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Obama's China Currency Comment (Mar 11)

Headline writers this afternoon say President Obama "urged" China to stop controlling its currency. What did Obama say exactly? Long into a banal booster speech at the annual meeting of the Export-Import Bank of the United States (a federal government agency), Obama said

"China moving to a more market-oriented exchange rate will make an essential contribution to that global rebalancing effort."

It surprises me Obama continues to spend political capital in a pointless pursuit to coerce Beijing to appreciate its currency. Washington can urge China all it wants but Beijing has made its position on Renminbi very clear. Just this week at the National People's Congress session China said the Yuan's unofficial peg to the US dollar will end and appreciation up to 10% over the short to medium term is expected.

A move by Beijing to drastically create a more "market-oriented" exchange rate would mean reducing China's dollar holdings in favor of other currencies or gold. Is this ultimately what Wa...

China Offshores Wind Turbine Jobs to Nevada (Mar 11)

Anti-China blowhard Senator (D-NY) Chuck Schumer's gambit may have paid off for Nevada. Schumer was close to derailing a giant wind farm in Texas planned by US Renewable Energy Group (US REG) and A-Power Energy Generation of China by thwarting currently available federal subsidies (tax credits) because the wind turbines would be manufactured at A-Power's plant in Shenyang, Liaoning Province. Today US Reg announced the joint venture will build a manufacturing plant in Nevada potentially employing 1,000 Americans to build and assemble the wind turbines. The location and details of the plant are not revealed at this time. A-Power shares (NASDAQ:APWR) are up over 8% today. US-REG is a private equity venture.

Schumer's opposition to the original deal was purely political grandstanding in an election year. Fact is American multinational GE will supply the massive gearboxes to A-Power and eventually build a manufacturing center to supply not only A-Power but China and Asia overall. A-Power'...

Will Geely Offshore Volvo? (Mar 11)

According to Paul Tan's Automotive News Geely has secured over $2 billion (US dollars) financing to complete its acquisition of Volvo from Ford Motor Company. Billionaire Chairman Li Shufu of Geely, China's biggest privately owned automaker, says the company has regulatory approvals to move forward with the deal. It was lack of Beijing approval that killed the Hummer deal for Sichuan Tengzhong.

At issue now is whether Geely will move Volvo production to China from Sweden. Plans are to double production to 300,000 vehicles per year. It seems highly unlikely Geely would mass produce Volvos in a country with one of the highest labor costs in the world, higher even than the US auto industry....

China Moves the World (Mar 10)

It is an interesting irony that the same mainstream media that criticizes Chinese government data as untrustworthy claims that same data is capable of moving commodities, currency, and stock prices the world over. Consider today's headlines. Chinese numbers on exports and inflation are responsible we read for stock markets going up in the USA, Canada, and Brazil; affected the Mexican Peso, the (US) Dollar, and the Yen; and impacted gold and oil markets!....

USA-China Venture Builds Largest Biologics Lab in Beijing (Mar 9)

AutekBio, a Silicon Valley based biotech business with operations in China, will build Asia's largest biologic contract manufacturing organization (CMO) outside Beijing. The $100 million (US dollar) facility is financed by US and China venture capital firms. The labs will meet current US (FDA) and EU regulatory requirements and be able to handle multiple production lines for biopharmaceutical research and development....

China Gets North Korean Port on Sea of Japan (Mar 9)

The provincial government of Jilin Province in Manchuria told the National People's Congress today that the North Korean government agreed to lease the port of Rajin on the northeastern coast of the Sea of Japan to China for 10 years. Use of the port will give sea access to the landlocked hinterlands of Manchuria for the first time since the collapse of the Qing Dynasty. Rajin is included in economic and trade zones originally created as part of the UN sponsored Tumen River Area Development Programme between Russia, China, and North Korea. Russia is upgrading a railway from the border to Rajin in what may be competing investment. Chinese development of Rajin port could jump start the Tumen River region. This development has important implications for the economy and navy balance in the region....

Beijing's Ambitious Plans to Settle the West by Rail (Mar 8)

Wang Mengshu, a Chinese expert in railway engineering and tunneling, has made a splash telling newpapers from the South China Morning Post to the Telegraph of Beijing's plans to extend high-speed railways into Central Asia and connect China to southeast Asia and eventually Europe.

The heads of China Eastern (NYSE:CEA) and China Southern (NYSE:ZNH) airlines warn that the Chinese high-speed rail network threatens their market for short and medium hauls. Some analysts believe that once complete Chinese railways will make flights under 800 kilometers (under 500 miles) uncompetitive potentially eliminating a great deal of flights. Investors in Chinese airlines should take this possibility seriously.

"We foresee that in the coming decades, hundreds of millions of people will migrate to the western regions" Wang said when discussing a plan to build high-speed rail from Urumqi, capital of Xinjiang autonomous region, to the Caspian Sea and beyond. It is interesting to speculate on just how tr...

China Reaches Peak Oil with Call for Bigger Strategic Reserves (Mar 8)

Chinese oil production has essentially peaked and the country's strategic reserve is insufficient according to National People's Congress delegate Chen Geng. Geng is a former executive of state-owned China National Petroleum Corp. China is one of the top oil producers in the world at just under 4 million barrels per day. Data of the International Energy Agency shows production increasing around 3% a year over the medium term but long term forecasts show the share of imported oil increasing much faster. Chinese press reporting from the Congress session say there are calls to greatly increase the strategic oil reserves currently targeted at 170 million barrels. By contrast the USA has almost 700 million barrels stored in salt caverns around the country....

TRADE WAR: US Anti-Dumping Duties of 349% on Chinese Bricks (Mar 6)

The US Commerce Department is pursuing at least 20 countervailing and anti-dumping duties cases against China. Yesterday a ruling put preliminary duties ranging from 132.74% to 349% on magnesia carbon bricks imported from China. In 2008 the USA imported $50.8 million of Chinese bricks. The original complaint came from one US maker, Resco Products Inc., a privately held conglomerate out of Pittsburgh.

Earlier this week Commerce slapped duties of 109% on certain types of coated paper and 13% extra on Chinese salts....

Visit Florida China (Mar 5)

The Sunshine State's new tourism marketing program Visit Florida is aggressively pursuing Chinese tourists - the fastest growing group of foreign visitors to the USA. This year Chinese tourist numers are expected to grow 15% overall and Florida wants a share. The state has an office in Shanghai and numerous programs to bring in more Chinese. It is anticipated that within 10 years China will be the world's number #4 source of foreign travelers.

Florida's efforts are in contrast to the damaging and divisive actions by their own Congressional Representaton such as Ileana Ros-Lehtinen (R-FL) Republican Congresswoman from the 18th District that includes Miami. Visit Florida should consider whether their cause is helped each time Ros-Lehtinen sponsors legislation or makes an official statement against "Communist China".....