Archive for the ‘trade’ Category

COMAC C919 gets 100 orders

November 16th, 2010 3 comments

COMAC C919 orders signing ceremony

Six months ago, I wrote about the “COMAC C919, Challenging the Boeing and Airbus Duopoly.” The aircraft was scheduled for production release in 2016. And looks like the plan is proceeding well. The company has reported 100 of the planes having been pre-ordered by various airlines. So, here we are, six years before release, the C919 has already started making dents in this lucrative industry.

You may follow the above link to see who the suppliers are (for various subsystems of this aircraft) as well as other pertinent information about the market the C919 competes in. The C919 leverages COMAC’s experience from the ARJ21 which is expected to enter service this year.

The orders are making news around the world. Additional coverage by USA Today: “China wants to rival Boeing, Airbus with its C919 ‘big plane’.”

Is it Ever Possible for the West to See a “Responsible” China?

October 18th, 2010 7 comments

Many in the West have tried to coax China to act more “responsibly.” But is it possible for China to ever act “responsibly”? I don’t think so – not because China is inherently not “responsible,” but because an “irresponsible” China is born out of the imagination of an insecure West. In this atmosphere, the only way for the West to deem China to be “responsible” is for China to stop being an independent polity and tow the Western line. Here is a case in point.

Today James Fallows wrote an interesting article on whether China is merely Self-Interested (as any power is) or “Actively Maligned” against the International Order. I won’t repeat what he wrote, suffice for me to quote his reasonable conclusion that: Read more…

Top 5 things I thank, wish for in the U.S. of A.

October 14th, 2010 8 comments

America being the victor of the Cold War means she is the undisputed super power right now. The last two decades could have gone worse, but if we look back, there are a lot of positives. In the context of China, America finally accepted her into the WTO and abolished the discriminatory MFN exclusion. We saw inflow of capital into China which helped China’s continued growth lifting hundreds of millions of people out of abject poverty. We also saw the invasion of Iraq on false pretense of WMD. I am sure there are a lot on peoples mind when thinking about the USA. I wanted to make a list of top five things I think the world should thank this country. I also want to list the top 5 things I wish this country would aspire to. Below are mine. I am really curious what yours are.

Top 5 things the world should thank USA for:

5. Awesome Hollywood movies
4. Showing the world having a very open society is possible
3. A culture of extreme individualism that helps unlock the individual’s abilities (though with really bad side-effects too.)
2. A world-order that roughly works and generally most gets to develop.
1. Technological advances in so many areas (Microprocessor, space exploration, medicine, biotech, etc.)

Read more…

The current global imbalance, a fight between rich and poor

October 11th, 2010 4 comments

Despite the moral posturing and smearing campaign against China in the Western media on the currency valuation issue, the essence of the current rebalancing of our world economic system is a fight between the rich and the poor (and between the rich themselves).

The U.S. really doesn’t have this currency valuation issue all that together. Here, NYT reports “Currency Rift With China Exposes Shifting Clout” where Jame D. Wolfensohn, a former president of the World Bank, on what this boils down to:
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Fighting for Jobs in a Globalized World

October 7th, 2010 6 comments

Last week, the U.S. Congress passed a bill that authorized the Obama administration to raise tariffs against Chinese goods in response to China’s alleged manipulation of its currency, purportedly to gain an unfair trade advantage. According to this article , while the Obama administration “has not taken a position on the bill … [t]he vote ‘shows lawmakers have serious concerns about this issue…’.” Leaders of the European Union appear also to join the chorus in bashing the Yuan, claiming that the Yuan may hurt prospects of overall European economic recovery. Read more…

the 8th Asia-Europe Meeting (ASEM)

October 6th, 2010 1 comment

the 8th Asia-Europe Meeting

The 8th Asia-Europe Meeting (ASEM), a bi-annual event (the previous was in Beijing in 2008), just took place on October 4th and 5th in Brussels, Belgium. It was a big deal. Asia and Europe represent 60% of humanity and 60% of global trade. I like how ASEM state their mission. Below is part of it:
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Orville Schell on China Daily, “Challenges investors face in US, EU”

August 31st, 2010 3 comments

I thought this was a very accurate characterization by Orville Schell via an op-ed on China Daily of the “dysfunctional” investment relationship between China and the U.S. at the moment. My interpretation? On one hand, China welcomes investment with open arms; think Intel, GM, Caterpillar, and even Google investing in China. That creates tons of jobs in China. American politicians calls that “exporting jobs” to China. Now China wants to “export jobs” to the U.S. through investing, and the American politicians call this a national security issue! (Yes, if Chinese companies invest in the U.S., it would also mean they will derive revenue from the U.S.. That is the same thing already being done by U.S. multinationals like Intel, GM, etc. in China. That’s globalization.) The 50 Congressional Representatives Schell referred to? They are xenophobic, protectionist, and stupid.
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U.S. Protectionism against Huawei and why that was a good thing [for Huawei]

August 4th, 2010 13 comments

Stan Abrams over at China Hearsay has a good article out today, “U.S. Practices the Art of Zen Protectionism on Huawei.”

(If you follow Huawei, you will know that it is one of the most innovative companies in China, and it has made substantial inroads around the world for its reliable and cost-effective telecom equipment. Actually, if you talk to some Cisco engineers about Huawei, they will tell you Huawei is incredibly innovative. Huawei may even be more active in international bodies defining standards – yes – even more so than Cisco!)

Abrams writes about the recent Huawei failed attempts at acquiring 3Com, 2Wire, and Motorola’s wireless equipment unit, despite offering $100 million more than the competition. He argues this was “blatantly protectionist.” I couldn’t agree more. The only disagreement I have with his article is his characterizing this blatant protectionist act on the U.S.’s part as “Zen.” It is American insecurity and xenophobia; pure and simple. Everyone in China recognize it as such.

In my opinion, this was really a blessing in disguise for Huawei.
Read more…

Intel achieved the best quarter in the company’s 42 year history

July 13th, 2010 4 comments

Intel has just announced its Q2 2010 earnings. It is the best quarter in the company’s 42 year history. Some of you might say, “what?!” With the financial crisis in Europe and the U.S., how can this be possible? Here is a direct link to their Q2 2010 report.

You will see in the report Intel’s revenue is derived 57% from “Asia-Pacific” excluding Japan. With Japan’s 11%, the whole of Asia accounts for nearly 70% of Intel’s revenue! China’s roaring economy is likely contributing a significant portion towards this record earnings. It is a little wonder that Intel is building a new fab in China (300mm fab in the northern Dalian using state of the art 90nm technology). Toyota too builds auto plants in the U.S., and for the same reasons: it would be too politically insensitive to not given how much Toyota derives its revenue from the U.S..
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Dagong rates U.S. credit worthiness below China’s and the impeccable timing of the report

July 13th, 2010 1 comment

China unveils first sovereign credit rating report,” and this news is spreading like wild fire in the West. One reason is the report ranking the U.S. lower than China. Here is a brief take on it at Seeking Alpha: “The Unthinkable: U.S. Stripped of AAA Credit Rating by Chinese Agency.” The English version of the report is here. While Dagong Global Credit Rating Co., Ltd. (大公国际资信评估有限公司), has been around in China, this is the first time the rating company reporting on sovereign credit worthiness.
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Zhang Monan (China Daily): “Towards new financial order”

July 5th, 2010 5 comments

Zhang Monan is economics researcher with China’s State Information Center and frequently appears on China Daily with her “big picture” takes on the global financial system. She is worthwhile following if you wish to understand how China sees the jostling of control between the now currently dominant developed countries and the emerging developing countries for a fairer share of wealth. In her 2010-07-05 article, “Towards new financial order,” she summarizes the inevitable competition (or “cooperatition” if you will) from developing countries in reshaping our worlds financial institutions. Below are snippets from her article:
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Opinion: the Foxconn Incident is a Reflection of the Growing Pains Associated with China’s Traditional Mode of Development

May 30th, 2010 5 comments

The following is a translation of an op-ed published published in China Review News.

May 27, 2010 – Opinion: the Foxconn Incident is a Reflection of the Growing Pains Associated with China’s Traditional Mode of Development

The recent spate of suicides at Foxconn in China has brought unprecedented attention to this major international manufacturing subcontractor of electronics equipments.  While the causes of these suicides are inevitably complex,  the incidents are a general reflection of the stress the traditional mode of development has wrought on China’s society and provide a warning that change must be brought about soon. Read more…

The Cheonan incident – what do you make of it?

May 28th, 2010 4 comments

On 26 March 2010, South Korean (ROK) naval ship, Cheonan was sunk 1.9 km off the southwest coast of Baengnyeong Island. 46 of the 104 sailors were presumed killed. South Korea claims the ship was sunk due to a torpedo attack from North Korea (DPRK). “The cause of this explosion was not immediately determined, although experts said that an external explosion was likely, as the structure of the ship was bent upwards, rather than evenly splitting as would have happened if metal fatigue had been the cause, and that an internal explosion was unlikely, as explosives on board the ship were undamaged.” (Source:

ROK Naval ship, Cheonan sunk near Baekryong Island March 26, 2010

ROK Naval ship, Cheonan sunk near Baekryong Island March 26, 2010

I’ve placed an “x” in red on the map above to indicate where the incident occurred. Note the dotted lines which separate the North from the South.
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COMAC C919, Challenging the Boeing and Airbus Duopoly

May 27th, 2010 13 comments

The passenger aircraft industry is dominated by Boeing and Airbus. That landscape will start to change in 2016 when Commercial Aircraft Corporation of China (COMAC) (中国商用飞机有限责任公司) officially enters its C919 jetliner into service. It will compete head on against the Boeing 737’s and Airbus A320’s and is expected to be both cheaper and more fuel efficient. China Daily cited a Bloomberg report where Airbus forecasted Asia region alone to buy 8,000 passenger aircrafts (100+ seats) over the next 20 years valuing at $1.2 trillion. The market is huge. It also cited an Aviation Industry Corporation of China (AVIC) report predicting that airlines in China will buy 2,922 large passenger jetliners before the year of 2028. That is in the neighborhood of $400 billion in jetliners. It is obvious that China would have to invest in this industry.

COMAC C919 Passenger Jetliner

COMAC C919 Passenger Jetliner

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The U.S. and the Dollar in numbers; how crazy, you decide

April 8th, 2010 8 comments

$1.4 trillion out of thin air

The U.S. government has created out of thin air (“manipulated” into existence if you prefer) $1.4 trillion since September 2008 (around the time of the financial crisis) to March 2010.  (Source: U.S. Fed.) In December 2008, James Grant wrote an article in the WSJ criticizing the Fed “printing like mad … and is the wrong approach with potentially dire consequences.”

What’s the point? Everyone who hold assets denominated in dollar are immediately going to have their wealth diluted in proportion to the amount “printed” (it’s computer based now, and so the physical printing is no longer necessary).  China and Japan are the two largest foreign holders of American debt,  so the value of their holdings decrease.  The vast majority of holders of dollar denominated assets are in fact Americans.  Their purchasing power is now reduced.  Who is “manipulating” who?

Read more…

Google shuts down and routing to

March 22nd, 2010 16 comments

Google has just officially announced discontinuing and routing web requests to It has proclaimed serving uncensored results from Hong Kong “entirely legal and will meaningfully increase access to information for people in China.” Legally, it is probably true, but the Chinese government might take steps to block for Mainland users, as China has done with some other Google services. Google has also announced a tracking web page to show what Google services are blocked within China.
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Professor Jiang Ruiping:”Revaluation of Japanese Yen, a historical lesson to draw: analysis”

March 21st, 2010 No comments

Under U.S. pressure, the Japanese government revalued the Japanese Yen 200% from end of 1985 through early 1988 to address the trade deficit U.S. had with Japan. Did it make any difference for the U.S.? What happened to the Japanese economy as a result of that revaluation?

Professor Jiang Ruiping, Chairman of the Department of International Economics, at the Beijing-based Foreign Affairs College had an article in the People’s Daily in September 25, 2003, titled, “Revaluation of Japanese Yen, a historical lesson to draw: analysis.”  He addressed those questions for us back in 2003.  Below is the translation by People’s Daily Online staff member Li Heng:

(For a view of the whole Yuan and Dollar exchange rate issue, have a read at one of our featured posts, “Opinion:Making Sense of the Dollar and Yuan“.) Read more…

Opinion: Keeping a cool view of the U.S.-China Cooperatition

March 9th, 2010 3 comments

The term, “cooperatition” was coined by economists to describe corporations both cooperate and compete at the same time.  For example, Apple and Google cooperate on getting Gmail and Google Maps integrated well into the iPhone, resulting in a better finish product and while helping both companies in the market place.  However, Google also makes the Android phone operating system which helps strengthen Apple’s iPhone competitors.

Read more…

The U.S. witch hunt against Toyota, and a lesson for foreign corporations?

February 19th, 2010 4 comments

[Edit 2/20/2010] People do not remember now, but back in 2007 and 2008, Chinese toys companies were the butt of high profile highly politicized investigations for manufacturing unsafe toys; after formal investigation it turned out most of the recalls were due to fault of U.S. designers – not Chinese manufacturers.  “Made in China” was under attack in the U.S. and a target of xenophobia and protectionism.

Never mind that iPhones, designer clothing, and computers are made in China and used widely by Americans.  Never mind a University of Manitoba compiled a study in 2008, “Toy Recalls – Is China the Problem?” looking at all the toy recalls within the last two decades, and finding:

“Of the 599 recalls since 1988, an overwhelmingly high number of recalls (424 or 70.8 percent of all recalls) were due to problems which could be attributed to design flaws.”

Many Americans still see made in China goods as toxic and low quality. Read more…