The following is an excerpt from Professor Burton Malkiel’s forthcoming book, From Wall Street to the Great Wall: How Investors Can Profit from China’s Booming Economy, scheduled to be published in December 2007 by W.W. Norton. The book is cowritten by Patricia Taylor, Jianping Mei and Rui Yang.
This excerpt comes from Chapter 4, “The Privatization Of Equity Shares,” and is reprinted here with permission. Following this excerpt is an in-depth interview with Professor Malkiel by Journal of Indexes editorial staff.
A distinctive feature of the Chinese stock market is the sometimes bewildering bifurcation of shares into tradable and nontradable categories. With the founding of the new Shanghai Stock Exchange—the SSE—in 1990, listed equities in the modern Chinese stock market were consigned to two categories: shares held by private investors that could be sold or purchased in the stock market; and shares controlled by state and other “legal persons” that could not be traded in the market. A “legal person” is generally another state or local government agency that participates in ownership of the company. The Chinese stock market was and remains to this day the only stock market in the world in which a majority of the listed companies are state-owned enterprises (SOEs). And a large portion of the listed shares cannot be traded. As the line from The King and I goes: “Is a puzzlement.”
This structure was designed by the “founding fathers” of the new Chinese economy in order to ensure that the state retained control of the SOEs even after they were listed for trading, and that no pressures for a change in that status would occur in the future from subsequent trading activity. Approximately two-thirds of the capitalization of Chinese stocks listed in Shanghai and Shenzhen were held until recently by government agencies or by other economic entities on behalf of the state. Until the end of 2006, state-owned shares were not allowed to be traded on the open market. “Legal person” shares have only limited marketability, as their trading is subject to cumbersome state approval.
The existence of state-owned shares has created a significant obstacle to the conversion of the Chinese economy to one that is fully market-oriented. They have also interfered with the growth and development of the Chinese stock market. Since 1999, many mainland financial analysts believe, the rise and fall of the Chinese stock market has been closely tied to the state’s efforts to reduce its holdings in listed companies.
Two important problems have concerned investors. First, there are troublesome governance implications. Shareholders would like to believe that company management will be making decisions with the sole objective of benefiting the shareholders of the enterprise. When the government is the major shareholder, the minority owners have good reason to believe that the government is likely to have other objectives in mind. The government has little interest in the behavior of the share price. It neither benefits much from rising prices nor need it fear a hostile takeover if prices fall.
The behavior of the majority-state-owned banks exemplifies this conflict. Often, the banks would find a manufacturing SOE that would need financing to keep afloat. While the SOE might be unprofitable, with little chance of repaying the loan, the enterprise might also be a major employer in the region, and a collapse of the business could create widespread unemployment. The government would want to ensure that the bank makes the loan and thus preserves jobs, despite the small likelihood of repayment. This general example illuminates the actual situation responsible for many of the “nonperforming” loans that have plagued the Chinese banking system.
A second problem arises if the state-owned shares are immediately made tradable and then quickly sold to the public. Dumping large numbers of previously locked-up shares could swamp the market and lead to devastating price declines. Investors call this phenomenon the “overhang” problem. In 2001, a state share reduction program was announced in which the sale of all state-owned shares would be completed over a five-year period. After the program started in mid-2001, prices in the Shenzhen and Shanghai markets plunged by about 40 percent and the program was suspended later that year. In the trial-and-error game, this was a big error. It became clear that a solution to the overhang problem required considerable care.
In 2005, Shang Fulin, chairman of the China Securities Regulatory Commission, achieved what many in China’s financial community considered an impossible mission: He set up a method of compensation whereby public owners of a state-owned enterprise would receive a bonus when the nontradable shares were converted to tradable shares, thus alleviating the precipitous drops in value that usually resulted. In the summer of 2006, for example, Sinopec (SNP), Asia’s largest oil refiner by capacity, announced that mainland holders of its stock would receive 2.8 shares for every 10 shares held as compensation for allowing the company’s nontradable shares to become tradable. Shang’s plan provided holders of exchange-traded shares with the reassurance that the release and trading of state-owned shares would be achieved gradually and according to a timetable. Many in China’s financial community feel that this plan has contributed to the rise of the Chinese stock market during 2006 and 2007.
On September 4, 2005, the China Securities Regulatory Commission officially issued a regulation with the rousing title “Listed Company Stock Ownership Diversification Reform and Management Methods.” Despite the bureaucratic name, it represents one of the world’s largest privatization movements. Wu Yalun explained its basic ramifications during our interview with him at the Shanghai Stock Exchange. First, there is an internal lock on all converted shares for one year after conversion. Second, those who originally held over 15 percent of the nontradable shares can sell no more than 5 percent of their holdings within the year following the lockup period, and no more than 10 percent within two years following the lockup period.
With the conversion of nontradable shares into tradable equities, and the slow but steady release of these newly tradable shares into the market, both trading activity and market value have begun to climb dramatically. Still, with 70 percent of the shares nontradable at the start of the conversion effort, the practical but slow process of making all stock-trading activity truly market oriented means that the overhang issue will be around for a number of years.
The Alphabet Soup Of Share Types
As if the tradable/nontradable share story isn’t confusing enough to those who just want to make some money investing in China, there is also the quagmire of a literal alphabet soup of share designations that indicate where the shares are traded and who can buy them. This is the second distinguishing feature of the Chinese stock market.
In alphabetical order, these shares are described below.
A shares: Available to local investors. The predominant class of publicly held shares—comprising about 30 percent of the total—is called A shares. These shares are denominated in yuan and traded on the Shanghai and Shenzhen stock exchanges. Originally, only Chinese nationals were allowed to own A shares, but as we will see below, a limited number of foreign investors now have access to these shares as well. Ticker symbols for A shares are given in numbers, e.g., 600028.SH. The numerals identify the company and the two letters the exchange (here, Shanghai).
Throughout much of China’s stock market history, A shares tended to represent ownership in the smaller, less-well-managed companies. That began to change in 2006, when the A-share market started heading for the sky. Worried that a bubble was in the making, one that could burst just as the country was to demonstrate its modern economic power at the Beijing Olympics, the government started introducing new measures to increase the breadth of the market, thus reducing a situation in which a lot of money—much of it pouring out of savings accounts where the Chinese had traditionally put their assets—was chasing too few stocks and thus contributing to the rise in prices.
Whereas in the past the larger, better-managed companies could not list locally and only appeared on foreign exchanges, in spring 2007 the government stepped up the transformation of the A-share market by unofficially requiring that any company wishing to list overseas had to also list locally. In addition, many of the larger companies, such as China Mobile and Aluminum Corporation of China, which had been listed only on overseas markets, requested and received government permission to list locally. The hope is that the newly available A shares of these larger, better-managed companies will mop up some of the excess liquidity and reduce some of the speculative frenzy that appears to be infecting the market.
Furthermore, A-shares buyers have tended to be individuals rather than institutions (in the United States, institutions account for over 70 percent of stock ownership). When we talked to senior staff of the CSRC, we were told that the development of an institutional shareholder base is one of their top objectives. At the time we had our discussions, banks and insurance companies were legally limited to holding only a minute percentage of their assets in stocks.
B shares: Available to foreign investors. These shares were created solely to allow foreign investors to participate in the domestic markets. The aim was to have outlets available for the investment capital of non-mainland Chinese investors so that Chinese companies had access to another source of capital. The B shares are traded in Hong Kong dollars on the Shenzhen exchange and in U.S. dollars on the Shanghai exchange. Since no arbitrage trades are possible between the two types of shares (mainland residents do not have ready access to B shares and foreigners have only limited access to A shares), the B and A shares of the same company typically trade at different prices. Moreover, the number of B shares is small and thus they are quite illiquid. The Chinese authorities currently are considering the termination of trading in the B-share market, so we have not considered B shares in developing our strategies.
H shares: Available to Hong Kong investors. The inability of the B shares to attract international capital led the government, in 1993, to allow the establishment of H shares. H shares represent mainland companies that are registered in Hong Kong and that trade on the Hong Kong Stock Exchange. They include SOEs that have gone through a major restructuring that satisfies the requirements for international issuance. Chinese government approval is required for an SOE to pursue an international listing, and in general, the companies listing in Hong Kong have been strong ones selected in part to showcase Chinese companies on the international stage.
H shares are traded in Hong Kong dollars. As with A shares, the ticker symbols are in numbers (e.g., 0386.HK). Since Chinese residents cannot freely convert yuan to Hong Kong dollars, they have effectively been denied the opportunity to buy stock in some of China’s largest and most profitable companies. This situation started to change in 2006, and gained momentum in 2007, when the government gave permission to major companies such as Bank of China and China Life to list on the mainland as well as on the international stock exchanges. During 2007, however, these companies tended to trade at higher prices in Shanghai than their equivalent prices in Hong Kong and New York.
Red Chips: In addition to H shares, so-called Red Chip shares trade in Hong Kong. The Red Chips are Hong Kong–registered companies that have a mainland Chinese corporate shareholder holding at least 35 percent of the shares. In many cases these listings are, in effect, “back door” listings. A non-listed Chinese company purchases a relatively dormant Hong Kong–listed company and inserts mainland assets into the Hong Kong “parent.” The Red Chip then becomes a kind of holding company with access to international financing that can be used as an acquisition vehicle for Chinese assets. All the shares traded in Hong Kong are available to international investors.
N shares: Chinese shares traded in the United States. Some of the strongest Chinese companies have been chosen by the Chinese government to register with the U.S. Securities and Exchange Commission and trade in the United States. These companies are widely regarded as being “the best of the best”; strong and profitable enough to undergo the listing requirements of the U.S. exchanges. www.indexuniverse.com/JOI January/February 2008 13 The trading typically takes place on the New York Stock Exchange or, particularly for high-tech companies, on the NASDAQ market—hence the designation “N shares.” Ticker symbols for shares traded on U.S. stock exchanges are given in letters (e.g., SNP for Sinopec).
The shares are generally traded as American Depository Receipts (ADRs), which means that the trades take place in U.S. dollars; dividends are also credited in U.S. dollars. That would appear to make it easy for an American citizen wishing to invest in a foreign company. But, alas, things are not always what they seem in this case. ADRs are frequently bundled shares. Bundled shares! Where did that come from?
When a foreign company lists on a U.S. exchange, it wants to look as enticing as possible. Because single shares of many foreign firms are so inexpensive, the feeling is that a single share listing would create the impression of a small, fly-by-night enterprise. Thus, foreign firms often will combine or bundle several shares and have these listed as one ADR share on a U.S. exchange. For example, one share of Sinopec (SNP) traded in New York represents 100 shares traded in Hong Kong.
And all the rest: Shares listed on other international exchanges. Some of the Chinese companies that are permitted to list internationally have chosen to bypass New York and opted instead to list on the London Stock Exchange (L shares), the Tokyo Stock Exchange (T shares) or the Singapore Stock Exchange (S shares). While available to all international investors, these shares are traded respectively in British pounds, Japanese yen and Singaporean dollars. Listing in places other than New York avoids the costs of complying with SEC and Sarbanes-Oxley requirements, which some companies find increasingly burdensome.
Slightly confused? Never strong on the alphabet? There’s more. If you have been paying close attention, you now know that some Chinese companies are only listed as A shares, others are listed only as H shares, some are listed as A and H shares, about two dozen are listed as H and N shares, about a dozen are only listed as N shares and a growing number are listed as A, H and N shares. Yes, a puzzlement indeed. To make this incredibly complex situation even more confusing, the same company often trades at different prices in the local and international markets. This price differential reflects extremely limited foreign access to mainland shares and limited local access to shares listed internationally. Thus, should a foreigner hold a share of Sinopec, for example, and see that it is trading at a 25 percent premium in Shanghai, it does her no good, because she is not allowed to sell her shares short in Shanghai while buying them in Hong Kong or New York. Whenever arbitrage is restricted, prices can deviate from market to market.
Changes In Chinese Regulations During the 2000s
Since joining the World Trade Organization in 2001, China has accelerated the pace of reform to bring the legal environment for its capital markets up to international standards. The WTO, for example, calls for allowing foreign investment in all industries, with the exception of sensitive companies associated with national security. This meant that China had to open its investment doors. It did so in a very Chinese way.
Cuefee and Quidee quotas: While they sound like new athletic challenges for Harry Potter, these are the pronunciations for two programs that China has initiated to further solidify its capital markets. The Qualified Foreign Investor Program (QFII—pronounced “Cuefee”), begun in November 2002, permits a limited number of qualified institutional investors, on an annual renewal basis, to participate directly in China’s domestic stock markets. UBS, Europe’s biggest bank, based in Zurich, was the first foreign bank to be issued a QFII quota. Since then a number of banks, insurance companies, brokers, universities and other investors have acquired QFII quotas. Although the quotas have been expanded over time, they are still relatively small. Moreover, there are limits to the number of A shares that QFIIs may acquire in any single company, and the program does not permit the unrestricted repatriation of the funds. The regulatory authorities are worried that since the capitalization of the domestic market is relatively small, it would be overwhelmed if foreign investors were given full access. In addition, the size and renewal of a QFII quota is often determined by the areas in which the institutions have invested. As this book goes to press, the government does not encourage foreign investment in real estate and new construction; thus, any institution concentrating its QFII quota investments in these areas will probably find it difficult to obtain additional quota the following year.
The CSRC and the State Administration of Foreign Exchange administer the quotas. There are, we believe, many advantages to liberalizing these quotas substantially. China badly needs to develop an institutional investment culture, and the presence of foreign institutional investors can help foster a domestic professional investor culture as well. Institutional investors can perform an important monitoring function and thereby help improve corporate governance. They can also help smooth out some of the market anomalies created by the alphabet soup where companies trading in Shanghai, Hong Kong and New York often sell at different prices in the domestic market.
The CSRC is well aware of these advantages and very much wants to establish an institutional investment climate in China. However, in our discussions with officials there, they also expressed a fear that moving too fast to liberalize the quotas could overwhelm the market. The total capitalization of all Chinese equities was less than 2 percent of the world market in July of 2007. The CSRC, therefore, has opted for gradualism in its policies over the liberalization of quotas and limitations on QFII’s ownership of the shares of any single company. But there is no question about the likely direction of policy change in the future as state-owned shares become fully tradable. China is moving to a system of private ownership where corporations will be run for the benefit of shareholders rather than the government. And the release of the state-owned shares to the private sector will lead to increased market liquidity, greater protection for minority investors, and increased efficiency for the state-owned firms themselves.
In July 2006, the government introduced the Qualified Domestic Institutional Investing (QDII, pronounced “Quidee”) program. Similar to the QFII program, it allows local institutions to exchange yuan into foreign currencies in order to buy shares on international exchanges. The government believes that this program can, at least in part, reduce the mounting pressure on the yuan to appreciate because of the deluge of foreign exchange flooding into China.
Nontradable share conversion: The nontradable share conversion is probably the biggest and most far-reaching reform under way in the Chinese market. At the start of 2007, all companies on the Chinese market had either announced or already completed a program to make restricted shares tradable.
The full-flotation reform instituted in 2005 also included an additional QFII–like system. Foreign investors who do not have an unused QFII quota will be able to purchase some state-owned shares through a private transaction. Five government agencies issued a joint decision in 2006 that allows non-QFII foreign investors to purchase strategic interests in the state-owned shares. Such private purchases would comprise a minimum of 10 percent of the listed company’s shares and a three-year holding period would be required.
New accounting standards: Until recently, the Chinese stock market has been without universally accepted accounting standards. It is widely believed that Chinese firms traditionally carried four sets of books—one for the government; one for official company records; one for foreigners; and one (obviously not widely available) for what was actually going on. Thus, when reviewing a financial statement, what one saw was not necessarily what one was paying for. In its inexorable effort to create a functioning world-class market, the government has acted to correct this situation.
As of January 1, 2007, China’s Ministry of Finance now requires all companies listed on the Shanghai and Shenzhen stock exchanges to report their annual performance in terms of International Financial Reporting Standards (IFRS). This is an enormously ambitious project, particularly given the overlapping interests of many Chinese companies that consist of numerous subsidiaries, as well as the woeful lack of qualified accountants to process and clarify the raw numbers (the Chinese accounting profession is still recovering from having been sent lock, stock and barrel to the countryside to be reeducated during the Mao years). To give some idea of the task facing the listed companies, it has typically taken three years for expectant Chinese corporations to meet the listing requirements enunciated by the IFRS and mandated by the Hong Kong Stock Exchange. Though listed companies were supposed to have complied with the Ministry of Finance’s directive by 2007, there is widespread feeling that many have yet to fully adhere to IFRS requirements. While progress has been slow, the new requirement is clearly a step in the right direction. As Martin Fahy, director of development for the Asia-Pacific region of the Chartered Institute of Management Accountants, has said, “You can’t have a functioning financial market and economy without objective and independent accounting.”
Futures and other modern techniques: The Chinese government continues to work to make its capital markets more rational. For example, in September 2006, the Chinese Financial Futures Exchange inaugurated a new exchange focusing on financial derivatives trades. This will allow institutions to hedge against market risk by investing in the Shanghai and Shenzhen 300 Index futures.
Furthermore, we anticipate that the government will soon be introducing two additional trading techniques: margin trades and short selling. Margin trades allow equity investors to borrow money to buy stocks. Short selling allows investors to sell stock they don’t own—perfectly legally—in the hopes of buying it back at a lower price. Without short selling, investors can only make money if their stock goes up. Since money can be made in both directions—and you do have to pick the directions correctly—short selling leads to more balanced trading patterns.
A Summing Up
As this chapter has made clear, China has gone a long way toward reforming its financial markets and embracing a market-oriented economic system. In so doing, however, it has created what can only be termed a Chinese Puzzle: There’s an alphabet soup of different kinds of shares; the national government’s controlling hand in the release of shares; and the constant tinkering in devising new programs. Somehow, this hybrid conglomeration works—and recently has worked surprisingly well. But China is far from a full market system. State-owned enterprises still control a large portion of the nation’s economic output, and the privatization of state-owned shares, we feel, could be moving at a faster pace. Certainly, much more needs to be done. China’s markets are far from problem free, and there is still far too much reliance on the state.
China, then, is in an unprecedented position with regard to the development of its domestic stock market. It continues to restrict outside access, is trying to dampen domestic speculative enthusiasm for share ownership, is introducing new accounting standards and requirements for transparency, and is also trying to rein in corruption. It is an extremely delicate balancing act; one that will affect the future not only of China but of the entire world economy. Having met with officials at many levels and in many government agencies, we are impressed with the creativity and the dedication devoted to this task.
Reprinted from From Wall Street to the Great Wall by Burton G. Malkiel and Patricia A. Taylor, with Jianping Mei and Rui Yang (©2008 by Burton G. Malkiel, Patricia A. Taylor, Jianping Mei and Rui Yang) with permission of the publisher, W.W. Norton & Company, Inc.
An Interview With Burton Malkiel
 As the preceding excerpt makes clear, Burton Malkiel knows China. The Chemical Bank Chairman’s Professor of Economics at Princeton University, Malkiel is the author of A Random Walk Down Wall Street and one of the most-respected names in finance.
He spoke with Journal of Indexes contributing editor Heather Bell about recent developments in the Chinese markets, and whether China truly remains an exciting place to invest today … or whether it’s a bubble.
Journal of Indexes (JOI): As of October 26, 2007, the Chinese equity market was up over 100 percent since March. Is this rapid rise troubling?
Burton Malkiel (Malkiel): It’s an issue of concern, but as discussed in the book, it is important to realize that there are many different kinds of Chinese stock.
The A shares [which are primarily available only to domestic investors] are in my judgment quite worrisome, in part because of the rapid rise in the market. The A share market was up 130 percent in 2006, so the recent 100 percent increase is on top of that.
It’s particularly worth noting that there are some companies that trade in New York, Hong Kong and Shanghai, with different share classes. And those shares are priced at premiums of 50 percent to 100 percent on the Shanghai market. That, of course, is extremely worrisome. It violates what we economists call the law of one price. There is no reason why China Life or Sinopec should trade at a 50 percent higher price in Shanghai than in the other markets.
Am I worried about the A share market? Yes. However, in my judgment, H shares [which trade in Hong Kong] and N shares [which trade in New York] are still reasonably priced relative to their growth rates.
JOI: Are the growth rates recorded by the Chinese government real?
Malkiel: The Chinese market is extremely volatile. It’s even more volatile than Brazil, which is always thought of as “the” really volatile market. I don’t think, however, that one can point to any specific effects on the world economy as of yet. But as the capitalization of the Chinese market grows, it undoubtedly will have more of an effect.
It is interesting that the Chinese market is so extraordinarily volatile, when it is also up so sharply over recent periods. There were three times in the last year when it was down 10 percent in one day. The first time that happened, I think it brought the S&P 500 down about 4 percent. But the next two times it happened, the S&P 500 was essentially unaffected.
The market’s volatility has a potential effect on the volatility of markets around the world, but in terms of total capitalization, it is still a small market, so its impact is not as large as one might imagine.
JOI: Should investors be tilting their portfolios toward China?
Malkiel: I believe every investor should have some exposure to China, and in my judgment, that exposure should take one of three forms: either a direct investment in H and N shares; exposure to Chinese real estate; or an indirect exposure by investing in companies that are domiciled in other countries but that get much of their growth from China. I would also add companies that make, mine or process commodities, because I think that one of the reasons that oil is so expensive now and other commodities have gone up is that the Chinese have had a really voracious appetite for commodities.
JOI: Speaking of commodities, people talk about China as a driver of commodities inflation. Is the Chinese market exposed to the risk of an oil shock?
Malkiel: Clearly China needs to import its oil just like we do, but just as I think it is true in the United States that we are less vulnerable to oil than we were 20 to 30 years ago, I don’t think the Chinese economy is particularly vulnerable to oil. They get most of their power by burning coal, which is abundant. That creates its own problems, and they do have a serious pollution problem. But I don’t think growth in China is highly vulnerable to oil prices. Just because oil has exceeded $90 a barrel, I don’t think that that will stop the growth of the Chinese economy.
JOI: What about other risks? For instance, is the Chinese real estate market vulnerable to something like the subprime crisis that has hurt us in the U.S.?
Malkiel: As far as I know, the kinds of things that we worry about in the United States—newfangled adjustable rate mortgages and negative amortization mortgages and so forth—are probably peculiar to an economy like the United States.
I’m not saying the Chinese real estate market is immune from speculation. I am sure that in some areas there may be some froth in the real estate market; there have been, in the major cities, substantial increases in real estate prices. I am sure that the growth in real estate valuations will not always be smooth.
JOI: How does the Chinese real estate market compare with other real estate markets globally?
Malkiel: In my judgment, there are really great opportunities in the Chinese real estate market. I think the difference is that the United States has basically gone through its period of urbanization, while China has just started to do that. The urbanization process has gone along quite far in the eastern part of the country, where cities like Beijing and Shanghai are very well-developed. But it is just beginning in the central and western parts of the country.
In my judgment, real estate development, while it may be mature in Beijing and Shanghai, is not a mature market in the center and west of the country. China is developing about two cities a year the size of Philadelphia.
JOI: What is Hong Kong’s current and future role in the Chinese markets? It’s been called the gateway to investing in China.
Malkiel: I think that is correct, and it’s about the only gateway. Either you buy stuff that’s listed in the United States or in Hong Kong. However, if you wanted me to put my future glasses on and look 10, 20 years into the future, I do not think, as China continues to develop, that these restrictions are likely to be as stringent as they are now.
JOI: What kind of role do you see for Taiwan?
Malkiel: Right now there’s a lot of tension. There are often politicians in Taiwan who say that they ought to claim their independence. And of course, the Chinese government says, “We won’t accept that.” And there’s some saber rattling.
I don’t worry about it as much as some other people do, because I know that the people on both sides of the Taiwan Strait are very practical. And the economic ties between Taiwan and what they call the mainland are in fact very, very strong. I don’t expect there to be anything like a shooting war; the Chinese government knows that that would be the surest way of ending what I call the Chinese miracle.
Will Taiwan and China eventually be integrated as East and West Germany were? I don’t know when, but at some point I think that’s likely, particularly as the mainland continues its growth and becomes more democratic. I certainly don’t expect this any time very soon.
JOI: Why did you decide to write a book on China?
Malkiel: I think it’s absolutely fascinating. I think China is likely to be the largest economy in the world in the 2020s. The growth rate that has been achieved in China is absolutely unprecedented. There is nobody who has grown as fast as China in history. It’s just a fascinating place and a very interesting place to study.
JOI: Did you have any interesting encounters in China when you were developing the book and researching it?
Malkiel: Well, I did do three trips to China. I had many fascinating experiences. You can’t go to China and walk down the streets of their cities without feeling an almost palpable energy. Sir W. Arthur Lewis, the Nobel laureate in economic development, used to tell me that if you want to know why some countries develop and some don’t, look at the culture. Is it a culture that reveres education? The Chinese have done that since the time of Confucius. Is it a culture that’s entrepreneurial? Is it a culture that’s risk taking? Is it a culture that’s hard working?
It’s one thing to read about these kinds of characteristics, but you can almost feel it when you are in China, and that to me is one of the main reasons why I think that this Chinese economic miracle is likely to continue.
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