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Chinese Fund Managers Sentenced to Death after Cheating Investors out of 1 Billion USD

HANGZHOU – Two brothers and their father were sentenced to death on Monday for cheating 15,000 investors out of over $1.1 billion in east China’s Zhejiang province. Ji Wenhua, president of the Yintai Real Estate and Investment Group, was sentenced to death for the crime

Gold at $7,000 article goes viral in Chinese media

Dan Collins CMR “Gold going to $7,000″, an article today in the Chinese media is going viral and one of the most viewed articles in the financial press. The article references American Jim Rickards and his concept of comparing inflation-adjusted gold prices. Most Chinese economists

Western paper markets manipulate gold prices lower as China takes the real stuff off the market.

It’s not uncommon for the large Wall Street banks to combine in shorting an entire years supply of minded silver in a single day.The same goes for all commodities. Endless paper printing getting funneled to Wall Street has destroyed all real price discovery. Capitalism fails

Chanos is back….This is getting sad

Chanos is back! His short China thesis is very long in the tooth but as it goes with most ego maniacs he cannot accept failure or that fact that he might be wrong. Being wrong on an entire country where you have never visited and

“American Collapse Theory” Gaining Ground in China

Dan Collins CMR When I moved to China back in 1998 I was surprised to learn how highly the Chinese thought of America. Of course China was a much poorer place back then but coming from the Detroit area I couldn’t fathom where was all

China Car Sales Up 22.6% -The Chinese economy is collapsing?

You have to laugh at the whole “China will collapse crowd” on CNBC and even respected sites like Zero Hedge. Personally, I love the Zerohedge stuff. They understand the ponzi-financial fraud-money printing-welfare state economy that now envelops the West. But China is a real economy,

Cloud Computing in China booming as American giants are pushed out

D.Collins CMR China’s cloud computing market is expected to be worth 37.2 billion yuan (US$6 billion) in 2017 as demand for the service grows, the Chinese-language China Securities Journal reported on Friday. Some American tech companies are watching the largest and fastest I.T. market in

Oil rig dispute could see repeat of Sino-Vietnamese War: report

Breaking News today that a Chinese vessel as rammed and sunk a Vietnamese fishing boat. All countries in the South China Sea and East China Sea are using fishing boats in a game of cat-and-mouse to challenge each other on their respective areas. This time

France relents to China, Chinese police to help patrol Paris streets

Scared of losing the Chinese tourist dollar, France has relented to China and will allow Chinese police on the streets of Paris. More signs of the benefits of third-world immigration into the West to the point where cultural breakdown has occurred and law and order

People’s Bank of China will take down global gold price manipulation

Gold has been flowing East for a decade. When the West wakes up to the fact that their gold is gone, they will no longer have sound money with which to back a currency. The world has only been off a gold standard since 1971

China to lower reserve requirement ratio

From the China Daily… BEIJING – China will lower banks’ reserve requirement ratio (RRR) by 0.5 percentage points starting May 18, the country’s central bank announced Saturday. The cut, the second of its kind this year, will drop the RRR for the country’s large financial

Chinese Officials Falsify Data To Mask Slowdown, NYT Says

Is China tweaking its numbers on GDP? Probably. For twenty years Chinese GDP roughy came in right on the governments target. This would be an almost magical performance record considering economists in the West can predict absolutely nothing. For years, China most likely lowered GDP

Japan Learning the Hard Way, Destroying your Currency is Not an Economic Strategy

Japan will learn the hard way that destroying your currency is not an viable economic strategy. Shanghai Daily JAPAN posted a record 1.63 trillion yen (US$17.4 billion) trade deficit in January as rising exports trailed surging imports of crude oil and gas due to rising

American GDP: The Fantastic Fiction of American Economic Strength

American GDP: The Fantastic Fiction of American Economic Strength By Dan Collins Is the U.S. economy still the most powerful in the world? That is what we are told as the United States does have by far the world’s largest Gross Domestic Product (GDP). In

Government tells Huawei that they are not allowed to spy on Americans. Only they can do that.

Youtube, Facebook, and Twitter are all blocked in China. They have algorithms in place to disrupt Google service as well which makes it very annoying even using Google here. You get many dead links when the algo’s are working. Despite blocking American companies in China,

2014 Profits of China’s Top 12 State-Owned Companies

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Wanda poised to buy 3 more sports firms

Dalian Wanda Group Co Ltd, the Chinese property giant, will buy at least three more sports companies this year as it continues on its quest to become a leader in the global sports industry.
Wang Jianlin, its chairman, told Xinhua News Agency that he expects to announce a major acquisition very soon that would be “good news” for Chinese soccer, without giving further details.

In February, Wanda fought off 11 other international bidders to take over Infront Sports & Media AG, the world’s most respected sports marketing company based in Zug, Switzerland, from the European private equity firm Bridgepoint in a deal worth around $1.2 billion.

The Swiss company owns copyrights and marketing sales rights for seven international sports associations that govern the Winter Olympic Games.

With control of Infront’s resources, its sports event broadcast rights and marketing rights, Wang said Wanda now stands in the upstream of the sports industry.

Wanda also took a 20 percent stake in Spanish La Liga giant Atletico Madrid in April.

“One of our major concerns is that the companies involved in the acquisitions should have a dominating role in sports marketing,” he said, adding they should also be prepared to bring something from the sports they specialize in to China.

“After buying the Swiss company, we are able to launch a series of sports activities in China,” Wang said.

Wanda signed a three-year agreement with the Chinese Football Association in 2011 to invest 500 million yuan ($80.53 million) into promoting Chinese soccer, which included funding 30 young Chinese players each year to train in Spain.

“Everything we have done in the past and will do in the future is aimed at boosting Chinese soccer, which is really in need of more talented young players,” Wang said.

In recent weeks, the Italian media have been speculating that Wanda is also interested in buying a 30 percent stake in Series A giant AC Milan at a cost of $170 million, and that it might also build the club’s new stadium in the Portello district of the city.

Xie Liang, a veteran soccer commentator with Radio Guangdong, said Wanda’s growing involvement in soccer is seen by many as a mirror of the country’s strategic plans to upgrade industries at home.

“Getting involved in sport worldwide will help build a better image of Chinese companies, and help Chinese companies diversify into other businesses,” said Xie.

In recent years, a growing number of traditional Chinese companies, especially in the real estate sector, have become involved in developing the soccer industry, either in cooperation with or by buying into overseas soccer clubs.

Evergrande Real Estate Group Ltd, the property developer based in Guangzhou, the capital of Guangdong province, has already formed an alliance with the Spanish giant Real Madrid to develop a soccer school in China and three overseas branch schools.

China markets rout resumes with 8.5% Shanghai sell-off

A sharp sell-off in China within the final hour of trade saw the Shanghai Composite close 8.5 per cent lower at 3,725.6 points, and register its biggest one-day fall since February 27, 2007. Moreover, it ranks as the second-biggest one-day fall since 2000

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This is Beijing! Foreigners in 300-style PR stunt draw ire of police

A publicity stunt by a Beijing salad store went horribly wrong after the semi-naked Western men it hired to promote its products were detained by police for “causing a public disturbance,” according to a report from the Beijing Youth Daily.

On Wednesday afternoon, Sweetie Salad, a start-up business in Beijing’s Chaoyang district, hired around 100 white males — mostly from Russia but not all of whom were in the best of shape — to parade around the city disguised as “Spartan warriors” made popular by the 2006 fantasy action film 300.

Dressed in nothing but leather shorts, shin pads and sandles, with a cape on their backs, the men marched through the streets handing out salad samples, passing through shopping malls and subway stations.

They eventually stopped to line up in a pyramid formation and held up boxes Sweetie Salad before chanting an advertising slogan.

The marketing campaign drew a lot of attention from passersby and picture-takers, but also the police, who arrived shortly after in an apparent response to a “mass complaint” about the crowd, according to a statement issued by Beijing police on their official Sina Weibo microblog account.

Several models were reportedly detained after they refused to disperse and leave the area, with photos posted online showing two of them being wrestled to the ground by police on a pedestrian overpass.

Sweetie Salad, which had not secured a permit to organize the event, apologized on its microblog page on Thursday: “After yesterday’s incident, we have come to realise that we lack experience in co-ordinating major events as a start-up company. We have worked out all misunderstandings with the police.”

News and photos of the incident quickly went viral in China, with one of the most widely forwarded posts being: “300 Spartans were no match for the Beijing police!”

Some netizens thought the stunt was a failure because people only paid attention to the Spartans as opposed to the product or company they were promoting, though others have pointed out that all the subsequent media publicity it has received will no doubt put Sweetie Salad on the map.

The incident comes just a week after a sex tape filmed in a fitting room of Japanese apparel giant Uniqlo in the same district went viral online, leading to at least five arrests in relation to spreading the video. Uniqlo rejected allegations that the tape was a publicity stunt.

While Chinese authorities have been cracking down on marketing campaigns using female models dressed in skimpy outfits, the use of semi-naked male models generally appears to be less frowned upon. However, Abercrombie & Fitch, the American company best known for its topless advertising, has pledged to stop using half-naked male models in China and around the world starting from August as part of its efforts to curb “sexualized marketing.”

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China tech expansion hits a phase that will worry the US

FT

Tsinghua’s interest in Micron evokes memories of Japanese chip onslaught of
the 1980s

US Memories Inc may sound like a greeting-card company. In fact, it was the
name for a proposed industry-wide joint venture to keep the US in the memory
chip business at the end of the 1980s, as the sector reeled from a Japanese
corporate onslaught.

US Memories is a forgotten footnote in the technology history books. The attempt
at collective action failed when some of the backers got cold feet. Instead, the
fight back, when it came, took a far more American form: an entrepreneurial
start-up from the unlikely location of Boise, Idaho, called Micron Technology.

Now the US faces another challenge from Asia in the chips that act as one of the
most basic components of the digital world. News this month that Tsinghua Unicom,
an offshoot of Beijing’s Tsinghua University, has been weighing up an offer for
Micron has provoked a predictable ripple of nationalist angst. When kites like
this are flown in public, it is often to find out what the reaction to a formal
offer would be. On cue, Republican senator John McCain worried publicly about
the “potential national security implications” if the US lost a significant
position in memory chips. That Tsinghua is a Chinese state-owned company was
among the factors weighing on the his mind.

US Air Force’s Australia bomber run a message: US official

Two B-52 strategic bombers from Barksdale Air Force Base located in Louisiana were ordered by the Pentagon to carry out “bomber assurance and deterrence” in the beginning of this month to bloster regional allies in the Asia-Pacific against Chinese maritime expansion, reports Bill Gertz, an American security analyst, in a commentary recently written for the Washington Times.

With the support of Royal Australian Air Force ground forces, the two B-52s flew directly to Delamere bombing range in northern Australia to conduct a bombing run. After unloading their conventional bombs on the range, the two craft headed back to Barksdale Air Force Base in the US. It took 44 hours for the US Air Force to complete its “bomber assurance and deterrence” on July 1, according to Gertz.

Admiral Cecil D. Haney, the commander of the US Strategic Command which is in charge of the US strategic bombers told Gertz that the “bomber assurance and deterrence” mission is one of many ways for the US to demonstrates its commitment to a stable and peaceful Indo-Asia Pacific region. While pointing out that the operation was intended to send a strategic message, Haney declined to identify the recipient of the message.

An insider at the Pentagon told Gertz that the message was intended for China due to its increasingly threatening activities in the South China Sea. “As the nation’s focus turns to the Pacific, it’s important to show the B-52’s presence, not only on Andersen Air Force Base, but throughout the entire region,” said Captain Jared Patterson, chief of weapons and tactics for the 96th Bomb Squadron based in Barksdale Air Force Base.

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China & Russia align strategies against US: Global Times

China and Russia are aligning their strategies to team up against the United States, according to a commentary by the Global Times, a tabloid under the auspices of the Communist Party mouthpiece People’s Daily.

Following more than two decades of development, bilateral relations between China and Russia have reached a new phase, the July 18 commentary said, adding that China now considers Russia an irreplaceable partner for all its key strategies.

These include the Silk Road Economic Belt, the land-based component of Beijing’s amibitious “Belt and Road” initiative to boost cooperation and connectivity in Eurasia; the Shanghai Cooperation Organisation, the political, economic and military organisation the two countries founded along with Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan; and the BRICS association comprising Brazil, Russia, India, China and South Africa, as well as the group’s New Development Bank.

During Chinese president Xi Jinping’s visit to Moscow in May, the two sides also signed off on a joint declaration detailing cooperation between the Silk Road Economic Belt and the Eurasian Economic Union, which comprises the Eurasian states of Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan.

Beijing appears to be working hard to eliminate Moscow’s wariness and concerns to form a China-Russia “dual engine,” Global Times said, noting that there is still some tension stemming from the perceived competition between the Trans-Asian Railway supported by China and the Trans-Siberian Railway pushed by Russia, as well as the Central Asia–China gas pipeline from Central Asia to the northwest Chinese region of Xinjiang and the Altai gas pipeline from Russia’s Western Siberia to North-Western China.

China therefore needs to find ways to synergize the Trans-Asian Railway and Silk Road Economic Belt, which will offer alternatives and develop infrastructure that is mutually beneficial to both sides, the commentary added.

A key to China’s strategies is the Beijing-led Asian Infrastructure Investment Bank, a pivotal platform for broadening cooperation and increasing the scale of development. Also important is the BRICS’ New Development Bank and its reserve currency pool of US$100 billion, which will contribute to the fight against the liquidity crunch and global deflation by helping emerging markets better deal with the risks.

Global Times warns, however, that the China-Russia relationship will not always be smooth sailing, and that the strength of the alliance will ultimately depend on Moscow’s attitude towards Beijing’s various ventures.

The commentary notes that there are four ways in which Xi and his Russian counterpart Vladimir Putin are joining hands to combat the United States.

The first is economic cooperation through mutually beneficial deals such as the recent 30-year, US$400 billion natural gas agreement signed in Beijing in May. It was a deal in the interests of both sides, as Russia needed an export partner for its energy resources, while China needed a supplier for its significant energy needs. China even forwarded part of the funds to Russia in advance to help Moscow better cope with the economic sanctions from the West after its annexation of the Ukranian territory of Crimea last year.

The second strategy is to jointly develop the Silk Road Economic Belt. Coupled with the Trans-Asian Railway, it is China and Russia’s hope of forming a China-Eurasia economic zone to the exclusion of the US, as both Beijing and Moscow know that an inability to exert its influence is what Washington fears the most.

Thirdly, China and Russia are aiming for the New Development Bank to put pressure on US dollar by competing with the US-controlled World Bank and International Monetary Fund. Given that the five BRICS nations account for half of the world’s GDP, it is possible that they could soon threaten the status of the US dollar as the dominant global reserve currency.

Lastly, China and Russia are also looking to penetrate the US “backyard” of Latin American markets. Xi and Putin both attended the BRICS summit in Brazil last July, after which Xi embarked on a tour of Argentina, Venezuela and Cuba. According to the Global Times, it was Xi’s way of telling Washington that if it meddles with Chinese business in Asia, China will interfere in US affairs in South America.

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Gold reserves underpin stable yuan seeking globalization

Xinhua

The rise of gold as part of China’s international reserves and the central bank recently publishing yuan-denominated external debts are conducive to a stable yuan, analysts said on Monday.

Official data showed the country’s gold reserves hit 1,658 tonnes at the end of June, jumping nearly 60% compared to the figure last released by China’s central bank at the end of April 2009.

Although countries have long abandoned the gold standard as the basis of monetary systems, gold reserve volume remains an important factor in market assessment of a country’s currency value due to its price stability, according to analysts.

The central bank said the gold reserve increase was in line with the nation’s needs to keep adjusting the structure of its international reserves assets in order to ensure the assets’ security, liquidity, and value increase.

“China’s increasing gold reserves will strengthen yuan holders’ confidence, which will help stabilize the exchange rate and facilitate the internationalization of the yuan,” said Xu Mingqi, a researcher with the Shanghai Academy of Social Sciences.

“A more important role of gold reserves lies in risk prevention. It helps boost confidence in a country’s currency, and reflect the country’s economic and financial strength,” said Ding Zhijie, a professor at the University of International Business and Economics.

China is the world’s largest gold producer and a major gold consumer. The updated figure also revealed China surpassed Russia to become the fifth largest holder of gold reserves around the world, behind the US, Germany, Italy and France.

Gold reserves account for a small part of China’s foreign exchange reserves, which hit US$3.69 trillion as of the end of June. The central bank said it would flexibly adjust its gold holdings according to its reserves and investment needs in the future.

The Renminbi’s Rising Influence

The data came as China looks to advance its currency’s status as a key international reserve currency, which is now a prime candidate for the International Monetary Fund’s (IMF) special drawing rights (SDR).

The international reserves data was released by using the special data dissemination standard (SDDS) established by the IMF in 1996 to enhance the availability of timely and comprehensive statistics, according to the People’s Bank of China, China’s central bank.

By using the standard, the central bank has widened its external debt calculations by introducing yuan-denominated external debt for the first time, which stood at 4.94 trillion yuan (US$795 billion), about 48.1% of China’s total foreign debt, central bank data showed.

“Improvement of the nation’s financial data disclosure would better meet the IMF’s requirements on information disclosure, and have a positive impact on yuan’s inclusion into the SDR,” said Xiao Lisheng, a research associate at the Chinese Academy of Social Sciences.

The SDR is an international foreign exchange reserve asset comprised of a weighted basket of four currencies, including the US dollar, euro, British pound and Japanese yen. The value of a country’s total exports and imports, as well as whether a currency is fully convertible under the capital account, are taken as two key criteria for SDR entry.

At the last SDR review in 2010, the yuan met the first criterion, but was assessed as not meeting the “freely usable” criterion. The IMF is expected to vote on the yuan’s inclusion late this year.

“Overseas markets are showing greater demand to hold yuan-denominated assets as yuan’s global status keeps rising. This has also reflected their confidence in China’s economic development and achievements in reforms,” the central bank said in a statement.

Since July 2009, China has taken a raft of measures to push for the yuan’s globalization, such as currency swaps with more than 30 countries and regions, setting up yuan clearing banks in foreign cities and allowing direct trading between yuan with other major currencies including euros and pounds in the inter-bank foreign exchange market.

With these measures and China’s efforts to promote greater convertibility of yuan under the capital account, the Chinese currency, also known as RMB, became the world’s No. 2 currency for trade finance globally in 2013, and overtook the Canadian and Australian dollars to enter the top five world payment currencies last year, according to global transaction services organization SWIFT.

Cheng Yulu, president of Renmin University of China, said China’s Belt and Road Initiative is also poised to offer strategic opportunities for yuan’s globalization.

Chinese media: “We are the Gold Consumption Super-Power.” Chinese citizens now holding over 6,000 tons

REPOST:

Chinese media: “We are the Gold Consumption Super-Power.”
Chinese citizens now holding over 6,000 tons
October 30, 2014

Dan Collins
CMR

– China officially imported over 1,500 tons in 2013 with some estimates
as high as 2,200 tons. This is in addition to the 400 tons they produce
annually which is never leaving the Mainland.

– China has now declared that its citizens are privately holding more
than 6,000 tons of Gold turning China into the “Gold Consumption Super-Power”

– China will not release their Gold holdings as they want gold prices
to stay low. Acquiring gold is all part of China’s master plan which the
Chinese press refer to as “Secret Gold Holding Logic” to make Shanghai
the world’s financial centre with the RMB as its central currency.

As most informed individuals know, Gold has been dropping like a rock from
its previous highs of over $1900 an ounce. This has only encouraged more
buying from China, in paticular the fictional character called “Auntie Want”
which represents all of those middle-aged Chinese women with money to burn
that love buying real assets like houses and are gold are now being blamed
for buying over 200 tons in only a few months during the summer when prices
hit lows around $1,250.

Last year, in 2013, China took advantage of falling prices to import more
than 1,500 tons of Gold. This is in addition to the 400 tons they produce
annually which is never leaving the Mainland.

What has people really talking in China is why the government will not
release their holdings in the People’s Bank of China (PBoC).The last time
China released their official holdings was 2009 when they shocked the markets
by showing a massive increase in reserves to 1,054 tons. They have always
promised to release their official holdings numbers every five years. Those
of us that watch China and Gold closely have seen the PBoC’s Gold release
data dates come and go with no release of the banks holdings.
Chinese financial commentators are saying that this is because the PBoC would
spook markets showing that their holdings are now up near 5,000 tons.
This is the last thing the PBoC wants to do as they plan to buy more and
they want to buy as low as possible.

The Shanghai Gold Exchange is now the world’s largest physical bullion
market in the world and all part of the plan. They are set up in Shanghai’s
free trade zone and are opening up gold holdings to foreign investors who
want to keep bullion in China. The Gold contracts are of course priced in
Chinese Yuan. Shanghai has also recently opened a new vault with a
2,000 tons capacity to back up Shanghai’s bid to hold and control global
pricing of the commodity.

While traders in Chicago on the COMEX sit and trade each other paper
contracts all day with neither one actually owning any of the commodity
they are training, the traders in Shanghai will be well-at-ease to know
the physical bullion is actually there.

China’s continuing grip on the global gold market is all part of the plan
according to analysts in the Chinese media. Literally translated it is called
the “Secret Gold Holding Logic”. China needs Shanghai to become a global
financial center. It will surly become one as the RMB goes global, and China
will have the gold reserves to partially back the RMB with a hard asset.
This is the long term plan according to some state media sources in China.

There are some Gold holdings in China which are not secret. Recent numbers have
been released estimating that the Chinese population themselves are now holding
over 6,000 tons of Gold. China has long been trying to get its citizens to invest
in Gold. In fact going back to 2004, the PBoC governor, Zhou Xiaochuan, was nicknamed
“Golds best salesman in the media. The result is today, in China’s Big 5 banks you
can hold gold accounts both paper and physical as well as visiting their “GOLD VIP”
centres to purchase physical bars.

With China now importing more than 1,500 tons annually and the consumers holding
more than 6,0000 tons one commentator in the financial press refereed to China has
the “New Gold Consumption Super-Power”

China unveils guidelines for Internet finance

Xinhua

China has rolled out a raft of policies and measures to support innovation and minimize risk to ensure healthy development of Internet finance.

To promote the sound and steady progress of the online finance industry, the country will regulate market order and further clear regulatory responsibilities, according to the guidelines jointly released on Saturday by ten central government ministries and industry regulators, including the People’s Bank of China, the Ministry of Industry and Information Technology, the Ministry of Finance and China Securities Regulatory Commission.

The guidelines highlight overall requirements for authorities in supporting Internet finance.

Governments at all levels should actively encourage innovation in e-finance platforms, products and services, according to the guidelines, and cooperation between financial actors in the industry should be protected and encouraged.

They state that governments should help expand access to capital for market players, government red tape should be cut, and related fiscal and taxation policies should be improved to avoid risks for the industry’s development.

China releases gold holdings one year behind schedule. Still hiding its vast reserves.

China’s gold reserves stood at 1,658 tonnes at the end of June, the central bank said on Friday, up 57 percent from the last time it adjusted its reserve figures more than six years ago. The country was scheduled to release these numbers last year but declined to follow its previously scheduled commitment.

China considers its gold holdings a state secret and does not report its holdings on a monthly basis to the International Monetary Fund as most other countries do.

It last adjusted its reserve figures in April 2009, when the level was lifted to 1,054.1 tonnes from 600 tonnes.

A WikiLeaks cable in 2011 cited a Chinese newspaper as saying that the country’s large gold reserves would be “beneficial in promoting the internationalization of the RMB.” (http://wikileaks.org/cable/2009/04/09BEIJING1134.html)

China is pumping out 400 tons annually of Gold, none of it which leaves China. It is also the largest importer of Gold. So How is it possible Chinese gold holdings are only up to 1,658 tons since 2009? Since 2009, Chinese domestic production of Gold has been over 2,400 tons alone and that does count what the country has imported.

The answer lies in where the Chinese keep their Gold. Firstly, China has been ordered their large national banks to buy and hoard the precious metals for at least ten years now. They have also instructed the citizens to keep Gold privately as a good investment and all of the large national banks offer Gold and Silver programs. This is in addition to the Shanghai Gold exchange which is soon to be the price setter globally for the precious metal.

China-Gold

Jack Ma refutes allegations of crashing China’s stock market

Want China Times

Jack Ma, the founder and executive chairman of Chinese e-commerce giant Alibaba, has vehemently denied allegations that a company he controls is responsible for wiping US$3.9 trillion off the Chinese stock market in less than three weeks.

On Monday, the China Securities Regulatory Commission reportedly paid a visit to the Hanzhou-based Hundsun Technologies, which is 20.6% owned by Ma’s financial investment company following a US$532 million investment last year.

Investigators said they were “looking for clues” and investigating whether Hundsun complied with market rules. The probe is believed to have been sparked by online posts over the weekend that blamed Hundsun’s HOMS system for automatically closing margin-trading positions, leading to increased volatility and selling pressure.

HOMS, a cloud-based system, was initially developed in 2012 for small- and medium-sized management firms, but is now widely used by gray market financing firms for margin lending, offering borrowers significantly higher credit than that allowed by official lending limits.

According to Dow Jones, HOMS brought in about 440 billion yuan (US$70.9 billion) of the 500 billion yuan (US$80.5 billion) grey market funds funneled into the stock market.

However, Hundsun has denied that HOMS is responsible for the stock market crash, noting in a filing with the Shanghai Stock Exchange on Monday that only 30.1 billion yuan (US$4.85 billion) was force-sold through HOMS between June 15 and July 10, representing only 0.1% of total transactions during that period.

“It’s not objective or rational to say that HOMS was the major force of the stock market turmoil,” Hundsun said in the statement.

For his part, Jack Ma took to Sina Weibo, China’s version of Twitter, expressing “astonishment” from reading that Hangzhou has been pegged as the origin of the stock market rout and that he was somehow responsible.

Posting from Europe, Ma, China’s second richest man with a fortune estimated by Forbes to be in excess of US$22.5 billion, said he has been on business abroad lately and does not even have the time to keep track of the stock market. He said he had given up speculating in the stock market a long time ago because he is “someone who was among the earliest to be hurt by stocks.” He added that he was not involved in manipulating the stock market, likening himself to someone who being shot at despite already lying on the ground.

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Chinese stock market finishes down -19.21% for the month but up 17.48% for the year

The CSI 300 Index finished today at 4,151.5 up +1.09%.

The CSI is down 19.21% for the month but up 17.48% for the year.

– China GDP for 2Q increased 7.0% yoy – higher than market expectations
of 6.8%.- China’s retail sales for June were up 10.6% and Industrial
production up 6.8% – both figures were above market expectations.-

Exports in June were up 2.8% and imports down 6.1%, resulting in a trade
surplus of US$46.5 billion for June. China continues to be helped
by the collapse in global commodity prices.

-The PBOC conducted two separate 20 billion RMB 7-day reverse repos, both
at 2.50%. There were 85 billion of reverse repos coming due this week,
resulting in a net 45 billion RMB drained from money supply.

-China issued new rules making it easier for foreign central banks, sovereign
wealth funds and global financial organizations to access its interbank bond
market. They will no longer need pre-approval to trade bonds, interest-rate
swaps and conduct repurchase agreements, and can do so after filing a
registration form.

Western Financial Propaganda Press Continues China Onslaught

The Western Press has been predicting collapse in China for nearly two decades
now. And usually after every story they have to crow-bar the ending sentence
which usually ends with something like, …”oh, by the way, car sales are up
24%”. But that is also signs of a collapse. And all those wage increases,
and new airports, and educated population. Just more evidence of collapse of
course.

The latest gyrations of the stock market have provided ample fodder to the
minions in the U.S. journalist press struggling to hold on to their jobs in an
online world. Ever eager to please their bosses , they continue to feed made-up
bullshit like the story below. Anyone could find a home jockey sitting in one
of the thousands of real estate offices in Shanghai to basically tell you
anything you want.

What they won’t tell you …is the U.S. GOVERNMENT IS PRINTING MONEY TO
FUND EBT CARDS. Now…that’s the real story which you won’t read from them.

cnbc

Indonesia plans naval base in S China Sea; blasts China’s 9-dash line

Want China Times

Indonesia is planning to build a military base in the South China Sea that may be within the territory marked by China’s controversial nine-dash line.

The Jakarta Post reported that Indonesia’s Defense Ministry and the National Development Planning Board (Bappenas) have already held a meeting last Friday to discuss the potential location of the base, which has been narrowed down to Sambas, West Kalimantan; Natuna Islands, Riau Islands and Tarakan, North Kalimantan.

Bappenas chief Andrinof Chaniago said Friday’s meeting was aimed at “synchronizing our ambition to guard the national interest and protect the sovereignty of our territory.”

While China and Indonesia are not directly involved in any territorial disputes, the waters surrounding the Natuna islands are claimed by Beijing under the U-shaped nine-dash line, the demarcation used by both China and Taiwan for their claims to the majority of the South China Sea.

Since 2014, Indonesia officials have repeatedly criticized China’s assertiveness in the South China Sea, which has included extensive land reclamation activities and military constructions on islands disputed with the Philippines and Vietnam, among others.

“China has claimed Natuna waters as their territorial waters. This arbitrary claim is related to the dispute over Spratly and Paracel islands between China and the Philippines. This dispute will have a large impact on the security of Natuna waters,” assistant deputy to the chief security minister for defense strategic doctrine, Commodore Fahru Zaini, said last March.

“Indonesia is dismayed…that China has included parts of the Natuna islands within the nine-dash line, thus apparently claiming a segment of Indonesia’s Riau islands province as its territory,” General Moeldoko, commander in chief of the Indonesian National Armed Forces, wrote in the War Street Journal at around the same time.

“The Indonesian military has decided to strengthen its forces on Natuna. We will need also to prepare fighter planes to meet any eventuality stemming from heightened tensions on one of the world’s key waterways,” he added.

In February this year, General Moeldoko said he expected the South China Sea to be a “flashpoint” in the future.

Even Indonesia president Joko Widodo has chimed in on China’s nine-dash line, saying in March this year before a trip to Japan that the line has “no basis in any international law.”

China’s take on Greece- Euro to be significantly affected, U.S. Dollar to rise, which we don’t want to see

Taken from an op-ed in Beijing

After racking up debt as high as €400 billion since 2009 and being unable to pay off rescue loans from the European Union and the International Monetary Fund, Greece is on the verge of being forced to leave the eurozone. If this becomes a reality, the value of the euro will be significantly affected, and the US dollar will rise along with America’s political power, resulting in long-term effects neither Europe nor China will want to see, Mu added.

Europe is China’s largest trade partner and China’s slowing economy wants to keep expanding exports to the continent.

“Even though Greece is an internal EU affair, the issue concerns China, as a key EU trading partner, but also because it affects the world’s financial stability and economic recover.

To prevent the damaging effects of Greece leaving the eurozone, China should be willing to team up with the EU to formulate a rescue package but if the risks of Greece’s departure from the eurozone can be somehow contained — whether it is geographically or temporally — then the negative impact can be restricted, and China may even receive some benefits out of it.

The impact of the Greek debt crisis is undeniable, regardless of whether Greece leaves or stays in the eurozone. A near-€400 billion (US$446 billion) hole cannot be filled even with China’s intervention, meaning the long-term value of the euro must necessarily fall. Under such circumstances, China can use the opportunity to swoop up assets in Europe at a discount and increase cooperation with struggling European companies to the mutual benefit of both sides.

As to the second requirement, China is particularly concerned about the direct impact of the crisis on its investments at the port of Pireaus, Greece’s largest commercial seaport, where state-owned company COSCO controls several container piers and has been trying to acquire a majority stake since Athens put it up for sale.

While Greece only has a population of around 11 million people and has no natural resources for China to exploit, the port is a key piece of Chinese investment that can be considered a form of financial assistance, and Chinese leaders have plans to connect it to infrastructure investments in the Balkans and in southern Europe. Greece is thus a window to the Mediterranean and a pivotal point of the belt and road initiative for China.

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Chinese short seller found and captured

A Chinese short-seller was found hiding this weekend by authorities in a
squalid apartment in the Pudong district next to the new Disney theme park.
It’s a magical world after-all.

The short seller was found hiding with 2 cartons of Hongtashan
cigarets, a bottle of maotai, and 5 illegal pornographic DVD’s of Japanese
porn star Sola Aoi.

The short-seller is now in the custody of local authorities.

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China retains world’s largest spot gold trading market for 8th year

China has retained its lead as the world’s largest market for spot gold trading for the eighth year, as growing participation by offshore investors fueled trade growth, the Shanghai Gold Exchange said Thursday.

Trading of gold surged 166% during the first half this year to 17,520 tonnes, while that for silver jumped 151% during the same period to 380,000 tonnes.

Trading of bullion and silver totalled 4,764 and 525 tonnes respectively at an international board set up for offshore investors in the Shanghai Free Trade Zone in September.

The World Gold Council estimates demand for bullion from China and India, the world’s top two buyers, will stand between 900 to 1,000 tonnes this year.

Other than being the world’s largest producer and consumer of the precious metal, China is also striving for a greater say in the pricing of gold.

The Shanghai Gold Exchange will establish gold fixing denominated by the Renminbi by the end of this year in a bid to compete with London and the US Comex over pricing of the precious metal.

Currently the pricing of gold is dominated by western markets, as markets in the UK and the United States account for more than 90% of gold traded. China’s onshore gold market took up 4% of global turnover in 2013, according to ANZ.

“The opening up of China’s gold market to international investors could provide a sharp boost to trading volumes on the exchange,” said ANZ chief economist Warren Hogan in a March research note.

“The tendency of the Chinese market to trade at a discount or premium to the global spot price could also attract investors to the exchange, with the pricing of the contracts in renminbi being another attractive aspect,” Hogan said.

Ministry of Public Security going after Short Sellers

[Ministry of Public Security in conjunction with the recent Commission investigation of malicious short stock and stock index clues] correspondent was informed on the 9th morning, Vice Minister of Public Security Meng Qingfeng led to the Commission, in conjunction with the recent Commission investigation of malicious short stock and stock index clues show regulatory authorities to the operation of heavy combat illegal activities.

The PSB has vowed to crack down on illegal and criminal activities in the field of securities and futures as well as cracking down on the spread of rumors and have warned people could be prosecuted.

【公安部会同证监会排查近期恶意卖空股票与股指的线索】记者9日获悉,今天上午公安部副部长孟庆丰带队到证监会,会同证监会排查近期恶意卖空股票与股指的线索,显示监管部门要出重拳打击违法违规行为的动作。

Iranian oil about to flood the market

Rumors abound of Iranian oil set to flood the global market .It is highly
expected now that Iran will capitulate to inspections of nuclear facilities.

The impact will be to permit Iran to rejoin the global economy for the first
time in 36 years.

This paves the way for Iran to double its oil exports from 1.2 to 2.4 million
barrels a day immediately, and then double them again once desperately needed
energy infrastructure investments are made.

The Reuters news agency is reporting that 38 million barrels of Iranian oil
are sitting in 15 VLCC tankers slow cruising the Persian Gulf and Indian Ocean.

WTI is now down from $62 to $51, some 18% in only few weeks.

How low can the price go?

Saudi Arabia has started cutting prices for and is ramping up production. We could see
oil meet the $43 low of March after the summer driving season in the U.S.

Could it go lower?

Saudi Arabia’s current production cost is $5 per barrel , plus a 20% profit
margin and $4 for shipping. Back in 1998 were were at $8/barrel.

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