The Richest Man In Asia Is Selling Everything In China

Tyler Durden's picture




 

Submitted by Simon Black of Sovereign Man blog,

Here’s 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, he’s 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 isn’t 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. China’s 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 they’re 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 isn’t important just for Asian property tycoons like Li Ka-Shing. Even if you don’t 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, you’d think that a major credit crunch with far-reaching consequences in the world’s second largest economy, its largest manufacturer, and its largest holder of US dollar reserves, would be constant front-page news.

But it’s not.

Most traditional investors are unaware that what’s 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 don’t 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, I’m 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.

It’s said that the Chinese word for “crisis” is a combination of “danger” and “opportunity”.

This isn’t 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.

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Wed, 04/16/2014 - 17:18 | 4666826 Bunga Bunga
Wed, 04/16/2014 - 17:22 | 4666840 TruthInSunshine
TruthInSunshine's picture

Whisper rumor that this dude is moving in with Simon Black in a small waterfront condominium in the Canary Islands.

Wed, 04/16/2014 - 17:23 | 4666851 Tengri Temujin
Tengri Temujin's picture

Guy is bailing out  because I am sure he got a lead that they are looking into corruption on his part.  He is trying to get liquid and move his money out of the country, cause you can't take properties out with lol

Wed, 04/16/2014 - 17:30 | 4666877 TruthInSunshine
TruthInSunshine's picture

He's Chinese version of The Honorable Jon S. Corzine, but with actual, real wealth accumulated?

Wed, 04/16/2014 - 18:01 | 4666991 strannick
strannick's picture

If he's selling everything, that means he's buying Dollars? Yuan? Yen? Euros? That seems kinda dumb...

Wed, 04/16/2014 - 18:04 | 4667002 THX 1178
THX 1178's picture

@ tengri So this guy acting in his self preservation could detonate the Chinese housing bubble no? Black swan?

Wed, 04/16/2014 - 18:13 | 4667041 Xibalba
Xibalba's picture

Isn't Uncle Warren in cash...or larget cash position ever?  

Wed, 04/16/2014 - 18:22 | 4667092 TruthInSunshine
TruthInSunshine's picture

This Li guy personally called Simon Black to let him know that he's dumping all his holdings and going off the grid.

Wed, 04/16/2014 - 18:48 | 4667174 max2205
max2205's picture

Li wan ot

Wed, 04/16/2014 - 19:01 | 4667228 Four chan
Four chan's picture

does he have a daughter i could marry..for the right price?

Wed, 04/16/2014 - 22:59 | 4668081 QQQBall
QQQBall's picture

Yes - Li Me Bhe

Wed, 04/16/2014 - 23:49 | 4668207 Soul Glow
Soul Glow's picture

Check out d-bag Krugman -

Paul Krugman: Why We’re in a New Gilded Age http://billmoyers.com/2014/04/16/paul-krugman-why-we’re-in-a-new-gilded-age/
Thu, 04/17/2014 - 00:15 | 4668258 prains
prains's picture

.....i think you meant

 

gelded age

Thu, 04/17/2014 - 00:33 | 4668289 HardlyZero
HardlyZero's picture

Does he overpay for his Gold ?

Thu, 04/17/2014 - 06:29 | 4668686 GetZeeGold
GetZeeGold's picture

 

 

Well he is keeping his gold Pandas....he's not that crazy.

Thu, 04/17/2014 - 04:04 | 4668562 Theosebes Goodfellow
Theosebes Goodfellow's picture

Soul...., please. Do you really think my life is long enough to go read about what Keynesian Krugman has to say on communist Bill Moyer's site? Really? Why would I want to soil myself so?

Thu, 04/17/2014 - 06:41 | 4668696 RealityCheque
RealityCheque's picture

Fuck reading anything by Krugman that's that long.

I'll assume the theme is: "printing money is great. Janet Yellen's dick tastes like an ice lolly."

Thu, 04/17/2014 - 11:27 | 4669605 RafterManFMJ
RafterManFMJ's picture

I'd rather punch myself in the balls than read anything Krugman has to say.

Wed, 04/16/2014 - 22:47 | 4668052 DoChenRollingBearing
DoChenRollingBearing's picture

 

 

Or maybe Mr. Li will buy all the gold in Peru...

(Warning: some of this could be construed as "gold porn")

"Gold News and Pictures from Peru"

http://tinyurl.com/nndg7dt

Thu, 04/17/2014 - 04:00 | 4668556 Theosebes Goodfellow
Theosebes Goodfellow's picture

Wait as I go all Homer Simpson:

"Mmmmm! Dirty gold bar porn. Mmmm!"

(Thanks, Do Chen!)

Wed, 04/16/2014 - 20:33 | 4667547 sessinpo
sessinpo's picture

strannick         If he's selling everything, that means he's buying Dollars? Yuan? Yen? Euros? That seems kinda dumb...

----

So how do you pay for day to day living expenses?

Wed, 04/16/2014 - 22:16 | 4667962 FutureShock
FutureShock's picture

He will buy it back cheaper, buying gold with the difference. The Asset price may drop further but will drop less than the currency. 

Wed, 04/16/2014 - 22:34 | 4668017 aminorex
aminorex's picture

Bitcoin.  $30bn dumb.

Wed, 04/16/2014 - 22:41 | 4668040 rxmitch
rxmitch's picture

mineset hacked

jim sinclairs website

Wed, 04/16/2014 - 23:58 | 4668224 TheReplacement
TheReplacement's picture

He's staying ahead of the game.  The crash won't be all at once.  It will be a wave.  Stay in front of the wave (move wealth internationally) and stay in the game.

Wed, 04/16/2014 - 21:00 | 4667660 Bindar Dundat
Bindar Dundat's picture

Even here in ZH they have figured out how to create class warfare.  were fucked.

Wed, 04/16/2014 - 22:46 | 4668051 nmewn
nmewn's picture

Could have sworn I commented on this thread.

I think I just had my first deletion!...lol.

Wed, 04/16/2014 - 23:19 | 4668125 GoinFawr
Wed, 04/16/2014 - 17:31 | 4666879 666
666's picture

Li needs the cash so he can invest in that bridge in Brooklyn I'm gonna sell to him.

Wed, 04/16/2014 - 17:35 | 4666896 TruthInSunshine
TruthInSunshine's picture

The one with the crafty hobos living in it?

Wed, 04/16/2014 - 18:21 | 4667083 Harbanger
Harbanger's picture

Yep, but believe it or not, there's  2 million dollar condos across the street and welfare housing projects a few blocks away.

Thu, 04/17/2014 - 00:47 | 4668313 Seer
Seer's picture

Sounds like my neigjhborhood, only it's way out in the country: run-down single wide trailers and then someone with a mansion close by.  The "hobos" around here are hard working motherfuckers.  The "others" help pay for the roads....  seems to all work out.

Thu, 04/17/2014 - 01:16 | 4668365 ClassicalLib17
ClassicalLib17's picture

Sounds like Mt. Juliet, Tennessee, Seer

Wed, 04/16/2014 - 18:18 | 4667072 BurningFuld
BurningFuld's picture

Li Ka-Shing out.

Wed, 04/16/2014 - 19:59 | 4667420 TheFourthStooge-ing
Wed, 04/16/2014 - 20:35 | 4667553 sessinpo
sessinpo's picture

666       Li needs the cash so he can invest in that bridge in Brooklyn I'm gonna sell to him.

----

More likely, you'd pay him to sell him that bridge. He didn't become a billionaire your way.

Wed, 04/16/2014 - 17:40 | 4666911 aVileRat
aVileRat's picture

Anyone who has dealt with the Li's know they take corruption including random internal fire drills at Hutchinson to an extreme level. I suspect he more likely recognizes that over 80% of chinese "industry" is based on using duress labour by communist unions plus grey market part fabrication from stolen Russian/American blueprints to generate mass inventory dumping zones. Since the world no longer needs 3 million Niike or Aiidiida shoes for 0.01/shoe the whole inventory repo ponzi is going to start to implode soon, starting with the upstream rubber/silicon/base metal producers. 

If we use an overlay similar to when the repo-produce for quota model imploded in the USSR, China is going to get very ugly, very fast. China since 1400 has had a problem with taking blame for their actions, and is famous for throwing their most prominent thinkers under the bus to placate the peon in the fields. Li I suspect is doing what a long list of oligarchs tend to do when the winds are moving towards rent seeking & fear, step back. Li also has recently come under fire as not a true "chinese" due to his location in HK and that alone would make him a strong target for being strung up vs. one of the princelings closer to the Politburo, like the Mao or Zhang children.

Or maybe he just wants to go all in on Facebook or Google, because those guys clearly have 300% year on year growth according to their "fundamentals".

 

Wed, 04/16/2014 - 23:39 | 4668177 DoChenRollingBearing
DoChenRollingBearing's picture

 

 

Nice analysis Mr. Rat!  Your comments re industry seem to ring true re Chinese bearings, but that is a murky business even though we buy over $100,000 per year of them for Peru.

Thu, 04/17/2014 - 00:53 | 4668325 Seer
Seer's picture

Yes, very good analysis: one that I pretty much saw coming from far away.

"famous for throwing their most prominent thinkers under the bus to placate the peon in the fields"

The "thinkers" and city-centric peoples exist by the good graces of those producing food.  In the end we all shall return to the earth...

Wed, 04/16/2014 - 22:02 | 4667892 Buck Johnson
Buck Johnson's picture

Exactly, he's no dummy and he knows Chinese history.  The game is about to implode and alot of chinese people are going to lose their money.  So when that happens nationalism happens and they go after the party leaders and all that are rich in the country (like the time before last and the time before last etc. etc.).  And they do trials, take their money and execute them. 

Thu, 04/17/2014 - 00:01 | 4668233 TheReplacement
TheReplacement's picture

Isn't that what the people should do when their leaders betray them?

Thu, 04/17/2014 - 01:01 | 4668338 Seer
Seer's picture

Well, this time it IS different.  This is global.  Going to be really hard to find sanctuary.  What, he's going to run to where Simon is, Chile?  Chile's economy emplodes and folks there will be set/conditioned to view the Chinese as the culprits.  If you don't have enough to become a powerful warlord then you're not going to last too long as anyone high-profile/different looking.

Being smart about "real estate" isn't the same as being smart about surviving.  Things are going to get much wierder than most can comprehend...

Thu, 04/17/2014 - 04:09 | 4668566 fockewulf190
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He´ll be bunked down in Singapore within a month.  Watch.

Wed, 04/16/2014 - 17:24 | 4666852 Fuh Querada
Fuh Querada's picture

doesn't say how much

Wed, 04/16/2014 - 17:46 | 4666923 Gringo Viejo
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HO NAH! HUNG GUI!.....The Jerky Boys

Wed, 04/16/2014 - 17:18 | 4666828 James-Morrison
James-Morrison's picture

Ka-Ching can't make up that name for the richest man in china.

Wed, 04/16/2014 - 17:23 | 4666849 Major Major Major
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ROR!

Wed, 04/16/2014 - 18:49 | 4667113 TruthInSunshine
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dpp

Wed, 04/16/2014 - 17:26 | 4666854 Fuh Querada
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Deleted

Wed, 04/16/2014 - 17:48 | 4666933 Gringo Viejo
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J Morrison: Fucking excellent my brother!

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