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China Market Update

China’s PE fund capital exceeds 10 trillion Yuan for first time

Odds of Chinese invasion grow as China warns ‘will not accept North Korea as nuclear weapons state.’

China ‘will not accept North Korea as nuclear weapons state’, ambassador warnsChina has warned that it will never accept North Korea as a nuclear weapons state, Beijing’s ambassador to the US warned, just hours after Kim Jong-un said his country was on course to achieve that “final goal”.

Speaking at a Chinese embassy event in Washington DC, Cui Tiankai also called on Donald Trump’s administration to stop sabre-rattling against the secretive communist state.

Instead the US should “resume dialogue and negotiation” over the stand-off, he said.

“Honestly, I think the United States should be doing much more than now, so that there’s real effective international cooperation on this issue,” he told reporters.

“They should refrain from issuing more threats. They should do more to find effective ways to resume dialogue and negotiation,” he said, while adding that China would never accept North Korea as a nuclear weapons state.

His comments came within days of North Korea firing another ballistic missile over Japan that landed in the Pacific Ocean.

It came despite threats by US President Donald Trump that the communist state would feel the “fire and fury” of his armed forces unless it halted its nuclear weapons programme.

Pyongyang shrugged off the rhetoric and launched another deadly Hwasong-12 in its goal to become a nuclear power and reach an “equilibrium” of military force with the US.

Mr Trump described the move as an act of “utter contempt for its neighbours and the entire world” and warned any US response would be “effective and overwhelming”.

North Korea on Friday launched its latest ballistic missile – which travelled past Japan’s northernmost island of Hokkaido before landing in the sea.

Its leader Kim Jong-un, who was quoted by the state news agency KCNA, later said: “Our final goal is to establish the equilibrium of real force with the US and make the US rulers dare not talk about military option.”

In response, President Trump warned that American military options were robust should they be required to respond to threats from Pyongyang.

Speaking at Joint Base Andrews, the Air Force installation outside Washington, Mr Trump said: “America and our allies will never be intimidated. We will defend our people, our nations, and our civilization, from all who dare to threaten our way of life.

“This includes the regime of North Korea, which has once again shown its utter contempt for its neighbours, and the entire world community.”

China Market Update-11SEPT17

China building world’s biggest quantum research facility

SCMP

Centre could boost military’s code-breaking ability and navigation of stealth
submarines China is building the world’s largest quantum research facility to
develop a quantum computer and other “revolutionary” forms of technology that
can be used by the military for code-breaking or on stealth submarines,
according to scientists and authorities involved in the project.

The National Laboratory for Quantum Information Science will be located on a
37-hectare site next to a small lake in Hefei, Anhui province. Some time this
month developers will be invited to bid for a contract to construct the site,
according to an article in Hefei Evening News, a daily newspaper run by the city
government on Thursday.

Pan Jianwei, China’s lead quantum scientist who was playing a key role in the
project, told local officials at a briefing in May that technology developed in
the facility would be of immediate use to the armed forces, according to Anhui
Business Daily newspaper.

Quantum metrology, which measures small variations in physical parameters such
as gravity with unprecedented accuracy, could significantly improve submarines’
stealth operations. A submarine with a quantum navigation system could operate
underwater for more than three months without the need to surface for positioning
satellite signals.

After operating for 100 days underwater the captain would still be able to pinpoint
the vessel’s position in the Pacific Ocean with a margin of error of just a few
hundred metres according to Pan, who could not be immediately reached for comment.

Another key mission of the laboratory is to build the nation’s first quantum computer
that could break an encrypted message in seconds.

“Our plan is that by 2020, or maybe as soon as next year, to achieve ‘quantum
supremacy’ with calculation power one million times to all existing computers around
the world combined,” Pan was quoted as saying by Anhui Business Daily, which is run
by the provincial government.

It was unclear whether the computer could be used for code-breaking. Construction work
is expected to finish in 2 ½ years with a budget of 76 billion yuan (HK$91.6 billion).
Ground-clearing work started with approval from the central government in February,
according to the website of the Chinese Academy of Sciences, the owner of the new
facility.Guo Guoping, a quantum information researcher at the Chinese Academy of
Sciences in Hefei, said

a large facility with centralised resources could accelerate this process by pulling
together the talents of scientists from all over the nation with knowledge and
experience of multiple scientific disciplines to overcome a wide range of technical
and engineering hurdles, he said.

Guo stressed that in the national laboratory, researchers’ performance should not be
evaluated by the scientific papers they published but by their contribution to specific
project targets,such as building a general-purpose quantum computer.

“This may sound a bit old-fashioned, even Soviet-style, but it can give China a chance
to win the race,” he added.China moved a step ahead with the launch of a quantum
satellite last year and conducted a series of cutting edge experiments such as quantum
entanglement and teleportation in space. Last month the world’s longest and most
sophisticated quantum key distribution network for ultra-secure communication between
Beijing and Shanghai was successfully tested and deemed ready for official deployment
in the military, government and financial sectors.

Guo said the field had advanced rapidly, but the delivery of a code-breaking machine
by 2020 was “highly unlikely”. Over the next few years, researchers from around the
globe may be able to develop primitive quantum computers to deal with some specific
tasks. They could, for example, simulate the movement of particles at a subatomic
level to solve some physical problems that might help develop new materials or drugs.
But these are not general-purpose computers capable of code-breaking, Guo added.

Fatty Kim Sends Another missile this time directly over Japan

North Korea has fired a missile over Japan for the first time since 2009, a
startling act of defiance against the US and its allies that Japan’s Prime
Minister Shinzo Abe immediately branded “unprecedented, serious and important”.

South Korea’s Joint Chiefs of Staff said the ballistic missile travelled
around 2,700km and reached a maximum height of 550km as it flew over the
northern Japanese island of Hokkaido around 5.06am Tuesday Hong Kong time.

Trumps team can’t find tariffs. It Better Hurry or the Future belongs to the Crowds.

CMR

Don DeLillo’s prophetic 1991 novel, “Mao II”: “The future belongs to crowds.
” Movements will be massive. The street will rise and push.

It’s no secret the American worker has been dashed on the rocks of globalization.
The trifecta of global protectionism; Japan, S.Korea, and China have built up large,
advanced economies on the back of tariffs and non-tarrif trade barriers. The U.S.
rightly looked the other way to help Japan and later S.Korea get back on their feet
after the devastation of WW2 and later the Korean War. The American steel and
automotive industries took the largest hits. We are now in a 3rd decade of a
depression in American manufacturing.The production of automobiles (not sales) is
less than it was 20 years ago. The U.S. is a laughing stock when it comes to steel
production and infrastructure. Most great American cities look stuck in time.

Japanese won’t buy Korean cars and Korean’s will not buy Japanese cars. Neither one
of them will buy American.

Both countries have put massive amount of government money into displacing American
firms in new technical fields. An American shipping or shipbuilding industry, they
is none. Need Advanced machine tools? You will need to talk to the Germans or Japanese.

This caniblization of American markets is but one tool in the toolkit. Your companies
have trouble, just devalue your currency. Currency manipulation, government funded
R&D, government funded access to low interest loans and of course structural delays
at customs, not to mention outright theft of R&D. All weapons in the ongoing trade
war that America forgot to fight.

Then along came China. Twenty times the size of Japan. Free trade and global
integration were to bring the Chinese into the global order. It didn’t work.
The Chinese will politically do what is best for them and guess what, they like
the CCP.

Unlike the American allies of Japan, and South Korea the Chinese market has been
relatively open but yet tightly controlled. The banking system, oil & gas, vehicle
production, technology are all examples with government ownership and control.
Most of these areas are locked out to foreign companies. Many foreign companies
have benefited in China not just by selling into the market but by doing their
manufacturing here. In fact, half of the U.S. trade deficit with China is due to
American companies manufacturing and shipping back from China.

The American consumer has benefited greatly as the Walmart’s,Autozones,and virtually
every other company started importing every type of consumer good from China.

Under this world order the Americans have continued to live far above their means
with massive current account and trade deficits. The Dollar has stayed strong as
these Asian currencies continue to prop it up with large purchases of U.S. Treasury
Bills. The reason for that is to keep their own currencies low of course and vendor-
finance there countries products into the American market.

The issue we have now is that no system lasts for ever. America has 100m people of
working age that don’t work. The millennial class are suffering from government-
induced disasters of health care and education expenses. There is no ladder for
young people to the middle class and the middle-class is shrinking rapidly. So you
get what we have here which is people hitting the streets.

What they protest for doesn’t matter. The mobs will find a cause,any cause, to
displace the current social order.

With that being said, we recommend the U.S. solution is to just do what China does
best. Copy. Start by copying every tariff on U.S. goods in the China market and bar
access to the U.S. market which is not an open market in China. You then modify
the tax structure to fund the government through consumption taxes and not productivity.

China Market Update- 28AUG2017

China-Saudi Team Up in $20 billion Investment Fund

Article here

Video Emerges of Indian and Chinese troops clash at Pangong Tso Lake.

China Market Update

Full Article Here

China has 20 new nuclear power plants under construction including the first meltdown-proof reactor

SCMP
21AUG2017

China has 20 nuclear power plants under construction, more than any other country on earth. With Sanmen, the industry is hoping to get the nod to build more reactors at home, and even export the AP1000 technology.

At a small peninsula facing the East China Sea in Sanmen county in Zhejiang province sits the world’s most advanced nuclear reactor, and China’s clarion call to the clean energy industry.
Some day over the next two weeks, the power plant will start loading more than 100 fuel assemblies into the honeycomb core of its AP1000 reactor with a pair of robotic arms, people at the site said.
The arms will move at a snail’s pace, not only because each assembly costs more than 10 million yuan, but their fine metal rods hold millions of thumb-size uranium pallets which together can emit enough heat for more than one gigawatt of electricity, enough to power Tibet’s entire grid.

Many people are waiting with bated breath for Sanmen to go online, because the AP1000 “is a simple, genius solution to reduce the risk of nuclear meltdown,” said Xi’an Jiaotong University’s nuclear science professor Shan Jianqiang, the author of several university texts on reactor safety and operation. The commencement of Sanmen “can be a shot to the arm for the nuclear industry, which has been mired in trouble at home and abroad,” he said.

The AP1000, designed and made by Toshiba Corp’s Westinghouse Electric subsidiary, is equipped with an overhead water tank that can flush the reactor’s core and keep it cool even if every water pump ceases to function in a blackout. Hot water would rise as vapour, dissipating energy from the core’s chain reaction through a heat exchanger into the atmosphere, condense and return to the tank. As long as there is gravity, the cycle would continue without human intervention.
In plain language, the reactor is designed to be meltdown-proof.

Compared with current technology, the AP1000 reactor is theoretically 100 times safer, requires 80 per cent less piping, 85 per cent fewer control cables, and need a third fewer pumps.

Full Article here. China pips US to start world’s first meltdown

China again #1 holder of U.S. Debt

Global Times

The Chinese mainland has again become the largest foreign holder of US Treasury securities, pushing Japan down to second place, according to data revealed by the US Department of the Treasury on Tuesday.

Experts told the Global Times on Wednesday that the situation is a result of improved capital flows and expectations of the yuan strengthening against the US dollar. They added that China might further pump up its holdings of US Treasuries if these trends persist.

The US Treasury data showed that in June, China bought $44.3 billion US Treasury securities, bringing its total holdings of US bonds, notes and bills to about $1.15 trillion in total.

The Chinese mainland has been increasing its holdings of US Treasuries for six consecutive months.

Japan, which replaced China as the US’ biggest Treasury securities holder last October, sold about $20 billion of Treasuries in June. Its current holdings of US Treasuries amount to about $1.09 trillion.

The US Treasury data also showed that Hong Kong is currently the ninth biggest holder of US Treasuries, with its holdings reaching approximately $203 billion.

China plans network of ‘influential’ cybersecurity schools

SCMP

Four to six schools will be created over the next decade, as the industry
struggles to meet demand for cybersecurity experts

China is planning four to six “world-renowned” cybersecurity schools by 2027,
as it ramps up its efforts to build a strong army of professionals to combat
cyber attacks, in an increasing digitalised world.

The Cyberspace Administration of China, the country’s top internet regulator,
and the Ministry of Education said they will roll out the nationwide project
over the next decade in order to create “internationally recognised and
influential” schools for the training of cybersecurity talent.

The two are inviting Chinese universities, which have sizeable cybersecurity
faculties, to sign up for the project.

Once the best have been chosen, they will be provided with policies and
investment to remake themselves as leading cybersecurity schools, the Ministry
said in a notice published on it website on Tuesday.

The ambitious plan comes within three months of China’s new Cybersecurity Law,
which came into effect on June 1, fuelling the need for top talent to better
protect the country’s 751 million people who actively connect with the internet,
via a social network, to their bank accounts.

The two authorities said they will explore the possibilities of setting up juvenile
classes too for children who show gifted skills in cybersecurity, as well as
improving current training programmes for those who study cybersecurity in colleges
and graduate schools.

Industry insiders say that China already has a strong community of cybersecurity
professionals, but that supply just cannot meet demand.

Cybersecurity specialist have become one of the hottest jobs, with average annual
pay increases of between 25 and 35 per cent, five percentage points higher than
other jobs in IT, according to a recent survey by Hays, the global recruiting firm.

China’s “FBI”, Chinese Start-ups compete for global AI title. Rest of the world left in the Dust.

The ImageNet competition was launched in 2010. ImageNet is a Large Scale
Visual Recognition Challenge has become a benchmark AI competition in object
category classification and detection on hundreds of object categories and
millions of images.

In 2016, Trimps-Soushen, a team supported by the Ministry of Public Security,
won in object recognition and detection, while researchers from Nanjing
University of Information Science and Technology won in the video
identification task.

This year’s ImageNet ended with Chinese AI teams’sweeping victory, yet again.
All the top performers were from China, and more than half of the 27 competing
teams were Chinese-based universities or institutes.

On the image classification challenge, the prize went to a team called WMW,
which included two experts from Beijing-based startup Momenta and another one
from Oxford University. Their error rate was 2.25 percent. Another team called
DBAT won the title in the object detection challenge, with an accuracy rate at
73.1 percent. DBAT consisted of eight experts from Nanjing University and two
from Imperial College London.

HFR: Asian Hedge Fund AUM Surges In Q2, Tops $117B

Strong performance among Asian hedge funds through the second quarter is having an effect on asset flows, according to new data from Hedge Fund Research, with the alternative investment segment seeing its first quarterly inflows in two years and bringing Asian hedge fund capital to its highest level since the fourth quarter of 2015.

The gains were led by funds investing in China and India, HFR said in its latest HFR Asian Hedge Fund Industry Report. The HFRX India Index gained +6.4% in the second quarter, bringing YTD performance to +26.6%, topping the Sensex 30 Index by over 1000 basis points for 1H17. Chinese hedge funds as tracked by the HFRX China Index rose +5.2% in 2Q17 is up +16.2% for 1H17 – topping benchmark measures of Chinese equities in 1H17 by more than 1300 basis points.

Total capital invested in Asian hedge funds rose to $117.1 billion, a quarterly increase of $6.7 billion, HFR said. New net capital inflows totaled $1 billion. Total capital invested in China-focused hedge funds increased to $52.5 billion through mid-year, a YTD increase of $3.9 billion.

Other highlights from HFR’s Asian Hedge Fund Industry Report:

Asian-located hedge funds investing in Equity Hedge (EH) and Event-Driven (ED) strategies led performance through mid-year, with Asian-located EH funds returning +12.2% in 1H17, while Asian-located ED funds gained +10.5%. Both metrics outperformed their respective broad-strategy HFRI peers.

The HFRI EM: Asia ex-Japan Index gained +15.0% in 1H17, which, alongside contributions from funds investing in Middle East, Russia/Eastern Europe and Latin America, drove HFRI Emerging Markets (Total) Index performance to +9.6% in 1H17.

Hedge funds focused on Japan were also up through 1H17 as the Japanese Yen climbed against the U.S. dollar, with the HFRI Japan Index advancing +3.0% in 2Q17, bringing 1H17 gain to +6.8%. This topped the performance of the Nikkei 225 by approximately 200 basis points. Total capital managed by hedge funds focused on Japan rose to $28.6 billion through mid-year.

Chinese Warships in the Heart of Europe

China Market Update

The Road to War: Eurasia vs The Dying West

CMR

Who rules East Europe commands the Heartland; who rules the Heartland
commands the World-Island; who rules the World-Island controls the world.
– Halford Mackinder

The world is splitting into 2 factions. It’s Eurasia vs The Dying West. The U.S.
is in political free-fall.Journalism has become a joke.The country is caught in
the last death-throes of political correctness.The transvaluation of all values
as Nietzsche would say.

Trump may have came to late to save The United States of Ponzi.Now a
De-industralized, War-mad,drug addicted country living off printed money and
welfare handouts.

The vacuum of power left on the world stage ever beckons the new world order
led by a hybrid Eurasian power anchored by China and Russia. Most of the
developing world are now satellites of an economically resurgent China.
When Serbia, Romania, Argentina, or South Africa need development funds or
technology they look to Beijing now.They no longer look to London, D.C. or
Berlin. The One-Belt one road project is now bringing all of Central Asia
into its sphere and will drive power projection from China through Asia and
into East Europe.

China has just conducted its 90th anniversary celebration of the founding of the
People’s Liberation Army. Military parades in China are nothing new but this one
has several changes that smack of China moving quickly towards battle readiness.
The first of these signs were the fact that the 12,000 troops on display were in
battle fatigues not military dress.Even Premiere Xi was in a Camouflage uniform.
He told the troops to “be ready to ­assemble at the first call and be ­capable of
fighting and winning any battle”.President Xi Jinping went on to say that China
needs a strong army more than ever, urging the building of the People’s
Liberation Army (PLA) into a world-class military force. He went on to say that
“The world is not all at peace, and peace must be safeguarded. Today, we are
closer to the goal of the great rejuvenation of the Chinese nation than any other
time in history, and we need to build a strong people’s military more than any
other time in history”.

In addition to 12,000 troops more than 600 pieces of military hardware were
displayed with nearly half of the weapons being new or modified versions that
had hardly been shown in public before.

China’s latest J-20 stealth fighters made their parade debut. The J-20 is China’s
indigenous fourth-generation medium and long-range fighter jet. It made its maiden
flight in 2011 and was first displayed in public at the 11th Airshow China in
Zhuhai,Guangdong Province, in November 2016. Besides the J-20, J-16 fighters
and Y-20 heavy transport aircraft were also among the new aircraft making parade
debuts.

Other cutting-edge weapons like 8×8 all-terrain vehicles, radar-and-communication
jamming drones and solid-fuel intercontinental missiles were among about 600 pieces
of military hardware on display.

But the highlight of the parade was the host of conventional and nuclear missiles
from the PLA’s newly established Rocket Force.

They include the Dongfeng-26 ballistic missile, which can be fired at short notice
and fitted with a nuclear warhead, the Dongfeng-21D land-based anti-ship ballistic
missile described by some as the “carrier killer,” and the Dongfeng-16G conventional
missile designed for precision strikes against key enemy targets.