October 30, 2006
USA Warns Taiwan and China
Despite upcoming elections that may challenge their one-party rule, Republicans stir up a storm of bluster aimed at Taiwan AND China this week. First, Stephen Young, the head of the American Institute in Taiwan (USA's arms peddler), warned Taiwan's parliament that they'd better cough up $13 billion for the 2001 arms package or else... The opposition party has long questioned the importance of the huge arms deal (orginally closer to $20 billion) that would chiefly benefit Lockheed-Martin and various Congressional pork projects such as reopening diesel submarine manufacturing in declining port cities of Connecticut or Mississippi.
Meanwhile, this week Congress's "US-China Economic Security Review Commission" is to reveal its annual report of the great China Threat. The commission, created in 2000 as a compromise to the Republicans for support of Clinton's China trade deal (that guaranteed Chinese admission to WTO), is an absurd assemblage of former members of the Heritage Foundation and other conservative groups and former staffers of Congress members with well known anti-China biases (Nancy Pelosi, William Byrd, etc.). It annual assessment has about as much validity as the China report put out by the Pentagon each year with similar fanfare. Indeed the commission is looking for expertise on the subject. You can apply here.
Meanwhile, this week Congress's "US-China Economic Security Review Commission" is to reveal its annual report of the great China Threat. The commission, created in 2000 as a compromise to the Republicans for support of Clinton's China trade deal (that guaranteed Chinese admission to WTO), is an absurd assemblage of former members of the Heritage Foundation and other conservative groups and former staffers of Congress members with well known anti-China biases (Nancy Pelosi, William Byrd, etc.). It annual assessment has about as much validity as the China report put out by the Pentagon each year with similar fanfare. Indeed the commission is looking for expertise on the subject. You can apply here.
Where's The Outrage?
Less than a year ago a months old protest by unhappy villagers in Dongzhou county, Guangdong Province, China, was ended by police action. As the protesters clashed with riot police, shots were fired and there were fatalities. The news of this incident was quickly broadcast throughout the American press, first by the US Government founded and supported "Radio Free Asia," followed by smaller syndicates of conservative and anti-China newspapers, and then -- days later -- picked up by the major dailies once their Beijing bureau chiefs got confirmation that something had happened (details were always sketchy) and they could be roused from their favorite restaurants and nightclubs.
For days headlines screamed about the horrors of Beijing's "killer cops" and "Tiananmen China." I argued that the riots needed to be seen in a historical perspective as they were economic born, similar to the "Memorial Day Massacre" in Chicago during the Great Depression.
On Friday (October 27) an American journalist from Indymedia.org was killed by Mexican riot police. For days Mexican federal officials with tanks, helicopters, planes, and plain-clothed armed thugs (as opposed to county and provincial level police in the Dongzhou protests) have battled protestors in Oaxaca, Mexico. The riots continue. But where is the widespread condemnation? Where is the outrage about human rights and abuse of state power?
Because Mexico is America's "backyard" (informal colony) their is no protest nor national news stories. Only the hollow echo of a double standard.
For days headlines screamed about the horrors of Beijing's "killer cops" and "Tiananmen China." I argued that the riots needed to be seen in a historical perspective as they were economic born, similar to the "Memorial Day Massacre" in Chicago during the Great Depression.
On Friday (October 27) an American journalist from Indymedia.org was killed by Mexican riot police. For days Mexican federal officials with tanks, helicopters, planes, and plain-clothed armed thugs (as opposed to county and provincial level police in the Dongzhou protests) have battled protestors in Oaxaca, Mexico. The riots continue. But where is the widespread condemnation? Where is the outrage about human rights and abuse of state power?
Because Mexico is America's "backyard" (informal colony) their is no protest nor national news stories. Only the hollow echo of a double standard.
October 27, 2006
Biggest IPO Ever is Chinese
The Industrial and Commercial Bank of China (ICBC), which opened the first post Mao share trading counter in Shanghai in 1986, debuted on the Hong Kong and Shanghai exchanges today and will taken in almost $22 billion (USA dollars) after the exercise of its "green shoe" option. The IPO is the most lucrative in history and drawfs the previous record holder, the 1998 IPO of Japanese telcom firm DoCoMo.
ICBC is now already the world's 5th largest bank with a stock market capitalization at over $156 billion.
ICBC is now already the world's 5th largest bank with a stock market capitalization at over $156 billion.
October 20, 2006
So Happy Not Together
Secretary of State Condoleeza Rice leaves Beijing for Moscow today capping off a frenzied effort to revive the "six party talks" on North Korea's nukes (minus North Korea). After her meeting with Chinese Foreign Minister Li Zhaoxing Rice and Li wished each other "happiness" and revealed that the real focus of Ms. Rice is on forming another multi-party talks, this time on Iran.
There has been no rejection nor qualification from the USA of Chinese special envoy Tang Jiaxuan's declaration that diplomacy is the only option to deal with Pyongyang. Indeed, the American and Chinese response to the North Korea nuke crisis is characterized by a general weariness. Neither of the Koreas' putative parents seems that interested in finding a real solution to their 53 year-old custody battle. Of course the Chinese have no real concern in finding a solution. Kim Jong-Il's bombs now ensure that someday a reunified Korea won't feature American bases anywhere near the Chinese border. And besides, Kim now says he is "sorry." What parent wouldn't accept that?
There has been no rejection nor qualification from the USA of Chinese special envoy Tang Jiaxuan's declaration that diplomacy is the only option to deal with Pyongyang. Indeed, the American and Chinese response to the North Korea nuke crisis is characterized by a general weariness. Neither of the Koreas' putative parents seems that interested in finding a real solution to their 53 year-old custody battle. Of course the Chinese have no real concern in finding a solution. Kim Jong-Il's bombs now ensure that someday a reunified Korea won't feature American bases anywhere near the Chinese border. And besides, Kim now says he is "sorry." What parent wouldn't accept that?
October 09, 2006
Born of Nuclear Threats
Seismic shifts are shaking East Asia. Over just the past week or so, the USA military announced plans to deactivate from Korea by 2009, the Japanese Prime Minister (Abe) broke with tradition and reported first not to Washington but Beijing and Seoul, and North Korea for all practical purposes became a member of the nuclear club.
North Korea’s nuclear ambitions are well known and are not a surprise. Further, there is a big difference between testing a crude atom bomb (which may not have successfully detonated) and becoming a nuclear power of strategic significance. In its official announcement North Korea said the bomb “will contribute to defending the peace and stability on the Korean Peninsula and in the area around it." More than 40 years ago, the Chinese used a similar argument emphasizing the defensive necessity of obtaining nuclear weapons due to the threat of American military invasion. The invasion and occupation of Iraq has made the Korean (and Chinese) fears of American military presence on their borders and outside their harbors real. A nuclear arms race in the area is now a very real possibility.
Korea, north and south, were born of nuclear threats and as much as Americans might not like it, there are probably millions of Koreans on both sides of the 38th parallel very proud and excited today. The majority of South Koreans have said they want their country to have nuclear weapons. And the Koreans are still seeking reunification. Less than a year ago the highest-ranking delegation from North Korea was in Seoul. The effort goes back to 2000 when South Korean President Roh visited Pyongyang.
What keeps the Korean peninsula apart isn’t just Kim Il-Jung and his anachronistic Stalinist state but the presence of 50,000 American troops, contractors, and their families in 100 military installations spread across South Korea. The USA continues to preside (in the same building in Seoul used by the Japanese when Korea was their colony) over a 53 year stalemate with China symbolized by the heavily armed “DeMilitarized Zone.” But all that conventional firepower and heavy troop presence is rendered moot by nuclear weapons.
And change is coming from the American side too. The commander of the 8th US Army in Korea said his command will deactivate and fall back to Hawaii within three years. Is this a signal that the long expected reduction of American presence in South Korea is begun?
But the biggest story may be the growing independence of Japan. Although President Bush gave his blessing prior to the trip, new Prime Minister Abe’s summits with China and South Korea are a positive sign and an indication that Japan may yet tire of being Asia’s “Britain.”
North Korea’s nuclear ambitions are well known and are not a surprise. Further, there is a big difference between testing a crude atom bomb (which may not have successfully detonated) and becoming a nuclear power of strategic significance. In its official announcement North Korea said the bomb “will contribute to defending the peace and stability on the Korean Peninsula and in the area around it." More than 40 years ago, the Chinese used a similar argument emphasizing the defensive necessity of obtaining nuclear weapons due to the threat of American military invasion. The invasion and occupation of Iraq has made the Korean (and Chinese) fears of American military presence on their borders and outside their harbors real. A nuclear arms race in the area is now a very real possibility.
Korea, north and south, were born of nuclear threats and as much as Americans might not like it, there are probably millions of Koreans on both sides of the 38th parallel very proud and excited today. The majority of South Koreans have said they want their country to have nuclear weapons. And the Koreans are still seeking reunification. Less than a year ago the highest-ranking delegation from North Korea was in Seoul. The effort goes back to 2000 when South Korean President Roh visited Pyongyang.
What keeps the Korean peninsula apart isn’t just Kim Il-Jung and his anachronistic Stalinist state but the presence of 50,000 American troops, contractors, and their families in 100 military installations spread across South Korea. The USA continues to preside (in the same building in Seoul used by the Japanese when Korea was their colony) over a 53 year stalemate with China symbolized by the heavily armed “DeMilitarized Zone.” But all that conventional firepower and heavy troop presence is rendered moot by nuclear weapons.
And change is coming from the American side too. The commander of the 8th US Army in Korea said his command will deactivate and fall back to Hawaii within three years. Is this a signal that the long expected reduction of American presence in South Korea is begun?
But the biggest story may be the growing independence of Japan. Although President Bush gave his blessing prior to the trip, new Prime Minister Abe’s summits with China and South Korea are a positive sign and an indication that Japan may yet tire of being Asia’s “Britain.”
October 06, 2006
Ready for the Chinese Cars?
Almost a half century after the first Japanese cars entered the US auto market (the 1957 Toyota Toyopet), American car makers are in a frantic scramble to prepare for Chinese car exports beginning as early as next year. At Ford, the Ford family stepped down to allow new leadership to restructure (layoff thousands) and prepare for the competition. Meanwhile General Motors though not for sale (it's a bargain at around $10 billion) is desperately seeking a merger with either Renault or Nissan. But the Germans may trump them all with a new joint venture with Chinese carmaker Chery (which is already scheduled to start delivering cars next year under its own brand and dealership network). Under the agreement, whose details are under wraps, Chery would produce subcompacts for sale under the Chrysler brand in the United States.
Of course, the real story here may be what's happening at Malcom Bricklin's (he of Subaru and Yugo fame) Visionary Vehicles which was to start importing Chery cars directly into the USA with its own network of dealerships. Seems now Bricklin is delaying his launch until end 2008 or later.
And don't forget Geely which was to start selling cars in America as soon as next year. Geely says now it may actaully build car plants in the USA, thereby jumping ahead to Toyota and Hyundai status.
Lastly, Nanjing Automobile plans to start producing MGs (they recently bought the British company and brand) as soon as next year and are planning to reopen an old GM plant in Oklahoma as well.
Is that most American of all industries, the automobile business, ready for the Chinese invasion?
Of course, the real story here may be what's happening at Malcom Bricklin's (he of Subaru and Yugo fame) Visionary Vehicles which was to start importing Chery cars directly into the USA with its own network of dealerships. Seems now Bricklin is delaying his launch until end 2008 or later.
And don't forget Geely which was to start selling cars in America as soon as next year. Geely says now it may actaully build car plants in the USA, thereby jumping ahead to Toyota and Hyundai status.
Lastly, Nanjing Automobile plans to start producing MGs (they recently bought the British company and brand) as soon as next year and are planning to reopen an old GM plant in Oklahoma as well.
Is that most American of all industries, the automobile business, ready for the Chinese invasion?
October 02, 2006
Morgan Stanley Gains and Loses
Thirteen years after Barton Biggs' "maximum bullish on China" statement, Morgan Stanley finally has a China commercial banking license with the purchase of Nan Tung Bank, a small bank in Zhuhai (Pearl River delta) once owned by a Macao based subsidiary of Bank of China. The move puts Morgan Stanley well ahead of its rivals (Goldman Sachs, Lehman Bros, etc.) in China.
And at the end of last week, Morgan Stanley launched the Morgan Stanley China A Fund to trade on the NYSE (symbol:CAF). The composition of the fund will be at least 80% A shares listed in Shanghai and Shenzhen.
For more on China shares, visit Sinomania! China Sharewatch.
Morgan Stanley is losing Andy Xie, however, in an unexpected departure.
For almost a decade, the incomparable Andy Xie moved minds and markets with his wise words on China. His often daily comments at the GEF were invaluable insights that cut through the fog of most China reporting.
Speculation is Xie may join a fund management firm, work in the mainland,
or perhaps join a Wall Street rival?
Bon Chance! Andy, and I hope we hear from you soon, and regularly!
And at the end of last week, Morgan Stanley launched the Morgan Stanley China A Fund to trade on the NYSE (symbol:CAF). The composition of the fund will be at least 80% A shares listed in Shanghai and Shenzhen.
For more on China shares, visit Sinomania! China Sharewatch.
Morgan Stanley is losing Andy Xie, however, in an unexpected departure.
For almost a decade, the incomparable Andy Xie moved minds and markets with his wise words on China. His often daily comments at the GEF were invaluable insights that cut through the fog of most China reporting.
Speculation is Xie may join a fund management firm, work in the mainland,
or perhaps join a Wall Street rival?
Bon Chance! Andy, and I hope we hear from you soon, and regularly!
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