March 06, 2008
National People's Congress Open For Business
The first session of the 11th National People’s Congress convened Wednesday (March 5, 2008) at the Great Hall of the People in Beijing.
Premier or Prime Minister Wen Jiabao opened the session with remarks on the state of the Chinese union emphasizing challenges ahead particularly dealing with inflation.
Beijing will pursue a “tight monetary policy” according to Wen signaling the central government’s worry over excessive liquidity and runaway growth in some areas.
As expected, Beijing will channel excess cash into more state investment, already accounting for over 45% of China’s Gross Domestic Product. Investment targets will be health care and social security bureaucracies based on United States models. Housing and safe drinking water for China’s impoverished classes will also receive state directed investment.
The Congress will vote on the candidates already selected last October by the Communist Party for top government positions. Hu Jintao will no doubt be elected for a second and final 5 year term as President.
But there are some interesting items to watch on the Congress agenda. For example, debate on “institutional restructuring of the State Council,” China’s day-to-day working government and a vote on changing the election law to adjust the level of representation for rural Chinese.
Currently, each rural delegate of the Chinese congress represents 4 rural residents. The aim of the reform is to increase representation for Chinese rural citizens. Also there will be discussion of a Congressional delegation for migrant workers.
And in another show of support to the vast floating population of migrant workers in China, by some estimates perhaps 200 million people, Wen Jiabao announced mandated paid vacations for migrants.
It is easy for foreign observers, particularly American media, to dismiss the National Peoples’ Congress as a rubber stamp farce. But as I’ve pointed out before, you ignore the work of the NPC at your peril.
The Congress affirms the direction China is going and gives law to Beijing’s policies. Each year thousands of petitions, white papers, and forums are presented by ordinary Chinese (an ancient tradition, by the way, that predates any Chinese republic) and in this great airing of gripes and views are clues to the aspirations and desires of the Chinese people.
The NPC will adjourn March 19. I’ll have a report on this year’s session in next week's episode of The Sinomania! Show video broadcast.
Labels: china, democracy, government, migrants, national peoples congress, reform
March 04, 2008
Pentagon Trades GWOT for China
Labels: china, GWOT, military, missiles, pentagon, spending
February 22, 2008
Taiwan Reunification Watch - Update
Labels: banking, china, fubon, hong kong, reunification, taiwan, xiamen
February 21, 2008
General Motors Turns Chinese - New China Funds - Coal Boom?
February 19, 2008
KISSINGER: CHINA A POTENTIAL PARTNER
SPIEGEL: Is China still a partner or primarily a rival?
Kissinger: China has to be treated as a potential partner. We must use all ingenuity to create a system in which the great states of Asia -- which really are not nation-states in the European sense but large conglomerates of cultures -- can participate. We have no choice.
SPIEGEL: Does the fact that "guided democracies" like Russia or China are currently more successful in economic terms undermine the attractiveness of Western-style democracy? Is that a new model that is becoming attractive for young people?Kissinger: The problem of guided democracies is that they have great difficulties solving the problem of succession and of giving access to the widest possible pool of talent. China has come closer to solving that problem than any other undemocratic system. I believe that the democratic model is better and more durable for the future but not automatically. It depends on our vision and determination.
Labels: china, foreign relations, great power, kissinger, partner
SARS Bat Link Confirmed
New research has confirmed the link.
February 15, 2008
USA Escalates Arms Race In Space
"My real concern is that this is simply a knee-jerk reaction made by the administration in response to the purported threat by the Chinese. Since the April 2007 ASAT [anti-satellite] test, there have been rumors and whispers going around that the Administration and like-minded individuals are looking for more sticks (instead of carrots) to use against China. While this "shoot down" is not a direct action against China, it would be a clear signal that the US can possess an active ASAT capability at any time if it so desires. That is a serious development as the previous US ASAT system using F-15s was mothballed in the 1980's.
There are many significant political ramifications that would happen as a result of this. The US has been berating the Chinese on their ASAT test but now demonstrate that it is okay as long as it occurs at a low enough altitude to prevent long-lasting debris and can "save lives". This is close to an implied "ok" for the US and other nations to conduct more ASAT tests, which could open another arms race. I am also certain that Russian and China would also see this as a slap in the face as they are trying to revive the Peaceful Uses of Outer Space treaty discussion and ban on space weapons. It would further negatively affect the relations between them and the US. Which could lead to increased tensions, arms buildup, etc etc etc. Nothing good for anyone outside of arms manufacturers and politicians that need a bogeyman to scare people into voting for them. "
Labels: china, cold war 2, mda, missile defense, satellite, spy, usa
Japan Forex Reserves Growing "Suspiciously Fast"
Morgan Stanley believes the net result is not stealthy intervention but skillful day trading of Yen/Euro positions and that the data reveals Japan is diversifying away from the US Dollar to over 20% Euro composition in its foreign exchange reserves."Japan’s reserves are growing suspiciously fast. Japan’s foreign reserves expanded from US$946 billion in September 2007 to US$996 billion in November, an increase of US$50 billion in four months. Assuming a 2.5-3.0% return on the underlying assets, Japan should only be enjoying US$25-30 billion in annual investment earnings, or US$6-8 billion a quarter. Further, it is widely assumed that Japan has the bulk (90%) of its reserves in USD, and the MoF never diversified away from USD. With such low holdings of EUR, valuation changes – from the rise in EUR/USD – should not have been a major factor generating gains in reserves. Indeed, what is embedded in our reserve tracker file assumes 90% USD holdings. Our presumptive calculations identified a US$13.7 billion gain during September-January due to the returns on the underlying assets, and another US$18 billion from valuation changes, leaving US$18 billion of the reserve increases unexplained by our metric. Could the MoF have conducted secretive interventions worth US$18 billion? "
If true, this raises another interesting question: Is America's loyal Asian satellite dumping the Dollar?
Labels: currencies, euro, foreign exchange, forex, globalization, japan
February 14, 2008
GM Turns to China
General Motors posted another record loss this week and now wants to lose its union labor force. GM is offering buyouts to all 74,000 union workers in the United States. This is yet another sign that GM is shifting its production overseas and I expect a lot of it will end up in China.
GM says its China operations are the one bright spot for its future. Last year GM sold over one million cars in China, a surge of 18 and a half percent. Indeed GM is poised to overtake Volkswagen in the success of its Chinese investments.
Just last month, GM and Shanghai Automotive Finance sold almost $2 billion Yuan worth of bonds backed by its car loans, the first ever securitization of car loans by an automobile financer in China.
In its efforts to fast track production of the Chevy Volt electric car, GM announced Monday a new global organization for hybrids and electric cars that will be partially based in Shanghai. Through a German consulting firm GM is recruiting engineers and senior managers for a future operation in Shanghai.
And visitors to Detroit’s new international air terminal are greeted with Chinese announcements, signs, and even a China UnionPay ATM. UnionPay is the ironically named debit card network in China. Detroit is ready for an influx of Chinese moneymen and business travelers when the new Northwest Airlines Detroit – Shanghai route starts a year from now.
Across the Detroit River in Ontario, the Canada China Business Council is actively encouraging Chinese direct investment in the region’s depressed auto and auto parts industries. China’s actual foreign direct investment in Canada is nearly one and a half billion dollars with more anticipated.
All this activity makes me wonder why opportunistic politicians in America are so worried about the Mexican border when parts of Michigan and Ontario may become Shanghai suburbs.
February 11, 2008
Hang Seng Plunge! Macro Effects of the Winter Storms - IPOs - AND Happy Year of the Rat!
Hong Kong, Shanghai stocks battered, macro effects and analyst opinions of the winter storms, IPOs on the ASX, Happy Chinese New Year wish...
Sinomania! Volume II Webisode 47, February 6, 2008
Complete transcript at www.sinomania.com
Taiwan Reunification Watch
Another sign of the quickening thaw, direct links are now open between mainland China and Taiwan island for mainland Chinese arriving by ship.
Labels: china, direct links, new year, reunification, taiwan
Subscribe to Posts [Atom]
