Betting on China

The promise and perils of Chinese stocks in American stock markets Betting on China takes readers on an illuminating journey into the often confusing and poorly understood world of Chinese stock issuances in America. With insightful qualitative and quantitative analysis, it looks at the phenomenon of equity and capital exchanged between the world's two largest economies and the implications for global finance. Written in an accessible narrative style and amply supported by hard data, the book examines the context and underpinnings of the Sino-American equity relationship, revealing its core dynamics through real-world case studies that range from the precedent-setting blockbuster IPO of China Mobile to the near breakdown of the U.S.-China equity exchange mechanism brought about by short seller attacks on Chinese concept stocks. Combining an insider's eye with an outsider's objectivity, American born author and Beijing-based consultant Robert Koepp explores the reasons and the means by which China, America, and the global economy reap enormous gains from the process of Chinese companies issuing equity shares on U.S. stock markets. Betting on China exposes the complexities and nuances of a vital but underappreciated pillar of modern international finance and offers a window into China's role as a dominant but still modernizing economic superpower. Analyzes on a macro- and microscale the forces that move Chinese companies to raise capital on NASDAQ and the New York Stock Exchange and what this means for the world at large Explores the real stories behind why and how China-based enterprises develop as public companies listed in the United States and why government regulations need to work in support of and not against this force of market nature Shows that the "e;betting"e; on China that occurs through the U.S. equity market exchanges is critical for getting an accurate picture of China's position and prospects in our interactively connected global economy Detailed but accessible, Betting on China is essential reading for global finance professionals, policymakers and regulators, students of finance, people doing business in China, and anyone curious about China's place in and impact on the global economy today and in the years to come.

The promise and perils of Chinese stocks in American stockmarketsBetting on China takes readers on an illuminating journeyinto the often confusing and poorly understood world of Chinesestock issuances in America. With insightful qualitative andquantitative analysis, it looks at the phenomenon of equity andcapital exchanged between the world's two largest economies and theimplications for global finance. Written in an accessible narrativestyle and amply supported by hard data, the book examines thecontext and underpinnings of the Sino-American equity relationshiprevealing its core dynamics through real-world case studies thatrange from the precedent-setting blockbuster IPO of China Mobile tothe near breakdown of the U.S.-China equity exchange mechanismbrought about by short seller attacks on Chinese conceptstocks.Combining an insider's eye with an outsider's objectivityAmerican born author and Beijing-based consultant Robert Koeppexplores the reasons and the means by which China, America, and theglobal economy reap enormous gains from the process of Chinesecompanies issuing equity shares on U.S. stock markets. Betting onChina exposes the complexities and nuances of a vital butunderappreciated pillar of modern international finance and offersa window into China's role as a dominant but still modernizingeconomic superpower.* Analyzes on a macro- and microscale the forces that moveChinese companies to raise capital on NASDAQ and the New York StockExchange and what this means for the world at large* Explores the real stories behind why and how China-basedenterprises develop as public companies listed in the UnitedStates--and why government regulations need to work in supportof and not against this force of market nature* Shows that the "betting" on China that occurs through the U.S.equity market exchanges is critical for getting an accurate pictureof China's position and prospects in our interactively connectedglobal economyDetailed but accessible, Betting on China is essentialreading for global finance professionals, policymakers andregulators, students of finance, people doing business in Chinaand anyone curious about China's place in--and impacton--the global economy today and in the years to come.

Acknowledgments xiPreface xvChapter 1 Wagers of the Dance: China, America, and theInterplay of Public Equity 1A Hierarchy of Financial Footwork 1IPOs for Cash-out and Cash-in 5A Ground-Level View 7U.S. China Issuances Measuring Up 22Chapter 2 Realities, Theories, and Gung Ho: The Ying and Yangof Chinese Issuances 25The China Wave 25Big-Stakes Games 28Ying-Yang IPOs 32Market Détente 35Breaking Molds 40Adam Smith's China Bet 42Gains, Rules, and Risks 44Information versus Noise 46Real "Gung Ho" 48Chapter 3 China Mobile: The Big Bet 51First Dish in an IPO Banquet 53Birth in a Maelstrom 57Ripple Effects 60Assimilating Global Standards 62Of Men and Governance 66Red Chip Scare 68Spillover Effects 71Quantity, Banditry, and Quality 75New Generations, New Markets 78Nothing and Everything 81Chapter 4 Spreadtrum Communications: When the Chips Are Down85Stirring the Waters 87The Basic Spreadtrum Story 92Leading a New Chinese Industry 96Pulling Back from the Brink 98Shortsighted Shorting 101Shorts Caught Short 105Chapter 5 Calling the Bluff: Truths, Fictions, and CRMs109Initial Misgivings 111In Through the Back Door 113Dawn of the CRM Dread 116A Short Love Affair for CRMs 119Unaccountable Accounting 123The Din of CRM Noise 125A Reversal for RM Overhype 128Chapter 6 Longtop Financial: The Costs of Dirty Dealing133The Longtop Shocker 133A Fallen Icon 137Deception's Depths 139A China Problem? 142New Stakes in the Game 145The SEC's Big Bet 148Upping the Ante 150Beyond the Brink? 155Chapter 7 Continuing the Bet: Accountability and Adaptability161Evolving Accountability 161The Adaptability Challenge 163Appendix 167Notes 187About the Author 199Index 201