‘Several Things Have Shocked Me’: An Ex-Insider on Business in China

[aziqbal]

‘Several Things Have Shocked Me’: An Ex-Insider on Business in China​

Desmond Shum built a multibillion-dollar empire in the boom times, and says the economy is in far worse shape than outsiders realize.

Desmond Shum’s 2021 memoir lifted the lid on links between business and politics in China.Credit...Andrew Testa for The New York Times

Desmond Shum was one of China’s most well-connected businessmen. He and his former wife, Duan Weihong, used their relationships with top government officials to build a multibillion-dollar property development company during a golden age for entrepreneurs starting in the mid-1990s.

Now, tensions with the West dominate discussion, with Treasury Secretary Janet Yellen sharply criticizing China’s treatment of American companies on a trip to Beijing this week.

Mr. Shum left China in 2015 as Xi Jinping, the country’s leader, asserted greater state control over the country and its businesses. Duan, also known as Whitney, disappeared two years later. (It is believed that Communist Party officials detained her after a high-ranking political ally was held on suspicion of corruption.)

Mr. Shum told the story of their rise and fall — and the murky reality of doing business in China — in his 2021 memoir. Many details cannot be independently verified but his role at the intersection of business and politics is certain. He now lives in Britain with the couple’s son (neither of them has seen Duan since she vanished) and says it is unsafe for him to travel to China.

Mr. Shum will testify next week in Congress about the challenges for U.S. businesses operating in China. This conversation has been condensed and edited for clarity.

What has changed since you published your book?

First, the perception of China has become more negative. Covid has had a lot to do with it, especially in shifting the general public’s views. That has helped to speed things up in terms of how policymakers deal with China — they now have a tide to ride.


Second, the outside world underestimates how badly the Chinese economy is deteriorating. Several things have shocked me in conversations I’ve had with businesspeople in China. A big dairy company is producing more milk powder because people are cutting back on buying milk. Normally this is one of the last things you would cut out.

Many executives also say that staff are blatantly robbing and stealing from companies since the pandemic. Why? They have lost hope because the economic outlook is so bad.

How is this affecting governance and business?

It adds to the growing insecurity of the Chinese Communist Party, so the government is tightening control using measures it introduced during the pandemic. That is affecting business: Raids on due diligence firms with Western ties and restrictions on access to Wind, a Chinese data provider, are part of an effort to control foreigners.

How are international companies adjusting?

Companies are overwhelmingly reducing their exposure. People talk about “deglobalization,” but the proper term is “reglobalization minus China.” You won’t have one country replacing China, but operations are spreading to Vietnam, Indonesia, Sri Lanka, India and elsewhere. Look at how many Taiwanese manufacturers are moving into Mexico on a large scale. And then you have friendshoring and nearshoring in Europe.

Does the U.S.’s messaging — tough talk while also saying it wants to maintain dialogue — complicate matters?

After four years of Trump and three years of Biden, you see a general consistency on China policy. A slight change or variation in tone won’t affect China’s perception that the U.S.’s view of it is set. They need some lessening of tension for the sake of reviving business confidence and bringing in more capital. If they can mitigate or delay U.S. measures, they want to do that.

‘Several Things Have Shocked Me’: An Ex-Insider on Business in China

Desmond Shum built a multibillion-dollar empire in the boom times, and says the economy is in far worse shape than outsiders realize.

www.nytimes.com

 

[Kuru]

@beijingwalker @etylo
Would you guys know where Duan Weihong is? The article says she is vanished since 2017

May be your CCP bosses would know about her camp location. Any info would be appreciated.

Also, please do share any red corner notice issued against Me Shum. May be he was involved in a murder of an innocent farmer back home.

 

[Menthol]

Reglobalization minus China is Western term.

In reality, China is more and more connected to the rest of the world, minus the West.

But yes, Covid is affecting everything, it's impossible, illogical, if Covid and all the lockdown measurement mean nothing.

But with proper measurement, the effect of Covid can be reduced.

Up to today, the whole world is still affected, post-Covid effect.


I don't think Chinese people don't know about this, and China media or officials never speak about it.

It's just Western media who is self-censoring everything from China doesn't want to report it.

Not just the post-Covid news, even up to today no one know what kind of life Chinese people have in China, how modern China is today.

 

[kingQamaR]

Another factor was Corvid. It showed that the idea of having your manufacturing centred in one country is a bad idea if that country closes its factories and stops your supplies due to lockdown. This caused big problems to the German car industries. Since China was the only source of components. It is going to see less demand for its parts as companies diversify their supply chains to reduce risk I believe this is reasoning behind it.

@beijingwalker @etylo
Would you guys know where Duan Weihong is? The article says she is vanished since 2017

May be your CCP bosses would know about her camp location. Any info would be appreciated.

Also, please do share any red corner notice issued against Me Shum. May be he was involved in a murder of an innocent farmer back home.

Worry about your own Indian problems you are facing

 

[CIA Mole]

the end goal is a north korean style feudal/terrorist society that only serves chief economist terror xi

 

[Menthol]

@beijingwalker @etylo
Would you guys know where Duan Weihong is? The article says she is vanished since 2017

May be your CCP bosses would know about her camp location. Any info would be appreciated.

Also, please do share any red corner notice issued against Me Shum. May be he was involved in a murder of an innocent farmer back home.

Vanish is the Western media tricky word that need to be used when reporting news about China.

It's in their propaganda dictionary.

The same with a photo and video about China, it should be filtered with gloomy filter.

For India and other third world countries, it should be shown along with the slums.

Since you are lack of experience, I can understand your shock.


Basically, when someone is being arrested for committing a crime, it will be processed just like in other countries.

the end goal is a north korean style feudal/terrorist society that only serves chief economist terror xi

White people are obsessed with Xi.

Like trying to say that everything happened in China, it was done just be one person, who is Xi.

Any bad thing happened during WW2 by Germans, it was Hitler's mistake, just Hitler.

Actually, almost entire Germans in Germany were equally guilty.

 

[Kuru]

Vanish is the Western media tricky word that need to be used when reporting news about China.

It's in their propaganda dictionary.

The same with a photo and video about China, it should be filtered with gloomy filter.

For India and other third world countries, it should be shown along with the slums.

Since you are lack of experience, I can understand your shock.


Basically, when someone is being arrested for committing a crime, it will be processed just like in other countries.

Oh how did I miss this. Anything against China is a propaganda and a lie. Thanks for reminding me this.

 

[Menthol]

Oh how did I miss this. Anything against China is a propaganda and a lie. Thanks for reminding me this.

It's not anything against China, but the way the article was written is not the same if it was written for friendly country for the same case.

One is written so badly that leads the reader to be angry and frustrated by reading it.

And the others are written in a good way that leads the reader to be calm and sympathized.

 

[Kuru]

It's not anything against China, but the way the article was written is not the same if it was written for friendly country for the same case.

How differently a friendly country would’ve written this article where a woman is missing since 2017.

Or are you saying that Duan Weihong isn’t missing at all?

 

[vikan]

I highly doubt this article. Seems propaganda and selective jurnalism. Nothing substantial has been revealed in this article, seems more like a disgruntled exile trying to paint a picture that suits his purpose and his host country's purpose.

 

[JSCh]

"Reglobalization minus China" - what about Russia?

I think how the world minus West - their collective stand and action with sanction on Russia, should tell plenty on how they feel about Western sanction.

 

[REhorror]

He left China in 2015, big doubt on everything else he said.