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Is the lanai available? Preferably something with a view of the ocean. Is room service available 24 hours?
How did a spambot get in here?
I think it is Kwan or Kwon. Kwok is a different person. Don't know about makeup of the board.
hrct bull - There is one additional factor in the SA IPO that hasn't had much discussion. The Kwon brothers own 50% and the IPO cannot go forward without their ok. If the IPO was at one time projected to raise an amount significantly greater than would be possible at the moment, is it not possible that they are the reason that it is being held up? There are probably a number of factors at work here but they would all have a bearing on the Kwon brothers decision process also.
500 - While you didn't address the question to me I do have a comment on it....
HRCT is unusual in that if a shareholder sends a query in an email, one of them is likely to answer them directly rather than respond with a boilerplate answer. The message that was sent to a number of people (at least 10 that I know of) wasn't really much and only stated that they were in negotations which may or may not pan out. That isn't exactly material information. They are in negotations much of the time. You are correct in saying that anyone could make something up and say they just got a message but in this case several individuals received it independantly and of course you always have the option of verifying it directly with one of the people at HRCT. Good point though and the HRCT people should take it under consideration in the future.
While they don't pertain directly to HRCT, I believe the rules of discussion on the board are on topic to the extent that they do or do not allow an open forum. I don't really have any problems with the way the board has been run to this point so I'll leave the subject alone from here on out. I appreciate the offer to be a director but that would be inhibiting to me so I should probably just remain one of the many voices in the woods.
My only concern with a moderated board is that dissent will be filtered out. A serious investor should look at all information about a company, both positive and negative. Of course it is necessary to determine if the information is factual and relevant but that is an investor's responsibility. I do agree that the worthless, unsubstantiated posts just clutter a board without adding any value but opinions evalauting the available information can be useful even if I don't agree with them. The crap on RB comes from both sides of the aisle.
The know-nothings have already started to tear apart Dr. Phan's words by taking them out of context. (The Witless poster on RB for example) My intention was just to moderate everyone from taking the message and jumping to conclusions about imminent news. Hopefully that will be the case but Dr. Phan made it clear that he could not guarantee how these particular negotations would turn out. On the other hand he indicated that HRCT had other options they would pursue if this first one was unsuccessful.
MBR - I don't think any deals fell through due to release of information but the release prior to completion of projects set up unrealistic expectations on the part of shareholders. Dr. Phan is understandably enthusiastic about the projects he is working on and wants to share them with us. Unfortunately everyone takes everything he says as a completed deal and is unhappy when some of them fall through. I do agree that at this point HRCT shouldn't release anything until it is complete.
MisterEC - I don't know what "quiet period" you are referring to. The "news blackout" referred to in the email is just a self-imposed one by HRCT to explain why they are not answering questions on the status of certain projects. The part of the email I posted was a response by Dr. Phan to another poster who had emailed him with a question. The balance of the email was on another subject unreleated to HRCT business. Dr. Phan sent the email response to him and added the email addresses of several others who had made inquiries (including myself). I assume he did this to avoid having to take the time to respond to each of us individually.
I don't think HRCT is not communicating with investors; they just don't want to fuel speculation on things that may not come to pass. I'm sure that they would discuss things unrelated to potential IPO activity or mergers of subsidiaries.
hrct_bull - I think they have realized the error in releasing information on things they have in the works and expect to be completed. Things don't always work out and that has hurt the company in the past by raising expectations. I think they have decided to wait until a project or negotation is in the bag, signed, sealed and delivered. This method seems like a good idea to me. No promises or hype, just a note that they are working on some solutions and they will announce them if and when they are completed.
hrct_bull - The following is a cut and paste from the original email. It is the third and final paragraaph - the first two are unrelated.
Meanwhile, just want to let you know that we have a
2-week news blackout, as we are in a very sensitive
phase of negotiation with a major capital group. I
don't know what the outcome will be, so we have to
keep our mouth shut. Nevertheless, we are also ready
with other options.
Actually it says that he doesn't know what the outcome of the negotiations will be and makes no mention of important news being announced.
MisterEC - The blackout is self-imposed and not related to any IPO "quiet period." HRCT is negotationing for a specific solution and cannot say at this time whether or not these negotations will be fruitful. They have opened several other avenues if this particular one does not work out. Raising capital is always an ongoing process and HRCT just wanted stockholders to know that even if we don't hear any immediate news that they have not folded the tent and gone for a walk on the beach.
I can.
shovel - As you stated, HRCT is looking at alternate solutions. I recently posted information on RB regarding other IPOs that have been pulled primarily because they couldn't get full subscription for the offered shares. If Yuanta couldn't get the IPO subscribed then they weren't going to go forward with it. It isn't a matter of GEM approval. If the money isn't there then they can't take the chance that it would fall on its butt and go in the toilet the first day. Soooo.... HRCT has to look at other avenues to accomplish its goals. HRCT's share price doesn't affect what is being considered for StreamingAsia as much as it does the merger for SinoBull.
I have no explanation.
There is a lot more internal wrnagling going on than most are aware of. Dr. Phan is aware of the need to IPO SA whether it is a good time to do so or not just to establish credibility. Yuanta would like to wait a while for a more positive trend in the markets. A variety of large shareholders have made their opinions clear and those range all over the board from doing the IPO immediately to waiting until fall. From what I gather HRCT management (except Dr. Phan) is stalling just a little in the hope that the markets will start to turn in the very near future. The SA IPO is ready to go.... it is just a matter of timing and agreement. The recent addition of an outside director with excellent credentials was the last important step.
I do agree that hammering someone who decides to sell is pointless. They may have a personal need for funds or have just decided that they would prefer to put the capital elsewhere. If several insiders begin selling then it is a signal for an investor to take a critical look at the company and evaluate their position. We can only look at insiders since they are required to file. Outsiders.... well we get a lot of posts about someone buying or selling but, of course, have no way to verify their accuracy or even if true, whether or not that poster has any coherent knowledge of what they are doing. Over the past couple of years I have noticed that some posters tend to be a little erratic - lol.
EZ - You can remove your football any time you like but I would have to disagree on the point that the sale of large amounts of restricted shares is not directly related to someone's investment in HRCT. I use insider trading in many stocks as an indicator on what management and those who have inside connections think of the prospects of the company. It is one thing to make statements about the company's prospects, but actually buying or selling the stock means much more since it is a vote with their pocketbook. Unlike trades by average investors which cannot be verified, trading in restricted shares requires a filing with the SEC for all to see and directly impacts everyone's investment.
MsAllorNone - I guess your post is why this board was created. When you post an obviously false statement that anyone can verify, you are just bashing with false information. As you well know, most of Mark's shares are restricted and if he was to sell them a 144 would have to be filed and at this point it hasn't been. He does own some unrestricted shares (a small portion of his total) that he can sell without filing. It is pretty much a waste of time to post on RB when the bashers who post false information are posting 20 times in a row in an attempt to trash the board. Even though I have them on ignore I still get the message that there are 140 new posts since the last time I read any and when I call up the message list I see that there are less than 20 actual posts. The rest of the missing are all posted by one or more of the 8 people I have on ignore. A sad commentary since the purpose of message boards is dialogue and what is going on there certainly isn't that. 80% of the posts are made by spambots (basher or pumper it doesn't make much difference) that have no interest in any type of discussion.
(OT) hansro - This type of game has been going on for a long time between various countries. US fighters used to "shadow" soviet bombers on a regular basis as theirs did ours. The fighter pilots typically would fly very close to the target plane and harass them; actually close enough that they used to give each other the finger. The Chinese pilots statement that they were 400 meters away from the E-3 when it turned and collided with one of them is ludicrious. 400 meters is over 1200 feet and if they were that far away a collision would never have happened. I suspect that the F8 pilot was coming up from underneath and behind in a manuver designed to scare the E-3 pilot and cause the E-3 to fly through his backwash. The F8 isn't much as fighters go but is much faster and more manuverable than a propellor driven patrol aircraft. The E-3 pilot probably didn't realize that he was that close as the F8 would have been in a blind spot. These situations, if they don't escalate, have a habit of passing fairly quickly once resolved. China and the US have many reasons to work together and not let incidents like this have a lasting effect. This has more to do with the internal struggles within China than it does with the incident in question.
After the Showdown
The Stakes: It all seemed familiar—a dogfight and a diplomatic dance. No, this isn't the cold war; it's different, but still dangerous. Why Americans need to worry more about Beijing's weakness than its strength
By Fareed Zakaria
Newsweek International
April 16 issue — Two years ago a pro-Beijing Hong Kong daily interviewed Chinese pilots who had begun "buzzing" American surveillance planes as they flew over the China Sea. The paper gushed that the way in which the pilots hassled the U.S. planes demonstrated "consummate flying skills and the wisdom of being bold but cautious." Whether or not that odd, almost oxymoronic, phrase can be applied to the Chinese pilot who collided with the U.S. Navy EP-3E last week, it accurately sums up the way that both sides have dealt with each other in the days that followed—bold but cautious. At the start, Beijing and Washington quickly and forcefully asserted their interests in muscular language. But once they recognized that the situation could get out of hand, both sides began climbing down from their rhetorical ledges. The Americans, having at first refused to apologize in any form, soon became willing to express "regret." The Chinese began by demanding a formal apology, but two days later President Jiang Zemin explained that what he wanted was more akin to a simple "excuse me." Those shifts, plus a few more diplomatic bells and whistles, have eased tensions. But those first few days of the crisis had a strangely familiar air. There was a sense that events could spiral out of control; that both sides desperately feared losing face; that diplomats would have to parse phrases and evoke obscure treaties. For a moment it seemed as if we were back in the cold war.
OF COURSE WE ARE NOT and China is not the old Soviet Union. It has neither the material capacity nor the ideological appeal to be a global rival to America. To state the obvious but often obscured fact: China is a Third World country. It has a per capita GDP of about $3,800—well below Mexico's—and spends less than 15 percent of the Pentagon's annual budget on its armed forces. Nor does the Middle Kingdom have the ideological appeal of the old Soviet Union. Nowhere on the planet is China the model for the future—not even in China, which is busily becoming a quasi-capitalist society.
‘I Hope It’s Over Soon’
A DANGEROUS WEAKNESS
The danger China poses to the United States is not one of booming strength but rather of weakness—both of the country and of its regime. Unfortunately, that's not going to make it any easier to maintain peace in East Asia.
China is going through a massive, painful transition from an agrarian to an industrial society (and from the lunacy of Maoism to the market). In recent years this has produced huge social stresses and strains as state-owned enterprises collapse in the northern rust belt, law and order unravels in the countryside and corruption accompanies primitive capitalism in the cities.
More troublesome for Beijing is the slow erosion of the ideology that gave it legitimacy. The regime has filled the vacuum left by Marxism in part by competent management. Chinese living standards have risen continuously for the last quarter century and most Chinese credit their government for this remarkable change. But equally, the regime has cultivated the image of being the fierce protector of China's sovereignty. This sort of nationalism rarely exists in the abstract and in China it has come to mean one thing more than any other—standing up to the United States. Thus we see that with the Communist Party in the midst of a leadership succession, none of its potential leaders wants to look soft. This is a problem that will not pass. The regime's vulnerability has made it encourage, or at least embrace ugly, anti-American forces it may not be able to control.
Economics and ideology aside, even in military terms China is fearful of its weakness. Ever since the gulf war—and then the Kosovo campaign—Beijing has been worried that it's old, rusting armed forces and a strategy that relied on quantity not quality (in men and arms) were no match for America's laser-guided weapons and stealth warfare. Even worse, they might not even be a match for Taiwan's high-tech forces. Over the last few years the politics of the region have, from Beijing's standpoint, gotten worse. Taiwan has grown bolder in its dealings with the mainland and the United States seems more willing to come to the island's assistance. So China has begun a major military modernization and is studying low-tech methods of battling a high-tech army—what military planners call "asymmetric warfare." American planes hovering above, hugging the Chinese coast, always there to watch, listen and learn must represent a constant reminder of America's overwhelming superiority.
NOT REALLY A THREAT?
So do these weaknesses suggest that China is really not a threat? No. It suggests that China is really not stable. It is being run by an aging regime that is trying simultaneously to modernize its vast country, gain influence in the world and preserve its own power. Besides, weak powers have often proved just as troublesome as strong ones. In an important essay in the spring issue of International Security, MIT's Thomas Christensen points out that Japan attacked Pearl Harbor fully aware that it was going up against a much stronger adversary and was starting a war it knew it would probably lose. China itself entered the Korean War, hoping that a quick strike at an advantageous moment would make up for the fact that American forces were superior to its own. Christensen's extensive interviews with Chinese strategists and analysts suggest that many in Beijing believe a confrontation with America over Taiwan is inevitable—even though these analysts recognize that China may not win that war. For them, the costs of inaction appear greater than the risks of action.
The greatest problem for America over the next few years is that the communist regime in Beijing will look around and see growing social unrest, the rise of a middle class, the Internet and satellite television, Falun Gong, America's relentless technological edge, Taiwan's growing assertiveness and conclude that it has to do something because time is not on its side. The fact that it is right is precisely what makes the situation so dangerous.
(OT) kiel - Now that is funny. All industrialized countries keep an eye on each other. The Chinese have extensive intelligence networks around the world. They have electronic eavesdropping devices on the roof of their embassy in Washington DC that they use to gather intelligence on the US. Even Germany spends a lot of effort keeping an eye on Russia. Hardly anything to apologize for. It is just the high tech equivilant of using a pair of binoculars to keep an eye out for your interests. You would have to be very naive as a country to think that other countries will not be observing your activities. Maybe if China doesn't like being watched they would consider not engaging in the same activity themselves.
(OT) kiel - The US has said that they regretted the loss of the pilots life. The US was not responsible for the situation. Now it is time for China to apologize for causing the collision.
(OT) Inexperience? Powell and Cheney hardly fall into that catagory. You are letting your politcal bias cloud your reasoning. Even though they are not wrong, you suggest that they dig around for something they can apologize for - lol. China's posture in foreign relations can be termed "pugnacious" at best and if they had more miltary capability it would probably be worse.
(OT) hansro - I will concede the airspace violation on landing but I think there are agreements in place to cover emergencies and the alternative to landing was crashing into the sea. I understand that they don't like the surveillance but we don't like their intelligence activities within the US. An unarmed surveillance aircraft isn't exactly a threatening posture, it is mostly irritating. Capitulating to demands from someone who is in the wrong isn't always good politics. Witness England's pre WWII posture toward Germany. Powell gave them a way to save face with the statement of regret and they didn't want to take it.
(OT) All China needed to do was apologize for crashing into our plane.... They created this situation and should find their own way out of it. Maybe if Clinton hadn't bombed their embassy they wouldn't be so touchy now.
(OT) hansro - I don't follow your reasoning. You state that we were in International airspace but think that we should apologize for being in sombody else's airspace? I don't think so. The Chinese have had a massive ongoing intelligence gathering operation going on over here for decades... a little late for them to be offended by the US engaging in offshore intelligence gathering activities. This is always a problem with countries where the miltiary is more powerful than the civilian authorities. This is more about an internal political ploy within China than it is about us.
Maybe China should be sending an apology to the US for sending those fighters up to fly within 50 feet of the E-3. You can bet that the E-3 wasn't chasing the Migs.
Breaking Through the Great Wall: Doing Business with the Chinese
From Knowledge@Wharton
Interested in a market that constitutes one-fifth of all the people in the world? Consider China. Many Western companies already have, as the country's burgeoning economic growth tempts more and more executives to try to navigate the complexities of Chinese business and culture.
Ming-Jer Chen, founder/director of Wharton's Global Chinese Business Initiative and author of a new book entitled Inside Chinese Business: A Guide for Managers Worldwide (Harvard Business School Press, April 2001), recently talked with Knowledge@Wharton about the business climate that exists today in China and in Chinese communities throughout different parts of the world. He began by offering the following statistics and predictions:
According to the most recent EIU (Economic Intelligence Unit) report, foreign investment in China amounts to $56.7 billion, a figure surpassed only by foreign investment in the U.S., the U.K. and Germany. The People's Republic of China attracts more foreign direct investment than any other developing country, with an average annual increase of over 15% a year during the 1990s.
Last year, Western companies purchased $35.6 billion worth of products from Taiwan alone. Compaq, Dell, Hewlett-Packard and IBM together accounted for $22 billion of that total.
During 1990-1996, the number of multinational companies in Shanghai increased from 300 to 16,000. More than half of Fortune 500 companies have operations there.
E-commerce is on the rise in China. According to a report from Andersen Consulting, Chinese will become the number one web language by 2007. Other promising industries include high-tech and high-tech magazines, consumer products and some media sectors.
China's entry into the World Trade Organization is now in final negotiations. The move will potentially expand Western business opportunities and help globally integrate China in terms of its reporting system.
Yet Chen says that not all is full steam ahead. He highlights the fact that doing business with the Chinese is, and always has been, a struggle for Western executives, which in turn creates a major barrier for companies hoping to profit from this huge new market. In working extensively with both Chinese and Western managers, Chen has found that "a large and diverse group of professionals feels there's a profound misunderstanding of Chinese business on the part of the West, stemming mainly from a lack of cultural knowledge." (The misunderstanding runs so deep, Chen says, that he considered titling his book "The Baffling Chinese.")
How can non-Chinese managers understand the often puzzling (to them) behavioral characteristics of Chinese businesspeople? Chen believes they need to familiarize themselves at least in part with the social and cultural values of the ethnic Chinese. These values, he asserts, form the basis for Chinese business practices, even pervading day-to-day corporate decisions.
"The Chinese company is not just an economic entity. It's a socio-economic combination. For instance, in the case of overseas Chinese, many businesses are family businesses. Families' agendas and goals are involved, a situation that often leaves Westerners feeling frustrated and confused about what is going on. Even public companies frequently have their own social networks, which play an important role in the decision-making process. To complicate things even more, in the PRC the majority of companies are still state-owned, or even state-affiliated, so they have a different kind of decision-making and reporting process."
Chen holds that two of the most essential -- and most misunderstood -- aspects of Chinese commerce are the family business and the tradition of guanxi, or social networking.
To understand the family business, or rather, the business family (a more appropriate term because family is primary, says Chen,) one must realize that in Chinese culture the family is the basis for all organizations, from social clubs to political parties. It is the driving force behind all activities and decisions in business affairs. Chen identifies four components of the business family:
Family-directed operation: The business is headed by a patriarch or matriarch and run by the descendants. A complex network of companies is often cross-held to create intra-family dependencies. Organizational charts can be deceptive; an outsider may have trouble identifying where the power really lies.
Dominant family head: The head of the family makes all the important business decisions. This can be true even in companies that appear "Western," with high global diversity and formal boards.
Enduring family obligations: Heirs feel profound responsibility and respect for their family and its business tradition. When assets are passed on, they are usually divided equally among the sons. (It is an indication of just how tradition-steeped Chinese business dealings can be that in spring 2000, the heads of the PRC's four leading enterprises all announced their intention to pass on their businesses to their sons.)
Family-financed, family-accountable corporation: Chinese businesses do not rely heavily on external institutions such as banks. This can be an asset since it makes them less vulnerable to political and economic upheaval, and lets them operate seamlessly across borders.
Chen lists other fundamental differences between traditional Chinese and Western firms:
In the Chinese firm, the purpose is to serve the family's interests for long-term family prestige. In the Western firm, the purpose is usually to maximize stockholder wealth; focus is on short-run, bottom-line profits and changes in market value of stock.
The Chinese firm tends to keep financial data private. In the Western firm, audits of financial reports are required.
The Chinese company is not for sale due to obligations to extended family. The Western company is subject to mergers and acquisitions.
In the Chinese firm, managers are recruited from within the family. In the Western firm, managers are hired based on merit and attracted by salary.
In addition to the family-run company, the second essential principle to understand is guanxi, key to building successful business relationships with Chinese throughout the world. Guanxi, once described by the Economist as the chief asset of most Chinese companies, refers to a particular kind of social networking grounded in trust, mutual obligations and shared experiences. Chen believes that Western managers dealing with China can, and must, develop their own guanxi networks.
How does guanxi compare with common Western practices such as socializing with clients, taking them out to dinner and/or buying them holiday gifts? Chen characterizes it as all this and more, with some key differences. "In the West we start from business reasons," says Chen. "We take people out to dinner in order to discuss business. But in the Chinese context, you have to establish a social bond and a relationship before you can start talking about business.
"Another very strong element is reciprocity -- an exchange of favors and interactions. I take you out for dinner this time, you take me out next time. And very often it goes beyond just getting to know an individual. A business associate would get to know your family too, perhaps help them in some way, such as hosting them while they're visiting another city."
The Chinese "relationship-based mindset" that gives rise to guanxi colors even everyday conversations and interactions. Chen, having spent more than 20 years of his life in Taiwan and 20 in the U.S., and moving frequently between these worlds in his professional life, is deeply aware of this difference between East and West. "I can guarantee that if you meet someone new who is Chinese, within three sentences he or she will start saying, ‘Did you go to Wharton, did you go to Harvard, do you happen to know professor so-and-so, I know this or that professor.' To Westerners, it sounds like name-dropping. We talk more about our jobs, our interests and so forth. But to the Chinese, it's a helpful way to place you in the context of your social network and let you understand where they are in theirs."
Another communication issue with the potential to sour business deals is that "yes" and "no" do not mean in China exactly what they mean here. Chen explains: "‘Yes' most often means, ‘I hear you and I understand what you're saying.'" Unfortunately for Western executives, it does not necessarily mean, "I agree to what you want." Chen adds: "It took me 12 years to learn to use ‘yes' and ‘no' in this country in a Western context."
Chen discusses one other issue that creates serious frustration for many Western executives: corrupt practices in mainland China. A recent Chinese statistic indicates that approximately 16% of China's GDP is being lost through corruption.
This certainly poses a problem for Western firms, but it is also problematic for the Chinese, Chen says. As China prepares to enter the World Trade Organization (WTO), however, corrupt practices are meeting increasing resistance on at least two fronts: a government that wants to strengthen the country's economy and improve relations with the West; and a new generation of Chinese entrepreneurs and managers who want to establish the appropriate infrastructure necessary for an advanced economy. "At a minimum, entry into the WTO will bring increased transparency of financial data and more standardized business practices," he says.
The perception that many Chinese business practices border on corruption raises an additional issue that is perhaps more culturally grounded, Chen adds. "The exchange of presents, for example, that is at the heart of building and maintaining guanxi may qualify as bribery in the West, where corporate gifts must comply with certain regulations (for example, not exceeding $50 in value). As this difference illustrates, the perception of corruption is vitally different from the intention of corruption. Where the exchange of gifts is concerned, drawing the distinction between the two can be a sticky and highly challenging task."
Some general tips for successful negotiating offered by Chen include:
Cultivate continuing support from your corporate office, since the Chinese will view you in the context of your network or "family."
Use non-business opportunities to enhance intercultural ties.
Try to see adversity in a positive light. Even a failed negotiation can be a good investment for the future. Think beyond just getting the best possible deal for now; focus instead on building a relationship.
Don't show excessive emotion, especially not anger or frustration.
Be flexible, and as in most business situations, be prepared to compromise.
Chen asserts that an understanding of Chinese values and their impact on modern business conduct can be applied to varying degrees in mainland China, Taiwan, Hong Kong and wherever the roots of traditional Chinese social practices have remained. It can be useful within the U. S., too; Chen points out that 20% of Silicon Valley start-ups are Chinese-owned.
How different are business dealings overall among the PRC, Taiwan and Hong Kong? "That's my next book," Chen says with a smile, but adds that in Hong Kong -- which in many ways is the epitome of Westernization -- a surprising one-third of all agreements are still made orally, harking back to Chinese tradition. And in the PRC, although family influence was subsumed by the state for many decades, the family business is experiencing a resurgence.
Chen hopes that his book helps Westerners understand not only Chinese business dealings, but broader strategies for success in a global economy. "Businesspeople here tend to assume what works in this country works worldwide, that business is business and best practice is best practice, regardless of where they go. And they miss opportunities this way. They need to say to themselves, "We know we have a good product, good technology, a good business practice. If we also pay attention to this region's cultural, philosophical and organizational differences, we can sell our technologies and products much more effectively. It isn't that one or the other culture is better or superior."
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