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12 year-old Victoria Grant on the Canadian banking system

June 4th, 2012 5 comments

Someone asked me recently to comment on the difference between Chinese banks and American banks. While both seeks to maximize profits, the former is much more under the control of the government and thus more aligned with national economic policy. Ann Lee recently told Allen and I that in the U.S., as in the recent bail-out of WSJ, the situation was a socializing of the risks but privatizing the gains. U.S. banks form a powerful interest that can co-opt the American public. That situation is no different than the Canadian one, apparently, as this amazing 12 year-old, Victoria Grant, who recently articulated what’s wrong with her country’s banking system:

Categories: economy Tags: ,

RMB-Yen currency swap starts June 2012

May 30th, 2012 9 comments

At the 4th BRICS summit, the member countries agreed to work towards currency swaps when trading among themselves. For China, this is a general trend in recent years to internationalizing the renmingbi (RMB) or yuan. At the end of 2011, 9% of China’s total trade were settled in yuan with 14 countries and regions. That’s quite a jump considering in 2010, the percentage was only 0.7! In anticipation of more agreements to come, a report by the HSBC in 2010 estimated half of China’s trade with emerging market countries by 2015 would be conducted using swaps. In other words, the report went on, “nearly USD 2 trillion worth of trade flows could be settled in renminbi annually, making it one of the top three global trading currencies.” Imagine that happening without the yuan floating. Japan and China just announced their swap agreement likely to take effect next month. As a matter of practicality, the two countries will shave $3 billion in commissions alone. What’s the political implication? Read more…

Categories: economy Tags: ,

President of Ecuador, Rafael Correa, to Julian Assange, “welcome to the club of the persecuted”

May 23rd, 2012 30 comments

Following is an interesting interview of Ecuadorian President, Rafael Correa, by Julian Assange. There are many criticisms of U.S. foreign policy, but what I find most interesting is Correa lamenting the fact he has to fight against moneyed interests within his own country who control the mass media. Assange asked about China being a replacement devil as source of capital. With Brazil and China as alternative sources of capital for Latin America, the political landscape is slowly changing. Another thought that struck me was the idea of transparency. U.S. media and politician often criticize China of being ‘opaque.’ Isn’t suppression of Wikileaks hypocrisy? Read more…

Is China a Resource Poor Nation?

May 17th, 2012 13 comments

China has repeatedly been billed as the largest energy consumer and portrayed as possible future aggressor in the quest for more energy, mineral, and even water resources. Most western press also mentioned that China is a resource poor country that consumed a prodigious amount of minerals. However, the first point is factually wrong. Read more…

Categories: Analysis, economy, Environment Tags:

‘Green’ protests in India backed by U.S.-funded NGO’s

April 17th, 2012 7 comments

Interesting take by Russia Today about U.S.-funded NGO’s operating in India doing ‘green’ protests against the country’s aim to develop more nuclear power plants. India has shut down some of such NGO’s while Russia Today insinuate they specifically targeted nuclear plants under construction by Russian firms.

Categories: economy, politics Tags: ,

Book Review: Shaun Rein, “The End of Cheap China”

April 13th, 2012 13 comments

If I have to pick three books for Western readers that best explains modern China, I would recommend Shaun Rein‘s recently released book, “The End of Cheap China: Economic and Cultural Trends That Will Disrupt the World.” (Also, see my interview with the author earlier this year.) The book draws heavily on Rein’s personal experience working and living in China. During one of his early trips in China in the 90s, visiting Changchun, he recounts being propositioned by a beautiful prostitute. Over the years, he has noticed a gradual “uglification” of the prostitution pool. He attributes that to the general trend of economic expansion in China where women are increasingly finding better job opportunities. Read more…

BRICS pondering their own development bank

April 3rd, 2012 11 comments

At the latest BRICS Summit in New Delhi, the member nations have announced plans to evaluate forming their own development bank. Currency swaps between them are under way, and in fact, Russia and China are already settling bilateral trade in Rubles and RMB’s. Below is Andrew Gavin Marshall weighing in on this development on Russia Today, with commentary about the lack of coverage in the Western press on this topic:

Categories: economy Tags: ,

The Retraction of Mike Daisey’s one-man show “The Agony and the Ecstasy of Steve Jobs” from ‘This American Life’

March 21st, 2012 17 comments

[Editor: this piece was co-written by Charles Liu and Allen]

To the credit of “This American Life” – a popular program on Public Radio International –  its producers over the weekend officially retracted its January airing of a version of Mike Daisy’s popular monologue titled “The Agony and the Ecstasy of Steve Jobs,” in which Daisy described first-hand terrible work conditions at Foxconn, a key supplier to Apple’s iPad and iPhones. There were simply too much distortion and fabrications of facts to ignore.

Both Allen and I actually heard the show in January.  It made us sad and angry at the time – not because we knew something was wrong – but because we got the sense that the story was too sensationalized.  Mike Daisy did know how to tell a story, but much of it sounded hollow to us.  It was too dramatized. It was so gloomy – so dark – so unapologetically one-sided. Read more…

Democracy Is Ruining Capitalism – Does China Do Capitalism Better Than America?

March 10th, 2012 18 comments

Slate/Intelligence Squared appears to be planning an interesting live debate on March 13 – with Orville Schell and Peter Schiff arguing for the motion in the title and Ian Bremmer and Minxin Pei against.

Details of the debate can be found at the slate and intelligence squared websites. The intelligence squared site – in particular – features a good and interesting set of articles linked under its research in depth section.

In anticipation of the debate, Schiff had this to say in an interview with Slate titled “Excuse Me, But Your Democracy Is Ruining My Capitalism”: Read more…

Glaxo CEO Witty on Competiveness and Innovation in China

March 5th, 2012 3 comments

In this short interview, CEO Witty of Glaxo – British multinational pharmaceutical, biologics, vaccines and consumer healthcare company – said that while Chinese government will continue to have a tension between building its domestic industry and fomenting an open competitive market in which foreign companies participates, it does a good job of making its market fair. Most importantly, Witty notes that it’s important to take a long-term view when it comes to China.  Glaxo intends to embed its Chinese operations into an integral part of the company. You won’t be that successful if you just take a “tourist” of China, he said. Witty says Glaxo intends to profit as well as to innovate in China.

Stan Abrams of China Hearsay – A Case of Pathological Bias?

February 29th, 2012 22 comments

I usually prefer to keep my posts on general, important issues – and not nit-pick on other bloggers.  However, just as once in a while one is permitted to get drunk, I will indulge in a very short post here on Stan Abrams of China Hearsay.

A few weeks ago, when China lost the WTO Appellate Body dealt China a blow in ruling that its practices on restricting exports of certain minerals / raw materials violated WTO rules, I had written a post on how unfair the decision was.  An agreement that categorically prohibits a nation of 1.3 billion from making any sort of export restrictions to protect its citizens and their environment is unfair. An agree that does so by discrimination – taking away such basic rights from China while preserving such them for other WTO members cannot be conscionable and cannot stand the test of time. I openly sided with an op-ed in the Global Times calling out the injustice and calling for China to renegotiate the grossly unfair terms under which it acceded to the WTO.

At the time, Stan wrote a post that mocked the Global Times op-ed, in effect pontificating that China must follow strictly the letters of its accession, fairness be damned. Read more…

WTO’s Recent Ruling Against China over Export Controls of Certain Raw Materials: A Critical Juncture for the WTO and a Chance for Chinese Leadership?

February 6th, 2012 8 comments

Last week, the WTO handed China a setback in its ruling over its appeal over export controls  (herein the Ruling) covering “[c]rtain forms of bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorous, and zinc.”

The Global Times has a strong response:

Time to reassess unfair WTO entry terms

Global Times | February 01, 2012 00:48

A WTO appeals panel has upheld a ruling against China restricting exports of nine types of raw materials. The ruling, completely unreasonable to Chinese, will threaten China’s resource preservation and environmental protection efforts.

China has generally been following WTO regulations and rulings. But it should find the best balance between applying WTO rules and protecting its national interests. Getting approval from the West is not our top concern.

Admittedly, joining the WTO has boosted China’s rise. However, entry was granted at the cost of China accepting some unfair terms, from which the aftereffects have gradually emerged, including this ruling. They may become a hidden problem for China’s economy. Read more…

A conversation with Shaun Rein on China

January 7th, 2012 72 comments

(On January 5, 2012, I sat down with Shaun Rein, founder and Managing Director of the China Market Research Group, to talk about China. He gave us his insights into major events of 2011. In this hour-long interview, we touched on many topics: pollution, CNN and Christian Bale’s recent run-in with Chinese police, food safety, Weibo, and so on.)

YinYang:2011 was another eventful year for China. Just when her bullet train seems unstoppable, a fatal collision left the whole country in doubt. China achieved space docking, something only the U.S. and Russia have managed. Then there was Tiger Mom.

I have invited a real China expert to weigh in on these events and other events that mattered to China. What were the Chinese narratives? How did the Chinese feel about them? I couldn’t have found a better person to do this with. Read more…

America feeling missing out in Asia

November 14th, 2011 35 comments

With Obama meeting other East Asian countries in Hawaii these few days, the “American re-engagement with Asia” story is all of a sudden in vogue again. This new way of thinking actually started with President Obama’s promise couple of years ago to double America’s exports in the not too distant future. The goal itself is worthy and is an excellent way to channel America’s energy. Unfortunately, the simple gist of that U.S. ‘re-engagement’ has instead been couched by the U.S. media into some sort of militaristic furtherance, with a suspicious eye casted at China. Such ploy is to dramatize and sell ads (and, sure, by politicians to garner votes). I am happy that the Obama administration still publicly reaffirms the idea that a richer China bodes well for American exporters, because that is the simple truth. Ask Intel, Apple, GM, and Caterpillar. Read more…

Categories: Analysis, economy, Opinion, trade Tags:

Is restriction of US export to China killing its own hi-tech industry?

September 9th, 2011 21 comments

Here’s one aspect of China’s manufacturing capacity that is rarely mentioned in mainstream western press. By restricting export to China, the US government is giving the largest manufacturing markets to its main competitors. The US hope that by restricting hi-tech export would prevent China from developing its own hi-tech industry. However, the reality is that companies from Germany, Japan, France and Taiwan etc are the major winners. As of now mainland and Taiwan companies accounted for 55% of the world market in Five-axis CNC machine. Technology is not a stagnant and exclusive national attribute, any country who aspire to it and willing to work hard and invest in it will develop it. There is just no exception to the rule.

Read more…

Categories: economy, Opinion, technology Tags:

Who owns America’s $14.3 trillion debt?

August 1st, 2011 26 comments

Americans, of course! Various entities within the U.S. own $9.8 trillion and the remainder $4.5 trillion are owned by foreigners and foreign governments. My own tally shows China, Hong Kong, and Taiwan combined for about $1.4 trillion, about $500 billion more than Japan. These data come from Business Insider and make for great reference since America is undergoing debates about raising the debt ceiling. Top holders of U.S. debt are listed below: Read more…

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Ever heard of Justin Yifu Lin?

July 15th, 2011 2 comments

Most people probably don’t know him but I believe he is one of the most influential people from Taiwan. Here is a World Policy Institute interview of Justin Yifu Lin, the current Senior Vice President of World Bank. He was appointed on 2008.  On another note Zhu Min was appointed deputy managing director at IMF. Read more…

Baidu and Microsoft teams up against Google and a view on censorship

July 5th, 2011 No comments

Some might wonder how is it possible that Google still commands about 15-20% search market share in China despite its google.cn service essentially shut down there. The reason is because many Chinese netizens, 450 million and growing, are still using google.com for English language searches. Actually, according to Analysys International, a Beijing market research firm, Google enjoys 19.2% in revenue share in China versus Baidu’s 75.8%. For this reason, Baidu and Microsoft have just announced combining efforts to take on Google on that market segment.
Read more…

Categories: Analysis, economy, Opinion Tags: , , ,

“The Economic Collapse of America”

May 19th, 2011 26 comments

Below is a two-part series made by Aaron Hawkins. I came across his channel on Youtube because he recently talked about the China, South Korea, and Japan efforts in looking into bypassing the USD in their trilateral trade. It appears he has built a small but steady following. Hawkins believes America will collapse economically when the dollar loses the “petrodollar” status and is a matter of when, not whether. He then imagines what happens next. Please watch the two videos in sequence and then cast your vote on this simple poll. (Click ‘Read more..” to expand the post and the videos will show.)

Do you agree with Hawkins?

View Results

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Kunming-Singapore High Speed Railway construction starts

May 17th, 2011 17 comments

By 2020, China’s FTA with ASEAN nations will get another big boost; a 3,900km high-speed railway system linking China’s Kunming through Laos, Thailand, and Malaysia down to Singapore becomes operational and construction has already started. See my hand-drawing in the regional map below to get a sense of scope of this project. China’s trade with the ASEAN countries has sky-rocked to $292.78 billion in 2010, the year the FTA went into effect. ASEAN countries exports to China at $154.56 billion already dwarfed the U.S.’. Read more…

Categories: Analysis, economy, Opinion, politics, trade Tags:

Having 1 billion MORE, shouldn’t China be more anxious in being the #1 economy?

May 2nd, 2011 10 comments

Following is Russia Today interviewing Economist Max Fraad Wolff, from The New School in New York, supporting an IMF report saying China’s economy will overtake that of the United States in five years on a purchasing-power parity (PPP) basis. This report has stirred up a new wave of discussions around the globe. I liked Wolff’s overall take on this issue, and I would like to chime in with some thoughts of my own. Please watch the footage below before continuing with this post.


Read more…

The beginnings of a multi-currency monetary system for the world

March 8th, 2011 No comments

Zhang Monan

One of my favorite columnists for China Daily is Zhang Monan. She has a crisp picture of our world’s financial system. Her recent Op-Ed, “Rebalancing global economy,” lays out for us the benefits enjoyed by the U.S. for having the USD dominating the international monetary system. Precisely because the U.S. is diluting the value of the USD at the rest of the world’s expense, China, Russia, Europe, and generally rest of the world are now pushing for a multi-currency based system through G20.
Read more…

Chinese banks finance $2.6 billion Baha Mar in the Bahamas

March 3rd, 2011 2 comments

The Bahamas has been hit hard by the financial crisis in developed countries and the resultant dwindling tourism. Back in July of 2010, China Daily reported two agencies approved for financing the Baha Mar resort in the Bahamas, enabling much needed job creation. The resort is the largest of its kind in the Caribbean. In this report, construction officially started few days ago. The resort is slated to open in late 2014. Chinese Ambassador Hu Dingxian said to Bahamians during the ground break ceremony, “China is committed to an economic relationship of cooperation and mutual benefit.”
Read more…

Russian President Dmitry Medvedev’s Visit at the 2010 Shanghai World Expo

February 24th, 2011 No comments

Even though the 2010 Shanghai World Expo has long passed, I thought this Russia Today coverage of Russian President Dmitry Medvedev’s visit was interesting. It gave a glimpse into the economic relationship between Russia and China as viewed from the Russians.



China invests $601billion in water conservation

January 31st, 2011 8 comments

Henan Province farmers setting up irrigation system

Should China levy environmental tax on exports? Before offering my thoughts on that question, I’d like to share some news first.

China has announced spending 4 trillion yuan ($601 billion) over the next decade in water projects, mainly to tackle over-exploitation, usage efficiency, and pollution. The country plans to cap water consumption at 670 billion cubic meters, and according to this other recent report, China is now short about 40 billion cubic meters annually.

China’s Ministry of Water Resources also reported severe droughts this year, especially in Shandong, Hebei, Henan, Anhui, Shanxi and Jiangsu provinces. It said that in Hebei Province alone, 370,000 residents are having difficulty getting drinking water due to abnormal rainfall (80% less than normal).
Read more…

Categories: economy, Environment, Opinion, trade Tags:

Russia Today on U.S. elites with respect to China: Military Industrial Complex vs. Rest of Industrial Capitalist

January 21st, 2011 7 comments

Russia Today’s Producer has a very thought-provoking take on the U.S.-China relations. It goes something like this. The true division is among the American elites. On one hand, the military industrial complex wants a fearsome and bogeyman China. On the other, “normal” industrial capitalists wanting more business for their constituents. “Human rights”, “intellectual property”, etc are perhaps “hot air.” “Congress attack on China?” Probably that too.


Read more…

“Pupils take up books, pens, and hand-stoves”

January 7th, 2011 8 comments

I was really moved by the following images, from Hunan Province’s Chaping township where the region is hit by a severe cold storm. The images appeared today in China Daily, entitled, “Pupils take up books, pens, and hand-stoves.”


Read more…

Categories: economy, education, Photos Tags:

A changing China

January 6th, 2011 3 comments

Mr. Zhang


Occasionally I sift through photos taken by friends who had recently been to China. This is a portrait of Mr. Zhang taken by my friend Ming while in Shanghai. (The same friend whose Tiananmen photo I used in a previous post.) In his words, this is the story behind the image:
Read more…

Categories: culture, economy, General, Opinion Tags:

Chinese scientists made breakthrough in nuclear technology increasing uranium efficiency 60 folds

January 3rd, 2011 6 comments

Chinese scientists made breakthrough at the No.404 Factory of China National Nuclear Corp in the Gobi desert in remote Gansu province, enabling the re-use of spent uranium and increasing the efficiency of nuclear fuel by 60 folds.  China’s existing supply of uranium throughout China was estimated to last for 70 years.  With this technology, China now forecasts the supply lasting 3,000 years.

This breakthrough obviously makes nuclear power a much more practical option, because the waste resulting from use is now dramatically reduced.
Read more…

Categories: economy, Environment, technology, trade Tags:

Warren Buffett weighs in on China; Three blames: “Government, Wallstreet, China”

December 21st, 2010 20 comments

Here is Warren Buffett talking to CNN Money about two months ago. I feel his basic message to the American people is right. I think he tried to stay away from the politics and offer a fairly optimistic view of the China-U.S. relationship. Quite a bit of ground covered in that short segment, actually. If one of my American friends ask me, I will provide basically the same nutshell. (There might be an obligatory 30 second commercial before Buffet appears.)

Categories: economy Tags: