Harry Chen Thinks Aloud

The Brookings Institutions, a leading US think tank, published a video interview that discusses the future top leaders of China. In China, the Communist Party always handpicks its government leader. The video speaks of two party candidates that may rise to the power after President Hu Jintao — Shanghai Party Secretary Xi Jinping (習近平) and Liaoning Party Secretary Li Keqiang (李克强).

What’s so fascinating about these two people is that they each represent a very different group of Chinese people and with conflicting interests.

Xi Jinping is the candidate of entrepreneurs and the emerging middle class. His father was the veteran Communist Xi Zhongxun, who served as a member of the Politburo, China’s second most powerful decision-making body, in the early- to mid-1980s.

Unlike Xi, Li Keqiang hails from a humble family background. Li grew up in Anhui province and began his career as a farmer. His father was a low-ranking local official. He overcame these obstacles, rising through the ranks of the Chinese Communist Youth League, Hu Jintao’s most important power base.

Given the distinctive background of these two people, picking a new leader is not a easy task. Picking Xi Jinping could mean more government policies that benefit the rich and the educated. Picking Li Keqiang could bring about an attempt to narrow the wealth gap between the rich and the poor.

There is no certainty in Chinese politics. Regardless who rises to the power at the end, competition is a good thing, but with some minor concerns.

… by choosing two people to compete against each other, this is something quite new in Chinese politics. So you will see a more dynamic factional politics in the next five years. In a way this is good—it will make the Chinese political system more open, more competitive, and probably more transparent. On the other hand, perhaps things might get out of control, because clearly these two leaders represent some conflicting interests, and the social forces will choose one or the other of these representatives, and this could lead to things spinning out of control.

Spotted on Virtual China

It’s almost the time to say “Good Bye” to the year 2007. I learned much about investing in 2007, and I’m looking forward to refine my strategies and apply them in 2008 and the years beyond.

Looking back 2007

In 2007 the development of three events have affected my family directly: (1) a slowdown in the US housing market, (2) a sharp decrease in the US Dollar value and (3) a significant increase in commodity prices, in particular, in food and energy prices.

The crash of the US sub-prime market caused a US housing slowdown. A minor drop in the home value in our neighborhood, though only damaged our net worth on paper, changed the way to we spend money. Because we felt that we have less money now, we have avoided purchasing many big ticket items.

A cheap US Dollar discouraged us from traveling to countries whose currencies are trading against the US Dollar in a record high. Similar to the effect of decreasing home value, a weak US Dollar hits my consumer confidence.

Expensive food and energy directly affected our household spending. Eggs, milk, wheat and corn products are now more expensive than what they used to cost. However, in some aspect, this has a positive consequence. We are more conscious about energy conservation and reduced the purchase of non-essential junk food.

Investing 2008

Two investment vehicles that I come to appropriate are (1) mutual funds that invest in gold and (2) high-yield CD. I believe that these two investment vehicles are useful for any personal investment portfolios.

Read the rest of this entry »

Andrew Martin at IHT reports that the Penthouse Media Group is investing $500 million in a group of social networking sites. Penthouse Media Group owns the Penthouse adult magazine.

The company acquired Various, which operates more than 25 networking sites.

Various’s most popular Web site is Adultfriendfinder, which describes itself as a personals community for swingers and sex. But Various owns a variety of other social networks like Italianfriendfinder.com, Gradfinder.com and Bigchurch.com, which offers to help users “meet people who share the same spiritual beliefs as you.”

Back in the early days of the Internet, I remember there was a saying, “if you want to know how latest Web technologies are been used, go visit a porn site”. This time there is no exception.

Source: Penthouse Media Group acquires social networking sites

According to the BusinessWeek, Larry Page, the co-founder of Google, is getting married today (Dec. 8th, 2008) to Lucy Southworth. There are few interesting things about getting married if you are a billionaire like Larry:

1. Rich people try to hide their private life from the public. But, in the age of Internet, it becomes extremely difficult to do so. Larry’s marriage was not widely announced, but a search for “Larry Page marriage” in the Google’s search engine returns 2,000,000+ matching pages.
2. Marriage for billionaires are like “business merger”. Not all relationships last forever. When things go south, there is the problem of divorce. In particular, how should assets be divided. Prenuptial agreements can help to solve the problem, but they are often difficult to implement and not without troubles when people trying to enforce them in court (read the article for details).

Here are my thought on why we shouldn’t think of marriage as “business merger”. First, marriage is about love — not about money or power. Don’t get married if you are worried about giving your spouse half of your money and power now or in the future. Second, prenups only encourage people to think of marriage as business merger and not the union of love. Signing prenups is an act of defense and an anticipation of unwillingness to solve relationship troubles. No marriage is perfect and without relationship problems. Couples must work together to solve these problems. Only people can solve relationship problems, prenups can’t. Third, giving half of your assets to your spouse is only fair if you choose to get divorced. Marriage is an equal partnership between a man and a woman. The union of love includes the union of financial assets. When people are married, their bank accounts are married, too.

Congrats to Larry and Lucy and those who are getting married today. My word of advice: Get married today, but don’t get divorced forever.