Watching "Once Upon a Time in America" last weekend, one of my favorite films, brought back memories of a time I spent in China about 10 years ago. It was a chapter in my life that changed everything. Here's my story.
I went back to China about 10 years ago and started a prop firm with a few friends. We each invested around 2 million. Our business model was built on using a SBLOC to apply for loans from Hang Seng Bank. Then, we would lend that money to retail investors as margin with a higher interest rate. Most brokerage firms in China at the time didn’t allow high leverage (like 2x to 10x), so our firm filled that gap by offering a more flexible and accessible margin trading option
Risk control was the critical part of our business model. We didn’t want to lose our own money if the market crashed. To make sure we were always on top of things, we used the fastest servers available to us at the time. Our risk assessment algorithm was constantly scanning every investor's account in real-time, monitoring for any signs of trouble. Thanks to this rigorous control, the business thrived. In our first month, we made around 500 million in revenue, and our projections for the year were around 8 billion
However, everything changed suddenly. One day, the government sent in an armed force of 40 to 50 officers, who stormed into our office, confiscating all of our servers and computers. Our employees were lined up against the wall, and the atmosphere was tense. Fortunately, nobody went to jail, but the entire situation was surreal. Despite our business being legally registered and fully compliant with all regulations, I was accused of 'maliciously shorting the market.' This allegation was completely baffling to me, especially since shorting was not even allowed in the Chinese stock market at that time. I had no idea where it had come from.
In the end, I lost everything—my investment, the business, and even had to pay severance to all of our employees. Looking back, I realize how much the environment in China at that time made it difficult for a business like ours to succeed, especially with the government’s unpredictability.
If I had known how things would unfold, I would never have started a business there.
Tranlation by ChatGPT:
上個周末，看了《美國往事》這部電影，這部我最喜歡的電影之一，勾起了我10年前在中國的一段記憶。那是我人生中改變一切的一個章節。以下是我的故事。
大約10年前，我回到了中國，和幾個朋友一起創辦了一家自營公司。我們每個人投資了大約200萬人民幣。我們的商業模式是利用證券抵押貸款（SBLOC）向恒生銀行申請貸款，然後將這些錢以更高的利率借給散戶投資者作為保證金。當時，中國大多數證券公司不允許高杠杆（如2倍至10倍），因此我們的公司填補了這個空白，提供了更靈活和易於接入的保證金交易選擇。
風險控製是我們商業模式的關鍵部分。我們不希望在市場崩盤時失去自己的資金。為了確保我們始終處於掌控之中，我們使用了當時能夠購買到的最快的服務器。我們的風險評估算法不斷實時掃描每個投資者的賬戶，監控任何可能的風險。由於這一嚴格的控製，生意迅速發展。在第一個月，我們的收入大約達到了5億人民幣，且我們預期全年收入能達到80億人民幣。
然而，一切突然發生了變化。一天，政府派遣了40到50名武裝人員闖入我們的辦公室，沒收了我們所有的服務器和電腦。我們的員工被迫靠牆站立，氣氛非常緊張。幸運的是，沒有人被送進監獄，但整個事件超現實般地發生了。盡管我們的公司是合法注冊的，完全符合所有法規，我仍然被指控“惡意做空市場”。這一指控讓我感到困惑不已，尤其是在那時中國股市根本不允許做空。我完全不知道這個指控從何而來。
最終，我失去了所有——包括我的投資、公司，甚至還得支付所有員工的遣散費。回首往事，我意識到當時中國的商業環境讓像我們這樣的公司很難成功，尤其是政府的不確定性。
如果我知道事情會如此發展，我絕不會在那兒創辦公司。
