China: Innovator or Thief?

From BBC Business Daily:

invnt-ip-logo“China’s latest factory data is the worst in 3 years. What’s wrong with China’s business model? Mark Anderson is CEO of INVNT/IP, a consortium of US companies and experts who’ve put together a report, claiming that some 50% of Chinese growth in recent decades has been founded on the stealing of western business ideas, via old-fashioned industrial espionage and more sophisticated state-sponsored hacking. He exclusively tells the BBC the basis for his claims. And we also hear from Chinese author Edward Tse, who says the old stereotypes of Chinese companies leeching off western technology and possessing few ideas of their own is outdated. He’s spent years advising Chinese companies, and in a new book, China’s Disrupters, he claims a new genuinely entrepreneurial and innovative spirit has transformed the country’s business climate.”

Listen to the discussion at the BBC.

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Chinese and US Markets III

Strategic News ServiceGiven the volatility and drops in global equity markets, we thought a short note to members might be helpful.

Members who have been following SNS will already be aware of our warnings from the first two Special Alerts in this series [Alert I] [Alert II].  Those who have not had the time might read them now.

As we suggested in the second Alert, the Chinese domestic economy is undergoing serious collapse.  Global investors probably are not fully aware of this yet, but they have been running for the doors since shortly after that Alert based on the obvious signals coming out of China: the currency devaluation, equity market manipulations, and the capital flight out of China.  Again, the complete list is in our last Alert.

At this time, we have two suggestions which may be helpful, given the range of equity market falls today(Shanghai down 8.5%, US down 3.9%, most others between these) and the likely continued fall in the next few days. Prior to listing these, here is the environment we expect:

  1. Depending on timeframe, China’s equity markets are at “fake” levels, pumped by the government to shift the debt of state-owned enterprises into the stock markets, thereby shifting the risk from banks and bondholders to shareholders.  That game is over.
  2. The above manipulations caused a runup over the last year of 150 – 200% vs. prior levels.  How far can China’s markets fall?  (This is THE question Wall St. is asking tonight.)  It’s obvious: at LEAST the same amount, so investors should prepare for a very tough ride down by the Chinese equity markets, no matter what the Standing Committee does to manipulate prices.
  3. Other Asian markets will tend to mirror this problem, at lower percent declines, just as happened today.  The more they are interlocked with China, the greater their equity market risk and drops will likely be.
  4. Countries with their own big problems (such as Russia) may also see very large declines, as global investors decide that any risk is too much, and put their money into safe harbors until the storm is over.

GIVEN all this, the two obvious recommendations for global investors would be:

  1. China is the problem, and the US will look like the solution, in the eyes of most money managers.  The US economy remains strong, and the Chinese economy will look increasingly weak going forward.  Money will likely move from Asia and emerging nations, and look for homes in safe US stocks and bonds.  Germany would be the second most attractive investment target, but it continues to suffer from high EU risk issues.
  2. Within the US, investors would be wise to sort their portfolios into those companies with zero direct China exposure, and those with maximum exposure; then sell the latter, and buy the former.

Of course, markets are not rational, and this may all take some time to sort out, with plenty of short-term volatility to come.  But shorting China exposure, and buying its lack, seems the best plan today.

—-
[View Chinese and US Markets I]
[View Chinese and US Markets II]
[View Chinese and US Markets III]

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Chinese and US Markets II

In line with our most recent Special Alert, we issued a new warning on the Chinese economy this morning, through the following press release.  We thought our members should be the first to be aware of this announcement:

FOR IMMEDIATE RELEASE

Strategic News Service

Press Contact:
Jennifer Lee
Communications Director 
INVNT/IP
info@invntip.com

CHINESE ECONOMY FACING COLLAPSE:
     NEW REPORT INDICATES UP TO ONE-HALF GDP GROWTH ROOTED IN THEFT AND FRAUD

Research by INVNT/IP Consortium Shows Instability Is Natural Result of PRC National Business Model

FRIDAY HARBOR, Washington – August 18, 2015

A study just completed by the INVNT/IP Global Consortium suggests that China is experiencing a serious episode of domestic economic collapse, with up to 50% of GDP growth rates reported over the last three decades derived directly from the theft of intellectual property and fraudulent practices around its re-branding, amplification, and subsidized sale in global markets.

The economic instability caused by a reliance on this model has left China and its Standing Committee in a position of extremely high risk, according to the study, which is scheduled for full release later this year.

INVNT/IP CEO Mark Anderson explained: “We have just completed the best description of the Chinese national business model available today, and up to one-half of China’s growth is based on fraud and theft. The implications of this research are a cause for deep concern among China’s global partners and investors. We are now convinced that almost all aspects of the modern segments of the Chinese economy are both illegal and unstable, from the IP theft that drives it to fraudulent banks, structural trade barriers, continual currency manipulation, and WTO-prohibited subsidies.

“The result is the short-term appearance of being rich, but the longer-term risk of instability and collapse, which it is facing now.”

According to Robert Atkinson, founder and president of the Information Technology and Innovation Foundation (ITIF), “China has long relied on currency manipulation to support its mercantilist, export-driven model, and its recent decision to devalue the RMB is no different. Notwithstanding apologetic responses from organizations like the International Monetary Fund (IMF) and the US Treasury, this most recent decision continues China’s negative-sum policies of helping its own economy at the expense of the global economy.”

To see the INVNT/IP database of IP thefts and related information, go to www.invntip.com.

INVNT/IP (Inventing Nations Vs. Nation-sponsored Theft of IP) is a consortium of global corporations and Cabinet-level government advisors in the US, the UK, Australia, and the EU.

—-
[View Chinese and US Markets I]
[View Chinese and US Markets II]
[View Chinese and US Markets III]

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Chinese Economy Facing Collapse: New Report Indicates up to One-Half GDP Growth Rooted in Theft and Fraud

Research by INVNT/IP Consortium Shows Instability Is Natural Result of PRC National Business Model

 

A study just completed by the INVNT/IP Global Consortium suggests that China is experiencing a serious episode of domestic economic collapse, with up to 50% of GDP growth rates reported over the last three decades derived directly from the theft of intellectual property and fraudulent practices around its re-branding, amplification, and subsidized sale in global markets.

The economic instability caused by a reliance on this model has left China and its Standing Committee in a position of extremely high risk, according to the study, which is scheduled for full release later this year.

INVNT/IP CEO Mark Anderson explained: “We have just completed the best description of the Chinese national business model available today, and up to one-half of China’s growth is based on fraud and theft. The implications of this research are a cause for deep concern among China’s global partners and investors. We are now convinced that almost all aspects of the modern segments of the Chinese economy are both illegal and unstable, from the IP theft that drives it to fraudulent banks, structural trade barriers, continual currency manipulation, and WTO-prohibited subsidies.

“The result is the short-term appearance of being rich, but the longer-term risk of instability and collapse, which it is facing now.”

According to Robert Atkinson, founder and president of the Information Technology and Innovation Foundation (ITIF), “China has long relied on currency manipulation to support its mercantilist, export-driven model, and its recent decision to devalue the RMB is no different. Notwithstanding apologetic responses from organizations like the International Monetary Fund (IMF) and the US Treasury, this most recent decision continues China’s negative-sum policies of helping its own economy at the expense of the global economy.”

To see the INVNT/IP database of IP thefts and related information, go to www.invntip.com.

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SNS FiRe Conference Names True North Therapeutics A 2015 FiReStarter Company

Strategic News Service (SNS) has selected True North Therapeutics Inc. as a 2015 FiReStarter company to be featured at the 13th annual Future in Review (FiRe) conference. FiRe 2015 will take place October 6-9, 2015, at the Stein Eriksen Lodge Deer Valley in Park City, Utah.

Described by The Economist as “the best technology conference in the world,” FiRe features global thought leaders in technology and the global economy, including Elon Musk, Craig Venter, Michael Dell, Vint Cerf, Leroy Hood, Patti Grace Smith, Mark Hurd, Paul Jacobs, and many others. FiReStarters are selected based on the strength of their innovations and their potential to bring positive change to the world, and are showcased at an exclusive investor reception at the FiRe conference, in panels throughout the event, and with ongoing relationships introduced and supported by SNS.

True-North-Therapeutics2True North Therapeutics Inc. is a pioneering biotechnology company selectively inhibiting the Complement pathway for diseases of high unmet clinical need. The company’s lead monoclonal antibody, TNT009, targets the Classical Complement pathway, enabling selective inhibition of downstream phagocytosis, inflammation, and cell lysis. True North is currently focused on Complement-mediated rare diseases in the hematologic, kidney transplant, dermatology, and neurological space. True North was formed in 2013 as a spin-out of iPierian, which was acquired by Bristol-Myers Squibb in April of 2014.

“It is a privilege for True North to have been selected as a FiReStarter. I look forward to updating the SNS FiRe community on our efforts in orphan drug discovery in neglected autoimmune diseases,” said Nancy Stagliano, CEO of True North Therapeutics.

“We are excited and honored to have True North Therapeutics as a FiReStarter company this year. Its proven management successes in this field, combined with a novel approach to combating autoimmune and related illnesses, offers great promise to those suffering from these diseases today,” said Mark Anderson, FiRe Chair and CEO of the Strategic News Service.

fire-logoFuture in Review is a gathering of world-class thought leaders, convened each year with the goal of providing the most accurate look forward in technology. FiRe is a world leader in exploring how technology drives the world economy and in using technology to solve major social challenges. These goals have been consistently achieved through FiRe’s collaboration across technology-driven industries and through active support from the global FiRe community.

To register for FiRe 2015, go to www.futureinreview.com

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SNS FiRe Conference Names Transatomic Power A 2015 Firestarter Company

Strategic News Service (SNS) has selected Transatomic Power Corp. as a 2015 FiReStarter company to be featured at the 13th annual Future in Review (FiRe) conference. FiRe 2015 will take place October 6-9, 2015, at the Stein Eriksen Lodge Deer Valley in Park City, Utah.

Described by The Economist as “the best technology conference in the world,” FiRe features global thought leaders in technology and the global economy, including Elon Musk, Craig Venter, Michael Dell, Vint Cerf, Leroy Hood, Patti Grace Smith, Mark Hurd, Paul Jacobs, and many others. FiReStarters are selected based on the strength of their innovations and their potential to bring positive change to the world, and are showcased at an exclusive investor reception at the FiRe conference, in panels throughout the event, and with ongoing relationships introduced and supported by SNS.

transatomicpowerTransatomic Power Corp., headquartered in Kendall Square in Cambridge, Massachusetts, is commercializing an innovative molten salt reactor that safely consumes nuclear waste, using it to produce affordable, carbon-free electricity to meet the world’s energy needs. The technical advisory board of Transatomic Power includes leading nuclear scientists and engineers with leadership experience from MIT, the University of Wisconsin-Madison, the Oak Ridge National Laboratory, and Westinghouse.

“We’re nuclear engineers with a new approach for electricity generation. We started Transatomic because we believe it’s possible to power the world while helping it thrive,” said Leslie Dewan, Co-Founder and CEO of Transatomic Power Corp. “We’re thrilled to be named a FiReStarter company and honored to have our technology selected for this prestigious event.”

“There is a planetary demand for carbon-free energy sources today, and a concomitant opportunity for safer designs in nuclear energy production. For these reasons, we are delighted to have Transatomic Power with us as a 2015 FiReStarter company,” said Mark Anderson, FiRe Chair and CEO of the Strategic News Service.

fire-logoFuture in Review is a gathering of world-class thought leaders, convened each year with the goal of providing the most accurate look forward in technology. FiRe is a world leader in exploring how technology drives the world economy and in using technology to solve major social challenges. These goals have been consistently achieved through FiRe’s collaboration across technology-driven industries and through active support from the global FiRe community.

To register for FiRe 2015, go to www.futureinreview.com.

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Executive Q&A: Mark Anderson’s Predictable Behavior

From Seattle Business:

execQA_6060_Working-2

A gift for pattern recognition makes his SNS Global Report on Technology and the Economy the go-to source for the scoop on what happens next.

“During the past 20 years from his home on San Juan Island, Mark Anderson, founder and CEO of Strategic News Service, has built up a newsletter that is as respected for its high-octane subscribers – they include the likes of Bill Gates, Paul Allen, Michael Dell, Elon Musk and Paul Jacobs — as it is for its annual predictions on technology, its deep dives into new trends and its provocative views on such issues as trade with China and global warming.”

Read the Interview

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Chinese and US Markets I

Strategic News ServiceAs you know, for the last four years we have been researching China’s state-sponsored theft of crown-jewel intellectual property, through our INVNT/IP Consortium.  That work has gone a long way toward educating business and government leaders on the economic model behind this practice, which we have named InfoMercantilism.

What you don’t know, and what we are announcing today: we have also spent the last year in an intensive research project, the purpose of which has been to describe, for the first time, the internal workings of the Chinese national business model.  This work has already received praise from leaders in business and government, and we will be making this information available to SNS members soon, but not today.

I am writing to you now because of the extreme instability of the Chinese equity markets, and the apparent lack of understanding in the West of what this may mean for China and the rest of the world.

All of you are aware that the Chinese equity markets, supported by many new entrants who often use margin lending to buy stocks, had risen by as much as 150% in the last year.  More recently, these markets are down about 30% since early June.  The government has done exactly the opposite of what modern central bankers would recommend, by: a) taking a bubble made larger by margin lending, and increasing such lending; b) shutting off IPOs, c) pressuring individuals and corporations to buy more stocks; and other desperate measures.

The business press seems to be taking two non-exclusive views of all this: one, that what goes up must come down (true), and, two, that this is just one sector in the overall economy, with the other sectors (banking, manufacturing, technology, etc.) quite healthy – so don’t worry.

We have the opposite view. Based on our work, the core Chinese economy is more than fragile, based essentially on non-market, often fraudulent practices and structures, all in a top-down, command-driven context which prevents free markets and trading, rather than enabling them.

From the highest perspective, we call this national model S.A.D., an acronym depicting Steal (IP), Amplify (it domestically), and Dominate (global markets).  A second, deeper description is contained in the acronym I.C.B.M., depicting which things are NOT as they seem in the national economy: Innovation is not innovation (it’s theft), Companies are not companies (90% are state-owned, with the rest state-influenced), Banks are not banks (the top ten are state-owned or controlled, and act as politically-driven cash distribution pipelines, with no accountability); and money is not money (the currency is government-manipulated in value).

We don’t intend the use of these acronyms to imply that any of these practices are cute or funny; they represent illegal and illicit financial behaviors which threaten the global economy.

For these, then, and related reasons, we believe that publications such as the Wall St. Journal have exactly the wrong “take” on the current status of China.  While the markets are in horrible shape, the other core economic sectors are, too.  We suspect that this is exactly why the government has done the opposite of what other central bankers would do: the government knows how fraught the core economic sectors are, and needs not only to avoid relying on their strength in the case of a market collapse but needs the market “goosing” provided by more fake money and bad lending practices to keep the machine going.

Indeed, at a time when the core sectors appear to be collapsing under the weight of too many years of fraud, the past year of rocketing equity markets has seemed to be the sole source of good news and energy in the Chinese economy.  Too bad that it, too, by being margin-driven and without real regulatory oversight, is a fake.

In summary, the Chinese markets are not a sole threat, or even the main threat, to the global economy; rather, they are just another sector based on poor accounting and questionable business practices.

If this is true, the world has much more to fear from the overall Chinese economic meltdown, than from its latest equity market gyrations.  Since foreign investors have been allowed to hold only about 4% of equities traded (another problem), the effect of this market circus will be almost zero in the sense of foreign investments lost.  But to the degree that Chinese investors have come into foreign markets, and Chinese firms listed (often through reverse shell mergers) on foreign markets, the effects could be much larger.

If and when China panics, their investors and companies will panic, and this could result in at least minor bumps in equity markets in the US, Australia, Japan, and the EU.  It’s doubtful these would be more than short-term blips.

But the big question, and the one indirectly raised by Chinese equity market performance this week, is now before the world: can fraudulent and illegal business practices at China’s scale damage the global economy?

The answer is certainly, yes.

Does this have anything to do with today’s NYSE interruption?  Probably not.

—-
[View Chinese and US Markets I]
[View Chinese and US Markets II]
[View Chinese and US Markets III]

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SNS Fire Conference Names RedFlow a 2015 FiReStarter Company

Strategic News Service (SNS) is proud to announce that RedFlow has been selected as a 2015 FiReStarter company to be featured at the 13th annual Future in Review (FiRe) conference. Described by The Economist as “the best technology conference in the world,” FiRe features global thought leaders in technology and the global economy, including Elon Musk, Craig Venter, Michael Dell, Vint Cerf, Leroy Hood, Patti Grace Smith, Mark Hurd, Paul Jacobs, and many others. FiReStarters are selected based on the strength of their innovations and their potential to bring positive change to the world, and are showcased at an exclusive investor reception at the FiRe conference, in panels throughout the event, and with ongoing relationships introduced and supported by SNS.

redflow-logoRedFlow‘s 5kW continuous/11kWh zinc-bromide battery module (ZBM) is designed to be integrated into electricity storage systems for a range of stationary applications. The ZBM’s specific characteristics of daily deep charge and discharge capability mean it is ideal for storage and shifting of intermittent renewable energy, managing peak load on the grid as well as supporting off-grid (“island”) power systems. RedFlow is one of the first companies to install fully operational and functional ZBMs into a range of stationary energy applications. RedFlow’s R&D center, located in Brisbane, Australia, is part of the company’s global presence, with offices located in the USA and the EU and manufacturing in North America. Its ZBM is manufactured by the global manufacturing company Flextronics, which provides scalable manufacturing capacity with rigorous change management.

“We are honored to be one of only a few technologies selected for such a prestigious event. Our technology has the potential to be truly disruptive in the energy storage market, and with the size of the opportunity already validated we are well placed to capitalize on this,” said Stuart Smith, Managing Director, CEO, and Company Secretary of RedFlow.

“Like many others concerned about global warming and the requirements of building out new alternative energy sources, we at FiRe have recognized the dramatic requirement for grid-scale batteries. These will have unique characteristics suited to the maintenance, cost, and performance associated with mammoth scale. We are delighted to present RedFlow as one of our FiReStarter companies this year, with a solution for this problem that can help the planet with this critical project,” said Mark Anderson, FiRe Chair and CEO of the Strategic News Service.

fire-logoFuture in Review is a gathering of world-class thought leaders, convened each year with the goal of providing the most accurate look forward in technology. FiRe is a world leader in exploring how technology drives the world economy and in using technology to solve major social challenges. These goals have been consistently achieved through FiRe’s collaboration across technology-driven industries and through active support from the global FiRe community. Now in its 13th year, FiRe 2015 will take place October 6-9, 2015, at the Stein Eriksen Lodge Deer Valley in Park City, Utah.

To register for FiRe 2015, go to www.futureinreview.com and for more information on Redflow, go to www.redflow.com

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SNS FiRe Conference Names Haydale a 2015 FiReStarter Company

Strategic News Service (SNS) is proud to announce that Haydale Graphene Industries Plc has been selected as a 2015 FiReStarter company to be featured at the 13th annual Future in Review (FiRe) conference. Described by The Economist as “the best technology conference in the world,” FiRe features global thought leaders in technology and the global economy, including Elon Musk, Craig Venter, Michael Dell, Vint Cerf, Leroy Hood, Patti Grace Smith, Mark Hurd, Paul Jacobs, and many others. FiReStarters are selected based on the strength of their innovations and their potential to bring positive change to the world, and are showcased at an exclusive investor reception at the FiRe conference, in panels throughout the event, and with ongoing relationships introduced and supported by SNS.

haydaleHaydale, based in South Wales, has developed a patent-pending proprietary scalable plasma process to functionalize graphene and other nanomaterials. This enabling technology can provide Haydale with a rapid and highly cost-efficient method of supplying tailored solutions to enhance applications for both raw material suppliers and product manufacturers.

The Haydale plasma process does not use wet chemistry, nor does it damage the material being processed; rather, it can clean up any impurities inherent in the raw material. The technology is a low energy user and, most important, environmentally friendly. The Haydale method is an enabling technology, allowing the company to work with a raw material producer that seeks to add value to the base product and tailor the outputs to meet the target applications of product manufacturers.

The Materials Science Department of The Aerospace Corporation stated, in a paper published in The Journal of Applied Polymer Science (2014,131,[18]DOI: 10.1002/app.40802), that having purchased and used Haydale Graphene Nano Platelets in a composite project the work demonstrated a significant increase (over 100%) in strength in toughened epoxy composites.

Everyone has been saying that graphene is the next big thing, and we at Haydale believe that. However, to get the most out of the amazing properties of graphene, it needs to be capable of dispersing homogeneously in the target material. In addition to the research conducted by The Aerospace Corporation, using our plasma functionalisation process we have also achieved some truly staggering increases in the mechanical strength and stiffness of resins — so much so that there are opportunities to reduce the layers of glass fiber and carbon fiber in composite systems which could lead to significant weight savings with all the attendant benefits that brings,” said Ray Gibbs, CEO of Haydale.

While many now understand the amazing properties of graphene, Haydale is leading its commercialization through a combination of innovation and product consistency. We have been longtime evangelists for graphene’s role in a sustainable future, and we are big believers in Haydale’s place in that universe. And we are delighted to have them with us as a FiReStarter company this year,” said Mark Anderson, FiRe chair and CEO of the Strategic News Service.

fire-logoFuture in Review is a gathering of world-class thought leaders, convened each year with the goal of providing the most accurate look forward in technology. FiRe is a world leader in exploring how technology drives the world economy and in using technology to solve major social challenges. These goals have been consistently achieved through FiRe’s collaboration across technology-driven industries and through active support from the global FiRe community. Now in its 13th year, FiRe 2015 will take place October 6-9, 2015 at the Stein Eriksen Lodge Deer Valley in Park City, Utah.

To register for FiRe 2015, go to www.futureinreview.com.

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