Hey Chris, thanks for those responses to my intro questions above. Correct me if I'm wrong, but it seems as if you came into Asia with a background in business. How did you get started in this? What's your origin story?
Prior to Dezan Shira I was in Hong Kong. I worked as a consultant for a local Hong Kong law practice for a short time, I wanted to get involved in what was happening in China, but needed to know more, and that helped. In the evenings I would go to the HK public library and read whatever I could about mainland Chinese business law. There were no courses on the subject in those days, and China was essentially a pariah state, Tiananmen had occurred. But I'd already visited Shanghai by then and knew the place was going to take off. (When I left, to set up Dezan Shira, my boss said "Don't go to China Chris, it's dirty, nothing works, communist and they'll rip you off." All of which was true but not commercially fatal). So I left Hong Kong to go and live in Shenzhen, just across the border, it was like the Wild East over there, such a contrast. Dezan Shira began life in Shenzhen, 27 years ago.
Prior to that I worked in company formation in Hong Kong for Mossack Fonseca, the firm that 25 years later was the subject of the Panama papers and the film "The Laundromat". Ramon Fonseca was my boss. I got fired LOL. Before that I had a brief spell as a Commodities broker, trading coconuts (copra) on an exchange in the Philippines, but based in Hong Kong. I lived on Lamma Island, which was very cool, and got the 6am ferry to Central every morning, in a suit, rubbing shoulders with all the vegetable farmers.
Before that I was in the UK, and had set up a Recruitment company, bad timing, as a recession hit, and no-one was hiring. The business became insolvent. I became homeless and lived in a shelter for 6 months before I could scrape enough cash together to fly to Hong Kong. So that taught me how NOT to run a business, and also not to worry too much, when you've lived six months with drug addicts and such, small problems don't tend to phase you. I knew HK as I'd been there before and knew I'd be able to pick up a quick job, and by this time I just wanted to get the hell out of the UK.
Prior to that I worked for a Yacht dealer in Greece for a few years, I am a qualified ocean skipper, and helped the company franchise its yachts across Greece in the summer and the Canary Islands in the winter, and that taught me about living overseas and leanrng a new language (Greek). So by the time several years later I got to China, it wasn't such a big challenge, and I could handle it.
So although it wasn't at all planned like that, all those experiences, good and bad, were helping me to become what I ended up being; successful, financially independent, secure, and enjoying life. It all ended up with me being in a good place. I am content these days, and that's pretty cool. I needed all those twists and turns though to better understand myself and learn how to maximize my strengths. So that's the full cv. You won't find all that on my Linked In pages LOL 😉😂
Ok, I'll kick off with some answers to Wade's questions. Please feel free to add to, or ask others.
1) How to get started investing in the Silk Road?
There's three component answers to this question:
a) Travel. Acquire knowledge. just that is an investment, and are experiences and academia you need to have behind you in order to understand what is going on. Travel right now may be difficult, so do online research, and acquire a library. Amazon and Ebay are great resources for inexpensive books, choose your subject and go buy a library. As we're all locked down for while it makes sense to use this time to study.
b) I just wrote three articles this past week about investing in stocks in Belt & Road Countries, these are basically broken down as follows:
I have written material on how to get involved in Big Ticket investments, including Due Diligence and Joint Venture issues. Ask me questions about that if you want me to provide links.
2) What has been the impact of the novel coronavirus pandemic on Silk Road business? What advice do you have for people running such businesses during this time?
Basically what is happening is an IT enhancement of having staff working securely from home, and having the right tools to do this safely without compromising IP, communications and confidentiality issues. Covid-19 is ushering in more flexible, and permanently applicable office-staff work capabilities and technologies.
3) What are your strategies for learning the business environment in a foreign country?
Immerse yourself in the local culture. That means learning the local language as best you can, and not being afraid to make mistakes. Locals will be more impressed you're making an effort than wanting to criticize. Go to the local museums, read books on the history and culture, and make local friends. Seek out like minded expats. Most expats are frankly horrible people, narrow-minded, jealous and scared. They get drunk at bars and never explore. Steer clear of the bores. Find your own path.
4) What does art and culture have to do with Silk Road investing?
The way people think and behave can be different than you may be used to, so research the culture. See (3) above, but also hang out with liberally minded locals, make friends. Most business magazines feature boring talking heads on their covers, or piles of cash. They have the worst covers ever. My magazines (see www.asiabriefing.com) always feature art on the front covers, firstly because the likes of Elon Musk are weird looking people, but they're also frankly pompous, overbearing twats hooked on overselling their importance. I use art to illustrate the importance of culture in local business environments, not photos of billionaires. Elon Musk and his ilk aren't going to lend you money, or give you any advise. But you might learn something from reading "The Art Of War", "Journey To The West" "Kama Sutra" or "The Brothers Karamazov" among others, and have more fun in doing so. Especially the third suggestion.
5) What are some personal highlights from your years of working on the business side of the Silk Road?
There are several, and hopefully many more to come. Here's a few, listed and answered in the (tongue in cheek, so don't take it too seriously) format of the seven deadly sins:
Pride: Because its cool to be working on something that not many other people can;
Envy: To see our competitors and others look at us and wish they could afford too, or have the time to do it. But they can't. Ha ha ha!
Gluttony: Because one business involving China isn't enough. I have to have two.
Greed: I'm not actually money-motivated, but I am greedy to have new challenges and life experiences.
Lust: I've been wanting to kick the ass of China Law Blog, in the past they have been very unkind to me online. But now their Alexa rankings are half of those we achieve at Silk Road Briefing. Ha ha ha! (again). Yes, it's petty but I don't care....Otherwise, how can we mention lust about the Silk Road without falling in love 15 times a day with all those fantastic looking ladies that live all the way along those countries. Mama Mia! I must belong to about 28 Silk Road dating sites LOL.
Sloth: Well it's hard to be sloth when the Chinese ate them all. But that aside, the Silk Road is so full of vitality - from the ancient romance, to the joys of travel, to making business happen, that there is simply no time to be lazy.
Wrath: Let's depict this as learning to be less wrathful, and more tolerant. I've certainly learned to be more chill and less easily angered while dealing with the Silk Road. Adventures have mellowed my temperament, and made me far more tolerant when the shit hits the fan, and that's a good thing. These days I am more inclined not to let stuff freak me out, or worry about it as much. Travel in places along the Silk Road taught me that. It's hard to be cool or even try to be when a Mongolian horse has just dumped you on your ass. You just have to get back on and do it again.
So those are my replies. Fire away if you wish to ask about those, or have any other questions.
"Travel. Acquire knowledge. just that is an investment, and are experiences and academia you need to have behind you in order to understand what is going on."
I like how you seem to view yourself as a traveler -- as in someone on a journey in the pursuit of understanding (and the collecting of experience). This mentality is important no matter what you do in life. If you activate it the opportunities will appear before you.
Also, the lack of fear of making mistakes. Good advice. Never fear getting bucked off a horse and looking like an ass. Plan to be embarrassed every now and then and pursue those types of circumstances, as these are the kinds of events that real value can be extracted from.
"When it feels awkward you know you're on the right path." I heard someone say this once and it's always stayed with me.
Also, enjoy the ride ... which you seem to do very well at.
1) I bought an apartment in Yerevan for a local Mistress. Ahem. True. Anyway, there was also a bit more to it than that, and the market was going up after the recent revolution there. So love and sex was involved, and a bit of homework, wanting to provide security with an appreciating asset to my local lover, an unmarried single Mum. So I guess this illustrates one reason to buy: to provide longer term security, if not for yourself, then for others.
2) I also have an apartment in Ulaan Baatar I bought about 12 years ago, as a place to retreat too when I got fed up of China (I was living in Beijing at the time). I still use it in the summers as a base to go out into the fantastic Mongolian countryside. (You can download a book I wrote about that here: http://ubmongoliatravelguide.com/). It'll never go up much in value so I might as well keep it. So I guess that's an example of buying for a retreat.
3) I have a large house in Sri Lanka, near to the beaches in the south. That is beautiful, and is a home. I chose there because it is lovely, and relatively close to my other offices in Asia. So that was an investment as a personal home, and also for security (somewhere to live).
4) I have a Penthouse apartment in Malta, overlooking the Marina. That's a second home, and I'm European so I use that as my European base. It's also an investment, and has doubled in value the past three years. So I could sell that one as an asset. I'm not so attached to it.
5) I have a small apartment in St.Peterburg. Valery Gergiev suggested I buy, and I love the city and Russian opera and it was cheap (then) so I did. I really bought that to satisfy my cultural needs, I had been away from Europe for 25 years and wanted a base in a European cultural centre. It doesn't get much more cultural than St.Petersburg.
6) I rent a Dacha on the outskirts of Moscow, to give me another Russian base and to immerse myself more in the culture. I lecture sometimes at the HSE, and I'm learning Russian. So that's practical.
So to summarize that, I bought property because I liked being in the place and gave myself responsibilities to make sure I return. Only 1 (Malta) was really an investment specifically to make money, and even then I live there part of the time. None of my properties as homes have been to attract rental income. Also I didn't get a mortgage some were unmortgagable) and bought cash. I never borrow money, and neither does my company. But I was a relatively old buyer as a result of that self-imposed constraint, I didn't buy my place in Mongolia until I was 46. Before then I'd always rented and reinvested income into my business in China, rather than property. I never liked the Chinese market either, so held back, and stuck it all into my company instead, which seemed a better bet and anyway it needed the development capital. It's paid off, Dezan Shira's annual revenues are well into tens of millions and slowly creeping to the hundred million mark. Pretty good.
But do have other purchases I made as investments, both close to my Sri Lanka home. One is an old mansion on top of a hill (I also own the hill) which I will renovate and turn into an upmarket restaurant. The other is a contemporary, six bedroom large Villa overlooking the Indian Ocean from the top of a cliff. That will become a luxury boutique hotel. They should both provide some type of income, although I have no desire to manage them. These should be completed by 2022. Then maybe I'll retire. So all I can answer your question with is say "Do as you feel is best for what you want." The rest, at least I found, took care of itself.
And I trusted my business development as an investment rather more than buying property, or did at least until I could diversify. Hope that makes sense, it did to me at the time LOL.
I didn't answer where I would invest now along the Belt & Road in terms of property. That would require more research and travelling, and going to see places and understand their property ownership laws and generally look at the business environment and reform policies. Turkmenistan for example is pretty closed! But I think Uzbekistan is on the right path, that country especially is going through a lot of reforms and is becoming more 'normal' and predictable as a market economy. So I would take a look at that. I think Vladivostok is a good bet, I was at SPIEF last Autumn and very impressed with the city. It's going to become an important North-East Asia Port. Tbilisi in Georgia is great as a living environment, although the economy depends on their political relationship with Russia, and their politicians like to be patriotic and macho and pick arguments. But the livings standards are high. Urumqi in China would be good, if they can get it more settled, but it's become a hotspot for political unrest, not all of it China's fault. Minsk is an interesting city and between Russia and EU so there are some cool things happening there, and Tallinn, the other side of the Russian border is great, and a developing EU logistics hub, but the Estonians tend to be a bit up their own ass concerning Russia too. Some interesting things are happening in Bucharest too, and ports like Constanta.
So, to summarize from East to West: Vladivostok, Urumqi, Tashkent & Samarkand, Tbilisi, Bucharest, Constanta, Minsk & Tallinn. That's already quite a list! ✈
Is Uzbekistan leading the way regarding political reform on the Silk Road and are there any advantages for investors in countries following the example of Mongolia and becoming more democratic?
Hi John, still doing the UB-London thing as Chair of the Mongolian–British Chamber of Commerce I see. Keep up the good work!
I wouldn't suggest that democracy has actually done Mongolia many favours - it's had a succession of short term elected Governments in a country that desperately needs long term planning, and needs to resolve that conundrum. In a quarter century of democracy they still haven't fixed many many problems. It would be for an autocratic guy to be in power for a decade to sort it all out, then pass it over to the people. It never had a transition period from from USSR to a free market and this lack of any adaption hasn't done the country any favours. The EU and USA have a lot of political mess they introduced too fast too soon in countries like this. Anyway...
Hi Chris, thanks for sharing your thoughts. As you know, I am interested in the Digital Sill Road and was wondering whether there would be any opportunity for foreign enterprise to invest in this program - particularly into innovation labs?
Hi Andre, China doesn’t provide specific financing for foreign companies - why would they? But they do provide investment incentives for businesses investing in IT and for those wanting to be involved in the Digital Silk Road. So where does that align? I wrote a couple of days ago about China reducing profits taxes in China’s Western Regions, to 15% for ten years, here: https://www.silkroadbriefing.com/news/2020/05/01/15-reduced-profits-tax-rates-preferential-policies-announced-foreign-investors-china-support-belt-road-initiative/. Businesses have to fit in with the Western Regions Encouraged Industry programme to obtain those benefits, however that typically includes IT. Regional Science and Technology Universities such as in Kunming (KUST), Nanning, Guangxi and others are all engaged in research and development in digital technologies and the digital field, and they are all in regions where foreign investors can claim a reduced level of profits taxes. I’d suggest those would be a good place to begin.
My question is not entirely related to investments. How to communicate with the corporate world via the Internet? For example. I found an interesting park in Belarus which is part of the New Silk Road, but having written a letter offering to shoot a video I got a cold reply. Often I get no answers at all. On the other hand, when in Moscow I met a large Japanese company at an exhibition, we got a joint project. It was easy. I have little experience to understand whether it is worth continuing to work with people who do not see the potential for collaboration through the Internet.
You're talking about the Great Stone Forest Park near Minsk airport right? I've been there. If that's the Park you're referring too, it's Chinese owned, and basically aimed back to China for Chinese manufacturers to set up manufacturing units in Minsk to make cheap cars for the Russian, EAEU and possibly some EU sales. The Chinese can be very wary of anyone they don't know and especially journalists, and even more so in other countries. They're not really interested in any publicity and don't need exposure as the investor market is back in China. You might had had more luck if you were CCTV.
So that'll be why.
If it wasn't Great Stone Forest then please let me know more. I'm not saying I can help get you in, but I might - just might - know someone.
Yes, it was the Great Stone Forest Park. I contacted the Russian-speaking administration and they answered me, but when I told the details about what I want to do they became silent.
From the list I understand that I live near couple SEZ - Dubna, Zelenograd, Tver. But on the ground not so much what you can see without connections with right people. Wade, do you have a strategy for this?
To get inside the walls of many of these projects you really need to establish your "authority." This can be done in a few different ways: 1) to create content for a known media entity that they want to be included in, 2) to know someone who has authority with the people involved in the project who can vouch for you and make connections, 3) to develop a reputation within the business / research niche so that there's a reasonable chance that the people you contact will already know who you are and what you do.
If you don't really have a major (or industry) publication backing you, you lack connections, and you don't have much of a publication record it's going to be pretty tough to get the projects to take out time for you. It's not just that they are busy but they also take a risk allowing outsiders to come in to create stories.
I would recommend publishing wherever you can and creating a body of work that's relevant to the Silk Road topic that you can show them. They need to see your name on webpages. They need to be able to figure out a little of who you are and what you want to do. Try to use these initial stories to to get an engagement with a larger publication. Use this to include in your pitch.
Be sure to have a plan that you can show them so they can understand a little of what you're after. The reason why Charlie Stevens was so successful in the New Silk Road project was that his plan was very well thought out and he was able to demonstrate what he was doing very clearing.
But Charlie also had myself and Chris helping him out haha. I was able to call up a bunch of projects and provide him with introductions which got him in.
After a while of publishing in this niche the people involved on the ground will eventually read / watch what you put out and become familiar with you. That's when things start getting cool.
But it's a process. Start small and work your way up. That's what I did with Ghost Cities. I just went out and began publishing about the topic on my own blog. That got me a book deal. The book deal got me a job at the SCMP. The authority from writing for the SCMP got me behind closed doors. All of this together allowed me to complete the project.
Georgiy; email me at silkroad@dezshira.com with what you want to do and which zones you'd like to visit and I'll see what I can arrange. No promises, and anyway it won't happen right now with lockdown and a serious situation developing across Russia. Keep that on the backburner and ask me again in August.
Thanks Chris. Lizzie Collingham’s book is excellent. Very sad news that Fela’s collaborator Tony Allen passed away a few days ago. We’ve had what my daughter calls ‘old man African music’ on a lot In recent days. I recommend the album Tony Allen made with Hugh Masekela called Rejoice.
Hi Chris, having known you for some 20 years and very much respected your opinions and knowledge I would like to know your thoughts on the recovery timeframes along the Silk Road, primarily on the basis of investment infrastructure and new development. Also, a bit off the primary topic, any foresight into the restaurant and hotel?
Hi Ray! You'll be enjoying spring in Beijing. The Magnolia's will be blooming by the Forbidden City about now...
First of all, I think you're referring to my property developments in Sri Lanka, right?
1) The Mount. This is a 250 year old Mansion on top of a hill, views over paddies and forests, it's inland, sitting on two acres of land. The property is sound, but needs a total renovation, I don't think anything has been done to it since 1949. It's two stories, and a large footprint, but in those days the upper floor was used for storage, so the ceiling is very low. I will take the roof off, build up the second floor walls to make it high enough for usable space, then put the roof back on. The staircase is missing so I need to sort that out, and I'll extend the outside by putting a 2.5 metre wide patio and timber / terracotta roof covering as a wrap around veranda. The back of the property has a separate, but close kitchen area and bathrooms I will renovate and bring into the main body of the building. A swimming pool and deck needs to be put to one side of the building.
The entire downstairs floor will be the restaurant, and has some alcoves for privacy, upstairs will be a library/cigar room, and a couple of small bedrooms for friends to stay. There needs to be an external building made for staff accommodation. ETA: 2022.
2) Ivory Villa. This is owned by the Equity Partners of Dezan Shira & Associates, in amounts relating to their equity holding. It's a bonus we can provide for our senior personnel, so they have some investment reward and can use it, and we can also use it for corporate management meetings and / or rent it out to other corporates.
It's a contemporary Villa, situated on a cliff top near Unawatuna beach, with 180 degree views across the Indian Ocean. Totally private, no-one can see in. The developer ran out of money, so we picked it up. It needs a bit of knocking around, and we'll extend the footprint to provide one main first floor area that can also be divided into three separate rooms. We need that flexibility so we can use it for conferences as well as accommodation. There will be a huge wooden deck outside, infinity pool, sun loungers etc. Views straight out to sea, and the setting sun, and over to Galle and the Lighthouse to the West. Upstairs to the second floor will be a master bedroom and two smaller bedrooms, ocean views of course and an upper deck area. The Ground floor - to get to the Villa itself requires climbing some steps cut into the rocks - will be a terraced garden, it already has mature trees growing there that provide shade, an outside dining area, and there is a small house to be converted into a kitchen and maybe one bedroom / living area for a Manager. It'll be totally 6 stars in terms of fixtures and fittings, it's pretty exclusive. ETA: 2023.
I had intended to get both these projects started this year, but things are on hold a bit as you can imagine. So some delays and I'm still waiting on architects plans, and to get work started. Sri Lanka is Monsoonal so the earliest now I can begin will probably be October. But they won't go away, and can just sit there awhile until we can start. Then you can visit! Or earlier in fact if you wish, my Bungalow is not so far away and I have guest bedrooms at my home.
My personal belief, and I have spoken to a lot of medical professionals about this, is that this virus isn't going to go away anytime soon. Infection rates will likely drop in the coming months, but it will hang around, and return late this Fall and into next Winter and Spring 2021. In fact, this time next year might be even worse than this first pass through. A vaccine won't be ready until mid next year. So, I recommend keeping diligent and preparing for another global sweep, and thinking about where you wish to be if there is another breakout. Remember this one isn't over yet. Prepare for the worst, and think about a plan. Hope for the best. But I think it'll be with us until 2022.
Stay safe up there in Beijing! Say Hi to the Capital Club for me.
Hi Chris, thanks for that. Informative and full of life as always. Unfortunately I am not in Beijing at the moment. I came to Sydney on March 1st to renew my visa, which was granted on March 18th, after a short delay. I booked to fly back to Beijing on March 30th, so that I could spend a bit of time with my family, then China closed the border on March 28th - very frustrating. I hope that I get to go home sooner rather than later. The restaurant and hotel sound amazing and definitely places that I will visit on a regular basis. Take care mate, stay well.
When the Hotel and Restaurant are ready, I'll fly you in for the opening parties. How about that? Cheers! Stay safe in Oz, not a bad place to be right now... 😎
Always good to hear your stories Chris. Your interest and encouragement over the years as we’ve built business and settled in Asia has been greatly appreciated.
Three quick questions for you:
1) If I had $100k to invest and a 5 year horizon what would be a good Silk Road bet?
2) assuming travel restrictions lift - an off beat family holiday destination for Oct (Diwali break)?
3) A recent book (fiction possibly?) set Somewhere along the Silk Road that you’d recommend.
Hello Mark, I would be happy to share some information about " to spend your time in Georgian in October" , Usually it is the best month for travelling there. Possible to see so many things, and the weather is perfect. From highest village in Europe, to seaside, from urban life to harvesting in vineyards. Wine harvest is a national thing that makes every Georgian proud. Ill be happy to provide more useful information. Regarding economy, everything is 3 times cheaper than in Europe. 5-7 days trip can be cool.
Thanks Helen. I haven't been to Georgia but have heard great things. We love the sound of the wine harvest, so that's a big draw. How best to connect with you?
Hi Mark! Hoping Bombay is treating you well...I see India viral figures seem 'reasonable'...if they're true...to answer your questions:
1) If I had $100k to invest and a 5 year horizon what would be a good Silk Road bet?
A small apartment near the city centre in one of the upcoming cities. Minsk, Bucharest, Tbilisi, Yerevan, Istanbul, Tashkent, Vladivostok. Somewhere where you want to go often anyway, but those I think will increase in value.
2) Assuming travel restrictions lift - an off beat family holiday destination for Oct (Diwali break)?
You can come to celebrate my birthday in Malta! LOL. October is a lovely month, all those autumn colours we don't get in Asia. Sri Lanka's weather is still a bit unsettled then. Georgia would be beautiful. And its the wine harvest!
3) A recent book (fiction possibly?) set Somewhere along the Silk Road that you’d recommend.
I've just finished William Dalrymple's "The Anarchy" about the British East India Company, and his collaboration with Anita Anand "The Koh-I-Noor". Those have both lead me down other literary rabbit holes with other books subsequently on the way. I'm currently half-way though Christopher Ondaatje's compendium of Leopard stories, "The Glenthorne Cat" which features his own stories as well as those from Balzac, Jim Corbett and others. Then I will start Lizzie Collingham's "Curry" - a tale of cooks and conquerors. I have biographies of Sun Ra and Fela Kuti in the mail, I've been listening to a lot of their stuff recently at home.
Hi Chris, thanks for sharing your advice, I'm already liking the candid nature of the comments and the slightly lighter tone!
The advice to live and experience the culture and history of the markets in which we intend to build businesses in is vital. Having built a career in China and then Singapore over the past 15 years I've leaned heavily on my language skills and experience working in the Chinese mainland and understanding the working culture as a unique selling point to my various corporate overlords...
Now that I'm considering starting my own businesses with special interests in Sri Lanka and several other Belt & Road nations I need to heed that advice and focus on understanding the markets in which I will operate.
Any 'New Silk Road' specific advice that you would give a novice entrepreneur looking to get started?
P.S. I can vouch for the beauty and wonder of Mongolia, God only knows if anyone will make any money there but I count myself as one of many that have fallen in love with the place: courtesy of Chris' introduction to the country 7 years ago.
Ha ha you're welcome Oliver. Yes Mongolia is cool. The Travel Guide I wrote about it a few years ago is now available free online. See: http://ubmongoliatravelguide.com/ I hope you're enjoying Sri Lanka in the Lockdown!
Silk Road specific advise for an entrepreneur:
All I really have to say is you have to have love, an emotional feeling for wherever it is you intend to invest. After all, by proxy you'll be staying there quite a well to develop your business! I've seen a lot of unhappy expats just in it for the money. They might make plenty of that, but I think its fucks them up in the head a bit, they become arrogant, egoistic and not especially pleasant, as well as ultimately boring and dull, you don't want to be like that. The number of expats I've tried to engage in conversations about cultural issues, and all they seem capable of talking about, all the time, is business...yawn, yawn, yawn, dull dull dull. They have no imagination. I cannot be around such people, it would drive me nuts. Business is fine, but not 120% all the fucking time, screw that. For me, I need to smell the flowers and get out there and enjoy where I am.
So I guess I'd put a love for the culture and people first, and if you invest in a place you like and enjoy, and want to be, you're more likely to be successful anyway and happy and to enjoy the experience, and that's got to be better for the mind.
Love and kisses to Shirley and the kids! 😘
(Oliver won't mind me telling readers this, but his wife, Shirley, used to work for Dezan Shira & Associates in Shanghai. I had to chaperone her on a date with Oliver once LOL. Anyway we got on and now they're married with two gorgeous children. I am available for Chaperone Hire if anyone needs assistance with their love life). 😉😂
She was making sure she did proper due diligence on me LOL! You can imagine how nervous I was when I found out that her friend was managing partner of massive legal advisory firm!!
I've got information about this new crypto currency. My question now is how can I invest into it? Is it listed among the 2000 digital crypto currencies ?
Do you see a possibility where the Shanghai STAR market actually grows as an alternative to NASDAQ within the Silk Road realm? Apart from liquidity, NASDAQ offers transparency and access to USD, which is important when raising funds for cross border expansion, among others. Can Shanghai be New York? Without a meaningful and accessible exchange, many ideas will stay on idea level
Great question Alex. There's a good Euromoney piece which answers a lot of questions here: https://www.euromoney.com/article/b1l7d8zpxt84pm/chinas-star-market-burns-bright-in-coronavirus-gloom. There are limitations to it, as its mainly a route for smaller Chinese companies rather than foreign companies, which are still restricted from raising Chinese capital. There are also dividends taxes in China, 10% of the total if you wish to repatriate the money outside of China. Finally, I've seen some of the listings being prepared in the past for Hong Kong, Shanghai and Shenzhen. Chinese domestic companies are extremely adept at inflating, or vastly inflating their value and also good at deflating their risks and liabilities and keeping them off the prospectus. There is a lot of collusion with government and auditors. That won't go away anytime soon, and we just saw that on Nasdaq with Luckin. My comments on spotting a Luckin style fraud in China are here: https://www.china-briefing.com/news/spot-luckin-coffee-type-fraud-china/
Nonetheless the Shanghai STAR project has got off to a good start, and it seems they are serious about clamping down on abuse, dis-listing companies forever if they cheat investors. Let's see how that pans out once they're had a couple of scandals, and we'll see how resilient it is and how far they are prepared to go to uphold transparency. Vested interests can run very deep in China. Cheers! Chris
when I, as a specialist in International Law, want to encourage others to think more about China's BRI, I'm worried about the transparency, so I can't advertise about it.
For example, I couldn't find an official website to know EXACTLY what projects are in process in any country and what do they cost.
now, what is your opinion about being or not being transparent of BRI and if you know any website I will appreciate it.
I don't think there is any website that lists all of the projects. There's a semi-Chinese Government portal "Belt & Road News" https://www.beltandroad.news/ that carries a lot of data fed to it by Xinhua. There's a list on "Belt & Road Initiative Project Overview" https://www.beltroad-initiative.com/info/ which was operated by a couple of students but that seems to have run out of steam. Then again you also face the difficulty of how do you define a "Belt & Road" project? The consensus is it has to involve Chinese funding and participation, but then again a lot of projects run parallel to that, but aren't funded by China. The International North-South Transport Corridor from India, via Iran, and branching off to Afghanistan and also heading north to Azerbaijan and Russia is an example of this, but it's not Chinese funded. Yet it is a major infrastructure project and connects with Chinese funded infrastructure. That's why over at Silk Road Briefing our weekly round up is called "China's Belt & Road And Beyond" https://www.silkroadbriefing.com/news/2020/05/04/chinas-belt-road-beyond-may-4-2020/
In terms of costs and details of financing, many of these projects remain G2G and are not available for public scrutiny. This is because of the terms involved, which are often more to do with non-democratic bid processes, loan conditions, maintaining secrecy of funding sources , and sometimes to cover up corruption. Essentially this comes as a result to get the deal done, as opposed to having it pulled apart of years or criticized in public, and delaying the build. So much of the transparency is lost through lets say an "over-abundance" of democracy. That's OK, as long as both parties are straight. But as we have seen, and spectacularly in Malaysia, and the 1MDB scandal that's not always the case. Their Prime Minister at the time, Najib Razak (who I met in China once, the guy oozed sleaze), is now in jail while the US bankers Goldman Sachs have been denying culpability. 😆 There are vested interests in the East and the West in keeping some deals quiet.
I think it remains true that in order to fully appreciate the legal issues when negotiating BRI project contracts, it is a requirement that any legal representation on the Foreign Investors side must have legitimate and proven China legal experience.
I'm from Iran, studying seriously about BRI but I couldn't even find China's BRI projects totally in my own country! :)
your links are so helpful, but I think I need to save money to study your "China's New Economic Silk Road: The Great Eurasian Game & The String of Pearls" :)
Hey Chris, thanks for those responses to my intro questions above. Correct me if I'm wrong, but it seems as if you came into Asia with a background in business. How did you get started in this? What's your origin story?
Prior to Dezan Shira I was in Hong Kong. I worked as a consultant for a local Hong Kong law practice for a short time, I wanted to get involved in what was happening in China, but needed to know more, and that helped. In the evenings I would go to the HK public library and read whatever I could about mainland Chinese business law. There were no courses on the subject in those days, and China was essentially a pariah state, Tiananmen had occurred. But I'd already visited Shanghai by then and knew the place was going to take off. (When I left, to set up Dezan Shira, my boss said "Don't go to China Chris, it's dirty, nothing works, communist and they'll rip you off." All of which was true but not commercially fatal). So I left Hong Kong to go and live in Shenzhen, just across the border, it was like the Wild East over there, such a contrast. Dezan Shira began life in Shenzhen, 27 years ago.
Prior to that I worked in company formation in Hong Kong for Mossack Fonseca, the firm that 25 years later was the subject of the Panama papers and the film "The Laundromat". Ramon Fonseca was my boss. I got fired LOL. Before that I had a brief spell as a Commodities broker, trading coconuts (copra) on an exchange in the Philippines, but based in Hong Kong. I lived on Lamma Island, which was very cool, and got the 6am ferry to Central every morning, in a suit, rubbing shoulders with all the vegetable farmers.
Before that I was in the UK, and had set up a Recruitment company, bad timing, as a recession hit, and no-one was hiring. The business became insolvent. I became homeless and lived in a shelter for 6 months before I could scrape enough cash together to fly to Hong Kong. So that taught me how NOT to run a business, and also not to worry too much, when you've lived six months with drug addicts and such, small problems don't tend to phase you. I knew HK as I'd been there before and knew I'd be able to pick up a quick job, and by this time I just wanted to get the hell out of the UK.
Prior to that I worked for a Yacht dealer in Greece for a few years, I am a qualified ocean skipper, and helped the company franchise its yachts across Greece in the summer and the Canary Islands in the winter, and that taught me about living overseas and leanrng a new language (Greek). So by the time several years later I got to China, it wasn't such a big challenge, and I could handle it.
So although it wasn't at all planned like that, all those experiences, good and bad, were helping me to become what I ended up being; successful, financially independent, secure, and enjoying life. It all ended up with me being in a good place. I am content these days, and that's pretty cool. I needed all those twists and turns though to better understand myself and learn how to maximize my strengths. So that's the full cv. You won't find all that on my Linked In pages LOL 😉😂
Ok, I'll kick off with some answers to Wade's questions. Please feel free to add to, or ask others.
1) How to get started investing in the Silk Road?
There's three component answers to this question:
a) Travel. Acquire knowledge. just that is an investment, and are experiences and academia you need to have behind you in order to understand what is going on. Travel right now may be difficult, so do online research, and acquire a library. Amazon and Ebay are great resources for inexpensive books, choose your subject and go buy a library. As we're all locked down for while it makes sense to use this time to study.
b) I just wrote three articles this past week about investing in stocks in Belt & Road Countries, these are basically broken down as follows:
* Central Asia: https://www.silkroadbriefing.com/news/2020/04/27/investing-emerging-belt-road-initiative-stock-markets-central-asia/
* Caucasus: https://www.silkroadbriefing.com/news/2020/04/29/investing-emerging-belt-road-initiative-stock-markets-caucasus/
* South-East Asia: https://www.silkroadbriefing.com/news/2020/04/30/investing-emerging-belt-road-initiative-stock-markets-south-east-asia/
c) There are opportunities for foreign investors in China to take advantage of China's just announced 15% profits tax breaks for businesses fitting in with China's Western Regional Encouraged Industry scheme. You can read about that here: https://www.silkroadbriefing.com/news/2020/05/01/15-reduced-profits-tax-rates-preferential-policies-announced-foreign-investors-china-support-belt-road-initiative/
I have written material on how to get involved in Big Ticket investments, including Due Diligence and Joint Venture issues. Ask me questions about that if you want me to provide links.
2) What has been the impact of the novel coronavirus pandemic on Silk Road business? What advice do you have for people running such businesses during this time?
Again, I have covered this very recently here: https://www.silkroadbriefing.com/news/2020/04/24/impact-covid-19-chinas-global-belt-road-project-financing-qa/ and concerning the BRICS nations of Brazil, China, India, Russia and South Africa here: https://www.silkroadbriefing.com/news/2020/04/13/current-social-economic-impact-covid-19-upon-brics-nations/. My firm produced a complimentary magazine about operating your business during Covid-19 and the steps to take at this time here: https://www.asiabriefing.com/store/book/managing-china-business-crisis-infectious-disease-outbreak.html. It's free, all you need to do is subscribe (also free).
Basically what is happening is an IT enhancement of having staff working securely from home, and having the right tools to do this safely without compromising IP, communications and confidentiality issues. Covid-19 is ushering in more flexible, and permanently applicable office-staff work capabilities and technologies.
3) What are your strategies for learning the business environment in a foreign country?
Immerse yourself in the local culture. That means learning the local language as best you can, and not being afraid to make mistakes. Locals will be more impressed you're making an effort than wanting to criticize. Go to the local museums, read books on the history and culture, and make local friends. Seek out like minded expats. Most expats are frankly horrible people, narrow-minded, jealous and scared. They get drunk at bars and never explore. Steer clear of the bores. Find your own path.
4) What does art and culture have to do with Silk Road investing?
The way people think and behave can be different than you may be used to, so research the culture. See (3) above, but also hang out with liberally minded locals, make friends. Most business magazines feature boring talking heads on their covers, or piles of cash. They have the worst covers ever. My magazines (see www.asiabriefing.com) always feature art on the front covers, firstly because the likes of Elon Musk are weird looking people, but they're also frankly pompous, overbearing twats hooked on overselling their importance. I use art to illustrate the importance of culture in local business environments, not photos of billionaires. Elon Musk and his ilk aren't going to lend you money, or give you any advise. But you might learn something from reading "The Art Of War", "Journey To The West" "Kama Sutra" or "The Brothers Karamazov" among others, and have more fun in doing so. Especially the third suggestion.
5) What are some personal highlights from your years of working on the business side of the Silk Road?
There are several, and hopefully many more to come. Here's a few, listed and answered in the (tongue in cheek, so don't take it too seriously) format of the seven deadly sins:
Pride: Because its cool to be working on something that not many other people can;
Envy: To see our competitors and others look at us and wish they could afford too, or have the time to do it. But they can't. Ha ha ha!
Gluttony: Because one business involving China isn't enough. I have to have two.
Greed: I'm not actually money-motivated, but I am greedy to have new challenges and life experiences.
Lust: I've been wanting to kick the ass of China Law Blog, in the past they have been very unkind to me online. But now their Alexa rankings are half of those we achieve at Silk Road Briefing. Ha ha ha! (again). Yes, it's petty but I don't care....Otherwise, how can we mention lust about the Silk Road without falling in love 15 times a day with all those fantastic looking ladies that live all the way along those countries. Mama Mia! I must belong to about 28 Silk Road dating sites LOL.
Sloth: Well it's hard to be sloth when the Chinese ate them all. But that aside, the Silk Road is so full of vitality - from the ancient romance, to the joys of travel, to making business happen, that there is simply no time to be lazy.
Wrath: Let's depict this as learning to be less wrathful, and more tolerant. I've certainly learned to be more chill and less easily angered while dealing with the Silk Road. Adventures have mellowed my temperament, and made me far more tolerant when the shit hits the fan, and that's a good thing. These days I am more inclined not to let stuff freak me out, or worry about it as much. Travel in places along the Silk Road taught me that. It's hard to be cool or even try to be when a Mongolian horse has just dumped you on your ass. You just have to get back on and do it again.
So those are my replies. Fire away if you wish to ask about those, or have any other questions.
Thanks!
Chris
"Travel. Acquire knowledge. just that is an investment, and are experiences and academia you need to have behind you in order to understand what is going on."
I like how you seem to view yourself as a traveler -- as in someone on a journey in the pursuit of understanding (and the collecting of experience). This mentality is important no matter what you do in life. If you activate it the opportunities will appear before you.
Also, the lack of fear of making mistakes. Good advice. Never fear getting bucked off a horse and looking like an ass. Plan to be embarrassed every now and then and pursue those types of circumstances, as these are the kinds of events that real value can be extracted from.
"When it feels awkward you know you're on the right path." I heard someone say this once and it's always stayed with me.
Also, enjoy the ride ... which you seem to do very well at.
Thank you for the opportunity to ask questions to Chris - always unique insights!
Which city along the Silk Road would you consider the most attractive place for property investments?
(I understand that you have investments in Yerevan, Armenia. Could you possibly share your experiences, financing terms, return expectations?)
Let me answer in stages:
1) I bought an apartment in Yerevan for a local Mistress. Ahem. True. Anyway, there was also a bit more to it than that, and the market was going up after the recent revolution there. So love and sex was involved, and a bit of homework, wanting to provide security with an appreciating asset to my local lover, an unmarried single Mum. So I guess this illustrates one reason to buy: to provide longer term security, if not for yourself, then for others.
2) I also have an apartment in Ulaan Baatar I bought about 12 years ago, as a place to retreat too when I got fed up of China (I was living in Beijing at the time). I still use it in the summers as a base to go out into the fantastic Mongolian countryside. (You can download a book I wrote about that here: http://ubmongoliatravelguide.com/). It'll never go up much in value so I might as well keep it. So I guess that's an example of buying for a retreat.
3) I have a large house in Sri Lanka, near to the beaches in the south. That is beautiful, and is a home. I chose there because it is lovely, and relatively close to my other offices in Asia. So that was an investment as a personal home, and also for security (somewhere to live).
4) I have a Penthouse apartment in Malta, overlooking the Marina. That's a second home, and I'm European so I use that as my European base. It's also an investment, and has doubled in value the past three years. So I could sell that one as an asset. I'm not so attached to it.
5) I have a small apartment in St.Peterburg. Valery Gergiev suggested I buy, and I love the city and Russian opera and it was cheap (then) so I did. I really bought that to satisfy my cultural needs, I had been away from Europe for 25 years and wanted a base in a European cultural centre. It doesn't get much more cultural than St.Petersburg.
6) I rent a Dacha on the outskirts of Moscow, to give me another Russian base and to immerse myself more in the culture. I lecture sometimes at the HSE, and I'm learning Russian. So that's practical.
So to summarize that, I bought property because I liked being in the place and gave myself responsibilities to make sure I return. Only 1 (Malta) was really an investment specifically to make money, and even then I live there part of the time. None of my properties as homes have been to attract rental income. Also I didn't get a mortgage some were unmortgagable) and bought cash. I never borrow money, and neither does my company. But I was a relatively old buyer as a result of that self-imposed constraint, I didn't buy my place in Mongolia until I was 46. Before then I'd always rented and reinvested income into my business in China, rather than property. I never liked the Chinese market either, so held back, and stuck it all into my company instead, which seemed a better bet and anyway it needed the development capital. It's paid off, Dezan Shira's annual revenues are well into tens of millions and slowly creeping to the hundred million mark. Pretty good.
But do have other purchases I made as investments, both close to my Sri Lanka home. One is an old mansion on top of a hill (I also own the hill) which I will renovate and turn into an upmarket restaurant. The other is a contemporary, six bedroom large Villa overlooking the Indian Ocean from the top of a cliff. That will become a luxury boutique hotel. They should both provide some type of income, although I have no desire to manage them. These should be completed by 2022. Then maybe I'll retire. So all I can answer your question with is say "Do as you feel is best for what you want." The rest, at least I found, took care of itself.
And I trusted my business development as an investment rather more than buying property, or did at least until I could diversify. Hope that makes sense, it did to me at the time LOL.
Thanks for asking!
Thank you for the detailed answer! Hope you enjoy your home in Sri Lanka!
I didn't answer where I would invest now along the Belt & Road in terms of property. That would require more research and travelling, and going to see places and understand their property ownership laws and generally look at the business environment and reform policies. Turkmenistan for example is pretty closed! But I think Uzbekistan is on the right path, that country especially is going through a lot of reforms and is becoming more 'normal' and predictable as a market economy. So I would take a look at that. I think Vladivostok is a good bet, I was at SPIEF last Autumn and very impressed with the city. It's going to become an important North-East Asia Port. Tbilisi in Georgia is great as a living environment, although the economy depends on their political relationship with Russia, and their politicians like to be patriotic and macho and pick arguments. But the livings standards are high. Urumqi in China would be good, if they can get it more settled, but it's become a hotspot for political unrest, not all of it China's fault. Minsk is an interesting city and between Russia and EU so there are some cool things happening there, and Tallinn, the other side of the Russian border is great, and a developing EU logistics hub, but the Estonians tend to be a bit up their own ass concerning Russia too. Some interesting things are happening in Bucharest too, and ports like Constanta.
So, to summarize from East to West: Vladivostok, Urumqi, Tashkent & Samarkand, Tbilisi, Bucharest, Constanta, Minsk & Tallinn. That's already quite a list! ✈
Chris.
Is Uzbekistan leading the way regarding political reform on the Silk Road and are there any advantages for investors in countries following the example of Mongolia and becoming more democratic?
Hi John, still doing the UB-London thing as Chair of the Mongolian–British Chamber of Commerce I see. Keep up the good work!
I wouldn't suggest that democracy has actually done Mongolia many favours - it's had a succession of short term elected Governments in a country that desperately needs long term planning, and needs to resolve that conundrum. In a quarter century of democracy they still haven't fixed many many problems. It would be for an autocratic guy to be in power for a decade to sort it all out, then pass it over to the people. It never had a transition period from from USSR to a free market and this lack of any adaption hasn't done the country any favours. The EU and USA have a lot of political mess they introduced too fast too soon in countries like this. Anyway...
However, Uzbekistan has been opening, and in ways that Mongolia hasn't. I've written about Uzbekistan's reforms several times, here: https://www.silkroadbriefing.com/news/2019/05/08/uzbekistan-offers-ppp-deals-foreign-investors-banking-infrastructure/ here: https://www.silkroadbriefing.com/news/2019/05/21/uzbekistan-becoming-compliant-international-business-standard-norms/ here: https://www.silkroadbriefing.com/news/2020/02/04/uzbekistan-opens-banking-financial-services-foreign-investors/ and here: https://www.silkroadbriefing.com/news/2019/11/07/carrefour-open-first-central-asian-stores-uzbekistan/.
My views concerning Mongolia from a lecture I gave in Ulaan Baatar a few months ago can be obtained here: https://www.silkroadbriefing.com/news/2019/09/10/mongolia-china-russia-trade-trends-point/
Maybe catch you in UB in the summer?
Best wishes - Chris
Hi Chris, thanks for sharing your thoughts. As you know, I am interested in the Digital Sill Road and was wondering whether there would be any opportunity for foreign enterprise to invest in this program - particularly into innovation labs?
Hi Andre, China doesn’t provide specific financing for foreign companies - why would they? But they do provide investment incentives for businesses investing in IT and for those wanting to be involved in the Digital Silk Road. So where does that align? I wrote a couple of days ago about China reducing profits taxes in China’s Western Regions, to 15% for ten years, here: https://www.silkroadbriefing.com/news/2020/05/01/15-reduced-profits-tax-rates-preferential-policies-announced-foreign-investors-china-support-belt-road-initiative/. Businesses have to fit in with the Western Regions Encouraged Industry programme to obtain those benefits, however that typically includes IT. Regional Science and Technology Universities such as in Kunming (KUST), Nanning, Guangxi and others are all engaged in research and development in digital technologies and the digital field, and they are all in regions where foreign investors can claim a reduced level of profits taxes. I’d suggest those would be a good place to begin.
My question is not entirely related to investments. How to communicate with the corporate world via the Internet? For example. I found an interesting park in Belarus which is part of the New Silk Road, but having written a letter offering to shoot a video I got a cold reply. Often I get no answers at all. On the other hand, when in Moscow I met a large Japanese company at an exhibition, we got a joint project. It was easy. I have little experience to understand whether it is worth continuing to work with people who do not see the potential for collaboration through the Internet.
You're talking about the Great Stone Forest Park near Minsk airport right? I've been there. If that's the Park you're referring too, it's Chinese owned, and basically aimed back to China for Chinese manufacturers to set up manufacturing units in Minsk to make cheap cars for the Russian, EAEU and possibly some EU sales. The Chinese can be very wary of anyone they don't know and especially journalists, and even more so in other countries. They're not really interested in any publicity and don't need exposure as the investor market is back in China. You might had had more luck if you were CCTV.
So that'll be why.
If it wasn't Great Stone Forest then please let me know more. I'm not saying I can help get you in, but I might - just might - know someone.
Good luck!
Chris
Yes, it was the Great Stone Forest Park. I contacted the Russian-speaking administration and they answered me, but when I told the details about what I want to do they became silent.
The local Belarussians aren’t the management. The Chinese investors are. They’re not really looking for publicity. This might be useful though: https://www.russia-briefing.com/news/russias-free-trade-special-economic-zones.html/ or this: https://www.silkroadbriefing.com/news/2019/10/30/chinas-overseas-free-trade-zones-industrial-parks/ but generally speaking the Chinese don’t like much publicity as the Western media tends to beat them up a bit about the Belt & Road.
This article featured the Great Stone Industrial Park in Minsk and also others along the Eurasian route from China to the EU: https://www.silkroadbriefing.com/news/2019/09/25/free-trade-zones-linking-china-russia-eurasian-economic-union/
From the list I understand that I live near couple SEZ - Dubna, Zelenograd, Tver. But on the ground not so much what you can see without connections with right people. Wade, do you have a strategy for this?
To get inside the walls of many of these projects you really need to establish your "authority." This can be done in a few different ways: 1) to create content for a known media entity that they want to be included in, 2) to know someone who has authority with the people involved in the project who can vouch for you and make connections, 3) to develop a reputation within the business / research niche so that there's a reasonable chance that the people you contact will already know who you are and what you do.
If you don't really have a major (or industry) publication backing you, you lack connections, and you don't have much of a publication record it's going to be pretty tough to get the projects to take out time for you. It's not just that they are busy but they also take a risk allowing outsiders to come in to create stories.
I would recommend publishing wherever you can and creating a body of work that's relevant to the Silk Road topic that you can show them. They need to see your name on webpages. They need to be able to figure out a little of who you are and what you want to do. Try to use these initial stories to to get an engagement with a larger publication. Use this to include in your pitch.
Be sure to have a plan that you can show them so they can understand a little of what you're after. The reason why Charlie Stevens was so successful in the New Silk Road project was that his plan was very well thought out and he was able to demonstrate what he was doing very clearing.
But Charlie also had myself and Chris helping him out haha. I was able to call up a bunch of projects and provide him with introductions which got him in.
After a while of publishing in this niche the people involved on the ground will eventually read / watch what you put out and become familiar with you. That's when things start getting cool.
But it's a process. Start small and work your way up. That's what I did with Ghost Cities. I just went out and began publishing about the topic on my own blog. That got me a book deal. The book deal got me a job at the SCMP. The authority from writing for the SCMP got me behind closed doors. All of this together allowed me to complete the project.
Georgiy; email me at silkroad@dezshira.com with what you want to do and which zones you'd like to visit and I'll see what I can arrange. No promises, and anyway it won't happen right now with lockdown and a serious situation developing across Russia. Keep that on the backburner and ask me again in August.
Thanks Chris. Lizzie Collingham’s book is excellent. Very sad news that Fela’s collaborator Tony Allen passed away a few days ago. We’ve had what my daughter calls ‘old man African music’ on a lot In recent days. I recommend the album Tony Allen made with Hugh Masekela called Rejoice.
Yup, we've been playing that at home too. It's excellent. Readers can listen to what we're talking about here: https://www.youtube.com/watch?v=qFkaGROC-48
Hi Chris, having known you for some 20 years and very much respected your opinions and knowledge I would like to know your thoughts on the recovery timeframes along the Silk Road, primarily on the basis of investment infrastructure and new development. Also, a bit off the primary topic, any foresight into the restaurant and hotel?
Hi Ray! You'll be enjoying spring in Beijing. The Magnolia's will be blooming by the Forbidden City about now...
First of all, I think you're referring to my property developments in Sri Lanka, right?
1) The Mount. This is a 250 year old Mansion on top of a hill, views over paddies and forests, it's inland, sitting on two acres of land. The property is sound, but needs a total renovation, I don't think anything has been done to it since 1949. It's two stories, and a large footprint, but in those days the upper floor was used for storage, so the ceiling is very low. I will take the roof off, build up the second floor walls to make it high enough for usable space, then put the roof back on. The staircase is missing so I need to sort that out, and I'll extend the outside by putting a 2.5 metre wide patio and timber / terracotta roof covering as a wrap around veranda. The back of the property has a separate, but close kitchen area and bathrooms I will renovate and bring into the main body of the building. A swimming pool and deck needs to be put to one side of the building.
The entire downstairs floor will be the restaurant, and has some alcoves for privacy, upstairs will be a library/cigar room, and a couple of small bedrooms for friends to stay. There needs to be an external building made for staff accommodation. ETA: 2022.
2) Ivory Villa. This is owned by the Equity Partners of Dezan Shira & Associates, in amounts relating to their equity holding. It's a bonus we can provide for our senior personnel, so they have some investment reward and can use it, and we can also use it for corporate management meetings and / or rent it out to other corporates.
It's a contemporary Villa, situated on a cliff top near Unawatuna beach, with 180 degree views across the Indian Ocean. Totally private, no-one can see in. The developer ran out of money, so we picked it up. It needs a bit of knocking around, and we'll extend the footprint to provide one main first floor area that can also be divided into three separate rooms. We need that flexibility so we can use it for conferences as well as accommodation. There will be a huge wooden deck outside, infinity pool, sun loungers etc. Views straight out to sea, and the setting sun, and over to Galle and the Lighthouse to the West. Upstairs to the second floor will be a master bedroom and two smaller bedrooms, ocean views of course and an upper deck area. The Ground floor - to get to the Villa itself requires climbing some steps cut into the rocks - will be a terraced garden, it already has mature trees growing there that provide shade, an outside dining area, and there is a small house to be converted into a kitchen and maybe one bedroom / living area for a Manager. It'll be totally 6 stars in terms of fixtures and fittings, it's pretty exclusive. ETA: 2023.
I had intended to get both these projects started this year, but things are on hold a bit as you can imagine. So some delays and I'm still waiting on architects plans, and to get work started. Sri Lanka is Monsoonal so the earliest now I can begin will probably be October. But they won't go away, and can just sit there awhile until we can start. Then you can visit! Or earlier in fact if you wish, my Bungalow is not so far away and I have guest bedrooms at my home.
As for Economic Recovery along the Belt & Road...
I wrote about that here: https://www.silkroadbriefing.com/news/2020/04/24/impact-covid-19-chinas-global-belt-road-project-financing-qa/
My personal belief, and I have spoken to a lot of medical professionals about this, is that this virus isn't going to go away anytime soon. Infection rates will likely drop in the coming months, but it will hang around, and return late this Fall and into next Winter and Spring 2021. In fact, this time next year might be even worse than this first pass through. A vaccine won't be ready until mid next year. So, I recommend keeping diligent and preparing for another global sweep, and thinking about where you wish to be if there is another breakout. Remember this one isn't over yet. Prepare for the worst, and think about a plan. Hope for the best. But I think it'll be with us until 2022.
Stay safe up there in Beijing! Say Hi to the Capital Club for me.
Cheers
Chris
Hi Chris, thanks for that. Informative and full of life as always. Unfortunately I am not in Beijing at the moment. I came to Sydney on March 1st to renew my visa, which was granted on March 18th, after a short delay. I booked to fly back to Beijing on March 30th, so that I could spend a bit of time with my family, then China closed the border on March 28th - very frustrating. I hope that I get to go home sooner rather than later. The restaurant and hotel sound amazing and definitely places that I will visit on a regular basis. Take care mate, stay well.
When the Hotel and Restaurant are ready, I'll fly you in for the opening parties. How about that? Cheers! Stay safe in Oz, not a bad place to be right now... 😎
Always good to hear your stories Chris. Your interest and encouragement over the years as we’ve built business and settled in Asia has been greatly appreciated.
Three quick questions for you:
1) If I had $100k to invest and a 5 year horizon what would be a good Silk Road bet?
2) assuming travel restrictions lift - an off beat family holiday destination for Oct (Diwali break)?
3) A recent book (fiction possibly?) set Somewhere along the Silk Road that you’d recommend.
Stay safe
Mark
Hello Mark, I would be happy to share some information about " to spend your time in Georgian in October" , Usually it is the best month for travelling there. Possible to see so many things, and the weather is perfect. From highest village in Europe, to seaside, from urban life to harvesting in vineyards. Wine harvest is a national thing that makes every Georgian proud. Ill be happy to provide more useful information. Regarding economy, everything is 3 times cheaper than in Europe. 5-7 days trip can be cool.
Best,
Helen
Thanks Helen. I haven't been to Georgia but have heard great things. We love the sound of the wine harvest, so that's a big draw. How best to connect with you?
I'll introduce you both via email. Georgia is a great place, and the wine harvest is a super idea. I might even join you there!
... me too.
Hi Mark! Hoping Bombay is treating you well...I see India viral figures seem 'reasonable'...if they're true...to answer your questions:
1) If I had $100k to invest and a 5 year horizon what would be a good Silk Road bet?
A small apartment near the city centre in one of the upcoming cities. Minsk, Bucharest, Tbilisi, Yerevan, Istanbul, Tashkent, Vladivostok. Somewhere where you want to go often anyway, but those I think will increase in value.
2) Assuming travel restrictions lift - an off beat family holiday destination for Oct (Diwali break)?
You can come to celebrate my birthday in Malta! LOL. October is a lovely month, all those autumn colours we don't get in Asia. Sri Lanka's weather is still a bit unsettled then. Georgia would be beautiful. And its the wine harvest!
3) A recent book (fiction possibly?) set Somewhere along the Silk Road that you’d recommend.
I've just finished William Dalrymple's "The Anarchy" about the British East India Company, and his collaboration with Anita Anand "The Koh-I-Noor". Those have both lead me down other literary rabbit holes with other books subsequently on the way. I'm currently half-way though Christopher Ondaatje's compendium of Leopard stories, "The Glenthorne Cat" which features his own stories as well as those from Balzac, Jim Corbett and others. Then I will start Lizzie Collingham's "Curry" - a tale of cooks and conquerors. I have biographies of Sun Ra and Fela Kuti in the mail, I've been listening to a lot of their stuff recently at home.
Stay safe!
The Anarchy was a great suggestion and read. Starting The Koh-_I-Noor.
Great! You can catch those cultural updates over on Silk Road Briefing while Wade's blog is on hiatus. You can search for them on the site. The latest is here: https://www.silkroadbriefing.com/news/2020/06/19/chinas-new-silk-road-weekly-arts-culture-round-june-19-2020/
Hi Wade, thanks for starting this open thread.
Hi Chris, thanks for sharing your advice, I'm already liking the candid nature of the comments and the slightly lighter tone!
The advice to live and experience the culture and history of the markets in which we intend to build businesses in is vital. Having built a career in China and then Singapore over the past 15 years I've leaned heavily on my language skills and experience working in the Chinese mainland and understanding the working culture as a unique selling point to my various corporate overlords...
Now that I'm considering starting my own businesses with special interests in Sri Lanka and several other Belt & Road nations I need to heed that advice and focus on understanding the markets in which I will operate.
Any 'New Silk Road' specific advice that you would give a novice entrepreneur looking to get started?
P.S. I can vouch for the beauty and wonder of Mongolia, God only knows if anyone will make any money there but I count myself as one of many that have fallen in love with the place: courtesy of Chris' introduction to the country 7 years ago.
Ha ha you're welcome Oliver. Yes Mongolia is cool. The Travel Guide I wrote about it a few years ago is now available free online. See: http://ubmongoliatravelguide.com/ I hope you're enjoying Sri Lanka in the Lockdown!
Silk Road specific advise for an entrepreneur:
All I really have to say is you have to have love, an emotional feeling for wherever it is you intend to invest. After all, by proxy you'll be staying there quite a well to develop your business! I've seen a lot of unhappy expats just in it for the money. They might make plenty of that, but I think its fucks them up in the head a bit, they become arrogant, egoistic and not especially pleasant, as well as ultimately boring and dull, you don't want to be like that. The number of expats I've tried to engage in conversations about cultural issues, and all they seem capable of talking about, all the time, is business...yawn, yawn, yawn, dull dull dull. They have no imagination. I cannot be around such people, it would drive me nuts. Business is fine, but not 120% all the fucking time, screw that. For me, I need to smell the flowers and get out there and enjoy where I am.
So I guess I'd put a love for the culture and people first, and if you invest in a place you like and enjoy, and want to be, you're more likely to be successful anyway and happy and to enjoy the experience, and that's got to be better for the mind.
Love and kisses to Shirley and the kids! 😘
(Oliver won't mind me telling readers this, but his wife, Shirley, used to work for Dezan Shira & Associates in Shanghai. I had to chaperone her on a date with Oliver once LOL. Anyway we got on and now they're married with two gorgeous children. I am available for Chaperone Hire if anyone needs assistance with their love life). 😉😂
She was making sure she did proper due diligence on me LOL! You can imagine how nervous I was when I found out that her friend was managing partner of massive legal advisory firm!!
I've got information about this new crypto currency. My question now is how can I invest into it? Is it listed among the 2000 digital crypto currencies ?
Do you see a possibility where the Shanghai STAR market actually grows as an alternative to NASDAQ within the Silk Road realm? Apart from liquidity, NASDAQ offers transparency and access to USD, which is important when raising funds for cross border expansion, among others. Can Shanghai be New York? Without a meaningful and accessible exchange, many ideas will stay on idea level
Great question Alex. There's a good Euromoney piece which answers a lot of questions here: https://www.euromoney.com/article/b1l7d8zpxt84pm/chinas-star-market-burns-bright-in-coronavirus-gloom. There are limitations to it, as its mainly a route for smaller Chinese companies rather than foreign companies, which are still restricted from raising Chinese capital. There are also dividends taxes in China, 10% of the total if you wish to repatriate the money outside of China. Finally, I've seen some of the listings being prepared in the past for Hong Kong, Shanghai and Shenzhen. Chinese domestic companies are extremely adept at inflating, or vastly inflating their value and also good at deflating their risks and liabilities and keeping them off the prospectus. There is a lot of collusion with government and auditors. That won't go away anytime soon, and we just saw that on Nasdaq with Luckin. My comments on spotting a Luckin style fraud in China are here: https://www.china-briefing.com/news/spot-luckin-coffee-type-fraud-china/
Nonetheless the Shanghai STAR project has got off to a good start, and it seems they are serious about clamping down on abuse, dis-listing companies forever if they cheat investors. Let's see how that pans out once they're had a couple of scandals, and we'll see how resilient it is and how far they are prepared to go to uphold transparency. Vested interests can run very deep in China. Cheers! Chris
Hello Chris.
I hope you're good.
when I, as a specialist in International Law, want to encourage others to think more about China's BRI, I'm worried about the transparency, so I can't advertise about it.
For example, I couldn't find an official website to know EXACTLY what projects are in process in any country and what do they cost.
now, what is your opinion about being or not being transparent of BRI and if you know any website I will appreciate it.
thanks.
Hi Reza,
Thanks, all is good.
I don't think there is any website that lists all of the projects. There's a semi-Chinese Government portal "Belt & Road News" https://www.beltandroad.news/ that carries a lot of data fed to it by Xinhua. There's a list on "Belt & Road Initiative Project Overview" https://www.beltroad-initiative.com/info/ which was operated by a couple of students but that seems to have run out of steam. Then again you also face the difficulty of how do you define a "Belt & Road" project? The consensus is it has to involve Chinese funding and participation, but then again a lot of projects run parallel to that, but aren't funded by China. The International North-South Transport Corridor from India, via Iran, and branching off to Afghanistan and also heading north to Azerbaijan and Russia is an example of this, but it's not Chinese funded. Yet it is a major infrastructure project and connects with Chinese funded infrastructure. That's why over at Silk Road Briefing our weekly round up is called "China's Belt & Road And Beyond" https://www.silkroadbriefing.com/news/2020/05/04/chinas-belt-road-beyond-may-4-2020/
In terms of costs and details of financing, many of these projects remain G2G and are not available for public scrutiny. This is because of the terms involved, which are often more to do with non-democratic bid processes, loan conditions, maintaining secrecy of funding sources , and sometimes to cover up corruption. Essentially this comes as a result to get the deal done, as opposed to having it pulled apart of years or criticized in public, and delaying the build. So much of the transparency is lost through lets say an "over-abundance" of democracy. That's OK, as long as both parties are straight. But as we have seen, and spectacularly in Malaysia, and the 1MDB scandal that's not always the case. Their Prime Minister at the time, Najib Razak (who I met in China once, the guy oozed sleaze), is now in jail while the US bankers Goldman Sachs have been denying culpability. 😆 There are vested interests in the East and the West in keeping some deals quiet.
I wrote about Due Diligence and Best Practice when dealing with BRI project contracts here: https://www.silkroadbriefing.com/news/2019/06/13/best-practice-preparation-negotiating-issues-handling-chinas-belt-road-initiative-projects/ as well as Negotiation issues here: https://www.silkroadbriefing.com/news/2019/10/23/negotiating-china-belt-road-project-contracts/ and Preparation here: https://www.silkroadbriefing.com/news/2019/06/29/preparing-foreign-investors-procurement-china-belt-road-projects/.
I think it remains true that in order to fully appreciate the legal issues when negotiating BRI project contracts, it is a requirement that any legal representation on the Foreign Investors side must have legitimate and proven China legal experience.
My firm www.dezshira.com does, and has had since 1992.
Hope that helps!
That was not a good answer.
That was a great answer! :)
thanks, Chris.
I'm from Iran, studying seriously about BRI but I couldn't even find China's BRI projects totally in my own country! :)
your links are so helpful, but I think I need to save money to study your "China's New Economic Silk Road: The Great Eurasian Game & The String of Pearls" :)
Hi Reza, Email me at silkroad@dezshira.com and I’ll send you a complimentary pdf of that book. How’s that?
Wow...it shows your kindness...
In the future, if we have a question about BRI, can we feel free to email you? :)
Of course. Thats what Wade wanted this blog to be able to do, to make a community of people.