6 billion for 332 deals. Europe completed 274 VC transactions for a total value of $6.1 billion. The U.S. still remains far ahead of the second and third place with 3209 deals receiving a total $32.6 billion financing, according to Isabella Steger on Wall Street Journal's Deal Journal. China has reached parity with Europe in venture capital financing for the first time ever. According to data from Dow Jones VentureSource, in 2011 Chinese companies received $6 billion in venture capital equity financing, up 8% from the previous year, compared with $6.1 billion in Europe. That’s a sharp drop for European start-ups, who until 2009 were still receiving 86% more in venture capital financing than their Chinese counterparts, and 20% more in 2010. In country rankings, that puts China in second place. In third place was the U.K., where VC financing for firms fell 32% year-to-year to $1.7 billion, though the U.S. remains, far, far ahead, where VC financing rose 10% year-to-year to $32.6 billion in 2011. In terms of deal volume, the U.S. leads with 3,209 deals, China is in second place with 332 and the U.K. third with 274. This is the... Read more →

When State Capitalism Meets Bamboo Entrepreneurship - How Chinese Government-funded Incubators Start-Up

China's twist on business incubators may turn out to be an indispensable engine of innovation for its economy. Most observers would agree that in China, the government is far more hands-on in terms of shaping commercial activities than in the Western world. Home-grown, emerging multinationals such as Lenovo, Huawei and Haier are not only dominant players in substituting imports, but they are also groomed to become national champions, competing in the global market. With its state-owned enterprises operating in industries that the government deems strategic, China appears to be an archetypical example of what state capitalism entails. Yet, in reality, millions of privately-held, small firms thrive alongside these state-owned behemoths. No one knows exactly to what extent such unplanned entrepreneurial activities contribute to the country's fast-growing economy. But collectively, private firms employ most of the country's workers. Less than 15 per cent of the total workforce is employed by state-owned enterprises. As expected, the less centrally orchestrated private sector is usually more daring when it comes to experimenting with new practices. Spontaneous autonomous entrepreneurial activities have proven to be most effective in capturing fleeting market opportunities: Taobao (a Chinese-language website for online shopping), Sina Weibo (a Chinese microblogging website), Renren... Read more →

PCAOB Will Not Get What It Wants in China - Gain a Quick Entrance into China for Inspection of Local Auditors

PCAOB has been pressing China to let it inspect auditors that audit US-listed Chinese companies since last summer.It is a reasonable request. Nothing wrong with it, at all. However, PCAOB's effort is heading to the wall. Why? Because it makes the most common mistake some American governmental entities and corporations tend to make when going to China - making criticism to begin with and enforcing American standards on Chinese without any compromise. (Reuters) - Chinese firms listed in the United States would be welcomed home, a senior Shanghai Stock Exchange official said, chiding the main U.S. auditor watchdog and other American institutions for having politicized company accounting issues. Click here for the full article. I agree with Paul Gillis, the visiting scholar of accounting at Peking University: "They (the U.S. side) have politicized it. They've made it more difficult to seek a compromise," said Paul Gillis, visiting professor of accounting at Peking University. PCAOB, as well as other organizations that want to accomplish anything in China, has to keep in mind that "saving face" (not embarrassing or criticizing someone in public) is Doing Business in China 101 Rule #1. Heating up pressure and blaming Chinese regulators in public will only... Read more →

Morgan Stanley’s Top Property Deal-Maker in Shanghai Resigned

According to Reuters, Morgan Stanley's top property deal maker in China, Garth Peterson. Peterson, a Shanghai-based managing director of Morgan Stanley Real Estate, who headed its China operations, resigned last week and his departure has been announced internally to property investment-related staff in Asia, the sources said. A Morgan Stanley spokesman confirmed that Peterson was no longer with the bank. Morgan Stanley Real Estate set up its Shanghai office responsible for China deals in 2006. The resignation of Perterson, a top deal maker of Morgan Stanley’s China real estate business, either sends us a signal that Morgan Stanley is concerned about Asia’s real estate market or that the headquarters, struggling with its balance sheet, is try to raise some cash by selling properties in Asia. Since 1991, Mogan Stanley has set up 6 REITs. The funds that are invested in international real estate are MSREF III International, MSREF IV International and MSREF V. In 2006, MSREF V raised $4.2 billion globally, 55% of which invested in Asian real estate markets including Japan and China. Morgan Stanley is invested in both residential and commercial real estate projects in China.In 2004, it invested $75 million in a high-end residential building Jinlin. In... Read more →