Chinese State Increases Protection To Fraudsters

The Chinese are a nation of embezzlers. They have become wealthy not due to hard work, but due to theft of foreigners' assets by embezzlement. Once foreigners leave with their assets from that cunning country, and therefore, there is no more property to steal from foreigners, the Chinese will, once again, defalcate each other and send its nation back to poverty. In the meantime, the Chinese state will continue to protect the ill gotten wealth of its citizens by imprisoning investigators who use public records to reveal the extent of rottenness underneath the phony propaganda:
In retaliatory crackdowns, one in May 2012 and one in January 2013, more than 1,000 local investigators and their alleged sources each time were detained, according to Chinese media.
Since intimidation has not been enough, the Chinese state decided to conceal the lies of Chinese "businessmen" by blocking access to what used to be public records:
In January 2013, forensic and investigation firms -- and local law firms -- found that they or their search agents could no longer freely access records filed with the Administration of Industry and Commerce (AIC) bureaus around the country. The AIC registers, incorporates, inspects and regulates all companies in China, and collects their annual returns. These records, until recently accessible in full, contain useful data and documents relating to the birth, evolution and status of a company, names and personal details of shareholders, annual financial data and annual audit reports.
And in February 2013, the Chinese state fully blocked access to such public records by relabelling them “personal information." Now, it will be even easier for the Chinese to steal cash funds, brands, fixed assets and whole companies from foreigners. And if that is not enough incentive for the Chinese to continue embezzling foreigners, the Chinese state has also guaranteed to continue its policy of dismissing lawsuits by foreign victims and imprisoning their investigators, so that stolen wealth has full protection.


After Losing Money In China, Danone Returns To Lose Even More

In 2005, Danone found out that Zong Qinghou, Wahaha's chairman, was running a parallel operation outside their joint venture that was stealing hundreds of millions of dollars from the partnership. In 2007, Danone realized that, in collusion with the Chinese state, Zong also stole the Wahaha brand from them. In 2009, Danone left the partnership after being extorted to sell its 51% stake in the $11 billion business for just half a billion.

But Danone CEO Franck Riboud has decided that they have not lost enough and they should go back to China because they "are quite nothing in Asia." So they are throwing away $417 million to "invest" in Mengniu. In addition, Danone will provide their yogurt know-how to the Chinese. In essence, Danone is paying Mengniu to take Danone's yogurt know-how. They might as well give their know-how away for free. Niu Gensheng can't be happier as the French has fallen, once again, into another Chinese scheme, which will only benefit Mengniu and bring ruin to Danone.

A Nature Journal Gets Conned By The Chinese R&D Center Of GlaxoSmithKline

Nature Medicine, which is one of the journals of the reputable Nature Publishing Group, published in 2010 an article which contains data fabricated by the Chinese R&D Center Of GlaxoSmithKline and the Department of Neurology of Baylor College of Medicine. The pseudoscientists who collaborated in the fabrication of such article are Chinese, including the one who works for Baylor College of Medicine.

The Chinese have managed to create the illusion that they are more intelligent than Americans or Europeans. And such illusion is driving Western companies to establish R&D centers in China. Eventually, those companies will realize that their Chinese employees are uncreative plagiarists who thrive on theft and deception. And when that realisation happens, they will close their research centers and leave that cunning country forever.


Fraud At The Hong Kong Mercantile Exchange

When prices fall, frauds arise. This time, after the price of precious metals have fallen significantly, the deception at the Hong Kong Mercantile Exchange became evident. The fraud consisted in overstating the Exchange's cash balance, which was being used by Chinese insiders to speculate in the price of gold and silver. When such bets didn't go their way, the amount by which the cash balance was being overstated became too wide to keep concealed any longer, as its cash funds were too low to keep the Exchange operating. And thus, the money was "vaporised," Ă  la Corzine.

The insider fraudsters speculated on a daily basis with the Exchange's cash but closed their positions at the end of the day. That's the reason why the daily volume increased every month whilst the open interest decreased every month. In 2011, the average daily volume was 4,229 for the 1 kilo gold futures and its year-end open interest was 772. In 2012, the average daily volume was 5,042, but its year-end open interest was just 112.

As most Chinese frauds, this was a multi-year operation. The reason these frauds take so long to be uncovered is not because of fraudsters' ingenuity, but because of victims' gullibility, who keep funding the fraudsters' operation. Among those involved in this fraud is its chairman, Barry CHEUNG Chun-yuen, who will never be charged of any wrongdoing, as he is an associate of LEUNG Chun-ying, Hong Kong's head of government. Thanksfully, the funds of both hedgers and speculators were not stolen, but this was not because they didn't want to steal them, but because they couldn't: the Exchange didn't have a clearing house of its own since LCH.Clearnet was clearing trades for them.

Unsurprisingly, this is not the first time a Chinese futures exchange goes bankrupt due to fraud. In 1987, the Hong Kong Futures Exchange (HKFE) closed its doors due to a margin fraud perpetrated by Robert NG Chee Siong, the chairman of Sino Group. As it happened, the perpetrator was rewarded with HKD 500 million, which were raised from taxpayers by the government of Hong Kong to rescue the Exchange. Simultaneously, the Hong Kong Stock Exchange (SEHK) was also rescued by the government, but it required a much larger amount: HKD 4 billion.

By the way, it is a matter of time before the London Metal Exchange suffers a premeditated "vaporisation" of its clearing house funds at the hands of its new Chinese bosses: the Hong Kong Exchanges and Clearing, which also owns the HKFE and the SEHK. But the likelihood of fraud at futures exchanges managed by Chinese presents an opportunity for American and European futures exchanges to offer competing products such as futures on the MSCI China index and the like. Offer them, and they will come.

All That Glitters In China Is Probably Fake

An American entrepreneur moved to China to start a franchised service business. As it turns out, things didn't go out as he expected. This is his story:
Six years ago I moved to China and within five months of arriving I was screwed out of $280,000 in a a Mr. GoodWrench franchise scam. Since then I follow all the scams that are the best disguised frauds with the most clever chinese cheaters I have ever come across. These sleaze have everyone on the take - the bankers, the cops, shills, singers, etc. I'm ashamed to say this but I am a retired military MP and although I'm no rocket scientist, I graduated cum laude from BYU. 
But some serious advice, if you're thinking of doing business in China - look elsewhere. In this country, if you're not fast, you're lunch. The stress of always being on the defensive is enough to make Mike Tyson paranoid. Everyone of my foreign friends here got scammed - one way or another. Even if the cops find and arrest the slime, a $2,000 bribe gets them released and a $10,000 bribe gets the judge to dismiss the case! My hobby is scuba diving and I have swam amongst many sharks in the ocean. But it is the mainland Chinese sharks that scare the hell out of me - not those in the sea.
He suggests reading this weekly column, which, by the way, is no longer being published. Nevertheless, you can find their previous articles here.