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Thursday, September 27, 2007

Chinese Investment Great Leap Forward


Reports: China to launch investment fund

BUSINESSWEEK

BEIJING

A government fund that is to invest part of China's US$1.3 trillion in foreign currency reserves is due to be officially launched on Saturday, according to news reports.

Financial analysts are watching the agency closely to see where it invests and its possible impact on financial markets. It is expected to be entrusted with US$200 billion, which would make it one of the world's richest investment funds.

The agency is likely to be called the China Investment Corp., Dow Jones Newswires and the Chinese newspaper Securities Journal reported Thursday. Both cited unidentified sources.

An Chinese official who was involved in setting up the fund said he could not confirm the reports. Foreign reporters will be barred from the official opening ceremony, said Jesse Wang, chairman of state-owned Jianyin Investment Co.

Beijing created the fund in an effort to earn higher returns on its currency reserves, which have soared amid a boom in export revenues. A large portion of the reserves have been invested in safe but low-yielding U.S. Treasuries.

Its creation comes at a time of tensions with Washington over China's swelling trade surplus and unease in the United States and elsewhere over Beijing's growing economic and military might.

Authorities say the agency will be modeled in part on Singapore's government-owned Temasek Holdings, which invests in banks, real estate and other industries in China, India and elsewhere.

A key question has been the possible impact of the new strategy on the market for U.S. Treasury securities.

Beijing is a big buyer of Treasuries, helping to finance the American government budget deficit. Chinese officials have given no details of how much money might be diverted to other assets.

The Chinese agency agreed in May to pay US$3 billion for just under 10 percent of American investment firm Blackstone Group LP.

Wang, who was involved in negotiating the Blackstone purchase, told The Associated Press in May that the Chinese agency was expected to try to avoid political strains abroad by purchasing minority stakes in companies rather than pursuing corporate takeovers.

Chinese companies have been uneasy about foreign acquisitions since the uproar in 2005 over state-owned oil company CNOOC Ltd.'s attempt to acquire U.S. oil and gas producer Unocal Corp. CNOOC dropped its bid after American critics said it might endanger energy security.



27 comments:

  1. 2164th: Beijing is a big buyer of Treasuries, helping to finance the American government budget deficit. Chinese officials have given no details of how much money might be diverted to other assets.

    If China dumps the treasuries and destroys the dollar, they destroy their own currency too, because it is pegged to the dollar. If they unpeg it the Commies lose control of their own economy and free market forces take over.

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  2. All the while everybody else dumps dollars and buys ever cheaper Chinese products while scratching their heads in wonder.

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  3. At the RCP there is a China article, today, as well

    It brings to light a disturbing pieve of reality:

    What's required is strong farsighted leadership from both sides.

    On the one hand, business between the two countries is booming. Between 2000 and 2006, bilateral trade flows grew from about $116 billion to some $343 billion. China needs American consumers to continue to spend freely, because about one-fifth of China's exports are now headed for the United States. Americans profit from access to inexpensive products and draw about 15 percent of their imports from China. Many American investors and companies operating in China are profiting handsomely. Annual U.S. foreign direct investment in the country has hovered at around $3 billion in recent years.


    15% of US imports = 20% of China's exports.
    Factor out oil from US imports and the Chinese share of manufactoered products imported into the US would soar.

    But would still only remain 20% of Chinese exports. We becoming much more dependent upon China than China is dependent upon US.

    I don't have the time today, to do the figurin' on the percentage of imports, sans oil, the Chinese supply to US. But I'd wager well over 40%, maybe even more.
    It puts US at a great soft power disadvatage, vis a vie the ChiComs.

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  4. It seems that the NYTimes is in need of financial restructuring, which will require a new "money man".

    The is a short list of candidates, the author of the piece, Thomas Lifson, does not mention the Chinese, though yesterday's news makes the list.

    Possible White Knights

    Larry Page and Segey Brin are the two mega-rich founders of Google. They know quite a bit about the information age, are reported to be politically liberal, and seem to have a grasp of what it takes to stake out a position and make money in advertising and information services.

    Speaking of money and the information age, there is Bill Gates of Microsoft, fierce rival of Google, and a company which has run into regulatory problems in the United States and the EU. The company has learned an expensive lesson in the need for friends and a sympathetic press.

    Ron Burkle of Yucaipa Companies, a liberal friend of Bill Clinton and wheeler-dealer extraordinaire, has been known to express interest in newspaper properties, too, and might regard saving the Times as a life's mission.

    But there is one billionaire who stands out as a candidate to really take advantage of the New York Times' under-managed assets: Michael Bloomberg, mayor of New York, possible presidential candidate, and owner of the Bloomberg LP, an electronic news service that sells vast arrays of data to finance industry people willing to pay tens of thousands of dollars a year to be up-to-the-split-second with the latest news moving markets.

    Bloomberg already sells his content for a lavish premium price to those who need it right now. Repackaging some of that content for those in Topeka, Westchester, or a college classroom and are willing to wait for the next dawn before receiving a hard copy printout, makes eminent sense.

    Finally, and most chillingly, no list of potential White Knights can leave out George Soros, international currency speculator, hedge fund artist, and moneybags for the American Left. Soros might not be able to turn a dime on the Times, but he doesn't care about making money with the organizations he funds.

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  5. Since I haven't watched mush of the debates I don't know if this guy is Hallucinating, or not.

    Talking about that GM strike, I heard yesterday GM is hardly an American corp anymore, selling and building more cars overseas than here.

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  6. Craig stalls one giving up Seat Stance widens on blowing out of Senate.

    Nearly every letter to the editor about Craig in the local papers is filled with attempts at humor, like the above. It is almost as if the Senator is a laughing stock.

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  7. In depth analysis of Craig's movements at the airport, measurement of the stall, etc. Here

    Forgive me, he is my Senator, you know, and I am getting a kick out of all this.

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  8. MAP of Minneapolis-St. Paul restrooms in the area in question.

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  9. Bobal: Forgive me, he is my Senator, you know, and I am getting a kick out of all this.

    The longer that Five Flavor Fruit Bar drags it out, the more damage the GOP takes. The Republican governor is anxious to appoint his replacement.

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  10. Hopefully the judge will let him withdraw the plea and force him to defend himself on the original charges. Should be interesting to see how the constitutionality of it shakes out. Wouldn't it be wild if it went all the way to the supreme court ;)

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  11. If the judge allows Larry Craig to withdraw(ah jeez it seems impossible to get away from words like this) his plea, the working assumption would have to be that the judge got paid off.

    One law for Senators.
    Another law for folks that can hire rich lawyers.
    Another law for everybody else.

    Craig could appeal the judge's decision if he is turned down. This fiasco could continue indefinitely.

    I just want everyone to know we are not all crazy here in Idaho.

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  12. MOSCOW (Associated Press) -- Foreign Minister Sergey Lavrov signaled that Russia was opposed to any new sanctions against Iran over its nuclear program, saying such a move would undermine the work of the U.N. atomic watchdog, Russian news agencies reported Thursday

    "Interference by means of any sanctions would undermine the International Atomic Energy Agency's efforts," Lavrov was quoted by ITAR-TASS and RIA-Novosti as saying at the United Nations, where he was attending a meeting of the General Assembly.

    "The U.N. Security Council measures on Iran should be balanced and respond to the steps taken by Tehran itself that obliged to answer all questions," Lavrov was quoted as saying.

    On Wednesday, Lavrov and Secretary of State Condoleezza Rice exchanged sharp words as the Bush administration tried to cement support for new U.N. sanctions on Iran.

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  13. NYALA, Sudan (Associated Press) -- Humanitarian groups are facing a new escalation of violence in Darfur, with more than a dozen of their vehicles hijacked in recent days and several employees abducted or critically wounded. Several aid groups are questioning how much longer they can go on amid the spiraling chaos.

    Most attacks occurred on roads to refugee camps housing some of the 2.5 million people chased from their homes by Darfur's warfare. But gunmen have also struck within Nyala, capital of South Darfur state.

    A driver from the Christian aid group World Vision was ambushed and his car hijacked in Nyala this week, as was another the week before. Three of the group's local employees were wounded, one critically, in a separate attack on a convoy Sept. 20.

    "The gunmen just jumped onto the road and sprayed the cars with bullets, it's a bit traumatizing," said Michael Arunga, the spokesman for World Vision.

    The New York-based group has asked all nonessential staff in South Darfur to go on leave, cutting its team by about two-thirds.

    "We aren't stopping our operations, but we're scaling down to regroup and understand what is happening," Arunga said. World Vision, one of the largest aid groups working in South Darfur, feeds 500,000 people and runs a half-dozen clinics, emergency nutrition centers and child care centers.

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  14. Darfur's violence is constantly shifting, one sector flaring up as another calms down, making it difficult for humanitarian workers to assess why they are being attacked, and by whom. Beside the government-aligned militias, suspects include bandits and the region's various splintered rebel groups.

    The U.N. says Darfur hosts the world's largest ongoing humanitarian effort, with a budget of over $1 billion a year and over 14,000 aid workers. It has repeatedly warned this effort could collapse if aid groups feel they are being targeted.

    The four-year conflict, in which more than 200,000 have been killed, pits the Arab-led government against ethnic African rebels who rose up complaining of discrimination. To put down the rebellion, Khartoum is accused of unleashing Arab janjaweed militiamen, blamed for widespread attacks and atrocities on villagers in the vast region of western Sudan.

    Attacks on humanitarian workers in Darfur rose 150 percent from June 2006 to June 2007, the U.N. says. This calendar year alone, more than 100 aid workers were kidnapped and 66 assaulted or raped, while over 60 aid convoys were ambushed and 100 vehicles hijacked, the U.N. says.

    The pace of attacks appears to be picking up throughout Darfur. Since last week, a dozen cars carrying aid workers have been ambushed and their passengers robbed, three aid workers were kidnapped, and a half-ton of food was looted in a refugee camp, the United Nations says.

    The International Committee of the Red Cross, the Red Crescent, UNICEF, the U.S.-based Samaritan's Purse and the French-based Action Contre la Faim are among aid groups or agencies caught in the latest violence.

    Aid workers say violence in South Darfur, the biggest of the three states that make up the region, and home to the most refugees, has considerably worsened in the past six months.

    "We don't know if it's a trend or just a reflection of the general chaos," said Abraham Hadoto, who heads World Vision in the area.

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  15. ...Meanwhile, a 7,000-strong force of African Union peacekeepers has been unable to secure the region.

    In the Otash camp, made up mainly of straw huts that house over 60,000 refugees, World Vision's center treats over 3,000 people a month for disease, malnutrition and pregnancies.

    Patients all worried the clinic would close if attacks continued. They urged aid workers to cling on, hoping security would improve once a new hybrid force of 26,000 U.N. and AU peacekeepers begins to deploy in October.

    "But if you want to leave, take us on the planes with you," said Moussa, the malaria patient. "We'll go anywhere away from this hell."

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  16. "All the while everybody else dumps dollars and buys ever cheaper Chinese products while scratching their heads in wonder."
    ---
    They're scratching their heads due to all the chemical allergies they've got from the toxins in the Chinese Junk.
    ...that's before our hair all falls out.

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  17. ""top results of recent complex Google searches turned out to be inane Chinese sites that were not even parking sites, just an assortment of keywords that somehow got indexed and brought to the top of the results list. After seeing a few of these sites, I have to wonder what's going on. Is it sabotage?

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  18. Reminds me:
    Kevin James says reports of Healthy Manufacturing Gains in this country are
    BOGUS.
    Manufactured, in fact, by the default deal these days:
    Move the Goalposts:
    How much growth would we see if Hamburgers were now regarded as MANUFACTURED Products?
    I'll see if I can find it.

    SAMO for the "REDUCTION" in violent crime in LA:
    In 2006, it was said to be down, but in the Valley, GANG CRIME WAS UP
    44%.
    But that is GANG CRIME, you see, an altogether different animal than "Violent" Crime!

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  19. "I just want everyone to know we are not all crazy here in Idaho."
    RIGHT!
    Tell us another UFO Sighting Story, Uncle AlBob.

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  20. " Five Flavor Fruit Bar "
    ---
    THAT'S DIGUSTING!
    Shame on you for calling another Human being that is Differently Abled a
    " Five Flavor Fruit Bar "
    Shame, and Double Shame!

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  21. It's really sad about the NY Times:
    Bloggers will never replace some functions in the foreseeable future:
    ---
    When you hear professionals like Burns describe their operation in Baghdad, unless you have Times Derrangement Syndrome, you know that losing good papers will be a real loss, indeed.
    After all these years in Baghdad, even when Saddam was in charge, he is now going to become London Bureau Cheif:
    At least we'll be getting some good reporting out of UK for a change.

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  22. Check It Out Tonight Doug Finally you'll know whether you have been programed, or de-programed and what a relief it will be to finally know:)

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  23. What about the invasion of the Wasps?

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  24. My wife sent me this push poll quiz today.

    I scored 30 for Brownback and 29 for Rudy.

    Don't think Mr Brownback stands a chance. Rudy may.
    Ms Clinton scored a 9

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  25. Sabotaging Google

    The easiest way to attack Google's dominance is by compromising its search results. The recent glut of keyword-heavy Chinese sites is a step in that direction.


    ... This site was the top result listed when the search term "reset mp3 player m240d" was entered. And here are the full search results, in which nine of the top ten results are these weird Chinese sites.

    Courtney sent me numerous examples of this phenomenon, and it's obvious that the more specific and detailed the search request, the more likely Google is to list these Chinese sites. The issue has apparently been reported to Google, but if the basic algorithms allow this sort of result, even banning the specific sites will not stop this sort of abuse.

    Right now the motives behind this phenomenon are obscure, unless it's being done just for testing purposes. You know, like underground nuclear testing.

    I'm reminded of some news reports I read in The New York Times as I was doing some Civil War–era research in old copies of the paper circa 1860 to 1870. At that time, the telegraph was the hot technology, and it was being built out all over the country using telegraph poles and wires strung everywhere. During this era it was not uncommon for one of the telegraph companies to chop down the poles and cut the wires of another telegraph company. There were constant news stories about it, and this sort of thing still exists. It's no different than a phone company "accidentally" unhooking a competitor's DSL rig in the central office during the burst of open-access activity in the 1990s.

    I remember my first visit to China 20 years ago, listening to the long lectures about how China intends to become a capitalist nation. The Chinese liked to say they were going to emulate American capitalism. Ever since then I wondered what that meant. Would it mean chopping down telegraph poles? The American way?

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