Dear Madharry,
Glad to connect with someone of a similar persuasion and trust me when I say: I feel your pain.
I agree with most of what you said. In mild defence of those who continuously bring up the VIE structure being a concern, I would comment that I do not necessarily think they are spouting nonsense since they are laying out hard facts (VIE structure).
On the other hand, is the VIE structure "risk"? I would say that a solid argument can be made for both sides of the coin and each individual market participant must come to their own judgement with regards to this. If one cannot stomach the VIE "risks" so to speak, one should steer clear of Chinese equities, that much is clear.
Regarding PRC stupidity:
I have trouble coming to grips with the one. I do not think the CCP is "stupid" per say. But I do think they have an agenda that is not aligned with the capitalists of the world (at least as evidenced since 2020). As you have accurately pointed out, they have fortunately shown intentions for a reversal of sorts during the past quarter or so. Will this be sustainable going forward? Only times knows but I am inclined to speculate that they will keep the path for now.
Reason being they should be able to see by now the damage they have wrought in pursuit of their political agendas. At the end of the day, leaving Alibaba, Tencent, Baidu etc...etc... twisting in the wind and hung out to dry does the CCP no good from an economic viewpoint. Once the CCP is convinced that its message is duly noted and adhered to, these companies will be allowed to continue on "business as usual".
Sincerely,
B18 |
