October 30, 2009

TRADE WAR: US ITC Sides with Steelworkers Union on Chinese Seamless Pipe

The quasi-independent US International Trade Commission (ITC) sided unanimously today with US Steel Corp. (NYSE: X) and co-petitioner United Steel Workers union to allow the US Commerce Department to continue its work toward determining anti-dumping and countervailing duties on imports of Chinese "seamless SLP pipe". Determination of anti-dumping duties must be reported by February 23, 2010.

If duties are imposed it will show Beijing that the Obama administration remains Janus-faced in its trade relations particulary as this news comes a day after important advances were made by the Commerce Department in China.

The pipe is primarily used for pipelines by the oil and gas industries. The ITC says Chinese manufacturers are subsidized and claim US producers are under threat from the imports. American companies imported $412 million worth of the pipes last year. How many America jobs are stake? The number is withheld by the trade commission as "proprietary information."

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China Supercomputer Petaflops

Technicians at China's National University of Defense Technology have built a supercomputer that achieves a petaflop - 1 quadrillion calculations per second. The supercomputer named Tianhe or Milky Way would be the 4th fastest in the world by last year's ranking data. The supercomputer uses Intel and AMD chips. It will be moved to a location in Tianjin and further enhanced. According to Xinhua Tianhe will be used for bio-medical, oil exploration, and aerospace research....

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October 29, 2009

China and USA Grow Closer on Trade and Investment

The 20th US-China Joint Commission on Commerce and Trade concluded a vibrant two-day summit in Hangzhou with significant agreement on several areas of growing trade and investment and some serious-sounding lip service on traditional disagreements such as intellectual property.

In attendance was ethnic Chinese US Commerce Secretary Locke, Trade Rep Ron Kirk, the new US Ambassador to China Jon Huntsman, and many others from the Obama administration and mandarins from a wide range of Beijing's bureaucracies. Advances include:
All of the above is good news and represents a lot of potential positive business opportunities for Americans. As the dragon and Uncle Sam hug tighter will Europe be left out? Time will tell....

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China-USA JV to Build 600 MW Texas Wind Farm

Shenyang Power Group in Shenyang, capital of industrial powerhouse Liaoning Province, will own 49% of a joint venture (JV) between its listed subsidiary A-Power Energy Generation Systems (NASDAQ: APWR) and private equity firm US Renewable Energy Group and privately held Cielo Wind Power. The JV will construct a 600 Mega Watt wind farm on 36,000 acres in Texas. When complete it will be one of the largest wind power installations in America. A-Power Energy will build the tubines, each 2.5 MW capacity, at its plant in Shenyang. Financing is yet to be finalized but rumour is Chinese banks will fund the project....

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October 28, 2009

Ford Picks Geely for Volvo Acquisition

Ford and Geely (Zhejiang Geely Holding Group) are jointly announcing that they are in direct talks for Geely to acquire Volvo. According to Ford a final decision has not been made but the two are in "detailed and focused negotiations" while Geely says it is Ford's "preferred bidder" for the famed Swedish automaker. If the deal moves forward Volvo will keep an independent management based in Sweden and be tied into Geely's supply chain and sales networks. Ultimately Geely may use the Volvo brand to become a potentially powerful exporter of automobiles....

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October 27, 2009

China Offshores More Jobs to USA

Yingli Green Energy Holding of Baoding, Hebei Province, is completing the financing for a solar panel factory in southwest USA location as yet unannounced. The plant will be built in two stages each producing 50 MW of panels and create 300 jobs with output as soon as late 2010. Leading Chinese solar panel producer Suntech by some measures the world's number 1 producer of photovoltaic cells is also planning a factory in America perhaps in Oregon as previously reported by Sinomania!....

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RIC Summit Focus on Business, Nano-Tech

The 9th Russia - India - China Trilateral summit is underway in Bangalore led by each nations' foreign minister. According to the People's Daily, mouthpiece of the Chinese Communist Party, the group have already reached "major consensus" on a variety of issues including agreement that the current international situation is experiencing a "deep and all-dimensional change". The group is focusing on business cooperation particulary in energy and nano-technology. The meeting follows high-level encounters between Russia and India in Moscow and a meeting on the sidelines of the ASEAN summit between the Prime Ministers of India and China....

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Reunification Watch: Taipei Removes Restrictions on Mainland Journos

Effective immediately journalists from Mainland China will no longer be restricted on Taiwan. Media staff may lease office space and increase the size of their bureaus. Most important they no longer must inform Taipei government of their movements. There are 5 national level and 2 provincial media outlets currently based on Taiwan. Ball in Beijing's court now....

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October 26, 2009

China Will "Never Seek Hegemony"

Ahead of a top-level military-to-military summit this week in Washington, DC, Vice Chairman of Beijing's Central Military Commission Xu Caihou said the Chinese military "will never seek hegemony" and emphasized the age-old line of China's rulers that China seeks only to repel attacks with a military on defense only not offense. Xu made the remarks at a Center For Strategic and International Studies confab in Washington. Xu is on a 10 day tour and will meet with his counterpart Defense Secretary Robert Gates and visit several USA military installations....

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Beijing to Convert Central Business District into Sustainable City

The Chicago and China offices of famous architectural firm Skidmore, Owings, and Merrill, will create for the Beijing Central Business Administration a sustainable city out of the existing business district and new developments that will focus on efficient transport improvements, green spaces, and reduction in CO2 emissions, waste, and water use. There is no timeline on the project yet but it will be an ambitious effort including high speed rail all to ensure Beijing's position as an international center of finance and business....

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October 21, 2009

Open Thread - Sinomania! on Assignment

Sinomania! is on assignment for the next few days around United Nations Day. Talk away! Keep it clean and serious, please. Suggested topics: Aksai Chin, nanotechnology, eco-tourism, moon colonization, nation state versus alpha city, Kashgaria and Kashmir. Got anything to say?....


China Buys Euro Aircraft Technologies

The Xi'An Aircraft Industry Group, part of China's AVIC conglomerate, will acquire FACC AG an Austrian company that specializes in composite components. FACC has an active research and development focus and already supplies COMAC (Commercial Aircraft Corp. of China) as well as Airbus and Boeing. The deal is meant to give Xi'An Aircraft access to FACC's new technologies and potential control over its supply capacity a strategic move as China further develops its aerospace industry....

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October 20, 2009

China Could Drill for Oil in the Gulf of Mexico

Norway's national oil major StatOilHydro is in talks with China National Offshore Oil Corp (CNOOC) on the sale of leases offshore the southern USA between Houston and New Orleans. Both companies are listed on the NYSE. The blocks are in deep water and include areas near where a consortium lead by BP recently found large oil deposits deep in the earth's mantle. No other details at this time....

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TRADE WAR: Beijing Imposes Anti-Dumping Duties on Nylon

In the latest tit-for-tat trade dispute, Beijing's Ministry of Commerce will impose duties on imports of nylon-6, a semicrystalline polyamide used in tire cord.

The anti-dumping duties impact nylon-6 from the EU, Taiwan, and the USA. The duties vary but the highest rates are for imports originating in the USA from BASF and Honeywell and the duty amounts - 30% to over 36% - are similar to Obama's tariff on Chinese tire imports.

The move is in direct response to the tire tariff particularly as it involves a source material for the production of some types of tires (trucks, off-road vehicles, aircraft, etc.)....

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October 19, 2009

Ten Million Vehicles

China has joined auto king USA and runner up Japan as only the third nation to produce 10 million vehicles per year. With two full months left to go in 2009, the 10 millionth vehicle produced was a Liberation brand truck made by the First Automobile Works (now called FAW Group) at one its main factories in Changchun, capital of Jilin Province in Manchuria - a center of auto production dating back to 1953. FAW has numerous joint ventures today and makes vehicles of several international brands...

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Self-Hating Half-Chinese

Christian Fong, a Republican candidate for governor of Iowa compared President Obama's policies to "Chinese Communists" saying "they came in promising hope and change" but ended up nationalizing business and forcing abortions. It is particularly sad to see an American born Chinese resort to pandering to the basest element of the base of the increasingly fringe Republican Party. The continued use of "communist" when discussing China, the government in Beijing, or even Chinese people is part of a disembodied language in American politics that has no relation to reality. It is deliberately misleading and perpetuates ignorance of China for no other purpose than to maintain China as a bogeyman for Americans to fear. The closest approximation of "communist party" in Chinese translates to "collective property party" and has no relation to the odd and vague concept of "communist" in American discourse which is more a state of mind mixing cartoon images of totalitarianism.

Fools like Fong, Chairman Mao said "attack us wildly and paint[s] us as utterly black and without a single virtue; it demonstrates that we have not only drawn a clear line of demarcation between the enemy and ourselves but achieved a great deal in our work".....

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Chinese EV Buses on DC streets

This Wednesday (October 21) a US-China joint venture will shuttle passengers around American University in Washington, DC, on ultracapacitor buses. Ultracapacitor batteries hold only a fraction of the energy of lithium-ion batteries but charge rapidly. Buses on inner city routes that stop frequently and often wait at bus stops regularly if briefly can use ultracapacitor technology effectively. A route in Shanghai has used ultracapacitor electric buses now for the past 3 years using bus stops as recharge stations. The demonstration is conducted by Sinautec Automobile Technologies and Shanghai Aowei Technology Development. The buses produced to date are actually made in Tennessee by Foton America Bus Company, a Chinese venture....

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GEM Update

Beijing's securities regulators say the debut of the Growth Enterprise Market or GEM board will be this Friday, October 23. GEM is envisioned as the Chinese NASDAQ or more appropriately similar to London's AIM. If recent deal making is correct (see chart) GEM will initially be dominated by lcoal firms from Shenzhen and ventures out of Beijing....

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October 16, 2009

Chinese Blockbusters

The center of gravity of Asia's film industry is shifting to China with more than a dozen Chinese movies expected to reach 100 million Yuan (renminbi) or more at the box office. Cinema business is booming in China and the deal making is moving from Hong Kong to Beijing. Some private Chinese production companies to watch include Cinema Popular, Enlight Media, Huayi Brothers Media, and the Shanghai Media Group.

Hollywood has yet to reap any advantage over the recent WTO ruling that China should free up distribution of foreign films in the country. But American movies are still a draw - "Transformers" topped "Titanic" this year for the highest grossing film in China....

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China Stem Cell Research Center Comes to San Francisco

The City of San Francisco signed a memorandum of understanding with Taizhou, Jiangsu Province, to bring a biotech research and development office to the City By The Bay. Taizhou is home to China Medical City, founded in 2005, a state level high-tech parmaceutical industrial park that contains Asia's largest stem cell bank and international facilities for testing and research. Taizhou has also signed similar intent with the so-called Research Triangle area in North Carolina. China Medical City has joint programs with the University of Texas Health Science Center along with numerous other biomedical cooperations. Incidentally, Taizhou is the birthplace of Chinese President Hu Jintao....

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October 15, 2009

Obama China Currency Flip Flop

During the 2008 Presidential campaign candidate Obama agreed many times with American industry groups and unions that Beijing "manipulated" its currency. Perhaps not understanding the impact of the "M" word in USA-China relations Obama's Treasury Secretary Tim Geithner also said as much in his confirmation hearings. But as so often happens when candidates come to power the complexities and realities of China relations compel an about-face.

Today the US Dept. of the Treasury released its semiannual Report to Congress on International and Exchange Rate Policies with the decision that China does not "manipulate" its currency. With somewhat contorted logic Treasury says that since the renminbi remains stable against the dollar it follows the movement of the dollar against other currencies although it is still "undervalued." The report revealed that China is anticipated to account for 2/3 of global growth in 2010. The reaction of Congress awaits....

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Trade Talks Before Obama China Visit

Prior to President Obama's first visit to China in November the US-China Joint Commission on Commerce and Trade (JCCT) will meet in Hangzhou, Zhejiang Province, for its 20th session. The JCCT is one of the oldest high level forums between Beijing and Washington - established under President Reagan to coordinate trade and foreign direct investment. Will the JCCT address Obama's tire tariff and the long list of Chinese products America's unions want anti-dumping duties? ....

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America's Discourse on China

What passes for discussion on China in the USA is forever tinged with racist disdain for Chinese and by seeing China only through the prism of Tiananmen Square 1989 or the 1914-era eyeglasses Dr. Kissinger stole from Chairman Mao's study. This piece by a pundit at The Hill, a newspaper of the U.S. Congress, is a typical example of muddled thinking on USA-China relations.

The author sees convergence with China - already occurring economically - requiring the USA to "yield" sovereignty. But why? Washington still has the upper hand with Beijing militarily and financially still - yes China buys the Federal Government's debt but they hold that debt in our currency which they need to settle their trade and pay for their oil imports. For Americans why not use this moment to craft a real capital T treaty with the Chinese instead of pipe dreams to revive the British Empire?

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October 14, 2009

China Leads World in Gene Therapy for Cancer

The USA and Europe are falling behind China in new alternative treatments for cancer particularly gene therapy. In gene therapy a patient's own genes are manipulated and reinserted directly into cancerous tumors as a completely different type of treatment less invasive and debilitating than surgery, chemotherapy, or radiation.

A Chinese company Shenzhen SiBiono GeneTech was the first to develop a gene therapy medicine called Gendicine back in 2003. The company is part of the Benda Pharmaceutical group out of Wuhan. Shares of the company trade on the Over The Counter bulletin board (BPMA:OB). The chart at left (click to enlarge) shows the top Chinese biopharma companies.....

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Russia, USA Engage Chinese Military

Russian PM Putin's visit to Beijing is being hailed as a renewed thaw in Russia-China relations with commitments for close cooperation on trade, energy, and high technology. Beijing and Moscow will set up a hot line similar to the one each nation already shares with Washington. And Russia and China will advise each other of ballistic missile launches. Meanwhile, the Pentagon will host the People's Liberation Army's number 2 man, Xu Caihou, for the week ending Halloween....

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October 13, 2009

One Third of China's Super Rich Are Communist Party Members

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....

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China and Guinea to form Massive Mining Company

A Chinese investment house, possibly China International Fund, will invest up to $9 billion (US dollars) to create a joint national mining conglomerate with the government of Guinea on the coast of West Africa. Guinea is already a leading source of crude oil for China and is believed to have significant deposits of bauxite, gold, and diamonds. The USA and Russia are also active in Guinea but the creation of the joint mining company intended to control all mining in the country will give China a distinct advantage. In addition China will invest billions in developing Guinea's infrastructure....

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October 12, 2009

Xi and Li Mix It Up

The two men many believe will replace President Hu Jintao when he steps down after his second and final 5 year term ends in 2013 are contrasting their perceived styles. Vice President Xi Jinping, the leading technocrat "princeling" (his father gave refuge to Mao and the Eighth Route Army after the Long March) is attempting a populist image with a soft power 5 nation European tour, emphasizing cultural exchanges, such as kicking off the Berlin Book Fair. Meanwhile Vice Premier Li Keqiang usually viewed a man of the people is meeting heads of state for the more strategic Shanghai Cooperation Organization. West and East, hard power or soft, who will it be, Xi or Li?....

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The 8th Summit of the Shanghai Cooperation Organization

The 8th heads of government meeting of the Shanghai Cooperation Organization (SCO) opens in Beijing this week. Already in town is Russian PM Vladimir Putin and on the way a delegation including first VP from Iran. Iran remains in observor status. Afghanistan is also an observor but no word on whether President Karzai will be in Beijing. Pakistani PM Gilani will be present but is cutting short his stay due to the spate of terrorist attacks in the past few days. The SCO began as a security group and even conducted war games but has devolved into an economic coordinating session. Putin will talk gas deals, Pakistan has its annual list of investment projects seeking Chinese support, Iran will talk gas too. The situation in Afghanistan will also be discussed....

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October 09, 2009

Chinese Navy Gets Russian Anti-Sub Helicopters, Orders More

The Russian Helicopters conglomerate is field testing an order of nine KA-28 type anti-submarine helicopters for China's navy. According to China Defense Blog, Beijing ordered 10 more. The purchase of the helicopters are part of a larger multi-year deal for destroyers and related equipment from Russia. The presence of nuclear armed submarines, primarily of the USA, off the long coastline of China is one of Beijing's greatest vulnerabilities.

But the helicopters will not affect any strategic balance in the region. Russia (and the Soviet Union) has sold approximately 20 Ka-28s to the Indian Navy since the 1980s....

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China-Korea-Japan Summit

East Asia's 'big three' renew a push for greater regional collaboration this weekend with a tri-partite summit in Beijing hosted by Chinese PM Wen Jiabao. Already Japanese PM Hatoyama and (South) Korean President Lee met in Seoul today. On the table for Saturday will be new talks on the concept of creating an EU style economic unit with perhaps someday a united currency....

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October 08, 2009

China Built Tank Farm On Track in Sri Lanka

The Hambantota Port development project on the southern coast of Sri Lanka is well underway. The project is being built by a consortium of Chinese companies largely funded by the Export-Import Bank of China. The multi-stage development is building a port capable of handling the largest container and bulk vessels. The President of Sri Lanka broke ground on an oil storage facility today. Three of the 14 storage tanks under construction will be for aircraft use. The port is on track for a 2011 initial completion. Situated midway between the main East-West shipping routes Hambantota is equidistant from the Straits of Malacca and Sunda....

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October 07, 2009

China To Fund Kyrgyzstan Road Link

The Kyrgyz government is considering a major renovation of the Bishkek-Naryn-Torugart road connecting the landlocked Central Asian state to Xinjiang Autonomous Region of China at the Torugart Pass. The Asian Development Bank and also China Development Bank may lend up to $50 million (US dollars) for improvement of the road, an expanding trade route. From Bishkek a new road leads to Osh and from there to Uzbekistan and south through Tajikistan to Afghanistan....

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The Importance of Guanxi

Chinese medical device manufacturer Huiheng Medical makes cancer fighting equipment using gamma rays and will build a plant in Baton Rouge, Louisiana, that will employ perhaps 300 in well-paying jobs. Why Baton Rouge? Largely, Huiheng CEO Xiaobing Hui says because mayor of Baton Rouge "Kip" Holden went to China and met with the company directly and they hit it off. This is an illustration of what "guanxi" really means - close, interpersonal relationships based on trust and a desire for mutual benefit. Huiheng Medical is listed as an Over The Counter stock in the USA with symbol HHGM.OB. The company has yet to secure FDA approval of its device....

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October 06, 2009

TRADE WAR: Obama Labor Showdown on China Currency

Big labor is pushing hard for President Obama to declare China a currency manipulator when his Treasury department must report to Congress next week. Obama maintained that Beijing manipulated the Yuan exchange rate up to the eve of the presidential election and as freshman Senator from labor stronghold Illinois. Now the AFL-CIO and others want Obama to live up to his rhetoric. Will he disappoint them as he has so many other supporters?

If labor doesn't get their way, which most economists say would be detrimental to both nation's trade and finances, expect a big push for anti-dumping countervailing duties from Congress and the Commerce department. The USA has not accused any nation of manipulating its currency since 1994 when it last leveled that designation on China (see graph at left)....

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Pakistan PM: Karakorum Highway Improvements by 2011

Speaking to reporters in Gilgit-Baltistan last week, Pakistan Prime Minister Gilani said improvements to the Karakorum Highway would be done by 2011. No mention of the Chinese railway along the route which is still in planning. Meanwhile, the USA is expressing its support of infrastructure projects in Pakistan with language in the Kerry-Lugar Senate bill to invest in "cross-border infrastructure projects with Afghanistan"....

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Dairy Queen Opens 200th China Store in Xi'An

Dairy Queen International, part of Warren Buffett's Berkshire Hathaway empire, opened its 200th shop in China in Xi'An, capital of Shaanxi Province. DQ plans another 500 stores in China which will be its biggest market outside North America....

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October 05, 2009

China SWF May Buy Developing World Bad Debt

According to World Bank president Robert Zoellick, Beijing's sovereign wealth fund, the China Investment Corporation (CIC), is interested in a new program of the International Finance Corp. of the World Bank to buy the troubled assets (mostly non-performing loans) of developing nations. The CIC is interested in the program as a way of vetting potential investments (CIC's track record remains somewhat poor to date) and removing the potential for the appearance of political influence. China itself has benefited from $4 billion (US dollars) in various IFC investments over the past 25 years. The IFC has said in the past that the extent of non-performing loans in emerging countries is a "crisis" and could be estimated in trillions of dollars....

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China's global navigational satellite system Beidou-2 is on target for a 2012 start with 12 satellites. The complete system is expected by 2020 with 30 space vehicles in geostationary, inclined and middle earth orbits. Beidou or COMPASS is a Chinese answer to GPS and the older GLONASS navigational systems controlled by the militaries of the USA (GPS) and Russia (GLONASS). Most of the world relies on the American GPS system but the EU is far along with the development of GALILEO. The addition of a Chinese alternative will significantly impact the commercial environment for all the applications of navigational satellite technology. Expect a lot of changes and opportunity in telecom and other related industries over the medium to long term....

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October 02, 2009

US-China Electric Vehicle Forum

A brief and practically unreported conference ended earlier this week in Beijing. Dubbed the US-China Electric Vehicle Forum it brought together scientists and government officials from both countries to discuss collaboration towards electric vehicles or EVs. David Sandalow, assistant Energy Secretary for the USA told American reporters after the meeting "the Chinese are well positioned to be global leaders in the electric vehicle industry" and warned that America needed to invest heavily in new technology. Chinese carmaker BYD, the darling of famed American investor Warren Buffett, is already well on its way to mass producing a line of EVs. But Jody Freeman, an adivsor to the White House on energy and climate change matters, stressed that the USA and should work together.

Meanwhile the executive over GM's Chevrolet Volt program, Bob Kruse, is leaving GM. The Chevrolet Volt, meant to the be the savior of GM and the first mass produced EV in the USA will be a hybrid and its release date has been pushed now to December 2010....

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