I can’t say I ever articulated it as a goal, because it always seemed too far-fetched. But, I did achieve something today I truly value. I had an article published in a leading Chinese newspaper under my own name. Well, not the name my parents gave me, but my Chinese name, 傅成, which is how I’m generally known here. You can click here to see the article. The title, IPO黄金时代一去不返 私募股权行业危机重重, can be translated as “With the Golden Age of IPOs Over, the Chinese PE Industry is in Crisis”.
It’s an article about problems with unexited PE investments in China, and the block on IPOs for Chinese companies. It appears in the country’s only major national business daily, called 21st Century Business Herald, in English, or 21世纪报纸 in Chinese. Calling it the “Wall Street Journal of China” is a little bit of a disservice, since it enjoys more of a dominant position, both in reputation and in its area of financial reporting, than even the Journal. And I give way to no one in my complete admiration of the WSJ. It is the only newspaper I read and value.
I’ve been an occasional online columnist for 21st Century Business Herald for a couple of years. This may have made them more comfortable when dealing with my rather unusual request, to publish in the daily paper’s news pages under my name an article I submitted to them. This isn’t something Chinese newspapers, especially the major ones, would generally ever do. Media is sensitive in China, extremely well-monitored. I’m just a guy who runs a small advisory firm 1,500 miles from Beijing, and have had no other form of official vetting.
After a day of deliberating, I got word they’d agreed to run the story. I never spoke directly to any of the editors at the newspaper. I wasn’t allowed to. One of the team that manages the online columns acted as middleman.
It was important to me to have the article, as submitted, published, under my name. The article touches on a topic that I think is both important, and little understood — that the block in IPO exits, and the simultaneous cut-off in most new PE funding for private companies in China, is beginning to do real harm to the private sector economy in China. I wanted to make that point, directly and clearly, and not have it be massaged in any way.
I’m a guest in China, and feel extraordinarily privileged to live and work here. There’s nothing in my story critical of government policies, nor should there be. This crisis in China PE industry is largely of its own making. Yes, the sudden stop of all IPOs does harm to PE investors. But, for years now, China’s PE industry has been overly-reliant on IPO as its one means of exit. Money flooded in and, even at the best of times, only a trickle leaked out through IPO. Now the trickle has been plugged shut. PE firms, their investors and the entrepreneurs they backed are all in serious peril. PEs may lose their LPs money, which would be very unfortunate. But, the real suffering is likely to be borne by the entrepreneurs, who may actually be doing a great job running their business, but now have a desperate unhappy investor inside and so no way to raise the additional capital they need to keep growing. They face a kind of slow asphyxiation.
Another reason I wanted the article to be published under my name was to try to make sure my company got some credit for the work we’ve done over six months to calculate and assess the scale of the problem of unexited deals in China. The article was published this morning. By lunchtime, electronic versions were popping up all over the Chinese internet, on most of the major financial news websites. In almost all cases, these repackaged versions all deleted my name and that of China First Capital. Pretty much par for the course in China. “Journalistic ethics” are two words not frequently paired in China. The pirated articles now discuss the findings of our research without ever mentioning who actually compiled it. If I were a reader, I’d wonder, “why should I believe any of these numbers when the article doesn’t tell me who the source is?” But, I guess Chinese readers aren’t that fussed.
As readers of this blog clearly will have noticed, me and my company have gotten rather a lot of English-language press attention lately. But, not a single one of those articles, or the whole lump combined, gives me even a fraction of the satisfaction and joy I had this morning holding a Chinese newspaper and finding my article in the middle of page 15.–