Finance and Strategy Inside China

148 Pages·2019·4.022 MB·English

by  Check-Teck Foo

The Chinese Management Book-of-Readings Series
Check-Teck Foo Editor
Finance and
Strategy Inside
China
The Chinese Management Book-of-Readings
Series
Series editor
Check-Teck Foo, Sun Tzu Art of War Institute, Singapore, Singapore
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Check-Teck Foo
Editor
Finance and Strategy Inside
China
Editor
Check-Teck Foo
Sun Tzu Art of War Institute
Singapore, Singapore
Fudan University
Shanghai, China
Hunan University
Changsha, China
ISSN 2520-1255 ISSN 2520-1263 (electronic)
The Chinese Management Book-of-Readings Series
ISBN 978-981-13-2840-4 ISBN 978-981-13-2841-1 (eBook)
https://doi.org/10.1007/978-981-13-2841-1
Library of Congress Control Number: 2018968121
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Contents
1 Currency at War: A Longer View . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Check-Teck Foo
2 Forecasting, Yi Ching and San Bian Shu: A Chinese Approach
for Gaining Foresight – An Interview of Jason Tan Beng Siang . . . . . 15
Check-Teck Foo
3 Sustainability Reporting: Case of a University in Beijing. . . . . . . . . . 27
Xinsheng Duan and Check-Teck Foo
4 Wanted: A New, Chinese Paradigm in Finance . . . . . . . . . . . . . . . . . . 37
K. Kishan
5 Real Estate and Inflation in China . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Siew Peng Lee and Mansor Isa
6 Managing Trade Secret Legal Risks
for Food Company in China. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Shi Yong Song
7 Company Secretaries in Chinese Board of Directors . . . . . . . . . . . . . 77
Liu Guang-you and Wang Xiao-hui
8 Determinants of Capital Market Integration:
The Case of ASEAN and Implications to China . . . . . . . . . . . . . . . . . 91
Ignatius Roni Setyawan and Buddi Wibowo
9 Modelling the Dao of Sun Tzu for Business . . . . . . . . . . . . . . . . . . . . . 113
Seow Wah Sheh
10 China’s Shadow Banking: Dynamics of Policy and Economy . . . . . . 131
Tianyue Lu and Wee-Yeap Lau
v
Chapter 1
Currency at War: A Longer View
Check-Teck Foo
Abstract In this chapter, the author highlights what he perceives as the world that
is at edges of different systemic changes. These changes may be seen more interest-
ingly from a metaphorical perspective. That is through the mirroring of the currency
that is “at war.” That is the case of Ren-min-bi vis-à-vis the other currencies of dollar
and euro. Intriguingly, the world has just taken cognition of Ren-min-bi by incorpo-
rating the currency as a global reserve currency.
If weighting may be taken as any indicator, Ren-min-bi by its heavier weight-age
(10.92%) had triumphed over both the pound and the yen. The symbol of 100 Ren-
min- bi reflects one man’s vision, that of Mao Zedong to transform mankind—not
just China—toward his vision of a world that is more equal than in his old days.
Paradoxically, the election of Trump as President reflects too this American deep
sense of social inequality.
Such a social symbolism is explored here. The world is perceived by the author
as being at the edges of different facets of intertwining, systemic changes. Our focus
here is of the world on the edge of entering the era of Trump with multifaceted rami-
fications for the Ren-min-bi. Here, presumptions are made by Trump generating the
necessary centrifugal forces to re-center economic activities in the USA such as the
goal of “American First” policy, creating some 25 million jobs in the USA, infra-
structural renovation and de-globalizing US businesses.
It is argued here that such tendencies will only reinforce the momentum of Ren-
min- bi in taking over the dollar as the global currency. In any case, US dollar as a
fiat currency is simply unsustainable. Ren-min-bi as backed by gold is rationally a
much safer and better choice. Then there is the euro, here the argument is with
Paper presented at 2016 China Financial Markets Conference at University of Malaya, organized
by University of Malaya and Sun Tzu Institute on 14–15 December.
C.-T. Foo (*)
Sun Tzu Art of War Institute, Singapore, Singapore
Fudan University, Shanghai, China
Hunan University, Changsha, China
© Springer Nature Singapore Pte Ltd. 2019 1
C.-T. Foo (ed.), Finance and Strategy Inside China, The Chinese Management
Book-of-Readings Series, https://doi.org/10.1007/978-981-13-2841-1_1
2 C.-T. Foo
Fig. 1.1 Opening line in
Romance of Three
Kingdoms
BREXIT, now seen as rational rather absurd, the floodgate may open. This may lead
to an underlying de-integral dynamic: say Italy, France may slip out. If so, euro will
dwindle, leaving Ren-min-bi victorious being the currency-at-war.
1 Introduction
I highlighted in the keynote lecture on Wednesday, December 14th during
Conference held at University of Malaya of a phenomenon that seems to making its
round across the world. The latest being Brexit, but one may recall back in 1990
how USSR collapsed and then broke up into pieces. If you are familiar with the
historical novel, Romance of Three Kingdom, you will remember it opened in the
first line on this very point, the dynamic of change among states. If I may translate
it as follows (Fig. 1.1):
Trend of the world,
Long separate, will merge
Long merged, will separate
Why is this novel so significant? Besides being one of the four major Chinese
classical novels — necessary reading for those keen on Chinese culture and think-
ing — it is studied by young Mao Zedong: he attributed the novel for shaping of his
military, strategic thinking. Unlike those who led armies in China’s civil wars, he
attended no military college.
This line reflected twentieth-century political reality. In the past, at least before
1990, the trend had been one of merging and consolidation, as in the case of
European Union (EU). Now the reverse seems to be the case. Since finance had
become so mathematically oriented, out of curiosity I looked up on the mathemati-
cal literature. The theory, measurement, and mathematics on the integral are well-
developed but not for de-integral1 (Fig. 1.2).
1 De-integral to differentiate from disintegration as associated with disintegration theorem or mea-
sures as applied to three-dimensional space: http://www.math.tifr.res.in/~publ/ln/tifr50.pdf
1 Currency at War: A Longer View 3
Integral mathematics are well developed
What about
de-integral
mathematics?
Maybe we
can collaborate?
Measuring
the de-integral?
Integration can be thought of as measuring
the area under a curve, defined byf(x),
between two points (hereaandb).
Fig. 1.2 Integral versus de-integral mathematics
Fig. 1.3 The de-integral dynamics of USSR?
Maybe someone may want to develop a mathematical model to reflect the de-
integral dynamics of USSR beginning from 1990. That is in how parts of the USSR
loosened up, broke free, and became independent. Thus these states are no longer a
part of the Russian motherland (Fig. 1.3).
4 C.-T. Foo
Fig. 1.4 California election results
Further reading up on currency, I realize that the very term Rouble under one
possible interpretation contained in its etymology, the roots of de-integration:
…to cut, to chop, to hack…2
The explanation being that currency Rouble is that segment which had been cut
off from a bar of silver. It is also the world’s oldest currency that is decimalized
under the Tsar, Peter the Great.
The more intriguing question remains: Will the same begin to happen to the
USA? That is the USA begins to become disunited. The most likely candidate
among the American states will be California. This clearly is suggested by the polit-
ical results: Hillary Clinton won more than 60% of the votes, double that of Trump
(Fig. 1.4).
Looking up on economics data: California is the most prosperous state in terms
of state gross domestic product (GDP) for 20153 and at least in the upper quartile
when GDP is adjusted for on basis of per capita. What surprises in this research is
to unexpectedly spot an ancient Chinese map (Fig. 1.5) that arose out of their early
maritime ventures to America. The collector probably did not realize it, but clearly
the region that may be attributed to the state of California is depicted as being cut
off, independently from the landmass of America. It may just be coincidental but
one that may be read from a traditional, ordinary Chinese mind’s perspective as an
ominous sign. Just as Rouble seems to metaphorically herald a USSR being cut,
chop, or hack up, is such an innuendo embedded in this archaic map? That Trump’s
election as president set about a de-integral dynamic to the USA.
2 https://en.wikipedia.org/wiki/Ruble
3 https://en.wikipedia.org/wiki/List_of_U.S._states_by_GDP