“Excuse me, sir. Seeing as how the VP is such a VIP, shouldn’t we keep the PC on the QT, ’cause if it leaks, he could end up MIA, and then we’d all be put out in KP.” *
That is Robin Williams playing the radio personality Adrian Cronauer in the film Good Morning, Vietnam.
These days, acronyms are embedded in the financial landscape. You cannot sit through a meeting without mentally hoovering up dozens of the things.
But some places take acronym-embrace beyond the next level and into another world, and this is where China comes in.
China first flirted with them in 1980, when it was still dirt poor and recovering from decades of war and chaos. Former leader Deng Xiaoping, an expert communicator, came up with the idea of special economic zones.
To be a banker, investor or analyst here, you have to chew through a mountain of acronyms each day
The first one was located in now-wealthy Shenzhen and the idea of special zones to support specific financial or commercial activities caught on. China now has six SEZs, but also 21 free trade zones (FTZs), 169 high-tech industrial zones (HIDZs) and 218 economic and technological development zones (ETDZs).
As it developed, so the tyranny of the acronym grew. Its currency, the renminbi, was truncated to RMB – or to use its official ISO code, the CNY, an abbreviation of Chinese yuan, which also happens to stand for Chinese New Year.
Bankers and investors refer to the Ministry of Commerce as MOFCOM and to the State Administration of Foreign Exchange as SAFE. Banks and insurers are regulated by the CBIRC and securities markets by the CSRC. The People’s Bank of China (PBoC) oversees monetary policy. State-owned enterprises (SOEs) are governed by the powerful State-owned Assets Supervision and Administration Commission (SASAC).
Then there are the young bucks. Hong Kong is being tethered tightly to the mainland by the Greater Bay Area (GBA). The Cyberspace Administration of China (CAC) sprang to global prominence in July after accusing Didi Global of “serious violations” of data laws, after the ride-hailing firm’s $4.4 billion New York IPO. The CAC will only grow in strength in a country bent on being a data empire.
And so it goes. To buy local RMB-denominated A shares, you have to be a qualified foreign institutional investor (QFII). Domestic fund managers must be QDII-licensed to buy foreign securities. Under a revived qualified domestic limited partnership (QDLP) scheme, foreign asset managers can raise local capital to invest in overseas assets.
Sometimes acronyms beget acronyms. A few years back, the Asset Management Association of China (AMAC) issued rules that let wholly foreign-owned enterprises (WFOEs) manage private securities investment funds within the sovereign confines of the People’s Republic of China (PRC).
Others begin life in one form then morph into another. Take One Belt One Road (OBOR), which transmogrified into the Belt and Road Initiative (BRI), and now seems to have fallen off the map altogether.
Reasons why
No one knows quite why this is. One mainland-based investment manager reckons it stems from the language itself, which is full of short-and-monosyllabic characters – mu, qu, chi and so on. Another wonders if it is a reflexive reaction to the ruling Party’s love of long, convoluted names for policies and programmes.
Another reason could be the staccato way China chose to open up to the world. Each time it takes a step closer to being a ‘normal’ trading power, it necessitates a fresh set of rules and principles, nestled within a new acronym.
Either way, it is the reality of doing business in China. To be a banker, investor or analyst here, you have to chew through a mountain of acronyms each day. It is no good saying OMG or IDK when confronted with yet another new one. It is a way of life, and it is here to stay.
* Glossary of terms
VP – Vice-president
PC – Press conference
QT – On the quiet
MIA – Missing in action
KP – Kitchen patrol
