Chinese Economics Thread

[Jiang ZeminFanboy]

So these expensive prep schools have two enormous problems:

First is that they make the cost of education too high, thus reducing the amount of people who are willing to have multiple children. And the reason that the cost is high is because these schools promise vast improvements in test scores making it nearly impossible for children who don't take these classes to compete with those who do. In that way, parents have no choice but to pay and everyone would rather have one prodigy kid than 2 or 3 who are mid-low tier in their classes.

The second issue stems from the first issue and that is that in order to produce these massive improvements in their scores that convince parents to hand over the big money, (over kids who already study the material very hard on their own, not over kids who don't study,) is to focus on teaching them skills that crack tests but are useless everywhere else. (Ex. Just look at the answer choices without the question, and use the differences amongst them to psychologically determine how the test-maker tried to trick you and where he hid the right answer.) This produces kids like my ex roommate, who scored a whopping 750 points (high 99th percentile) on the English section of the GRE, but ended up virtually unable to communicate in English, having difficulting understanding classes in the US and needing native English speakers to proof his disastrous essays when those people really only scored in the 500's (~70th percentile), sometimes even 400's.

The final combined effect is that parents reduce the number of children they have in order to raise kids who don't know how to do shit except find the correct multiple choice answers on a test without even trying to understand the questions. Needless to say, that's not good for China.

By making these prep classes non-profit, they can't charge egregious sums anymore and they lose the motivation to train kids on useless skills that elevate their scores without adding to their knowledge. This kills 2 birds with one stone; the parents now have more money and can consider more children, and the kids actually study the subject rather than test-maker psychology.

You need to also change gaokao, I believe that's the next step that will be taken.

 

[Tyler]

Thats right......the moment DiDi got listed in the NYSE, it became a Foreign Owned Company operating in China.
Its natural that it is scrutinised for National Security Reasons as it has access to private data of Chinese Citizens.
A Chinese company operating in the US with access to such sensitive data would come under similar scrutiny. In fact it could be banned from operating altogether in the US.
The only way DiDi could normalise its operations in China once again might be to De-List from the NYSE in a few years time and Re-list in either Shanghai or Hong Kong.

If that is the case it looks like most Chinese companies will delist from NYSE. Even alibaba, jd, baidu will all delist from nyse? US investors are complaining about the VIE structures of these US listed Chinese companies anyway.

 

[Kaine]

Even alibaba, jd, baidu will all delist from nyse?

Its doesn't matter.

These 3 companies which you mentioned are also listed in Hong Kong. Its not like they would immediately lose the ability to raise money on the stock market if they decided to exit from NYSE

A company can be listed to multiple stock exchanges. And these Chinese companies who are only listed in the US will now start listing in HK

 

[WTAN]

If that is the case it looks like most Chinese companies will delist from NYSE. Even alibaba, jd, baidu will all delist from nyse? US investors are complaining about the VIE structures of these US listed Chinese companies anyway.

I read recently that the Chinese Regulator will exempt Companies that List in Hong Kong from the stringent National Security Checks.
So yes......i believe Companies will be tempted to relist in Hong Kong.
Even new Chinese Tech Companies will consider launching their IPOs in Hong Kong or Shanghai instead of NYSE.
This supports the goal of the Chinese Govt to have most of its large Corporations be Listed in Shanghai or Hong Kong.
Govt has allowed Foreign Investment Banks to set up and wants Shanghai to be a major Global Financial Centre.

 

[siegecrossbow]

What makes London and Manhattan influential is that not only UK and US companies go there to list, but many foreign companies choose to seek finance there. If China wants similar status for Pudong then you would see not just Chinese companies but for instance Southeast Asian companies or even further afield listing in Shanghai.

I agree. London and Manhattan benefit from liberal financial policies. I don't see Shanghai matching the two unless things really go to hell else where and China is the only true haven for money.

 

[KYli]

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[Nobaron]

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[KenC]

I agree. London and Manhattan benefit from liberal financial policies. I don't see Shanghai matching the two unless things really go to hell else where and China is the only true haven for money.

Shanghai will be financial hub of China, servicing China's powerful real economy. The difference with other international financial centers is that it will mainly use Chinese Yuan. The Yuan to be more widely used in near future.

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[Kaeshmiri]

Certainly not what US wanted !

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[Gatekeeper]

Certainly not what US wanted !

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Schhhhhhhhh.