April 24, 2009

Guest Post: Victor Shih on the Chinese Stimulus Package: "What did 5 Trillion RMB Buy?"

[Today's post comes to us, with our thanks, from Victor Shih, Assistant Professor of Politics at Northwestern University in the U.S., and blogger at Elite Chinese Politics and Political Economy. Victor is the author of the very fine, Factions and Finance in China, now available in paperback.]

Victor Shih | Apr 23, 2009

I have been getting a wave of bullish sell side reports about how the stimulus program launched late last year is having an unexpectedly good impact on leading indicators in China. Before we draw quick conclusions about how rosy everything will be, let's step back and examine what these figures are actually telling us. In essence, most of the benefits of pumping 5 trillion into the economy are temporary. When this pace of lending slows, many benefits will reverse into major problems.

First of all, I am more or less repeating some points that Mike Pettis raised in earlier notes. Also, unlike many sell side analysts, Stephen Green at Standard Chartered has issued several reports that give a more comprehensive view. Let's look at the latest figures. In conjunction with the stimulus program, the banks issued nearly 5 trillion RMB in new loans in the first quarter, a historically high level. Because there was basically no share issuance or new corporate bond issuance, the 5 trillion from the banks was really the main engine for 1Q 2009. The 5 trillion is almost the size of the US fiscal stimulus package and basically 1/6 of China's 2008 GDP. As far as I know, this is the largest monetary easing in this period of time as a share of a country's GDP (that didn't go into writing off bad debt, that is). Impressive indeed, but what did China get in return?

1. To be sure, fixed asset investment grew by 25+%, which was one of the intended effects of monetary easing of this magnitude.
2. Official PMI, which mainly reflects sentiment among SOEs or state corporation, went back into positive territory, but private sector PMI was still in negative territory at the end of March.
3. There has been a pretty impressive stock market rebound in the A share.
4. The housing market is showing some sign of life after a long winter. Sales in many major cities are going up significantly, even driving up prices in some cases.

So far so good, BUT...

When we look at figures for non-investment economic activities, things do not look good at all. In fact, it is down right disappointing after pumping 5 trillion into the economy.

1. First of all, export and FDI continue to fall at a pretty fast pace, which can't be helped.
2. More alarming, inventory for many industrial goods continue to build UP! According to a recent note by Stephen Green's team, refined oil inventory is up over 35% YoY as of the end of February.
3. Coal inventory seems to have gone down, but that's because many coal mines have ceased to operate. The 21st Century Business Herald reported that 50-70% of mines are "resting" for the moment. Iron ore mines are facing the same problem as international iron ore now costs less than domestic ore.
4. Electricity usage continues to be in negative territory.

Steel consumption has picked up somewhat from a collapse late last year. However, I think the problem there is continual over-capacity. The central government didn't want any major steel firms to go under, so they are spending billions to "merge" a bunch of steel firms. For example, Bao Steel based in Shanghai will buy up several steel producers in the Jiangsu/Zhejiang area. This maintains the over-capacity in the sector and will put upward pressure on inventory.

In electricity generation, there is rumor of CIC2, a mega company that will buy up distressed electricity producers and coal mines from across China, boosting the on-going consolidation financed by bank loans. In the airline industry, billions have been injected into airlines to keep them afloat amidst disastrous bets on world oil prices.

There is then the widely cited figures of 12% increase in urban income at the end of 2008 and increase in car sales in first quarter. In the first instance, I have no idea how the income figures were produced, but they almost always miss migrant workers, who are also urban residents. On the car sales, China Economist already points to a recent FT article which questions whether sales of minivans will help car company profitability. Finally, employment, which supposedly was the main point of the stimulus, was only marginally improved by the 5 trillion. Most large projects haven't gotten going yet as land still needs to be procured. The biggest employment impact was that the 5 trillion prevented the mass bankruptcy of hundreds and perhaps thousands of firms. However, some firms are staying alive by laying off or furloughing workers, like the coal mines.

So, really, when it comes down to it, the 5 trillion bought:

1. some psychological relief
2. some more sales of real estate, thus delaying the bankruptcies of many developers
3. an upbeat stock market, for a while
4. prevented the bankruptcy of numerous state firms, especially in the airline, coal, electricity, and steel sector

The most alarming thing is that these "positive" effects of pumping money into the economy lasts only as long as the money keeps flowing. If for whatever reason, the central government decides to slow down the pace of lending (and there are signs they are thinking of doing so), ALL of the above benefits will collapse relatively quickly. Imagine; if the flow of funds slows significantly, the psychological relief will disappear quickly, as will short-term loans to developers; the upbeat market sentiment will follow as speculative funds withdraw suddenly from the market. SOEs, which are building UP their capacity and inventory as we speak, will face growing losses from depreciation and deflationary pressure on output. Without free flow of bank loans, they will begin to default on their previous loans. Speculative demand for real estate will also collapse, given that inventory is expected to reach over 1 billion sqmtr some time in 2009 (again citing SCB report by Green et al.).

What does this mean? The central government cannot stop or even significantly slow this pace of lending until export picks up in a significant way, else the bubble will burst. This is a race against time. At some point, this pace of lending will lead to a serious NPL problem or inflation, or both. If by that point, export and domestic household consumption remain anemic, I am not sure what options the central government will have.

April 21, 2009

Another Attorney Scam -- Referral From Non-Existent US Attorney to Sweeten the Pot?

A twist! Here's another attorney scam email I just received, referred from my Chinese language law site, after a brief Skype chat conversation in Chinese with a purported potential client in (or so he/she said) Chongqing:

Dear Counsel,

I am sending this email as a mutual introduction (potential representation). Mr Yong Woong Shin is the manager and owner of Dongkuk Refractories& Steel Co., Ltd

Mr Yong Woong Shin entity is a Steels & Chemical trading company in South Korea, Dongkuk Refractories & Steel CO., Ltd has a claim against an American company for a breach of contract. I can not handle this matter at this time because I will be going for a surgery operation.

I have represented this company in a different matter, in the past. This matter is in your jurisdiction/region; that is why I am referring him to you, and I do not require a referral fee. Please contact Dongkuk Refractories & Steel Co.,Ltd if you are interested in representing him/his company. Below is his contact information as follows:

Yong Woong Shin 411-1, Woogye-Ri Sangdong-Myeon Kimhae, Gyeongsangnam-Do, 621-812 South Korea +82-51-5505050 (Phone) +82-51-5584058 (Fax) yongwoongshin@dkrefcokorea.asia

Sincerely, Peter Smith 5553 Bridgetown Rd Cincinnati, OH 45248 1-877-254-5338 psmith_law@yahoo.com

IMPORTANT: This email originates from a law firm. The information contained in this message is confidential and subject to various privileges and other legal protections. If you are not the intended recipient of this message, you should take appropriate action to prevent any harm that may arise due to the improper release or dissemination of the information contained herein. You should destroy this message and notify the sender.

5553 Bridgetown Rd, Cincinnati, OH 45248 is the address of Bridgetown Hardware and Supply.

View Larger Map

There is no Peter Smith licensed in Ohio. Try it for yourself.

This email offers a new twist -- a proposed referral from a member of the profession. Watch out! They're smart!

Posted by Richard at 4:49 PM | Comments (0)

April 16, 2009

EVENT: CEO of Blackstone Greater China in New York

Event: China and Hong Kong: Post Financial Tsunami, CEO Forum and Lunch

Topic: Antony Leung, Chairman of Blackstone Greater China and former Financial Secretary of Hong Kong will speak on the financial and economic future of China and Hong Kong.

Date: Wednesday, April 23

Time: 12 pm - 2 pm (12 - 12:30pm registration, 12:30-2 luncheon & discussion)

Location: Asia Society, 725 Park Avenue, New York, NY 10021

Event URL here.

RSVP: By phone, (212)-517-ASIA (M-F 10am-5pm), online here.

Posted by Richard at 3:17 PM | Comments (0)

April 13, 2009

Sundry Notes on the Chinese Judiciary

Judicial independence -- that is, making the judiciary an independent decision-making body -- has been a topic for muted discussion in China for over a decade, at least in academic circles. [For more on the ways in which the Chinese judiciary is not independent, read this and this.]

However, the subject may now be seeing rather more of the light of day, apparently drawing inspiration from "international legal principles." As an indicator, an American resident in China who shall remain anonymous graciously allowed this image to be posted:

The resident writes:

I visited a law bookstore in Chengdu,the Tianping Falu Shudian 天平法律书店. On a big sign at the entry of the bookstore is an announcement of the Chinese language translations of the Oxford Companion to the U.S. Constitution and of Judge Posner's book "How Judges Think".

Of course, the poster may, instead, simply be an indicator of the reach of Lexis Nexis's marketing. But I think it's remarkable that the company would consider it saleable -- very likely, it is selling and Chinese are reading it.

On a related subject, a judiciary which prefers to keep its rationale for many of its decisions opaque reads of calls for greater transparency.

This editorial in the Beijing News (新京报) calls for it explicitly. (By the way, who is its 后台?)

　　■ 社论

　　正所谓“好事不出门，坏事传千里”。在法制恢复重建的这30年中，即便有优秀的裁判文书，恐怕也已湮没在时间的流水里了。而一些糟糕的裁判文书，却因种种象征意义得以流传。

　　最新的例子发生在西安市莲湖区法院，在一起继承官司中，某法官“依照《中华人民共和国继承法》第十三条、《最高人民法院关于贯彻执行若干问题的意见》第三十条、第一百七十七条的规定，判决如下……”（4月10日《西安晚报》）但问题是，判决中所援引的《最高人民法院关于贯彻执行若干问题的意见》只有六十四条，所谓“一百七十七条”纯属凭空捏造。

　　错漏百出的裁判文书屡现报端，已然引起司法系统的重视。杜绝或至少是遏制这些显然有损司法声誉的低劣裁判文书，也确已成为司法制度改进的追求。从十余年司法改革的实践看，最受期待的具体举措莫过于“裁判文书公开”。在颁行不久的法院改革“三五纲要”中，对此着墨颇多并意图推动。

　　按照审判公开原则的要求，判决书是法官通过对证据质证、认证，从而认定案件事实，并依据相关法律规定作出的实体裁判的载体。黑格尔曾将诉讼的进行和审判的展开，看作是法律在特殊事件中的实现，而“公开的依据在于，首先，法官的目的是法，作为一种普遍性，它就应当让普遍的人闻悉其事；其次，通过审判公开，公民才能信服法院的判决确实表达了法”。自然，也只有判决的公开，才能让当事人和社会公众清晰地看到国家司法权是否在法律和理性的范围内被运用、当事人的诉讼权利和基本人权是否得到了应有的尊重和保护，以及是否存在司法专横、法官擅断乃至司法官贪赃枉法的情形。

　　随着信息时代的到来，以及公平、正义及法治的理念日益深入人心，裁判文书上网成为近年来引人注目的司法公开成果。近年来，确有不少法院正将本院的裁判文书搬上互联网，以期实现“以公开促公正”之目的。如北京、河南等地法院，已经建立起功能较为完备的裁判文书库，面向社会开庭。截至4月10日，全国各地法院已公布生效裁判文书59744件，共计1.6亿余字。（4月10日《文汇报》）

　　但是，即便在树为典型的几家法院，裁判文书的上网也远未做到及时、持久、无保留的公开，全国只有不到6万件生效裁判文书上网，和去年各级法院共审结、执结9839358件（尽管生效裁判只占这一数字中的一部分）相比，公开的数量还太少。“公开”的目的不应是“选择性公开”，尤其要警惕“裁判文书公开”被异化为“优秀裁判文书公开”。司法公正应是对每一宗个案的追求，而非某些个案的追求。所谓“以公开促公正”，一是要以公开为预防裁判文书出错的动力；二是要以公开为监督司法的重要手段，让公众“雪亮的眼睛”找出那些问题裁判，并使之得到校正的机会。“裁判文书公开”被推动了十多年，仍然是“进行时”而非“完成时”。

　　裁判文书公开或上网公开，展现法院愿意主动接受监督的姿态。这一被公众冀望颇多的司法改革举措，不能仅仅停留在“姿态”，而更需要实实在在的成果。若裁判文书公开切实做到及时、持久、无保留，“一百七十七条”式的荒唐裁判才可能成为历史。

[H/t to Joshua Rosenzweig of The Dui Hua Foundation for the editorial.]

Finally, by far the most debilitating aspect of Chinese life, including the judiciary: corruption. In an article touching on both judicial independence, international legal principles as well as transparency, we find this quote and its profound rhetorical question at the end of the paragraph:

在司法大众化和职业化之争的背后，还隐藏着一个更为宏观的“普世价值”和“中国特色”的立场分歧。那些主张大众化的部分人士认为，司法职业化改革盲目崇拜西方主流模式，丢弃了中国过去几十年形成的据说行之有效的传统办法，主张抛弃“西方崇拜”，强化上级对下级的监督和指导。

笔者不得不说，这种主张在本质上是要退回到人治时代，不仅违背了法治的基本规律，而且也是和30年改革开放的基本精神背道而驰的。任何人都不能否认，崇尚法治不是崇洋媚外的结果，而是中国人民和政府在饱受人治和政治运动之苦后达成的一致共识。假如革命时代形成的某些政治传统确实如某些人主张的那样对于治理当代社会行之有效，那么中国当年为什么还要改革开放？为什么还要建立市场经济和法治国家？

Posted by Richard at 1:41 PM | Comments (0)

April 10, 2009

Counterfeit Check in Attorney E-mail Scam Looks Persuasive

Having never seen one before, and thinking readers have not as well, I was delighted when a fellow attorney showed me a counterfeit check used in an attempt to deceive a law firm in an attorney e-mail scam. Gracious thanks to Utah attorney Randy Birch -- who was not deceived. The Secret Service informed him that it was indeed counterfeit, but looked very much like the real thing.

Aside from the detail, attorneys will note that the check is made out to the law firm's IOLTA account. This should give warning that the people on the other side of the scam are quite knowledgeable about our business. Beware!

Posted by Richard at 2:50 PM | Comments (0)

April 2, 2009

Home Depot Buyer Convicted in International Kick Back Scheme -- and What an Old Scheme It Is!

A former divisional merchandising manager in charge of Home Depot's hard flooring products was sentenced to 63 months in prison for tax evasion and wire fraud, and ordered to pay $1.1 million in restitution to Home Depot. You can read the brief blurb about it here.

He is one of three former executives who have pleaded guilty to receiving millions of dollars in kickbacks from foreign suppliers in return for placing their products in Home Depot stores across the nation.

The article does not detail the scheme, but instead focuses on a lavish lifestyle the extra cash in pocket enabled the manager to lead. For the uninitiated, let me tell you how it happens.

A buyer in a national or even regional chain store controls millions of dollars worth of purchasing power. He is responsible for choosing suppliers, wherever they may be, and ensuring goods in his department are competitively priced, of sufficient quality and delivered on time. The buyer is paid a static wage which appears puny in comparison to the amount of purchasing power he wields through his organization.

Buyers on the take generally expect 1% of the total value of order to come back to them. A buyer who controls $25 million of annual spending can rack up $250,000 a year, and many become quite wealthy over time. If he doesn't get caught...

The convicted individual lived life a little too obviously large:

...more than $1 million in cash, luxury cars and real estate...including $269,000 to a California real estate development firm that sold Robinson two Tennessee properties, $135,000 in deposits to Robinson's investment accounts, and funds that paid off Robinson's loans on a 2004 Cadillac Escalade and a new Infiniti sports utility vehicle.

Who pays the 1%? Not the seller, because he adds that 1% to the value of the order. The buyer's company ends up paying. Business acquaintances have told me several buyers demanded currency, so that there be no trace. (One factory owner I knew gave his buyer a birthday card loaded with cash while singing, "Happy Birthday!") The payoff is expected before the order is placed. Simply because the payoff is made does not allow the seller to provide shoddy goods. One is given no quarter. There is such competition to get product into an established distribution channel that a deadbeat supplier will be dumped and a paying, hungry, effective supplier found quickly enough.

Management suspects buyers of being crooked. (Years ago, one buyer I knew told me "They suspect me even if I am pure, so why don't I just go ahead and do it?" I thought it pointless to suggest the benefits of uprightness to him) Some companies, especially those with experience, shift buyers from department to department every few years and engage investigative services in an attempt to ferret out dishonesty.

Executives with any intellect know what's going on. I am reminded of the CEO who said to me over drinks, "Bob X in Purchasing just bought a new house in that subdivision. Son of a b--- must be on the take. Didn't he just buy a Caddy, too?"

Purchase from overseas manufacturers enables greater camouflage, such as overseas bank accounts in false names, the establishment of trading companies which masquerade as the producer (sometimes established with buyer capital) and gifts bestowed in overseas venues (gold coins, women, gambling forays, etc.).

The "savvy" buyer who is on the take does not disclose his relationship to any but the one decision-maker in the organization from whom he is taking his payoff, refuses to discuss payoffs in close quarters even with that executive (preferring a space where he cannot easily be recorded) and makes sure his department is extremely profitable.

It is surprising how few are caught and publicly made an example of. Partly, management may prefer a simple termination rather than arrest, the publicity and the negative implications for their control over staff. But even if management discovers the buyer's fraud, it may choose to keep him on, considering the 1% simply as another expense. Yes, I have known this situation to have actually occurred, and can only assume I gained a glimpse of a more general practice.

Posted by Richard at 2:42 PM | Comments (0)

March 30, 2009

Yale Asia Tomorrow Conference: Text of Asiabizblog Editor's Comments

[The following are my remarks at this conference, held at Yale University, March 28, 2009.]

Thank you for inviting me to participate on this panel. Here's the question I will address: is the average person in Asia living in a "global" environment more so now than at some point in the past?

Here is my brief answer: only superficially so. The physical environment in which people live has generally changed, due in part to factors originating outside of that geographic space. But, those who live in Asia, ideationally, remain insular. While there has been transformation it can't be said that outside influences have been significant. If I had to put it in a catchphrase, I'd say that, as far as globalization in Asia is concerned, it's old wine in new bottles.

I admit my initial question is vague. This is because the topic itself and the terms used are as well. The topic "globalization, its effect on Asia" is ripe for discussion, if only because it has seized the high ground of public interest, while also being nebulous. Firstly, it's my contention that there is no such thing as an "Asian." That is because there really is nothing readily definable which is also meaningful called Asia. Asia is an ancient word which has always referred to a region of indistinct boundaries and uncertain shape. Over time, the English, the Germans, the Japanese -- all of them picked up the term, and applied it to a region of ever-growing size upon the map. Thus, we now have rather unuseful term "Asia" applying to geography encompassing virtually one half the entire Eastern Hemisphere, from Lebanon to Japan, and from Siberia to the Andaman Islands, and sometimes even including Australia and New Zealand. This incorporates hodgepodge of nations, languages, societies, cultures, etc. Great diversity. To make it easy on me, I shall limit my remarks to China.

"Globalization" is another terror. I have seen many definitions, each of which may be distinguished significantly from one another, from Stiglitz to Krugman to Friedman to Palmer to Tinkers to Evers to Chance. Anyone can use it to mean just about whatever he wants. The dominant usage appears to be that global economic interconnectedness has given rise to a transformation in cultural and/or social spheres. But I think it can be sliced and diced just about any way you wish to.

The term also, at least in the United States and Western Europe has come to mean that just about any way of life or belief is as good as any other and all should be tolerated. This is typical thinking of those Westerners who have so little faith in their own tradition of civilization and believe the grass is greener on the other side of the hill, usually because they've never been there.

Narrowing the question, how has Chinese life changed as a result of products and ideas originating elsewhere?

As to physical life, let's get the easy ones out of the way: the product imports. As China becomes relatively wealthier, food consumption patterns have changed to include many Western products not traditionally consumed in the Chinese home: dairy products, meat, bread. Chinese are, as a result, physically larger and stronger than they were 100 or even 25 years ago. Relatively the same change occurred in Japan in the 1960s. Chinese costume has become thoroughly Western. Traditional Chinese garb is worn only on ceremonial occasions or where formality is required -- almost as a reminder at an important time of life that one is indeed Chinese.

But these are skin deep changes. What about the ways in which Chinese think and behave? The record, I believe, is mixed.

Mainland China, with the establishment of the Chinese Communist Party in 1949 became a militarized society, an extension of Yenan life. Political rule was, at least in theory, based upon a Marxist/Leninist foundation – Western ideas – but, over time, these principles and methods of governance became synthesized with both traditional Chinese as well as newly created ideas and techniques. As a brief example of that synthesis, the traditional Chinese tactic, seen often in Imperial governance, and also employed very often in modern China – even in business -- is the top-down hierarchy of political cells set one against the other in constant struggle, in an effort to keep struggle distant from the top people, those who initiated it.

The higher ideas of traditional Chinese thought were crushed, and exist now only in fragments, remaining alive in Chinese communities worldwide. Yes, there was a Chinese diaspora. Even today, the militarized nature of modern Chinese society remains, despite development since 1978, even though it has changed somewhat, leaving a spiritual vacuum. Chinese life is now bereft of its traditional ideas -- known to academics as the syncretic tradition of Confucianism, Buddhism, Taoism -- and within China, not much available to replace it (or better said, allowed to replace it).

Yet, in overseas Chinese communities, wherever they may exist, that tradition has begun an extraordinary resurgence – commencing at the end of the 20th century with Buddhist charitable associations, funded in part by the finances of wealthy industrialists, and fueled by a growing dissatisfaction of the populace with the insubstantial nature of financial wealth to the soul.

Certain traditional Chinese practices remain prevalent in China: Chinese education consists primarily of the memorization of facts -- the rote inculcation of knowledge. The Western idea of higher education is alien, that is, education as a means by which one's ken may be expanded, whereby one is intended to become a civilized participant in a community of capable, self-dependent individuals. (Of course, we can argue the extent to which the American public school system has been successful in doing just that.)

Briefly, as an example, we do not see Chinese youth taught to persuade by means of expository writing, the creation of an argument and the mustering of facts in support of it. Instead, writing for most Chinese is very much stream of consciousness.

Chinese continue to be taught negatively -- as opposed to the United States, which is positively. Negative criticism is used to create shame and thus, to compel change – Chinese are delicately sensitive to shaming; whereas, the West stopped using the whip to teach long ago. When I have trained or taught Chinese -- they have found both methods -- the conceptual and the positive -- very different from what they're used to. Sometimes liberating. But many of my trainees just wanted to be told what to do, so that they could mimic the teacher. To me, this is the last thing I would wish a student to do. How can you stand on your own two feet, and learn to deal with all of the changes that occur in life, if all you learn to do is mimic your instructor? (Think also of political indoctrination and the propaganda insisting that good Chinese citizens follow a path laid down by a leader.)

Let me throw out for consideration two very brief points, of which time constraints don't permit much discussion:
• An idea that has not changed: the use and abuse of power by the big against the small – in daily life, not just politics. Try crossing the street in Shanghai as you would in Manhattan. A taxi driver once told me 我比他大 (i.e., that a pedestrian must wait for him to cross first because the taxi is bigger).
• Money – here we find a great change in that it is now respected, unlike in traditional Chinese society, in which merchants were at the bottom of the list. (But has "globalization" been the cause of this effect?)

Finally, let me suggest that the study of globalization is not new to the study of Asia. John King Fairbank, who taught Chinese history at Harvard, beginning in the 1930s and over the next 40 years, posited the theory of western impact, Chinese response. Sounds a little bit like globalization, doesn't it? of course, now we have more of a two way street. Or do we?

So, has America been similarly globalized? why don’t we go out for Chinese food -- or what to the American passes for Chinese food -- and talk about it?

Posted by Richard at 2:03 PM | Comments (0)

March 27, 2009

Malaysian Loan Sharks, 地下錢莊 and Making an Offer the Debtor Can't Refuse

地下錢莊 (literally, "underground bank") flourishes wherever Chinese borrowers need cash quickly without having to go through the process of a loan application at a formal bank. They are as easy to access as black market foreign exchange in any Chinese city, if you get an introduction. While not always tied to criminal gangs, one never knows whether the poorly dressed man in the watch repair shop is a front for a group of successful, wealthy store owners or potential leg breakers.

Fujian （福建）immigrants to the United States, businessmen who are completely on the level, for example, will often pool assets to lend to the Fujianese newcomer so that he may open his business. This has been a common practice in Chinese communities in the United States since the mid-19th century, e.g. the 同鄉會 (an association of people originating in the same locale). Koreans, as well.

Cash is advanced at terms certain and agreed, usually at a high rate of interest (in one case, I was told, 12% monthly), often with the reversion of certain properties occurring on nonpayment, including the entire business, personal automobile, etc. Sometimes, the parties sign a simple document，much like an IOU, several of which I have seen. Other times, a relationship, family or close friend, serves as the bond sufficiently close to compel either repayment or a transfer of property. Many times, that family or friend, who was the intermediary, is the one who must pay up upon default of the primary debtor.

What happens to those who don't pay? in Malaysia, apparently this. Public ostracism. But this is certainly the easy-out. Among Chinese, as far as I am aware, beatings, leg-breakings and death -- where lender-debtor are strangers, not family or friends -- occur frequently.

An example, which occurred in Taipei. A friend lent a substantial sum of money to an investor. The investor's business failed. Fraud was suspected. My friend arranged for a small-time gangster to visit the investor, but when the gangster returned, he informed my friend that the investor had already been stabbed to death. The investor paid a very high rate of interest, indeed, and my friend's investment was entirely lost. In other words, my assumption is that the deeper truth among Malaysian loan sharks and their debtors is not as 單純 (pure and simple) as the Bloomberg writer, who otherwise wrote a terrific article, makes it out to be.

Posted by Richard at 2:53 PM | Comments (0)

March 24, 2009

China Proposes "Super-Sovereign Reserve Currency" to Eliminate the Middle Man

[UPDATE (March 26, 2009): The American response here and here.]

Zhou Xiaochuan (周小川), Governor of the People's Bank of China, has proposed a supranational currency to which national currencies shall be linked and valued according to a system of "rules." Remember China's concern (panic?) over its enormous U.S. dollar reserves and investments in U.S. Treasuries [See: China's Holdings of U.S. Securities: Implications for the U.S. Economy] The New York Times provides a brief overview; WSJ here and here.

Pie in the sky. From WSJ:

Large, deep, and highly traded markets involving a particular currency "don't spring up spontaneously just because the Chinese central bank governor suggests this would be a good idea," says Barry Eichengreen, an economist at the University of California at Berkeley.

This is a shot over the bow. My initial reaction is that, given the statements of Treasury Secretary Geithner, this public announcement of an attack on the dominance of the US dollar indicates a worsening government-to-government relationship in economic matters between the U.S. and China.

Zhou Xiaochuan's comments in full appear below:

Reform the International Monetary System

Zhou Xiaochuan

The outbreak of the current crisis and its spillover in the world have confronted us with a long-existing but still unanswered question,i.e., what kind of international reserve currency do we need to secure global financial stability and facilitate world economic growth, which was one of the purposes for establishing the IMF? There were various institutional arrangements in an attempt to find a solution, including the Silver Standard, the Gold Standard, the Gold Exchange Standard and the Bretton Woods system. The above question, however, as the ongoing financial crisis demonstrates, is far from being solved, and has become even more severe due to the inherent weaknesses of the current international monetary system.

Theoretically, an international reserve currency should first be anchored to a stable benchmark and issued according to a clear set of rules, therefore to ensure orderly supply; second, its supply should be flexible enough to allow timely adjustment according to the changing demand; third, such adjustments should be disconnected from economic conditions and sovereign interests of any single country. The acceptance of credit-based national currencies as major international reserve currencies, as is the case in the current system, is a rare special case in history. The crisis again calls for creative reform of the existing international monetary system towards an international reserve currency with a stable value, rule-based issuance and manageable supply, so as to achieve the objective of safeguarding global economic and financial stability.

I. The outbreak of the crisis and its spillover to the entire world reflect the inherent vulnerabilities and systemic risks in the existing international monetary system.

Issuing countries of reserve currencies are constantly confronted with the dilemma between achieving their domestic monetary policy goals and meeting other countries' demand for reserve currencies. On the one hand,the monetary authorities cannot simply focus on domestic goals without carrying out their international responsibilities; on the other hand,they cannot pursue different domestic and international objectives at the same time. They may either fail to adequately meet the demand of a growing global economy for liquidity as they try to ease inflation pressures at home, or create excess liquidity in the global markets by overly stimulating domestic demand. The Triffin Dilemma, i.e., the issuing countries of reserve currencies cannot maintain the value of the reserve currencies while providing liquidity to the world, still exists.

When a national currency is used in pricing primary commodities, trade settlements and is adopted as a reserve currency globally, efforts of the monetary authority issuing such a currency to address its economic imbalances by adjusting exchange rate would be made in vain, as its currency serves as a benchmark for many other currencies. While benefiting from a widely accepted reserve currency, the globalization also suffers from the flaws of such a system. The frequency and increasing intensity of financial crises following the collapse of the Bretton Woods system suggests the costs of such a system to the world may have exceeded its benefits. The price is becoming increasingly higher, not only for the users, but also for the issuers of the reserve currencies. Although crisis may not necessarily be an intended result of the issuing authorities, it is an inevitable outcome of the institutional flaws.

II. The desirable goal of reforming the international monetary system, therefore, is to create an international reserve currency that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies.

1. Though the super-sovereign reserve currency has long since been proposed, yet no substantive progress has been achieved to date. Back in the 1940s, Keynes had already proposed to introduce an international currency unit named "Bancor", based on the value of 30 representative commodities. Unfortunately, the proposal was not accepted. The collapse of the Bretton Woods system, which was based on the White approach, indicates that the Keynesian approach may have been more farsighted. The IMF also created the SDR in 1969, when the defects of the Bretton Woods system initially emerged, to mitigate the inherent risks sovereign reserve currencies caused. Yet, the role of the SDR has not been put into full play due to limitations on its allocation and the scope of its uses. However, it serves as the light in the tunnel for the reform of the international monetary system.

2. A super-sovereign reserve currency not only eliminates the inherent risks of credit-based sovereign currency, but also makes it possible to manage global liquidity. A super-sovereign reserve currency managed by a global institution could be used to both create and control the global liquidity. And when a country's currency is no longer used as the yardstick for global trade and as the benchmark for other currencies, the exchange rate policy of the country would be far more effective in adjusting economic imbalances. This will significantly reduce the risks of a future crisis and enhance crisis management capability.

III. The reform should be guided by a grand vision and begin with specific deliverables. It should be a gradual process that yields win-win results for all.

The reestablishment of a new and widely accepted reserve currency with a stable valuation benchmark may take a long time. The creation of an international currency unit, based on the Keynesian proposal, is a bold initiative that requires extraordinary political vision and courage. In the short run, the international community, particularly the IMF, should at least recognize and face up to the risks resulting from the existing system, conduct regular monitoring and assessment and issue timely early warnings.

Special consideration should be given to giving the SDR a greater role. The SDR has the features and potential to act as a super-sovereign reserve currency. Moreover, an increase in SDR allocation would help the Fund address its resources problem and the difficulties in the voice and representation reform. Therefore, efforts should be made to push forward a SDR allocation. This will require political cooperation among member countries. Specifically, the Fourth Amendment to the Articles of Agreement and relevant resolution on SDR allocation proposed in 1997 should be approved as soon as possible so that members joined the Fund after 1981 could also share the benefits of the SDR. On the basis of this, considerations could be given to further increase SDR allocation.

The scope of using the SDR should be broadened, so as to enable it to fully satisfy the member countries' demand for a reserve currency.

Set up a settlement system between the SDR and other currencies. Therefore, the SDR, which is now only used between governments and international institutions, could become a widely accepted means of payment in international trade and financial transactions.

Actively promote the use of the SDR in international trade, commodities pricing, investment and corporate book-keeping. This will help enhance the role of the SDR, and will effectively reduce the fluctuation of prices of assets denominated in national currencies and related risks.

Create financial assets denominated in the SDR to increase its appeal. The introduction of SDR-denominated securities, which is being studied by the IMF, will be a good start.

Further improve the valuation and allocation of the SDR. The basket of currencies forming the basis for SDR valuation should be expanded to include currencies of all major economies, and the GDP may also be included as a weight. The allocation of the SDR can be shifted from a purely calculation-based system to a system backed by real assets, such as a reserve pool, to further boost market confidence in its value.

IV. Entrusting part of the member countries' reserve to the centralized management of the IMF will not only enhance the international community's ability to address the crisis and maintain the stability of the international monetary and financial system, but also significantly strengthen the role of the SDR.

1. Compared with separate management of reserves by individual countries, the centralized management of part of the global reserve by a trustworthy international institution with a reasonable return to encourage participation will be more effective in deterring speculation and stabilizing financial markets. The participating countries can also save some reserve for domestic development and economic growth. With its universal membership, its unique mandate of maintaining monetary and financial stability, and as an international "supervisor" on the macroeconomic policies of its member countries, the IMF, equipped with its expertise, is endowed with a natural advantage to act as the manager of its member countries' reserves.

2. The centralized management of its member countries' reserves by the Fund will be an effective measure to promote a greater role of the SDR as a reserve currency. To achieve this, the IMF can set up an open-ended SDR-denominated fund based on the market practice, allowing subscription and redemption in the existing reserve currencies by various investors as desired. This arrangement will not only promote the development of SDR-denominated assets, but will also partially allow management of the liquidity in the form of the existing reserve currencies. It can even lay a foundation for increasing SDR allocation to gradually replace existing reserve currencies with the SDR.

关于改革国际货币体系的思考
周小川

此次金融危机的爆发与蔓延使我们再次面对一个古老而悬而未决的问题，那就是什么样的国际储备货币才能保持全球金融稳定、促进世界经济发展。历史上的银本位、金本位、金汇兑本位、布雷顿森林体系都是解决该问题的不同制度安排，这也是国际货币基金组织（IMF）成立的宗旨之一。但此次金融危机表明，这一问题不仅远未解决，由于现行国际货币体系的内在缺陷反而愈演愈烈。

理论上讲，国际储备货币的币值首先应有一个稳定的基准和明确的发行规则以保证供给的有序；其次，其供给总量还可及时、灵活地根据需求的变化进行增减调节；第三，这种调节必须是超脱于任何一国的经济状况和利益。当前以主权信用货币作为主要国际储备货币是历史上少有的特例。此次危机再次警示我们，必须创造性地改革和完善现行国际货币体系，推动国际储备货币向着币值稳定、供应有序、总量可调的方向完善，才能从根本上维护全球经济金融稳定。

一、此次金融危机的爆发并在全球范围内迅速蔓延，反映出当前国际货币体系的内在缺陷和系统性风险

对于储备货币发行国而言，国内货币政策目标与各国对储备货币的要求经常产生矛盾。货币当局既不能忽视本国货币的国际职能而单纯考虑国内目标，又无法同时兼顾国内外的不同目标。既可能因抑制本国通胀的需要而无法充分满足全球经济不断增长的需求，也可能因过分刺激国内需求而导致全球流动性泛滥。理论上特里芬难题仍然存在，即储备货币发行国无法在为世界提供流动性的同时确保币值的稳定。

当一国货币成为全世界初级产品定价货币、贸易结算货币和储备货币后，该国对经济失衡的汇率调整是无效的，因为多数国家货币都以该国货币为参照。经济全球化既受益于一种被普遍接受的储备货币，又为发行这种货币的制度缺陷所害。从布雷顿森林体系解体后金融危机屡屡发生且愈演愈烈来看，全世界为现行货币体系付出的代价可能会超出从中的收益。不仅储备货币的使用国要付出沉重的代价，发行国也在付出日益增大的代价。危机未必是储备货币发行当局的故意，但却是制度性缺陷的必然。

二、创造一种与主权国家脱钩、并能保持币值长期稳定的国际储备货币，从而避免主权信用货币作为储备货币的内在缺陷，是国际货币体系改革的理想目标

1、超主权储备货币的主张虽然由来以久，但至今没有实质性进展。上世纪四十年代凯恩斯就曾提出采用30种有代表性的商品作为定值基础建立国际货币单位 “Bancor”的设想，遗憾的是未能实施，而其后以怀特方案为基础的布雷顿森林体系的崩溃显示凯恩斯的方案可能更有远见。早在布雷顿森林体系的缺陷暴露之初，基金组织就于1969年创设了特别提款权（下称SDR），以缓解主权货币作为储备货币的内在风险。遗憾的是由于分配机制和使用范围上的限制，SDR 的作用至今没有能够得到充分发挥。但SDR的存在为国际货币体系改革提供了一线希望。

2、超主权储备货币不仅克服了主权信用货币的内在风险，也为调节全球流动性提供了可能。由一个全球性机构管理的国际储备货币将使全球流动性的创造和调控成为可能，当一国主权货币不再做为全球贸易的尺度和参照基准时，该国汇率政策对失衡的调节效果会大大增强。这些能极大地降低未来危机发生的风险、增强危机处理的能力。

三、改革应从大处着眼，小处着手，循序渐进，寻求共赢

重建具有稳定的定值基准并为各国所接受的新储备货币可能是个长期内才能实现的目标。建立凯恩斯设想的国际货币单位更是人类的大胆设想，并需要各国政治家拿出超凡的远见和勇气。而在短期内，国际社会特别是基金组织至少应当承认并正视现行体制所造成的风险，对其不断监测、评估并及时预警。

同时还应特别考虑充分发挥SDR 的作用。SDR具有超主权储备货币的特征和潜力。同时它的扩大发行有利于基金组织克服在经费、话语权和代表权改革方面所面临的困难。因此，应当着力推动 SDR的分配。这需要各成员国政治上的积极配合，特别是应尽快通过1997年第四次章程修订及相应的SDR分配决议，以使1981年后加入的成员国也能享受到SDR的好处。在此基础上考虑进一步扩大SDR的发行。

SDR的使用范围需要拓宽，从而能真正满足各国对储备货币的要求。

●建立起SDR与其他货币之间的清算关系。改变当前SDR只能用于政府或国际组织之间国际结算的现状，使其能成为国际贸易和金融交易公认的支付手段。

●积极推动在国际贸易、大宗商品定价、投资和企业记账中使用SDR计价。不仅有利于加强SDR的作用，也能有效减少因使用主权储备货币计价而造成的资产价格波动和相关风险。

●积极推动创立SDR计值的资产，增强其吸引力。基金组织正在研究SDR计值的有价证券，如果推行将是一个好的开端。

●进一步完善SDR的定值和发行方式。SDR定值的篮子货币范围应扩大到世界主要经济大国，也可将GDP作为权重考虑因素之一。此外，为进一步提升市场对其币值的信心，SDR的发行也可从人为计算币值向有以实际资产支持的方式转变，可以考虑吸收各国现有的储备货币以作为其发行准备。

四、由基金组织集中管理成员国的部分储备，不仅有利于增强国际社会应对危机、维护国际货币金融体系稳定的能力，更是加强SDR作用的有力手段

1、由一个值得信任的国际机构将全球储备资金的一部分集中起来管理，并提供合理的回报率吸引各国参与，将比各国的分散使用、各自为战更能有效地发挥储备资金的作用，对投机和市场恐慌起到更强的威慑与稳定效果。对于参与各国而言，也有利于减少所需的储备，节省资金用于发展和增长。基金组织成员众多，同时也是全球唯一以维护货币和金融稳定为职责，并能对成员国宏观经济政策实施监督的国际机构，具备相应的专业特长，由其管理成员国储备具有天然的优势。

2、基金组织集中管理成员国储备，也将是推动SDR作为储备货币发挥更大作用的有力手段。基金组织可考虑按市场化模式形成开放式基金，将成员国以现有储备货币积累的储备集中管理，设定以SDR计值的基金单位，允许各投资者使用现有储备货币自由认购，需要时再赎回所需的储备货币，既推动了SDR 计值资产的发展，也部分实现了对现有储备货币全球流动性的调控，甚至可以作为增加SDR发行、逐步替换现有储备货币的基础。(完)

Posted by Richard at 2:39 PM | Comments (0)

March 19, 2009

EVENT: ABA Washington DC -- China 2009: Gazing into the Crystal Ball

China 2009: Gazing into the Crystal Ball

Date: Mar 27, 2009 08:30 - 10:00 AM

Site: ABA Washington Office
740 15th St NW
Washington, DC, 20005-1019
United States of America

"Wondering how the economic downturn is impacting legal and business developments in China? Curious as to what is happening to China's once sizzingly hot real estate sector? Bewildered as to how employee lay-offs are being handled by foreign-invested companies facing decreasing demand for their products? And, what about those unfortunate companies who may need to file for bankruptcy of their China operations - how are they likely to fare? What developments have been taking place with China's new Anti-Monopoly Law and should we expect changes in light of the global economic downturn? These and other fascinating questions will be considered in an informal monitored discussion on March 27, in person at the Section's offices in Washington, D.C. and via teleconference for members wishing to participate from other locations - whether in the United States or elsewhere."

Speakers: Amy Sommers, Elizabeth Cole, Robin Kaptzan, and Peter Neumann. Moderator: Adam Bobrow.

A continental Breakfast will be served.

Participate by attendance in person or via teleconference. URL here.

Posted by Richard at 2:05 PM | Comments (0)

March 18, 2009

Asiabizblog Editor to Speak at March 28 Yale Conference

I've been invited to speak at the “Asia Tomorrow” conference at Yale University on March 28. For further information, click here.

Posted by Richard at 7:19 PM | Comments (0)

Tokyo Gumshoe -- That Company Simply Doesn't Exist!

Remember this post on attorney scams? The company from which it purportedly originated was stated to be

G and T trading Company Limited, Tokyo Kotsu Kaikan Bldg. 7F. 2-10-1 Yurakucho Chiyoda-ku Tokyo 100-0006 JAPAN

We now have first-hand evidence that this company does not exist at that location.

Brian Johnson, who works in Tokyo for a patent law firm, graciously sauntered over to that address, located near the Yurakucho Station (有楽町駅). He reports:

Here's what I found:

There are five businesses on the 7th floor. They are

1. Mitsubishi Shuji Logistics -- Known in English as Mitsubishi Corporation LT, Inc
Transport Equipment, warehousing & transport

2. Kyocera Contax Salon -- a photo gallery for Kyocera/Contax

3. Kabushi Kaisha Hitachi Hoken Service -- Seems to be some kind of insurance company related to Hitachi

4. Kaigisu Musubikai -- can't find out anything about these guys but no G or T or trading in their name.

5. K.K. Gakujo -- an employment agency

Thus:

...it appears that there is no company called G and T Trading on that floor.

Heartfelt thanks to Brian Johnson for his willingness to take time out of his day for Asiabizblog readers!

Continue reading "Tokyo Gumshoe -- That Company Simply Doesn't Exist!"

Posted by Richard at 6:55 PM | Comments (2)

March 16, 2009

EVENT: Chicagoland China Business Seminar

Seminar: "Challenges and Rewards: Doing Business with China in 2009"
Time: 9:00 am - 3:00 pm, May 1, 2009 (Friday)
Venue: Quality Inn Schaumburg, Illinois (Chicago west suburb)

Agenda & Topics

Global Recession and its Impact on China's Economy & Sino-US Trade
Introduction to China's Economic Stimulus Plan
New Business Opportunities in the Emerging Cities
U.S. Commodity Export and U.S. Services Export
The Myth vs. The Reality (Business Diligence)
Assessing Your China Readiness and Commitment
Market Entry and Investment Strategies (JV, WFOE, Sourcing, Acquisition)
Strategic Management and Operations in China
Risk Management and Legal Issues in China
Establishing and Utilizing "Guanxi" for Your Business Development
Understanding Chinese Corporate Culture and Social Norms
Attracting Chinese Investment Capital to the U.S.
Attracting Chinese Companies and Investors to Your Area

URL here.

Posted by Richard at 1:29 PM | Comments (0)

March 11, 2009

Watch LIVE Webcast of Alibaba CEO Jack Ma at Asiabizblog

The live webcast starts at 7.30 am EST, Thursday, March 12.

Here's the blurb from the Asia Society.

"Known as China’s Web King, Jack Ma is Chairman and CEO of Alibaba Group, the leading e-commerce company in China and one of the world’s largest online trading platforms. A pioneer in the Chinese Internet industry, Ma is recognized as the man who put China on the Net. Over a decade ago he founded China’s first Internet-based company and has since transformed China’s Internet industry. Ma was named by Fortune Magazine as one of the “25 Most Powerful Businesspeople in Asia” in 2005, “Businessperson of the Year” by BusinessWeek in 2006, and one of the 30 “World’s Best CEOs” by Barron’s in 2008.

Tomorrow morning, Thursday, March 12, Jack Ma will speak at the Asia Society in New York about building Alibaba and will share his insight on technological innovation and development as the driving forces of the global e-commerce industry."

Current time in New York:

Posted by Richard at 8:50 PM | Comments (0)

Chinese Export Volume Falls Off the Proverbial Cliff

Reuters:

Exports in February slid 25.7 percent from a year earlier, dwarfing forecasts of a 5.0 percent fall, while imports dropped 24.1 percent, close to projections of a 25.0 percent decline.

Bloomberg's story fleshes it out a bit more. Read also Andrew Batson's article for context.

As we've written many times in the past -- echoing the research of scholars of the Chinese economy -- official Chinese statistics must be taken with a grain (make that "pillar?") of salt. Distortions due to collection methodology, the inaccuracy of reporting, the pressure of political demands, all contribute to inaccuracy.

But we all know that the manufacturing sector in China has been badly hit -- we saw the signs and posted our early presentiments back in the summer of 2008. As unreliable as the number is. I find this officially announced statistic so shocking that I'm compelled to compare it to the extraordinary upset occasioned by an event in modern Taiwanese economic history: when the New Taiwan Dollar peg to the US dollar was removed in the late 1980s.

In the space of a few months, that ratio moved from 40:1 to 25:1, shutting the doors of many businesses on the island and forcing factory owners to look for manufacturing sources elsewhere in Asia. It was -- and those who were there at the time will remember it -- a disaster of great proportions. Prices and unemployment soared, and Taiwanese, already following the trail of general diaspora throughout the world, hastened their steps away.

While a handful of Westerners have told me they do not see much change in China -- they see people continuing to purchase and go about their lives as naturally as they did before the global meltdown -- these gentlemen reside in the major urban centers and are only vaguely aware of the boiling undercurrent in rural areas, especially in the middle and southern parts of the country.

One does not see China creating within a generation -- not to mention a brief economic cycle -- a domestic market capable of absorbing sufficient volume of manufactured product to make up for the decline in exports. Exports are the engine which drives China's growth, upon which great masses of uneducated and poorly skilled people rely for a basic living. The Chinese stimulus package may provide limited employment for some building roads and fixing the rails, but never the kind of capacity that manufacturing has provided. An empty stomach and idle hands are ruinous to individual, family and country. Now that they have had a taste of a better life, Chinese will not willingly return to the life of strict social constraint and enforced poverty of the pre-1978 years.

The export statistic is, thus, a crude indicator of the social turbulence to follow.

Posted by Richard at 2:06 PM | Comments (1)

March 9, 2009

And One More Attorney Scam E-mail -- The Last One, I Promise!

This one is so transparently badly done, no one should be fooled by it:

Attention:

We represent the management of G and T trading Company Limited, Tokyo Kotsu Kaikan Bldg. 7F. 2-10-1 Yurakucho Chiyoda-ku Tokyo 100-0006 JAPAN ,"Engaged in international marketing of Painting & Crafts Tools, Power Tools and Outdoor Equipment since 1992" G and T trading Company Limited, JAPAN have supplied Painting & Crafts Tools, Power Tools and Outdoor Equipment to many American and Canadian customers, total invoices in excess of US$3.6million since Last the year. Some of the American and Canadian companies have defaulted in their payment to G and T trading Company Limited, the Chairman of G and T trading Company Limited contacted me last month and through a Power of Attorney, appointed me to collect their overdue payments. I therefore require you'r legal representation in order to collect on the supplied invoices from the American and Canadian Customers.

We understand that a proper Attorney Client Retainer will provide the necessary authorization and we are most inclined to commence talks as soon as possible. Your consideration of our request is highly anticipated and we look forward to your prompt response.

Sincerely,

Raj Yaokeem
Yaokeem Consultants.
No 33-35 Queen Square BS1 7LU, London

Posted by Richard at 4:56 PM | Comments (0)

March 3, 2009

Tax Reform on Foreign Profits of Multinationals Coming To a Government Near You?

Now what might this be about?

The Obama administration will propose a series of measures "over the next several months" to reform taxes on the foreign profits of multinational companies, and to crack down on abusive offshore tax shelters used by firms and wealthy individuals, Mr. Geithner said.

Posted by Richard at 8:51 PM | Comments (0)

Fiddler on the Roof in Japanese -- Really!

Performers and date of performance unknown. Looks like a rehearsal(?).

素晴らしいよ！　

[Thanks to Mother Zion for the onpass.]

Posted by Richard at 5:45 PM | Comments (0)

March 2, 2009

Another Attorney Scam E-Mail Purportedly from China

For those of us who are collectors of attorney scam e-mail, yours truly included, here's another:

From: Mr. Qiming Wang.
Legal Representative/Owner,
Quanzhou Haitian Textile Co.,Ltd,
Address: Haitian Industrial Park,
Jiangnan Development Zone,
Quanzhou, Fujian
China.
Email: qimingwang41@gmail.com
Website: http://www.htt.cn

Dear Sir,

Request for Legal assistance.

This is an official request for legal representation on behalf of Quanzhou Haitian Textile Co.,Ltd. We are a textile company with principal business in garment manufacturing and trading.

We are presently incapacitated due to international legal boundaries to exert pressure on our delinquent customers and we request for your services accordingly. We got your contact information from the Online Lawyers Directory as a result of our search for a reliable firm or individual to provide legal services as requested.

After a careful review of your profile as well as your qualification and experience, we are of the opinion that you are capable and qualified to provide the legal services as requested.

On behalf of Quanzhou Haitian Textile Co.,Ltd, Please accept my sincerest appreciation in advance for your willingness to render your services as we look forward to your prompt response to our request.

Thank you..
Mr. Qiming Wang.
Legal Representative/Owner,.
Quanzhou Haitian Textile Co.,Ltd..
Website: http://www.htt.cn

Notice how the content is basically similar to all those that have come before it:

1) The recipient is addressed neither by name nor by firm.
2) The text is written in a slightly archaic English "we are presently incapacitated..."
3) The proposed legal service required is the collection of the debt.
4) The question an attorney may have -- how did you find out about me? -- is answered with the proffered validation that the contact information came from the "Online Lawyers Directory." But which one?

Note the use of a gmail account, which enables the sender to hide important information about the origin of the e-mail.

Posted by Richard at 9:06 PM | Comments (1)

February 24, 2009

China: A Couple of Former Billionaires, Fraud, Bribes, Prison

Recommended: this story -- Jailed Billionaires Show New Face of China as Markets Unravel -- rich in detail, like this:

Greaves hasn’t seen or spoken to Huang, 39, since. One morning in November, the dapper, baby-faced tycoon failed to turn up, along with his Maybach limousine, at Gome’s Beijing headquarters, where he normally worked such long hours that he had installed a double bed in the office adjacent to his own.

Well-worth reading.

Posted by Richard at 4:56 PM | Comments (0)