Sinomania!

A new report by Credit Suisse says Chinese personal wealth my increase to $35 trillion by 2015 second only to the USA. The huge number of Chinese with increasing discretionary incomes will reshape the global economy according to the private bank. Sectors expected to see significant growth in China include transportation & communications, recreation & education, housing & utilities, and healthcare....

Jim Chanos interview by Charlie Rose (whose show is partially funded by US taxpayer dollars) is getting lots of play time today with Chanos reaffirming his belief that China will collapse this year. Meanwhile in China "independent economist" Andy Xie, famous for years for his more sober views on China, now says Chinese real estate is a bubble ready to pop and with bad consequences. Chanos and Xie are just two in a growing group of talking heads staking their reputations on a China crash call. We'll see what happens over the next 8 months. And if they are wrong will their clients including media outlets still pay big buck$ for their thoughts in the future....?

Today is World Water Day a project from the 1992 UN conference on the environment in Rio. Chinese PM Wen Jiabao just concluded a visit to drought stricken Yunnan Province. For 3 days Wen saw empty reservoirs and dried up villages suffering from a century drought in southwestern China. The provinces of Yunnan and Guizhou are particularly hard hit but also affected are Guangxi Zhuang Autonomous Region, Sichuan, and giant Chongqing municipality.

China has suffered devastating droughts from time immemorial. Beijing says the drought in the southwestern region is the worst in 100 years. Officially 51 million Chinese are impacted. The rains stopped coming last October and some areas have not seen rain for 9 months. Downstream along the Mekong River China's dams are blamed by critics in Thailand, Laos, and Vietnam. Wen Jiabao said no one in China would go without drinking water and indicated Beijing will ramp up relief efforts....

Several thousand high net worth individuals will be flown to Sanya, Hainan Province, in April to bask in the tropical waters of the South China Sea and sample the largest number of yachts ever assembled in China. The "Hainan Rendez-Vous" is a boat and yacht show put together by a real estate investment group developing marinas on Hainan Island. The show will feature super and mega yachts in China for the first time - vessels over 50 meters (over 164 feet) long. Many international luxury yacht builders will be present including Azimut-Benetti, Sunseeker, Princess Yachts, Lurssen, Bloem & Voss, Royal Huisman, Marquis Yachts, Ferretti Yachts, and Pershing.

As reported earlier the Hainan provincial government got Beijing's blessing late 2009 to turn the island province into an international tourist destination with duty-free shopping and luxury developments. Sanya is also building a big passenger ship terminal in a bid to become a hub for international cruise ships....

Beijing made tourism a "pillar" of the Chinese economy in the 11th 5-year plan that ends next year. At the recent central government Work Conference on the economy, support for developing the tourism industry was stressed. It is expected that 40 million Chinese will travel outside the confines of the People's Republic in 2010 and head for Asia first followed by Europe and America. By 2020 100 million Chinese tourists are predicted to travel outside China.

The Pacific island nation Fiji just opened a travel bureau in Shanghai and Fiji is banking on more Chinese tourists coming to the island paradise via new air service from Hong Kong on Air Pacific and partner Cathay Pacific Airlines. For the year Fiji is hoping for 11,000 visitors from China.

In the USA Chinese tourists spent an average $7,200 per person according the US Commerce Department. The Chinese rep for the New York Travel Bureau said the agency was expecting an increase in Chinese visitors who often come to shop. In Beijing today, Canadian Prime Minister announced that Canada was declared an "approved" outbound destination for Chinese travelers, a designation that will make it easier for Chinese to get visas and arrange outbound travel....

The annual Hurun Report of the The Richest People In China is out and shows that China is second only to the USA in the number of billionaires (130). China has more than three times the number of super rich than Russia and five times as many as India. Of the 1,000 citizens on the list around 1/3 are members of the Chinese Communist Party....

Copper closed up 7% on the London Metal Exchange today on continued Chinese demand. China is a net importer of nearly all basic metals. This fact alone should ensure that the commodities supercycle will resume once the current capital crisis is sorted out. Some analysts see demand back up for all commodities by 2010. When (not If) commodities markets recover there will be a future supply crunch. And higher prices once more.

The flurry of headlines and news reports in major world press highlighting the slowdown of China's economy to "only" 9% refutes the "de-coupling" nonsense about the global economy. We are all linked, China to Europe, Japan, the USA, South America, Australia, Brazil, Chile, ETC., and all concerned experienced a surprisingly sharp fall at the end of the third quarter.

What next? Morgan Stanley says we are in for a "wok" shaped recesssion and to expect only gradual improvement in the forseeable future.

Damage from the Sichuan earthquake is estimated at close to $10 billion (US) and shares of companies in the region effected by the quakes fell on Chinese stockmarkets and caused a broader decline in Chinese stocks. The Shanghai Composite Index is back down below 3,500 and the CSI 300 Index also plunged this week on the bad news about the impact of the massive earthquake just ten days ago.

Beijing now says over 50,000 people perished in the disaster and expect the death toll to continue to climb. Almost 5 million are reported homeless.

Over 14,000 industrial enterprises are impacted with severe destruction at some big companies such as Dongfang Electric - an important manufacturer of electric engines and motors. Downstream businesses will be faced with supply and price pressures. Asia's biggest oil refiner Sinopec is diverting product to the region and that could mean shortages and price increases in southern and coastal China.

Short term positive trend will be in rebuilding and speculators briefly drove up share prices for Chinese companies in cement, steel, and construction services.

And 184 historic and tourist sites were damaged and in some cases destroyed by the earthquake and may take years to rebuild, if at all, in a region where tourism was just beginning to be developed.