Archive for November 30, 2011

SocGen calls $8,500 Gold After QE3?-Must Read

 

 

74069786-Socgen-Patience-Bad-News-Will-Become-Good-News

 

China Banking Regulatory Commission (CBRC) Moves to Prevent Systemic Risk

Summary for CMR- Long Story Short, Chinese Banks need deposits. Deposit rate ranges paid out by Banks are fixed by the government and are not any higher than inflation. Money is not staying in cash on deposit at the Banks. Banks have created “Wealth management Products” to bring in capital and off-set bad loans.

 

China Banking Regulatory Commission (CBRC) held a meeting with senior
executives of major banks last week, and asked commercial banks to suspend
sales of wealth management products with maturities of less than one month until
the end of 2011.

CBRC’s main purposes for introducing this new tough measure are as
follows:
i) To curb commercial banks’ behavior of attracting deposits in
disguised forms. At the end of each month or quarter, banks tend to
adjust fundraising periods and maturity dates of wealth management
products to meet the regulatory requirements on such parameters as
deposit-to-loan ratio. Suspension of the issuance of wealth management
products with maturities of less than one month will make it more
difficult and costly for banks to attract deposits in such ways.
This is also in-line with CBRC Chairman Shang Fulin’s recent
restatement of strictly prohibiting deposit solicitation with high interest
rates, regulation avoidance and regulatory arbitrage by selling short-term
wealth management products.
ii) To prevent systemic risks. CBRC requires the investment portfolio
corresponding to each wealth management program to be managed
separately by banks. If the maturity of a product is relatively short, it will
be difficult to find matching assets with similar maturity, so long-term
assets have to be used to match several short-term products. As a result,
the underlying risks will increase accordingly. For instance, when bad
asset accounts occur or when asset returns are low, there will be problem
in the accounting of short-term wealth management products.
iii) To slow the growth of both wealth management product issuance
and balance of wealth management products. According to
CNBENEFIT (普益财富) statistics, the ratio between corporate clients
and individual clients is 3:7. We estimate issuance in value terms will
drop 20%, and the balance of deposits at month-end and quarter-end will
be less volatile.

Macro CBRC on short-term wealth management 112111

Tis the Season…East meets West in the Global Economy

China Market Wrap-28NOV2011

 A-shares
.
- China Everbright Bank Co Ltd <601818.SS> has revived its Hong Kong listing plan and has submitted an application to the stock exchange with a scaled-down offering of HK$15 billion ($1.9 billion), the China Securities Journal said on Tuesday.

- Nearly all Chinese export companies have already been hit by Europe’s debt woes, according to a survey released on Monday showing just how fast the crisis is rippling through the global economy.
. 

• H-shares


PICC Property and Casualty Co Ltd <2328.HK> said on Tuesday it planned to raise 5 billion yuan ($783.20 million) by way of rights issue, raising capital to strengthen its capital base and to improve its solvency margin.
CNOOC Ltd <0883.HK> closed its C$2.1 billion ($2.04 billion) acquisition of Opti Canada Ltd <OPC.V> on Monday, giving China’s top offshore oil company its second stake in a Canadian oil sands property.
- Cosmetics group L’Occitane International S.A. <0973.HK>, the first French company to list in Hong Kong, said on Monday its net profit in the fiscal first half ended in September fell 3 percent from the year ago period.

- Property developers CapitaLand <CATL.SI>, CapitaMalls Asia<CMAL.SI><6813.HK> said on Tuesday that together with Singbridge Holdings Pte Ltd, they have been awarded a site in Chongqing, China, for the price of S$1.28 billion ($985.30 million).

- Jewellery retailer Luk Fook Holdings (International) Ltd<0590.HK> said its profit attributable to equity holders rose to HK$719.6 million for six months ended in September, from HK$319.8 million in a year ago period, thanks to increasing visitors numbers and appreciation of Chinese yuan which boosted spending. It said it would accelerate expansion of China retail network.

China Wary of Choking on Dollar Driving Hong Kong Dim Sum Bonds

As reported in Bloomberg

The helicopter swooped over Hong Kong’s Victoria Harbor trailing a huge red-and-white banner: RMB SOVEREIGN BONDS. There were billboards on buses and banks and at the entrance to the cross-harbor tunnel.

The city’s biggest sale of bonds in China’s currency, the renminbi, may not have blown away the man and woman on the street. Yet the burst of advertising in August did signal just how important the event was to the Beijing government and to the bankers and traders who feed off the Chinese economy, Bloomberg Markets magazine reports in its December issue.

Nicknamed Dim Sum bonds after Hong Kong’s favorite dining pastime, the securities are the hottest financial innovation in town.

“It’s probably the fastest-growing market I’ve seen in my career,” says Tee Choon Hong, a 20-year banking veteran now at Standard Chartered Plc. (STAN)

Dim Sum bonds have come into their own this year.

The first-ever Dim Sum bond was sold by China Development Bank Corp. in July 2007. That maiden sale was a solid indication of China’s interest in promoting its currency in global trade and investment via yuan-denominated bonds: CDB is one of three banks in China responsible for raising funds for large infrastructure projects such as the Three Gorges Dam and Shanghai Pudong International Airport.

From then until July 2010, only Chinese and Hong Kong banks were allowed to issue bonds denominated in yuan, the basic unit of the renminbi. Now all banks can.

A Bright Spot

The surge in Hong Kong this year has been electrifying, says William Liu, a Hong Kong-based partner at Linklaters LLP, an international law firm.

“The changes are so rapid that I have to amend my slides every time I give a presentation,” Liu says.

The appetite for Dim Sum debt is one of the few bright spots in the Hong Kong economy.

Gross domestic product edged up 0.1 percent in the third quarter from the previous months, compared with a 0.4 percent contraction in the second quarter, as Europe’s crisis created a drag on overseas sales.

Exports declined in September for the first time in almost two years. The Hong Kong stock market fell 21 percent during the third quarter, its worst performance in a decade.

Donald Tsang, the city’s chief executive, said on Nov. 12 that Hong Kong’s economy may face “some shocks” in the coming quarters. The government lowered its estimate for the full-year expansion to 5 percent from a range of 5 percent to 6 percent in an August estimate.

Bankers Cheered

Against this backdrop, the dim sum bond boom has cheered bankers in Hong Kong, one of two former colonies designated as special administrative regions by Beijing. (The other SAR is Macau.)

“The offshore yuan business offers one of the most exciting new opportunities for Hong Kong,” says Gina Tang, head of debt capital markets for Hong Kong and China at HSBC Holdings Plc. (5) “Banks are actively recruiting to build up their teams.”

Sales of Dim Sum bonds rose from the third quarter of 2010 onward following a decision by the Hong Kong Monetary Authority to give companies greater freedom to sell yuan bonds.

At the same time, China made it easier for corporations to settle trades in the Chinese currency.

With Hong Kong’s currency — the dollar — pegged to the U.S. greenback and its near-zero interest rates set by the U.S. Federal Reserve, the former colony offers bargains for mainland Chinese visitors as well as borrowing costs that are lower than China’s, which were set at 6.56 percent in July.

Hedging Dollar Bets

That makes it advantageous for foreign companies with China operations to raise yuan in Hong Kong, says Augusto King, co- head of debt capital markets for Asia at Royal Bank of Scotland Group Plc in Hong Kong.

Reflecting a trend, McDonald’s Corp. issued 200 million yuan of debt in August 2010, marking the first Dim Sum deal by an overseas nonfinancial company.

Bond sales by Caterpillar Inc. (CAT), Volkswagen AG (VOW) and Tesco Plc (TSCO), leading a charge of over 80 issuers, could bring total sales to 230 billion yuan ($36 billion) this year, a sixfold jump from last year, according to HSBC. The lender forecasts Dim Sum bond sales could total as much as 310 billion yuan in 2012.

Dim Sum bonds are a way for China to hedge its dollar bets. The world’s second-largest economy is promoting the use of yuan in global trade and finance because the weakness of the U.S. dollar may hurt its record $3.2 trillion in foreign-exchange reserves.

Hong Kong’s Ambitions

Dim Sum bonds also provide investment channels for yuan holders outside of China, paving the way for the yuan to be fully convertible and held by central banks as reserve currency, says Frank Song, an economics professor at the University of Hong Kong.

The dollar, held in large quantities by most governments in the world as part of their foreign-exchange reserves, is currently the world’s major reserve currency. If the yuan goes global, it’s less necessary for China to hold such huge reserves, Song says.

As for Hong Kong, Dim Sum debt helps it diversify its equities-focused financial market. The bond sales also bolster Hong Kong’s ambitions to become China’s most important offshore yuan-trading center while fending off threats from rival financial centers in Asia.

Since Hong Kong returned to Chinese rule in 1997, the former British colony has steadily lost ground to regional competitors Shanghai and Singapore in terms of GDP.

Mainland Markets

In 2009, Shanghai’s economy exceeded the size of Hong Kong’s for the first time in at least three decades. In coming months, Singapore’s GDP is expected to reach $254 billion compared with Hong Kong’s $245 billion in inflation-adjusted terms, according to International Monetary Fund estimates.

Speculation by investors betting that the yuan will appreciate against the dollar is fueling demand for Dim Sum bonds from those unable to access mainland markets.

Yuan deposits in Hong Kong totaled 622 billion yuan in September, up 98 percent from December. That provided a ready pool of funds for investment. By comparison, savings in Hong Kong dollars fell 0.2 percent during the same period.

Hong Kong’s income as a yuan offshore center will expand as Chinese currency deposits in the city increase to 2 trillion yuan by 2014, Deutsche Bank AG’s chief China economist Ma Jun estimates. Growth in yuan bond sales is expected to add about 30,000 financial jobs in Hong Kong in the next five years, Ma says.

‘Actively Support’

Chinese government policy promotes Hong Kong’s position as a yuan offshore center.

“The central government will actively support the growth of the renminbi market and the innovation and development of offshore yuan financial products in Hong Kong,” Chinese Vice Premier Li Keqiang said during a visit to Hong Kong in August.

Li pledged to allow more Chinese companies to sell yuan bonds and to encourage foreign direct investment in yuan.

As of Nov. 14, Standard Chartered’s Tee had concluded 45 Dim Sum bond deals out of Hong Kong; that’s more than the total number of yen, dollar and euro transactions done by Standard Chartered in the entire Asia-Pacific region, excluding Japan.

Debt is not the only yuan-denominated type of security on offer in Hong Kong.

In April, the city’s richest man, business magnate Li Ka- shing, sold units of Hui Xian Real Estate Investment Trust, the city’s first stock denominated in yuan. He raised $1.6 billion.

Natural Pioneer

Hong Kong Exchanges and Clearing Ltd. (388), the stock exchange, says it’s targeting more initial public offerings by the end of the year and will allow listed companies to sell shares in yuan. In October, Hong Kong’s Chinese Gold & Silver Exchange Society, a century-old bullion bourse, started trading gold quoted in yuan.

It’s natural that Beijing would pioneer yuan bonds in Hong Kong, given the former colony’s history.

In 1992, five years before the handover to China, Hai Hong Holdings Co. was the first Hong Kong-incorporated Chinese enterprise, or so-called red-chip firm, to list its shares on the city’s exchange through an IPO. A year later, Tsingtao Brewery Co., the country’s second-largest brewer, became the first China- incorporated company to trade on the exchange.

In 2005, Bank of Communications Co. went public in Hong Kong, making it the first Chinese bank to be listed outside the country.

“Hong Kong is a unique place for the experiments and initiatives to promote yuan as a global currency because it’s much closer to the international financial community,” Tee says.

Faster Than Anticipated

Yuan-based trade is one step toward a fully convertible Chinese currency, which is what the U.S. and Europe are demanding from Beijing as a condition for the renminbi to become part of the IMF basket of reserve currencies now restricted to the dollar, euro, yen and pound.

People’s Bank of China Governor Zhou Xiao-chuan has said that while there’s no timetable for convertibility, the offshore yuan market is developing faster than the central bank anticipated.

About 9 percent of China’s trade in the first half of this year was settled in yuan, according to the Hong Kong Monetary Authority. Hong Kong now handles more than 80 percent of China’s trade settled in yuan.

Under China’s latest five-year plan, Hong Kong will continue to develop as the world’s most important yuan-trading hub. Chinese officials told European Union business executives that the yuan will be fully convertible by 2015, EU Chamber of Commerce in China President Davide Cucino said on Sept. 7.

Singapore Challenge

The embrace of yuan-denominated debt in Hong Kong hasn’t gone entirely smoothly.

Dim Sum bond sales slowed in July after Muddy Waters LLC, a short seller, said some Chinese companies, including the forestry company Sino-Forest Corp. (TRE), may have exaggerated assets and finances, which led to concern among investors about the ability of firms to repay loans.

Yuan bond sales revived in the following month, boosted by the Chinese Ministry of Finance’s sale of 20 billion yuan in bonds and by Beijing’s pledge to allow easier transfer of funds across the border.

Also, Hong Kong may have to contend with competition from Singapore, which is also looking to offer yuan products, according to King.

Singapore this year surpassed Tokyo as the busiest market for currency trading in Asia. Average trading volumes rose to $314.2 billion in April, higher than Tokyo’s $277.9 billion.

‘Big Meals For Many’

Shanghai aspires to be the nation’s international financial center by 2020, while London is eager to build up its own offshore yuan-trading capability.

Furthermore, Dim Sum bonds haven’t been immune to the recent global market rout.

In these adverse conditions, investors are demanding additional protection for holding the securities. The average yield on yuan-denominated bonds has risen 57 basis points to 3.805 percent since August. It reached a record 3.837 percent on Nov. 3. (A basis point is 0.01 percentage point.)

None of this has diminished the prevailing mood of optimism among bankers and investors in Hong Kong.

The number of banks arranging Dim Sum bond sales in Hong Kong totaled 36 as of Nov. 14; for all of 2010, the number was 14. Underscoring the internationalization of the business, HSBC overtook Bank of China Ltd. (3988) as the top underwriter of the securities this year.

“Yuan internationalization will be one of the most important episodes of Hong Kong’s history in the next 20 years,” Song says, inevitably serving up a culinary metaphor. “With more issuers tapping the market, Dim Sum bonds will become big meals for many.”

To contact the reporter on this story: Fion Li in Hong Kong at fli59@bloomberg.net

To contact the editor responsible for this story: Laura Colby at lcolby@bloomberg.net

Chinese Blitzkrieg Planned for Global Mining Sector in 2012

What else to do with the $3.5 Trillion FX reserves? Global fiat currencies are becoming a hot potato and China knows it. Look for major M&A and outbound FDI from China in 2012 and beyond.

From the China Daily..

BEIJING – Chinese mining companies will continue to increase both purchases and investment in the overseas resources market in 2012, even though costs and challenges in the industry are rising, said experts.

“China has continued to gain strong influence in the global mining sector against a background of increasing activity in the acquisition of overseas resources,” said Jeremy South, global mining leader at Deloitte Touche Tohmatsu Ltd (DTT) on Thursday.

South said that Chinese mining companies were “a bit quiet” in terms of overseas mergers and acquisitions (M&A) in the first half of this year because of the soaring price of high-level resources. However, he added that now is a good time for M&A activity because of a slight rebound in the price of resources after huge declines in recent months.

He predicted that Australia and Canada will continue to be the main target markets for overseas investment, but said that Chinese mining companies will continue to invest in and explore more mines in other countries such as those on the African continent.

He added that possible resource and carbon taxes, proposed by the Australian government and likely to come into effect in July next year, will undoubtedly impose pressure on Chinese mining companies.

“Canada is expected to see an increase in investment from Chinese companies in the mining industry,” said Glenn Ives, North American Mining Leader at Deloitte Canada. “In recent years, Canada has only rejected two M&A approaches, which came from the United States and Australia. The country warmly welcomes Chinese investors in the mining industry.”

However, Deloitte’s South said Chinese companies need to find the right partners because the mining industry is a highly risky business and most Chinese companies lack experience of overseas business management.

One recent example of an unsuccessful overseas mining deal is the suspension of an iron ore project by a subsidiary of Sinosteel Corp Ltd in Western Australia, because of problems with the local infrastructure.

Industry insiders said China has signed many M&A contracts with foreign companies, but not all of the deals will be completed because of alleged problems with the managements of the foreign targets.

The management risks are big for Chinese companies, said Andrew Zhu, a partner in tax and business advisory services at DTT.

He said Chinese companies should build better relationships with foreign companies to ensure cooperation in the exploration of resources.

Chinese companies may have to look further than they had anticipated to attract the necessary funds over the long term, according to the DTT report. They also need to build the relationships required to gain access to foreign markets, while gaining better insight into those regions, it said.

(China Daily)

The Horror….The Horror…Banks Crank Up Doomsday Machine.

Banks increased total outstanding derivatives by a record $107 Trillion in 6 Months. The grand total has reached over $708 Trillion.

This number represents the latest total amount of all notional Over The Counter (read unregulated) outstanding derivatives reported by the world’s financial institutions to the BIS for its semi-annual OTC derivatives report titled “OTC derivatives market activity in the first half of 2011.” Indicatively, global GDP is about $63 trillion.

China’s Agricultural Bank Starts New Gold Mutual Fund in China in Effort to Bring Gold to the People.

Today, China’s Agricultural Bank of China (ABC),one of the top 4 banks in China announced the start of their new Gold Mutual Fund for small investors. Small investors can purchase Gold in amounts as small as 1 gram per purchase. ABC banks press release stated that more and more investors have started to invest in gold and the price appreciation has put gold purchases above the capability of small investors. Therefore, ABC Bank is launching its “Gold Savings Project” which they believe will be very suitable for small investors. Investors can have set amounts from their cash savings directly deposited into the gold mutual fund. As their amount of gold holdings increase over time they can keep these savings in paper gold on deposit or withdraw gold bars. All investors no matter what their purchasing power should have access to Gold savings stated the manager from ABC.

BREAKING……Muddy Waters Short Selling Site Hacked by Chinese

From Muddy Water website at www.muddywatersresearch.com
MW regrets that our site has been hacked. We will bring it up as soon as possible.
FMCN is still a Strong Sell.
Happy Thanksgiving,
MW

 

 

 

 

 

From the China Money Report- We have not reviewed his latest call on FMCN which is Focus Media Holding. I would not be surprised however to find out he is wrong AGAIN. We have followed Muddy’s work closely and were impressed with the low hanging fruit they took out short selling. It is the opinion of CMR that most Chinese RTO companies listed in the U.S. have BIG problems. However, Muddy did not stop there, they called out Spreadtrum Communications with no evidence or logic at all to their argument. We at CMR bet heavily on the company after he made the call and have returns of over 300% since the lows.See our free issue of CMR for more details. Muddy has also failed with his call on Silvercorp. We will see how the action flows on this call.

 CMR UPDATE1- 24NOV2011

When a company is under attack, the best way to squeeze the short-sellers, is to buy back shares. Both Spreadtrum and Silvercorp did that and rebounded. If you shorted Spreadtrum…you got HAMMERED. Sinoforest never bought back shares…because they were a fraud-

The Fosun Chairman just bought back shares…

- China’s top private conglomerate Fosun International Ltd<0656.HK> has acquired $10.35 million worth of shares in Chinese digital advertising firm Focus Media Holding Ltd

 

China to Cut Rare Earth Export Quota’s in 2012?

China’s rare-earth exports have recently retreated due to weakening overseas demand and the nation may cut export quotas for the precious metals next year, the National Business Daily reported on Wednesday.

Since the beginning of this year, high referential prices set by customs have impacted rare-earth exports as the official guide price is much higher than spot prices, according to Du Shuaibing, an analyst at a local rare-earth information provider.

In September, the average price of neodymium oxide was RMB 1.1 million ($173,000) per tonne in China, but the average export price was RMB 2.1 million a tonne, according to data from commodity information provider 100ppi.com.

China’s rare-earth export quotas would be capped at 30,000 tonnes in 2012 as this year’s quota has not been used up, an industry insider was cited as saying. The nation’s export quotas for rare-earth were set at 30,184 tonnes for this year, but only 12,000 tonnes of rare-earth products were exported in the first 9 months.

He estimated the remaining quota in 2011 would be around 8,000 tonnes, the insider said.

Rare-earth prices are also falling domestically due to sluggish demand, the paper said.

Trade is thin as downstream clients are expecting lower prices, Liu Ruixing, analyst at 100ppi.com, told the paper.

It is likely the central government will cut exports quota next year in view of consumption and international demand, Liu added.

Our view at CMR is that the goverment will cur export quota’s next year. Baosteel who currently controls 87% of global production is buying material on the open market in order to control price. They have also stopped production for one month in order to support price levels.

 

 

 

 

 

 

 

 

Chinese State Media Says U.S. Ignoring “Debt Bomb”

When this thing finally goes off….you don’t want to be anywhere around it.

BEIJING (Reuters) – The United States has ignored a “ticking debt bomb” in admitting defeat in reining in the country’s ballooning debt, Chinese state media said Tuesday, criticizing U.S. legislators for neglecting their duty to the world.

Monday, Republicans and Democrats on a 12-member congressional “super committee” said they were too divided to tackle trillion-dollar budget deficits and a national debt that is roughly equal to the U.S. economy.

China’s official Xinhua news agency, in an English-language commentary, blamed the “miscarriage” on political wrangling ahead of a U.S. election season, and said it would overshadow flimsy market confidence around the world.

“America’s nonsensical domestic political wrestling” has proved its inability to “step up and shoulder its responsibility” to help spur sustainable and balanced growth in a bearish world economy, the news agency said.

“Washington’s political elites … are obligated to muster the courage to defuse the ticking debt bomb and start to show the world they have the wisdom and determination not to further jeopardize the fragile global economic recovery,” Xinhua said.

Such commentaries in state media do not represent official policy of China’s ruling Communist Party but provide insight into government thinking.

U.S. lawmakers’ failure to agree on $1.2 trillion in deficit reduction sets up a year of uncertainty on taxes and spending that could further rattle investors already shaken over euro zone debt woes.

The U.S. Congress is set to deliver those budget savings through automatic cuts to defense and domestic programs, but some Republicans have vowed to prevent them from hitting the military. Obama said he would veto any effort to do so.

“U.S. politicians have never shied from lecturing other countries about global responsibility, and now it is high time they showed a sense of true global leadership,” Xinhua said.

(Reporting by Michael Martina; Editing by Robert Birsel)

Apple Adopts Yuan for Online Payment

BEIJING / SHANGHAI – Apple Inc’s online store has started accepting payments made in Chinese yuan, to gain a further foothold in the world’s biggest Internet market.
The App Store, which sells software applications for devices such as the iPhone and iPad, started accepting the currency last week in an unannounced move.
“The service has been there since last Friday. It’s really good news for our customers and local application developers,” said a spokeswoman for Apple China, but she declined to comment on the timing of the move.
The App Store previously listed prices and accepted payment in US dollars, requiring consumers to use payment cards with access to foreign exchange.
The online store will now accept yuan credit and debit cards issued by more than 20 banks, according to a customer services representative.
Because Chinese users had to previously use overseas credit cards to pay for applications, identity thieves stole credit card information used to obtain Apple IDs registered to overseas customers and then sold the information to Chinese customers.
When Apple discovered that the Chinese accounts were fake, the company blocked the IDs and returned the money to the genuine cardholders. That move is alleged to have resulted in Chinese application developers failing to be paid for downloads of their applications by people using the fake IDs.
Diehard fans in China, which has an online population of more than 500 million, have been known to line up for days to get their hands on the latest Apple products.
Analysts said allowing payment in yuan might not provide a large revenue boost for the company, because customers can also download pirated applications for free.
“Users who do not want to spend money in the first place will not spend money simply because you allow them to pay in yuan,” said Sun Peilin, a Beijing-based analyst with the consultancy Analysys International.
The California-based Apple has recently expanded aggressively in China, opening its first store in Hong Kong and its third in Shanghai in September, bringing the total to six on the mainland and Hong Kong.
China has become Apple’s fastest-growing region, with revenue of $4.5 billion in the company’s fiscal fourth quarter, a figure only surpassed by the United States.
China Daily – AFP

China Market Wrap Up

A-shares
- China’s Yanzhou Coal Mining Company Limited <600188.SS> <1171.HK> will produce more than 20 million tonnes of coal from its Australia assets in 2011 after the company signed two M&A deals in Australia earlier this year, Zhang Minglin, vice general manager of parent Yankuang Group, said on Tuesday.

H-shares

- PCCW Ltd’s <0008.HK> HKT Trust prices its Hong Kong initial public offering (IPO) at HK$4.53 per unit, the bottom of an indicative range, putting it on course to raise about $1.2 billion. The units are expected to commence trading on November 29.

- Chinese sportswear brand Li Ning Co Ltd <2331.HK> said on Tuesday that it has recorded flat growth in the value of orders for delivery in the second quarter of 2012, while order value for the first half grew at low single-digit percentage year on year.

- AIA Group Ltd <1299.HK>, Asia’s No.3 insurer, said on Tuesday it was investing 10.5 billion baht ($337 million) in Thailand through two large-scale real estate projects.

- Property group New World Development Co Ltd <0017.HK> said on Tuesday that Hong Kong home prices could fall 8 to 10 percent over a short period, calling it a reasonable drop given that the government has continued to bring new land supply to the market.

- China Gas Holdings Ltd <0384.HK> said it expected to record a significant increase in profit for six months ended in September against the same period a year ago thanks to an improvement in natural gas and LPG businesses operations and a reduced non-operating expenses during the review period.

China to Spend a Massive Sum of $1.7 Trillion USD into Strategic Sectors

China confirmed to visiting U.S. officials that Beijing planned to pour $1.7 trillion into strategic sectors over the coming five years, U.S. Commerce Secretary John Bryson told reporters on Monday. The confirmation of the huge sum underlines Beijing’s ambition to refocus the growth engine of the world’s No.2 economy on cleaner, hi-tech sectors while boosting domestic growth as the global economy struggles.

Reuters reported a year ago that Beijing was considering investing 10 trillion yuan ($1.7 trillion) over five years in seven strategic industries, but Beijing has never confirmed the move, which was 2.5 times bigger than the eye-popping 4 trillion yuan fiscal stimulus package launched during the global financial crisis in 2008.

CMR Editor, Dan Collins interviewed on the program “On the Edge” with Max Kesier

Did China Just Shout “Ma Tay” on RMB Apreciation?

In the 1980′s classic “Bloodsport”, the famous Hong Kong Kung Fu action star Bolo Yeung plays the character of a champion fighter who kills a fellow contestant before fighting Jean Claude Van Damn in the final. Despite the constant cheating of Bolo, It ends as Van Dam places him in a neck breaking lock and Bolo is forced to shout….”May Tay!!!…or Uncle.
 One could imagine that President Obama had some serious ramifications on Chinese trade policy ready to put in place had Premier Wen not agreed over the weekend to some secretive RMB appreciation schedule. My guess today is high placed Democratic donors are now rushing to buy long calls on the RMB.

* China to allow more yuan flexibility in either direction -Wen

SHANGHAI, Nov 19 (Reuters) – China will make the yuan more flexible in either direction and recent reforms to make the currency more market-oriented have begun to achieve some results, Premier Wen Jiabao said on Saturday.

“China will continue to closely monitor the yuan’s trading movements … and will strengthen yuan’s trading flexibility in either direction,” the premier was quoted as saying in an evening news bulletin on state broadcaster CCTV.Wen’s comments on the yuan were in line with recent central bank moves to encourage the yuan’s value to fluctuate more widely within the daily trading band. The People’s Bank of China (PBOC) allows the yuan to rise or fall 0.5 percent from its daily mid-point.

Some analysts and traders have argued that the central bank has been laying the groundwork for a widening of the trading band, which would allow China to say in the face of renewed U.S. pressure over the yuan that it is indeed moving ahead with reform to loosen its grip on the currency.

The Only Chinese Hard Landing Will Be On America’s Head

A lot has been made of the so-called Chinese property bubble. And after 2008, when America’s subprime bubble was the straw that broke the camel’s back, who can blame those who see China as low-hanging fruit? In the hedge fund world, both Hugh Hendry and  Jim Chanos (among others) are significantly outperforming the market by shorting Chinese companies.

But the naysayers will be proven sorely wrong.

 

http://azizonomics.com/2011/10/02/the-only-chinese-hard-landing-will-be-on-americas-head/

China Applies Five Finger Death Touch to Another Business Fraudster

The culling continues.
As reported today in the Suzhou evening news.
Former President Shen Changfu of China Mobile Telecom Chongjing Co, Ltd was sentenced to death on charges of taking bribes of over 36 million RMB. (Around $6 million U.S.D) On 17Nov, 2011 his son Shen Juncheng was sentenced to ten years in prison for taking bribes valued at 13 million RMB ($2M USD) In this case, the son was using his fathers connections to support getting new contracts for companies. He was then paid dividends by the companies.

 

China’s gold demand might exceed 750 tons in 2011.

As reported today in Caijing. Chinese Gold demand this year may top 750 tons. The Western nations just do not get it. They will print and print and print, sending bad price signals into the markets. Autobot computers and Hedge Funds trading on momentum will will drive prices down with naked shorts. But on every dip, the Chinese will continually and quietly take the physical stuff off the market. One day, the paper exchanges will crash and someone will realize their is no more Gold and Silver…. in the U.S. at least.

http://english.caijing.com.cn/2011-11-18/111420539.html

Beijing Professor Warns Students…Go make 40 million by 40 or forget you know me.

An interesting take on Chinese society. As professors in the West focus on progressive left wing socialism, Chinese professors start to resemble Ayn Rand.

Beijing Normal University professor “warns” students: If you don’t have 40 million($6 million USD) by the time you are 40-years-old, don’t come see me
Dong Fan: When you are 40-years-old, if you don’t have 40 million in assets, don’t come see me, and don’t say you were my student either——This is the requirement I have for graduate students. Cultivating a consciousness of wealth is one aspect of my work, and of course, the precondition is that the wealth is reasonably and legally earned. Once you yourself have become rich, that means that you have created a lot of GDP, tax revenue, and jobs. When your contribution to society is large, it also helps low-income people, as well as preventing yourself, your family, and your relatives from become a burden upon society. For highly-educated people, wealth signifies struggle and effort, whereas poverty signifies inability, laziness, shame, and failure.

http://www.chinasmack.com/2011/stories/beijing-professor-demands-students-have-40-million-by-age-40.html