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Sunday Papers

The Sunday Paper – Many Things You Know about Patent Infringement Litigation in China Are Wrong

Foreigners bring less patent infringement cases to Chinese courts than domestic plaintiffs because the deck is stacked against them. Chinese courts are biased in favor of protecting Chinese interests and even when foreigners get a judgement in their favor damages awarded are piffling. To make matters worse judgements are opaque leaving lawyers in the dark […]

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Sunday Papers

The Sunday Paper – Do Corporate Site Visits Impact Stock Prices?

There’s a view among some fund managers that corporate site visits are unnecessary. A good company, the argument runs, should be providing via it’s regular reporting sufficient information on its operations to allow investors to make informed decisions about their prospects. Perhaps this is the case in developed markets where a mature culture of corporate […]

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Sunday Papers

The Sunday Paper – Oil and Stock Market Momentum

Using data from the Shenzhen and Shanghai stock markets Chun-Da Chen, Chiao-Ming Chen and Riza Demirer from the Lamar University (Texas), ZhiDao Financial Services and the Southern Illinois University respectively set out to test if oil price volatility had any predictive power for stocks when combined with a simple momentum strategy? They finger momentum as […]

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Thoughts

China Through The Letterbox – Impressions From a Recent Guanghai Deep Dive

I’ve told myself, and others, the real excitement in China today is in the smaller cities; and it is. Therefore, in the last few years I’ve concentrated my travels into the lesser metropolises. Thus, I felt a catch up with vanguards of China’s progress, the cities of Guangzhou and Shanghai, was overdue. Fresh from a […]

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Sunday Papers

The Sunday Paper – Academic Freedom and Critical Speech in Hong Kong: …the Future of ‘One Country, Two Systems’

Academics writing about curbs to academic freedom are likely to have a bias. However, the paper highlighted this week from Carole J. Peterson of the University of Hawaii and Alvin Y. H. Cheung from the NYU is reasonably balanced. They detail the way in which academic freedom has been compromised in Hong Kong since the […]

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Sunday Papers

The Sunday Paper – Engagement Auditor Industry Specialization and Stock Price Crash Risk: Evidence from China

The paper highlighted last week showed the relationship between stock price crash risk and a long delayed audit. To remind, the principal reason for stock price crashes is managers hoarding bad information which, ultimately, comes out all at once. The authors of the paper highlighted today, Hua Feng from the Xi’an Jiaotong University et al, […]

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Sunday Papers

The Sunday Paper – Abnormally Long Audit Report Lag and Future Stock Price Crash Risk: Evidence from China

Academic research has been closing in on why stock prices go up in small increments over a long period but ‘crash’ more violently over much shorter periods. The  reason seems to be a combination of asymmetric management reporting and the fact that all investors can buy good news but few can sell short. Company managers […]

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Sunday Papers

The Sunday Paper – Ideas and Ideologies Competing for China’s Political Future

Apologies, this paper is too long and a lot of the conclusions have the whiff of biased conjecture; but there’s some good stuff among the often circular-referencing social ‘science’. The authors, Kristin Shi-Kupfer, Mareike Ohlberg, Simon Lang and Bertram Lang all from the Mercator Institute for China Studies in Berlin, have tried to take China’s […]

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Sunday Papers

The Sunday Paper – Corruption, Censorship, the Media, and the Market in China

Censorship in China is normally associated with political issues; but Jonathan Hassid, an Assistant Professor at the Iowa State University, has taken a look at censorship from an economic perspective. In the process he takes the lid off a major contributory factor to domestic Chinese investors’ antipathy to the A-share stock markets. The high degree […]

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Sunday Papers

The Sunday Paper – In Public or in Private: Repressing Dissidents in China

Perhaps, with the National Congress still in full flow, this isn’t the most appropriate time to look at the dark underbelly of the Magic Kingdom? Let’s do it anyway. In the paper highlighted this week from Dimitar D. Gueorguiev, Assistant Prof. of Political Science, Syracuse Univ., Maxwell School of Citizenship and Public Affairs, he uses China […]

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Sunday Papers

The Sunday Paper – From Uncles of Victoria Park to the Net Generation Square People: National Identity and Student Movements in Hong Kong

In the 1960’s students in Hong Kong were concerned about local Chinese being given a fair shake by an aloof colonial administration. This generation are now the ‘Uncles of Victoria Park’ that go there to shout down the new generation of young malcontents who want to be recognized as Hongkongers first and foremost. [How times […]

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Sunday Papers

The Sunday Paper – Analyst Herding and Stock Price Crash Risk: Evidence from China

The more analysts covering a stock the better the quality of information about the stock, right? WRONG! The paper highlighted this week, from Nianhang Xu, Xianyu Jiang, Shinong Wu and Kam C. Chan of the Renmin, Central University of Finance and Economics and West Kentucky universities, is the first study to address the question ‘Is […]

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Sunday Papers

The Sunday Paper – Do Females Always Generate Small Bubbles? Experimental Evidence from U.S. and China

The paper highlighted this week adds a thought provoking dimension to a discussion that’s been ongoing for some time; the one about how differently men and women operate in markets. It suggests a rethink of the notion men were responsible for the recent financial crisis, due to their higher risk taking proclivity. It also sheds […]

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Thoughts

Why Have China Bears Been So Consistently Wrong?

Q. What do these names have in common? Bass, Chanos, Chang, Chu, Dalio, Druckenmiller, Edwards, Faber, Li, Odey, Soros and Xie? A. They belong to just a few of the people who in recent years have all made bold, dire proclamations about China’s prospects; and none of them, not one, has been correct. A Brief […]

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Sunday Papers

The Sunday Paper – Shadow Banking in China: Then and Now

For the new reader an accessible and informed primer; for practitioners, some useful reminders. Writing last July in an International Monetary Institute Working Paper, Chao Xi and Le Xia from the Chinese University of Hong Kong and BBVA Asia respectively, took a look at the sector from an emerging regulatory framework perspective. Their catalogue in […]

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Sunday Papers

The Sunday Paper – The Effect of Mandatory CSR Disclosure on Firm Profitability and Social Externalities: Evidence from China

The paper this week is a useful companion to one I highlighted back in May. The May paper came to the conclusion, using the same before and after study approach made possible by China mandating Corporate Social Responsibility (CSR) reporting for firms in December 2008, that there was an effect (down) on pollution levels subsequently […]

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Thoughts

Optimism In Financial Markets – Of Acceleration and Accelerants

Preamble Bar the last condition in the definition* below we are living, right now, in an economic boom  i.e. a ‘Period that follows [The] recovery phase in a standard economic cycle. A boom is characterized by an economy working at full or near-full capacity, strong consumer demand, low rate of unemployment, and a rising stockmarket, […]

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Sunday Papers

The Sunday Paper – Trading with China: Productivity Gains, Job Losses

This is the first work I’ve seen that comes down unequivocally on both the the benefits and the dis-benefits of China’s (and others’ by implication) rise as a trading nation to the rest of the world; part of the process often sloppily summarized as ‘globalization’. First, the benefits. The authors of this IMF Working Paper, […]

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Sunday Papers

The Sunday Paper – The Vulnerability of Rising Powers: The Logic Behind China’s Low Military Transparency

Why is China so cagey about it’s military capability? Isn’t the fact that Beijing keeps the world and it’s neighbors guessing destabilizing; and couldn’t it lead to a dangerous proliferation of arms in the region if others end up over-arming on the better-safe-than-sorry principle? Surely that outcome isn’t in Beijing’s best interest, so what explains […]

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Sunday Papers

The Sunday Paper – China’s Disaffected Insiders

Writing in the Journal of Democracy (July 2017) Professor Kevin J. O’Brien from the University of California, Berkley notes that China’s development model is tired and, for different reasons, some former supporters are now somewhat brassed-off. He looks in more detail at three such groups: frustrated cops, former military officers and bullied cadres, teachers, hospital […]