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U.S. Pressures World Against Asian Infrastructure Bank

Australia, Indonesia and South Korea skipped the launch of a China-backed Asian infrastructure bank on Friday as the United States said it had concerns about the new rival to Western-dominated multilateral lenders. China’s $50 billion Asian Infrastructure Investment Bank (AIIB) is seen as a challenge

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

Shanghai<>HK Connect Scenarios

Gerard DeBenedetto Former CEO at An Zhong (AZ) Investment Management Shanghai When China printed third quarter GDP growth of 7.3% the collective media somehow characterized it as a beat and a miss simultaneously. Fortunately we’ve all learned to look past the headlines and try to

H.K. Chief executive has proof of American Intelligence agencies at work in Occupy Central movement

CMR Staff Reporter Hong Kong’s chief executive CY Leung said on Tuesday that he would consider disclosing evidence of external interference in the Occupy Central movement at an appropriate time, adding that he was not merely speculating. American intelligence has been trying to foment revolutionary

Tesla Motors to Power up with Chinese Money

Staff Reporter China Money Report October 14 Minsheng Bank and Tesla today signed a cooperation agreement to build jointly 400 Power stations in 20 different cities across China. The two companies are also expected to discuss further cooperation in the field of financial services. In

China’s one-year interest-rate swaps dropped toward a 17-month low

China has plenty of room for policy action. The economy is growing at 7% with a “Fed funds rate” at 5%. The U.S. Fed Funds rate is of course 0%. Bloomberg China’s one-year interest-rate swaps dropped toward a 17-month low on speculation the central bank

Chinese steel prices sink further, now priced the same as cabbage.

Staff Reporter China Money Report Steel prices continue their downward spiral in China. Steel production has always been an obsession with state planned economies as it was steel output that separated the developing from the developed economies. Nowadays, steel production separates the real economies from

Jimmy Carter Ignored, humiliated on China Trip

Want China Times Former US president Jimmy Carter was mistreated during his visit to China in September despite his contribution to the establishment of formal ties between Washington and Beijing 35 years ago, according to a scholar who was traveling with him. Orville Schell, director

The Pentagon: Where American Money Goes to Die

China Money Reporter Staff Reporter A Stars & Strips Article brought to our attention via the site Full-Spectrum- Dominance.com has once again highlighted to the American tax payer the utter incompetence of where American tax dollars go to die. Basic scrap steel sells for $100/pound

Dr Udo Ulfkotte, respected journalist and author “I was paid to write propaganada”

Dr. Udo Ulfkotte , respected journalist, has confessed the following: – I was educated to lie and hide the truth from the public – I was employed to write propaganda against Russia – I was supported by the Central Intelligence Agency – I was bribed

After 400 Years…China is back on top of the World Economy

Dan Collins CMR For most of recorded history, China has been the worlds largest economy. The country stagnated and finally crumbled under the Ming dynasty and was soon carved up by Western powers only to be followed by an invasion and attempted colonisation by Japan.

China’s richest man to invest in Atletico Madrid?

WildEast Football Spanish newspaper Marca is reporting that La Liga champions Atletico Madrid have worked out a deal with China’s richest man Wang Jianlin, head of the Wanda Group, that will see him invest in the club and get involved in the team’s management. Nothing

Internet giants move into China’s movie business

Want China Times BAT-man: Internet giants move into China’s movie business Staff Reporter 2014-10-08 11:42 (GMT+8) Web portal Tencent’s Sept. 17 announcement of the establishment of its new unit Tencent Movies+, which will produce seven films, including an adaptation of a novel by Nobel literature

R.I.P. Aral Sea. With kind regards from your friends “free trade” and fashionistas.

The fashion industry is linked to the environmental devastation in the Central Asian inland sea – once the world’s fourth largest lake, the Aral sea ‘completely dried’ in August. When will the Ivory Tower academics in the U.S. start to re-examine the hypothesis of so-called

VietJet Air criticised for lingerie model photo shoot

VietJet Air criticised for lingerie model photo shoot Photographs showing lingerie models posing for a Vietnamese airline in nothing but air hostess- style caps and bikinis have been criticised for being sexist. Personally…I don’t see a problem with it…no problem at all.  

World’s 6 largest photovoltaic (PV) producers all from China

Want China Times
A report by Solarbuzz, the photovoltaics (PV) institute of consumer market
research firm NPD, suggests that during the second quarter of the year,
the world six largest manufacturers of PV parts and components were all
from China.

The combined output of solar modules by these Chinese businesses
reached 5.2 gigawatts (GW) in the second quarter of the year, up 26%
from the previous quarter. The output accounted for 71% of the combined
output of the world’s top 20 PV makers, the report stated.
Solarbuzz attributed the increase to demand from emerging PV markets,
including Africa and the Middle East.

The potential installation volume of solar modules reached 11 GW in
Africa, while it was pegged at 1.3 GW in the Middle East, according to
another Solarbuzz report. A senior analyst at Solarbuzz said data in the
report covers all completed and under-construction solar power stations in
29 African nations and seven Middle Eastern countries.

The projects were mostly presided over by South Africa and Israel, but
there are more and more Middle Eastern and African countries beginning
to enter the PV market, the analyst said.

Citing Solarbuzz’s reports, Beijing-based Securities Daily stated that the
strategies used by Chinese PV manufacturers while exploring foreign
markets include setting up production lines abroad and outsourcing. The
Zhejiang-based Renesola Group for example, successfully expanded into
markets in Europe, Australia and India through outsourcing.

In the future, it is vital for Chinese PV businesses to secure emerging
markets, the Securities Daily said.



Sina Finance: Oil could drop to $40 a barrel

Sina Finance
Despite the Middle East was once again being shrouded by gunfire and
killing, crude oil (92.73, -0.07, -0.08%) futures are still down
10 percent.

The American surge in domestic oil and gas production puts
OPEC’s (OPEC) dominance in jeopardy. This is partly true, but there
is one important reason is that the demand is no longer as strong
as usual.

CIBC World Markets chief economist Jeff Rubin pointed out before,
the average daily oil consumption in the United States has dropped
from 21 million barrels before the financial crisis barrels fell
to 18.60 million barrels of crude oil consumption. Europe’s numbers
are also dropping. China’s numbers have also stopped growing at
such a fast pace.

“If crude oil futures ended up with its cousin the same
fate of coal, then oil prices will fall in the near future to
$40-60 U.S. dollars a barrel.




China and Iran prepare for historic joint military exercise

Message to the world…Don’t touch our Iranian oil imports.

Want China Times
China and Iran are preparing to launch a joint military exercise, reports the
Global Times, a tabloid under the auspices of the Communist Party mouthpiece
People’s Daily.

Warships from the People’s Liberation Army have docked at the Iranian port of
Bandar Abbas ahead of the historic drills, the first time Chinese vessels have
ventured into the Persian Gulf. Admiral Amir Hossein Azad, commander of Iran’s
First Naval Zone, said on Sept. 20 that the five-day military exercise would
entail joint rescue operations and testing the technical readiness of the
respective fleets of both sides. The exercises are aimed at “establishing peace,
stability, tranquility, and multilateral and mutual cooperation” between the
two countries, he added.

The admiral’s sentiments were reciprocated by Huang Xijiang, deputy chief of
staff of the PLA’s East Sea Fleet, who led the Changchun Type 052C destroyer
and the Changzhou Type 054A frigate in Bandar Abbas on Saturday morning, when
they were greeted by Iranian military officials and representatives from the
Chinese embassy in Iran.

Huang said in his arrival speech that the PLA Navy was visiting for “peace and
friendship,” adding that he hopes the experience can help both sides improve
their mutual learning and understanding. Both the Chinese and Iranian navy
will open up their vessels for inspections by the other side during the cultural
exchange, which will also reportedly include friendly soccer, table tennis and
tug-of-war matches.

The exact timeline of the imminent drills currently remain unclear, though they
will take place just days after the Iranian navy announced that they had foiled
a pirate attack on Chinese container ship in the Gulf of Aden.


Chongjing creates sidewalk lanes for smartphone users



China opens gold market to foreigners, seeks to block price fixing by Western Banks

Shock…China wants a free market in gold not 6 guys locked in a
back room deciding pricing.

Global Times
Foreigners now have access to China’s gold market after the Shanghai
Gold Exchange (SGE) launched its international board on Thursday.

The yuan-denominated board was opened in the China (Shanghai) Pilot Free
Trade Zone (FTZ), a move to encourage foreign participation in China’s
tightly controlled gold market. The launch will mark the first time China
has allowed foreign investors to participate in the country’s gold trade.

Despite being the world’s largest producer and consumer of the precious
metal, China has little say over the pricing of gold in the global market.
Authorities hope to gain greater influence over pricing by granting global
investors access to the country’s 3.2 trillion yuan (522.8 billion US dollars)
gold trading market.

The new international board hopes to challenge current gold market leaders
London and New York. So far, it has attracted dozens of foreign members,
including renowned international commercial and investment banks but it did
not release their names.

Gold contracts listed on the SGEI will include a 99.5 percent 12.5 kg contract
widely traded among central banks and bullion investors on the global market,
a 99.99 percent 1 kg contract traded in China’s domestic gold market and
100 gram contract of the same purity. Daily price volatility will be capped
at 30 percent on either side of the closing price from the previous day.

“The international board has made China’s opening up of the gold market a
reality,” said Xu Luode, the SGE Chairman, adding that growing participation
and rising trading volume will make China a real international market for gold.

“For years, the gold price in the Chinese market has been shadowing that in
the west. Overnight trading in the New York and London exchanges would weigh
on gold prices in China the next day,” Xu said. “If China wants to have greater
pricing power over the bullion, it has to first expand the trading market,” said
Zhao Qingming, chief macroeconomic researcher with China Financial Futures Exchange.

The international board is the first step for China to transform its gold trading
exchange into a regional trading center for precious metals, Zhao added. Gold contracts
denominated in Chinese renminbi will allow gold pricing to better reflect trading
activities and demand in China

The SGE has been the top spot gold trading location in the world for 7 consecutive
years with trading volume reaching 11,600 tons in 2013.”A benchmark price for gold
could emerge from trading in the Shanghai FTZ and become a potential factor, along
with prices in established regional trading centers, to shape global price for
bullion in the future, “said Zhou Hao, China economist with Australia and New
Zealand Bank.

Yuan-denominated gold contracts also add a new investment option for offshore
investors holding Chinese currency. Global use of the Chinese currency has experienced
exponential growth in recent years, as renminbi assets, including deposits, bonds and
loans, have reached 1.88 trillion yuan as of the end of last year. It was virtually
nothing four years ago, according to the Asia Securities Industry and Financial
Markets Association (ASIFMA).

Launching an international board for yuan-denominated gold contracts, is part of a
broader effort by Chinese authorities to broaden the range of financial products and
increase the renminbi’s appeal as an investment currency, according to Zhou.

“When there is more viable renminbi investment options available in the market,
investors will be more willing to hold renminbi assets.” Zhou said.


The Fog of War- US Navy tests Pandarra Fog in exercise

The Fog of War

Want China Times

To defend its carrier battle group from a potential attack by Chinese
supersonic cruise missiles such as the C-602 and the C-805, the United
States Navy launched an exercise to test its new obscurant, Pandarra Fog,
between June 21-25 this year near the island of Guam according to National
Defense, a monthly magazine operated by the Russian defense ministry.

The USS Mustin and the USS Wayne E Meyer, two Arleigh Burke-class guided
missile destroyers, were tasked with protecting the USS Frank Cable, an
Emory S Land-class submarine tender, which was to be disguised as an
aircraft carrier or some other large vessel of the United States Navy
during the exercise. The destroyers released the carbon fiber clouds known
as Pandarra Fog to defend the submarine from simulated incoming enemy
anti-ship cruise missiles.

Pandarra Fog was developed by the US Navy with the threat of Chinese missiles
in mind to defeat the guidance systems of missiles aimed at its ships.
The Russian military magazine stated that one advantage of Pandarra Fog is
that it is very cheap compared to the other ways of intercepting missiles.
The obscurant’s weakness is that it can’t be used in bad weather.

The magazine stated that another weakness of Pandarra Fog is that it can
damage the radar systems of the destroyers releasing it as well. Generating
Pandarra Fog also produces enough heat for infrared homing missiles to track
targets. The Chinese PL-16 anti-radiation missile is also capable of
paralyzing US warships before they have a chance to release the fog.



Chinese ambassador to Iceland-Turned Japanese Spy and Executed

Want China Times

Rumors have circulated that the Chinese ambassador to Iceland, Ma Jisheng,
was arrested along with his wife Zhong Yue earlier this year accused of
being a Japanese spy and has already been executed, but Ma’s real fate has
not yet been confirmed, according to the Hong Kong-based Mingjing News.

A source said Ma was recalled from Iceland on Jan. 23 and that he and his
wife were immediately arrested by the authorities. The Chinese government
is said to believe that he shifted his loyalties to Japan when he served
at China’s embassy in Tokyo between 2004 and 2008.

Ma did not return to Iceland from China in March as originally expected
and his name has been deleted from the official website of the embassy,
although his most recent article, in which he condemns Japanese prime
minister Shinzo Abe for visiting the Yasukuni Shrine, which commemorates
14 A-Class Japanese war criminals along with other war dead, can still be
seen on the site. This has fuelled rumors of his arrest and ongoing
detention, as well as suggestions that he may already have been executed.

Hong Lei, the spokesperson of the Chinese foreign ministry said that he
had no information on the matter.

Zhu Jianrong, a Chinese professor from the Tokyo-based Toyo Gakuen University
was also arrested in China last July on suspicion of being a Japanese spy,
despite Zhu’s reputation as a fervent Chinese nationalist who was opposed to
the Japanese move to nationalize the disputed Diaoyutai (Diaoyu or Senkaku)
islands which China and Taiwan also claim.

Zhu was eventually released this January, however several Japanese newspapers
believe that the political struggle that has been taking place in Beijing
since Xi Jinping became the president of China is the key reason why so many
well-known Chinese diplomats and scholars have been arrested. People with a
Japanese background have been arrested not because they are really working
for Japan, but because their loyalty to the new Communist leadership is in
question, the report said.


CDC Warns on Ebola: Prepare

Washington Examiner

The Centers for Disease Control and Prevention, warning hospitals and doctors
that “now is the time to prepare,” has issued a six-page Ebola “checklist”
to help healthcare workers quickly determine if patients are infected.

While the CDC does not believe that there are new cases of Ebola in the
United States, the assumption in the checklist is that it is only a matter
of time before the virus hits home. For example, one part reads: “Encourage
healthcare personnel to use a ‘buddy system’ when caring for patients.”
Another recommends a process to report cases to top officials:

Plan for regular situational briefs for decision-makers, including:

– Suspected and confirmed EVD patients who have been identified and
reported to public health authorities.

– Isolation, quarantine and exposure reports.

– Supplies and logistical challenges.

– Personnel status, and policy decisions on contingency plans and staffing.

The checklist has been distributed to major hospitals and even little ones,
including an urgent center in Leesburg, Va.

“Every hospital should ensure that it can detect a patient with Ebola,
protect healthcare workers so they can safely care for the patient, and
respond in a coordinated fashion,” warns the CDC.



‘Guam killer’ missile inadvertently revealed in China: report

Want China Times

China has inadvertently revealed that it is in possession of a DF-26C
medium-range intercontinental ballistic missile, informally known as the
“Guam killer,” designed to allow China to attack US military facilities
in the Pacific in a potential conflict, according to a Sept. 8 article
on Strategy Page, a Washington-based website covering global military

The website stated that the DF-26C missile appears to have a range of
3,500 kilometers. It is designed based on the earlier DF-21 missile.
The DF-26C is considered a threat to US national security because it is
capable of hitting US military facilities in Guam. Even though China has
a tradition of keeping its weapons secret, overseas governments and media
outlets are able to discover them through satellite photos or curious
Chinese military enthusiasts taking cell phone photos and posting them
on the internet.

The United States was able to monitor China’s test of the DF-41 ICBM,
which can carry multiple warheads, with satellites and other air, land,
and sea-based sensors back in 2012. The People’s Liberation Army never
displays the DF-41 missiles in public but photos of them have been
circulating on the internet.

Strategy Page said China, which is believed to have more than 400 nuclear
warheads, has very few ballistic missiles with the ability to reach the
continental United States. The website also said that about two thirds
of China’s warheads are believed to be in missile warheads, most of them
DF-21s and these will be replaced by DF-26Cs. For this reason, a nuclear
strike against Guam in a potential war between China and the United States
over the Western Pacific is a distinct possibility, the report said.



China creates 40,000 new millionaires


China created 40,000 new millionaires in 2013, bringing the total to
1.09 million, according to a new study.

The growth of 3.8 percent is a bit of an improvement from last year’s
3 percent gain. But it’s still only about half the growth rate of 2010
and 2011, suggesting that China’s economic slowdown and the government’s
crackdown on corruption is slowing its millionaire manufacturing machine.

According to the Hurun Research Institute, the number of people in China
with personal wealth of 10 million yuan—or $1.6 million—in mainland China
reached 1,090,000, up from 1,050,000 in 2012. The number of people in
China worth 100 million yuan, or $16 million, increased by 2,500 people
to 67,000.

The slower millionaire growth comes as sales of high-end luxury goods in
China—everything from watches and wine to handbags and Lamborghinis—have
also cooled. But Rupert Hoogewerf, chairman and chief researcher of the
Hurun Report, said this year’s millionaire growth was still solid.

“Although we have been seeing a slowdown in spending, the money is still
very much there,” he said in the report. The report said 55 percent of
the millionaires are private business owners. One in 5 are senior executives
at large companies and 15 percent are listed as “real-estate investors.”
Only 10 percent are described as “professional stock market investors,”
or those whose main source of income is stocks and financial investments.

Beijing and Guangdong have the most millionaires, with 192,000 and 180,000
respectively, followed by Shanghai with 159,000. Yet Shanghai had the fastest
growth of millionaires, adding 12,000 millionaires in 2013. Beijing and
Guangdong each added 8,000 millionaires, and Shenzhen added 4,000.

Read MoreCities with the most millionaires per capita
Estimating people’s private wealth in China is a difficult task, given the
lack of transparency and unreported wealth and income. Hurun Report said it
uses a “bottom-up” and “top-down” approach, looking at sales of high-end
real estate, sales volume of luxury cars, income-tax returns, the registered
capital of companies and other high-end consumer indicators. It also uses
measures of gross domestic product and gross national product.


Which Economy to put your money ? A or B?

Dan Collins

Economy A is sinking in debt with massive government and trade imbalances.
Its private Central bank is printing trillions,giving it to their member
banks,propping up the stock market, and funding up to 80% of the government
debt at each auction. Its labor force participation rates are down to 62%.
Half of the countries homes require a check from the government to sustain
themselves. It’s once proud industrial centres look like they have been
bombed and are littered with “check cash now” and liquor stores.
Half the country is on drugs.

Economy B is hitting new records on their trade surplus which in August rose
9.4%, while imports fell 2.4%. Country B’s monthly trade surplus reached
$ 49.83 billion, once again rewriting their July record of $ 47.3 billion.
The economy is growing at a sluggish “7%” and the country is barely keeping
up with placing all of the engineering graduates each year. Their factories
struggle to find workers as their pay checks are rising each year by up to 15%.
The country has put restrictions in place to stop people from buying homes
and cars with cash.

If anyone had bothered to watch CNBC anymore they would of course know…
you put you money in Economy A.



If China goes forward on the shale gas revolution…they may need to relocate 1 billion people. Africa here we come.

Dan Collins

China has only 2% of the water resources per capita as does the United
States. The environment today in China is killing people. After decades
of under-pricing the RMB and absorbing the world’s manufacturing capacity
it has turned the country into an environmental wasteland. People with
money are fleeing…and others may follow if China does not stop oil
companies in China from extracting shale gas in China.

According to the World Energy Council’s latest report, the lack of
water may severely limit the development of China’s shale gas. China
has the world’s largest recoverable shale gas reserves, but 61% are
located in the highly drought and facing water stress areas.

Shale resources require huge amounts of water in the extraction process
including the exploitation of clean water. The water resources of China
are under extreme pressures as agriculture, families, and industry compete
for the water that is left.

Huge areas of the country are drying up and turning into desert. The North
China industrial-intensive areas have the largest problems with water
shortages more than half of China’s water resources are used in industry.

Despite the environmental concerns, Chinese energy giants PetroChina and Sinopec
are talking up shale potential in the country and making huge forecasts on
bringing new shale oil out of the ground in China. If that happens the population
pressures in China may be completely untenable, at that point…the large
uncultivated, fertile countries of Africa are going to start to look real
nice for emigration.




War won’t end by Xmas if US and China face off: commentary

Want China Times

War won’t end by Xmas if US and China face off: commentary
Staff Reporter 2014-09-10 09:09 (GMT+8)
In the event of a conflict breaking out between the United States and China,
there is not likely to be any quickly won victory, according to Chris Dougherty,
a research fellow from the Washington-based Center for Strategic and Budgetary
Assessments, in an article written for The National Interest magazine on
Sept. 5, citing the premature predictions that World War I would end by
Christmas 1914, over in a few short months.

As well as making reference to the frequent comparisons of the network of
connectedness in the world in 1914 and in 2014 in the centenary of the outbreak
of World War I, Dougherty said that there is another more worrying similarity
between the world then and now, which is the failure of both sides to prepare
for the possibility of a protracted conflict based on the flawed belief that
conventional war between major powers will be brief and decisive.

Dougherty said that the United States today is not the only major power that
believes modern conventional war is short and decisive, as opposed to its
experience with “irregular” warfare in Iraq and Afghanistan. According to
Dougherty, China has spent at least 20 years developing its “anti-access/area-
denial” strategy, designed to hold US forces at bay while the People’s
Liberation Army takes action to invade Taiwan or seize disputed territories
from its neighbors in the South China Sea.

The article said that China relies heavily on conventional cruise and ballistic
missiles to strike at US air bases and naval forces as well as those of its
regional allies and partners. He added however, that China is unlikely to win
a short and decisive conflict before the United States can bring its full
military power to bear as it predicts. “China’s arsenal of missiles is prodigious,
but their high cost and the length of their production process make these
weapons a poor instrument for protracted warfare,” said Dougherty.

The article goes on to say that the United States is entering an era in which
its conventional military dominance may be increasingly challenged by a host of
rivals such as China, Iran, and a resurgent Russia. Dougherty suggests that
Washington and its allies prepare for a long and destructive conflict. “China
likely poses the greatest long-term threat.”




40 years later..Sweden continues to bill North Korea for unpaid Volvo’s

The year …1974. Swedish leftists pressure the Swedish government to
support North Korea with the purchase of 1,000 Volvo 144 vehicles. But,
40 years later, the cars have never been paid for. Since the 1974 fiscal year,
the Swedish Trade and Investment Committee each fiscal year has sent the bill
to North Korea but has never gotten paid. Interest alone has now reached
300 million euros.

Sweden is not alone in falling into the North Korean “order” trap with bills
from many countries going uncollected. Reports of unpaid Rolex watch orders
and Benz taxi’s have also surfaced.



China invests $10bn in Russian coal mine project, Twitter adds “Buy” button.

D.Collins CMR
Its not just in Russia and China where real economic growth is taking off,
in the U.S. today, Twitter has just launched a “buy” button.

Want China Times
Russia’s state-owned Rostec and China’s Shenhua Group signed a contract on Sept.
4 in China, planning to jointly develop the Augustine gold mine area in Siberia
and the Russian Far East, as well as construct a coal harbor on site. It is
the latest deal in furthering cooperation between the two nations over energy
production, the Shanghai-based Yicai.com reports.

The total investment will reach around US$8-10 billion, including the joint
development of the coal mine area, infrastructure, power generation facilities
and high-voltage transmission lines that can export electricity to China, the
report said, citing Rostec. They plan to start building the project by the end
of this year, and will begin production in 2018.

Sergey Chemezov, Rostec’s CEO, said his company and Shenhua will each take a
stake of 50% of the joint venture, which is expected to have a return rate of
about 22%.

But its not just in Russia and China where real economic growth is taking off,
in the U.S. twitter has just launched a “buy” button.



Associated Press

TOKYO (AP) — Japan’s economy shrank more sharply in the second quarter
than first estimated and the latest indicators suggest only a modest
bounce back since then.

The world’s third-largest economy contracted at an annualized rate of
7.1 percent in the April-June quarter, according to updated government
figures Monday. The initial estimate released earlier this month said
the economy contracted 6.8 percent. Business investment fell more than
twice as much as first estimated.

The economy’s contraction was expected after Japan increased its sales
tax from 5 percent to 8 percent on April 1. So far, data for the current
July-September quarter suggest any rebound in growth is likely to be
modest and slow in materializing.

A government survey of “economy watchers” released Monday showed confidence
in the economy’s prospects deteriorated in August. Business activity surged
early in the year, with the economy growing 6 percent in January-March, as
consumers and businesses stepped up purchases to avoid paying more tax.

Prime Minister Shinzo Abe has championed an aggressive stimulus program
aimed at ending chronic deflation that has discouraged corporate investment
and dragged on growth. A sustainable recovery will require strong corporate
and private spending, since exports and public spending have so far done
little to lift growth.

Abe will be watching data from the current quarter as he decides later in
the year whether to go ahead with a further 2 point increase in the sales
tax to 10 percent in 2015. Surveys show the public opposes a further tax
increase, though increases are needed to counter ballooning public debt,
which now is more than twice the size of the economy. The revised data
Monday show business investment fell more than twice as much as estimated
before, or 5.1 percent, while private residential spending sank 10.4
percent in annual terms.

“Theoretically, there should be no impact from the consumption tax
increase on corporate spending or long-term corporate planning, but a
large number of Japanese corporations seemed to see a large impact from
the hike on final demand,” said Junko Nishioka, an economist at RBS
Japan Securities in Tokyo.

“We are not that pessimistic for the future picture of the Japanese
economy,” Nishioka said, forecasting a “V-shaped recovery,” supported
by stronger wage growth. Conditions remained weak in July. Real incomes
fell 6.2 percent from a year earlier and household spending dropped.

The survey of economy watches, a grassroots assortment of service
industry workers and others thought to have a good real-time sense
of business activity, was at 47.4 in August, down from 51.3 in July
and the first drop in five months. “Industrial production was still
2 percent below the second quarter average in July, and we have yet
to see a turnaround in capital spending,” Marcel Thieliant of Capital
Economics said in a commentary.



Americans now practising “No Cup” Economics

As reported this week, Americans not working reached a new record as labor force
participation hit its lowest number since 1978 with 92 million Americans no longer
working or looking for a job. In addition, full-time employment in the U.S.
continues to plummet due to insane tax laws and inflated health costs and regulations.
America is now practising ” NO CUP” economics. Hard-core Bro!



China paying bonuses to mixed-race couples to solidify rule in Western provinces


China has ruled over Xinjiang for hundreds of years despite the province
being filled with mostly a European-Turkic peoples whom have over the
generations acquired a combination of Han and European features.
There has been little conflict over the centuries as frankly no
one wanted to go to this desolate, desert province and the Uighur’s
of the region were largely left to themselves.

The original inhabitants as found in archeological remains were
of European origin with red and blond hair and sharing very similar
textile production processes as the ancient celts. Google “Xinjiang
Mummies” for more information.

Over the last decades with the rise of China, there has been an increasing
westward migration of Han Chinese into the province which has turned the
ethnic balance in the region to a majority Han Chinese and has left the
Uighurs at about 46% of the population. In order to encourage Chinese dominion
over the region the country has encouraged poor settlers into the province.
It was basically the same strategy the Mexican government is currently
using on the United States southern border.

What is stirring tensions more now is the fact that the Han Chinese are
better educated and harder working. They are pushing out the Uighur’s in
business ,schools, and generally marginalising the native group. In most
cases, the Uighur people cannot even speak decent Mandarin Chinese which
put them at an impossible disadvantage to compete for jobs in modern China.
The Uighur’s are resting now more than ever, launching terrorist attacks
against innocent people all over the country.

To deal with the threat.. China has implemented a new and controversial
plan to fix the problem once and for all. That solution is to dilute the
gene code and to encourage “Hanization” of the province.

Authorities are offering rewards of 10,000 yuan ($1,600) a year to promote
intermarriage in restive Xinjiang between ethnic minorities and China’s
dominant Han ethnic group according to the state media.

As reporting in the state media..
“We are advocating the intermarriage of Han and ethnic minorities to promote
positive energy,” local official Zhu Xin said in a media report postedlast
week on the website of the Bayingol Mongolian Autonomous Prefecture government.
The programme also provides health care, housing, employment, educational and
other benefits for intermarried households and would contribute toward the
realisation of the “Chinese dream”, he added, employing a favoured slogan of
Chinese President Xi Jinping.

Last month a renewed push by authorities in China’s Tibet region to encourage
intermarriage between Tibetans and Han Chinese similarly made headlines.

A years-long effort in the region had led to double-digit increases
in the intermarriage rate.

If you can’t get them out…breed them out.





US Predator not as good as China’s CH-4 drone: Chinese media

First you outsource the plastic injection parts and metal stampings.
Then you outsource the whole part…eventually the final product.
Engineering and finally design is also outsourced. What you are left
with is a entire country such as the United States which has no
machine tool industry left to speak of. The country made more
steel in 1920 than it does today despite global steel production
being up over 100 times. What we are left with now, is a second rate
engineering power without an industry which will increasingly be reliant
on government protected, defence contractors that could not compete
in a free market. The results are shockingly clear…the new American
fighter the F-35 is not capable. Even in drone technology the U.S
is getting surpassed despite probably investing 100 times what the
Chinese invested.

Want China Times

The People’s Liberation Army’s CH-4 unmanned aerial vehicle (UAV) is
receiving high-profile publicity in China after being touted as being
superior in all key indicators to the American MQ-1 Predator.

The CH-4, otherwise known as the Cai Hong-4 or Rainbow-4 drone, was
developed by the China Academy of Aerospace Aerodynamics of China
Aerospace Science and Technology Corporation (CASC). The drone was most
recently on display at the 2014 Tianjin International UAV and Model
Exhibition on Aug. 29, just days after its use in the multinational
Peace Mission 2014 military exercise in Inner Mongolia featuring member
nations of the Shanghai Cooperation Organization.

PLA Air Force spokesperson Shen Jinke said on Aug. 26 that during Peace
Mission 2014 the CH-4 was “tasked with surveillance, reconnaissance,
and ground attacks, [and] will play a vital role in fighting terrorism.
” Feng Aiwang, commander of the exercise’s PLA Air Force battle group,
later said that the CH-4 hit every one of its targets in several missile
firings, with national broadcaster CCTV also airing rare footage of a
missile hitting a simulated enemy vehicle.

The CH-4 has been dubbed the Chinese version of the US MQ-1 Predator
developed by General Atomics, though Chinese state media is claiming
that the CH-4 is superior in just about every way. In recent television
interviews, CASC researchers Chen Hongxin and Li Pingkun revealed the
specifications and capabilities of the CH-4 to a wider audience, adding
that the drone was first developed in 2010 and conducted its maiden flight
in September 2011.

According to Chen, the CH-4 has a maximum takeoff weight of 1,330 kilograms,
a maximum payload of 345kg, a service ceiling of 8,000 meters, endurance of
38 hours and a maximum range of 3,500 km. The drone’s military applications
include reconnaissance, surveillance, targeting, intelligence gathering,
electronic warfare missions, border patrol, island defense and anti-
terrorism, while civilian applications include emergency communications,
geological mapping and exploration.

Li said that the CH-4 has a long wingspan of 18 meters to give the UAV more
lift, even though the length of the drone is less than 9 meters. The CH-4
is also extremely light as it is made with more than 80% composite materials,
he said.

Li also revealed that the CH-4, which can launch missiles from 5,000 meters
up in the air, could hit both land and sea targets with a margin of error
of less than 1.5 meters. The UAV is capable of carrying four guided missiles
or bombs, and up to six in emergency situations, he added.

By comparison, the MQ-1 Predator has a wingspan of 15 meters, weighs 1,020kg,
has an effective maximum payload of 204 kg, a service ceiling of 7,600 meters,
endurance of 24 hours and a maximum range of 1,100 meters.



China Investing – Everything Has Changed

China Investing – Everything Has Changed
Gerard DeBenedetto
Former CEO at An Zhong (AZ) Investment
Management Shanghai
Sep 4 2014

In the past week a friend from Singapore and my own father asked me
to put together some thoughts the “China” market for foreign investors.
The impetus for this request is undoubtedly the recent upswing in the
major market indexes in A-Share equities (about 14% this summer) and
to a lesser extent my years on the ground in Shanghai. First off,
everything has changed in the past few years.

Jim Chanos quipped back in Sept of 2012 that China is a classic
emerging market roach motel. I laughed as well, but not because I
agreed with his metaphor, but because he was missing outsized risk
adjusted returns in the fixed income and currency market during that
time. Once again, my favorite theme, asset allocation.


There’s been a rush to introduce a number of China ETF’s and while
more products is almost always better, there have been far too
few choices. The following chart summarizes the past two years using
two simple indexes, the CSI300 (dominated by banks and large SOE’s)
and Chinex (micro caps and new IPO’s).


Of course the usual caveats apply about past performance, but why hasn’t
any large ETF provider launched a pure A-Share micro cap ETF? There is
a DB product (ASHS) tracking the CSI500, but that is more of an SME product
and predictably, performance is just about in the middle of the above chart.
This is not an endorsement to run out and buy the first Chinex ETF, but it
is important to understand that the A-Share market has become more nuanced.
WHAT TO DO? My advice is to allocate money to pure A-Share ETF’s (PEK for
large caps and perhaps ASHS for small caps until a Chinex ETF becomes
available). Do not purchase hybrid funds that include H-Shares or Chinese
companies listed abroad since they introduce different systematic risks.
If your China allocation is 10% of your portfolio, I would not suggest
buying 5% PEK and 5% ASHS, as there is a much bigger asset class to
consider, fixed income.

Fixed Income

My preference for the China Fixed Income market is well documented and I
continue to believe the asset class will perform, particularly if the dollar
remains strong, as the RMB should keep pace. Investors simply need to
understand a few rules: 1) Defaults are going to rise, 2) The waterfall
of recovery is not defined and has not been truly tested, 3) The yield pickup
in Corporate bonds is not satisfactory for professional investors, and 4)
There is no reason to take duration risk. This leads to a very narrow window
of government bonds and deposits. But make no mistake, this asset class has
been lucrative on a risk adjusted basis as the underlying assets are high
quality. CYB is a good example returning 2% annually for the past few years
and there are plenty of Dim Sum bond funds that offer almost twice this
with a bit more risk including CHLC and DSUM.

Back to asset allocation. With a bit of persistence and searching, gaining
low risk exposure to the China fixed income market should occupy a portion
of your China exposure if for nothing else to decrease the volatility of
the equity portion.

Final note on Fixed Income

There is about to be a massive shift in the availability of fixed income
securities as regulators continue to open up the market, in particular
giving foreign managers access to the inter-bank market. This will unleash
a new stream of (R)QFII products with access to a variety of securities that
heretofore were unavailable to foreign managers and their clients. For
example, while money market rates have been coming in on the mainland, the
7-day repo was quoted at 3.39% yesterday, a fine return for AA- risk and a
low volatility currency. While this is exciting for managers, investors
must be vigilant as the rules listed above still prevail and experienced
fixed income managers are few on the ground in China.