China's Arrogant Big Institutions

2008/3/10 16:21:13

I originally wanted to write a lesson, but let me write about this first.

China's big institutions were quite meek N years ago. But thanks to their privileged pedigree, after a few years, they've all become incredibly cocky. Quite a few have made the Fortune Global 500, every one of them strutting around with green onions stuffed up their nostrils pretending to be elephants.

With that kind of environment and those kinds of resources, anyone with half a brain could have achieved the same. But these institutions have become inflated — they've stuck green onions up their noses and started parading around the world.

So how did that turn out? In the world's futures markets, who do they love seeing the most? Why, China's big institutions, of course! Everyone waits happily: "Look, here comes the money delivery guy again!" In the world's equity markets, who do they love seeing the most now? China's big institutions, of course! "Look, here comes the money burner again!"

It's truly hard to recall a single instance where these big institutions have done anything in global financial markets that could be considered a competent human act. A single lawyer sits at the command center of one of the world's largest companies — may I ask, sir, during your time at the Securities Committee and throughout the subsequent series of capital market activities, aside from talking big, have you ever actually operated any major market activity?

This market is built through action, not talk, and certainly not through reading.

This ID long ago gave these institutions the best possible advice: keep throwing your weight around domestically, and stop going out there to embarrass yourselves. Both in terms of talent and organizational structure, they are nothing but a laughable farce.

So this ID has always advocated: make China's own nest bigger, keep the meat rotting in our own pot. It's precisely because this ID has zero confidence in these institutions' competence. Going out to be cannon fodder? They'd be better off being turtles hiding in their shells. As long as the turtle's nest is big enough — the biggest in the world — so that every non-turtle in the world has to come here, then even a turtle hiding in its shell can become a Ninja Turtle.

Unfortunately, our institutions have gotten too used to being cocky. They actually want to pool domestic money to play their globalization games. This ID can predict with certainty: every one that goes out will die. In the financial sector, it's not like simple low-end manufacturing. Using the blood and sweat of the Chinese people to let them get their thrills and momentarily flaunt their so-called achievements — is that even possible?

This ID has always been unequivocally opposed to any attempt to funnel China's capital outward, from that pointless "Through Train" scheme to those laughable QDIIs. The facts have proven it: the Through Train has become a farce, and QDII has become a tragedy. Do we really want our big institutions to continue this buffoonery?

You certainly have the skills to climb the ladder, but your ability to operate capital in international markets won't improve just because you've stuck green onions up your nose. This is the reality of China's big institutions. Stop parading around the world with green onions in your nostrils — get back in the pen.