Latest News:  
Beijing   Shower/Overcast    28 / 22 ℃  City Forecast

English>>China Business

Chinese entrepreneurs unite against short-sellers

(Xinhua)

13:15, September 07, 2012

A group of over 60 Chinese business leaders have united to criticize short-seller Citron Research for issuing erroneous reports on U.S.-listed Chinese stocks.

It is a positive sign that after limited experience in the global market, Chinese enterprises are becoming mature enough to respond loudly to groundless charges.

Headed by former Microsoft and Google executive Kai-Fu Lee, these CEOs, investors and regional heads of global tech giants have abundant experience in international companies and are well-versed in the tech industry as well as practices in the capital market, so they are clear about how short-sellers can succeed in shorting Chinese stocks and the importance of public opinion.

Regardless of the result of the debate, the incident marks an important step for Chinese companies heading toward the global market.

Since March 2011, overseas short-sellers, especially Citron Research and Muddy Waters Research, have issued negative reports on U.S.-listed Chinese stocks, which led to slumps and even the suspension of these stocks.

Earlier in August, Citron targeted China's Internet search engine sector, arousing the fury of Lee and other business leaders who have great experience in the sector.

They signed an open letter condemning Citron for practicing fraud rather exposing it, and "some of these 'China short-sellers' started targeting legitimate companies with either no problems or minimal problems." The letter was posted on the newly-established website Citronfraud.com.

Mei Xinyu, a researcher at the International Trade and Economic Cooperation Institution under China's Ministry of Commerce, said one of the reasons why overseas-listed Chinese stocks often become targets for short-sellers lies in the information asymmetry in the capital market. It is also the biggest risk overseas-listed Chinese firms are facing on the micro-level.

U.S. investors lack understanding about Chinese companies as well as the country's full situation, so they cannot verify or disprove negative reports about Chinese firms that some short-sellers maliciously publish. Therefore, investors can easily believe this information and Chinese companies suffer great losses.

【1】 【2】



News we recommend:
Diaoyu row hurts Japanese car sales New Controls in the Making Housing report notes rise in sales
The Price Goes Up and Up Rail projects to spur economy Finance vehicle loans to local govts up in H1
A Treasure Trove of Resources  Kai-Fu Lee, Citron battle heats up Frictions Over Renewable Energy

Email|Print|Comments(Editor:厉振羽、张洪宇)

Leave your comment0 comments

  1. Name

  

Selections for you


  1. APF soldiers conduct anti-terrorism training

  2. Moscow holds salon displaying auto trends

  3. Diaoyu row hurts Japanese car sales in China

  4. Mantries to woo potential mates by wearing homemade 'chastity belt'

  5. Spectacular! When magma enters into sea

  6. Spanish beauty sexy show

Most Popular

Opinions

  1. ASEAN 'must not take sides in disputes'
  2. Commentary: Asian SMEs must plan for crisis
  3. US firms poison reputations of China start-ups
  4. Exams still fairest way for kids' school selection
  5. Quality better for box office than quotas
  6. Don’t hand over judgment to foreign media
  7. China, Japan can find path to more stable future
  8. Editorial: FDI rise possible

What's happening in China

Freshmen receive etiquette training in E China

  1. Two dead in Beijing railway stabbing
  2. Coca Cola to rebuild image through public welfare
  3. Booklet tells parents to 'prevent' homosexuality
  4. Dog's death prompts pet safety plea for planes
  5. 3 smugglers' sentences stir debate

China Features

  1. Exclusive:A probe into GM rice test
  2. How much we continue to pay for 'face saving? '
  3. Entering China's northernmost village
  4. Italy makes efforts to attract Chinese students
  5. Chinese economy not to suffer a hard landing

PD Online Data

  1. Ministry of Water Resources
  2. Ministry of Railways
  3. People's Bank of China
  4. Ministry of Health
  5. Ministry of Culture