Chinese business is getting far too risky, big problems ahead.

[tsznecki]

ROFL, Groot finally gave in to his impulses, and put me on ignore. All because I called him out on getting too harsh on that folk who asked a simple question on taxes by DannoXYZ.

Snowflakes gonna snowflake.

 

[tsznecki]

When I send my child to a school I want that school to have done an extensive background check and ban all kids with an extensive track record of bullying. The list goes on.

LOL. OK CCP agent.

Guy claims to hate Chinese society, yet publicly advocates a social credit score. Dunning Kruger maxed out.

 

[morganist]

It is getting to the stage where I will no longer buy shares in companies which have significant exposure to China, here's the reason why....

China’s Big Brother targets business

Beijing has announced one of the most significant developments in its Social Credit System ahead of a planned nationwide rollout of its controversial behavioural engineering system pegged for 2020.

Key points:

• Companies will be labelled as having excellent, good, fair, or a poor credit rating
• The NDRC will seek feedback from companies and local authorities by the end of October
• Businesses risk repercussions like sanctions or even blacklisting if they don't comply with rules

The National Development and Reform Commission (NDRC) circulated a statement saying it is pushing ahead with a corporate ranking system that will affect 33 million companies.

But it is generally understood that all companies in China and its 1.4 billion citizens will by 2020 be covered by the mandatory system that is designed to value and engineer better individual behaviour by awarding the trustworthy and punishing the disobedient.
Beijing | China is funnelling vast amounts of public and private data into huge databases aimed at tightening its control over its nearly 1.4 billion people. But the business world has become its biggest target.

Beijing is increasingly amassing information now divided among various government agencies and industry associations — including court decisions, payroll data, environmental records, copyright violations, even how many employees are members of the Communist Party — and using it to grade businesses and the people who run them, according to state media, government documents and experts.

For many businesses, however, social credit has become a fact of life. In September, China's central economic planning agency announced that it had completed a first evaluation of 33 million businesses, giving them ratings from 1 for excellent to 4 for poor. China hopes it will someday become a nationwide regulatory tool, harnessing the country's growing skills in big data and automation, to help the Communist Party keep the business world in line.

"It's supposed to affect the decision-making of businesses to conform to what the party wants," said Samantha Hoffman, a fellow at the Australian Strategic Policy Institute, a think tank.

Loren Fei, the 30-year-old-daughter of a silk factory owner, has been added to a blacklist of businesses and their owners. Because her father couldn't pay his bills, she said, her bank accounts have been frozen and she lost her job and her ability to travel.

"My family really wants to pay back the money, and the system is making it impossible," Fei said.

The rewards and punishment system increases the potential for one violation to snowball until you have this avalanche of penalties

Authorities are testing the system as a tool to bend foreign companies to the Communist Party's political views.

United, Delta and American received letters last year from Chinese aviation officials saying their social credit score could be hit unless their websites labelled Macao, Hong Kong and Taiwan as part of China. Lower scores would lead to investigations, the possibility of frozen bank accounts, limitations on local employees' movement and other punishments, according to a letter sent to United and seen by The New York Times.

Representatives of United, Delta and American Airlines confirmed changing their websites but declined to comment specifically on the matter.

Companies have little recourse if the data is inaccurate or punishments disproportionately disruptive, experts said.

"The unified rewards and punishment system significantly increases the potential for one violation to snowball across your operations until you have this avalanche of penalties that make it impossible to operate until you solve that one thing," said Kendra Schaefer, head of digital research at Trivium China, a consulting firm that recently published a report on social credit.

Foreign companies have expressed concern about how they could be affected by their business partners. The German chemical company BASF, for example, is responsible for ensuring that its Chinese partners stay environmentally compliant.

"They put pressure on us in the supply chain to sort out the environmental challenges," said Jörg Wuttke, president of the European Union Chamber of Commerce in China, who is also the chief representative of BASF in China. "That's a definite shift that puts a lot of pressure on us."

Foreign businesses also worry that social credit could become a weapon in the trade war between China and the United States. (Or any country)

China began to detail its ambitions for the social credit system six years ago, saying it could be a reality by 2020. While some critics saw it as a form of total social control, it was primarily envisioned as a tool for a country where people often break the law in big and little ways without consequences. Chinese authorities typically exert social control through police, who are setting up separate, more draconian systems that include biometric data, like face scans and DNA records.

The social credit system brings together various blacklists long run by different ministries and local governments, allowing authorities to broadly and consistently punish wrongdoers.

Fei, the daughter of the silk factory owner, found out she was in the system during a work trip in late 2017, when she could not buy a train ticket home. Then her bank accounts were frozen. She was eventually fired from her job as a financial analyst.

Fei had signed for a loan on her father's behalf. Fei's mother, who is retired, is also on the blacklist because she is a shareholder. Her monthly pension payments have been frozen. The family is in debt for hundreds of thousands of dollars. Fei, who now sells goods on the internet, said she makes one-10th of what she did before.

Fei said this was unfair. "No one wants to be a dishonest person," she said.

The way I have been getting round the risk of shares is to invest in corporate bonds. I am not sure if it is the same in China but in the UK corporate bonds are higher in the order of payouts if the company goes into administration. Therefore as long as the assets are worth more than the bonds owed and there are no other creditors that have priority over you in the bankruptcy payouts your investment is safe. I have been trying to protect the Chinese economy by maintaining growth levels through putting forward new techniques, which I sent to the Chinese Ambassador in the UK. The link is below.

http://morganisteconomics.blogspot.com/2019/08/letter-to-chinese-ambassador-to-uk.html

 

[GRULSTMRNN]

You have 3000 posts and trade and you are not sure whether globally bond holders, who get paid right after secured creditors, get paid before unsecured creditors and equity holders? Same in China and same everywhere, even in Bangladesh.

The rest of your post is so absurd that I refrain from commenting on it. How you can have a single paying subscriber is a mystery to me. I am definitely in the wrong business. Selling shovels to gold diggers must still pay very well.

The way I have been getting round the risk of shares is to invest in corporate bonds. I am not sure if it is the same in China but in the UK corporate bonds are higher in the order of payouts if the company goes into administration. Therefore as long as the assets are worth more than the bonds owed and there are no other creditors that have priority over you in the bankruptcy payouts your investment is safe. I have been trying to protect the Chinese economy by maintaining growth levels through putting forward new techniques, which I sent to the Chinese Ambassador in the UK. The link is below.

http://morganisteconomics.blogspot.com/2019/08/letter-to-chinese-ambassador-to-uk.html

 

[morganist]

You have 3000 posts and trade and you are not sure whether globally bond holders, who get paid right after secured creditors, get paid before unsecured creditors and equity holders? Same in China and same everywhere, even in Bangladesh.

The rest of your post is so absurd that I refrain from commenting on it. How you can have a single paying subscriber is a mystery to me. I am definitely in the wrong business. Selling shovels to gold diggers must still pay very well.

I wasn't certain if the corporate law was the same as in the UK, these matters often differ from one nation to another and can change over time too. I don't understand what was wrong with the rest of the post, if the assets of the company are greater than the bonds held then they will guarantee the investment will be secured this reduces the risk for the investor. I don't understand why you claim I have a subscriber and what selling shovels to gold diggers is about.

 

[GRULSTMRNN]

I was referring to this part

". I have been trying to protect the Chinese economy by maintaining growth levels throughputting forward new techniques, which I sent to the Chinese Ambassador in the UK. The link is below."

You want to school the Chinese but don't even know basic economics and financial customs of the Chinese corporate sector... Strange...

I wasn't certain if the corporate law was the same as in the UK, these matters often differ from one nation to another and can change over time too. I don't understand what was wrong with the rest of the post, if the assets of the company are greater than the bonds held then they will guarantee the investment will be secured this reduces the risk for the investor. I don't understand why you claim I have a subscriber and what selling shovels to gold diggers is about.

 

[morganist]

I was referring to this part

". I have been trying to protect the Chinese economy by maintaining growth levels throughputting forward new techniques, which I sent to the Chinese Ambassador in the UK. The link is below."

You want to school the Chinese but don't even know basic economics and financial customs of the Chinese corporate sector... Strange...

As you pointed out the corporate administration payout order is the same all over the world. Sometimes this changes. Corporate bonds are a good way to protect an economy and pension savings and dependent on how the money is invested can speed up or slow down an economy. The techniques I sent to the Chinese have been proven to work in the UK and although the Chinese have a different system on most things I think the techniques could be used to enable growth.

An example, reducing the allowed pension saving in the short term enables economic stimulus but the lost pension contributions can be compensated for later in the pension saving period. When inflation is high and the economy over heats the pension saving can be increased to reduce the pressure on the economy. There are other techniques that involve taxation but as taxation is different in China, even on a regional level, there has to be some flexibility on the application of the techniques I suggest.

You have to understand, this is something I have learned, that even the most rigid operations and processes of governments change from one nation to another, within one nation in different regions and over time. Never assume anything and always check it and even if you are originally right it can change quickly, so disclaimer it in a statement by making sure your position could be incorrect. If you write a report make sure it is dated and the reference to your source at that date is provided.

 

[morganist]

How you can have a single paying subscriber is a mystery to me. I am definitely in the wrong business. Selling shovels to gold diggers must still pay very well.

I don't understand this part of the post. Can you explain please?

 

[SunTrader]

I see Mr "Morganist" has four paperback books for sale on Amazon with not a single customer review to be found on any of them. Why is that? Not printed in Cantonese?

 

[GRULSTMRNN]

And you honestly think the Chinese would not know in much finer grained detail what works in certain countries and what not? Then you seriously underestimate the intelligence and effort of the 0.1% smartest of a 1.4 billion nation.

As you pointed out the corporate administration payout order is the same all over the world. Sometimes this changes. Corporate bonds are a good way to protect an economy and pension savings and dependent on how the money is invested can speed up or slow down an economy. The techniques I sent to the Chinese have been proven to work in the UK and although the Chinese have a different system on most things I think the techniques could be used to enable growth.

An example, reducing the allowed pension saving in the short term enables economic stimulus but the lost pension contributions can be compensated for later in the pension saving period. When inflation is high and the economy over heats the pension saving can be increased to reduce the pressure on the economy. There are other techniques that involve taxation but as taxation is different in China, even on a regional level, there has to be some flexibility on the application of the techniques I suggest.

You have to understand, this is something I have learned, that even the most rigid operations and processes of governments change from one nation to another, within one nation in different regions and over time. Never assume anything and always check it and even if you are originally right it can change quickly, so disclaimer it in a statement by making sure your position could be incorrect. If you write a report make sure it is dated and the reference to your source at that date is provided.