January 30, 2008
Snow Job in Guangzhou?
For almost a week huge crowds of stranded passengers –by some estimates hundreds of thousands – are stuck at railway stations across China unable to travel home for the Chinese New Year holiday because of snow storms blanketing parts of China. The main train station in Guangzhou (Canton) is particularly hard hit. The official explanation for why all trains out of the city are cancelled is that power transmission from neighboring Hunan province is disrupted because of ice and snow. In a showy display of populist support Prime Minister Wen Jiabao went to the Guangzhou train station this morning and talked to stranded travelers.
But is the chaos on Chinese rails all nature’s fault? Signs point to other actors at play particularly the China Southern Power Grid Corporation. The transmission company complained two weeks ago of shortages of coal and having to buy pricey power from Hong Kong and the Three Gorges Dam. Deputy General Manager Xiao Peng of China Southern Power Grid appealed to the National Development and Reform Commission in Beijing for regulatory relief. Reports say that one reason many passenger trains are not running is because priority was given to transporting coal over the railways lest industry cease production. At the same time the Guangdong provincial authorities cut China Southern Power’s tariff rate claiming they are overcharging customers, particularly residential users, impacting its high profitability at a time when it is trying to go public.
January 29, 2008
Chinese Markets Fall, Davos 2008, and this week's Alpha Bet
TRANSCRIPT: Shanghai stocks fall, special comment on Davos 2008, and introducing this week's Alpha Bet for China stocks...
Sinomania! Volume II Webisode 46, January 29, 2008
Full transcript at www.sinomania.com
January 22, 2008
Shanghai Composite Around 4,600 As Predicted
Viewers of my Sinomania! broadcasts will remember that back in May 2007 my prediction that the Shanghai Composite would be around 4,600 at the start of 2008. Even with the big profit bubble of last summer here we are - the Shanghai Composite Index fell over 7% in last trading and closed January 22 at 4,559.75. Now, where to go from here?
"Corrections" of this magnitude are consistent with two of my forecasts for Chinese stocks this year: the hot scenario and the flat. Either way, the roller coaster ride is just beginning!
"Corrections" of this magnitude are consistent with two of my forecasts for Chinese stocks this year: the hot scenario and the flat. Either way, the roller coaster ride is just beginning!
Labels: bubble, china, crash, shanghai composite, shares, stocks
January 21, 2008
Shanghai Composite 10,000? 2008 Chinese Stocks Forecast
The Sinomania! Show season 2 opener with four predictions for the Shanghai market in 2008 plus a look at the big hot button issues for China's economy and foreign relations including sovereign wealth funds and their impact on the US presidential race.
January 15, 2008
Sino-Indian Ties Strengthen
China and India today agreed to a joint "Shared Vision for the 21st Century of the People's Republic of China and the Republic of India" in a signing ceremony between their Prime Ministers. The agreement calls for the two countries to work closely together for a fair "international energy order" including cooperation in nuclear energy. The declaration is a major stepping stone in peaceful cooperation from the two Asian giants and could herald closer economic cooperation and development.
Labels: china, cooperation, india, nuclear
January 14, 2008
Taiwan Reunification A Step Closer?
The Kuomintang (KMT) party win in the Taiwan legislative elections signals defeat of Chen Shui-Bian and further damages the Democratic Progressive Party's (DPP) chances of retaining power. Chen Shui-Bian although still legally President stepped down as Chairman of the DPP. The DPP's only hope now is that their ploy to bring out the vote - the referendum on Taiwan's United Nations recognition - will result in a DPP win for the Presidency. That ploy (inspired by the DPP's mentors in the USA Republican Party - think anti-gay amendments and voter turnout for the Presidential election in 2004) may not be enough as Taiwan voters appear to link the island's poor economic performance to DPP rule overall.
The KMT are expected to hasten direct links between mainland China and Taiwan and set the stage for a slow absorption much in the way Hong Kong was integrated directly into the economy of the greater Pearl River region long before the flags changed in 1997. If uninterrupted (certainly not a foregone conclusion) the impact will be felt greatest by the Hong Kong region to Shanghai's benefit and by American weapons purveyors, particularly Lockheed Martin.
Labels: chen shui-bian, dpp, elections, kmt, kuomintang, reunification, taiwan
January 08, 2008
Neo-Cons Call For China Export Halt
One of the few bright spots in the overall American economy over the past few years has been the meteoric rise of exports to China. A fast-track process that allows Chinese high-tech importers to be pre-screened and thus avoid lengthy (and usually political) license procedures is under fire from a conservative group called "Wisconsin Project on Nuclear Arms Control." These are the same geniuses behind "Iraq Watch" and "Iran Watch" handwringers over non-American weapons of mass destruction so far proved very wrong.
The Wisconsin Project is largely funded by the conservative Smith Richardson Foundation which bankrolls frequent China threatmonger, the American Enterprise Institute, and features neo-con visionaries such as Samuel Huntington on its board of directors.
The group claims the Chinese companies in question are controlled by the Chinese government but the companies are in fact linked by ownership to Boeing and the Chinese state conglomerate AVIC I which rumour says may go public. The assertion betrays an embarrassing ignorance of Chinese corporate and business structure and a simplistic nation-state viewpoint. Will they succeed in derailing an import trade that positively impacts America's balance with China? Under the current government probably not. If a China scare monger liberal Democratic politician such as Barack Obama or John Edwards or right-wing China basher such as Duncan Hunter wins the Presidency anything is possible.
The Wisconsin Project is largely funded by the conservative Smith Richardson Foundation which bankrolls frequent China threatmonger, the American Enterprise Institute, and features neo-con visionaries such as Samuel Huntington on its board of directors.
The group claims the Chinese companies in question are controlled by the Chinese government but the companies are in fact linked by ownership to Boeing and the Chinese state conglomerate AVIC I which rumour says may go public. The assertion betrays an embarrassing ignorance of Chinese corporate and business structure and a simplistic nation-state viewpoint. Will they succeed in derailing an import trade that positively impacts America's balance with China? Under the current government probably not. If a China scare monger liberal Democratic politician such as Barack Obama or John Edwards or right-wing China basher such as Duncan Hunter wins the Presidency anything is possible.
Labels: china, high-tech, neo, neocon, trade, wisconsin project
January 03, 2008
China To Open Government Procurement
With just one business day left to 2007 the Chinese government filed to join the World Trade Organization's Government Procurement Agreement on December 28. China committed to join the WTO GPA in early 2006 after being an observor to the protocol since 2002. The process can legally take years to complete but could some day open up billions of dollars worth of export opportunities for foreign bidders. Something to watch very closely and a new wedge in the ongoing trade imbalance between China and Europe.
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