SinoSkeptic (or Sino-skeptic), noun. A person who harbors honest concerns – based on China’s stated policy goals and behavior – about whether China is willing or able to be a positive participant in a global community of nations, (as framed by the system of international institutions that has evolved in the wake of World War II,) or whether its very participation is by accident or design inimical to the intent of those institutions. Different from a “China-basher” or “Panda-puncher,” a person who paints China as an implacable foe based at least in part on that person’s ulterior motives.
In the wake of the inauguration of Donald Trump, I have been getting calls from clients, from past clients, and from perspective clients all asking what this is going to mean to them. I expected to get the calls from US and European companies. What surprised me – and probably should not have – was the number of calls coming from Chinese companies. On the surface, one is tempted to ascribe this preoccupation to Trump’s acerbic anti-trade rhetoric.
But concerns about China are nothing new to American elections. The role of China in business and the US economy has been on the national docket since Bill Clinton ran for his first term. What is more, the concerns coming from the people I was speaking to were both immediate and urgent. They weren’t worried about some abstract degree of market access in the coming years: they wanted to know what would happen to their plans over the next twelve months. All of this stands as circumstantial evidence that, more than at any other similar juncture in the past, Chinese companies appear poised to leap into the American sea, and right soon.
Challenged but Determined
Perhaps the most urgent challenge facing China’s enterprises today is learning how to reach successfully beyond the home market and build viable international, if not global, businesses. China’s more thoughtfully-led companies are figuring out that in order to “go out” they need to learn how to operate in environments where local government and consumers are at best indifferent, and at worst hostile. They are learning that they will need to figure out how to innovate consistently and meaningfully; and that creating, building, and defend their own brands against local and global competitors overseas (and especially in the US) is going to require a new thinking, a lot of money, and outside help.
Of course, understanding this intellectually and actually doing it are two different things, and considerable cultural obstacles lie ahead of China, Inc. But leaders of US, European, and Japanese companies would be foolish to assume that China’s companies will all fail in that effort. Some, possibly many, will succeed. The challenge for which we should all be preparing, then, is how to compete with – and beat – China’s emerging global companies.†
We’re From the Government, and We’re Not Here to Help
For the moment, let’s leave aside the rhetoric coming out of the Trump administration. Belligerent bombast aside, there is not much that the White House can do to halt the slow but inexorable globalization of Chinese brands. Raising barriers to protect domestic enterprises against a Chinese onslaught requires more than the election of a populist president with anti-trade chops. Without a broad national consensus against trade, Congress and economists remain too haunted by the ghost of the Smoot-Hawley Act of 1930* to raise significant barriers to a global trading giant like China, and the number of US jobs that depend on exports to China is significant and continues to rise.
Even if legislators found the resolve to act, the speed of business and the nature of lawmaking limit the ability of legislation to respond to specific commercial threats. Ditto the creaking machinery of the World Trade Organization: even when a government can be persuaded to lodge a formal protest against China, such cases require years to work their way through the process and evoke an outcome.
And all of this ignores the expanding influence of Chinese investment in US and European business. High-profile investors like the Dalian Wanda Group and Anbang Securities are just the visible apex a vast and varied group of companies and cash-rich entrepreneurs setting down commercial roots in America. Except in matters of national security, legislating against such inflows would be political suicide, especially as Chinese investments reach ever deeper into the rusting industrial hinterlands of the developed west.
We Are On Our Own
In short, the Chinese competition is coming to America and Europe, and companies need to rely on themselves to address this new threat.
Doing so will mean approaching the China challenge with the same resolve and flexibility with which American enterprise addressed the Japanese challenge, but doing it sooner and with greater alacrity. Japan’s economic expansion in the 1970s and 1980s wrought unprecedented disruption to US business in no small part because most executives didn’t see it coming. They were too late to realize that the iron triangle of government, enterprise, and organized crime in Japan left many US industries facing an existential threat.
The US business community cannot afford to be as slow on the uptake with China. Forget wait-and-see: a nimble and aggressive Chinese company with a deep home market in China is an existential threat even before you find out they’re looking in your patch. Assume they’re coming, and will hire the local expertise to disrupt your markets, undermine your customer relationships, and beat you to innovations.
Winning demands insight. Executives have to understand how Chinese companies work, how they make use of relationships and government support, and the strategy they will use to take markets away from global competitors. Then they need to drill into their specific competitors, learning the strengths of a Chinese challenger so as to use those strengths against them.
(Such strengths vary from firm to firm, but you won’t go far wrong to assume that they come with a) a deeply supportive government at home; b) the world’s largest home market, able to provide global economies of scale before they make their first sale overseas; c) a readiness to play fast-and-loose with intellectual property; and d) momentum.)
The discussion America’s business leaders should be having about China, then, must go beyond “how do we make money in China?” If that question isn’t academic by now, it soon will be. It must also be “how do we meet – and crush – our Chinese competition both at home and around the world?”
† The use of “we” here is not an affectation. China, Inc. it is no less a challenge in business services than it is with manufacturing. Sometime in the next five years, the leaders of the marketing and PR business in the US are going to face severe disruption from China.
* Also known as The Tariff Act of 1930, The Smoot-Hawley Act was a protectionist measure passed by the US Congress that wound up inciting a trade war, one that arguably deepened the Great Depression and helped speed Europe into conflict a decade later.
The reason the “One Belt, One Road” initiative is going to be so interesting to watch carefully is that its outcome will be a litmus test for governance in China.
More than just a simple question of whether the initiative makes economic sense, the results will determine the degree to which such centrally-planned and -driven initiatives are either workable or relevant in modern China.
Rhetoric about strongmen aside, this is not the era of Mao. China is a larger, more complex, and more decentralized country than it was forty years ago, or even in 1999 when Jiang Zemin launched his “Go West” initiative. If the nation faces challenges with OBOR, it does not follow that the strategy is wrong: what it points to, more likely, is how the role of government in these initiatives must be to instigate and enable rather than to plan and oversee.
That thinking would represent a huge deviation from the Party’s modus operandi, but as Huang Yasheng is fond of reminding us, the greatest leaps in China’s post-Liberation economic progress have occurred when the government sets the tone, and then gets out of the way. Combining such an approach with vigilance over safety, graft, corruption, and the environment will likely emerge as the way forward for the government’s role in development.
The popularity of the adventourous model-photographer Xiao Yun Dou (nicknamed “Dou Dou“) among young people in China is a hint at a major change taking place in China’s travel market.
While their parents craved the opportunity to travel, for many young people in China today, the yearning is for much more: it is for adventure, perhaps, but I believe there is something even more prosaic at work here. There is a growing desire in the collective psyche for escape, and escape that is not as part of a herd on a bus or a plane, but for travel and adventure that is deeply personal.
Group travel still dominates the market, but the numbers of independent travelers – and those looking for something unique and out-of-the-ordinary – are growing. One young Chinese man I spoke to the other day was excited about going to Las Vegas for the Consumer Electronics Show. He was not excited about the show, the gadgets, or the gambling in the casino in his hotel, but he was excited about the opportunity to hike in Red Rock Canyon, shoot automatic weapons, and take a side trip to Hoover Dam and the Grand Canyon.
He is by no means typical, but neither is he unique, and his kind of international travel may define the next generation of sojourners from the mainland, inspired by Dou Dou and her rarified ilk.
Apple is opening a 300 million yuan ($45 million) research and development center in Beijing, its first ever in China.
On the surface, the idea of Apple opening an R&D center in China sounds logical, and possibly a really good call. If China is not Apple’s largest market it is certainly in the top three, and there are enough cultural and behavioral differences between China and, say, California that it would make sense to have a lab designed to make Apple products more “China-friendly.”
Adding a more urgent impetus would be the growing power of local electronics manufacturers like Huawei, Lenovo, and especially Xiaomi. In contrast with Apple’s “One Device to Rule Them All” strategy, the local players offer features and tweaks developed to match the lifestyles and wishes of China’s consumers. Xiaomi in particular has built a vast business by honing the ease-of-use of Google’s Android operating system to within a hair of iOS, and then adding thousands of enhancements suggested by fans. These tweaks, combined with slowing innovation from Cupertino, have helped locals eat into the iPhone’s former market dominance.
What is more, a series of government-backed measures over the past three years, ranging from attacks by state-owned media to the government-ordered shutdown of Apple’s iBooks store, are provoking speculation that Beijing may have it in for the company.
Against all of this, an R&D center seating 500 would seem to be a smart move.
What will dog Apple’s effort, though, is a justifiable degree of cynicism among both government and consumers in Beijing about whether this R&D center will do substantive research and development work, or whether it is so much window dressing. If all the center does is localization work, not only will Apple waste the opportunity to fully tap China’s pool of engineering talent, audiences in China will dismiss the center as so much PR.
The onus is thus on Apple. Unless the company offers frequent and convincing examples of genuinely innovative work being done exclusively in the China location, it will give local challengers a ready-made opportunity to discredit the iPhone maker with both the government and consumers. Rather than helping the company, it would serve to grease the rails in Apple’s decline in a strategic market.
Wanda’s Wang Jianlin has now made his fourth major acquisition in the US film industry. To his stable of the AMC and Carmike cinema chains and the Legendary Pictures production company he is now adding Dick Clark Productions. But it is rare indeed that something in China is as it seems, and that is why it is worth probing a bit into Wanda’s US acquisitions.
To their credit, US media are trying to do exactly that. Over the past several months, I’ve spoken to experienced reporters from the world’s leading financial news services, all of whom are trying to discern whether to take Wang Jianlin at face value, or whether there is something happening beneath the surface at Dalian Wanda Group that is at odds with its founder’s public positions.
What they’re getting is frustrated. It is always challenging to get information out of a firm unbound by the disclosure laws that govern public US companies. For what are probably very practical reasons related to its China business, Wanda apparently makes a fetish out of opacity.
When the world’s best investigative financial journalists start coming up empty, we are left with seeking answers based on clues rather than on answers. The best place to look is in the behavior of their partners and subsidiary companies. Some potential clues:
- Check IMDB. Does Legendary look like it’s production slate is shrinking, or its production rate is slowing? Is Dick Clark increasing production, or is production on decline?
- Check reviews of AMC and Carmike cinemas, especially their bigger, newer, flagship multiplexes in large US cities, on Yelp! and similar sites. Are reviews trending upward, or are they in decline? Are there complaints related to quality of service, of food, of cleanliness?
- What is the status of partnerships with companies like Sony and IMAX? Are we seeing any action, or have things gone quiet after big announcements? Is Wanda living up to its commitments?
- And, of course, watch for news on major moves in China’s real estate market, or from the government on restricting Chinese investments abroad.
Good reporters are already doing all of this. But journalistic standards won’t allow them to report on such circumstantial indicators. For the rest of us, they can help us gain a general hunch about where the company stands, how it is operating in the US, and where it is likely to go next.
Longer term, though, Wang will have to learn to operate in a part of the world where deep scrutiny of his operations are encouraged rather than prohibited, and where transparency is a necessary precondition for the trust he will need to sow in order to prosper.
Even if LeEco and the rest of Jia Yueting‘s business holdings implode over the next few weeks, those of us who will pick through the wreckage looking for the lessons will surely learn two things very quickly.
The first thing that we will discover will be that anyone who dismisses Jia as a “fool” or an “idiot” will be wrong. Under the bluster, we will find that Jia is an exceptionally smart guy who had a fantastic vision for his company.
The second thing we will find is that the reason for Jia’s failure was not his overall strategy. Let me explain that a bit.
Jia is an implicit subscriber to an ethos that is common among entrepreneurs that I call “conglomeration mystique.” Seeing himself as cut from the same cloth as Elon Musk, Steve Jobs, and Jeff Bezos, Jia sees no reason why he cannot do what they did.
All things being equal, he’s right. Other entrepreneurs, supported by a war chest from a core cash-cow business, have leapt into unrelated fields and surprised their critics. I know of no gift possessed by those people that Mr. Jia might have lacked. So the vision was not wrong.
Jia’s mistake is one that has plagued so many Chinese entrepreneurs: operating in a market that rewards speed and short-termism, he became convinced that he had to do everything right now, or the opportunity would be lost to him.
As the Bloomberg article hints, Jia’s pace of execution outstripped his ability to build the capital to support it. At several points, he likely had the choice to slow down and let the capital catch up. Instead, he chose to risk overextension, to gamble on things working out just right, and in so doing proved Gordon Sullivan’s maxim that “hope is not a method.”
The question this leaves is thus: how do you get an entrepreneur, forged in China’s Make-It-Today-For-Tomorrow-The-Government-Will-Change-the-Rules business environment, to eschew the very thinking that made him money in the first place? I don’t think you can, which means that the kind of grand-scale Hail Mary approach that has tripped LeEco is likely to become a fixture on the China business scene in the coming years.
For some, it will work. And LeEco is down, but it is not out, yet.
In all of the discussion lately about Uber in China, one topic that is not getting a lot of airplay is the way in which the outcome for Uber is being positioned. One person for whom I have a great deal of respect believes that Uber did great, that they wound up with exactly what they wanted in the first place, and that overall the outcome – as junior partner to Didi Chuxing in a combined business – is a victory for Uber.
As I mentioned in an earlier post, to me that seems a bit like spin. First, it is highly unlikely that this is the outcome Uber sought all along. Had it sought a minority stake in Didi, it could have (as Apple did recently) simply written a check, swapped stock, and agreed to work together globally. And it could have been done more quickly, easily, and with less of a drain on company attention and coffers.
Second, all that their efforts won them is a weak role in Didi, just another seat at the table with a group of powerful investors to whom Uber is a very small potato. Had they gone in with an offer early, they may well have saved everyone money and saved Didi from the need to turn to outside investors. Uber may well have ended up with a less diluted position.
Third, they sit with no better odds of a payoff now than before. Didi is a rapidly-growing company with a need for a huge war chest in order to secure its market position. Payback to investors will be some time down the line, and others will decide when and if Uber will ever see a dividend. Even if it does, the question will remain as to whether that dividend was a fair compensation for the price and a fair return to investors on the risk.
Finally, with its new A-List of global investors, Didi may well prove to be a more formidable rival outside of China in the long term than it might have been otherwise, especially if Uber had shown up at the beginning offering a strategic tie-up. Now Didi has international ambitions, and with an 85% market share at home in a much bigger market, will be in a better position to face Uber in other markets.
So did Uber win? Events will tell us, but probably not for some time. And that’s about the most you can say. From a removed perspective today, Uber is salvaging the most it can from a shipwreck, and pretending that it intended to be on the rocks all along won’t do much for the company’s credibility with the Street.
Conglomeration Mystique – concept – a business ethos with two components.
First, the conviction on the part of a successful entrepreneur or company that a) because it is successful in one field it can be successful in any field to which it applies its brand or capital, and b) that to be a truly great company a firm must be in a diverse range of businesses rather than focus on a single field, all regardless of actual market conditions. Entrepreneurs with this ethos frequently cite examples like Elon Musk, Jeff Bezos, and Steve Jobs as proof of the concept.
The second component is the compulsion, usually the result of the above, to build a conglomerate business, either via acquisition or startups, and usually accompanied by rapid geographic expansion.
Related condition: gigantism
If you believe the writings of Tom Peters – whose thinking informed a lot of my early business career – the conglomerate is a really dumb idea. Peters was not necessarily wrong. During the economic boom following World War II, Corporate America decided that the best, easiest path to growth was acquiring profitable companies with stock, excess cash, and cheap debt.
The decade 1973-1983 threw a sequence of challenges at US businesses that exposed the weaknesses of these companies. The end of cheap energy, the conclusion of the Vietnam War, the end of the Gold Standard, the rise of Japanese and German companies, the emergence of corporate raiders, and the growing disruption of technology all landed on US companies in rapid succession. The conglomerates were the largest and most unwieldy of America’s corporate dinosaurs, and they crumbled: Fansteel, ITT, LTV, Olin, Teledyne, Esmark, Litton, Continental Group, and Sperry were all conglomerates in the Fortune 100 in 1970, and are today either gone or are leftovers of their former selves.
The verdict – and now the accepted wisdom, at least outside of China – is that specialization and focus pay. While a degree of strategic diversification might be good, lumping radically disparate businesses together under a single roof creates more management problems than it solves.
Donning my historian’s hat, I think the verdict is more qualified. During times of rapid economic growth and boom, using cash-cow businesses to fund expansion and acquisition into other promising markets is a viable strategy. And there are exceptions. GE has used a long sequence of acquisitions and spinoffs to keep it a going concern, swinging from industry-to-industry like Tarzan swinging on vines through a jungle. And call it what you will, Warren Buffet’s Berkshire-Hathaway is aught more than a very well managed conglomerate, drawing free cash-flow from insurance operations to fund its growth elsewhere.
So conglomerates can work under some very specific circumstances. Where Peters’ research still stands, though, is that corporate conglomeration is not a viable default strategy, especially when it is used as a substitute for an imaginative strategy.
When any company in China – whether a large state-owned enterprise or an entrepreneurial operation like LeEco – appears to be turning itself into a diversified holding company, the burden of proof rests on the company to demonstrate that there is some really smart thinking behind the activity, and that it is not simply hiding strategic failure.
For two years, Jean Liu and Travis Kalanick were mortal adversaries, as their businesses, the world’s two largest ride-sharing companies, fought an increasingly bitter and expensive war. Kalanick, CEO of Uber, the San Francisco-based ride-hailing app, was trying to muscle into China, where Liu is president of Didi Chuxing, Uber’s Chinese equivalent.
Charles Clover at the FT offers this dramatic lede for an article that lays the credit for Uber’s defeat in China at the feet of Didi Chuxing’s Jean Liu.
Ms. Liu and her team at Didi deserve much credit for their victory in China’s shared-ride wars. All of us wish them only the best as they take on what will undoubtedly prove to be the far more formidable adversary: a Chinese government decidedly uncomfortable with leaving in the hands of a privately-owned company an increasingly essential piece of the nation’s transportation infrastructure.
But an honest assessment of the battle must conclude that Ms. Liu was helped at many turns by a series of unforced errors on Uber’s part. I won’t go into them here – take a look at my interview with Jeremy Goldkorn at SupChina, where I lay out Uber’s four most fundamental mistakes in China.
In addition, let’s also remember a few things:
- Didi’s financial backers gave the company the war chest it needed to fight a street battle of attrition against one of the planet’s best funded unicorns.
- Ms. Liu’s boss, Didi Chairman Cheng Wei, was hardly a figure head in this battle. Not for nothing did Forbes Asia name him 2016 Businessman of the Year.
- Didi came to the battle fighting on familiar, home ground, and was in substantial possession of the field already when Uber showed up. Uber was battling an entrenched player as an interloping underdog in a market increasingly unfriendly to outsiders. Uber’s rhetoric and war-chest aside, they were the weaker player.
- It was not “Jean vs. Travis.” It was Jean vs. the Uber China team, and as time goes on it will become more clear that Travis and his team were relatively hands-off, allowing the local team to run things. Didi defeated Travis’s partner’s team.
- Regulatory changes in the market played a significant role in the driving Uber’s surrender. Unless Didi orchestrated those (not impossible), the government was also a player in the game. And if Didi did orchestrate those, protectionism beat Uber as much as Didi’s executive team.
To the victor goeth the spoils, and Ms. Liu is clearly a capable executive whose career is now pointed toward even bigger and better things. But there is nothing learned by pretending that this was not a far more complex battle than the FT seeks to portray as it graces Ms. Liu with the laurels.
One more interesting point from the article. Ms. Liu and Didi continue to play the outcome as a “win-win” for Didi and Uber. I’ve spent a career in PR in China, and to me that messaging carries a very heavy whiff of spin. I’ll explain why in a later post.
Catching up on reading over the weekend, I came across a report Goldman Sachs published in March about China’s “new consumer class.” (“The Rise of China’s New Consumer Class.”) The title is a bit deceptive: the researchers at Goldman note correctly that there is not a single class of consumer, but several. They’re partly right.
The problem with the Goldman report is that it focuses on income as a primary differentiator. While income has some practical value as a predictor of consumer behavior in China (poor peasants are unlikely to be potential buyers for Rolexes or megayachts,) that value is limited because incomes are not as closely tied to buying power as they are in other economies, and for two immediate reasons.
First, as one friend of mine noted on Twitter, incomes are notoriously hard to pin down in China. Reporting is spotty, and even the Chinese government lacks the wherewithal to really understand an individual’s income. What is more, there is a vast population of individuals who nominally make very modest incomes (government officials, leaders of state-owned enterprises, senior military officers), but whose actual buying power far exceeds their incomes. Add a third group – those who supplement their incomes via transfers from relatives overseas – and you can see how any company that targets its consumers by nominal income is going to miss a massive chunk of their addressable market.
Second, China’s consumers tend to consume based less on their income than on their desire for face and fulfillment. Purchases of automobiles (which are 12 to 14 times more expensive in China than in the US based on income and price differences), high-end mobile phones, and houses are far out of line with the incomes of those buying them. Parents and even grandparents will often kick in their own savings to help a young man make a downpayment on a house; newly-graduated urban workers will spend up to three months of their income on a mobile phone or a laptop; and the more entrepreneurial will take up a side business off the books or even engage in illicit activity to allow them to have the things they desire.
Classifying China’s consumers by income is, at best, an economics exercise. Classifying them by their values and priorities is far more relevant to businesses, and is a far better indicator of the degree to which you have a market – or not – in China.
The OTA that recorded the strongest performance in 2015 was Ctrip, which grew by an impressive estimated 58%, to reach gross bookings of $27 billion, driven by the booming Chinese domestic and outbound travel markets. Ctrip is today the third global OTA player, and is forecast to be able to challenge Expedia Inc and The Priceline Group for global leadership by 2019.
Ctrip has, it seems, now officially (and to us in China, somewhat belatedly) joined the ranks of the world’s largest online travel agencies.
In fairness, the company offers the most comprehensive travel agency service in China, and has worked hard to fend off challengers for the past 15 years, either crushing them with size or, when all else fails, buying them out or co-opting them.
Now China’s leader must master three new challenges that come along with its newfound status:
Build a Better Outbound Service. First, the Chinese challenger must figure out how to match the listings and relationships that Expedia and Priceline have built around the world outside of China. Offering a handful of cheap alternatives in major cities is not going to keep hold of China’s 125 million outbound travelers, in particular as many of those who can speak English are already skipping Ctrip for international journeys and going right to Expedia and Priceline.
Defend against tougher local competition at home. Second, it must fight a growing number of challengers at home, both hungry local players all seeking to grab part of the market; platforms like Airbnb and its local imitators that are increasingly offering shared alternatives to traditional travel; and Expedia and Priceline as they bring their challenge into Ctrip’s home market.
Break out of China. Finally, at some point Ctrip must figure out how to evolve beyond the core Chinese market. Massive the travel base in the PRC may be, but the world beckons, and continued growth will eventually depend on deft expansion abroad.
The extent to which Ctrip can address these three challenges will determine whether it will remain a specialized, local player, or whether it will one day be feasting on the remains of Expedia, Priceline, or both.
Leftover students – concept – that group of high school graduates in China who aspire to higher education – and who appear to have the ability to complete a degree – but who are denied that education and the attendant social mobility by China’s limited university seats and the caprice of the gaokao.
Leta Hong Fincher has done an incredible job framing and documenting the phenomenon of “leftover women” in China, explaining the roots of the phenomenon and the challenges facing women who have, for all the best of reasons, passed what serves as a marriageable age, or who have careers that make finding a suitable spouse all but impossible. If you have not picked up her book, by all means do so. As you would expect, the work does more than simply describe a unique demographic: it also offers an insight into an underlying dynamic of China’s winner-take-all culture: the leftovers.
Indeed, riffing on Leta’s research, it is not hard to discern that unmarried women of a certain age are not the only leftovers in China. Last week saw this year’s administration of the gaokao, China’s national university entrance examination. Nine million students sat for the three-day exam this year, but there are seats in China’s universities for no more than three million. While some of those who fail to gain entrance in university will try again next year, we can count on over five million young people facing a future without a university education.
These “leftover students” are a challenge for China’s leaders and an opportunity for international educators. For the Communist Party, it is no small thing to say to six million families a year that the promise of a better life for their children through education is out of reach: every four years that tallies a population equal to the membership of the Party that has often invested its hopes and treasure into the promise of education, only to have it tossed back to them.
For tertiary educators around the world, many of whom are suffering from secular population and economic trends that are pushing enrollments downwards, leftover students represent an massive pool of potential enrollees, many from prosperous families, that could save and sustain many of the world’s less popular colleges and universities, and that could potentially fuel the creation of the world’s largest market for continuing education.
China’s Anbang Insurance Group Co said on Thursday it has abandoned its $14 billion bid for Starwood Hotels & Resorts Worldwide Inc (HOT.N), paving the way for Marriott International Inc (MAR.O) to buy the Sheraton and Westin hotels operator.
I have a longer post about this in the works, but it will take me most of the weekend to compile it from this stack of research. In the meantime, a thought, based on the possibility that Anbang was too afraid to untie its kimono to continue the process:
We say in my business that sunlight is the best disinfectant. What most of my colleagues outside of China rarely have cause to contemplate is this: what happens when the company in question is itself one giant festering bacteria culture?
Beware ye who shaketh hands with a well-heeled investor from afar: due diligence should always work two ways.