March 31, 2010
We then proceeded to Beijing Film Studios
"...to be greeted by another delegation, the ritual similar to this morning except that after the tea, we had small, dubious sandwiches and rice wine, followed by a tour of the studio, which is like all other studios I've ever seen -- slightly out of date (considerably so, here) dusty and cluttered, repeated warnings not to trip on the cables I've been avoiding before the people who warn me were born.
Some of the sets from The Last Emperor
are still standing...absolutely world class. On the back lot, some really fine exterior sets are now useless because the sky behind them is now studded with high-rise buildings. That happened a long time ago in Hollywood. It's curious how similar film studios are around the world."Actor Charlton Heston in Beijing in 1988 while he directed an all-Chinese version of Herman Wouk's play "The Caine Mutiny Court-martial". Heston, Charlton. Beijing Diary. New York: Simon & Schuster, 1990.[ed. note: on days when Sinomania! is unable to post meaningfully a random quotation relevant to China is offered.]
March 30, 2010
Shanghai To Launch Yuan Funds, REITs
Before the Panic of '08 China's State Council created the little-known National Office of Financial 30 to direct a series of financial liberalizations in Chinese capital markets. The financial crisis and Beijing's mammoth stimulus spending delayed many of the reforms. But word is Shanghai is on the cusp of getting approval for two major initiatives -- launching foreign Yuan private equity funds
and Real Estate Investment Trusts (REITs).
A "trial plan for participation of foreign investment in Renminbi investment funds" is close to approval. This will allow certain foreign investors, most likely big institutions such as the Carlyle Group, to invest in Chinese private equity funds via a mechanism that would grant a quota of Yuan directly to the foreign investor.
Property developers in Pudong (Shanghai) and Tianjin appear to the driving force behind establishing REITs in mainland China. Details for Chinese REITs are still being sorted out but word from Yan Qingmin
, head of the Shanghai office of the China Banking Regulatory Commission, is that REITs should get the green light in the 1st half of this year. Rumour is Citic Securities, the brokerage of Citic Group - China's premier transnational corporation - may be the first to establish a REIT.
The intent of the Financial 30 is to expand private sector access in bank lending and to channel investment to Chinese small and medium enterprises as well as other breakthrough type reforms. The ShenZhen GEM board
, for example, grew out of the program....
Labels: banking, finance, financial news, reform
March 29, 2010
China Business News for Monday 29 March 2010
- Geely Buys Volvo - Chinese carmaker Geely becomes the 1st Chinese auto maker to buy a legendary brand with its $1.8 billion (US dollar) acquisition from Ford Motor. Analysts say for the venture to work Geely will need to take a different approach something Geely just may be able to pull off given its reputation as China's biggest privately owned auto company....
- Rio Tinto Ex-employees Sentenced in China to prison on bribery and theft charges with terms ranging from 7 to 14 years. Australian Foreign Minister Stephen Smith criticized the verdicts and said it may impact relations with China. China is Australia's top trading partner....
- AFP says a World Gold Council report sees Chinese gold consumption doubling over the next decade. Although currently the world's leading gold producer China could exhaust its known gold reserves in just 6 years if gold consumption reaches the same degrees as India....
- Sinopec Buying Upstream Assets from its parent China National Petroleum Corp. including Angola assets valued at $2.6 billion (US dollars) all in a bid to ensure petroleum reserves....
- China's National Social Security Fund To Invest Overseas and its Chairman Dai Xianglong specifically mentioned USA, EU, and India as investment targets. Currently the fund has around $114 billion (US dollars) available and aims to more than double in size in 5 years to 2 trillion Yuan....
Labels: business news, Chinese business, financial news
March 26, 2010
Maryland Biofuels Gets Chinese Investment
Dell Computer Plans Billion$ in China Investment
Shanghai Starts Index Futures, Short-Selling Next
Trading in stock index futures will begin April 16 in Shanghai according to Reuters
. The Shanghai Financial Futures Exchange will offer futures contracts on the CSI 300 index (made up of 300 leading shares from Shanghai and ShenZhen exchanges). Initial capital requirements will be hefty
(500,000 Yuan or over $73,000 US dollars) and margin requirements around 15%. Coming soon short-selling in stocks will be allowed on 40 shares of the Shanghai Composite Index (which 40 shares is unavailable at this time - if you have insight, please let me know) and margin trading is promised as part of a plan to slowly liberalize Shanghai's capital markets...
Labels: csi 300, financial news, futures, shanghai composite
March 25, 2010
TRADE WAR: US Credit Cards Demand China Access
Bloomberg via Businessweek reports that US Trade Representative Ron Kirk may be considering a WTO complaint against China
on behalf of Visa, American Express, MasterCard, and Discover Financial. The credit card giants want access to China's fast growing electronic payment processing market. Although Chinese still prefer to use cash for most transactions credit and debit cards are rapidly gaining popularity. The number of new cards issued is measured in hundreds of millions. Most growth has occurred in just the past few years and domestic ATM king UnionPay has the largest market share in China at around 65%
America's card companies claim China committed to opening up the sector to foreign competition when it joined the WTO. Fact is, however, there is absolutely no mention whatsoever regarding credit or debit cards and electronic payment processing in either the USA China Trade Relations Act or the WTO Accession Protocol. Both documents are readily available at the Sinomania! website....
Labels: foreign relations, foreign trade, wto
China Backs Away from IPI Pipeline
According to a report originating at Upstream (an oil & gas industry publication out of Norway) an unnamed senior mandarin in Beijing told Iran that China would not invest in the IPI
(India-Pakistan-India) pipeline project to bring gas from Iran's south Pars fields. The source said an extension to China through Pakistan and via roughly the Karakoram Highway was too difficult at present and wouldn't be considered for at least 5 years. China's preference is to buy gas direct from Iran most likely in LNG form....
Labels: energy security, gas, pipeline
Beijing Rockers Revive Chinese Grunge
Last weekend the SXSW (South by Southwest) music festival
in Austin, Texas, featured a China Night with rock bands from Beijing mostly -- Carsick Cars in particular was a hit. While nearly all China is saturated with bubble bands and American Idol knock-offs, Beijing tries to retain its gritty grunge from the '80s. Even today Cui Jian and other ethnic Korean-Chinese rockers still define rock music in China's capital. When I first visited China ten years ago the music scene was definitely more eclectic and active. While there are certainly more and bigger music clubs now live music is not the norm. But according to some observers Beijing may rock in 2010
. You can check out the Beijing based rockers during the Chinese Invasion Tour 2010
put together by music producer Maybe Mars, founded by American expat Michael Pettis of Beijing. Here in San Diego, California, you can catch them at Brick by Brick
March 24, 2010
Much Ado About Google
Ten flower bouquets were pretentiously laid outside Google's headquarters in Beijing one per each million or so residents of the Chinese capital. The flowers are an apt metaphor for Google's market share in China. At the insistence of co-founder Sergey Brin Google is quitting China and wants a messy exit to hide its inability to build successful brand and business in the world's number 1 Internet and cell phone market. This move will mark the end of Google's seemingly unstoppable trajectory. Like Yahoo!, Ebay, and other web businesses before it Google will discover that while the USA may have created the Internet and still runs much of it (backbone, ICANN, etc.) it does not control it nor have a monopoly on its commercial applications.
Google cannot remain viable just delivering ads to eyeballs based on an outdated Internet business model. The future is in smartphones and new devices linking people directly to video, music, texts, independent of search engines. Even websites (god forbid!) are endangered.
Sergey Brin is a hypocrite. Google censors all over the world at the pleasure of governments from Germany to the USA targeting sex offenders, neo-Nazis, wannabe terrorists or "dissidents" that want to overthrow their own governments.
Mainstream media genuflects for Google with story after story about Google's brave stand not once revealing the fact that Google has three current executive employees in White House positions or that Google was the Obama campaign's number 3 contributer. The editiorial line shared by Anglo-American newspaper and media giants (New York Times, Washington Post, Wall Street Journal, Financial Times, London tabloids, etc.) says China is becoming "isolationist" and that the business world is abandoning China. This is deliberate misinformation and complete nonsense.
Just this week the Chairmans, Presidents, or senior executives of the following companies were all in Beijing: Caterpillar, Morgan Stanley, Bosch, Nomura, Nokia, Unilever, Bombardier, JP Morgan/Chase, Novartis, Sybase, Ford, ADB, McKinsey & Co., Michelin, Toshiba, Royal Dutch/Shell, Danone, Dupont, Amway, Total, Rio Tinto, BP, Dow Chemical. And that was at just one meeting....
See my earlier post "Google Hijacks US China Policy
."[Disclaimer: the author owns shares of Google via a mutual fund.]
Labels: business news, foreign investment, hypocrisy, hypocrite
March 23, 2010
Chinese Mega Resort May Transform Bahamas
Boosters in the Bahamas say a multi-billion (US) dollar deal between Armenian tycoon Sarkis Izmirlian and the Export-Import Bank of China to build the Baha Mar resort complex is moving forward and will revive Bahamian tourism
. Hopes are Baha Mar will lure Chinese tourists and bring new focus to Nassau. An agreement was signed earlier this month in Beijing with China State Construction Engineering Corp. to begin building on Cable Beach. Baha Mar
will feature a Jack Nicklaus golf course, casinos, and hotels, condos, and spas under brands W, St. Regis, Westin, among others....
Labels: foreign investment, foreign relations, tourism
March 22, 2010
Historic Chinese Drought Marks World Water Day
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....
Labels: economic impact, globalization
Xi and Li at Home and Abroad
China's senior leaders are taking a back seat this week to allow the next generation a chance at the helm. Vice President Xi Jinping began a four-nation European state visit in Vladivostock
with President Medvedev and PM Putin and other senior Russians there to greet him. Xi is traveling with a large entourage of important mandarins including Zhang Guobao, director of the National Energy Administration of China. They will travel the length of Russia to the Baltic and visit Finland and Sweden.
In Beijing, Vice Premier of the State Council Li Keqiang delivered the keynote speech at the China Development Forum 2010
. The forum opened on Saturday and features a full range of heady topics and addresses by a who's who of global mulitnational corporations and NGOs from the IMF to OECD and from Morgan Stanley to Ford and Bombardier. The participation makes mockery recent mainstream media reports focusing solely on Google and false claims that foreign companies are "wary" of doing business in China or pulling out altogether.
Xi Jinping and Li Keqiang are expected to be the next President and Prime Minister of China but I still believe either man could be President in 2013....
Labels: energy security, foreign relations, new world order, reshuffle
March 19, 2010
Trade Win: China Agrees to Buy US Pork
US Trade Rep Ron Kirk and Secretary for Agriculture Tom Vilsack announced today that China will resume pork imports from the US
as soon as export documentation is agreed. During the H1N1 scare Beijing had barred imports of pork from the US in a knee-jerk reaction followed by many countries. At the time China was the number 7 market for American pork exports valued at $275 million annually. Since then China increased imports from the EU. In the words of Secretary Vilsack this is "excellent news for American hog producers." The talks on removing the trade barrier began with the latest US-China Joint Commission on Commerce and Trade in Hangzhou last October....
Labels: foreign relations, foreign trade, free trade
China Fastest Growing Market for California Wine
While 2009 saw a decrease overall in the near $1 billion (US dollar) exports of California wine the outlook for 2010 is looking good according to data from the Wine Institute of California
. China (including Hong Kong which re-exports wine to the mainland) accounted for $83 million in exports and is by far the fastest growing market at over 70% overall. China currently ranks number 8 globally in terms of wine consumption but the number of Chinese drinking and enjoying wine is set to grow immensely according to Vinexpo the international wine and spirits association.
Figures for 2008 show that imports accounted for 11.8% of Chinese wine consumption with France the largest supplier. By contrast imported wines account for almost 1/3 of wine consumption in the USA. Always adept at developing new business Chinese are ramping up wine production around China. But as California well knows it takes a lot of work and time to grow vineyards and create good wines. In the interim Chinese imports could grow to a level similar to that in America and be a real opening for California wines in the immediate future. The Wine Institute says it is making progress introducing its wines to Tier 2 cities. My recommendation is to focus instead on select lower tier cities.
Download the 2008 China Wine Market report
from the USDA Agricultural Trade Office. The report indicates that USA wines are losing to Europe, Australia, and Chile. The report says the key is to create brand awareness of the US as a premier wine producer. This is wrongheaded thinking. Better to focus on creating brand around California wines - clearly the leader in US wine exports. Notice the ugly USA banners showcased at a trade fair in the report. That sort of marketing will not be effective in the more nationalistic Tier 2 cities and less developed parts of China....
Labels: foreign trade, free trade, imports
Winner Medical Gets NASDAQ Listing
ShenZhen based Winner Medical Group
is the leading Chinese exporter of medical dressings. The company has 10 plants in the Pearl River Delta and thousands of employees making specialized non-woven 100% cotton products. Winner has USA FDA license to direct ship sterilized medical products to America. The company has been approved for a NASDAQ listing
and will start trading in early April under symbol WWIN. This is another opportunity to directly invest in the roaring Chinese economy and the cost conscious US healthcare industry....
Labels: chinese stocks, exports, foreign trade, free trade, shares
March 18, 2010
PayPal China Deal Expands Online Shopping for Hundreds of Millions
Online payment business PayPal (wholly owned by Ebay) announced that it will form a partnership with China UnionPay
the number 1 electronic payment processer and ATM network of China. PayPal said the arrangment means China is open for business as an import
market. There are over an estimated 100 million online shoppers in China and the number may swell to 300 million by 2013 according to PayPal's China manager Alien Tien. This is a big win for an American business over Chinese ecommerce rival Taobao
and its proprietary payment system. Using PayPal will allow Chinese to buy direct from millions of online merchants from Amazon to Walmart....
Labels: foreign relations, free trade, imports
March 16, 2010
When China reestablished its sovereignty over Hong Kong in 1997
...I did not hold much hope for the survival of Hong Kong capitalism. The notion that China would honor its pledge that Hong Kong would remain a bastion of capitalism for fifty years seemed to me rather naive. Capitalism and Communism side by side under the same sovereign authority was just not credible."Former USA Federal Reserve Chairman Alan Greenspan. The Age of Turbulence: Adventures in a new world. New York: The Penguin Press, 2007.
[ed. note: on days when Sinomania! is unable to post meaningfully a random quotation relevant to China is offered.]
March 15, 2010
Chinese Firm Funds Botswana Energy Complex
The Mmamabula Energy Complex at the Mmamabula Coal Field in southeastern Botswana is an important independent power project for southern Africa. Development is led by CIC Energy Corp., a Toronto exchange listed company with headquarters in the Bahamas and operations in South Africa. Today it was announced that Golden Concord Holdings Ltd., a Chinese conglomerate, will take a 70% stake in the Mmamabula project
and build and run a 300 MW power plant. Golden Concord Chairman Zhu Gong Shan said the investment was an excellent way to establish his company's opportunities in southern Africa. Zhu mentioned that the Botswana government was aware of the deal. A contract for the power plant was originally signed by CIC Energy last year with Shanghai Electric Group....
Labels: africa, energy security, foreign investment, foreign relations
China to Develop Deep Water Chittagong Port
Newspapers in India are reporting
that Bangladesh Prime Minister Sheikh Hasina will seek Beijing's support for a massive $8.7 billion (US dollars) development of Chittagong Port. Hasina will begin a 5 day visit to China on Wednesday at the invitation of Chinese PM Wen Jiabao. Word is Hasina will visit the new highway in Yunnan Province that may someday connect via Myanmar all the way to Chittagong in Bangladesh. There is also a railroad planned.
China is already working on port projects in Chittagong. The China Harbour Engineering Group or CHEC builds container terminals there. CHEC is the world's largest maker of quayside cranes and other port heavy machinery. CHEC remains state-owned but is slowly corporatizing. In 2004 its dredging businesses were spun off as public companies.
Connecting Yunnan and southwest China to a major deep water port at Chittagong will give China access to the Bay of Bengal and Indian Ocean avoiding the Straits of Malacca....
Labels: foreign relations, foreign trade, shipping, strategic
Krugman's Last Stand
Columnist Paul Krugman of the New York Times says
the US government needs to "take a stand" against China by declaring that Beijing "manipulates" its currency (Renminbi) and slap big extra tariffs on Chinese imports. Krugman began the year with the same message and seems willing to stake his reputation on his quixotic quest. Frankly the US has already taken a stand on the issue of the Yuan/Dollar exchange rate and been stood down. Further Krugman's simplistic explanation of alleged Chinese "mercantilism" is surprising from a Nobel Prize winning economist. To blame global economic imbalance on imports of Chinese goods is absurd.
To declare China a currency manipulator while ignoring Tokyo's support of the Yen and other currencies pegged to the US dollar including oil exporting nations and whole regions (the Caribbean, etc.) is a selective and hostile act. And if the Yuan is so undervalued why are the EU, Brazil, Australia, and other countries with important China trade not joining the USA in a stand against China?
Millions of Americans are already cutting back on what they buy and trying to make do with less. Do we need the cost of everything to go up because of additional tariffs on Chinese goods? Does Krugman think stagflation will help the American economy recover?
Labels: anti-china, currencies, forex, free trade, renminbi, yuan
March 12, 2010
Reunification Watch: Taiwan Approves Financial Integration
Taiwan's Financial Supervisory Commission
- the Taipei government's financial regulator - approved direct investment by mainland Chinese banks, brokerages, and insurance companies in Taiwan. Several Chinese financial businesses are interested in setting up branches on Taiwan and investing in Taiwan companies. Bank of China and Bank of Communications are known to seek expansion to Taiwan. Taiwan news sources say
the Commission still needs to inform the Executive Yuan and Taiwan's parliament but the new rules could be in place as soon as next week....
Labels: banking, financial news, reunification, taiwan
March 11, 2010
Obama's China Currency Comment
Headline writers this afternoon say President Obama "urged" China to stop controlling its currency. What did Obama say exactly? Long into a banal booster speech
at the annual meeting of the Export-Import Bank of the United States (a federal government agency), Obama said
"China moving to a more market-oriented exchange rate will make an essential contribution to that global rebalancing effort."
It surprises me Obama continues to spend political capital in a pointless pursuit to coerce Beijing to appreciate its currency. Washington can urge China all it wants but Beijing has made its position on Renminbi very clear. Just this week at the National People's Congress session China said the Yuan's unofficial peg to the US dollar will end and appreciation up to 10% over the short to medium term is expected.
A move by Beijing to drastically create a more "market-oriented" exchange rate would mean reducing China's dollar holdings in favor of other currencies or gold. Is this ultimately what Washington really wants? It is also hard to argue that the exchange rate of the Yuan is that out of whack for US exporters when China is year after year the fastest growing market for US exports.
A far better use of rhetoric and effort would be for Obama to push Beijing to fulfill its promise to enter into the WTO Government Procurement Agreement (GPA) and open up potentially billion$ in opportunities to American businesses. So far no moves on the GPA have been made by US Trade Rep Ron Kirk or anyone else in the Obama administration. Why not?....
Labels: currencies, exports, foreign exhange, forex, goverment procurement, obama, wto, yuan
China Offshores Wind Turbine Jobs to Nevada
Anti-China blowhard Senator (D-NY) Chuck Schumer's gambit may have paid off for Nevada. Schumer was close to derailing a giant wind farm in Texas planned by US Renewable Energy Group (US REG) and A-Power Energy Generation of China by thwarting currently available federal subsidies (tax credits) because the wind turbines would be manufactured at A-Power's plant in Shenyang, Liaoning Province. Today US Reg announced
the joint venture will build a manufacturing plant in Nevada potentially employing 1,000 Americans to build and assemble the wind turbines. The location and details of the plant are not revealed at this time. A-Power shares (NASDAQ:APWR
) are up over 8% today. US-REG is a private equity venture.
Schumer's opposition to the original deal was purely political grandstanding in an election year. Fact is American multinational GE will supply the massive gearboxes to A-Power
and eventually build a manufacturing center to supply not only A-Power but China and all of Asia. A-Power's wind turbines are built under license from Fhurlander AG of Germany
, a leader in wind energy technology. The Texas wind farm demonstrates the benefits and complexity of globalization. You can read my post on the original deal here
Labels: alternative energy, foreign investment
Will Geely Offshore Volvo?
According to Paul Tan's Automotive News Geely has secured over $2 billion
(US dollars) financing to complete its acquisition of Volvo from Ford Motor Company. Billionaire Chairman Li Shufu of Geely, China's biggest privately owned automaker, says the company has regulatory approvals to move forward with the deal. It was lack of Beijing approval that killed the Hummer deal for Sichuan Tengzhong.
At issue now is whether Geely will move Volvo production to China from Sweden. Plans are to double production to 300,000 vehicles per year. It seems highly unlikely Geely would mass produce Volvos in a country with one of the highest labor costs in the world, higher even than the US auto industry....
Labels: automobiles, chinese autos, foreign investment, foreign trade, free trade
March 10, 2010
China Moves the World
It is an interesting irony that the same mainstream media that criticizes Chinese government data as untrustworthy claims that same data is capable of moving commodities, currency, and stock prices the world over. Consider today's headlines. Chinese numbers on exports and inflation are responsible we read for stock markets going up in the USA
, and Brazil
; affected the Mexican Peso
, the (US) Dollar
, and the Yen
; and impacted gold
Labels: exports, forex, gold, inflation, oil
March 09, 2010
USA-China Venture Builds Largest Biologics Lab in Beijing
March 08, 2010
China Gets North Korean Port on Sea of Japan
Beijing's Ambitious Plans to Settle the West by Rail
Wang Mengshu, a Chinese expert in railway engineering and tunneling, has made a splash telling newpapers from the South China Morning Post to the Telegraph
of Beijing's plans to extend high-speed railways into Central Asia
and connect China to southeast Asia and eventually Europe.
The heads of China Eastern (NYSE:CEA
) and China Southern (NYSE:ZNH
) airlines warn that the Chinese high-speed rail network threatens their market for short and medium hauls. Some analysts believe that once complete Chinese railways will make flights under 800 kilometers (under 500 miles) uncompetitive potentially eliminating a great deal of flights. Investors in Chinese airlines should take this possibility seriously.
"We foresee that in the coming decades, hundreds of millions of people will migrate to the western regions
" Wang said when discussing a plan to build high-speed rail from Urumqi, capital of Xinjiang autonomous region, to the Caspian Sea and beyond. It is interesting to speculate on just how transformative a potential migration of that many people -- most likely poor rural Chinese -- will be on western China, Central Asia, even Eastern Europe.
China Reaches Peak Oil with Call for Bigger Strategic Reserves
Chinese oil production has essentially peaked and the country's strategic reserve is insufficient
according to National People's Congress delegate Chen Geng. Geng is a former executive of state-owned China National Petroleum Corp. China is one of the top oil producers in the world at just under 4 million barrels per day. Data of the International Energy Agency shows production increasing around 3% a year over the medium term but long term forecasts show the share of imported oil increasing much faster. Chinese press reporting from the Congress session say there are calls to greatly increase the strategic oil reserves currently targeted at 170 million barrels. By contrast the USA has almost 700 million barrels stored in salt caverns around the country....
Labels: energy security, oil, peak oil, strategic
March 05, 2010
TRADE WAR: US Anti-Dumping Duties of 349% on Chinese Bricks
Earlier this week Commerce slapped duties of 109% on certain types of coated paper and 13% extra on Chinese salts....
Labels: chinese trade, exports, foreign trade, free trade
Visit Florida China
The Sunshine State's new tourism marketing program Visit Florida is aggressively pursuing Chinese tourists
- the fastest growing group of foreign visitors to the USA. This year Chinese tourist numers are expected to grow 15% overall and Florida wants a share. The state has an office in Shanghai and numerous programs to bring in more Chinese. It is anticipated that within 10 years China will be the world's number #4 source of foreign travelers.
Florida's efforts are in contrast to the damaging and divisive actions by their own Congressional Representaton such as Ileana Ros-Lehtinen (R-FL) Republican Congresswoman from the 18th District that includes Miami. Visit Florida should consider whether their cause is helped each time Ros-Lehtinen sponsors legislation or makes an official statement against "Communist China".....
Labels: anti-china, congress, foreign relations
Gamet Bearings Gets Guanxi
Gamet Bearings, a manufacturer of precision ball bearings and related equipment in Colchester, UK, understands the importance of Guanxi in building business in China. Gamet spent nearly two years developing close relations with Chinese
businesses and prospective partners in several Chinese cities. The company now anticipates a good future supplying components to China's aerospace and other industries - good news for the borough of Colchester and for UK exports. Gamet is part of the 600 Group PLC a machine tool conglomerate. Last year the 600 Group announced it would no longer outsource production to China over quality concerns....
Labels: foreign relations, foreign trade
China's Parliament Convenes
Prime Minister Wen Jiabao opened with a report on the economy and presentation of the central government budget. As in many nations today the Chinese government is predicting a deficit (around $154 billion). And while overall government spending is increasing the rate from last year is decreasing. Unreported in world media is a drop in Chinese defense spending the number 1 item in the government budget just as in the USA.
Wen said Beijing will loosen the grip of state power on "monopoly industries" and encourage further corporatization of state-owned enterprises. This is a signal that more government owned shares may be sold into market and that further privatization will occur....
Labels: economy, government, national peoples congress
March 04, 2010
US-China Fence Mending Falls Flat
The Obama Administration's emissary to Beijing left empty-handed and is now in Tokyo in a reversal of the old Tokyo first then Beijing
protocol. Deputy Secretary of State James Steinberg and chief Asia analyst at the National Security Council Jeffrey Bader met with Foreign Minister Yang Jiechi and State Councilor Dai Bingguo. Both Washington and Beijing billed the visit as an attempt to ease tensions over recent disputes on trade, the Dalai Lama, and arms sales to Taiwan. But judging from what the State Department disclosed today
the meeting was just more lip service on established positions. Beijing may feel assuaged that the emissary came directly to China. We can only hope that more substantive talks did occur behind the silk screens otherwise the stalemate continues....
Labels: foreign relations
Chinese Scientists Decode Human Digestive System
Chinese scientist Wang Jun and a team of international researchers say the average human gut contains up to a thousand species of bacteria. Their findings are presented in the latest issue of the presitigious journal Nature
. Wang's team sequenced the genes inside the human digestive system and according to Wang 99% of them are not of human origin
. The discoveries may reveal causation between types of bacteria and certain diseases including cancer. Once identified drugs and other products could be created to interact with the various species. Research such as this are further evidence of China's growing lead in genomics....
Labels: foreign relations, high-tech
China to Build Big SEZ in Pakistan
Pakistan papers say
that a delegation from a Chinese entity called Asia International Development signed an agreement with the Punjab Industrial Estates Development & Management Company
to build a giant industrial city of 100,000 acres or more outside Lahore, capital of Punjab in Pakistan.
Exactly where the special economic zone (SEZ) will be located is unknown but word is it will be near important transport corridors such as the Lahore Ring Road begun five years ago. From there it is not far to connect with the Karakoram Highway and railway projects currently planned or under construction by Chinese business and government interests or connect to the port at Karachi or perhaps in the future Gwadar. China builds industrial zones with an eye to finished processing and as a form of export substitution. A developed deep water port at Gwadar may some day ship containers filled with China origin goods finished in Pakistan....
Labels: foreign investment, foreign relations, pakistan
March 02, 2010
They have the deepest fidelities to family ties
"...and the fullest affection for their children. They work harder and more hours than any race in the world. True, they are superstitious beyond belief, but they have a vivid sense of humor. They are courageous, as witness the armies they have created. They are highly acquisitive, and one need have little fear that this great mass will ever be communists for long."Former USA President Herbert Hoover (1929-1933) on the Chinese people. Hoover moved to China in 1899 with his new bride to be foreign adviser to the Chinese Ministry of Mines and agent for the Chinese state-owned Chinese Engineering and Mining Company. They lived in Tianjin during the Boxer Rebellion. Lyons, Eugene. Herbert Hoover A Biography. New York: Reader's Digest Association, 1947.
Iraq Oil Minister Says China Oil Contract Coming
China Bid for Azerbaijan Oil
Late last week the head of investment at the State Oil Company of Azerbaijan (SOCAR) Vagif Aliyev revealed that Devon Energy of Oklahoma was to sell its 5.6% stake in the big Azeri-Chirag-Gunashli offshore oilfield. The Azeri-Chirag-Gunashli field is controlled by a consortium of oil majors led by British Petroleum. Vagif Aliyev said negotiations were underway between Devon and Chinese oil companies
- CNCP, CNOOC, and Sinopec have all been named as interested parties - and the other consortium members. If the consortium agrees not to buy Devon's share they could be joined by the Chinese.
The field lies offshore in the Caspian Sea in waters claimed as national by Azerbaijan. It is estimated to have 5.4 billion barrels of recoverable oil. Oil production is exported by the Baku-Tbilisi-Ceyhan (BTC) pipeline for delivery onto tankers plying the Mediterranean Sea. Over the weekend SOCAR said that Kazakhstan had stopped exporting oil through the BTC pipeline
China was quick to recognize Azerbaijan as an independent nation in 1992. Chinese companies have been at work onshore since at least 2004. Devon Energy may be a takeover target according to some analysts. Rumours are Devon wants to focus on developing its domestic assets....
Labels: energy security, foreign investment, oil, peak oil
March 01, 2010
Recession? China Hosts Largest Luxury Yacht Show
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....
Labels: economic impact
BYD Auto in EV JV with Daimler
German auto major Daimler AG (parent of Mercedes-Benz and maker of the Smart mini) signed a memorandum of understanding today with ShenZhen based BYD Auto to develop Electric Vehicles (EVs) for the Chinese urban market. The EV will be a new creation with joint branding according to Daimler's press release
. Daimler CEO "Dr. Z" Dieter Zetsche describes the deal as a "perfect match." BYD is 10% owned by famed investor Warren Buffett's Berkshire Hathaway firm - the second largest stock holding in Buffett's portfolio.....
Labels: automobiles, chinese autos, electric cars, foreign investment
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