FOOD FOR THOUGHT if you haven't read this.
I didn't write this but alot of it makes sense.
Many of you have probably been watching, and investing, in the recent wave
of "China Deals" on the OTC and Nasdaq Exchanges. These deals recently got
much attention due to the WTO (World Trade organization) announcement
released by the U.S. Government. The following article sheds a slightly
different light on the matter. Remember......many "hocus, pocus' deals ride
on the "shirt tails" of what's hot on Wall ST. China Deals may be the
current "flavor of the day", but all deals are not created equal. Our
opinion is that the deals which may help build the Chinese Infrastructure
will get the preferencial treatment. Other companies which only provide
services, or offer product....in effect which take currency from the
Chinese, will be carefully scrutinized. These could include Internet
service providers, Online Gaming and any form of Internet Shopping Malls.
As always....do your DD first before you invest!
Here's the article;
China?s Protectionists Speak Out on WTO Package
International News
Just a week after the WTO accord between the US and China, the
protectionist lobby in China is talking down the impact the agreement will
have on China's telecommunications industry. In his first clear public
statement since the news of the agreement, leading protectionist Wu
Jichuan, the Minister of Information Industry, said WTO membership will not
dramatically impact China's telecoms and IT industries.
In an interview with China Youth Daily, Wu said that after China gains WTO
membership, the telecommunications sector in China will be open to foreign
businesses. But he then said "certain problems should be conscientiously
studied and solved. China will continue to reinforce regulatory efforts in
the telecoms industry," which could be bad news for potential investors.
It was Wu who jolted the global internet investor community last September
by declaring foreign investment in China's internet sector to be illegal,
and who last year told the country's second official carrier China Unicom
to get its foreign partners to disinvest causing a furore which is still
continuing. For years. Wu has also fought to protect near-monopoly China
Telecom from competition from China Unicom.
Also weighing in has been Prof Zhang Hanlin, who is the secretary-general
of the World Trade Organization Research Association at the University of
International Business and Economics in Beijing. Also speaking to the
official media, he said the agreement has been largely misrepresented in
the press and, as a result, misunderstood by the public.
Saying the US side should not have published any details of the agreement
at all until China has finished bilateral negotiations with all WTO
members, Zhang claimed the US summary aimed to quell domestic opposition to
the accord, and so details US gains and leaves out concessions made to
China.
Looking at specific areas he felt had been misrepresented, Zhang said
claims that "foreign businesses will be allowed to invest in all sectors of
the internet market" are inaccurate. "This is because other WTO members who
have opened their markets placed restrictions on the percentage of foreign
ownership allowed. China will no doubt do the same," he said.
He said the telecoms agreement had also been misreported with media
claiming foreign businesses could hold a 49% equity stake in Chinese
telecom companies, a percentage that would increase to 50% in two years.
"To be accurate," he said, "foreign businesses can possess 50% equity
stakes in value-added services after two years and in paging services after
three years." But he said "this does not mean foreign companies can hold
such stakes simultaneously, nor does it mean foreign businesses will gain
control over the operation and management of these enterprises."
He also claimed the telecoms industry will be opened in stages, in line
with domestic demand and according to domestic telecom services rules and
laws. "Foreign investors will in no way be exempt from these regulations,"
he said, repeating what Wu implied in his interview. |
