Saturday, December 21, 2013

United Chingdom?

The flag of the landed gentry in the UK

The biggest property tycoons in the UK are... Chinese. As reported in this SCMP article, the two wealthiest property moguls are no longer members of England’s aristocracy. The Duke of Westminster, Gerald Grosvenor, who held the title for the past ten years (informally “His Most Wealthy Grace”), has tumbled to fourth place in this year’s ranking by Estates Gazette Rich List, behind Wang Jianlin (Dalian Wanda group), Henry Cheng (New World Development group) and a Mumbai-born businessman.  Joseph Lau, a Hong Kong-based tycoon who has been found guilty of bribing a senor Macau official in the widespread Ao Man-long scandal, holds the number seven position.
Not surprisingly, London’s toniest neighborhoods, landmark buildings and new land holdings are increasingly flowing into the hands of foreigners. And without fail, Asian investors have been taking full advantage of the city’s lenient property ownership rules. The three Chinese investors mentioned above alone combine for 38% of the total fortunes of the top 10 on the Gazette’s list. The British elite naturally still own most of the property in the UK. Therefore, the sovereignty of the island kingdom is not about to change. However, the symbolic flag flying over more and more of its most valuable properties these days are much redder than the Union Jack.   

Wednesday, December 18, 2013

Shrinking the Wealth

Well, it all started when my parents left me $100 million.

Yes, even the rich have mental health problems. Theirs are just different from those of the 99%. They feel unloved by the jealous masses. They face family stress because of estate planning feuds. Their self-esteem can be gnawed away by the lack of needing a career. They can fill too much idle time with substance abuse, shopping addictions and eating disorders. Luckily for the wealthy, help is close at hand. (But then, isn’t it always?) As reported in this Wall Street Journal article, a growing number of the affluent are relying on wealth psychologists to help them navigate the bewildering emotional wilderness of having loads of money. These specialists work closely with money managers to help their patients “root out everything from individual self-defeating attitudes to broader family trust and communication breakdowns” in order to better preserve their financial and mental well being.

Methods that these “wealth shrinks” might employ are diverse, as summarized in this extract: “Some try and remove clients' emotional blockages by linking money-related behavior to universal psychological types. (Message: You're not the only person to feel like "the victim" of a prenup, but it's also possible to approach the document as a resourceful "creator" or strong "warrior.") Others draw genograms, a sort of family tree that reveals a client's inherited attitudes and patterns about money. A handful of practitioners even strap clients to a biofeedback monitor—think brainwaves or heart rate—which might reflect fleeting thoughts or subconscious emotions during money discussions.” Got it? Or is it as clear as wading through a stirred-up pool of long suppressed oepidal memories?

In any event, it should be no surprise that the sessions don’t come cheaply. Some therapists charge up to $10,000 for day-long sessions. The price alone may feel insane. But perhaps that’s a reason why these professionals might be aptly nicknamed “wealth shrinks”. In any event, let’s hope that the privileged few among the world’s population who own the lion’s share of capital are able to keep their wits about themselves, so as not to constantly fall into the herd-delirium mindset of recent years.

Thursday, December 12, 2013

Beyond the Ways of the Tiger

This Asia Wall Street Journal interview clip of Lang Lang by Deborah Kan deals with the Asian Tiger Mom way of teaching. With all the subtlety for which he is famously known, he doesn’t dis rote learning out of hand. Rather, he says that all people need to move beyond the “work” phase of learning and engage emotionally in their subjects if they are to truly become educated. Good teachers, mentors and parents can balance the two methods and manage the necessary transition.

Wednesday, December 11, 2013

Those Shoes are Killing Me


A tragic story posted in about a Christmas shopping excursion gone terribly wrong:

Man leaps to his death after girlfriend refuses to stop shopping

When his girlfriend insisted on prolonging their Christmas shopping marathon, 38-year-old Tao Hsiao leapt from a seventh-story walkway and killed himself in a Jiangsu shopping mall.

Tao and his girlfriend (whose name has not been released) had reportedly been in the Golden Eagle International Shopping Center, in Xuzhou, for some five hours before a rather routine relationship scuffle escalated drastically out of proportion.

Tao told his girlfriend that "she already had enough shoes, more shoes that she could wear in a lifetime and it was pointless buying any more," according to a witness. Tao was then accused of "spoiling Christmas," and the shouting match likely would have continued had Tao not chosen that moment to hurl himself over the seventh-story balcony.

Tao fell through elaborate christmas decorations and crashed into a shopping stall on the mall's ground level, injuring no one but himself in the process. He died on impact.

Thursday, December 5, 2013

World’s Academic Ordering – Asians on Top

Graphic shows scores for PISA test for U.S. and other nations; 3c x 4 inches; 146 mm x 101 mm;
Let’s first dispense with two distortions in the above graphic. First, Shanghai’s score at the top, while interesting, is an oddity to the result. Though some local Shanghai residents might think otherwise, the place is a city, not a country. It is not administratively autonomous, and it happens to be China’s wealthiest and most elite urban entity. Thus, comparing test results from Shanghai to the US is like comparing a nugget of gold to a rock quarry. It just ain’t the same thing.  Second, and in a related manner, whinging about the overall scores of a country such as the US is a waste of breath. No country is more heterogeneous than the US (“bring us your tired, your poor, your huddled masses yearning to watch network television”) and with a population of 300 million diverse and economically unequal citizens, the country is not going to do well when taken as a whole. Specific areas such as Massachusetts and Connecticut (and probably the San Francisco bay area, if it were segregated out) score meaningfully better than the national average.
The 2012 test was conducted with approximately half a million students in 65 nations and educational systems through the Program for International Student Assessment, or PISA, which is coordinated by the Paris-based Organization for Economic Cooperation and Development, or OECD. The Shanghai distortion notwithstanding, Asia’s leadership is still remarkable across the board. Special mention goes to Vietnam for poking itself up into the Top 10 in Science.

Tuesday, November 26, 2013

The Peak of Hong Kong Property

Hong Kong’s Opus: a case of twisted loftiness?

When the smart money gets out of the market, who should be going in? That question will be on many real estate buyers’ minds when they consider the current state of the top end of the Hong Kong residential market. And lofty it is. As detailed in this SCMP article on Peak homes sold, a house on Barker Road in HK’s Peak district has just sold for $69 million. At 5,700 square feet, that works out to a whopping $12,000 per square foot. This latest deal follows on the back of another sale last week of a 6,800 square foot house on the same street that sold for $95 million, or $14,000 per square foot. This earlier deal represented the third most expensive home ever sold in Hong Kong.
This flurry of activity at the nose-bleed end of the the market is likely to encourage over ultra-premium property holders to sell. An apartment unit at the Frank Gehry-designed Opus could sell for over $60 million, or $11,000 per square foot, which would make it the most expensive flat in Hong Kong, and perhaps all of Asia.
These numbers are particularly extraordinary considering the restrictions that the Hong Kong government has been imposing to cool the wok-hot market. Mortgages are limited to 40% of appraised value, and transaction stamp duties for luxury dwellings range from 4.25% for primary residences to 8.5% for secondary residences. For the Opus apartment alone, the stamp duty would represent either $2.56 million or $5.12 million, depending upon first or second home status. Those additional costs alone would buy a palatial home in other most places in the world.
Buy or sell? When it comes to real estate, it’s always safer to follow the smart local money.

How to Get Rich – Literarily!

A money manager for the ages

Everything I needed to know about managing money I learned from... classic fiction? So asserts this thought-provoking article from the Wall Street Journal's Marketwatch column. Who are the suggested literary Midases and what do they espouse that could put you into the financial 1%?
Daniel Defoe (Robinson Crusoe), on having the appropriate emotional detachment and perspectives about money
Charles Dickens (Little Dorrit) and Anthony Trollope (The Way We Live Now), on avoiding bad investment decisions and fraudsters
George Eliot (Middlemarch) and Gustave Flaubert (Madame Bovary), on curtailing potential ruinous consumer credit
Charles Dickens (A Christmas Carol), on saving, not hoarding
Leo Tolstoy (Anna Karenina), on performing due diligence and knowing the value of assets.
Okay, these historical folks may not have been a Rothschild or Morgan, but they certainly knew a thing about how emotions and circumstances can impact many outcomes in life, including wealth accumulation. So one might characterize these books as a holistic approach towards asset management, one which also confers wisdom on loads of other things (not to mention dispensing hours of entertainment). Therefore, instead of heading down to your local private banker, perhaps give the local library a try. An added benefit awaits you - you won’t get charged a 2% front-end load.

Thursday, November 21, 2013

JP Morgan: No Thanks to $2 billion China Deal!

Spotlight too bright for JP Morgan these days

Okay, now the US SEC’s investigation into JP Morgan’s hiring of Chinese princelings to win deals is really starting to take a bite. As reported in this Wall Street Journal article and elsewhere, JPM has resigned from acting as a bookrunning lead manager for a $2 billion offering for China’s well-regarded China Everbright Bank. What?? An investment bank turn down a cherry piece of business in a strong market? NFW. Banks almost never walk away from such promises of money. Unless...

As it turns out, JPM had once hired Tang Xiaoning, son of the chairman of China Everbright Group, a state-backed conglomerate that owns China Everbright Bank as well as a brokerage and insurer. Might Mr. Tang have helped his then-employer win a deal that his Dad had a hand in awarding? No one is commenting for the record. However, relationships such as this are now casting a lengthening shadow for companies caught in the spotlight of regulatory scrutiny.

Tuesday, November 19, 2013

Biggest Church Begets Biggest Scandal

Senior pastor David Yonggi Cho accused of siphoning off millions in church funds; his camp denies the allegations

By Cho Yeon-hyun, religion correspondent
The HankyorehNov. 15, 2013

30 elders from Yoido Full Gospel Church, the world’s largest megachurch, held a press conference at the Korea Ecumenical Building in Seoul’s Jongno district on Nov. 14 to allege that senior pastor David Yonggi Cho and his family funneled off hundreds of billions of won from church donations.

Yoido Full Gospel Church (left) and senior pastor David Yonggi Cho
The sheer scale of the amounts alleged by the elders to have been misappropriated is beyond the imagination. The elders made public a report from an investigation into three alleged improprieties by Cho made by a special investigation committee and ethics committee formed within the church last year. This time around, the allegations came from members of a group called the Prayer Meeting for Correcting the Church, including elders Kim Dae-jin and Kim Seok-kyun.

First, they claim that Cho returned only 64.3 billion won (US$60.2 million) of the 163.3 billion won (US$152.9 million) he borrowed from the church while building the CCMM Building between 1992 and 1998, when he was chairman of the church‘s Mission Society. The remaining 99 billion won (US$92.7 million), they say, was never returned.

By the elders’ account, construction payments of 28.5 billion won (US$26.7 million) and 16.6 billion won (US$15.5 million) were made at the time to Next Media Corporation and Facility Management Korea, companies managed by Cho’s eldest son Hee-jun.

It is also being claimed that Cho’s third son Seung-jae’s International Club Management Group bought three floors of the building from the church for 29.5 billion won (US$27.6 million) and sold them back three years later for 37.2 billion won (US$34.8 million) - pocketing the difference of 7.7 billion won (US$7.2 million).

In addition to allegedly appropriating 34.2 billion won (US$32 million) in Kukmin Ilbo newspaper lifetime reader memberships from 50,000 people for stock investments, Cho Hee-jun was also accused by the elders of making off with a total of 240 billion won (US$224.7 million) in assets related to the church.

They also claimed that David Cho’s wife Kim Sung-hae, president of Hansei University, has yet to account for 10.5 billion won (US$9.8 million) paid by the church as support for Bethesda Christian University, an institution she runs in the US. The elders also view US real estate purchased by the university for around US$15 million as having been bought with church money.

In total, the elders are accusing the Chos of embezzling as much as US$500 million or more in church money.

Associates of David Yonggi Cho insisted he had “no connection with any direct exchanges of money.”

Kim Sung-hae’s camp said the details of the Bethesda Christian University situation would be brought to light by prosecutors, who are currently investigating, but added that the elders’ claims were “merely allegations, not facts, and not worth responding to each one.”

The most explosive part of the allegations is the sheer amount of money supposedly received by David Yonggi Cho. The elders claim he received a severance payment of 20 billion won (US$18.7 million) when he stepped down as head pastor in 2008 - and that even that was decided without their knowledge or any voting by major church decision-making bodies. They also said no information was available on the whereabouts of 12 billion won (US$11.2 million) a year paid between 2004 and 2008 - 60 billion won in total - for “special missionary expenses.”

The elders gave a yearly total of 100 billion to 120 billion won (US$93.6-112.3 million) in donations received by the church. This would mean the annual amount taken in by the headquarters dropped by almost half from about 200 billion won a year when Cho spun off the Jisungjun center in downtown Seoul around the time he handed over senior pastor duties to Lee Young-hoon in 2008. Nevertheless, it remains the largest amount received in donations by any religious body in South Korea.

The elders also claim that Cho continued controlling the church even after his “retirement” by making decisions as “governor” - to the point where his successor Lee had difficulty exercising his authority on appointments and finances.

One of the former elders at the press conference, Ha Sang-ok, previously admitted to taking part in giving 1.5 billion won (US$1.4 million) while collecting the book “Madame Butterfly in Paris” from a female vocalist in France named Jeong who anonymously wrote the account about an affair with Cho.

“A sect leader might violate the commandments and do as he wishes, but a pastor cannot do that,” Ha said. “Over the past 14 years, I have met with Rev. Cho many times to try to persuade him to repent and return to being a great pastor, but the corruption has continued. That‘s why I had no choice but to disclose it to the outside world.”

The elders also made public a statement allegedly made by Cho saying he would give Jeong 1.5 billion won in exchange for her making no future mention of their extramarital relationship, along with copies of receipts for the two transactions totaling 3 billion won.

The church’s public relations office said the claims were “a personal matter that the church has no comment on.”

Lee Won-gun, an elder who functions as Cho’s “chief of staff,” said Cho is “unconcerned with money, to the point where I’ve never once seen him talk about giving money or not giving money to somebody.”

“There will be a response from this side after looking at the elders’ claims,” Lee added.

Cho is currently on trial for alleged causing 15.7 billion won (US$14.7 million) in damages to the church by instructing it to buy 250,000 shares of his eldest son’s stocks at a rate four times market value.

During the press conference, a physical altercation occurred when a number of Cho’s supporters attempted to rush the platform at the press conference and accused the elders of “insulting” the pastor.

Monday, November 18, 2013

Blood Money

Prime Minister Wen Jiabao: “That’s my girl!”

When it comes to the New York Times’ and the US SEC’s investigation into JP Morgan’s relationships with China’s princelings (first blogged here in August 2013), the digging goes on. The emerging details are impressive, as set out in this New York Times updated article and, from last year, this New York Times chart of the Wen family and its dealings. The article focuses on Wen Ruchun (aka Lily Chang), daughter of ex-Prime Minister Wen Jiabao, her advisory firm Fullmark Consultants and the myriad business deals that she did with JP Morgan in the years leading to and around the 2008 global financial crisis. The names of individuals and entities directly involved (including China Railways Group, Ping An Insurance, the China Banking Regulatory Commission) is elite, and the likely sums that went around this network of influence peddling and pocket-lining is staggering. The full amount of money involved in the various schemes may never be publicly known.
As eye-popping as this one case in isolation may be (together with the fact that the Wen family made several billion dollars on their Ping An dealings alone), it sheds light on the fact that the hiring of princelings and other insiders by large banks and corporations has been “business as usual” for decades. Anyone claiming to be ignorant of this practice must have been doing business on Mars. In some respects, it’s not dissimilar to Lance Armstrong crying out that he doped because everyone else did. How could he be competitive otherwise? The differences between Lance and the banks are many, of course, not the least of which is that cycling’s practice was conducted behind a dark shroud of secrecy, rather than merely a thin veil.

Thursday, November 14, 2013

Maid for Murder

This Wall Street Journal article sheds light on a disturbing issue – maids in India being severely abused, and sometimes killed, by those who employ them. Particularly troubling is that much of the cases point to violence by employers who are professional women. The WSJ article details a specific case where the battered body of a maid from West Bengal was found shortly after the Diwali festival in the Delhi residential compound of a lawmaker and his dentist wife. Neither have been charged with murder, but the police consider the wife as the prime suspect. Another helper to the family, a young boy, testified of cruel, almost slavery-like conditions imposed on them by the professional couple.
In reference to the increasing cases of violent behavior by professional women, an aid worker activist explained, “For so many years women were suppressed. And suddenly women are becoming empowered. Women are working.” The activist added that for some women, when faced with the pressure to run a home (especially around demanding holidays like Diwali) and do the bidding of relatives as well as excel professionally, “it all culminates in anger. And then the violence starts.” When society combines repressive attitudes about gender with the inherent prejudices imbedded in a caste system, the results can be tragic.

Wednesday, November 13, 2013

Uptown Girl

One-upping Brad PItt and Leo DiCaprio

Zhang Xin, CEO of real estate firm SOHO China, is one of the wealthiest women in China and the world. Her net worth is estimated at $3.6 billion. By developing and managing some of Beijing’s landmark commercial properties, she has risen to be wealthier than Oprah Winfrey and, in a sweet twist of justice for anyone with a modicum of taste, Donald Trump.
Now, in a small way, she has one-upped Brad Pitt and Leo DiCaprio by outbidding them on a tony (pictured) Manhattan townhouse, paying $26 million. The New York pied-a-terre features a roof terrace with a custom-built hot tub, a wine cellar, English garden, and a fitness floor with a waterfall, swimming pool and sauna.
By her own telling, she started from humble beginnings, sleeping on factory floors until a teenager. She scraped up enough savings and savvy to be educated at Cambridge University in the UK. After graduation, she worked at Goldman Sachs before returning home to China to seek her real fortune. She’s someone who has seen what life can dish out and take away. As such, a little star power is hardly going to phase this extraordinary woman.

Monday, November 11, 2013

What Chinese citizens hope to see from Third Plenum

Two elephants in the room – political freedom and economic welfare

The below is a re-print of an article that appeared in the website. True to long-held notions about the Chinese population, economics trump political freedom as the leading aspiration. Nevertheless, it is inevitable that, as the country gains a certain base level of material comfort, political freedom’s importance will increasingly become the larger elephant in the room. 
The Third Plenum is currently underway, and the China Communist Party’s Central Committee is reportedly discussing major reforms from "development of a socialist market economy, democracy, cultural development, social harmony and ecological progress." Here's what Chinese citizens want to see according to a Global Times survey:

According to the poll, more than 63 percent of the respondents said they will pay close attention to the plenary session, while some 36 percent said they will pay no attention.

In the multiple-choice survey on what respondents hoped from the plenum, reforms on the social welfare and social security systems, income distribution system and anti-corruption mechanism led the votes.
    • Nearly 80 percent of those surveyed said they look forward to reforms in the social welfare and social security systems, while over half of the respondents also welcomed reforms on the income distribution and anti-corruption fronts.
    • In comparison, only about 33 percent of the respondents chose the political system as their desired area of reform.
    • It also suggested that respondents who were male, older or holding at least a bachelor's degree are more prone to calling for political reforms.
    • The result shows that while political reforms are aspired for by people mainly from the elite class, the majority of the public pay more attention to issues that are related to their livelihood, said Xu Yong, dean of the Research School of Politics at Central China Normal University.

Sunday, November 10, 2013

The Anti-Cinderella Story

The lie that $100,000 can buy

This story has appeared in multiple tabloids, and some parties have questioned its veracity. So this blogger does not stand by the facts of this account. However, the phenomenon is one that many people across Asia wonder about.
Time for a multiple choice Pop quiz time: Which segment of this story is the most absurd?
A. Chinese man divorces and sues wife in court over an “incredibly ugly” daughter who “horrified” him. He claims that the wife has had an affair. DNA test shows that he is wrong – it is his child.
B. Wife confesses, not to an affair, but having had $100,000 of cosmetic surgery in South Korea (before and after shots above) prior to knowing her husband and keeping the truth from him.
C. Court rules in favor of husband, awarding him $120,000 on the grounds of false pretenses.
D. All of the above. It's all tragic and loony at the same time. 
Given how widespread and extensive cosmetic surgery practice has gotten in Asia, it’s sadly no surprise that this has become a growing marital problem. Anecdotal stories of similar cases abound. Deception and superficiality have become a coupling that is too common in a region obsessed with getting ahead, or at least giving the appearance of it.

Friday, November 8, 2013

College Entrance Exam Day – Korea’s Holiest?

Praying to the Academic Gods

Thousands of families go into prayer. Airplane flight schedules are curtailed. Trading is delayed on the stock exchange. Military exercises are suspended, police security is tightened. In short, Korea holds its breath and goes into a hush. It’s college entrance exam day. It is perhaps the single most important day in a Korean’s life, since it can determine university options and therefore career and marriage prospects. Korea families are rabid about ensuring that students do as well as they can on this test. They spend almost $18 billion each year on private tutorial courses (called hagwon), by far the most education spending per capita of any country. School kids routinely stay up studying until 1 am only to wake up again at 6 am for years on end as they prepare for this fateful day. For those families who have to endure this pressure cooker existence, life can alternatingly feel like necessary ordeal or social insanity.
For decades, Koreans have complained bitterly about the rigidity of its education system. It seems absurd that so much of a person’s future should rest on the results of one arbitrary day. God forbid that a student should catch a cold or otherwise feel slightly off-kilter. It is a leading reason for the soaring teenage suicide rates in the country as well as the main motivation for families to want to emigrate to other, more flexible countries such as the US, Canada or Australia. However, old social structures die hard. Exams such as this are deeply imbedded in Korea’s Confucian past. Change is especially difficult when entrenched interests point to such hard work and discipline as key ingredients to Korea’s success over the years. 
Looking at the country from the outside, there is much that looks good about Korean society. It appears to be prosperous and family oriented, with a big middle class. However, from the inside, it can seem like a hyper-competitive, dogmatic existence. It’s a shame that so much of the burden of such a life should fall on emotionally fragile teenagers. The costs, though not always immediately apparent, are no doubt high.

Thursday, November 7, 2013

Poaching the Ivory Poachers

Nothing but heinousness comes of this brutality.

No, this blogger is not advocating committing murder. But the practice of poaching ivory from elephants needs to be exterminated. Now. This Shanghaiist article reports that 1.9 tons of illegally sourced elephant tusks have been found in the Tanzania home of three Chinese men. The culprits made lame excuses for the existence of the stash. The trio claimed that the tusks were being held for a friend. They asserted that they were simply small business people involved in the garlic trade, of all things (the tusks were hid among mounds of the pungent root). They were less sure-footed in explaining why they had tried to offer a bribe of $19,000 to the authorities to let things slide, or why they had dual license plates for their specially converted minibus.
As the tide of wealthy Chinese continues grow, one can only hope fervently that a consciousness of the heinous global rare wildlife trade (e.g. elephants, shark fins, bears, tigers) influences their consumption patterns. Paying large sums for rare gemstones, grape wine or fine cloth hardly has the same moral and environmental consequences as permanently killing off species that are both vital and magnificent to behold. 

Sunday, November 3, 2013

Asia Getting a Legatum Up

The Legatum Institute has just released its 2013 Prosperity Index. The Legatum Institute is a London-based independent non-partisan public policy organization. Its annual Prosperity Index attempts to define “prosperity” beyond just dollars and cents. Instead, its secret formula takes account of several social virtues - Economy; Education; Entrepreneurship & Opportunity; Governance; Health; Personal Freedom; Safety & Security; and Social Capital.
This year, the Institute took a five year view to chart how the Economy sub-rankings in the Index changed from 2009 to 2013 (above). The results? Serious downgrades for the US (from 12th to 24th) and many other European nations. Hong Kong also got roundhouse kicked on the chin, falling from 11th to 18th. Singapore slipped a touch, from a lofty 2nd to a still-lofty 3rd. All other Asian countries rose commendably, led by China’s improvement from a lowly 34th place to 7th. 
When the other criteria were factored into the index, Asian countries did not rank so well. Singapore led the region at #18, followed by Hong Kong at #19. The top ten nations consisted of Northern European countries, Canada and Australia / New Zealand.
Hopefully, as Asian countries mature enough to be able to begin to ask about the true meaning of life, they too will begin to break in soon into the top ten pack.
More details: Four Major Changes in Global Prosperity - Harvard Business Review

Tuesday, October 29, 2013

Nanny Money-Bags

The 21st century Mary Poppins?

Below is a re-print of an article that appeared in the always-interesting website.
Just how far will some families go to have bilingual children? For the US's elite, it may include paying your nanny a six-figure salary. At Pavilion Agency, one of New York City's high-end housekeeping agencies, such numbers are the norm. The nannies are expected to be both caretaker and language teacher, along with whatever else the family may require.

On top of the astronomical salary, apartments, paid vacations and health benefits may also be worked into the arraignments. Before you run and hop on a plane though, consider your options carefully. The price of such a high paying job is very little social life, as the women are expected to drop everything for the whims of the family or even put up with extreme emotional abuse from their employers. The typical nanny in NYC though, earns around 90 yuan (USD $15) an hour.

"I'm desperately seeking qualified Chinese women," Says Pavilion's president Clifford Greenhouse in an article from China Daily. "Bring me one and I can give her a choice of ten top families." Elsewhere too, the demand for bilingual and trilingual nannies is on the rise, and those that are native Mandarin speakers can easily make 300,000 yuan more than their European counterparts. At the Elizabeth Rose Agency in Beverly Hills, mansions, hand-me-down Prada, and ball gowns can also come as perks of the job.

Saturday, October 26, 2013

Club Red

Prison guard or concierge?

Now that Bo Xilai’s conviction has been confirmed with the rejection of his final appeal (to no one’s surprise), full attention can turn to examining his fate. Exactly how much of his life sentence will be behind bars is yet to be seen. It’s not unheard of that some political prisoners are released for “medical” or other reasons after only serving a few years, to live out the rest of their years retired by a placid body of water.

It’s also noteworthy to consider what conditions he will be subjected to during the years of his incarceration. Very likely, he will spend his time in Qincheng Prison, an elite correctional compound somewhere in the hills outside of Beijing. As this news article on Qincheng prison details, the place has a section reserved for elite political prisoners that is akin to the “Club Fed” network that exists in the US to house high-profile white collar criminals. Mind you, white collar criminals may not deserve to be locked up together with mass murderers, rapists and hardened violent criminals who can make dropping a bar of soap in the communal shower a life-debilitating event. However, it’s worthwhile to debate the fairness of the relatively cushy conditions of places such as “Club Qincheng”, which some observers joke is like a five star hotel.
According to second hand reports, Qincheng provides its VIP guests, er inmates, with the following amenities:
- large private cells (215 square feet) with soft bed, sofa, desk and en-suite bathroom.
- prison guards who provide “warmth and care”
- choice of clothes chosen by loved ones at home
- jail chefs that used to work in top Beijing hotels or for “ministry chief level” officials
- milk for breakfast, choice of meat and soup, an apple as dessert
- view of “pavilions, trees and grass reminiscent of a Chinese garden”
- a plot of land to grow vegetables
- TV privileges between 2 pm and 9 pm daily
- walks in the open air six times a week
Another source of spiritual comfort for Mr. Bo is that he follows in a line of prisoners who have shared political values and beliefs akin to his own, including his father Bo Yibo and Mao’s widow Jiang Qing. So in this respect, perhaps this sentence is more than simply a long period of reflection and remediation. It may even feel like a homecoming.

Wednesday, October 23, 2013

Want to be Wealthy? It’s a Feng Shui-In.

A compass for the road to riches

This New York Times editorial by novelist Kim Young-ha presents a rare and intriguing look into an ancient practice (I won't call it a superstition) that Mr. Kim claims is alive and well in corporate Korea today – the country’s version of feng shui, called pung-su. Many of the underlying principles of pung-su are similar to the Chinese system of geomancy that holds that mankind needs to be in harmonious relationship with his surrounding space and with nature in general. However, Korea’s active practice extends into something called physiognomy — the notion that a person’s personality and fate can be “read” in the shape of the eyes, nose, ears and forehead.This type of fortune telling has variations around the world, most notably in astrology and gypsy-esque divinations. However, Korea has a shamanistic strand to its cultural history that raises pung-su to the status of a minor religion.
Still, how much weight big-shot Korean CEOs truly place on the directives given to them by their shamans (versus through more conventional forms of number-crunched market analysis) in making business and investment decisions is up for debate.  It would defy credibility that chaebol chiefs rest the fate of their fortunes on the mysterious workings of the Taoist nether world. Nevertheless, as with Western religions, a measured dose of humility towards powers that are outside the human scope of understanding and control is certainly not a bad thing for anyone facing uncertainties, big or small. If nothing else, hedging bets is a good business practice.

Friday, October 18, 2013

2013 Forbes China Rich List

Many more of these to go around

The Forbes list of 100 richest mainland Chinese is out. In aggregate, the numbers are significantly bigger than in 2012 – 44%, in fact. The top 100 are worth $316.5 billion, or on average $3.16 billion each. The new money emperor is Wang Jianlin, the Chairman of Dalian Wanda Group, a real estate conglomerate. He is worth $14.1 billion. He eclipses China’s beverage tycoon Zong Qinghou, who headed last year’s list. The key themes for top wealth are real estate, internet/IT, and automobiles. Of the leading 25 names, close to half are in either real estate (seven) or internet (five). Another key theme? Despite the volatile times, the rich as a class continue to get richer. In a capitalist’s world, together with death, gravity and the speed of light, that seems an immutable law.

Thursday, October 17, 2013

Chinese Women: Hapless? Ruthless?

Worse than crying in a BMW?

This thoughtful New Inquiry essay about yuppie-aged women in China is well worth a read, despite its length. Written by a Yale graduate student, the piece discusses the way that many 25-35 women are perceived in the fast changing, materialistic-minded society that is modern China. The article focuses the spotlight on two female archetypes – the shengnü and the BMW Lady. The shengnü refers to “leftover women”, characterized as well-educated and highly successful females aged thirty or older who are not married, either out of choice or because they can’t find suitably enlightened and compatible mates. The BMW Lady is the stereotypical gold digger, coined in 2010 when a young female dating reality show contestant rejected a male suitor who had offered her a romantic ride on a bicycle, proclaiming, “I’d rather cry in a BMW than laugh on a bicycle.”
The essay is full of eye-opening tidbits, including pithyisms such as “As soon as a man has money, he turns bad; as soon as a woman turns bad, she has money,”characterizations of not-so-old women as “white bone spirits” (baigujing) and gold digging club hoppers as “dry cleaners: just looking to pick up suits!” However, for the most part, the piece raises a number of pressing social issues, including the gender population discrepancies that have resulted from the one child policy, the uneasy tussling between Communist egalitarian ideals with Confucian male-oriented traditions, and the moral vacuum that has descended onto a society doused with showering of new money. As for those who say they might prefer to cry while riding a BMW all the way to the bank, one can only hope that they will someday soon get to appreciate pleasures that are truly priceless, such as having the sun and wind on one’s face as bicycle wheels whirl below them. 

Tuesday, October 15, 2013

Travel Guide to the Chinese Tourist

Love me, love my wallet

With China’s National Day Golden Week holiday recently ended, this Forbes magazine artlcle provides a useful updated summary of the types of Chinese tourists that are increasingly making their way into the world. While the image of the stereotypical uncouth, great unwashed Chinese tourist cramming into souvenir and luxury shops with camera phones at the ready is an easy butt of jokes, their numbers and spending exuberance are no laughing matter. Estimates are that in 2012, 83 million Chinese traveled overseas and spent $102 billion. For sluggish economies around the world, those are welcome figures.
The article breaks out the Chinese tourist into five broad groups:
Business tourist: Generally entrepreneurs and business owners looking to expand their enterprises overseas. They attend conferences and meetings, but also spend big bucks shopping for family and friends back at home.
Student tourist: Not your typical $10/day teenager. Chinese students overseas are often backed by doting parents who don’t think twice about ensuring that their sole child is well pampered. One MBA student studying in London admitted to spending on average $5,000 per month for general expenses.
Adventure tourist: This category may sound like an oxymoron when associated with the Mainland Chinese. However there is little doubt that, amongst 1.3 billion people (of whom some are finding themselves with more time on their hands), there are those looking for the less-trodden discretionary experience. Scuba diving, mountain climbing and backpacking fall into this category.
Danwei tourist: “Danwei” means work unit. The modern day equivalent of this Communist concept is a department in a Chinese corporation. Some companies give their workers the perk of traveling overseas to learn and broaden their horizons. Given that these folks get to travel on the corporate dime, they tend to be loose with their pocket money. All told, their total spend can be up $10,000 per person per trip.
Locust tourist: By numbers, group tours are still the largest and most conspicuous segment of the Chinese tourist market.This disparaging characterization will be particularly familiar to the much maligned Hong Kongers who feel that their city-state has been swarmed in the past few years by the Mandarin-speaking hordes. The “locusts” have been accused of everything from buying up baby formula, taking up scarce hospital beds, jacking up retail rents and real estate prices, and soiling public transport systems with their appalling sense of hygiene.
For a number of Western countries, including the US and France, Chinese tourists may soon become the most important source of tourist dollars. And meanwhile, the Chinese government is taking pains to try to clean up the manners and image of their people. Therefore, given the steadily increasing quality and quantity of the Chinese visitor, foreign residents should come to realize that, far worse than the sometime-annoying presence of these masses, is the tinny echo of their absence.

Wednesday, October 9, 2013

Asia’s Luxury Investing : Addendum

The growth of luxury investments by country. (WealthInsight)

Thanks to Jing Daily, above is a graphic that provides an interesting adjunct to this blog’s Monday October 7 posting about the growth rate of luxury investing in various countries. The graph plots the growth rates for both the past and prospective five years for each country, as well as depicts the relative sizes of the markets. As shown, India leads the pack looking both backwards and ahead, chased closely by Indonesia. Interestingly, Hong Kong has shown ripping growth in the past few years, but looks to slow (by its standards) in the years ahead. The non-Asian nations? With a few exceptions, they seem positively plodding by comparison.

Those seeking further confirmation of the trend of Asians storing their wealth in pretty things need look no further than the just-completed Sotheby's luxury goods auction in Hong Kong. The event resulted in total value of over US$500 million, including a 118-carat white diamond that sold for a record $30.6 million. With the value of financial assets looking increasingly suspect due to the shenanigans of governments and financial institutions around the world, stashing cash in the form of a flawlessly cut rock may end up being a brilliant strategy.


Tuesday, October 8, 2013

Hey, K-POP: WTF??

Too beautiful for K-Pop

This is a story that should piss off any person who cares even remotely about developing healthy self-esteem in teenagers:
Australian-born Sri Lankan singer Shimali De Silva entered a reality show contest in Hong Kong to have a chance at a K-Pop career in Korea. She won. The show organizers flew her to Seoul together with other finalists from around Asia. However, once there, she was told the following: “You’re 14 but you look 30”, she was too dark, she did not have the right curvature of forehead or a good ratio of nose to chin.  She was given a catalogue binder with pictures of alternative eyes, noses and boobs, with a suggestion that she could avail herself to surgical procedures that could alter her appearance. Some of the contestants opted to have work done during the contest. Shimali, however, was emotionally devastated and flew home shortly thereafter. Incidentally, she was the youngest of the contestants.
K-Pop has been a great asset to help Korea and Asia build a hip brand. But the darkest aspect of the industry is the cost that it extracts from its young talent. Likening the K-Pop farm system to a prison camp network is probably going too far (even though I just did it), but turning young, talented and diverse people into the homogenized milk equivalent of popular musicians is a deplorable practice. As the industry matures and grows, one fervently hopes that it expands out beyond the Belieber-esque and Miley Cyrus-esque style to welcome all shapes, sights and sounds. Maybe then, K-Pop might unearth the next Janis Joplin, Aretha Franklin or Mick Jagger.
Sample Shimali on YouTube here. And listen to what K-Pop is missing.

Monday, October 7, 2013

Asia’s Growth in Conspicuous Investing

Now THAT's an investment I can flaunt.

Forbes magazine (link below) has compiled a Top 10 list of countries which will experience the highest growth rate in luxury investing, defined as high end consumables (e.g. wine, paintings, vintage cars, big-rock jewelry, watches) which are expected to rise in value. At the risk of acting as spoiler, here is the list, in ascending order of growth rates. Surprise surprise, Asian countries take four of the five top places. India’s growth rate leads them all with a 23% annualized growth rate through 2017. One might also suspect that Asian influence is considerable in places such as the UK and Canada in helping those countries make the list.  
10. Switzerland
9.  Germany
8.  France
7.  Canada
6.  USA
5.  Japan
4.  UK
3.  Singapore
2.  China
1.  India
While advanced countries still spend more in the aggregate on these blingy things, the future is clearly moving East, following the cash.

Wednesday, October 2, 2013

Gangnam-Style Bespoke Beauty

V is for vacuity

This Bloomberg article on Korea's cosmetic surgury tourism industry provides an update on the swells of foreigners traveling from Asia and Western countries to Seoul for cosmetic surgery. The Korean government is now pitching in to help fuel the trend, actively promoting a domestic industry that is becoming recognized as the best in the world. Whether it is Koreans wanting to look more Western, other Asians wanting to look more K-pop, or Westerns wanting to look slimmer and more subtle (a bemusing circularity of envy), Seoul is increasingly the place to go for that needed nip and tuck. Certainly, it’s not cheap, as attested by the Vietnamese kindergarten school manager budgeting $10,000 for a chin implant and face-lift. The cost includes travel and hotel stay during the post-op rest period, during which flying on airplanes is highly inadvised, lest patients suddenly have to check their new noses into the overhead bin.
The epicenter of cosmetic surgery is in the Gangnam district of Seoul, where it is virtually impossible to throw a jar of night cream without hitting a building that has a beauty clinic in it. The Korean government is targeting the industry as part of its goal to add 20,000 new jobs, including nurses and interpreters who can speak Japanese, Mandarin, Cantonese, Vietnamese, Russian etc etc. Despite the questionable moral and social issues of encouraging a global homogenization of beauty, the government recognizes the economic value of drawing in foreigners willing to spend tens of thousands of dollars per visit. Apparently, the hope is that the benefits to the country of promoting itself as the cutting edge of the cutting edge is more than, well, skin deep.