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Feb 17 • 11 tweets • 3 min read
THE banker of China IT industry. Fan and I started our careers about the same time. He was working for Morgan Stanley when we first met. We have been friends over 2 decades and watched the growth of each other reuters.com/business/finan…
We were both involved w Asiainfo, the first NASDAQ listed CN tech co. I did first round of it and Fan was subsequently its CFO. He financed many startups at Asiainfo and then went independent and started China Renaissance. WHY was he disappeared? As my ex’s case, we can only
guess and we may never know. 1. Fan knows details of every major tech deals that has happened in the past two decades. Like every business in CN, political power is always involved. No exception to tech industry wsj.com/articles/china…
He maybe tugged in because CCP is going after certain bureaucrats. 2. CCP wants the in and outs of all the back room deals, and there are many in tech industry. Not because they are going after particular bureaucrats, but because they are fishing for knowledge they can use either
to charge or as a threat to bureaucrats and senior politician. 3. It is unlikely they are going after Fan personally. He is a private entrepreneur. I don’t believe he’s a criminal in our common sense. But because he’s an operator in CN system, he can be criminalized. It all
depends on how CCP executes ex post. IMPLICATIONS: 1. All venture capitalists will stay offshore. Because anyone of significance knows Fan. No one know where this will spread. 2. A major blow to investment into CN tech industry. If you are an investor, you want to hold
and wait. Hasn’t all news media talked about CCP focuses this year on econ rejuvenation? Is that still the priority? 3. Where does cn tech financing go from here? Is it going to be mostly state funded? MY TWO CENTS. 1. I feel really sad, both for Fan and for our generation
of entrepreneurs. We were believers in CN. We did our best to navigate CN system of the decades before Xi. Xi changed rules of the game mid course and we become sacrifices. I think this entire generation of us felt betrayed. Our generation is probably the generation
that has the most commercial and financial success under CCP rule. What does disheartening this generation mean for future generations? 2. I’ve said multiple times, Xi has a vision for CN. But we as individuals won’t want to live in his vision. I believe the first priority of his
vision is to have CCP rule over this 15% of humanity forever. 3. Another maxim of mine, Xi always manage to make the worst strategic choice. Didn’t he send signals that he want to rejuvenate CN economy? Didn’t he say he supports private entrepreneurs? Didn’t he say the focus
is tech development? Arresting THE banker of the tech industry sends a completely opposing message to the financial and tech industries. MY PRAYER. I wish Fan won’t have too much suffering inside and he will be released soon to unit w his family

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More from @DesmondShum

Desmond Shum Profile picture
Feb 7
Is Xi responsible for balloon fiasco? Yes and No. Recently, there have been all sorts of speculations on why the wandering balloon happened. I interacted w the CCP bureaucracy for two decades, both personally, for example with Premier Wen family, and professionally, like building
Beijing airport. I would like to share my experience of how ccp govt programs come into being. What I’m sharing is generally true in all spheres, be it economy, military or industrial. It’s just the way CCP governance structure operates.
Top leadership sets a directional agenda.
After that agenda is in place, next level of apparatus, will set their own agenda, modified for each’s circumstances, but always in line w the directives from above. This process cascades down to every level of the CCP governing machine.
In this case, CMC sets the directional
Read 7 tweets
Desmond Shum Profile picture
Jan 27
How do we identify good analysis on China?
1.We need to continuously update the cast of Sinologists w ones who have recently left China after extended stay. I frequently question myself when would my experience/ knowledge of China expire. I have met / known some of the
current key players on stage, and I know the psych of the bureaucracy. But I do think my experience/knowledge will expire in a few years. We all accept China is a country under constant flux. Sinologists expires fast. Even if most Sinologists are only able to be in touch w fringe
of ccp power structures, extended stay allows ones to build deeper relationships and be in sync w pulse of the Chinese society.
2.Historical perspective helps to an extent. Of all the analysis about China, the one I truly enjoy is Stephen Kotkin. His deep understanding of
Read 4 tweets
Desmond Shum Profile picture
Jan 12
Little by little, we had this CCPness in our bones
What does it mean to be an American company in todays world? When its senior executive openly brags about helping to train CCP party officials, wsj.com/articles/honey…
half its US employee number over the last 20 years, aids a US sanctioned company that flagrantly steals IP from multiple US technology companies, built factory in an areas that CCP has violated human rights for decades, and still lands on WSJ to laud its achievements in CCP ruled
China.
Since Deng Xiaoying embarked on the policy of state capitalism, CCP aims to lure MNCs to invest in China, which bring investment, employment and technology. It has been proven in the past decades that what China gains is most often a loss of the home countries. It has
Read 11 tweets
Desmond Shum Profile picture
Dec 31, 2022
Met him when he’s a lowly bureaucrat at China UK embassy. My impression: 1. His career developed over the period of china’s opening, and he had been posted in UK. He’s more open minded, more flexible and less dogmatic than the preceding generation of China diplomats; 2. He is
sociable and enjoys goodies of life. I ran into him multiple times dining w beauties in better restaurants in Beijing when he was spokesman for MOF. It left me a deep impression. I thought spokesman would be more discreet: 3. He knows how to make guanxi within the system, as I
was saying he’s flexible and sociable. He socialized w me b/c we were known attaché of Wen family. That’s probably how he had gained favor of Xi and Xi’s attaches to move up the ladder. To conclude, he’s flexible and very much motivated by personal gains. By those two counts, his
Read 5 tweets
Desmond Shum Profile picture
Dec 15, 2022
What would enhance confidence in CN entrepreneurs? First of all, confidence of CN entrepreneurs has always been fragile 1. when communism is enshrined in the constitution; 2. CCP history of destroying private enterprises; 3. Favoring SOE over private enterprise is the default
mode in all permit approval, courts, banks, etc… There’s a saying in CN, entrepreneurs are like condoms - to be used when necessary, then to be disposed. We’ve all seen how the last decade had been. On the other hand, regarding the comment of lacking demand, entrepreneurs
create their own demand. To me, that’s the definition of entrepreneurship - you see demand others don’t see, you believe in your ability to create demand, and you garner resources to meet that demand. Most famous case is Steve Jobs w Apple. To conclude, we have seen pendulum
Read 5 tweets
Desmond Shum Profile picture
Dec 13, 2022
Why am I petrified of ccp surveillance but not the west? Everyone know mRNA vaccines are more effective than china vaccines. Ccp wants western companies to hand over mRNA technology in order to approve vaccines import. So ccp is effectively saying we want your tech for free, and
we are willing to trade hundreds of thousands, if not million, of extra Chinese death if you don’t agree in order to block you. That’s the regime that we are dealing w. So when ppl ask why are you so upset about ccp surveillance, when many western govt doing the same thing. It’s
because there’s limitations to what a democratic govt can do, and there’s due process to address it when they cross the line. Could you imagine a democratic govt kidnap a citizen without charge, no notice to relatives, held that p in captivity, and do whatever they desire to that
Read 4 tweets

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