Maybe. Depends on if you agree/disagree with the wider market on the inherent problems with BABA and more specifically the relative insecurity/danger of Chinese government intervention.
I previously held BABA. I exited at roughly break-even. Furthermore, I won't re-enter for the same reason I exited, the Chinese government can and have ruined Chinese-born companies at the flick of a pen.
I think BABA has a good business. If the Chinese government leaves it alone it would be a great investment, but the more influential BABA is the less likely that seems.
PS - Plus do the risks and gains actually balance? The risk could be as much as your entire investment, and the returns are far lower than that.
> Xi Jinping’s campaign against private enterprise, it is increasingly clear, is far more ambitious than meets the eye.
> The Chinese President is not just trying to rein in a few big tech and other companies and show who is boss in China.
> He is trying to roll back China’s decadeslong evolution toward Western-style capitalism and put the country on a different path entirely, a close examination of Mr. Xi’s writings and his discussions with party officials, and interviews with people involved in policy making, show.
> For most of the 40 years after Deng Xiaoping first unleashed economic reforms in China, Communist Party leaders gave market forces wider room to flourish. That opening helped lift hundreds of millions of people out of poverty and created trillions of dollars in wealth, but also led to rampant corruption and eroded the ideological basis for continued Communist rule.
> In Mr. Xi’s opinion, private capital now has been allowed to run amok, menacing the party’s legitimacy, officials familiar with his priorities say. The Wall Street Journal examination shows he is trying forcefully to get China back to the vision of Mao Zedong, who saw capitalism as a transitory phase on the road to socialism.
> Mr. Xi isn’t planning to eradicate market forces, the Journal examination indicates. But he appears to want a state in which the party does more to steer flows of money, sets tighter parameters for entrepreneurs and investors and their ability to make profits, and exercises even more control over the economy than now. In essence, this suggests that he aims to rewrite the rules of business in what could someday be the world’s biggest economy.
Quality of life is the only meaningful metric. China's ultimate goal is to create bounded equality. Xi himself has implied their propensity has brought the country on a path they don't want and now they're trying to revert it back.
I used to think of Alibaba as the one legitimate Chinese company. Their product seems sound to me: we'll navigate the complex world of Chinese factory for you and take a cut off the top.
But apparently, most of their growth since IPO has come from mainland sales. Which seems to go against the narrative I just stated. Their Edgar SEC filings don't break out revenue as much as I would like. [0]
So are they a scam? The very opinionated Deep Throat IPO seems to think so. [1]
The unexpected $15.5 billion in spending on Xi Jinping's "common prosperity" initiatives was unsettling. It was only 10% of their net income for 2020, so not terrible as a one-time hit, but really drove home for me that the government might unexpectedly expropriate large amounts of shareholder value in the future. Baidu, Tencent, and others also had to pay up.
There may be some policies/actions from the Chinese government I don't like but certainly not that one, I think it's laudable to take measures to shrink the gap between rich and poor and raise the standard of living for everyone before having some tiny percentage of the population living like kings.
In many western countries this divide is increasing and it doesn't look like it's stopping anytime soon unless measures are taken.
As an example, in the UK, where I live, the median yearly salary is roughly £31k, which means you take home about £2k each month. Start subtracting rent/mortgage, car/public transportation, bills, groceries, toiletries, and just stuff necessary for living and you won't be left with much for pleasure and entertainment, i.e., for living beyond surviving.
Which is btw why I find some HN users are sometimes in such a bubble when they make comments about how they despise ad-supported websites and would love for them to be paid instead; that's lacking empathy, not realising that soooo many people wouldn't be able to afford a system like that, or if they did they would have to give up a bunch of other things instead.
>that's lacking empathy, not realising that soooo many people wouldn't be able to afford a system like that, or if they did they would have to give up a bunch of other things instead.
I think this is a valid criticism, but I would like to note that there's a massive gap between what sites make off of me from ads vs. what they are requesting I pay to get rid of ads. So if there was truly a drop-in replacement for ads that came at the same cost as what the advertisers would otherwise be paying for my eyeballs, that'd be great. That's not the choice consumers are being given though.
Oh I definitely agree that is the case for certain sites, which will ask you for an outrageous fee and they may not even fully disable ads and/or tracking.
But even in the fair payment scenario you're suggesting, how many people do you reckon would be able to afford paying per whatever metric ,e.g., video watched, article read, MB downloaded, search queried, etc. for all/most sites they currently use like facebook, google, youtube, reddit, tiktok...? And how many would be willing?
On top of that, how would the Internet change as a result of that?
Imagine in this hypothetical new setting someone who wants to make a decision about what film/series to watch: currently they may check all of imdb, letterbox, metacritic, rottentomatoes, justwatch, etc.
Would they still do that if all those sites required some sort of payment (let's assume they may be different, some may require subscription, another charges per query... the point is they would all cost money to use)? I'm not so sure, and I don't think I'd like that Internet any more than the one we currently have.
>"There may be some policies/actions from the Chinese government I don't like but certainly not that one, I think it's laudable to take measures to shrink the gap between rich and poor and raise the standard of living for everyone before having some tiny percentage of the population living like kings."
That take on 'common prosperity' is very optimistic; most policy realists think that 'common prosperity' is just a tactical component of Jinping's strategy to centralize power in the central government (and Communist party).
You might be conflating justifying the ostensible purpose of a policy with justifying its likely effects, and perhaps justifying its means.
I think reducing inequality is great. But do you think Mr. Xi's initiative will meaningfully reduce inequality, or will it mostly be used to bolster Mr. Xi politically?
Do you have any worries about Mr. Xi keeping companies on a tight leash with the threat of regulatory hassles if they don't appease him? I think it is a mistake to view these coerced donations as independent from Mr. Xi curtailing the independence of tech companies. Mr. Xi views keeping party leadership over all forms of work in China as essential to the survival of his politically repressive regime (see a summary of "Xi_Jinping_Thought."). No doubt having the headline cause making the tech companies submit being reducing inequality is more politically palatable than, say, further crushing criticism of the government, although reduced corporate independence seems likely to lead to that too.
Most people in my life with a Phd choose to go by "Mr" as opposed to "Dr". All major news organizations I just checked, including Bloomberg, WSJ, and the BBC, call him "Mr. Xi" and not "Dr. Xi". Do you any evidence he chooses to go by "Dr" as opposed to "Mr"? Because otherwise, I am inclined to assume all the major news sources have it right.
But maybe I'm not really understand your point. Are you saying there is another English word that would better describe Xi than President, or that English should add one? Are you thinking "President" is insufficient to capture his power, and something like "Dictator" would be better? That has such negative consolidations that I would be hesitant to use it.
Xi has three titles: general secretary of the CCP, president of China, and another chairman title related to the military (chairman of the CCP is reserved for Mao). The presidency is mainly a ceremonial one that used to be a separate role, most of his power stems from being general secretary of the communist party, so that’s what they use in the Chinese press. Because the Chinese know this wouldn’t translate well into the west, they use the Presidency title in their English press oriented toward foreigners.
I think the initiative will serve both to reduce inequality and bolster Xi; to what degree each is yet to be seen, I can only speculate.
I do understand (and agree) with the fact that chances are Xi is not doing this out of the goodness of his heart but mostly due to self-interest to strengthen his position.
However, if we separate the person from the action I still believe this measure will potentially benefit more people than it hurts and is in my opinion a positive one. Companies should always come second to people, and not just when it comes to monetary policies, but also environmental, etc.
It's not always directly pointed out but I think quite a few people would like a system that is either/or. Either I pay you a reasonable amount to not show me ads or you give me the product for free and serve up ads. Similar to how some mobile apps and games have an in app purchase option to disable ads.
A better way to look at this is that the risk presented by the Chinese government to Alibaba has increased, so that has to be discounted against future cash flow. The market cap reflects an increase in external risks.
Xi's reforms are not just a flash in the pan or motivated by his desire to reign in some rogue companies, it seems like there is a fundamental shift in policy - moving away from free wheeling capitalism which has lifted millions out of property but has also come at a huge cost - loss of cultural and family values and corruption. Xi wants to re-align with socialist values, which is a good sign for the country. But, it remains to be seen how he can successfully maneuver the country in that direction.
The Cultural Revolution was partly about promoting a "loss of cultural and family values" (reporting your parents etc.), so that the state could have more control. The CCP has always been corrupt, and its leaders have always wanted more control.
36 comments
[ 2.7 ms ] story [ 92.7 ms ] threadhttp://catb.org/jargon/html/story-of-mel.html
thats prob closer to euphoria.
But Alibaba got really hammered down ( the stock ). No position for me but I follow the Company
I previously held BABA. I exited at roughly break-even. Furthermore, I won't re-enter for the same reason I exited, the Chinese government can and have ruined Chinese-born companies at the flick of a pen.
I think BABA has a good business. If the Chinese government leaves it alone it would be a great investment, but the more influential BABA is the less likely that seems.
PS - Plus do the risks and gains actually balance? The risk could be as much as your entire investment, and the returns are far lower than that.
You don’t really own any of the operating corp if you buy its shares, so you have both regulatory risk and contract default risk with ??? recourse.
https://www.wsj.com/articles/u-s-and-chinese-regulators-are-...
https://en.m.wikipedia.org/wiki/Variable_interest_entity
https://www.wsj.com/amp/articles/xi-jinping-aims-to-rein-in-...
https://archive.vn/DRIDr
> Xi Jinping’s campaign against private enterprise, it is increasingly clear, is far more ambitious than meets the eye.
> The Chinese President is not just trying to rein in a few big tech and other companies and show who is boss in China.
> He is trying to roll back China’s decadeslong evolution toward Western-style capitalism and put the country on a different path entirely, a close examination of Mr. Xi’s writings and his discussions with party officials, and interviews with people involved in policy making, show.
> For most of the 40 years after Deng Xiaoping first unleashed economic reforms in China, Communist Party leaders gave market forces wider room to flourish. That opening helped lift hundreds of millions of people out of poverty and created trillions of dollars in wealth, but also led to rampant corruption and eroded the ideological basis for continued Communist rule.
> In Mr. Xi’s opinion, private capital now has been allowed to run amok, menacing the party’s legitimacy, officials familiar with his priorities say. The Wall Street Journal examination shows he is trying forcefully to get China back to the vision of Mao Zedong, who saw capitalism as a transitory phase on the road to socialism.
> Mr. Xi isn’t planning to eradicate market forces, the Journal examination indicates. But he appears to want a state in which the party does more to steer flows of money, sets tighter parameters for entrepreneurs and investors and their ability to make profits, and exercises even more control over the economy than now. In essence, this suggests that he aims to rewrite the rules of business in what could someday be the world’s biggest economy.
But apparently, most of their growth since IPO has come from mainland sales. Which seems to go against the narrative I just stated. Their Edgar SEC filings don't break out revenue as much as I would like. [0]
So are they a scam? The very opinionated Deep Throat IPO seems to think so. [1]
[0]: https://otp.investis.com/clients/us/alibaba/SEC/sec-show.asp...
[1]: http://www.deepthroatipo.com/alibaba-december-quarter-2020-r...
In many western countries this divide is increasing and it doesn't look like it's stopping anytime soon unless measures are taken.
As an example, in the UK, where I live, the median yearly salary is roughly £31k, which means you take home about £2k each month. Start subtracting rent/mortgage, car/public transportation, bills, groceries, toiletries, and just stuff necessary for living and you won't be left with much for pleasure and entertainment, i.e., for living beyond surviving.
Which is btw why I find some HN users are sometimes in such a bubble when they make comments about how they despise ad-supported websites and would love for them to be paid instead; that's lacking empathy, not realising that soooo many people wouldn't be able to afford a system like that, or if they did they would have to give up a bunch of other things instead.
I think this is a valid criticism, but I would like to note that there's a massive gap between what sites make off of me from ads vs. what they are requesting I pay to get rid of ads. So if there was truly a drop-in replacement for ads that came at the same cost as what the advertisers would otherwise be paying for my eyeballs, that'd be great. That's not the choice consumers are being given though.
But even in the fair payment scenario you're suggesting, how many people do you reckon would be able to afford paying per whatever metric ,e.g., video watched, article read, MB downloaded, search queried, etc. for all/most sites they currently use like facebook, google, youtube, reddit, tiktok...? And how many would be willing?
On top of that, how would the Internet change as a result of that? Imagine in this hypothetical new setting someone who wants to make a decision about what film/series to watch: currently they may check all of imdb, letterbox, metacritic, rottentomatoes, justwatch, etc. Would they still do that if all those sites required some sort of payment (let's assume they may be different, some may require subscription, another charges per query... the point is they would all cost money to use)? I'm not so sure, and I don't think I'd like that Internet any more than the one we currently have.
That take on 'common prosperity' is very optimistic; most policy realists think that 'common prosperity' is just a tactical component of Jinping's strategy to centralize power in the central government (and Communist party).
I think reducing inequality is great. But do you think Mr. Xi's initiative will meaningfully reduce inequality, or will it mostly be used to bolster Mr. Xi politically?
Do you have any worries about Mr. Xi keeping companies on a tight leash with the threat of regulatory hassles if they don't appease him? I think it is a mistake to view these coerced donations as independent from Mr. Xi curtailing the independence of tech companies. Mr. Xi views keeping party leadership over all forms of work in China as essential to the survival of his politically repressive regime (see a summary of "Xi_Jinping_Thought."). No doubt having the headline cause making the tech companies submit being reducing inequality is more politically palatable than, say, further crushing criticism of the government, although reduced corporate independence seems likely to lead to that too.
[Hint: the Chinese language has a word for President - which they use for Biden, Macron, etc. They don't use it for Xi].
But maybe I'm not really understand your point. Are you saying there is another English word that would better describe Xi than President, or that English should add one? Are you thinking "President" is insufficient to capture his power, and something like "Dictator" would be better? That has such negative consolidations that I would be hesitant to use it.
Yip, mainstream media gets it wrong. :)
Here you go: https://qz.com/1112638/xi-jinping-title-xi-jinping-is-not-th...
But yeah, its not a big point to squabble over.
I do understand (and agree) with the fact that chances are Xi is not doing this out of the goodness of his heart but mostly due to self-interest to strengthen his position. However, if we separate the person from the action I still believe this measure will potentially benefit more people than it hurts and is in my opinion a positive one. Companies should always come second to people, and not just when it comes to monetary policies, but also environmental, etc.