China’s stock markets have been in free-fall for the past several weeks, reversing tremendous gains over the prior twelve months. The Chinese version of the SEC (CSRC) has intervened, attempting to staunch the slide. The management teams of many local Chinese companies have unilaterally halted trading in their own stocks, adding to the panic that currently prevails. Additionally, the ADRs (American Depository Receipts) of the shares in Chinese tech companies that trade in the U.S. have also fallen pretty sharply.

    At my venture capital firm, GGV Capital, we’ve been actively investing in China with a strong local presence for the past 15 years. We’ve backed some of the strongest new-economy Chinese companies that have emerged including Alibaba BABA 1.21% , Qunar QUNR 0.36% and YY YY 0.08% , and our China-based partners have been involved at the earliest stages of other Chinese tech companies such as Baidu BIDU 0.10% and Xiaomi. We’re heavily invested in China and are on the ground to see developments first-hand. We’ve lived through the Internet bubble, SARS and the global financial crisis, to name a few. As a result, I’ve gotten lots of questions recently about what’s going on in China, the prospects for the Chinese economy, and what the impacts might be on the US tech and VC markets. I’ve summarized some of the key elements of the story and my perspective on these questions below.

    The Chinese stock market sell off in context

    China has several local exchanges. The Shanghai and Shenzhen exchanges (which include “A-Share, Renminbi denominated stocks) are the most developed and include many low-growth, offline-economy, state-owned enterprises (SOEs) with minority stakes that trade publicly. SOEs are often local monopolies. There are also three Nasdaq styled exchanges – the Shenzhen-based Chinext (aka “3rd board), the Beijing based “New Third Board” and the very new “Special Shanghai Board.” These three exchanges have less stringent listing criteria, and include other local companies, many of which are offline-economy focused or niche players with slowing growth. Chinese stocks on all of these exchanges fell steadily for roughly the four years leading up to last summer.

    Meanwhile, the Chinese economy kept growing and many publicly-listed companies exhibited solid financial performance. As a result, Chinese stocks got cheaper on a multiple basis during this period and started to look more attractive. Eventually a rally ensued, initially based on fundamentals. Subsequently, more liberal government policies, including the enhanced ability for individuals (retail investors) to buy on margin, began to fuel further stock appreciation as investors had access to more capital and a thirst to bet on appreciating equities. This spiraled on itself until roughly one month ago when Chinese stocks began their nose-dive. The surge was meaningful – for example, A-Shares were up on average approximately 140% in the 12 months before the fall of the past 3-4 weeks.

    What is the government doing and why?

    The government has a priority to build flourishing, open capital markets in China. One important step is to have some of the highest quality Chinese companies trade locally. As local Chinese stocks rallied up until a month ago, an arbitrage window began to open up. Chinese companies trading in the US with ADRs looked like they’d have much higher valuations on Chinese exchanges. As a result, several take-private transactions were announced, where local Chinese funds partnered with management teams and local financial institutions to announce buyout offers for ADR, U.S.-listed Chinese companies, with the ultimate plan of restructuring these companies as onshore Chinese entities and taking them public locally. Given the government’s priority of building out the local Chinese stock markets, I believe there’s tacit support for these types of deals, and many of the U.S.-listed ADRs rallied on rumors of more take-private offers coming.

    Now with the local markets in free fall, the Chinese government is more focused in the short term on trying to calm the markets, similar to the moves we’ve seen the U.S. government make in times of local market strife. To date, these moves seem pretty draconian (e.g., unilaterally locking up insiders from selling stock for a long while, closing the IPO window, etc.) and have been ineffective in reversing the slide. Making matters worse, many companies have halted trading in their own stocks, further stoking panic fears among investors who are getting margin calls and needing to find liquidity urgently.

    过去几周中国股市直线下坠，开始回吐此前12个月的巨大涨幅。中国证监会已经出手干预，试图遏制市场滑坡。许多中国公司的管理层都选择了停牌，这加剧了目前笼罩市场的恐慌心态。同时，美国市场交易的中国科技公司ADR（美国存托凭证）也出现了相当大的跌幅。

    15年来，我所在的纪源资本风投公司一直积极在中国投资，在华业务规模已经很大。我们支持的中国公司包括一些实力最强的新经济企业，如阿里巴巴、去哪儿网和欢聚时代。我们的中国合作伙伴也参与了百度和小米等其他中国科技公司的最早期投资。我们在中国投入了大量资金，亲眼目睹了这些公司的发展。我们也经受住了互联网泡沫、非典、全球金融危机等一系列困难的考验。因此，最近许多人都在问我中国出了什么事，中国经济前景如何，以及美国科技和风投市场可能受到哪些影响。我总结了一些关键因素，并提出了我对这些问题的看法，具体如下。

    中国股市暴跌有因

    中国有多个股票交易市场，上交所和深交所是中国两大股票市场，许多增长缓慢、从事线下经营的国有企业都在此上市，但它们只有少数股份可以流通。这些国企往往在中国处于垄断位置。另外还有三个类似纳斯达克的市场，分别是深圳创业板（即三板市场）、北京新三板和最新的上交所战略新兴产业板。这三个市场的上市条件不那么严格，囊括了其他地方性公司，其中许多都以线下经济为重点，或者是增长缓慢的小众企业。去年夏天之前，这三个市场上的股票在四年时间里一直处于稳步下滑状态。

    同时，中国经济持续增长，许多上市公司都披露了良好业绩。因此，在这个阶段中国股票的估值倍数下降，吸引力开始上升。最终牛市出现了，而且最初是建立在基本面上的。随后，政府放宽了政策，包括提高了散户借助抵押融资的交易能力，此举使得投资者可以获得更多资金，再加上他们急于买进那些正在升值的股票，股市开始进一步上扬。这样的高歌猛进一直延续到大约一个月前，中国股市随后开始直线下滑。此前的涨幅很大。比如说，过去3-4周出现滑坡前，A股在12个月时间里的平均升幅约为140%。

    政府有何举措？为什么要这样做？

    中国政府的首要任务是建立繁荣而且开放的资本市场，其中的重要步骤之一就是让一些最优质的中国企业在国内上市。中国的牛市延续到了一个月之前，套利空间变得越来越大。在美国以ADR方式上市交易的中国公司感觉如果回到A股市场，会拿到更高估值。因此，一些赴美上市的中国公司宣布退市，中国国内基金、这些公司的管理层以及中国金融机构联手对这些ADR，也就是在美上市的中国企业提出了收购要约。他们的最终目标是将这些公司重组为中国境内企业，然后让他们登陆中国股票市场。鉴于中国政府以壮大国内股市为首要任务，我认为这样的行为获得了暗中支持，更多中国企业也要退市的传闻也推动许多中国公司ADR走强。

    眼下，随着中国股市开始暴跌，中国政府更关心稳定市场这种眼前的问题，这和美股动荡不安时美国政府救市的行为类似。到目前为止，中国政府的措施看来力度很大（如在很长一段时间里禁止股东减持，暂停新股发行等），但一直未能扭转A股的颓势。许多公司都停了牌，这让情况变得更糟，因为它让那些被催缴保证金，急需融资的投资者更加恐慌。

    What’s the impact?

    The wealth effect impact of the falling market should be fairly moderate in my opinion. In the U.S., approximately 60% of all equities are owned by institutional investors, in China this figure is only 10%. So, the big losers of this recent market sell off are individuals. Second, while participation in the equity markets had certainly become more popular over the past year as margin debt became available and people were seeing strong gains, the numbers I’ve seen suggest there are less than 100M trading accounts open in China. Relative to the 1.3 billion people in China, this is a small percentage of the population. Third, across the population, equities represent a small percentage of total net worth (much lower than the U.S., for example), so the average person can recover from a shock in equity values. Finally, financial institutions who’ve lent money on margin to these speculators may end up with bad loans on their books, but these seem to represent a very small percentage of their balance sheets, again pointing to a relatively muted impact of this sell-off.

    Will it impact the broader economy in China?

    Generally there’s a pretty tight linkage between equity markets and underlying macro-economic trends. In this case, similar to the U.S. dotcom bubble, the rally and then fall of Chinese stocks seems de-coupled from the underlying economy. The pain will be felt by a minority of consumers in China and, as a result, I suspect the damage will be fairly muted. This may impact economic growth rates on the margin, especially because consumption is climbing as a component of China’s GDP growth, but I wouldn’t be shocked by government intervention to stimulate consumption. Of course, if consumer sentiment is meaningfully negatively impacted by the equity market swoon, the economic slow-down could be more precipitous, so we should watch this closely over the coming months and quarters.

    What’s the impact for Silicon Valley? How about for the new economy companies in China?

    Most in Silicon Valley under-estimate the growing convergence between the U.S. and Chinese tech economies. These two markets rely on each other now more than ever. Apple’s AAPL 2.67% biggest market is now China. The same will be true for Uber by the end of this year. Conversely, Alibaba, Tencent and others have been investing and acquiring in the U.S., while Chinese investors have become increasingly active in the U.S. venture capital arena.

    I anticipate continued health and rapid growth of China’s new economy. There’s much infrastructure yet to build out, many new consumers entering the ranks of the middle class and huge growth coming in mobile internet users. These factors should conspire to continue to catapult new economy growth in China, overwhelming any negative impacts of wealth declines from the stock market. If I’m correct, I think you’ll see limited impact on Silicon Valley. The best U.S. mobile, Internet, hardware and enterprise companies will continue to eye China as a growth market, and many will follow Apple and Uber’s lead into China, finding strong local competition but a very fruitful, dynamic market. Similarly, the strongest Chinese tech companies and investors will not lose sight of the U.S. as a desired place to do business.

    So are we out of the woods?

    I’ve argued that the correction in Chinese equities will have a fairly modest impact on China’s new economy and U.S. tech and VC markets. That said, there are still risks. Two that bear watching include the Chinese consumer and Chinese debt levels.

    Chinese consumption is a critical and growing part of China’s macro-economic growth machine. If Chinese consumers lose confidence and stop spending money, due to the stock market induced panic, fears of falling home prices, or some other reason, this could ultimately spill over to China’s new economy health. China’s total debt levels, including consumer, corporate and government debt, is at a very high ratio relative to total GDP. While underlying growth has helped finance this debt to date, a slow-down could cause significant challenges as well.

    Glenn Solomon (@glennsolomon) is a Managing Partner with GGV Capital. Some of his recent investments include Zendesk, Nimble Storage, Pandora, Successfactors, Isilon, Domo, Square, Opendoor, AlienVault and HashiCorp. This post originally appeared on his blog.

    有哪些影响？

    在我们看来，股市下跌产生的负财富效应该相当有限。在美国，机构投资者持有的股票占整个市场的60%左右；而在中国，这个数字只有10%。因此，近来A股暴跌后，损失最大的是散户。其次，随着可以通过保证金来借款炒股，再加上人们预期股市将大涨，一年来开始投资股票的人越来越多，但A股投资账户仍不到1亿个。相对于中国13亿人口，这个数字占的比重不高。第三，在中国，股票只占个人总资产净值的很小一部分（远低于其他国家，比如美国）。因此，普通人可以从股票价值暴跌造成的损失中恢复过来。最后，向这些投机者提供资金的金融机构可能出现坏账，但坏账规模和它们的资产负债相比看来很小，这也表明本轮市场暴跌的影响相对不大。

    对中国经济有何影响？

    一般来说，股市和宏观经济走势有相当密切的联系。但就目前情况而言，中国股市的涨跌似乎已经和经济脱钩，就像美国的网络泡沫那样。受到冲击的将是一小部分中国消费者，因此我觉得损失会相当有限。这或许会略微影响中国的经济增长率，特别是在消费占中国GDP增速的比重不断上升的情况下，但如果政府为了刺激消费而进行干预，我也不会感到惊讶。当然，如果股市暴跌对消费信心产生了重大不利影响，经济放缓势头就会更明显。因此，今后几个月乃至几个季度，大家应对此予以密切关注。

    对硅谷有何影响？中国的新经济企业情况怎样？

    在硅谷，大多数人都低估了美国和中国在科技经济领域不断融合的态势。如今，这两个市场的相互依赖程度超过了以往任何时候。现在，苹果公司的最大市场是中国。到今年底，中国还将成为Uber的第一大市场。反过来，阿里巴巴、腾讯和其他中国公司一直在美国投资和收购，中国投资者在美国风投领域也变得越来越积极。

    我认为中国的新经济将继续健康而迅速地增长。还有许多基础设施有待建设，许多消费者都成了中产阶层，移动互联网用户也出现了巨大增长。这些因素应共同推动中国的新经济继续快速增长，从而消除股市造成人们财富减少而产生的不利影响。如果我没有看错，我认为硅谷受到的影响也将有限。美国最好的移动、互联网和硬件公司以及着眼于大客户的企业都将继续把中国视为成长型市场，许多美国公司将追随苹果和Uber的脚步进入中国，而且它们将看到一个竞争激烈但成果丰富、活力十足的市场。同样的，最有实力的中国科技公司和投资者也不会忽视美国这片商业乐土。

    我们已经摆脱困境了吗？

    上文已经指出，中国股市回落对中国新经济以及美国科技和风头市场的影响相当有限。不过，仍有一些风险，其中值得关注的两个风险因素是中国消费者和中国的债务水平。

    消费是中国宏观经济增长的关键组成部分，比重也越来也大。如果股市带来的恐慌、对房价下跌的担忧或者其他一些原因使中国消费者失去了信心并且停止支出，中国新经济的健康状况就可能最终受到影响。包括消费、企业和政府在内，中国总债务占GDP的比例非常高。虽然经济增长保障了中国迄今为止的还债能力，但经济增速放慢则可能带来巨大的挑战。（财富中文网）

    本文作者格林•所罗门是纪源资本管理合伙人。他最近投资的公司包括Zendesk、Nimble Storage、Pandora、Successfactors、Isilon、Domo、Square、Opendoor、AlienVault和HashiCorp。本文最初刊登在他的博客上。

    译者：Charlie

    校对：詹妮