This week’s podcast is about political risk in China tech, but really it is about how to think systematically about the role of the State. And about making investment decisions on uncertain terrains.
Here are five investment approaches to uncertain environments.
How to assess the role of the State and political risk:
- Question 1: Does the State have an active role in this sector?
- If so, don’t go forward until you can understand it. It is one of three key forces.
- If no role, then you can view this with a typical industry approach.
- Question 2: If there is an active role, what are the State’s interests? What is the evidence for this?
- Is it actively supporting?
- Is it against against rapid or significant development?
- Is it just muddy and mixed?
- Ques 3: If it is actively supporting, then ask how this firm is advancing the State’s interests? How is it working with govt? That is the main thing that matters.
About Giants, Dwarves and the State:
- What TikTok Can Learn From Huawei About the Role of the State (Jeff’s Asia Tech Class – Podcast 39)
- How Tsingtao, CR Snow and the Other Beer SOEs Won Big in China (Pt 2 of 2)
From the Concept Library, concepts for this article are:
- Role of the State
- Giants, Dwarves and the State
From the Company Library, companies for this article are:
- Philip Fisher
- Ben Graham
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