China becomes a roach motel for foreign investors

Thinking about putting your money into China?

Think again. According to what respected emerging markets investor Mark Mobius described, the place has become a roach motel for investors. Money goes in, but now it can't come out.

According to Asia Financial:

In an interview on Fox Business, the billionaire, now 86, cautioned other investors to be “very, very careful” about investing in an economy under a tight government grip.

“I have an account with HSBC in Shanghai. I can’t take my money out. The government is restricting flow of money out of the country,” Mobius, founder of Mobius Capital Partners, said in an interview published on March 2.

“I can’t get an explanation of why they’re doing this … They’re putting all kinds of barriers. They don’t say: No, you can’t get your money out. But they say: give us all the records from 20 years of how you made this money … This is crazy.”

That's expropriation, a communist specialty, whether the Chicoms are going to admit it or not. Not letting someone get their money out is the same as keeping it, stealing it, helping oneself to it. Why they would do this to a famous investor with a big global audience to let the other investors know is something of a mystery, this is tremendously bad public relations for them, but based on their other actions, it seems as though  at this point they don't care. Already we know they're getting mean, what with their crazed COVID lockdowns, which drew tremendous popular protests, their stepped-up spy activity against the West, their machinations in Latin America, their intimidation of their neighbors, particularly Taiwan, and their massive military buildup. Today they announced that they'd ramp up their defense spending 7.2%

Mobius added that they've been increasingly moving to take over companies and industries. That's part of the classic fascist and socialist playbook:

“The bottom line is that China is moving in a completely different direction than what Deng Xiaoping instituted when they started the big reform program,” he said, referring to the former Chinese leader.

“Now you have a government which is taking golden shares in companies all over China. That means they’re going to try to control all of these companies … So I don’t think it’s a very good picture when you see the government becoming more and more control-oriented in the economy.”

Sound like an ideal place to invest? That might be the exact reason Mobius wants to take his money out. Like the scorpion in the Aesop fable who couldn't help himself from stinging the frog who rescued him, because he was acting according to his nature, China is acting according to its communist nature, and it's getting noticible now. Commies gonna commie.

The Chicoms may have even squandered the actual money Mobius owns, the way Sam Bankman-Fried did with his investor deposits, given the recent spate of instances where China's enfeebled regional banks have refused to let consumers get their money out. They've had riots in cities such as Henan and Zhengzhou over this. While those were small rural banks in bad fiscal straits and Mobius has his money in a seemingly well-capitalized HSBC Bank, one wonders if there's some kind of problem with the money being missing in the Shanghai branch he uses and the Chicom officials attempting to stall Mobius from taking it out. 

Whatever it is, it doesn't make sense. Every dollar or yuan they keep of Mobius's is a dollar a foreign investor witholds from spending in that country. Every dollar withheld means that much less economic growth -- and higher borrowing costs for that 7.2% defense spending increase. You wouldn't invest in a country where they won't let you take your earnings home, would you? That kind of risk is poison to investors, that's what pariah states do, and China up until now has put on a good dog and pony show about their capitalist values and respect for private property to keep the investments incoming.

Well, seems they don't want that now. They're raring for war. They're stealing from those who helped them out earlier by laying down their capital. It falls into line with everything else we see of that country in the age of pathetic Joe Biden. They'll pay big for this in lost investment -- and just as they are growing old before they grow rich.  

Image: // CC0 public domain




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