Posts Tagged ‘bubble’

Recently I got a call from a friend offering me an interesting day job. She wasn’t clear on the specifics but it had something to do with businessmen and she assured me I wouldn’t have to do anything seedy. Foreigners in China often get offered these kinds of mystery jobs where you don’t really know what you’re getting into until you’re halfway through it. But they’re usually at least good for some entertainment and writing material, so I agreed.

I was whisked away in a Mercedes to the Diaoyutai Guesthouse – a government compound where foreign dignitaries stay and meet with top leaders like Hu Jintao and Wen Jiabao.

It was for a social networking company to formally announce its plan to go public on Nasdaq. They were pulling out all the stops to impress the investors. As I somewhat suspected, my job was to sit there and be a white guy. Sketchy, yes, but I was just happy they didn’t expect me to pretend I was part of the company or an investor like many of these white-guy-in-a-tie jobs do. I just had to sit and be foreign to enhance the prestige of the event.

But the prestige didn’t stop with me. The Diaoyu guesthouse must cost a small fortune for private companies to rent out. Everyone in China has heard of it. The investors lined up to be photographed next to the podium bearing the compound’s name.

There were cameramen and reporters from several of China’s major media agencies, but I find it hard to believe they had any real interest in covering the event. This was just some two-bit social network that will never compete with the established juggernauts. The ceremony itself was an excruciatingly ordinary chain of executives giving each other face and making flowery speeches.

It’s quite common in China for companies to pay reporters to show up and cover their event…even if there’s no intention of actually airing any of the material they get (that costs extra). Photographers conspicuously snapped away hundreds of pictures of the executives and, during the three minute question & answer period, two journalists were called on to lob softball questions at the panel. But the investors came away with a lot of face and confidence in their investment. The number of people who will actually purchase shares on Nasdaq remains to be seen.

It was reported last week that a Chinese cave somehow managed to get listed on the New York Stock Exchange through a series of backdoor schemes. The lengths and expenses some companies go to in order to bestow prestige and recognition upon themselves in China often goes to a Loony Tunes level of absurdity. I have a little more hope for this company to make a ripple in the stock market than I do the cave, but not a lot.

The money quote of the day came when an Australian investor who was backing the company said, “If you invest in the internet industry, you will achieve great success.”

I can’t say I know anything about this company, but I couldn’t help feeling a bit guilty while wondering how much the crowd, largely rich middle-aged Guangdong housewives, actually knew about “the internet industry.” I wondered how much my presence was contributing to China’s .com bubble (or rather, .cn bubble). And how many companies routinely put on shows like this wooing investors who, like Japanese of the 1980’s, think this rocket ship of economic growth will keep soaring forever.

Perhaps the most distressing thing I thought about while watching was how many Chinese Enrons there might be out there. How many companies are already seeing cracks, yet will keep aggressively pushing for investment until the house of cards comes crashing down?

I don’t know, but I’ve decided to cool it for a while with these mystery jobs.