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

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

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

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

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

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

“American Collapse Theory” Gaining Ground in China

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

Chanos is back….This is getting sad

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

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

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

Cloud Computing in China booming as American giants are pushed out

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

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

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

China now runs 4 of the world’s 5 biggest banks

Stockswatch China has become a banking powerhouse. Four of the five largest banks in the world are Chinese, according to SNL Financial’s latest global bank rankings. It’s a big change from the past few years when only two Chinese banks made the top five. Beijing-based

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

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

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

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

China to lower reserve requirement ratio

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

Chinese Officials Falsify Data To Mask Slowdown, NYT Says

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

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

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

Renminbi-yen trade growing strongly a year after launch

One year after the launch of direct trading between the renminbi and Japanese yen, the daily trading volume between the two currencies has reached 50-100 billion Japanese yen on the Shanghai market and 15 billion yen on the Tokyo market, a combined volume double that

The Dreamliner is your dream. We want to build our own airplanes.”

A good example of nationalist company executives from China marching to
the same drum and lifting up their country. U.S. executive can’t move fast
enough to move jobs and profits offshore.

China Eastern Airlines wants to build more of its own airplanes, a company
executive announced this week. Liu Shaoyong, chairman of the airline and
president of China Eastern Air Holding Company, came to town during Chinese
President Xi Jinping’s visit to Seattle this week to speak as part of a panel
at a U.S.-China trade conference on Tuesday.

“The Dreamliner is your dream,” he told U.S. and Chinese delegates at the
conference. “In China, we want to fulfill our dream. We want to build
manufacture our own airplanes.”

While right now, Chinese aerospace manufacturers aren’t a big threat to Boeing
(NYSE: BA), that could change as the Chinese planes get more sophisticated in
their design and technology.
Liu called on the Federal Aviation Administration to support the Chinese-made
C919 aircraft. The single-aisle plane is built by the government-funded
Commercial Aircraft Corporation of China or COMAC to directly compete with
Boeing’s 737 series.Earlier this month, a Thai airline placed an order for 10
of the C919 planes to replace two leased Boeing 737-400s. The C919s aren’t quite
as technologically advanced as Boeing’s Renton-built 737s, but the planes use a
similar engine.

It’s a troubling trend for Boeing, which sees China as its largest future market.
Liu spoke on the eve of Boeing’s announcement about a $38 billion deal to sell
300 jets to China and build its first-ever overseas production facility in the
country. The facility will finish 737s destined for Chinese airlines. Chinese
airlines took delivery of about 30 percent of all of the Boeing’s single-aisle
planes this year, and the company is banking on that trend to continue.

Japan fears China could restrict vital shipping lanes

Want China Times

Japan’s access to maritime shipping lanes will be under serious threat if China is able to assert control over the entire South China Sea, according to a commentary by Yasu Ota, an editor of the Tokyo-based Nikkei published on Sept. 21.

Ota said that about a quarter of the 350 vessels that pass through the Strait of Malacca via Singapore every day belong to Japanese enterprises. The shipping lane extending from the Strait of Malacca through the South China Sea and the Taiwan Strait is considered Japan’s maritime lifeline, providing a shortcut for the country’s enterprises to transport strategic supplies such as oil from the Middle East, according to the author.

However, China claims both the South China Sea and the Taiwan Strait as its territorial waters. If China exercised control over these maritime areas, Japan’s economy would be under Chinese control, the piece said. To prevent this from happening, the United States is trying to bring Malaysia into its Trans-Pacific Partnership even though its economic policy is not as liberal as Singapore and Brunei, Ota said.

U.S. negotiating to send back 25,000 Illegal Chinese immigrants to China , keep $600m in stolen money and bring in 500,000 Muslims

The China Money Report

News leaked today from Duowei that the Chinese government is allegedly willing
to forgo returning US$600 million in illegal assets and take back 25,000 illegal
immigrants from the US in return for the repatriation of Ling Wancheng, the
younger brother of disgraced Chinese presidential aide Ling Jihua, reports Duowei
News, a US-based Chinese political news outlet.

One of the goals of Xi Jinping’s meeting with Barack Obama in Washington this
week is said to be finding a way to send Ling Wancheng back to China, Duowei said.

The younger Ling is believed to have been hiding in the US since around 2013 or
2014. His elder brother Ling Jihua, best known as the political “fixer” of former
president Hu Jintao, was placed under investigation by anti-graft authorities in
December 2014 and expelled from the Communist Party on July 20.

Duowei alleges that Beijing has been pressuring Washington to return Ling Wancheng
to China through months of secret negotiations. The reason Beijing wants Ling
Wancheng so badly is because he is believed to be in possession of a significant
amount of classified and top secret information, said to have been given to him
by his older brother as leverage. Duowei said it is likely that this rumor is true
as one of Ling Jihua’s alleged crimes outlined by state media is obtaining “a great
deal of the party and state’s core secrets.”

There is increasing speculation that the information held by Ling Wancheng includes
a list of Chinese spies on foreign soil, Duowei said. If that information is handed
over to the US it would mean far more than losing Chinese agents, as it also would
allow for targeted policies against China and provide Washington with an overwhelming
strategic advantage, Duowei added.

According to Duowei’s sources, Beijing made two concessions to entice US authorities
to hand Ling Wancheng over during negotiations. First, Chinese authorities will forgo
chasing down all the illegal assets he has stashed away in the United States, which is
said to total around US$600 million. Second, China will agree to take back 25,000
illegal immigrants living in the US.

In other news …John “the traitor” Kerry after having started the problems in Syria
by backing Al-Qaeda rebel groups in Syria against the Assad regime is now telling the
world of a new plan that the U.S. will bring in more than 500,000 war refuges by 2020.
Under the new plan, the limit on annual refugee visas would be increased to 85,000 in
2016. The cap would then rise to 100,000 in 2017.



China may have conducted test flight of world’s fastest aircraft

Want China Times

China may have recently conducted a successful test of the fastest hypersonic aircraft in the world, reports Hong Kong newspaper Ta Kung Pao.

According to a report released Friday on the official website of state-owned aerospace and defense giant Aviation Industry Corporation of China (AVIC), one of its test flight centers has completed an initial test flight on an unspecified high-altitude, super-fast aircraft with a “unique flying style.”

Though the report was deleted shortly after, military analysts believe it is likely that China is developing a new hypersonic aircraft that can travel at five times the speed of sound.

The Shanghai-based Guancha Syndicate said that while the AVIC report did not divulge the model of the plane or what missions it can carry out, it is clear from reading between the lines that the aircraft is a hypersonic demonstrator that can travel at record speeds. This means an aircraft that can travel faster than Mach 5, or 6,125 kilometers per hour.

A Chinese military expert who uses the online handle KKTT believes that AVIC is developing a new high-altitude, hypersonic unmanned aerial vehicle requiring a carrier aircraft such as an H-6 twin-engine bomber. The drone will be launched once it is carried to a high enough altitude and will climb by itself to cruising altitude before traveling at hypersonic speed, KKTT said, adding that the drone will be able to return to base itself.

And as reported today….

As the SR-71 should have been retired by the US Air Force already, a better point of comparison is the D-21 Mach 3+ reconnaissance drone, KKTT said. Also launched from an a carrier aircraft, the D-21 has a top speed of Mach 3.3-3.5, a service ceiling of 29,000 meters and a range of 5,550 kilometers. The UAV also has a length of 12.8 meters, a wingspan of 5.8m and a launch weight of five tons.

China is currently developing a Turbo Rocket Combined Cycle (TRCC) propulsion system that would enable top speeds between Mach 4.5-5. However, as the TRCC engine is still under development, it is more likely that the new drone is using a less advanced Rocket-Based Combined-Cycle (RBCC) engine, KKTT said.

For the moment, Chinese drones can probably reach cruise altitudes of 30,000m and speeds of Mach 3, which is sufficient for the purposes of regional strategic surveillance, KKTT added.

News of the secret drone comes amid suggestions that the Chengdu Aircraft Design Institute is also developing two high-altitude, high-speed UAVs. Leaked satellite photos revealed that one of them is about 10m long with a winspan of around 6m. Though the size is similar to that of the D-21, the external appearance is said to be closer to the America’s retired X-15 hypersonic rocket-powered aircraft.

In addition, China’s J-20 fifth-generation stealth fighter aircraft is also said to be close to being ready to enter into service. The highly touted jet is said to be capable of rivaling America’s F-22 and F-35 fighters. China’s new J-10B multirole fighter has also conducting test flights, while the J-11B jet fighter, whose airframe is based on the Soviet-designed Sukhoi Su-27, has already been performing at air shows and military parades.

Duowei believes that news of the secret UAV may have been intentionally leaked by the Chinese government as Xi’s “present” to Obama. Such a move is not unprecedented as the maiden flight of the J-20 stealth jet when then secretary of defense Robert Gates visited Beijing in 2011. Since Xi has already exhibited the PLA’s weapons at the Beijing parade earlier this month to celebrate the 70th anniversary of Victory over Japan Day, the news leak could be his way of showing off Chinese arms technology for the future, Duowei said.


China continues to build high speed rail in less developed countries, next project to connect Las Vegas and Los Angeles.

Want China Times

The first high-speed railway project in the United States with Chinese investment involved is expected to kick off as early as September 2016, according to a senior Chinese official on Thursday.

The 370-km Xpress West high-speed railway project, also named the Southwest Rail Network, will connect Las Vegas, Nevada and Los Angeles, California.

Last week, Xpress West agreed to form a joint venture with China Railway International USA, to build and operate the rail, according to Shu Guozeng, deputy head of the Office of the Central Leading Group for Financial and Economic Affairs.

China Railway International USA is registered by a Chinese consortium led by national railway operator China Railway.

With US$100 million in initial capital, the new high-speed rail line will create abundant jobs throughout the interstate corridor. Implementation of necessary regulatory and commercial activities will begin within the next 100 days.

“As China’s first high-speed railway project in the United States, the project will be a landmark in overseas investment for the Chinese railway sector and serve as a model of international cooperation,” said Yang Zhongmin, chairman of China Railway International.

Europe Under Siege

China’s Raw Economic Power

China makes 80 percent of the world’s air conditioners –
that’s 109 billion annually.

The country produces about 1.8 billion tons of coal
(oil equivalent) annually, taking up 48.2 percent of the
world’s total.

Pork bred by China contributes 49.8 percent of the total
worldwide, hitting 1.5 million tons annually.

China annually produces 1.8 billion tons of cement, which
accounts for 60 percent of the world’s supply.

The number of shoes made in China annually reaches
12.6 billion, taking up 63 percent of the world’s total.

China makes about 70.6 percent of global mobile phones,
1.77 billion annually.

Overall capacity of solar cells hits 21.8 million kW
annually, 80 percent of the world total.

The country’s 4.3 billion energy-saving lamps account
for 80 percent of the global total.

China produced 286.2 million personal computers in
2014, accounting for 90.6 percent of the world’s total.

Chinese Stocks Surge 4.9%

Stocks surged on Wednesday, with the benchmark Shanghai index jumping 4.9 percent after sliding below the 3,000 level.The rush in the last hour of trading coincided with a pattern that has become associated with State support, said Bloomberg.

The Shanghai Composite Index turned around a two-day loss, closing at 3,152.26, up 147.09 points, while the Shenzhen Component Index rallied 6.5 percent to 9,890.43.

RMB-denominated Islamic bonds coming soon: DIFC chief

Essa Kazim, the governor of the Dubai International Financial Center (DIFC), said during a recent visit to Beijing that the center is discussing the prospects for issuing a renminbi-denominated Islamic bond with a bank in China.

He declined to disclose which Chinese bank will be the issuer of the first renminbi-denominated Islamic bond, Shanghai’s China Business News reports.

Promoted by Beijing’s “Belt and Road” initiative, all Chinese banks with branches and representative offices in the DIFC are interested in issuing Islamic bonds in the renminbi, Kazim told the daily.

All Islamic bonds issued so far have been issued in the US dollar.

Asked when the first renminbi-denominated Islamic bond will be issued, Kazim said it is difficult to say but he expects it will be soon because the Chinese banks showing interest in the matter all want to be the one to makehistory.

Islamic bonds are an important part of sharia compliant finance, Kazim said, and are issued by several major economies and Muslim countries, including Hong Kong and Malaysia.

Chinese banks have been increasingly active in the global financial exchange of the DIFC. In July, the Bank of China issued a renminbi-denominated “Belt and Road” bond worth 2 billion renminbi (US$322 million) on the Nasdaq Dubai.

The Industrial and Commercial Bank of China and the Farmers Bank of China have also issued bonds in Dubai. Now the three major Chinese banks and the China Construction Bank either have opened or are setting up branches in the DIFC to facilitate their expansion in the region.

During his stay in Beijing, Kazim proposed a DIFC project that supports the implementation of the Belt and Road initiative.

As the world’s second-largest economy, China should have a presence in the Middle East, one of the world’s important trade and financial hot spots, to help Chinese enterprises connect western and eastern markets, he said.


Russia positioning tanks at Syria airfield: U.S. officials

WASHINGTON (Reuters) – Russia has positioned about a half dozen tanks at an airfield at the center of a military buildup in Syria, two U.S. officials said on Monday, adding that the intentions of Moscow’s latest deployment of heavy military equipment were unclear.

Moscow has come under increased international pressure in recent days to explain its moves in Syria, where the Kremlin has been supporting Syrian President Bashar al-Assad in a 4-1/2-year war.

The Pentagon declined to directly comment on the Reuters report, saying it could not discuss U.S. intelligence. But a U.S. Defense Department spokesman said recent actions by Moscow suggested plans to establish a forward air operating base.

The Macau Job: $258 million casino heist

On Thursday, the Hong Kong-based investment bank Daiwa Capital Markets published a report saying that as much as $258 million had been stolen from a junket operating inside Wynn Macau.

In Macau, junkets operate as third parties within casinos, bringing in cash that high rollers — the VIPs who bet big at the casino — use to leverage their bets.

It is suspected that employees of Dore Holdings, the junket working inside the casino, made off with the cash.

For its part, Wynn told Bloomberg its casino didn’t lose any money, but the company’s stock has still fallen 9% on the news.

The reason for the drop is that the heist has the potential to do serious damage to the high-roller market in Macau, which makes up a chunky 50% of gambling revenue on the island.

Haijing 2901: China’s heavily armed patrol boat may provoke escalation

China is deploying its largest maritime patrol vessel, the Haijing 2901 to the eastern island of Zhoushan for a potential war of attrition with Japan over the disputed East China Sea, according to the Tokyo-based Sankei Shimbun on Sept. 13.

It has been Japan’s policy to deploy its coast guard vessels instead of warships to prevent its territorial conflict with China over the Diaoyutai islands (Diaoyu to China, Senkaku to Japan, which controls them), from escalating into a full-scale war. The deployment of the Haijing 2901, which is also the world’s largest maritime patrol vessel with a greater displacement than the Arleigh Burke-class destroyers of the United States, will eventually challenge this policy since Japan’s coast guard has no vessel that can counter it.

With its 76mm rapid-fire naval guns, two secondary turrets and two anti-aircraft machine guns, the Haijing 2901 can easily overpower any patrol boat. If Japan’s coast guard cannot oppose China’s now “routine” patrols around the disputed islands, it could eventually lose control of the territory. The next step, an inevitable escalation, would be to deploy the warships of the Japan Maritime Self-Defense Force.

Tokyo would then be accused by Beijing of provoking a war by deploying warships against a maritime patrol vessel, albeit one that is a warship in all but name.

In the skies above the islands, a total of 464 sorties were made by fighters of the Japan Air Self-Defense Force in 2014 to intercept Chinese aircraft after China declared an air defense identification zone covering the disputed islands at the end of 2013.


Barron’s predicts a 50% retrenchment in Ali Baba,which short sellers is the Magazine working for?

Barron’s this morning came out with a cover story predicting that shares of
Alibaba could fall 50%. In what journalistic world does a magazine come out
with such a speculative hit piece with a journalist trying to predict a fall
in a stock. The reasons the weekly financial newspaper gave for the dour outlook:
China’s struggling economy, increasing competition in e-commerce and more
scrutiny of the company’s culture and governance.

Alibaba spokesman Bob Christie said the article “contains factual inaccuracies
and selective use of information, and the conclusions the reporter draws are
misleading.” The company has posted on the internet a letter to Barron’s editor
complaining about the story.

Ali Ba Ba is still growing at better than 40% annually and is hitched the fast
growing ecommerce area of the economy not the static, retrenching fixed asset part
of the economy.

If I were Ali Ba Ba I would instantly complain to the SEC and have the journalist
investigated to see which short selling hedge funds they are working with to print
such garbage.

Beijing now considering strike on ISIS still not taking asylum seekers

Putting a Chinese hostage up for sale was probably the wrong move on
ISIS part, with that being said, China will not take asylum seekers anymore
than the Middle-Eastern countries will and is using this an an excuse to stand
on the sidelines.

Want China Times
Beijing is hesitant to accept asylum seekers amid the ongoing European refugee crisis as it is continuing to procastinate over whether or not to strike the Islamic State (ISIS) jihadist terror group, says Duowei News, a US-based Chinese political news outlet.

Duowei said this hesitancy is reflected in Beijing’s handling of claims that a Chinese hostage held captive by ISIS has been put up “for sale.” While the ISIS “advertisement” was posted on Sept. 9, the Chinese foreign ministry did not respond until a press conference on Sept. 11, when ministry spokesperson Hong Lei indicated that “preliminary information shows that one of the two hostages as relevant media revealed matches the characteristics of a Chinese citizen who has gone missing overseas.”

By contrast, the government of Norway, which also had one of its purported nationals “advertised” by ISIS, held an emergency conference in Oslo on Sept. 9, with Prime Minister Erina Solberg stating: “In late January we learned of the possible kidnapping of a Norwegian citizen. He has since been held by different kidnappers but there is reason to believe he is now held by ISIS.”

China is also clearly not prepared to deal with the European refugee crisis, triggered by a new wave of asylum seekers from Syria’s brutal civil war and others fleeing the turmoil in Afghanistan, Iraq and the Horn of Africa, Duowei said. While several EU countries, the US and Japan have all announced that they are willing to take in refugees, China has remained quiet.

When asked on Sept. 11 whether China has been requested by any foreign country to accept refugees from Syria and Iraq, Hong replied: “The Chinese side has taken note of the recent refugee issue as well as measures taken by relevant EU countries. It is the joint wish of the international community to solve the humanitarian crisis, the fundamental solution to which lies in regional development and stability. We believe that the EU and relevant countries are able to rise to the critical challenge, properly deal with related issues and safeguard regional stability with concerted efforts. The Chinese side is willing to communicate and coordinate with the EU and its member states on the refugee issue through international and bilateral channels.”

In other words, China is planning to be an observer rather than a participant in the process and is content with putting the burden on other countries, Duowei said. The main reason for this is because for Beijing the decision to accept Syrian refugees comes hand in hand with whether or not to carry out military strikes against ISIS, Duowei added, noting that the Chinese government is not yet ready to make up its mind.

On the surface, China has many reasons to join the international coalition against ISIS. The jihadist group has had northwest China’s Xinjiang Uyghur autonomous region in its sights since last year and has repeatedly criticized Beijing for policies that have affected the lives of the region’s largely Muslim population. In July, China was even included in a list of 18 countries and regions ISIS has declared war against.

However, accepting the US invite to take on ISIS means that China would also have to take sides between the US and Russia, Duowei said. While both of those countries want to take down ISIS, the US supports the rebels in their fight against Syrian president Bashar al-Assad, while Russia remains one of the Assad administration’s main supporters. If Beijing sides with Moscow, Washington will no doubt be unhappy, though if Beijing sides with Washington it could free up from resources for the US to focus more on its Asia-Pacific strategy, which Beijing believes is targeted at China.

Duowei also notes that China may subscribe to the idea that the US played a role in the rise of ISIS. A 2012 US government report indicated that Washington and its allies knew that by supporting and arming opposition groups in Syria that were dominated by extreme sectarian groups that they could be creating some sort of “Islamic state” that would pose a “grave danger” to Iraq’s unity. If that is the case, then Beijing might take the view that it should not have to clean up the mess the US created, Duowei said.

A third reason for not acting is China’s long-stated principle of non-interference in the internal affairs of other countries. In any case, China is more concerned right now with its ambitious “Belt and Road” initiatives to boost connectivity and cooperation throughout Eurasia, Duowei said. Neither the land-based belt nor the oceangoing road pass through Iraq or Syria, so Beijing simply needs to ensure that its economic ties with the Middle East are not severed, Duowei added.

A final consideration is the religious consequences of tackling ISIS, which is mainly composed of Sunni Arabs from Iraq and Syria. Such a move could damage China’s ties with Arab League countries dominated by Sunnis, Duowei said, adding that it could also worsen tensions domestically as the Uyghur people of Xinjiang are also predominantly Sunni Muslims.

Protests continue in Germany

Germans are being told they must pay for benefits from cradle to grave for
over a million people from Syria and most likely their children, and of course,
their children as well, and if you don’t agree your a racist. Of
course,this act of kindness will be repaid….with 10 million more migrants
until the entire social system collapses. And that is just what Europe’s
controllers want.

It’s really no fun lording over a middle class, semi-prosperous country with
health care and education. Now, lording over a mass of desperate hungry people
all at each others throats over religion or class issues, thats where someone
can really have some fun.

France: Topless Protestors hauled off stage and beaten at Muslim Conference

China will not start currency war, insists premier

Li Keqiang says currency war is not in China’s interests as he seeks to allay
fears about the health of the world’s second largest economy. China’s premier
has sought to soothe concerns about the health of the world’s second largest
economy, insisting the country would not engage in a currency war to boost growth.

Li Keqiang said China’s current growth trajectory was “still moving in a positive
direction” and that recent stock market “fluctuations” would not change the
country’s pace or direction of reforms. Mr Li said the addition of seven million
urban jobs in the first half of the year was a sign that the economy remained in
rude health.

“All this shows the Chinese economy has been running within the proper range,”
he said at the World Economic Forum in Dalian, China.

Mr Li comments follow a surprise decision by the People’s Bank of China (PBoC)
last month to devalue the renminbi by almost 2pc against the US dollar.

The move triggered a global stock market sell-off as fears about Chinese growth
intensified. China’s second-in-command insisted that Beijing had no plans to
allow its currency to decline further.

Mr Li said the devaluation was prompted by exchange rate fluctuations in other
countries, as he highlighted that the renminbi had climbed by 15pc against a
basket of other currencies since he took office in March 2013.

However, he insisted that it was not in China’s interests to push the renminbi down
further. Mr Li said “continuous depreciation” of the currency would hurt Chinese
exporters by causing foreign customers to postpone orders.

“We don’t wish to boost our exports by devaluing the Chinese currency … Still
less do we want to see a currency war,” he said.

“As the Chinese economy has become so closely integrated with the global economy,
such a currency war would bring more harm than any possible gains to China.”

Mr Li reiterated Beijing’s aim to let its currency float freely, but specified
no time frame.

PLA ‘sinks’ US carrier in DF-21D missile test in Gobi

The People’s Liberation Army has successfully sunk a US aircraft carrier, according to a satellite photo provided by Google Earth, reports our sister paper Want Daily — though the strike was a war game, the carrier a mock-up platform and the “sinking” occurred on dry land in a remote part of western China.

A satellite image reveals two large craters on a 200-meter-long white platform in the Gobi desert used to simulate the flight deck of an aircraft carrier. The photo was first posted on SAORBATS, an internet forum based in Argentina. Military analysts believed the craters would have been created by China’s DF-21D anti-ship missile, dubbed the “carrier killer.”

While claiming that the missile has the capability to hit aircraft carriers 2,000 kilometers away, the nationalistic Chinese tabloid Global Times stated that the weapon was only designed for self-defense; the DF-21D will never pose a serious threat to US national security because it is not even able to reach Hawaii, the newspaper said, though fully aware of the US naval deployment in the Western Pacific.

Underlining this point, Global Times took a common line from China’s national defense doctrine before the country acquired an aircraft carrier of its own — namely that carriers are an offensive weapon while anti-ship missiles are defensive. “It can be used like a stick to hit the dog intruding on our backyard, but it can never be used to attack the house where the dog comes from,” the paper’s commentary said.


Xi Jinping breaks with protocol to select own bodyguards

China’s president, Xi Jinping, has purged the Central Security Bureau and frequently changes his personal bodyguards, according to a Hong Kong news outlet cited by US-based Duowei News.

The revelation comes as Xi’s anti-corruption campaign continues after taking down heavyweights including the former Politburo Standing Committee member Zhou Yongkang and retired vice chair of the Central Military Commission Guo Boxiong.

The report said Xi has replaced the entire Central Security Bureau, transferring personnel from field armies to replace the Zhongnanhai guard, with his own personal bodyguard changing all the time.

The Central Security Bureau was purged on the eve of the “lianghui” — the annual twin meetings of the National People’s Congress and the Chinese People’s Political Consultative Conference, according to the report. In the reshuffle, both the head of the bureau Cao Qing and deputy head Wang Qing were transferred from their posts. There were then subsequent rumors that Wang Qing had been arrested. Wang Shaojun, the deputy head of the bureau in charge of daily affairs, who formerly headed up the 38th Army, was promoted to head of the bureau to a post as Xi’s personal bodyguard.  

Hong Kong’s Oriental Daily reported that before the lianghui, Cao Qing was transferred to a post as a deputy commander at the Beijing Military Region after a series of other changes to the bureau leadership. The paper reported that only Xi was capable of bringing off such a large-scale reshuffle, suggesting that he did not hold great trust in the bureau’s previous leadership.

The bodyguards of the party leadership are normally assigned by the bureau. Senior Politburo members are assigned a squad of guards, while members of the Politburo Standing Committee, the party’s top circle of power, are assigned a platoon.

Since Xi became head of the party at the end of 2012, however, bodyguard assignment has reportedly been overseen by the director of the CPC General Office, Li Zhanshu, who is concurrently the political commissar of the bureau, which means that previous bureau chief Cao Qing never had control over the selection of Xi’s bodyguards.

Most of the original personnel of the bureau have already been transferred from bodyguard units, replaced by elite troops from the 38th Army, said the Hong Kong Economic Times, citing insiders. It is almost unprecedented for the president to break with convention and select his own bodyguards. It had been previously reported that members of the guard detail of Xi’s predecessor Hu Jintao were not allowed to approach within three meters of him without permission. Xi however seems to have taken things to a greater extreme.

Don’t underestimate effects of Fed’s expected rate rise: Xinhua

To raise or not to raise interest rates? That is a question for the US Federal Reserve to ponder, but the uncertainty over a potential increase in interest rates has had negative spillover effects in the market.

The US unemployment rate in August dropped to a seven-year low of 5.1% and is now in the middle of the range that Fed officials consider full employment, raising expectations of an interest rate hike.

US stocks suffered heavy losses Friday as investors tried to digest the closely watched August jobs data amid a global sell-off. Financial markets have experienced a storm over the past few weeks, with stocks, commodities and emerging market currencies selling off sharply.

The recent turmoil has been caused by anxiety about an anticipated US interest rate rise and a weak world economic recovery.

Financial and monetary volatility could already be seen in some emerging markets before China rolled out new foreign exchange rate regulations, which may have helped trigger but is not the fundamental cause of recent global market fluctuations.

Since the 2008 global financial crisis, many developed countries have pumped a great deal of liquidity into the market and lowered interest rates to nearly zero. Hot money flowed to emerging markets for higher returns. However, as the US economy has recovered, the expectation of an interest rate rise has prompted hefty capital outflows from emerging economies since mid-2014.

Disruptive asset price shifts and financial market turmoil could lead to capital flow reversals in emerging economies and remain a risk to emerging markets, according to a note from the IMF for the G20 Finance Ministers and Central Bank Governors’ meetings.

Historical evidence shows that almost all major financial crises since 1980 occurred when the Fed tightened monetary policy.

Given the US dollar’s role as a universal currency, the Fed’s move will have a wide spillover effect, influencing global commodities, exchange rates and stock markets.

The uncertainty over the interest rate rise might continue to haunt emerging markets, whose currencies are under huge depreciation pressure and whose foreign exchange reserves are falling sharply. Drastic changes in the value of major currencies will make the financial market even more turbulent.

For the sake of global economic stability, the pace and scale of a possible rate rise should be treated with due caution.