From Imagethief blog:
Imagethief recently found himself huddled in a wintry hutong courtyard in conversation with two longtime Beijing-based foreign correspondents. During this discussion we came to the conclusion that the recent Yilishen ant-farming scandal is more or less the perfect China story. It brings together at a stroke all of the elements of the modern Chinese story. And surreal story it is.
If you’re not familiar with this incident (and you really should be), you can go read Mark O’Neill’s comprehensive article on Asia Sentinel, or any of several other stories which, collectively, have generated something of a bumper crop in pun headlines.
But if you’re pressed for time here is a synopsis: The Yilishen Tianxi Group, a Shenyang-based company, was manufacturing an allegedly aphrodisiac tonic made from ants, which are widely believed to have medicinal properties in traditional Chinese medicine. But rather than wrangle ants itself (nothing feels as good as bringing in a herd, I hear) Yilishen’s scheme was to sell would-be ant farming “investors” boxes of special medicinal ants at RMB10,000 for three. Along with the boxes came a promise that once the ants matured (read: died), about 14 months later, Yilishen would buy them back for RMB13,250. That’s a 30% guaranteed gain over 14 months which, while not quite pre-meltdown A-shares, kicks the ass of many a hedge fund.
Except that the Yilishen ant trade was a pyramid scheme, and it went spectacularly bust, leaving tens of thousands of Dongbei punters short RMB10,000 and long three boxes of worthless ants. Not exactly Warren Buffet. [Full Text]
