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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TruthInSunshine's picture

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

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

TruthInSunshine's picture

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

strannick's picture

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

THX 1178's picture

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

Xibalba's picture

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

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.

Four chan's picture

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

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/
prains's picture

.....i think you meant

 

gelded age

HardlyZero's picture

Does he overpay for his Gold ?

GetZeeGold's picture

 

 

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

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?

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."

RafterManFMJ's picture

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

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

Theosebes Goodfellow's picture

Wait as I go all Homer Simpson:

"Mmmmm! Dirty gold bar porn. Mmmm!"

(Thanks, Do Chen!)

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?

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. 

rxmitch's picture

mineset hacked

jim sinclairs website

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.

Bindar Dundat's picture

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

nmewn's picture

Could have sworn I commented on this thread.

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

666's picture

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

TruthInSunshine's picture

The one with the crafty hobos living in it?

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.

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.

ClassicalLib17's picture

Sounds like Mt. Juliet, Tennessee, Seer

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.

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".

 

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.

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...

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. 

TheReplacement's picture

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

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...

fockewulf190's picture

He´ll be bunked down in Singapore within a month.  Watch.

Gringo Viejo's picture

HO NAH! HUNG GUI!.....The Jerky Boys

James-Morrison's picture

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