I recently retired as UK senior partner of BDO after 23 years as a partner with the firm. Last year, I took up a position as visiting professor at Xiamen University, China. My wife is Chinese and I decided to spend three months exploring business opportunities in the region and trying to learn some Mandarin.
I’m blogging about my experiences in China for Real Business – catch up on my journey so far (see “related articles” on the right-hand side).
Two disturbing pieces of corporate news from China may represent patterns of which I fear we will see more.
First, it seems clear now that the Muddy Waters website’s exposé on Sino-Forest’s accounting irregularities does have substance – the CEO/chairman has resigned, three other executives suspended and the going concern of the business is in doubt.
Second, Cosco is withholding charter payments for ships contracted for at the height of the market in 2008, perhaps with a view to trying to negotiate new, lower rates; the amounts involved are significant and the dispute could affect the wider shipping industry. Both these stories seem to represent part of the unacceptable face of Chinese capitalism.
China is greedy for natural resources of all kinds, including metals, energy, food and water.
Its “economic colonisation” of Africa is causing consternation, as is its control of the flow of the very essence of life on this planet, water. Surrounding countries are concerned at how it is damming the many rivers that run across it.
The concerns are both practical and political. Problems at the huge Three Gorges Dam, potentially include silting of the river, cracking in the dam and making the area more prone to earthquakes and even drought; one needs to add to that the risk of freshwater supply to downstream countries being reduced to quench China’s thirst.
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