reverse mergers

China has been home to the most extreme economic growth in human history. In four short decades, the nation has gone from a struggling backwater filled with poverty to this, a nation of glistening skyscrapers and more Gucci stores than you can poke a stick at. The driver of this growth has obviously been its embrace of the free market and opening itself up to international trade.  The nation has always had huge potential, given that historically for 1,900 out of the last 2,000 years it has been the largest economy on earth, but now it is finally realizing that potential once again.  Seeing this sustained growth people are obviously keen to jump on board, millions of dollars are been made by millions of people and any logical investor would be foolish to not have exposure to the largest growth market in the world right? I spend a fair amount of time chatting to channel viewers on discord, Patreon, and even in the comments section of the video’s and it’s probably one of the questions I see the most, Mr economics man how can I invest in Chinese companies stock?  Now I don’t want to sound rude, and I promise I absolutely mean this in the nicest possible way, but if you have to ask someone on youtube how you can invest in Chinese equities, you absolutely should not at all be investing in Chinese equities.  And in fact even for more seasoned investors, the market for Chinese companies is not exactly the promised land of double-digit annual returns you may think it is.  This is because there are a few major problems that have yet to be overcome, the stock market in China is both too regulated and not regulated enough. Which sounds silly but let’s explore it by looking at this problem piece by piece.  How is the Chinese stock market over-regulated?  How is the Chinese stock market under-regulated? And why does this mean that most investors probably shouldn’t be investing in these markets?

In the wake of the 2008 financial collapse, hundreds of China-based companies merged with American shell companies. Many of those companies reported assets and revenues out of line with their actual value. And investors were left holding the bag. That’s the subject of a new documentary, The China Hustle. On this week’s show, Chris talks with director Jed Rothstein. And best-selling author Daniel Levitin shares some thoughts from his book, The Organized Mind: Thinking Straight in the Age of Information Overload. Thanks to LegalZoom for supporting The Motley Fool.  Get special savings by going to www.legalzoom.com and use the promo code “Fool” at checkout. Learn more about your ad choices. Visit megaphone.fm/adchoices