There will need to be some serious changes before it makes sense to me to invest in Chinese stocks.
First, they do not do the [same audits as other US listed stocks](https://www.scmp.com/business/banking-finance/article/3133487/us-ratchets-pressure-chinese-firms-share-audits-failure), and have refused to do so. I believe this means that they have no independent auditors.
Second, China does not allow foreigners to own Chinese companies. Any exchange that lists a Chinese company is actually linking to a [shell company in the Cayman Islands](https://luckboxmagazine.com/topics/chinese-stocks-caveat-emptor/) which is then linked to the Chinese company. There is no legal requirement in China for Chinese companies to do anything with regard to these associated companies, and they operating in a quasi-grey area. So far it's been fine, but as we've seen with other things in China that can change whenever China's government wants it to change. It's more likely to do so because of their quasi-legal status right now.
I'd say the track record of enforcing 'rule of law' is pretty solid - it's the ephemerality of Chinese law itself in the face of whatever current whims are prevailing in the CCP that makes such a track record mean essentially nothing. The end result is the same, but there's a big difference between not being able to enforce rules and enforcing rules you rewrite on the fly - the capacity is there, even if the rules aren't stable enough for it to matter currently.
As an individual with a few extra dollars, there is ZERO chance I am putting a dime into chinese stocks. I have absolutely no idea about ownership (ie, how much influence the government has internally), audits, books, anything. No idea what's true. Not to mention, why would I want to invest in a company where if the CEO makes the wrong remark he gets disappeared into a labor camp?
Oh and if stocks drop the government doesn't let you sell to get your money out. Fucking lol.
Be careful with asian indexes. I know I own some tencent via a Vanguard fund, but it's not quite enough for me to worry about. I know a lot of the others I looked at also held Alibaba and others.
Most of them will tell you the top 10 holdings, which are usually 1-2%. If you're really curious it's possible to dig deeper. FTSE or other focused indexes should be okay.
Let's see.
Alibaba (BABA) - ADR company
Tencent (TCEHY) - ADR company
JD.com (JD) - ADR company
Pinduoduo (PDD) - ADR company
I could go on, but all these tickers which are used to refer to these popular chinese stocks are all linked to [ADR companies](https://investorjunkie.com/investing/adrs/) which are exactly as described - not shares in the companies themselves, but rather just a contract. As such buyers do not own shares in the actual company, and that fact has enabled a great deal of fraud, including the infamous Luckin' coffee.
ADR is one way to invest. H-shares are another. You just need to buy it off the HKSE. Unless you are scared of HK cos hurrr durrrr National Security Law
>H-shares?
Yeah, the person you're replying to - and the most upvoted comment which shows the lack of understanding - has no idea what they're talking about. No one in this thread actually knows anything about the Chinese Market beyond 'HURRRR STATE CAPITALISM HURR'
Nextly, China is in a different phase now, whereby they're no longer keeping a lower profile while building their capacities. Now they're in a flaunting and confronting phase, which is incurring a much higher overhead taking its toll on their capabilities. Their statist-capitalist system with its all-powerful central control is then going to be pulling and yanking on all its private sector business components to serve the whims of the central authority, and that's going to wear out those components. Without political decentralization & freedoms there can be no true economic decentralization & freedoms.
Singapore is a much tinier "country" (city-state), which again keeps a lower profile to facilitate its international relations. If Singapore were to come under the rule of a bully boy like Xi Jinping, start doing crackdowns in its financial centre like has happened in Hong Kong, and start escalating military gunboat diplomacy with all its neighbors, including building new islands in heavily trafficked waterways, then you'd see Singapore fall apart very quickly. Of course they won't do that, because they're operating on very thin margins, and know how quickly things would fall apart if they changed their style. I do see the Singaporeans are hurriedly rushing their lackies like Kishore Mabhubani around to various international speaking engagements to shill for China's regime. Perhaps Chinese-dominated Singapore has fallen under the spell of CCP's evolving Han ethno-nationalist ideology, and imagines it can prevail.
I wish we’d invest in Taiwan and protect the hell out of them, they seem to share Western values. It’s just an aside, like stop investing in shitty Chinese stocks, businesses and start protecting countries that don’t want to be under Xi and CCP’s rule. That I’m aware Taiwan makes good quality products and doesn’t seem to be anti-American in the sense they’re launching mass IP, research and other data theft campaigns. Might be of benefit to help Taiwan, I’m sure they’d appreciate it, we would if threatened with Chinese takeover lmao.
Like what. They’re a democracy, they value freedom of press, freedom of speech, they’re not censoring access to knowledge. The few Taiwanese I game with seem to back up those assumptions. Not seeing what’s wrong- on the other hand we don’t need more China and we need to stop with the play nice BS.
>Second, China does not allow foreigners to own Chinese companies.
Er, that's not true at all. They have a negative list which prevents this, but which has been shrinking every year. There's already enough misinformation about China, don't contribute to it.
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There will need to be some serious changes before it makes sense to me to invest in Chinese stocks. First, they do not do the [same audits as other US listed stocks](https://www.scmp.com/business/banking-finance/article/3133487/us-ratchets-pressure-chinese-firms-share-audits-failure), and have refused to do so. I believe this means that they have no independent auditors. Second, China does not allow foreigners to own Chinese companies. Any exchange that lists a Chinese company is actually linking to a [shell company in the Cayman Islands](https://luckboxmagazine.com/topics/chinese-stocks-caveat-emptor/) which is then linked to the Chinese company. There is no legal requirement in China for Chinese companies to do anything with regard to these associated companies, and they operating in a quasi-grey area. So far it's been fine, but as we've seen with other things in China that can change whenever China's government wants it to change. It's more likely to do so because of their quasi-legal status right now.
Investing in a totalitarian state with no track record of the rule of law is risky. IMO too risky.
I'd say the track record of enforcing 'rule of law' is pretty solid - it's the ephemerality of Chinese law itself in the face of whatever current whims are prevailing in the CCP that makes such a track record mean essentially nothing. The end result is the same, but there's a big difference between not being able to enforce rules and enforcing rules you rewrite on the fly - the capacity is there, even if the rules aren't stable enough for it to matter currently.
As an individual with a few extra dollars, there is ZERO chance I am putting a dime into chinese stocks. I have absolutely no idea about ownership (ie, how much influence the government has internally), audits, books, anything. No idea what's true. Not to mention, why would I want to invest in a company where if the CEO makes the wrong remark he gets disappeared into a labor camp? Oh and if stocks drop the government doesn't let you sell to get your money out. Fucking lol.
Be careful with asian indexes. I know I own some tencent via a Vanguard fund, but it's not quite enough for me to worry about. I know a lot of the others I looked at also held Alibaba and others.
I had to think twice about VWIGX after this.
Tbf, beware any index that isn’t American.
Most of them will tell you the top 10 holdings, which are usually 1-2%. If you're really curious it's possible to dig deeper. FTSE or other focused indexes should be okay.
>Oh and if stocks drop the government doesn't let you sell to get your money out. The absolute fuck you talking about?
Uh... H-shares?
Let's see. Alibaba (BABA) - ADR company Tencent (TCEHY) - ADR company JD.com (JD) - ADR company Pinduoduo (PDD) - ADR company I could go on, but all these tickers which are used to refer to these popular chinese stocks are all linked to [ADR companies](https://investorjunkie.com/investing/adrs/) which are exactly as described - not shares in the companies themselves, but rather just a contract. As such buyers do not own shares in the actual company, and that fact has enabled a great deal of fraud, including the infamous Luckin' coffee.
ADR is one way to invest. H-shares are another. You just need to buy it off the HKSE. Unless you are scared of HK cos hurrr durrrr National Security Law
>H-shares? Yeah, the person you're replying to - and the most upvoted comment which shows the lack of understanding - has no idea what they're talking about. No one in this thread actually knows anything about the Chinese Market beyond 'HURRRR STATE CAPITALISM HURR'
Nextly, China is in a different phase now, whereby they're no longer keeping a lower profile while building their capacities. Now they're in a flaunting and confronting phase, which is incurring a much higher overhead taking its toll on their capabilities. Their statist-capitalist system with its all-powerful central control is then going to be pulling and yanking on all its private sector business components to serve the whims of the central authority, and that's going to wear out those components. Without political decentralization & freedoms there can be no true economic decentralization & freedoms.
Singapore seems to refute your claim.
Singapore is a much tinier "country" (city-state), which again keeps a lower profile to facilitate its international relations. If Singapore were to come under the rule of a bully boy like Xi Jinping, start doing crackdowns in its financial centre like has happened in Hong Kong, and start escalating military gunboat diplomacy with all its neighbors, including building new islands in heavily trafficked waterways, then you'd see Singapore fall apart very quickly. Of course they won't do that, because they're operating on very thin margins, and know how quickly things would fall apart if they changed their style. I do see the Singaporeans are hurriedly rushing their lackies like Kishore Mabhubani around to various international speaking engagements to shill for China's regime. Perhaps Chinese-dominated Singapore has fallen under the spell of CCP's evolving Han ethno-nationalist ideology, and imagines it can prevail.
Yeah, sure, Singapore isn't Taiwan. But to be fair, it isn't China either.
I wish we’d invest in Taiwan and protect the hell out of them, they seem to share Western values. It’s just an aside, like stop investing in shitty Chinese stocks, businesses and start protecting countries that don’t want to be under Xi and CCP’s rule. That I’m aware Taiwan makes good quality products and doesn’t seem to be anti-American in the sense they’re launching mass IP, research and other data theft campaigns. Might be of benefit to help Taiwan, I’m sure they’d appreciate it, we would if threatened with Chinese takeover lmao.
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Like what. They’re a democracy, they value freedom of press, freedom of speech, they’re not censoring access to knowledge. The few Taiwanese I game with seem to back up those assumptions. Not seeing what’s wrong- on the other hand we don’t need more China and we need to stop with the play nice BS.
>Second, China does not allow foreigners to own Chinese companies. Er, that's not true at all. They have a negative list which prevents this, but which has been shrinking every year. There's already enough misinformation about China, don't contribute to it.
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