Skip to comments.The richest man in Asia is selling everything in China
Posted on 04/17/2014 7:52:18 AM PDT by SeekAndFind
Heres a guy you want to bet on Li Ka-Shing.
Li is reportedly the richest person in Asia with a net worth well in excess of $30 billion, much of which he made being a shrewd property investor.
Li Ka-Shing was investing in mainland China back in the early 90s, way back before it became the trendy thing to do. Now, Li wants out of China. All of it.
Since August of last year, hes dumped billions of dollars worth of his Chinese holdings. The latest is the $928 million sale of the Pacific Place shopping center in Beijing this deal was inked just days ago.
Once the deal concludes, Li will no longer have any major property investments in mainland China.
This isnt a person who became wealthy by being flippant and scared. So what does he see that nobody else seems to be paying much attention to?
Simple. Chinas credit crunch.
After years of unprecedented monetary expansion that has put the economy in a precarious state, the Chinese government has been desperately trying to reign in credit growth.
The shadow banking system alone is now worth 84% of GDP according to an estimate by JP Morgan. The IMF pegs total private credit at 230% of GDP, jumping by 100% in the last few years.
Historically, growth rates of these proportions have nearly always been followed by severe financial crises. And Chinese leaders are doing their best to engineer a soft landing.
If theyre successful, the world will only see major drops in global growth, stocks, property, and commodity prices.
If they fail, the spillover could become pandemic.
This isnt important just for Asian property tycoons like Li Ka-Shing. Even if you dont know Guangzhou from Hangzhou from Quanzhou, there are implications for the entire world.
Here in Chile is a great example.
Chile is among the top copper producers worldwide, China among its top consumers. With a major slowdown in China, however, copper prices have dropped considerably.
Consequently, the Chilean economy has slowed. The peso is down nearly 10% against the US dollar in recent months, and the central bank is slashing rates trying to prop up growth.
There are similar situations playing out across the globe.
Not to mention, China could put the entire global financial system on its back just by dumping a portion of its Treasuries in order to defend the yuan.
Now, youd think that a major credit crunch with far-reaching consequences in the worlds second largest economy, its largest manufacturer, and its largest holder of US dollar reserves, would be constant front-page news.
But its not.
Most traditional investors are unaware that whats happening in China will likely have far greater implications to their investment portfolios than the policies of Janet Yellen and Barack Obama combined. At least for now.
And folks who dont see this coming and keep buying at the all-time high may see their portfolios turned upside down. Quickly.
At the same time, some investors who are conservative and cashed up may realize a real blood in the streets moment.
Again, using Chile as an example, Im starting to see over-leveraged property owners coming to the market in droves ready to make a deal. This is great news because my shareholders and I are able to buy far more property with US dollars than we could even just six months ago.
I expect this trend to hold given that China is just at the beginning of its process.
Its said that the Chinese word for crisis is a combination of danger and opportunity.
This isnt entirely accurate. Weiji can have several meanings, but is probably best translated as dangerous and crucial point.
We may certainly be at that crucial point, and now might be a good time to take another look at your finances and consider selling before a major crash. The richest man in Asia certainly thinks so.
-- Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man.
China has destroyed their water supply. I am far from an environmentalist but what they have done to mother earth is actually scary.
Asian tycoon: Hong Kong tycoon Li Ka Shing is tightening his grip on Britain's utility companies 2 August 2011
[ China has destroyed their water supply. I am far from an environmentalist but what they have done to mother earth is actually scary. ]
Ironic given most enviro-nuts are closet commies...
Soviet Russia was anything BUT green as well...
Green is nothing but a vehicle to attain power through a belief system controlled by data supplied by the university and grants to researcher.... grants given by the government who want things to be found to support the green faith.
Li Ka-Shing, and his brother in law, Ka-Ching!
Most prolific polluter on the planet......is exempt from the Gore game.....hmmm wonder why?
Bump for reference. Interesting that this story comes out JUST as he has liquidated all of his major China holds. lol...too late for everyone else. Just like Buffet. Everyone finds out AFTER it is done.
Yeah, ain’t that freakin’ interesting how not a word is said or printed until the deed has been completed.
Dang! And all these years...
He also owns Husky Oil in Canada...
Ka Shing? Really? The wealthiest man in Asia is named Ka Shing? What syllable is the emphasis on? Is it like, “Ka SHING!” or is it like “Cashing”?