Another Brick in the Wall: Link Edition XXX

Two areas of potential opportunity mentioned in the links: if you are an expert or veteran of the food and beverage industry, specifically fast food restaurants, you may be able to do a lot of consulting for local eateries that want to branch out and franchise across the country.  The other area are the zounds of unemployed graduates.  While there is a lot of skillset mismatch (and perhaps no skills at all), because of the rampant nepotism you may be able to find qualified candidates who have been looked over.

Thanks to James and Sinocism for a couple of links:

Regulatory risks, challenges and opportunities of cryptocurrencies in China and elsewhere

On Monday I had lunch with a couple of tech investors based in Shanghai.  We chatted about a number of topics but spent the bulk of the time discussing Bitcoin and specifically Bitcoin-related opportunities in China.  As an aside, a few months ago I wrote a post about the small BTC community in China.

As enthusiastic as I might be regarding the positive merits cryptocurrencies such as Bitcoin and Litecoin offer, I do think that regulatory oversight specifically in the form of Known Your Customer (KYC) and Anti-money Laundering laws (AML) will present serious hurdles for the entire ecosystem.  (Here is a podcast I did with David Veksler back in April regarding some of these challenges.)

In fact, all Bitcoin money exchanges based in the US have closed down and Mt. Gox, the largest exchange has recently suspended US dollar withdrawals for the next couple of weeks.  This is not to say that the cryptocurrency experiment is doomed to fail but it does mean that going forward all entrepreneurs and investors should be cognizant of the fact that the state — globally — has its eye on it.

Below are some links to relevant news stories about various exchanges and money transmitters being shut down/suspended:

In terms of the volume of various exchanges, Bitcoin Charts has an up-to-date spread of the major exchanges for BTC.  And based on CryptocoinCharts it appears that BTC-E has the lionshare of volume for Litecoin right now (~90%).

If you have a VPN or are based outside of China you can listen to a recent interview with Charles Lee, the creator of Litecoin (here was the first public announcement of Litecoin back in October 2011 made by Charles).  And if you are interested in visualizing the profitability and popularity of mining other alternative cryptocoins, visit CoinWarz.

Reader who were wondering who the lead developer of Bitcoin was now, his name is Gavin Andresen.  A few weeks ago the WSJ published an in-depth profile of him as did HuffingtonPost here as well.  Warren Togami is currently part of the core development team of Litecoin, he also works at Red Hat developing Fedora (he put together a LTC fundraiser the past couple months).

Lastly if you’re interested in knowing exactly what FinCEN announced back in March, here is the full guidance notice and the American Banker recently interviewed Jennifer Calvery, the director at FinCEN for her thoughts on cryptocurrencies.

Another Brick in the Wall: Link Edition XXIX

Analysts are still sorting through the interbank lending costs that are putting a squeeze on all debtors, especially “wealth management products” (see this description of WMP from a friend).  Thanks to Marshall and Sinocism for a few of the links:

Introducing China Law for Expats

A good friend of mine, Eric Meng, recently launched a new site targeting a specific niche: China Law for Expats.

I worked with Eric last year at the American Chamber of Commerce.  He graduated from the University of Virginia law school and is a New York licensed attorney.

And according to him, his goal is to help provide answers to many of the commons hurdles, struggles and questions that confound the expat community in China.  For example, one of his recent posts discusses work visas, describing the process and eligibility requirements for those without work experience.

Consequently, I know from first hand experience (see Chapter 10) how useful it can be to have cogent, legal advice out here.  Thus if you plan to work or even travel out on the mainland for an extended period of time, be sure to visit his site or contact him for more information.

Another Brick in the Wall: Link Edition XXVIII

Lots of bearish news right now but there are a couple of opportunities such as selling real-estate to Chinese buyers in foreign countries (specifically the US, see the last link) as well as finding ways to get big Chinese brands overseas.  Can your firm do either?  Thanks to Mike, James H and Sinocism for some of the links.

Another Brick in the Wall: Link Edition XXVII

Perhaps the biggest story that I have come across this past week is the newly unveiled plan to move 250 million rural residents to cities over the next 12-15 years.  This raises multiple questions: What will they do after the forced migration? Do they have any useful skills for urban environments?

This is not to say that this will end in collapse or some other doomsday scenario but if there were opportunities that rural migrants were capable of achieving in the cities they wouldn’t have to force people to move.  How are things going to be when the cities are full of unemployed migrants?

Either way, this probably does provide an opportunity to training companies that may find demand from relatively unskilled individuals looking to receive training for skilled work, so they can find work (or create companies that do).  This pretty much opens up the spectrum of training possibilities, though obviously affordability may also be a big issue (e.g., rural migrants are relatively poor, typically earning less than $5,000 a year).  See Chapter 9 for more ideas on the education and training segment.

Other news stories, some courtesy of Sinocism:

Are MOOCs a solution for the skillset mismatch?

While few people have a desire to be unemployed (or unemployable) the current higher education system in China has a number of issues in that many of the programs students have enrolled and graduate from do not prepare many of them for the labor market.  For example, roughly 6.99 million students will graduate from a Chinese college this summer (exams are typically held at the end of June, early July) yet in large cities like Guangdong, Beijing or Shanghai, only ~30% or so of new graduates have signed contracts for employment.

This is not a new issue or discovery, in fact, I wrote about it last year (as did the WSJ).  In Chapter 9 I discuss several of the opportunities that comes from this skillset mismatch, namely the need for retraining — some of which may take place online.  Massive open online courses (MOOCs) could be one solution.

Below is a very interesting, very concise write-up of the current problem as shown at a recently held Shanghai job fair, where neither candidate nor employer is incentivized by the other.  From MarketPlace education:

Hundreds of HR managers carefully eye prospective employees who, resumes in hand, crowd the floor at a Shanghai job fair.

Here’s the problem: neither group is interested in each other.

Nicole Li is looking to hire college graduates for her property management company. “We need technicians to fix software problems, but college grads don’t have these skills,” says Li, frowning. “We need people for exhibitions who can do presentations in English, but they can’t do that, either.”

Li needs to hire people for 60 high-skilled jobs. She says among the thousands of candidates here today, she’ll be lucky if she finds one.

Tong Huiqin comes to this job fair every Friday. He graduated from the Shanghai Finance University six years ago. Since then, he’s jumped from one job to the next. “It isn’t hard to find a job,” says Tong.  “It’s hard to find the right job.”

He’s worked as a supervisor for a bunch of companies, but hasn’t found the right fit. “You could have five hundred graduates and five hundred job openings here, and none of them would match up,” he says.

Tong blames Chinese universities. He says they need to do a better job at preparing people for the country’s rapidly changing labor market. Xiong Bingqi is the deputy dean of the 21st Century Education Research Institute, a nonprofit think tank in Beijing. “The scale of China’s higher education system has developed so fast that we’re failing to produce college graduates with the right skills for the jobs that are out there,” says Xiong.

For those with means, that’s meant sending your college-age children instead to universities in the U.S., Australia, or Europe. But most young Chinese can’t afford that, so they’re stuck in a Chinese university. And after they graduate — according to a recent state survey — their unemployment rate is four times higher than for those who didn’t get past elementary school.

Inside the job fair, young graduates linger in front of a booth for Bao Steel, China’s largest steel manufacturer. A big sign says that people from parts of Sichuan, Henan, Anhui, and Hunan are not allowed to apply. A guy applying for a job says people from those provinces can’t be trusted. It’s sort of like a booth at a New York job fair banning applicants from, say, Minnesota, Wisconsin and North Dakota. But this is typical in China, where even state-owned enterprises don’t bother to hide their discrimination.

At a neighboring booth, Jason Zhang is hiring people to work at a chain of nightclubs. He doesn’t care where his job candidates are from. He’s more concerned whether they’re willing to work. “I think today’s graduates are less appealing than people who were born in the ’70s and ’80s,” says Zhang. “They tend to be overly confident and they don’t want to work very hard.”

I turn around and ask 22-year-old Wang Qianmin, who’s about to graduate from Shanghai Normal University with a teaching degree, what she’s looking for at the job fair. “I don’t know,” she says with a pout. “Most of the jobs here aren’t really interesting. I’m looking for a company that’ll give me a high salary, money for meals and that’ll pay my rent — a place where the working hours aren’t too long.”

Wang says she wants to be a teacher. Or maybe a wedding planner.

She can’t decide.

Jason Zhang, the recruiter who has years of experience hiring people, rolls his eyes at this type of candidate. “Chinese college graduates these days think they’re really special,” he says with a smile. “The problem is — they’re the only ones who think that.”

Zhang says Wang and many others in China’s class of 2013 will go all summer thinking they’ve got lots of options, and will probably end up unemployed.

Another Brick in the Wall: Link Edition XXVI

Another cornucopia of links, mostly China-related.  I wonder if encryption usage will become more prevalent by companies and individuals?  Maybe not though because it can be complex and cumbersome to use… although as David Veksler has mentioned, it is good “best practices” to prevent proprietary information from leaking at your company by utilizing encryption.  Perhaps services like Silent Circle will become more popular as time goes by?

Another Brick in the Wall: Link Edition XXV

A smorgasbord of China-related links.  Xi and Obama are meeting out in Sunnylands right now (good VF article covering Sunnylands last year).  I wonder if Xi’s wife (Peng Liyuan) will dump her iPhone now that Apple is allegedly part of the NSA PRISM program.  Thanks to Sinocism for several of the links.

Let’s Talk: Interview with creator of Litecoin

Very informative interview with Charles Lee, the creator of Litecoin, the largest and most popular alt-coin spinoff of Bitcoin (it’s market cap is around ~$65 million right now). Be sure to check out CoinWarz to visualize the profitability in mining and speculating on alternative cryptocoins.

If you have some free time, listen to other interviews from Stephanie Murphy, the host of Let’s Talk Bitcoin.

Another Brick in the Wall: Link Edition XXIV

Despite the political issues and bilateral hacking, there is an ever growing amount of trade between the US and China.  This is great — win/win.  See the Bastiat link at the end for why.  Thanks to Sinocism for some of the links.

Another Brick in the Wall: Link Edition XXIII

Upcoming political meetings between Xi and Obama, relatively slow news other than that.  Some of the links are from Sinocism.