Cheah Cheng Hye from Value Partners had this to say, in his speech on "Value Investing in China":
Cheah Wrote:It is not a level playing field. If you are a private enterprise, you don't get access to bank lending, bank loans; you don't get access to privileged locations, and you have to wait a lot longer for licenses and other things. So the playing field is very unfair if you are not a state-owned enterprise, and the way to get around that is to be corrupt.
So, there is a saying that may be less true... I'm trying to figure out what are the right words to use; I'm not good at this kind of thing... is that you have got to be friends with the government officials. But every now and then, the government officials turn against you and then they pick up your file and say you did XYZ corrupt things back in 1985. Sorry boy, you know, you're in jail. See, it's a very messy system. Yeah, a lot of heartbreaks.
Personally, I think anyone who wants to invest in China companies has to live with corruption. Things just can't move without.
Having said that, doesn't Midas ballooning receivable worry you? The IPO prospectus mentioned a usual receivable days of 2 to 3 months. As of the latest result, it is 8 months.
China has unveiled new plans to speed up the construction of two economic development zones in far-western Xinjiang, pledging greater investment, fiscal subsidies and measures to accelerate connecting the border region to Pakistan through railway lines and air routes.
The State Council, or Chinese cabinet, outlined the measures in a policy document released on Saturday, which, for the first time, detailed Beijing's already announced ambitious plans to set up two economic development zones in the frontier cities of Kashgar and Korgas, respectively located near China's borders with disputed Pakistan-occupied Kashmir (PoK) and Kazakhstan.
The measures come as a number of companies which have planned to invest in the region have expressed concern over recent violence in Kashgar. Knife and bomb attacks in July, blamed by the local government on terrorists with links to Pakistan-based groups, left at least 20 people dead. The region has also seen ethnic unrest between the native Uighur population and Han Chinese migrants. Many companies have voiced fears that investment promised in plans to transform the city into a “Shenzhen of the west” have failed to materialise, according to representatives of three companies which have recently set up businesses in the region. Shenzhen, a sleepy southern fishing village, was China's first Special Economic Zone, transformed into a major trading hub.
Saturday's announcement is being seen as a move to boost the confidence of companies. The guidelines said the central government would offer subsidies every year until 2015, exempt enterprises from income-taxes, and offer loans at discounted rates. It would also adopt fiscal subsidies and tax breaks in both zones. Yang Jihong, an official with the Korgas zone, located near the city of Yining, told the State-run China Daily newspaper that Saturday's policy document was the most detailed yet since plans for both zones were first announced in May 2010.
“This is a long-awaited policy for us,” he said. “Although more time is needed to work out and finalise detailed measures, the guidelines have a milestone significance for the zone's development.” The measures also laid emphasis on boosting rail connectivity across China's western border, saying the government would increase investment and ‘actively promote' the construction of a China-Pakistan railway line, which would run from Kashgar through Pakistan-occupied Kashmir (PoK). It would also support airlines which opened routes from Kashgar to neighbouring countries.
Mr. Yang, from Korgas, said the government had also approved the construction of a railway facility at the town and lines to, which, when completed, would become “the biggest transshipment station in Asia.”
A railway line through Kyrgyzstan to Uzbekistan will be built. Much of the development in Kashgar and Yining is expected to be led by State-run companies, which will invest 991.6 billion yuan ($155 billion) in Xinjiang from 2011 to 2015.
In August, Wang Yong, Chairman of the State-owned Assets Supervision and Administration Commission (SASAC), warned these companies, which account for 70 per cent of Xinjiang's industrial output, to boost local employment and not “expand blindly [and] abuse resources.” Locals have expressed concern in the past that high investment has not brought commensurate benefits to the local economy in terms of employment.
For instance, in Jiashixian, a high-tech industrial area near Kashgar, much of the investment was from companies in southern Guangdong, who also brought their own employees.
“There are few Uighurs working here,'' a representative of a company from Foshan, in Guangdong, involved in growing and selling high- end flowers said in a recent interview. Another plant, also run by the Foshan government, which has pledged 213 million yuan, hired only a few dozen locals. Saturday's document appeared to seek to address these concerns. It said companies would receive discounts on electricity and transportation costs if they hired more people.
The big picture is to have a transnational railway stretching from singapore to kunming to central asia from there to turkey and europe. Midas website also mention they are looking to exploring in Turkey Light rail transit project.
[Image: 0013729e48090fff1bcd09.jpg] A train runs on the 100-year-old railway linking Kunming in China with Vietnam. The line is only a small part of the Trans-Asian Railway. [Xinhua]
Major problems remain but ambitious network hopes to link Asia to Europe, Alfred Romann reports from Hong Kong.
Creative locals use "bamboo trains" to travel along Cambodia's abandoned railway lines. These homemade vehicles ferry food and people and are powered by adapted water pumps. Technology at its most basic but Cambodia's railways could yet be part of an ambitious network linking Asia to Europe.
In 2009, the Asian Development Bank provided $84 million to rebuild Cambodia's 600-km railway network. The whole project should cost $141 million and is due for completion by 2013.
Cambodia's railways are among several missing links in the Trans-Asian Railway (TAR) project, an 117,000-km rail network, 10,500 km of which has yet to be built. Rehabilitating Cambodia's rail network is integral to the project that would link Singapore to Kunming, and beyond to Central Asia and, eventually, to Turkey and mainland Europe.
Envisioned in the 1960s, TAR would ultimately link the fragmented national railways in 28 countries into a unified transportation system.
"The completion of the missing links in the network and its efficient operations are key to the region's economic integration," according to Pierre Chartier. He is economic affairs officer in the transport division of the United Nations Economic and Social Commission for Asia and the Pacific, which is driving the project.
The scope of this undertaking is massive. Some countries in the network have no railways to speak of; others have dilapidated ones.
--Making connections
Chinese investment in domestic and foreign projects is driving forward the development of TAR, but more than money is required. Missing links between countries have to be filled and infrastructure built to overcome significant technical differences before a single, unified rail system can run smoothly across the continent. For instance, the width of tracks and, in turn, the axles of trains often vary from country to country.
"Financing and building railway infrastructure is easy. The challenge is integrating the Greater Mekong Subregion railways, which developed in splendid isolation from each other since World War II, to the point where they can operate effectively," said Peter Broch, senior transport economist at the Asian Development Bank.
"Effective cross-border rail traffic would provide medium- to long-distance land transport, thereby improving economic efficiency," Broch said. Transport and transaction costs would be reduced, and national economies could be better linked.
A 128-km link from the small city of Loc Ninh, along the Cambodian border, to Ho Chi Minh City will provide one of the missing links. It is part of a national plan Vietnam developed in 2002 to rehabilitate and turn Vietnam Railways into a corporation. Once that bit of the system is laid out and operational, it will be up to Cambodia to link it up with the wider transnational network.
--Sizable economic zone
There are myriad options to overcoming technical hurdles such as varying rail gauges, the distance between rails, but all of these have problems of their own and would interrupt the smooth flow of traffic. The upshot is that despite tens of thousands of kilometers of track already laid, the original goal of a seamless network remains elusive.
There is, however, much merit in the idea of a continental rail network. For one, there are a dozen landlocked countries in Central Asia.
Southeast Asia, the area from southwest China to Singapore, could particularly benefit. An integrated railway would be another step toward "creating a large, reasonably homogenous market" similar in size to the European Union, Broch said.
The UN Economic Commission for Asia and the Far East, forerunner of Chartier's agency, floated the idea of TAR in the 1960s to provide a 14,080-km rail link between Singapore and Istanbul. Over the following decades, countries moved forward railway projects and sometimes linked them, but coordination was limited.
Nevertheless, by 2001 TAR evolved to the point that four clear corridors had been developed and studied:
The Northern Corridor links Europe and the Pacific Ocean through Germany, Poland, Belarus, Russia, Kazakhstan, Mongolia, China, the Democratic People's Republic of Korea and the Republic of Korea.
The Southern Corridor goes from Turkey to Thailand through Iran, Pakistan, India, Bangladesh, Myanmar and Thailand, and includes links to China, Malaysia and Singapore.
The North-South Corridor would link Northern Europe to the Persian Gulf.
The Southeast Asian Corridor would link Kunming to Singapore.
In November 2006, 18 countries signed the Trans-Asian Railway Network Agreement, which covered some 81,000 km of railways. By the time the agreement took effect, in June 2009, a further 11 countries signed up and the network swelled to 117,000 km. Since then, 16 countries have officially ratified or accepted the deal.
"The development of the Trans-Asian Railway is not time-bound. It is evolutionary by nature and in this respect follows policy options of governments as well as the worldwide economic environment," the UN commission's Chartier said.
Despite official commitment and national railway development, progress has been spotty. The Northern Corridor across China and Russia has operated for decades, linking China with Europe. In Southeast Asia, however, things have moved at a slower pace.
Last October, Chartier noted a lot of missing links. There are no actual rail connections between China and Laos or China and Myanmar. Thailand, Myanmar and Cambodia are not linked; neither are Cambodia with Vietnam, or Vietnam with Laos.
Over the next few years, much of the building activity will be focused in this region, in particular the Mekong subregion.
Surprisingly, the financial crisis of 2008 sped up the network's development, unlike the 1997 crisis when many governments abandoned projects. Collaboration among China, Laos, Myanmar and Thailand demonstrates what Chartier called "the mobilization of governments on projects with multilateral dimensions".
China is a big driver behind much of the building. Not only is the government making massive investments in its own railways, but it is also financing those in other countries. It is likely to provide up to 70 percent of the investment in the link that will go through Laos.
While TAR is an overarching agreement, regional and bilateral deals are pushing the actual construction. One such agreement among the six countries in the Greater Mekong Subregion should lead to further railway integration. China has also signed a deal for the Kunming-Singapore link.
Malaysia started building its own section of TAR in 1995. In March 2009, Thailand and Laos launched a rail link.
--Closing gaps
Despite the progress, holes remain.
One is in Myanmar. At the end of May, Chinese workers and engineers started work on a line that would link Kunming to the Myanmar border, but then there is a 160-km gap on the Myanmar side. Also, the two lines operate on different gauges.
In Vietnam, China Railway Construction workers are expected to complete the link between Loc Ninh and Ho Chi Minh City by 2013.
In Cambodia, serious train travel restarted a year ago, when the first stretch of rail between Phnom Penh and Touk Meas opened. The 254-km line from Phnom Penh to the port of Sihanoukville opened this year. Other work continues.
After decades of bamboo trains, a functioning railway network is beginning to emerge, linking Cambodia to the rest of Asia and much of the world.
As good as it sounds, let me just say that when you have so many countries and governments involved, grand plans like these, supposing they indeed come to fruition, take a very, very long time to materialise. The article itself gives some clue to that.
(12-10-2011, 01:27 PM)kazukirai Wrote: As good as it sounds, let me just say that when you have so many countries and governments involved, grand plans like these, supposing they indeed come to fruition, take a very, very long time to materialise. The article itself gives some clue to that.
Although I would love to travel around SEA and north asia by train, I would not even want to bet a single cent that we would see that in a decade.
It is a pity since train transport is likely to reduce the cost of transportation of goods among the countries.
This is their national project that will take many years and take a lot of money. Regardless of many obstacles that may come how many accidents that will happen they will push until it's completed. national pride and much face is at stake ok.
This is a nice little history article about the Great Leap Forward (wikipedia) If any of you happen to have any doubts about their determination or sacrifices that they have been known to make just to achieve their national dreams.
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