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[b]Europe needs to stop its pandering to China
John Fox and François Godement, Financial Times, May 18, 2009
The EU needs a new interest-based approach that focuses on a few priority areas and uses incentives and threats to strike tougher bargains, write John Fox and François Godement.
China's edge in the energy-efficiency industry
Edward Silver, Los Angeles Times, May 19, 2009 The sleeping giant is taking the lead in manufacturing components for solar and wind generators and building electric cars, but the U.S. could still catch up.
More on China's Efforts to Hedge Against Its USD Holdings by Paul Harper
The fact that the money and power are leaving for China has escaped everyone in our leadership. They are totally blind to this. They cannot conceive that we have given up the lead to anyone, because we are so perfectly good. This is called Hubris and is a tool of the Gods to destroy any who dare to become Godlike.
China, Brazil Agree to $10 Billion Loan, Exploration (Update1)
2009-05-19 11:11:00.536 GMT
By John Liu
http://www.bloomberg.com/apps/news?pid=206...amp;refer=china
2009-05-19 11:11:00.536 GMT
By John Liu
http://www.bloomberg.com/apps/news?pid=206...amp;refer=china
China
- BMP Sunstone Reports Large Q1 Revenue Gain by ChinaBio Today
- Simcere's Q1 Disappoints Investors by ChinaBio Today
- NIVS IntelliMedia Earnings Review by Mike Havrilla
- China and Brazil to Ditch U.S. Dollar? Hardly by Marc Chandler
- China Inks Deal with Siemens for World's Largest High Speed Rail Network by James Rickman
- China Sky Confusion: Management Is Flying in Circles by Manuel Asensio
- China Cutting Steel Capacity by Lee Eugene Munson
- More on China's Efforts to Hedge Against Its USD Holdings by Paul Harper
- E-House Holdings Q1 2009 Earnings Call Transcript
- Earnings Preview: Analog Devices by theflyonthewall.com
- BrandZ Rankings Show Remarkable Changes for Financials by Felix Salmon
Taiwanese outpost reaps benefits of warming China ties
Kinmen, Taiwan (AFP) May 19, 2009 - From the Taiwanese island of Kinmen, it is easy to see across the water to China's industrial and trading city of Xiamen, just a few kilometres away on the mainland. For years, the mine-strewn island was a symbol of the tense relations between China and Taiwan, which split at the end of their civil war in 1949. Chinese troops would fire shells across to the island, where Taiwanese forces ... more
economy
+ China massively expands consumer subsidies: state media
Beijing (AFP) May 19, 2009 - China announced Tuesday a massive expansion of subsidies for people who buy new cars and home appliances this year, state media said, in the government's latest bid to lift the crisis-battered economy. The State Council, or cabinet, decided to increase the money available to subsidise car replacements to five billion yuan (733 million dollars) from one billion yuan when the programme was ann ... more
gas
+ Brazil's Lula signs oil, financial agreements with China
Beijing (AFP) May 19, 2009 - Brazil's president said Tuesday in China that the two nations had achieved a century's worth of results in a mere generation, as he witnessed the signing of several large business deals cementing ties. Luiz Inacio Lula da Silva spent a day meeting with Chinese leaders in Beijing, during which analysts said he could broach a plan to ditch the US dollar in his nation's trade with China. ... more
gas
+ China eager to join BRIC meetings
Beijing (AFP) May 19, 2009 - Beijing said it was eager Tuesday to take part in a meeting next month of foreign ministers of the four so-called emerging BRIC nations, Brazil, Russia, India and China. "China has a positive attitude towards taking part in the meeting," foreign ministry spokesman Ma Zhaoxu told reporters. "We believe China, Russia, India and Brazil are major emerging powers and are major forces in promo ... more
Kinmen, Taiwan (AFP) May 19, 2009 - From the Taiwanese island of Kinmen, it is easy to see across the water to China's industrial and trading city of Xiamen, just a few kilometres away on the mainland. For years, the mine-strewn island was a symbol of the tense relations between China and Taiwan, which split at the end of their civil war in 1949. Chinese troops would fire shells across to the island, where Taiwanese forces ... moreeconomy
+ China massively expands consumer subsidies: state media
Beijing (AFP) May 19, 2009 - China announced Tuesday a massive expansion of subsidies for people who buy new cars and home appliances this year, state media said, in the government's latest bid to lift the crisis-battered economy. The State Council, or cabinet, decided to increase the money available to subsidise car replacements to five billion yuan (733 million dollars) from one billion yuan when the programme was ann ... moregas
+ Brazil's Lula signs oil, financial agreements with China
Beijing (AFP) May 19, 2009 - Brazil's president said Tuesday in China that the two nations had achieved a century's worth of results in a mere generation, as he witnessed the signing of several large business deals cementing ties. Luiz Inacio Lula da Silva spent a day meeting with Chinese leaders in Beijing, during which analysts said he could broach a plan to ditch the US dollar in his nation's trade with China. ... moregas
+ China eager to join BRIC meetings
Beijing (AFP) May 19, 2009 - Beijing said it was eager Tuesday to take part in a meeting next month of foreign ministers of the four so-called emerging BRIC nations, Brazil, Russia, India and China. "China has a positive attitude towards taking part in the meeting," foreign ministry spokesman Ma Zhaoxu told reporters. "We believe China, Russia, India and Brazil are major emerging powers and are major forces in promo ... moreThe Toll Booth Economy
By Michael Hudson
China’s central bank is now the largest holder of U.S. government and other dollar securities, it has become the main subsidizer of the U.S. payments deficit – and also the domestic U.S. federal budget deficit. Half of the federal budget’s discretionary spending is military in character. This places China in the uncomfortable position of being the largest financier of U.S. military adventurism. Continue
By Michael Hudson
China’s central bank is now the largest holder of U.S. government and other dollar securities, it has become the main subsidizer of the U.S. payments deficit – and also the domestic U.S. federal budget deficit. Half of the federal budget’s discretionary spending is military in character. This places China in the uncomfortable position of being the largest financier of U.S. military adventurism. Continue
Cramer's Stop Trading! China Is Not for Contrarians (5/20/09) by SA Editor Miriam Metzinger
China
- The Euro Is Resuming a Strong Uptrend by Angelo Airaghi
- Artificial Life: A New Stock for Apple's App Store Dominance by Jason Schwarz
- Why These Currencies Will Benefit from China's Commodities Purchases by myWealth.com
- Emerging Market Equities Now Far More Interesting than U.S. Market by David Goldman
- How to Think About China Stocks by John Christy
- China's Growth Is No Miracle by Vitaliy Katsenelson
- Renminbi Not Ready for Prime Time by Tom Lindmark
- Gold and Yuan: Not the Slam Dunks They Appear to Be by Index Universe
- Fuqi International: Riding the Profit Boom in China by Joshua Hayes
China warns EU on meddling in internal matters at summit
Prague (AFP) May 20, 2009 - China warned the European Union against meddling in its internal affairs on Wednesday at a summit in Prague, where the European side had hoped to move on from past tensions over the Dalai Lama. The summit was originally set for December last year but China called it off to protest against a meeting between the exiled Tibetan spiritual leader and French President Nicolas Sarkozy, who then hea ... more
trade
+ China loses low-cost manufacturing crown to India, Mexico: study
Shanghai (AFP) May 20, 2009 - China has lost its position as the world's lowest-cost components manufacturer to India and Mexico, a study indicated Wednesday, in a blow for the Asian giant as it fights the financial crisis. The United States has also significantly closed the gap to the degree that China's total manufacturing costs are now only six percent below those of American factories, the study by AlixPartners busi ... more
economy
+ Profits at China's state-owned companies down sharply: govt
Beijing (AFP) May 20, 2009 - China's state-owned firms saw their profits fall sharply in the first four months, the government said Wednesday, in yet another sign the Chinese economy continued to suffer from the global crisis. State-owned enterprises across the country made 323.6 billion yuan (47.4 billion dollars) in profit from January to April, down 32.3 percent from the same period of 2008, said a statement posted ... more
economy
+ Outside View: We have met the enemy
Washington (UPI) May 20, 2009 - Of all the emerging threats we may face, the wolf closest to or already in the sled is here at home. It is, to repeat that childishly effective phrase of the 1992 presidential election, the economy stupid! Despite a rebound in the stock markets and expectations of "green shoots" of recovery, the economy is still in ill-health. What we are seeing is the movement of the economy into the eye of ... more
trade
+ China's Wen urges EU to ease high-tech export limits
Prague (AFP) May 20, 2009 - Chinese Premier Wen Jiabao called on the European Union on Wednesday to ease limits on exports of high-tech goods at an EU summit in Prague. "We hope that the European Union will relax its restrictions on the export of high-tech products to China and foster new growth areas in our business cooperation," he told journalists after the summit. He also reiterated Beijing's long-standing hope ... more
Prague (AFP) May 20, 2009 - China warned the European Union against meddling in its internal affairs on Wednesday at a summit in Prague, where the European side had hoped to move on from past tensions over the Dalai Lama. The summit was originally set for December last year but China called it off to protest against a meeting between the exiled Tibetan spiritual leader and French President Nicolas Sarkozy, who then hea ... moretrade
+ China loses low-cost manufacturing crown to India, Mexico: study
Shanghai (AFP) May 20, 2009 - China has lost its position as the world's lowest-cost components manufacturer to India and Mexico, a study indicated Wednesday, in a blow for the Asian giant as it fights the financial crisis. The United States has also significantly closed the gap to the degree that China's total manufacturing costs are now only six percent below those of American factories, the study by AlixPartners busi ... moreeconomy
+ Profits at China's state-owned companies down sharply: govt
Beijing (AFP) May 20, 2009 - China's state-owned firms saw their profits fall sharply in the first four months, the government said Wednesday, in yet another sign the Chinese economy continued to suffer from the global crisis. State-owned enterprises across the country made 323.6 billion yuan (47.4 billion dollars) in profit from January to April, down 32.3 percent from the same period of 2008, said a statement posted ... moreeconomy
+ Outside View: We have met the enemy
Washington (UPI) May 20, 2009 - Of all the emerging threats we may face, the wolf closest to or already in the sled is here at home. It is, to repeat that childishly effective phrase of the 1992 presidential election, the economy stupid! Despite a rebound in the stock markets and expectations of "green shoots" of recovery, the economy is still in ill-health. What we are seeing is the movement of the economy into the eye of ... moretrade
+ China's Wen urges EU to ease high-tech export limits
Prague (AFP) May 20, 2009 - Chinese Premier Wen Jiabao called on the European Union on Wednesday to ease limits on exports of high-tech goods at an EU summit in Prague. "We hope that the European Union will relax its restrictions on the export of high-tech products to China and foster new growth areas in our business cooperation," he told journalists after the summit. He also reiterated Beijing's long-standing hope ... more
China Security Memo: May 21, 2009 May 21, 2009 2150 GMT Operating in China presents many challenges to foreign businesses. The China Security Memo tracks and summarizes key incidents throughout the country over the past week. (With STRATFOR Interactive Map) [more]
China
- The Dilemma of Chinese Central Bankers by Tim Iacono
- China Marine Foods Group Builds on Its Solid Reputation by The GeoTeam
- Why Investors Must Own Gold by Steven P. Orlowski
- China Sky One Seals Novel Cancer Drug Deal by ChinaBio Today
- China's Metal Imports Are Impressive by Andrew Horowitz
- Hurray! Q1 2009 Earnings Call Transcript
- Verigy Ltd. F2Q09 (Qtr End 04/30/09) Earnings Call Transcript
- Will China End Its Co-Dependent Relationship with the U.S.? by Trader Mark
- Chinese Tech Stock Weekly Summary (May 11 - May 17, 2009) by IRG
- Early Look: Buck Is Barking by Keith McCullough
- 3S Bio: Post-Earnings, Still a Buy by Zacks.com
- Could China's Recovery Be Stalled? by Trader Mark
- The Coming of a U.S. Savings Culture? by Michael Pettis
Former China official says he helped Zhao on memoir
Beijing (AFP) May 21, 2009 - A former top official in China has said he and three others secretly helped deposed leader Zhao Ziyang pen a memoir in which he sharply criticises the violent crackdown on the 1989 Tiananmen protests. Du Daozheng, once the head of China's state publishing watchdog, said he and three former top officials transcribed recordings made by Zhao that were later turned into the recently published En ... more
china
+ Hundreds rally in China over police beating: state media
Beijing (AFP) May 21, 2009 - As many as 1,000 protestors took to the streets in northwestern China after police officers allegedly beat a cyclist for running a red light, state media reported Thursday. The angry mob in Huining county, Gansu province, overturned a police car late Tuesday before around 100 backup police arrived, the Global Times daily newspaper said, citing witnesses. Ten police officers and governmen ... more
china
+ US House speaker Pelosi to visit China: state media
Beijing (AFP) May 21, 2009 - US House of Representatives speaker Nancy Pelosi will visit China this month, state press said Thursday of the longtime critic of Beijing's rule over Tibet and its human rights record. Pelosi, who will be heading a delegation from the US Congress, will arrive on Sunday and stay in China until May 31, the official Xinhua news agency said. The House's first female speaker, Pelosi has been ... more
Beijing (AFP) May 21, 2009 - A former top official in China has said he and three others secretly helped deposed leader Zhao Ziyang pen a memoir in which he sharply criticises the violent crackdown on the 1989 Tiananmen protests. Du Daozheng, once the head of China's state publishing watchdog, said he and three former top officials transcribed recordings made by Zhao that were later turned into the recently published En ... morechina
+ Hundreds rally in China over police beating: state media
Beijing (AFP) May 21, 2009 - As many as 1,000 protestors took to the streets in northwestern China after police officers allegedly beat a cyclist for running a red light, state media reported Thursday. The angry mob in Huining county, Gansu province, overturned a police car late Tuesday before around 100 backup police arrived, the Global Times daily newspaper said, citing witnesses. Ten police officers and governmen ... morechina
+ US House speaker Pelosi to visit China: state media
Beijing (AFP) May 21, 2009 - US House of Representatives speaker Nancy Pelosi will visit China this month, state press said Thursday of the longtime critic of Beijing's rule over Tibet and its human rights record. Pelosi, who will be heading a delegation from the US Congress, will arrive on Sunday and stay in China until May 31, the official Xinhua news agency said. The House's first female speaker, Pelosi has been ... more
BOOK REVIEW
The dragon's shadow
China's Rise and the Two Koreas by Scott Snyder
China's economic influence may not have fully transformed the Korean Peninsula's security policies, but it has challenged the primacy of the United States. Though this book is pro-American for endorsing Washington's military footprint in the region, it offers an intelligent appraisal of how Beijing's reach is lengthening over East Asia - and why it needs to keep North Korea in its orbit. - Sreeram Chaulia (May 22,'09)
The dragon's shadow
China's Rise and the Two Koreas by Scott Snyder
China's economic influence may not have fully transformed the Korean Peninsula's security policies, but it has challenged the primacy of the United States. Though this book is pro-American for endorsing Washington's military footprint in the region, it offers an intelligent appraisal of how Beijing's reach is lengthening over East Asia - and why it needs to keep North Korea in its orbit. - Sreeram Chaulia (May 22,'09)
China
- China Biotech in Review: Deals and Earnings by ChinaBio Today
- Baxter Plans Big Investment in China Medical Instruments Industry by ChinaBio Today
Will China Save the World From Depression?
China's stimulus package is not likely to bail out either the Chinese peasants or the global economy, says columnist Walden Bello.
China's stimulus package is not likely to bail out either the Chinese peasants or the global economy, says columnist Walden Bello.
10 International Dividend Paying Growth Stocks
by: Danny Furman May 25, 2009 | about stocks: CHL / CPL / CWCO / GFI / GSH / SBS / SQM / TKC / TLK / VE wing
About this author:
The list below was largely inspired by two Seeking Alpha articles I read recently, "Dividend Investing vs. Trading" and "Altria, Value Play or Value Trap?" In the former, author Dividend Growth Investor reminds us that long-term holding and reinvesting dividends from industry leaders is the historical "holy grail" of investment strategies. Equally influential were many of the comments made in response to the article, which were overwhelmingly in concordance with the author's sentiments. My other reference, written by Ryan Vanzo, warns investors of the risks associated with a high-yielding, financially sound company with signs of negative growth in the future.
Currently, about half of my stock portfolio is comprised of dividend payers in what I consider safe and growing industries. The other half is deep value growth plays, such as profitable China smallcaps trading at under half their book value. The gambler in me is very fond of the latter, and in no way has my confidence declined in any of my holdings. I do, however, have a family history of high blood pressure, not to mention a strong appreciation for sleeping at night. Either way, 6 months from now I intend for some combination of the companies below to make up 85%+ of my holdings.
The only criteria for my list was at least one annual dividend. Beyond that, generally equally weighted are percentage yield, valuation, financial strength and future growth prospects. My opinions on future growth eliminate most manufacturing, retail, banking and real estate stocks from consideration.
10. Indonesia Telecom (TLK): An ETF may be a better way to play this agriculturally wealthy and rapidly growing nation, but this telecom provider operates more profitably than most international counterparts.
9. Guangshen Railway Co (GSH): Railroads are a major target of China's stimulus package as it transforms itself into a more self-sufficient consumer. Guangshen grew revenues and income over 10% year-over-year in Q1 09 and trades at book value.
8. Consolidated Water Co (CWCO): This is a current holding of mine and I don't expect that to change in the next decade. CWCO is a Bermuda-based leader in desalination and trades at a huge discount to less profitable American competitor ERII, which does not pay a dividend. Our need for desalination is being realized and will never stop growing.
7. Turkcell Iletisim Hizmetleri (TKC): This Turkish telecom provider won't pay its next dividend for a year, but operations have held up well during the economic downturn. This is an interesting currency hedge with a yield over 6% and valuation not far up from 4-year lows.
6. Gold Fields Ltd. (GFI): Inflationary worries have the world's most gold-rich country garnering more attention from investors than ever before. This profitable miner pays a modest quarterly dividend and trades at a book value discount of over 50% to Anglogold (AU) or Randgold (GOLD).
5. China Mobile (CHL): China's telecom giant boasts a PEG ratio of 0.42 and hasn't recovered in price nearly as much as the country's other industry leaders. Throw in a 4% yield and nationally subsidized infrastructure growth and this stock looks very ripe.
4. Veolia Environment (VE): This highly leveraged, highly diversified world leader in wastewater management and environmental services trades at just over book value, 70% off 52-week highs. Annual dividend yield is 5.5%.
3. CPFL Energia (CPL): This Brazilian electric utility recently reported first quarter net income growth of 6.5% and has a record of distributing profits as dividends. Over $11/share has been paid to shareholders over the last 3 years.
2. Sociedad Minera y Quimica de Chile (SQM): Almost 200% up from October lows this is still a screaming buy. SQM mines the world's most abundantly accessible lithium and Chile boasts South America's most concentrated gold deposits. Earnings grew 179% in 2008 and this company operates at nowhere near capacity.
1. Companhia de Saneamento Basico do Estado de Sao Paulo (SBS): Sao Paulo's leading water utility company trades at 64% of book value. Dividends are irregular, but have been paid no less than semi-annually for the last 4 years. Shareholders of record on May 29 will receive a recently announced $0.47/share payment.
In case it's not already clear, I believe that water utility companies are terribly undervalued. Water is the most important resource for every person in every country. There are dozens of profitable water utilities that operate regionally in the US and I consider most of them great investments. Brazilians are simply greater consumers than us and SBS is both relatively and historically much cheaper than domestic options in the sector. Additionally, US water companies face greater competition and regulation, inhibiting expansion to other regions, nor are they as diversified as VE.
Disclosure: Long VE, SBS, SQM, CPL, GFI, CWCO.
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by: Danny Furman May 25, 2009 | about stocks: CHL / CPL / CWCO / GFI / GSH / SBS / SQM / TKC / TLK / VE wing
About this author:
The list below was largely inspired by two Seeking Alpha articles I read recently, "Dividend Investing vs. Trading" and "Altria, Value Play or Value Trap?" In the former, author Dividend Growth Investor reminds us that long-term holding and reinvesting dividends from industry leaders is the historical "holy grail" of investment strategies. Equally influential were many of the comments made in response to the article, which were overwhelmingly in concordance with the author's sentiments. My other reference, written by Ryan Vanzo, warns investors of the risks associated with a high-yielding, financially sound company with signs of negative growth in the future.
Currently, about half of my stock portfolio is comprised of dividend payers in what I consider safe and growing industries. The other half is deep value growth plays, such as profitable China smallcaps trading at under half their book value. The gambler in me is very fond of the latter, and in no way has my confidence declined in any of my holdings. I do, however, have a family history of high blood pressure, not to mention a strong appreciation for sleeping at night. Either way, 6 months from now I intend for some combination of the companies below to make up 85%+ of my holdings.
The only criteria for my list was at least one annual dividend. Beyond that, generally equally weighted are percentage yield, valuation, financial strength and future growth prospects. My opinions on future growth eliminate most manufacturing, retail, banking and real estate stocks from consideration.
10. Indonesia Telecom (TLK): An ETF may be a better way to play this agriculturally wealthy and rapidly growing nation, but this telecom provider operates more profitably than most international counterparts.
9. Guangshen Railway Co (GSH): Railroads are a major target of China's stimulus package as it transforms itself into a more self-sufficient consumer. Guangshen grew revenues and income over 10% year-over-year in Q1 09 and trades at book value.
8. Consolidated Water Co (CWCO): This is a current holding of mine and I don't expect that to change in the next decade. CWCO is a Bermuda-based leader in desalination and trades at a huge discount to less profitable American competitor ERII, which does not pay a dividend. Our need for desalination is being realized and will never stop growing.
7. Turkcell Iletisim Hizmetleri (TKC): This Turkish telecom provider won't pay its next dividend for a year, but operations have held up well during the economic downturn. This is an interesting currency hedge with a yield over 6% and valuation not far up from 4-year lows.
6. Gold Fields Ltd. (GFI): Inflationary worries have the world's most gold-rich country garnering more attention from investors than ever before. This profitable miner pays a modest quarterly dividend and trades at a book value discount of over 50% to Anglogold (AU) or Randgold (GOLD).
5. China Mobile (CHL): China's telecom giant boasts a PEG ratio of 0.42 and hasn't recovered in price nearly as much as the country's other industry leaders. Throw in a 4% yield and nationally subsidized infrastructure growth and this stock looks very ripe.
4. Veolia Environment (VE): This highly leveraged, highly diversified world leader in wastewater management and environmental services trades at just over book value, 70% off 52-week highs. Annual dividend yield is 5.5%.
3. CPFL Energia (CPL): This Brazilian electric utility recently reported first quarter net income growth of 6.5% and has a record of distributing profits as dividends. Over $11/share has been paid to shareholders over the last 3 years.
2. Sociedad Minera y Quimica de Chile (SQM): Almost 200% up from October lows this is still a screaming buy. SQM mines the world's most abundantly accessible lithium and Chile boasts South America's most concentrated gold deposits. Earnings grew 179% in 2008 and this company operates at nowhere near capacity.
1. Companhia de Saneamento Basico do Estado de Sao Paulo (SBS): Sao Paulo's leading water utility company trades at 64% of book value. Dividends are irregular, but have been paid no less than semi-annually for the last 4 years. Shareholders of record on May 29 will receive a recently announced $0.47/share payment.
In case it's not already clear, I believe that water utility companies are terribly undervalued. Water is the most important resource for every person in every country. There are dozens of profitable water utilities that operate regionally in the US and I consider most of them great investments. Brazilians are simply greater consumers than us and SBS is both relatively and historically much cheaper than domestic options in the sector. Additionally, US water companies face greater competition and regulation, inhibiting expansion to other regions, nor are they as diversified as VE.
Disclosure: Long VE, SBS, SQM, CPL, GFI, CWCO.
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- PetroChina Flies Solo
In Singapore Deal Subscriber Content Read Preview
PetroChina's proposed $1 billion purchase of a stake in Singapore Petroleum shows China's largest listed oil company is ready to go it alone when expanding overseas.
To those who read the China thread...How can we maintain a friendly competition with China for the next 20 years and avoid war?
China
- China Is Now in Firm Control of U.S. Debt Markets by Jeff Nielson
- A Butterfly's Wings in China: How Chaos Theory Affects the U.S. Market by Joseph L. Shaefer
- Chinese Stimulus Boosts Iron Ore Trade with Australia to Record Levels by Individual Global Investor
- Opportunity for China's Domestic Private Equity Industry by Rob Abbanat
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China's Yuan: The Next Reserve Currency? (BusinessWeek)
Beijing's Would-Be Houdinis
Sebastian Mallaby, Washington Post, May 26, 2009 The Chinese government is clawing for a way out of the dollar trap.
Sebastian Mallaby, Washington Post, May 26, 2009 The Chinese government is clawing for a way out of the dollar trap.
China Is Now in Firm Control of U.S. Debt Markets by Jeff Nielson
china
+ US Speaker Pelosi tours China's financial hub
Shanghai (AFP) May 25, 2009 - US House of Representatives speaker Nancy Pelosi, a tough critic of China's human rights record, visited Shanghai's financial centre Monday, after meeting a leading Chinese Catholic priest. Pelosi, who has been outspoken on Beijing's rule over Tibet, arrived in China Sunday with a delegation from the US Congress and was due to meet national leaders in the nation's capital later. At the ... more
+ US Speaker Pelosi tours China's financial hub
Shanghai (AFP) May 25, 2009 - US House of Representatives speaker Nancy Pelosi, a tough critic of China's human rights record, visited Shanghai's financial centre Monday, after meeting a leading Chinese Catholic priest. Pelosi, who has been outspoken on Beijing's rule over Tibet, arrived in China Sunday with a delegation from the US Congress and was due to meet national leaders in the nation's capital later. At the ... more
Bank of China chair says central bank tightening credit
Shanghai (AFP) May 25, 2009 - China's central bank is tightening liquidity despite its stated commitment to a loose monetary policy, the head of one of the country's leading lenders said, according to state media. The People's Bank of China has become more cautious even though government guidelines remain unchanged, Xiao Gang, chairman of Bank of China, the nation's top forex lender, was quoted as saying on Caijing magaz ... more
Shanghai (AFP) May 25, 2009 - China's central bank is tightening liquidity despite its stated commitment to a loose monetary policy, the head of one of the country's leading lenders said, according to state media. The People's Bank of China has become more cautious even though government guidelines remain unchanged, Xiao Gang, chairman of Bank of China, the nation's top forex lender, was quoted as saying on Caijing magaz ... more
CITIC chairman looks beyond forex 'disappointments'
Hong Kong (AFP) May 25, 2009 - The new chairman of troubled conglomerate Citic Pacific said Monday that the investment firm performed well in the first quarter despite massive losses incurred on forex trades in October. In his first press conference as chairman, Chang Zhenming would not give specific figures but told reporters that "the disappointment and distraction of the past seven months cannot change what was achiev ... more
Hong Kong (AFP) May 25, 2009 - The new chairman of troubled conglomerate Citic Pacific said Monday that the investment firm performed well in the first quarter despite massive losses incurred on forex trades in October. In his first press conference as chairman, Chang Zhenming would not give specific figures but told reporters that "the disappointment and distraction of the past seven months cannot change what was achiev ... more
Peace With China, and
Other Surprises by Steve Chapman
Other Surprises by Steve Chapman
China warns Federal Reserve over ‘printing money’
China has warned a top member of the US Federal Reserve that it is increasingly disturbed by the Fed’s direct purchase of US Treasury bonds.
By Ambrose Evans-Pritchard
Last Updated: 9:19PM BST 24 May 2009
Richard Fisher, president of the Dallas Federal Reserve Bank, said: "Senior officials of the Chinese government grilled me about whether or not we are going to monetise the actions of our legislature."
"I must have been asked about that a hundred times in China. I was asked at every single meeting about our purchases of Treasuries. That seemed to be the principal preoccupation of those that were invested with their surpluses mostly in the United States," he told the Wall Street Journal.
His recent trip to the Far East appears to have been a stark reminder that Asia’s "Confucian" culture of right action does not look kindly on the insouciant policy of printing money by Anglo-Saxons.
Mr Fisher, the Fed’s leading hawk, was a fierce opponent of the original decision to buy Treasury debt, fearing that it would lead to a blurring of the line between fiscal and monetary policy – and could all too easily degenerate into Argentine-style financing of uncontrolled spending.
However, he agreed that the Fed was forced to take emergency action after the financial system "literally fell apart".
More…
China has warned a top member of the US Federal Reserve that it is increasingly disturbed by the Fed’s direct purchase of US Treasury bonds.
By Ambrose Evans-Pritchard
Last Updated: 9:19PM BST 24 May 2009
Richard Fisher, president of the Dallas Federal Reserve Bank, said: "Senior officials of the Chinese government grilled me about whether or not we are going to monetise the actions of our legislature."
"I must have been asked about that a hundred times in China. I was asked at every single meeting about our purchases of Treasuries. That seemed to be the principal preoccupation of those that were invested with their surpluses mostly in the United States," he told the Wall Street Journal.
His recent trip to the Far East appears to have been a stark reminder that Asia’s "Confucian" culture of right action does not look kindly on the insouciant policy of printing money by Anglo-Saxons.
Mr Fisher, the Fed’s leading hawk, was a fierce opponent of the original decision to buy Treasury debt, fearing that it would lead to a blurring of the line between fiscal and monetary policy – and could all too easily degenerate into Argentine-style financing of uncontrolled spending.
However, he agreed that the Fed was forced to take emergency action after the financial system "literally fell apart".
More…
China Seeks to Dethrone the Dollar, Transforming the Yuan into the Dominant Global Currency By Keith Fitz-Gerald
Investment Director
Money Morning/The Money Map Report
http://www.moneymorning.com/2009/05/27/yua...lobal-currency/
China has taken yet another step to transform the yuan into the dominant global currency, a long-term initiative that could ultimately dethrone the dollar as the world’s top unit of exchange.
In the last four months alone, China has signed currency swap agreements worth more than $95 billion (650 yuan) with an array of nations - including: Argentina, Brazil, South Korea, Indonesia, Malaysia, Belarus and Hong Kong - that are only too glad to move away from the increasingly shaky U.S. dollar.
For Westerners who are struggling to come to terms with the notion of a disarrayed dollar, the thought of oil, gold or other commodities being priced in yuan instead of dollars has to seem about as likely as having another country put a man on the moon.
But the Chinese yuan is already well on its way to becoming that globally accepted standard unit of exchange and the proverbial genie, as they say, is out of the bottle. In fact, I’d even go so far as to say the dollar’s days of dominance are numbered and with each new round of bailout chicanery, the clock is winding down ever faster.
Asia’s Long-Term View
In such Asian markets as Japan, Hong Kong and Mainland China, the long-term planning that’s an anathema to Corporate America is actually standard fare. During the height of Japan’s dominance in the 1980s, the Western business press - with a touch of derision - wrote about how some Japanese companies routinely formulated business plans with durations of 100 years or more (while working in Asia early in my career, I actually even contributed to several such plans … but that’s another story for another time).
That’s neither here nor there to most people who note smugly that Japan is getting its comeuppance. But what they don’t understand is that Japan is not alone. In fact, many people I talk with are shocked to learn that at a time when the West is still busy handing out Band-Aids in an attempt to deal with the greatest financial crisis on record, China has been quietly and shrewdly reinventing itself with the same kind of long-term vision.
Take commodities, for example. While companies in the United States, Great Britain and Europe are being forced to shed promising assets in order to compensate for massive losses or to pay down debt, cash-rich China has been able to operate as a buyer in a buyer’s market. While the rest of the world has interpreted this as a sign that China’s interested in buying the things it needs to grow, what they have not understood is that China’s also interested in using physical assets as a source of “currency” that offsets an increasingly eviscerated U.S. dollar.
This is actually a double-whammy of sorts, for while the rest of the world has been grappling with the global slowdown, China has been locking up supplies of commodities that are only going to become more scarce (and more valuable) as global demand escalates.
In fact, as I’ve suggested for months, now, China isn’t just going to consume those assets; it’s going to use them as part of the same long-term vision it’s been staking out with regard to its own currency, the yuan, which it fully intends to boost in status to the point where it becomes an internationally accepted currency.
The Once-Dominant Dollar
That’s quite a turn of events.
Even now, despite the travails of the U.S. economy, the dollar remains the world’s most widely held reserve currency and, as such, is the standard unit of exchange in most international transactions. In fact, many non-U.S. firms (such as Airbus SAS) actually price their manufactured products in dollars. And the dollar is the de facto unit of pricing for such commodities as oil (hence the term “petrodollar“). Several countries even use it as their “official” currency.
But the global financial crisis is threatening that dominance.
The United States has already “injected” into the world economy trillions of dollars that are collectively worth more than 60% of this country’s entire gross domestic product (GDP). And the prospect of still more injections for California, GMAC LLC and other “national” interests is extremely worrisome - and not just to millions of Americans, either. If Washington stays on this path, the result will be a currency crisis the likes of which few are capable of imagining and a near-complete devaluation of the once-almighty U.S. dollar.
Ironically, both events will only further embolden China, speeding up its efforts to boost the yuan’s international acceptance.
The “New” Yuan
While some experts may question Beijing’s motives, it’s hard to question China’s long-term strategic vision, since the country is actually being forced to take these steps that ensure its own survival. Unfortunately, our leaders in Washington don’t seem to understand this, so they’re only making matters worse - when they instead could be actively working with China and the world community on this instead of summarily ignoring the fact that the yuan may well be the world’s next reserve currency.
At the very least, China’s currency is likely to be granted a global status on par with the current major currency trading pairs for purposes of settling international transactions, whether the West wants that to happen or not.
I’ve outlined this scenario many times in recent years and, quite frankly, too often received blank stares in return. Most folks here in the West just aren’t prepared to deal with the idea that the U.S. dollar could be finished and that another currency could replace it after more than 60 years of global dominance. But they better get used to the idea - and in a hurry.
China is acutely aware that not having international currency convertibility hampers both its development and - thanks to the ongoing financial crisis - its potential survival. Not only has China been forced to accept huge reserves built upon previous trade growth (its $2 trillion in reserves is an all-time record), but its own policies have contributed to its relative inability to flex its capital-market muscles. That’s especially true in transactions involving U.S. dollar/yuan exchange rates.
What for us sounds quite theoretical in nature represents a very real problem for businessmen such as Dong Xianbin, the chairman of the Guangxi Sanhuan Enterprise Group Holding Co. Ltd. He estimates that he’s lost more than 150 million yuan (about $22 million at current exchange rates) on international trade in the past three years alone because of exchange rate changes between the dollar and the yuan. So he’s keen to see yuan-based transactions that will reduce exchange-rate risks, or eliminate them entirely. And he’s not alone. Thousands of Chinese companies are chomping at the bit for the same reasons.
As a nation, not having a universally accepted currency is a huge issue. China’s record reserves are now at risk thanks to the U.S. government’s bailout boondoggle, because each new greenback printed debases the value of every other dollar out there, including the ones China holds.
Historically, Beijing sought to mitigate that risk by diversifying its holdings into other currencies most notably the European euro and the Swiss franc, for instance. But now China’s facing the kinds of problems that massive mutual funds closer to home must deal with when they hold a disproportionately large amount of money: China’s reserve fund is so massive that there’s literally no other single currency that can absorb all that liquidity. So even if China wanted to diversify more aggressively, it’s going to be hard pressed to do so.
Incidentally, this is precisely why China’s so-called “nuclear option” will never become more than a theory bandied about by conspiracy buffs. Under such a scenario, China will either “dump” its dollars, and/or stop buying them, causing the value of the greenback to plummet. China might start selling, but there literally is not another currency on the planet that could absorb a wholesale liquidation.
Therefore, the reality is that China needs to have the U.S. boost the value of the dollar - even as the United States needs to have China do all it can to maintain the dollar’s value.
Shopping for Commodities
At this point in time, China essentially has two alternatives:
China’s also gone global in its hunt for oil - which, of course, is the only other global “currency” truly in international demand.
While there’s a real benefit to having locked up supplies of commodities, they aren’t an ideal store of value. And that suggests that what China really needs to do is elevate the global prominence of its own currency at the same time, whether U.S. leaders aid the process or not.
History shows that strong economies tend to have strong currencies. And the actions that I’ve reported on recently from China - the cross-Straits agreements reached between China and Taiwan, the Hong Kong yuan-trade agreements and the “yuan carry trade,” to name a few - only reinforce the effort China is putting forth to achieve this goal.
Speaking of goals … there are obviously plenty of Doubting Thomases on this issue - but they were around years ago before China announced that it wants to put a man on the moon by 2020.
[Editor's Note: Money Morning Investment Director Keith Fitz-Gerald just recently completed his investing tour of China. His conclusion: Every investor has to have a China strategy. As this essay shows, the global financial crisis has re-written the rules for global investing. It's also generating a whole host of new profit plays, having created what Fitz-Gerald likes to call "The Golden Age of Wealth Creation ." Investors who ignore this "New Reality" will get left behind. But those with the courage and conviction to press ahead could well find this to be the greatest profit opportunity of their lifetime. China's just one such opportunity. To find out about the others, please click here .]
.
News and Related Story Links:
Investment Director
Money Morning/The Money Map Report
http://www.moneymorning.com/2009/05/27/yua...lobal-currency/
China has taken yet another step to transform the yuan into the dominant global currency, a long-term initiative that could ultimately dethrone the dollar as the world’s top unit of exchange.
In the last four months alone, China has signed currency swap agreements worth more than $95 billion (650 yuan) with an array of nations - including: Argentina, Brazil, South Korea, Indonesia, Malaysia, Belarus and Hong Kong - that are only too glad to move away from the increasingly shaky U.S. dollar.
For Westerners who are struggling to come to terms with the notion of a disarrayed dollar, the thought of oil, gold or other commodities being priced in yuan instead of dollars has to seem about as likely as having another country put a man on the moon.
But the Chinese yuan is already well on its way to becoming that globally accepted standard unit of exchange and the proverbial genie, as they say, is out of the bottle. In fact, I’d even go so far as to say the dollar’s days of dominance are numbered and with each new round of bailout chicanery, the clock is winding down ever faster.
Asia’s Long-Term View
In such Asian markets as Japan, Hong Kong and Mainland China, the long-term planning that’s an anathema to Corporate America is actually standard fare. During the height of Japan’s dominance in the 1980s, the Western business press - with a touch of derision - wrote about how some Japanese companies routinely formulated business plans with durations of 100 years or more (while working in Asia early in my career, I actually even contributed to several such plans … but that’s another story for another time).
That’s neither here nor there to most people who note smugly that Japan is getting its comeuppance. But what they don’t understand is that Japan is not alone. In fact, many people I talk with are shocked to learn that at a time when the West is still busy handing out Band-Aids in an attempt to deal with the greatest financial crisis on record, China has been quietly and shrewdly reinventing itself with the same kind of long-term vision.
Take commodities, for example. While companies in the United States, Great Britain and Europe are being forced to shed promising assets in order to compensate for massive losses or to pay down debt, cash-rich China has been able to operate as a buyer in a buyer’s market. While the rest of the world has interpreted this as a sign that China’s interested in buying the things it needs to grow, what they have not understood is that China’s also interested in using physical assets as a source of “currency” that offsets an increasingly eviscerated U.S. dollar.
This is actually a double-whammy of sorts, for while the rest of the world has been grappling with the global slowdown, China has been locking up supplies of commodities that are only going to become more scarce (and more valuable) as global demand escalates.
In fact, as I’ve suggested for months, now, China isn’t just going to consume those assets; it’s going to use them as part of the same long-term vision it’s been staking out with regard to its own currency, the yuan, which it fully intends to boost in status to the point where it becomes an internationally accepted currency.
The Once-Dominant Dollar
That’s quite a turn of events.
Even now, despite the travails of the U.S. economy, the dollar remains the world’s most widely held reserve currency and, as such, is the standard unit of exchange in most international transactions. In fact, many non-U.S. firms (such as Airbus SAS) actually price their manufactured products in dollars. And the dollar is the de facto unit of pricing for such commodities as oil (hence the term “petrodollar“). Several countries even use it as their “official” currency.
But the global financial crisis is threatening that dominance.
The United States has already “injected” into the world economy trillions of dollars that are collectively worth more than 60% of this country’s entire gross domestic product (GDP). And the prospect of still more injections for California, GMAC LLC and other “national” interests is extremely worrisome - and not just to millions of Americans, either. If Washington stays on this path, the result will be a currency crisis the likes of which few are capable of imagining and a near-complete devaluation of the once-almighty U.S. dollar.
Ironically, both events will only further embolden China, speeding up its efforts to boost the yuan’s international acceptance.
The “New” Yuan
While some experts may question Beijing’s motives, it’s hard to question China’s long-term strategic vision, since the country is actually being forced to take these steps that ensure its own survival. Unfortunately, our leaders in Washington don’t seem to understand this, so they’re only making matters worse - when they instead could be actively working with China and the world community on this instead of summarily ignoring the fact that the yuan may well be the world’s next reserve currency.
At the very least, China’s currency is likely to be granted a global status on par with the current major currency trading pairs for purposes of settling international transactions, whether the West wants that to happen or not.
I’ve outlined this scenario many times in recent years and, quite frankly, too often received blank stares in return. Most folks here in the West just aren’t prepared to deal with the idea that the U.S. dollar could be finished and that another currency could replace it after more than 60 years of global dominance. But they better get used to the idea - and in a hurry.
China is acutely aware that not having international currency convertibility hampers both its development and - thanks to the ongoing financial crisis - its potential survival. Not only has China been forced to accept huge reserves built upon previous trade growth (its $2 trillion in reserves is an all-time record), but its own policies have contributed to its relative inability to flex its capital-market muscles. That’s especially true in transactions involving U.S. dollar/yuan exchange rates.
What for us sounds quite theoretical in nature represents a very real problem for businessmen such as Dong Xianbin, the chairman of the Guangxi Sanhuan Enterprise Group Holding Co. Ltd. He estimates that he’s lost more than 150 million yuan (about $22 million at current exchange rates) on international trade in the past three years alone because of exchange rate changes between the dollar and the yuan. So he’s keen to see yuan-based transactions that will reduce exchange-rate risks, or eliminate them entirely. And he’s not alone. Thousands of Chinese companies are chomping at the bit for the same reasons.
As a nation, not having a universally accepted currency is a huge issue. China’s record reserves are now at risk thanks to the U.S. government’s bailout boondoggle, because each new greenback printed debases the value of every other dollar out there, including the ones China holds.
Historically, Beijing sought to mitigate that risk by diversifying its holdings into other currencies most notably the European euro and the Swiss franc, for instance. But now China’s facing the kinds of problems that massive mutual funds closer to home must deal with when they hold a disproportionately large amount of money: China’s reserve fund is so massive that there’s literally no other single currency that can absorb all that liquidity. So even if China wanted to diversify more aggressively, it’s going to be hard pressed to do so.
Incidentally, this is precisely why China’s so-called “nuclear option” will never become more than a theory bandied about by conspiracy buffs. Under such a scenario, China will either “dump” its dollars, and/or stop buying them, causing the value of the greenback to plummet. China might start selling, but there literally is not another currency on the planet that could absorb a wholesale liquidation.
Therefore, the reality is that China needs to have the U.S. boost the value of the dollar - even as the United States needs to have China do all it can to maintain the dollar’s value.
Shopping for Commodities
At this point in time, China essentially has two alternatives:
- It can seek out other stores of value, such as natural resources, which are highly liquid and reasonably “deep” in global markets, but which can also be very volatile from a pricing standpoint.
- Or it can elevate the credibility of its own currency in the international financial markets and effectively remove the exchange rate risks associated with its own partially blocked yuan.
China’s also gone global in its hunt for oil - which, of course, is the only other global “currency” truly in international demand.
While there’s a real benefit to having locked up supplies of commodities, they aren’t an ideal store of value. And that suggests that what China really needs to do is elevate the global prominence of its own currency at the same time, whether U.S. leaders aid the process or not.
History shows that strong economies tend to have strong currencies. And the actions that I’ve reported on recently from China - the cross-Straits agreements reached between China and Taiwan, the Hong Kong yuan-trade agreements and the “yuan carry trade,” to name a few - only reinforce the effort China is putting forth to achieve this goal.
Speaking of goals … there are obviously plenty of Doubting Thomases on this issue - but they were around years ago before China announced that it wants to put a man on the moon by 2020.
[Editor's Note: Money Morning Investment Director Keith Fitz-Gerald just recently completed his investing tour of China. His conclusion: Every investor has to have a China strategy. As this essay shows, the global financial crisis has re-written the rules for global investing. It's also generating a whole host of new profit plays, having created what Fitz-Gerald likes to call "The Golden Age of Wealth Creation ." Investors who ignore this "New Reality" will get left behind. But those with the courage and conviction to press ahead could well find this to be the greatest profit opportunity of their lifetime. China's just one such opportunity. To find out about the others, please click here .]
.
News and Related Story Links:
- Money Morning Special Report:
How the New ‘Yuan Carry Trade’ Will Add to China’s Global Muscle, and Possibly Even Accelerate the U.S. Recovery. - Wikipedia:
Currency Swap. - Money Morning News Analysis:
China Flexes its Muscles and Finds Support in a Bid to Dump the Dollar as the World’s Main Reserve Currency. - Wikipedia:
The Renminbi. - Money Morning News:
What Companies Are Profiting From China’s Commodities Crusade? - Wikipedia:
Petrodollar. - Money Morning Market Analysis:
Profit from China’s ‘Nuclear Option.’ - Money Morning News Analysis:
China/Taiwan Investment Accords Will Lead to Profit Plays for Investors. - News Sophisticate:
China: Man on the Moon by 2020? First Lunar Orbiter Launch Successful.
China's Debt Bomb
Tong Li, Forbes, May 27, 2009 Should the U.S. set up 'bad' banks? Look to China for some answers.
Tong Li, Forbes, May 27, 2009 Should the U.S. set up 'bad' banks? Look to China for some answers.
China
- Asian Investment Opportunities Abound by Frank Holmes
- China Dumping Long-Term Bonds, Concerned About U.S. Inflation by Living4Dividends
- Simcere Pharma Follows Diversified Expansion Strategy by ChinaBio Today
- China Sky One Expands Portfolio with Two New Drugs by ChinaBio Today
- MidAmerican Energy, BYD Partner on Battery Storage Initiative by Ravi Nagarajan
- Chinese Economy Down; U.S. Home Prices Still Falling Fast by Peter Cooper
- Fuqi International Glitters Despite Hard Times in China by Paul Goodwin
Beijing weighs its options
North Korea's latest nuclear test again puts China on the spot. The issue, though, is not whether Beijing has the leverage and is willing to use it against Pyongyang; it is the calculation of what impacts on what specific goals such pressure would generate, given that China's overriding and vital concern is stability on the Korean Peninsula. - Jing-dong Yuan (May 27,'09)
Kim Jong-il tests US-China cooperation
The complex dynamics which for centuries have marked relations between the political entities on the current Korean Peninsula - and their gigantic Western neighbor - show that Korean national pride refuses, despite China's unavoidable presence - or precisely because of it - subordination. The influence of Beijing - given its relationship with the United States - on Pyongyang, should not be overestimated. - David Gosset (May 27,'09)
North Korea's latest nuclear test again puts China on the spot. The issue, though, is not whether Beijing has the leverage and is willing to use it against Pyongyang; it is the calculation of what impacts on what specific goals such pressure would generate, given that China's overriding and vital concern is stability on the Korean Peninsula. - Jing-dong Yuan (May 27,'09)
Kim Jong-il tests US-China cooperation
The complex dynamics which for centuries have marked relations between the political entities on the current Korean Peninsula - and their gigantic Western neighbor - show that Korean national pride refuses, despite China's unavoidable presence - or precisely because of it - subordination. The influence of Beijing - given its relationship with the United States - on Pyongyang, should not be overestimated. - David Gosset (May 27,'09)
Walden Bello
Can China Save the World From Depression?
Can China Save the World From Depression?
economy
+ China's expects 600 bln yuan new loans in May: report
Shanghai (AFP) May 27, 2009 - New loans from Chinese banks are expected to reach about 600 billion yuan (88 billion dollars) in May, roughly the same as April, local media reported Wednesday. New loans have been extended at a moderately fast pace, and the accumulated sum for the first half of the year will likely total around six trillion yuan, the China Securities Journal said, citing sources at major banks. ... more
+ China's expects 600 bln yuan new loans in May: report
Shanghai (AFP) May 27, 2009 - New loans from Chinese banks are expected to reach about 600 billion yuan (88 billion dollars) in May, roughly the same as April, local media reported Wednesday. New loans have been extended at a moderately fast pace, and the accumulated sum for the first half of the year will likely total around six trillion yuan, the China Securities Journal said, citing sources at major banks. ... more
- China: All's Not so Quiet on the Eastern Front by Kurt Brouwer
- Will China Dump the Dollar? by Kurt Brouwer
China
- Why Investing in Taiwan Will Help Fix China’s Broken IC Industry by Robert Castellano
- Covered Call Strategy with American Oriental BioEngineering by Jason Tillberg
- Recovery from China: Will the Debtors Lead the Debtors? by Trader Mark
- Investing in BRICs with ETFs by John Christy
- Will Buying Spree Boost China ETFs? by Michael Johnston
- Will China Dump the Dollar? by Kurt Brouwer
- A-Power: The Stock That Got Away by Trader Mark
- Noah Education Holdings Ltd. F3Q09 (Qtr End 03/31/09) Earnings Call Transcript
- China Sunergy Co., Ltd. Q1 2009 Earnings Call Transcript
- Chinese Tech Stock Weekly Summary (May 18 - May 24, 2009) by IRG
- A Tale of Two Economies: U.S. vs. China by Jeff Nielson
- L & L International Holdings: Capitalizing on Coal Demand in China by The GeoTeam
China says 'no thanks' to G-2
Although flattered by the thought, China has no desire to enter into a Group of Two with the United States that would dominate international affairs. A G-2 would resemble world hegemony, something that goes against Beijing's core foreign policy principle of a multipolar world order and is beyond its current capabilities and ambitions. - Jian Junbo (May 28,'09)
Although flattered by the thought, China has no desire to enter into a Group of Two with the United States that would dominate international affairs. A G-2 would resemble world hegemony, something that goes against Beijing's core foreign policy principle of a multipolar world order and is beyond its current capabilities and ambitions. - Jian Junbo (May 28,'09)
Yuan in the ascendancy
International agreement on proposals by People's Bank of China governor Zhou Xiaochuan for reform of the international monetary system is remote, despite the non-provocative language he used. Yet while the US dollar will remain the reserve currency, increased use of China's currency is also certain. - Pieter Bottelier
Taiwan goes back to work
Workers are being rehired in Taiwan as improved ties with mainland China are helping the economy, reeling from a slump in exports, find its way back to growth. That does not mean a sustained recovery is on the way. - R M Cutler
International agreement on proposals by People's Bank of China governor Zhou Xiaochuan for reform of the international monetary system is remote, despite the non-provocative language he used. Yet while the US dollar will remain the reserve currency, increased use of China's currency is also certain. - Pieter Bottelier
Taiwan goes back to work
Workers are being rehired in Taiwan as improved ties with mainland China are helping the economy, reeling from a slump in exports, find its way back to growth. That does not mean a sustained recovery is on the way. - R M Cutler
Beijing weighs its options
North Korea's latest nuclear test again puts China on the spot. The issue, though, is not whether Beijing has the leverage and is willing to use it against Pyongyang; it is the calculation of what impacts on what specific goals such pressure would generate, given that China's overriding and vital concern is stability on the Korean Peninsula. - Jing-dong Yuan (May 27,'09)
Kim Jong-il tests US-China cooperation
The complex dynamics which for centuries have marked relations between the political entities on the current Korean Peninsula - and their gigantic Western neighbor - show that Korean national pride refuses, despite China's unavoidable presence - or precisely because of it - subordination. The influence of Beijing - given its relationship with the United States - on Pyongyang, should not be overestimated. - David Gosset (May 27,'09)
North Korea's latest nuclear test again puts China on the spot. The issue, though, is not whether Beijing has the leverage and is willing to use it against Pyongyang; it is the calculation of what impacts on what specific goals such pressure would generate, given that China's overriding and vital concern is stability on the Korean Peninsula. - Jing-dong Yuan (May 27,'09)
Kim Jong-il tests US-China cooperation
The complex dynamics which for centuries have marked relations between the political entities on the current Korean Peninsula - and their gigantic Western neighbor - show that Korean national pride refuses, despite China's unavoidable presence - or precisely because of it - subordination. The influence of Beijing - given its relationship with the United States - on Pyongyang, should not be overestimated. - David Gosset (May 27,'09)
China’s Internet Control Gives Hope to Libertarians
by Jacob G. Hornberger
The Chinese government’s strict control over the Internet will come in handy during the upcoming 20th anniversary of the Tiananmen Square massacre, when Chinese troops, faithfully following orders of their superiors, opened fire on tens of thousands of peaceful demonstrators.
Ironically, the tight control that the Chinese communist regime maintains on the Internet provides hope for libertarians here in the United States.
How so?
Because the Chinese government’s tight control over the Internet is powerful circumstantial evidence of the enormous power of truth and ideas on liberty, the power to bring down even governments whose power over the citizenry is omnipotent.
The Chinese Communist Party maintains a political monopoly in the country. No non-Communist Party member is permitted to compete in elections against the Party. Thus, there is no way to peacefully oust government officials from office through elections.
Violent overthrow of the government is also not an option. Long ago, the communist authorities established a nationwide ban on the private ownership of guns, thereby ensuring that the citizenry would forever be denied the ability to resist tyranny by force. When the troops opened up on the protestors in Tiananmen Square, they were certain that the protestors would not fire back owing to the long-established policy of gun control in China.
Why would a regime that maintains a monopoly on power care about controlling the Internet and other media? When they have total power and own all the guns, why should they care about what people are saying or writing?
The answer is that Chinese officials know that truth and ideas on liberty have a power that is immeasurable, a power that can energize and motivate a populace to demand the recognition of fundamental rights and liberty. They are fully aware that no matter how powerful a government might be and no matter how faithful and obedient its troops might be, it might have a difficult time standing against millions of aroused and knowledgeable citizens yearning and demanding to be a free people — free of the domination and control of their own government.
Here in the United States, libertarians face a daunting task in restoring liberty to our land.
First of all, we face the statism that is ardently embraced by both liberals and conservatives, as reflected by their joint commitment to socialism, interventionism, and empire.
Second, there is the political monopoly that Democrats and Republicans have established, which has proven almost as effective as the political monopoly that the Chinese communists enjoy. The statists like to pretend that their system is different from the Chinese system because there are two political parties competing against each other. But that’s just tripe. Actually, it’s one big party — the Statist Party — divided into two wings, the Democrats and Republicans, much as the NFL is divided into two competing conferences.
With their ballot-barrier restrictions, their campaign-finance rules, and their limits on campaign contributions, the Statist Party has effectively ensured that people who oppose its statism has a virtually impossible time competing with them in the political arena. Every once in while a non-statist will break through the monopoly, such as Ron Paul, but it’s a rare exception.
So, with all these forces arrayed against us, it might be tempting for libertarians to say, “Oh, what the heck? There’s no way we can bring all this socialism, interventionism, and empire to an end and restore liberty to our land.”
That temptation must be resisted, however. And the reason lies in the power of truth and sound ideas on liberty.
Think of the situation this way: At one end of the spectrum are us libertarians. At the other end are the statists — forget most of them, they are incorrigible and there is no way that they are going to change their minds. But in the middle are millions of people who are seeking the truth, seeking moral principles, seeking a better way. Those are the people that the statists, in China, the United States, and elsewhere fear.
So, we libertarians just need to keep speaking the truth and sharing our ideas on liberty, with faith and confidence that our efforts are moving us closer to restoring freedom to our land. In the final analysis, to paraphrase George Washington, the results of our efforts are in the hands of God.
Jacob Hornberger is founder and president of The Future of Freedom Foundation.
by Jacob G. Hornberger
The Chinese government’s strict control over the Internet will come in handy during the upcoming 20th anniversary of the Tiananmen Square massacre, when Chinese troops, faithfully following orders of their superiors, opened fire on tens of thousands of peaceful demonstrators.
Ironically, the tight control that the Chinese communist regime maintains on the Internet provides hope for libertarians here in the United States.
How so?
Because the Chinese government’s tight control over the Internet is powerful circumstantial evidence of the enormous power of truth and ideas on liberty, the power to bring down even governments whose power over the citizenry is omnipotent.
The Chinese Communist Party maintains a political monopoly in the country. No non-Communist Party member is permitted to compete in elections against the Party. Thus, there is no way to peacefully oust government officials from office through elections.
Violent overthrow of the government is also not an option. Long ago, the communist authorities established a nationwide ban on the private ownership of guns, thereby ensuring that the citizenry would forever be denied the ability to resist tyranny by force. When the troops opened up on the protestors in Tiananmen Square, they were certain that the protestors would not fire back owing to the long-established policy of gun control in China.
Why would a regime that maintains a monopoly on power care about controlling the Internet and other media? When they have total power and own all the guns, why should they care about what people are saying or writing?
The answer is that Chinese officials know that truth and ideas on liberty have a power that is immeasurable, a power that can energize and motivate a populace to demand the recognition of fundamental rights and liberty. They are fully aware that no matter how powerful a government might be and no matter how faithful and obedient its troops might be, it might have a difficult time standing against millions of aroused and knowledgeable citizens yearning and demanding to be a free people — free of the domination and control of their own government.
Here in the United States, libertarians face a daunting task in restoring liberty to our land.
First of all, we face the statism that is ardently embraced by both liberals and conservatives, as reflected by their joint commitment to socialism, interventionism, and empire.
Second, there is the political monopoly that Democrats and Republicans have established, which has proven almost as effective as the political monopoly that the Chinese communists enjoy. The statists like to pretend that their system is different from the Chinese system because there are two political parties competing against each other. But that’s just tripe. Actually, it’s one big party — the Statist Party — divided into two wings, the Democrats and Republicans, much as the NFL is divided into two competing conferences.
With their ballot-barrier restrictions, their campaign-finance rules, and their limits on campaign contributions, the Statist Party has effectively ensured that people who oppose its statism has a virtually impossible time competing with them in the political arena. Every once in while a non-statist will break through the monopoly, such as Ron Paul, but it’s a rare exception.
So, with all these forces arrayed against us, it might be tempting for libertarians to say, “Oh, what the heck? There’s no way we can bring all this socialism, interventionism, and empire to an end and restore liberty to our land.”
That temptation must be resisted, however. And the reason lies in the power of truth and sound ideas on liberty.
Think of the situation this way: At one end of the spectrum are us libertarians. At the other end are the statists — forget most of them, they are incorrigible and there is no way that they are going to change their minds. But in the middle are millions of people who are seeking the truth, seeking moral principles, seeking a better way. Those are the people that the statists, in China, the United States, and elsewhere fear.
So, we libertarians just need to keep speaking the truth and sharing our ideas on liberty, with faith and confidence that our efforts are moving us closer to restoring freedom to our land. In the final analysis, to paraphrase George Washington, the results of our efforts are in the hands of God.
Jacob Hornberger is founder and president of The Future of Freedom Foundation.
Little leaps forward?
By Geoff Dyer
The Financial Times: May 27 2009
Faded supremacy: Shanghai children beneath a mural depicting Mao Zedong. Since his time, decisions are made more by consensus among party leadersEver since China’s leaders sent in tanks and soldiers to mow down pro-democracy protesters in Beijing 20 years ago, the Chinese Communist party has faced a constant stream of predictions about its imminent demise. American President Bill Clinton was one of the most pointed critics, telling Jiang Zemin, Chinese president, in 1997 that China’s authoritarian system “was on the wrong side of history”.This year has been no different. The global economic crisis has led to at least 20m factory workers losing their jobs, and would, according to some forecasts, undermine the legitimacy of the Communist party.
Yet 20 years after the Beijing massacre, the Communist leaders remain firmly in control. There is no coherent challenge to their rule and, although grassroots protests are widespread, the simmering discontent of 1989 is less evident today, especially in the main cities. Even the economy appears to have begun to recover more quickly than that of any other major country.
Opinion polls have to be viewed cautiously as respondents might be afraid to criticise the government openly, but they generally show a level of optimism that few nations can match.
“There is a lot of unhappiness, but surveys tend to show that hope is rising and people generally think the country is going in the right direction,” says Cheng Li, a Chinese politics expert at the Brookings Institution.
The apologetic tone that leaders once adopted on political issues has gradually been replaced by more confident claims about the benefits of a “China model”. Zhou Xiaochuan, head of the central bank, recently said indications China was recovering from the crisis demonstrated “its superior system” when it came to making important decisions.
From Russia to Venezuela, other countries have trumpeted a more authoritarian, statist approach in recent years, but it is China with its steamroller economy and rising international influence that poses the biggest challenge to the postwar march of democracy. Indeed, the fate of the Communist party – whether it maintains its tight grip on power or is forced to give way to more democratic forms of government – will be one of the defining stories of the century.
Just how has China managed to disarm the democracy movement? The basic outline of the approach is well understood – a mixture of wealth from a dynamic economy and repression. The state clamps down on signs of organised opposition and boasts an increasingly sophisticated propaganda machine, skilled at fanning the flames of nationalist sentiment.
Yet there are other explanations for the durability of the one-party state. Beneath its Leninist surface, the CCP has introduced a string of reforms aimed at boosting its ability to govern and adapt to a changing society.
Training for officials has been improved, including the opening of MBA-style colleges for party members. The CCP’s all-powerful personnel department has imposed rotation of officials to reduce scope for corruption and broaden experience, as well as enforcing retirement for older officials. In 2007 alone, about 200,000 local government officials changed positions.
Since 2002, private entrepreneurs – a potential source of opposition – have been allowed to join the party; in one recent list of the country’s richest people, one-third were CCP members. Although public debate on sensitive topics is still closely curtailed, the CCP has established stronger ties with intellectuals and professionals to solicit expert advice. New labour laws to strengthen workers’ rights, for example, were drafted with the help of academics. Some intellectuals were motivated to advise the Tiananmen protesters by their anger at being ignored: now, their successors give regular private briefings to top leaders.
While a small group of scholars openly supports democracy, other academics are trying to find ways to gauge public opinion without elections. Experiments are being conducted with focus groups, opinion polls and public hearings. The objective is not to pave the way slowly towards a more democratic system but to make the one-party state more effective and durable.
The CCP also seems to have established a more stable process for leadership transitions – the Achilles heel of so many authoritarian regimes. Hu Jintao was anointed the next leader a decade before he took over in 2002, which helped avoid a destabilising power struggle when he took office. For the next generation, the leadership has been selected five years ahead of time, with Xi Jinping expected to become president and CCP boss in 2012, with Li Keqiang as premier. Most importantly, these decisions were the result of consensus among senior party members, not the word of one dominant figure such as Mao Zedong or Deng Xiaoping.
In his book, China’s Communist Party: Atrophy and Adaptation, David Shambaugh of George Washington University described the 10-year effort by the CCP to study the decline of the Soviet Union and learn survival lessons. Some conclusions were obvious, such as the need to avoid economic stagnation and military adventures overseas. But the CCP also decided to make its officials more professional and allow for dissent and debate within the party. “The lesson [from the Soviet experience] is clear: adapt and change or atrophy and die,” Mr Shambaugh concluded. “The CCP has clearly chosen the former option.”
None of this is to deny that there are clear limits on political discussion and activity – the CCP does not allow debate about its own legitimacy or any potential challengers. But the capacity for flexibility helps explain how the party has avoided becoming an ossified oligarchy in the eyes of many Chinese.
If the CCP has stifled calls for democracy by adapting, the other reason for its resilience has been the important changes in peoples’ lives that go well beyond the expansion in incomes.
Society can still seem highly controlled to many westerners, but petty interference by the state has diminished dramatically – especially for the urban middle class. The young have grown up hearing about how the authorities decided the length of hair and clothes to be worn. Even in the 1980s, getting married required the approval of officials from the “work unit”, the employer-based bureaucracy that controlled many aspects of private life. Getting tickets to the theatre or to travel often required official stamps. Large parts of that supervision, one of the underlying complaints of the Tiananmen generation, have disappeared.
Academic debate in elite circles has become much more open. The internet is another important part of that sense of liberation. Whether it really does allow a wide discussion of sensitive issues or whether, actually, the government’s extensive censorship efforts restrict discussions to safer topics is open to question. But young internet-savvy people genuinely believe their access to information has been greatly enhanced.
Foxshuo, a 22-year-old blogger from Wuhan in central China, says the government’s propaganda tactics – which range from blocking sites to paying students to make pro-CCP comments in chatrooms – are often fruitless. “Even though we have to use proxies or encryption tools, which can be a complicated process, we eventually get to find out what we want,” he says. “The internet environment is harsher than in many western countries, but westerners would be wrong to think that China has no freedom at all.” In other words, whatever the reality, the flow of information feels free to the young.
As a result of the effective combination of governance reforms and co-opting the rich and the middle class, few analysts believe the party will face a serious threat over the next decade.
Yet there are also plenty of reasons for thinking that the party will come under greater pressure to introduce deeper political reforms. For all the resilience the party has shown, its support at the level of ideas is shallow.
When asked if they support multiparty elections, the young will often sound sceptical but they are also quite likely to express strong support for much greater freedom for media and for civil society organisations. Opinion surveys bear some of this out. A study of youth attitudes prepared by the Chinese Academy of Social Sciences found 61 per cent said they identified with “liberalism”. Surveys also indicate that most of the bright young people who apply for membership are mostly interested in the job opportunities that party membership might bring.
The youth are gradually shedding their image as an apolitical, materialistic “me generation”. The Sichuan earthquake last year exposed a deep vein of idealism that is not otherwise being channelled. On the campuses of the leading universities, environmental protection is becoming as important an issue as it is in the west.
The sense that the CCP has yet to win the political argument is reinforced by the frequency with which leaders use the word “democracy”. In his speech to the National Peoples’ Congress this year, Premier Wen Jiabao said: “We need to improve democratic institutions, enrich the forms of democracy, expand its channels, and carry out democratic elections.” What they mean by “democracy” is different from what reformers seek or how it is practised elsewhere – usually some modest form of inner-party vote on specific CCP posts. But the fact that leaders feel the need to couch their words in the language of democratic reform is not indicative of a regime with solid intellectual foundations.
The country is a long way from creating the sort of institution that can channel legitimate complaints from citizens and counterbalance unaccountable political power. Important court decisions are still referred to party officials and the centuries-old petitioning system, where people lodge complaints to the authorities, is known for corruption and abuse.
For all the party’s success in blunting any challenge from the new middle class, it has been helped by the fact that the number of people whose income makes them genuinely comfortable is still relatively small. Car ownership in China – an important badge of middle-class status – is only 2-3 per cent. One popular idea among political scientists is that pressure for democracy really starts to build when gross domestic product per capita reaches $5,000-$6,000. Based on purchasing power parity China has reached this, although in nominal terms it is still barely half that level. This means the theory that a flourishing middle class will challenge the CCP is only just starting to be tested in China.
Moreover, the very flexibility that has helped the party survive means that the status quo is unlikely to hold. “If the CCP really is so resilient, it will have to adapt into something fundamentally different as society changes,” says Cheng Li at Brookings. China’s dissidents hope social changes will eventually propel political reform. “For now, the attempts to protect individual rights are dissipated and fractured,” says Bao Tong, a former senior official whose reformist views led him to be imprisoned after Tiananmen. “But if all those pieces can be gathered together, they will create a power that will influence China’s leaders.”
Additional reporting by Yang Jie
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June 4 1989: The day the tanks moved in
On the night of June 3 1989, soldiers arrived at the scene of protests in Beijing’s Tiananmen Square. By the next day they had cleared it and the army was in control.
Independent estimates of deaths range from 500 to several thousand. The government claimed no one was killed on the square itself, although this has been contradicted by witnesses. However, most deaths did occur elsewhere in the city, in particular around Muxidi to the west, where residents tried to block the soldiers.
Recently leaked documents say that in the days after the massacre, anti-government protests occurred in 181 places around the country.
PROTEST 20 YEARS ONCopyright The Financial Times Limited 2009
From jail time to a ‘cup of tea’ with the police
Liu Xiaobo is China’s latest democracy martyr. Late last year, he helped write Charter 08, a pro-democracy manifesto that organisers say has been signed by 8,000 people. He has been in jail since December 8, write Geoff Dyer and Jamil Anderlini.
The fate of Charter 08 illustrates the way China smothers its democracy movement to avoid any repetition of the Tiananmen protests. Promoting democracy is not illegal, at least within a circle of approved academics. Beijing University’s Yu Keping, an occasional adviser to President Hu Jintao, published Democracy is a Good Thing last year. But the state cracks down on sensitive discussions outside its control. Mr Liu was charged with “inciting subversion of state power”.
“There can never be harmony when there is a constant crackdown under way,” says Bao Tong, a prominent dissident. “China is stable but turbulent at all times under this government.”
Repression can be subtle. Tang Xiaozhao, a blogger, describes how after signing the charter she was invited to “have a cup of tea” by the police, who told her off for being naive. “What can you change by signing a document? It’s no use. It could only bring you trouble. I think you are not mature enough in politics,” she says she was told. A blocked promotion or a word with relatives are other methods of marginalising persistent critics.
Charter 08 has an impressive number of signatories given the risks. But some liberal academics declined to sign it because they thought it too foreign, modelled as it was on Charter 77, the anti-Soviet manifesto issued in what was Czechoslovakia by intellectuals such as Vaclav Havel.
Qin Hui, a historian at Tsinghua University in Beijing, says he approved of a lot of the ideas in the document but it did not “suit the characteristics of China’s special situation”. The implication is that future reformers must present their ideas as continuous with Chinese traditions and history rather than adopting an occidental blueprint.
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