1，中国油荒祸由美国，主要因缘中国成品油的行政性定价体制。它已经成为跨国金融资本向中国出口国际商品通胀的战略通道和重要的突破口，构成了对中华民族生存方式的深刻挑战。
近日国际原油价格出现了超过９０美元的过快跳长，引转了包括中国在内的全球所有重大利益集团的对弈，它使全球每年４０亿吨左右的原油产量成为新的造富平台；它使全球每年用于石油出口贸易的近２０亿吨原油价值大幅上涨超过４０００多亿美元；最重要的是它使以美元定价的数万亿的国际石油期货交易牛气旺盛，再造了国际资本新的繁荣点。值此美国调整次贷危机之时，成为修补美元纸币体系高速运转的故障部件的强大支持力量。
与此同时，单薄而又扭曲的中国成品油定价体制饱受煎熬，中国部分地区近日甚至出现油荒。中国油荒的实质一方面祸起美元，祸由美国；另一方面也反映了拥有巨大的进出口贸易总量，又实行不完全市场化运转的国家大宗商品管理、特别是油气价格管理的重大制度缺陷。这种缺陷正使得中国利益面临人为刀俎，我为鱼肉的惨局。构成这个鲜美鱼肉的至少有两道大餐，同时它们也是中国与全球交往的两条最重要的战略价格通道，其一是１９９４年以来中国实行的强制性结售汇和外汇占款制度，它使人民币采取了紧盯美元为主的一篮子货币政策。这种类似固定汇率的汇率制度，在人民币不断升值的预期内，中国资产的预期收益已经转化为当期价格和现价体系，热钱入华导致处于转型中的当代中国出现了流动性过剩，由此也迫使当代中国发展需要同时应对通胀和升值两大世界性难题；其二就是中国的大宗商品，特别是成品油的行政性定价体制，它使世界上的第二大成品油消费国的成品油与国家行政主管部门的行政调控政策挂钩，也即行政部门决定中国最大宗商品的价格，从而使中国的成品油价格具有行政与市场双重属性。而且成品油的行政价格调控还往往成为主导，由此它使跨国资本可以肆无忌惮地拉高国际原油期货价格，并借助中国对国际原油的巨大需求向中国的经济运行体系输出商品通胀，使得国际资源性商品的价格的预期收益转化为中国的生产成本、消费成本；由此高油价也导致了中国能源企业难于有效的开展全面改革并成功地向国际上输出生产上涨的生产成本，迫使中国的发展需要应对资源性商品全面通胀和加快经济转型的民族生存难题。
因此，无论是人民币的升值，还是成品油的行政性定价问题，都反映了目前以行政力量定价中国与全球交往的价格通道的运转的后果，它不但有增长的好处，也是吃大亏的传导载体。目前中国这种成品油与国际成品油的价格倒挂，成品油价格由行政机制主导的特殊能源价格政策是国际上的一种典型的人治体制，也必然是过渡性的、临时的。同时也是需要行政部门展现英雄精神，甚至超人意志的体制，它既透支国家的行政资源，也使最需要市场化的能源商品人为的与活跃的市场价格变动脱节，因此往往弊大于利。
油价下调，人民未必享受好处；油价上涨，企业又需要国家补贴。这种人造的对国际投机力量炒高油价的包容，变相地支持了美元的贬值，使美国顺利的索引中国、日本、印度等的亚洲美元储蓄运转，而且还可以再造国际大宗商品价格的繁荣以弥补国际次贷的损失，以高油价的综效反应阻断次贷在国际金融体系的传导，恢复美元纸币体系的活力，并使美国成为高油价的最大赢家。
因此，油气价格的跳长得到了美国经济领袖的联合力挺。美联储前主席格林斯潘１０月３０日表示：油价上升损害全球经济的增长，唯油价即使升到１００美元也不是坏事。美国财长保尔森１０月２６日则表示：油气不断上涨对美国经济并不产生积极作用，但高油价对美国经济的负面影响并不大。美国能源部长博得曼近日更表示：原油价格大幅上扬是由供求不平衡造成的，而非投机炒作所致。美国经济领袖对高油价的瞻评说明：油市繁荣的目的就是要造就国际大宗商品上涨的繁荣。它的繁荣不但要避免石油和大宗商品期货市场形成继次贷危机之后又一个体系散架的米牌反应，从而促生一次以美国为主的全面的金融危机，而且其繁荣还将修复次贷问题造成的国际金融体系的运转故障。这是美国的追求，也是美国利益的实质。
2，高油价的美国利益
目前美国是建立在负债基础之上的超真实的联合组装体，是世界上的负债大王，大脑是美国的，心脏可能是中国和日本的。负债创造了美国经济的增长，营造了高油价、通货膨胀、货币贬值、低利率和金融工具的活跃惯习，解决美元纸币健康运转的核心就必须降低美国经济的负债水平，实现预期收入与当期收入的双向合理转换。美国目前已在调整这个结构，保尔森财长和伯南克主席正在推进美元体系的重大转型。截止2007年4月30日，美国政府债券为8,753.070万亿美元，其中政府间相互持有的数量为3,778.255万亿美元，投资者持有的数量为4,974.815万亿美元，目前美国经济转型要对付的难点和重点就是巨大的负债。如果减债成功了，建立适度的负债体量，美圆体系仍可能再造辉煌。
全球性的债务改变了美国，从某种角度而言，美国的意义已经不大了，美国的利益代表就是美元，美国已经成为一项投资工具，美国也成为融资主体。由此债务美国必然需要应对不断增长的危机，也需要大力制造经济的兴奋点和繁荣点，延债益美。
2007年8月激化的美国次贷危机大规模地冲击了美元纸币体系的转型，目前虽集美国官民结合的力量仍难以克服。因此最好的办法就是在美元纸币体系主导的最大宗商品—油气市场上制造一次繁荣，化解美元纸币体系基于次贷问题形成的局部危机。并构造这样一个局面：即消费国支付过高的油价制造产油国的美元财富；产油国又以美元储备或美元交易大大强化美国的资本顺差；产油国、消费国都为美国提供资本顺差服务的体制，维持这个运转制度就会为美元体系改革创造千载难逢的机遇，并维持美国的期货体系对全球大宗商品的绝对定价权。
为此，美国政府已经开始推进大规模消减预算赤字的战略，2007年2月布什政府向国会报告，计划到2012年消除赤字，实现财政平衡，5月布什政府进一步估计2007年美国赤字将降低到2441亿美元。目前美国政府已开始借鉴欧元体系的稳定经验，创造美元体系的第二春，创造美元体系的另一个巨大革命的时代。为此美国可能采取五项措施以扭转美元纸币体系的运转：其一，利用美圆纸币体系的优势，保持合理水平的通货膨胀，均衡降低美元负债总量，通货膨胀是纸币贬值的最好杀手。高油价全面制造的财富肯定大于通胀，甚至淹没通胀，因此高油价比低油价好，放大财富是美圆纸币体系的最大长处，它可以有效防止美国出现次贷危机以后的米牌反应。其二，保持贸易顺差，用纸币换取更多的全球产品和服务，同时大力发展美国的海外债权，对冲美国的国内负债水平，对称性降低中国等地外汇储备的纸币收益。高油价的实质是美元体系贬值，也是控制亚洲外汇储备的手段之一。因此油价的高低是次要的，重要的是需要美圆纸币交换。其三，采取有选择的汇率战，对外推行适度的美元贬值，保持美元体系对欧元体系的国际优势，有效防止国际储备向欧元的转换，高油价会加强目前美圆纸币的储备地位。其四，对内加强税收，维持美元债务体系的良性运转，较高的油价可以提高美国的税基。其五，充分发挥美国的金融智慧，创造更多更新的金融工具，弥补美元纸币体系的集资能力，继续保持美圆的资本顺差，高油价引致的大宗商品价格上涨是美国加大实现资本顺差的重要手段，也是让美国期货体系繁荣的关键点。其六，促进新的能源革命和技术革命，保持美元资产的升值，保持美元体系对欧元体系的国际优势，有效防止国际储备向欧元的转换。例如美国正在推进天然气水合物，又称可燃冰的能源变革。由于1立方米天然气水合物相当于164立方米的常规天然气，1998年5月24日美国参议院能源委员会通过1418号议案《天然气水合物研究与资源开发计划》，该议案强调：天然气水合物列入美国战略能源规划，要求2015年美国能源部实施商业性开采。可燃冰的商业利用将改变能源美元的重大利益和国际政治版图，为美元转型创造机会。届时天然气水合物将扭转油气资源独秀的局面，因此，国际油气价格实际上在未来十到十五年内面临着上涨受到抑制的重大挑战，为此目前启动高油价可以实现最大的末日利润。其七，推进大宗资源性商品的金融属性的演化，构建美元体系新的复合基础，高油价作为第一冲击波是最为可行的。其八，全面发展以美国为中心的跨国公司的全球生产体系，保持对中、日、印等国的竞争力量，再建美国经济在消费和生产领域的双重优势，在全球美元实体经济和虚拟经济的大盘局中，相对降低美国的债务水平，高油价的本质是再一次巩固以美国为中心的大宗商品定价体系。
这个转型期长则10年左右，短则5年上下即可初步实现。改革成功了，美元即使从稳定性方面也将超过欧元；改革失败了，将是美元纸币体系的一次重大危机。从目前情况判断，由于美国掌握美元体系的全部主动权，转型成功的希望很高，然而美国必然以盘剥它国经济为代价，因此油气等大宗商品几乎是一个必然被选择的主体工具。
但是，我们也必须注意到美元体系调整面临的困难：为了应对2001年美国科技股的泡沫调整，格林斯潘将联邦基金利率即商业银行隔夜拆借利率从6.25%下调到1%，以配合克林顿政府刺激美国经济，此后又逐步回调到5.25%。伯南克主持的美联储在艰难做着减息的、低息的决定，也即美联储要用五厘以内的利率水平实现四个目标：即：对付通胀，保持资本顺差，促进国内消费增长和推动全球经济稳定，这是非常高的经济调控难度。
3，面对高油价的中国选择
面对国际高油价的上涨，中国必然应有两个选择,其一，利用中国的需求调节国际市场，以强化开发国内油气资源的战略大举替代进口。加快参与全球油气价格的定价运转，目前中国政府应全面改变油气上涨的中国预期因素。其二，果断地放开成品油价格，建立政府指导的多层次的成品油市场价格运转体制，因此10月31日即开始调整国内成品油价格是完全必要的，它将改变中国能源企业的估值体系；改变全球石油贸易的运转；改变全球石油期货走势。而且还应尽快地建立汽油以外的柴油、石脑油等成品油与国际成品油挂钩的市场运转体制。
Wednesday, October 31, 2007
华盛顿时报：有钱的中国人很多很多
英国前首相丘吉尔曾说，在他父亲生活的１９世纪后半叶，“世界是少数人的……极少数人的”。他所指的不是今天这个世界，甚至也不是西方。他所说的“世界”是指英国，当时地球上最富有的国家。
自二战结束以来，我们业已见证了经济“奇迹”改变欧洲、日本以及其他亚洲国家。少数人已变成了许多人。但是，你绝不会料想到上海当前所发生的一切。人类历史上也许从未有过在如此短的时间内，造出如此多的建筑；人类的历史上也许从未有过如此多的人，能如此迅速地发家致富。
当美国人提到中国时，大多数人想到的是为了微薄工资而苦干的工人大军，他们生产出的产品不仅质量低劣而且经常造成危险，并且总是很便宜。我们觉得中国人偷走了我们的工作，并向我们出售常常被召回的垃圾产品。但在上海待个数日，就能使这些想法一扫而光，并获得另一种全新的视角。
上海在进行人类历史上最庞大的建筑活动。高楼大厦拔地而起，其数量比笔者在其他任何地方看到的都要多。上世纪７０年代，美国纽约市长纳尔逊·洛克菲勒重建纽约州首府奥尔巴尼，这个浩大的工程甚至改变了整个美国的建筑业。据一些专家称，上海如今对世界有着类似的影响。
一些建筑属于典型的“国际风格”现代派，一些则是“后现代”建筑。在西方人看来，许多建筑都有些怪异。这可能是某种建筑宣言，或者与风水有关。
许多人仍生活在旧式的“鸽子笼”和狭小的巷子里，那里洗完的衣服都是挂在横挑的竹竿上的。它们看上去整洁干净，据说许多居民不愿意搬到离市中心较远的新的楼房里。
街道和高速路上挤满了汽车。令人震惊的是，中国如今是世界第二大汽车市场，并且也是全球增长最快的汽车市场。路上跑的许多都是美国生产的别克车，偶尔会有福特车和雪佛兰车，更多的是中国生产的大众汽车。
在１９世纪，美国的商人梦想着进入中国的市场——向中国销售灯油，他们知道那里的人很穷，但人口众多，哪怕能分到市场的小小部分都能发大财。如今，有钱的中国人很多很多。所以，别以为中国人只会生产廉价货，我们应该想到他们是一切产品的消费者。
忘记灯油吧。我们错过了那个机会，他们如今都用上电了。但是，所有那些亮锃锃的浴室的管道呢？还有中国厕所的马桶呢？
自二战结束以来，我们业已见证了经济“奇迹”改变欧洲、日本以及其他亚洲国家。少数人已变成了许多人。但是，你绝不会料想到上海当前所发生的一切。人类历史上也许从未有过在如此短的时间内，造出如此多的建筑；人类的历史上也许从未有过如此多的人，能如此迅速地发家致富。
当美国人提到中国时，大多数人想到的是为了微薄工资而苦干的工人大军，他们生产出的产品不仅质量低劣而且经常造成危险，并且总是很便宜。我们觉得中国人偷走了我们的工作，并向我们出售常常被召回的垃圾产品。但在上海待个数日，就能使这些想法一扫而光，并获得另一种全新的视角。
上海在进行人类历史上最庞大的建筑活动。高楼大厦拔地而起，其数量比笔者在其他任何地方看到的都要多。上世纪７０年代，美国纽约市长纳尔逊·洛克菲勒重建纽约州首府奥尔巴尼，这个浩大的工程甚至改变了整个美国的建筑业。据一些专家称，上海如今对世界有着类似的影响。
一些建筑属于典型的“国际风格”现代派，一些则是“后现代”建筑。在西方人看来，许多建筑都有些怪异。这可能是某种建筑宣言，或者与风水有关。
许多人仍生活在旧式的“鸽子笼”和狭小的巷子里，那里洗完的衣服都是挂在横挑的竹竿上的。它们看上去整洁干净，据说许多居民不愿意搬到离市中心较远的新的楼房里。
街道和高速路上挤满了汽车。令人震惊的是，中国如今是世界第二大汽车市场，并且也是全球增长最快的汽车市场。路上跑的许多都是美国生产的别克车，偶尔会有福特车和雪佛兰车，更多的是中国生产的大众汽车。
在１９世纪，美国的商人梦想着进入中国的市场——向中国销售灯油，他们知道那里的人很穷，但人口众多，哪怕能分到市场的小小部分都能发大财。如今，有钱的中国人很多很多。所以，别以为中国人只会生产廉价货，我们应该想到他们是一切产品的消费者。
忘记灯油吧。我们错过了那个机会，他们如今都用上电了。但是，所有那些亮锃锃的浴室的管道呢？还有中国厕所的马桶呢？
中国反垄断法将动真格？
经过长期讨论，中国全国人大常务委员会周二通过反垄断法，新法定于2008年8月1日起施行。
据说中国的方便面生产厂家私下商定价格、垄断市场，损害消费者利益，引发群众不满，最终促成了反垄断法的制定和通过。新苏黎世报认为，其实中国食品业总体竞争激烈，而中国国家操控的行业垄断问题最为严重：
“中国大部分经济领域都处于严重的垄断或寡头卖主垄断状况。这些领域带有战略性国有企业的印记，与政府和无所不在的共产党紧密结合。尽管这些企业已登上股市，但它们多数仍然为国家所有，其业务活动受政治考虑和欲望的左右。许多这样的大集团提供的服务没有什么竞争力，但却收取超高的费用，它们的工作不透明，是政界及其干部的重要收入来源。
这个国家资本主义的‘中国股份公司’控制了中国股市的大多数资本。属于这个股份公司的有石油和天然气领域、整个电信和金融服务行业。国家保护银行，一再向银行提供大笔补贴，因为这些银行往往不是从经济、而是从政治角度做出决定，经常资助不能赢利的面子工程。银行为客户提供的服务很差，存款人获得的利息实际上是负数。”
正是由于国家控制的企业坚持垄断地位，反对自由竞争，中国的反垄断法经过千呼万唤才得以出台。那么，新出台的反垄断法将保持还是打破原有体制呢？新苏黎世报的文章最后写道：
“现在通过的法律版本给两者都留下了余地。法律规定禁止有损竞争的行为，必须实行市场价格，国有企业也须遵守这一法律。但是，法律又包括一些为了保护’国家利益’的例外规定，这样实际上可以随意巩固现有状况。规定中表达不清的地方是，外资参与的企业是否违反国家利益的问题有待从新做出解释。另外，法律提出，要按照竞争法原则审查专利保护。这两条都有可能被滥用，使外国竞争对手吃亏并把他们排挤出中国市场。
新的竞争法能否及如何改变中国的企业景观，取决于新法的执行情况。由于国家及其干部在经济界依然存在，所以难以想象，目前结构并不强大的反垄断部门在没有强有力的政治影响的条件下能够有效执法。驻北京的外国企业家联合会一致认为，中国的竞争环境带有至今仍不明确的政治意志烙印。但是，明年夏天毕竟有了竞争法和反垄断部门，外国投资者表示欢迎，不过他们也异口同声地希望中国政府能遵循国际做法，明确统一地贯彻法律规定。”
据说中国的方便面生产厂家私下商定价格、垄断市场，损害消费者利益，引发群众不满，最终促成了反垄断法的制定和通过。新苏黎世报认为，其实中国食品业总体竞争激烈，而中国国家操控的行业垄断问题最为严重：
“中国大部分经济领域都处于严重的垄断或寡头卖主垄断状况。这些领域带有战略性国有企业的印记，与政府和无所不在的共产党紧密结合。尽管这些企业已登上股市，但它们多数仍然为国家所有，其业务活动受政治考虑和欲望的左右。许多这样的大集团提供的服务没有什么竞争力，但却收取超高的费用，它们的工作不透明，是政界及其干部的重要收入来源。
这个国家资本主义的‘中国股份公司’控制了中国股市的大多数资本。属于这个股份公司的有石油和天然气领域、整个电信和金融服务行业。国家保护银行，一再向银行提供大笔补贴，因为这些银行往往不是从经济、而是从政治角度做出决定，经常资助不能赢利的面子工程。银行为客户提供的服务很差，存款人获得的利息实际上是负数。”
正是由于国家控制的企业坚持垄断地位，反对自由竞争，中国的反垄断法经过千呼万唤才得以出台。那么，新出台的反垄断法将保持还是打破原有体制呢？新苏黎世报的文章最后写道：
“现在通过的法律版本给两者都留下了余地。法律规定禁止有损竞争的行为，必须实行市场价格，国有企业也须遵守这一法律。但是，法律又包括一些为了保护’国家利益’的例外规定，这样实际上可以随意巩固现有状况。规定中表达不清的地方是，外资参与的企业是否违反国家利益的问题有待从新做出解释。另外，法律提出，要按照竞争法原则审查专利保护。这两条都有可能被滥用，使外国竞争对手吃亏并把他们排挤出中国市场。
新的竞争法能否及如何改变中国的企业景观，取决于新法的执行情况。由于国家及其干部在经济界依然存在，所以难以想象，目前结构并不强大的反垄断部门在没有强有力的政治影响的条件下能够有效执法。驻北京的外国企业家联合会一致认为，中国的竞争环境带有至今仍不明确的政治意志烙印。但是，明年夏天毕竟有了竞争法和反垄断部门，外国投资者表示欢迎，不过他们也异口同声地希望中国政府能遵循国际做法，明确统一地贯彻法律规定。”
美国制造业价值领先世界 远超中国
尽管中国有世界工厂之称，但美国研究人员发现，美国制造业所创造的产品价值在世界上仍然处于领先地位，大幅度领先于中国制造业。
研究人员指出，制造业工作岗位减少是全球范围的普遍现象，其主要原因是生产力显著提高，美国制造业近年来的大批裁员并不像一些批评人士所说的那样单纯是由于生产项目外包所致。
美国财经刊物福布斯杂志报导说，美中贸易的巨大逆差并不能说明美国制造业生产力的全貌。报导指出，中国只是在生产运动鞋、塑料玩具和服装等低成本和劳动密集型产品方面超过美国，而美国工厂的总产量实际上远远超过中国工厂，而且在价钱方面，美国产品远比中国产品值钱。
*美国制造业生产高增值产品*
美国智囊机构卡托研究所贸易政策研究中心副主任丹.艾肯森(Dan Ikenson)对美国之音表示，他从美国政府、联合国以及世界银行获得的数据中研究发现，美国制造业在世界上制造出来的产品总价值中占21%，跟 1995年的21.3%几乎持平，处于全球第一的地位没有改变。
他说，中国制造业在世界产品总价值中所占的份额正在增大，但是只有8%。
他说：“从中国工厂里每生产出来价值一美元的产品，美国工厂就生产出价值两美元50美分的产品。其主要原因是，美国工厂现在生产的是高增值的产品。你知道，我们生产飞机，我们生产价格高昂的通讯设备、人造卫星等成本较高的产品。从重量来看，中国工厂生产的东西多，但是以价值来计算的话，美国仍然在世界上是最多产的制造国。”
*生产力提高制造业就业人数下降*
他说：“在整个世界，制造业的就业人数都在下降，在中国也是如此。事实上，中国制造业丧失的工作机会比美国制造业还多，其原因也是因为生产力提高。而这并不是坏事。”
美国卡托研究所的研究员艾肯森说，随著生产力的大幅度提高，人们的生活水平和生活质量也在逐渐提高。他表示，人们可以通过高效率的生产把更多的人力物力节省下来投入到其他方面。
有专家指出，目前服务业在美国经济中所占的比例高达80%到85%，而侧重于生产技术含量高和资本密集型产品的美国制造业仍然在美国和世界经济中发挥重要作用。
研究人员指出，制造业工作岗位减少是全球范围的普遍现象，其主要原因是生产力显著提高，美国制造业近年来的大批裁员并不像一些批评人士所说的那样单纯是由于生产项目外包所致。
美国财经刊物福布斯杂志报导说，美中贸易的巨大逆差并不能说明美国制造业生产力的全貌。报导指出，中国只是在生产运动鞋、塑料玩具和服装等低成本和劳动密集型产品方面超过美国，而美国工厂的总产量实际上远远超过中国工厂，而且在价钱方面，美国产品远比中国产品值钱。
*美国制造业生产高增值产品*
美国智囊机构卡托研究所贸易政策研究中心副主任丹.艾肯森(Dan Ikenson)对美国之音表示，他从美国政府、联合国以及世界银行获得的数据中研究发现，美国制造业在世界上制造出来的产品总价值中占21%，跟 1995年的21.3%几乎持平，处于全球第一的地位没有改变。
他说，中国制造业在世界产品总价值中所占的份额正在增大，但是只有8%。
他说：“从中国工厂里每生产出来价值一美元的产品，美国工厂就生产出价值两美元50美分的产品。其主要原因是，美国工厂现在生产的是高增值的产品。你知道，我们生产飞机，我们生产价格高昂的通讯设备、人造卫星等成本较高的产品。从重量来看，中国工厂生产的东西多，但是以价值来计算的话，美国仍然在世界上是最多产的制造国。”
*生产力提高制造业就业人数下降*
他说：“在整个世界，制造业的就业人数都在下降，在中国也是如此。事实上，中国制造业丧失的工作机会比美国制造业还多，其原因也是因为生产力提高。而这并不是坏事。”
美国卡托研究所的研究员艾肯森说，随著生产力的大幅度提高，人们的生活水平和生活质量也在逐渐提高。他表示，人们可以通过高效率的生产把更多的人力物力节省下来投入到其他方面。
有专家指出，目前服务业在美国经济中所占的比例高达80%到85%，而侧重于生产技术含量高和资本密集型产品的美国制造业仍然在美国和世界经济中发挥重要作用。
Is China's stock rally about to burst?
The bull that stands outside the Shanghai stock exchange could not be more apt.
The Chinese market has almost tripled in value this year as investors clamour for a slice of the world's fastest growing economy.
And if the shares of PetroChina soar when it lists in Shanghai next week, there's a chance the Chinese oil giant could become the world's most valuable quoted company, stealing the crown from ExxonMobil.
For some, this is a natural extension of China's economic rise.
For others, it's evidence of a massive stock market bubble that parallels the height of the dotcom boom.
Too hot?
China's market is displaying many of the classic warning signs of a bubble.
Cab drivers, college kids and Buddhist monks are making small fortunes in a frenzy of "chao gu" or stir frying stocks - Chinese slang for trading.
Internet chatrooms are abuzz with investment tips and reports say that millions of stock trading accounts are being opened each month.
People have a bullish feeling before the Olympics
Professor Yao Shujie, China Policy Institute at the University of Nottingham
Investment guru Warren Buffett, who recently sold his Hong Kong-listed PetroChina shares for a huge profit, warned last week that China is too hot to buy.
By most conventional yardsticks, valuations of many of China's largest shares do look stretched.
China's main stock index trades at more than 50 times projected earnings of the companies listed on it, almost triple that of major European and US stock markets.
Different standards
Shanghai-based fund manager Chris Ruffle says China's market cannot be judged by the same standards as other exchanges.
Inflation exceeds the return on bank deposits and real estate has lost its appeal following measures taken by Chinese authorities.
Strict investment rules forbid Chinese households from putting their $2.3 trillion savings in overseas assets, leaving China's stock market the only option.
"If it was a normal market it would be overheated, but it's a closed system here," says Mr Ruffle, who manages a $3bn fund for Martin Currie, an investment management business with its headquarters in Edinburgh.
Mr Ruffle says that companies have enjoyed explosive profit growth of 30% in recent years and this could pick up pace as management techniques at state-run firms improve.
"Attitudes are changing. Managers regard themselves as executives rather than civil servants," says Mr Ruffle.
He plans to steer clear of big-name Chinese companies like PetroChina, but says he can still find good value firms in sectors such as healthcare, where the Chinese government is channelling investment.
Record listing
One factor behind the market's white-hot rally has been a slew of stock market listings. In the third quarter alone, China hosted 75 share offerings.
Many recent debuts have been household names in China and a big draw for local investors' cash.
BIGGEST FIRMS BY MARKET VALUE
ExxonMobil
PetroChina
General Electric
China Mobile
ICBC
Gazprom
Sinopec
AT&T
BP
China Life
Source: Reuters
PetroChina, which is also listed in Hong Kong and New York, said this week it raised almost $9bn from its share sale, the largest amount raised in Shanghai to date.
"Prior to 2006, there were few big heavyweight firms listing in Shanghai," says Professor Yao Shujie, at Nottingham University's China Policy Institute.
"If prices continue to rocket when it's smaller firms doing [initial public offerings], to me that's a much clearer sign of a bubble."
Chinese authorities have taken some steps to cool the market but investors have so far paid little heed.
There is a strong conviction that the government will not allow a huge crash in share prices.
"People have a bullish feeling before the Olympics," says Professor Yao.
"They believe the government will do what it can support the market in case of difficulty therefore they are not so cautious about protecting their investments."
Political fallout
A crash would have political ramifications for China's leaders, who have staked their legitimacy on maintaining a breakneck pace of economic growth.
Ordinary urban Chinese would be the biggest victims of any crash, with foreign investment in the Shanghai market still subject to limits.
"When it does fall it will be the middle classes marching on the streets," says Kerry Brown, associate fellow at international affairs think tank Chatham House.
"It would cause unease among those that have kept out of politics for the past two decades and dent confidence in the Communist Party's economic management."
The stock market boom has given China five of the world's 10 biggest companies by market value.
For now this is a source of pride for China's government, but it is an honour that could turn into a big headache.
The Chinese market has almost tripled in value this year as investors clamour for a slice of the world's fastest growing economy.
And if the shares of PetroChina soar when it lists in Shanghai next week, there's a chance the Chinese oil giant could become the world's most valuable quoted company, stealing the crown from ExxonMobil.
For some, this is a natural extension of China's economic rise.
For others, it's evidence of a massive stock market bubble that parallels the height of the dotcom boom.
Too hot?
China's market is displaying many of the classic warning signs of a bubble.
Cab drivers, college kids and Buddhist monks are making small fortunes in a frenzy of "chao gu" or stir frying stocks - Chinese slang for trading.
Internet chatrooms are abuzz with investment tips and reports say that millions of stock trading accounts are being opened each month.
People have a bullish feeling before the Olympics
Professor Yao Shujie, China Policy Institute at the University of Nottingham
Investment guru Warren Buffett, who recently sold his Hong Kong-listed PetroChina shares for a huge profit, warned last week that China is too hot to buy.
By most conventional yardsticks, valuations of many of China's largest shares do look stretched.
China's main stock index trades at more than 50 times projected earnings of the companies listed on it, almost triple that of major European and US stock markets.
Different standards
Shanghai-based fund manager Chris Ruffle says China's market cannot be judged by the same standards as other exchanges.
Inflation exceeds the return on bank deposits and real estate has lost its appeal following measures taken by Chinese authorities.
Strict investment rules forbid Chinese households from putting their $2.3 trillion savings in overseas assets, leaving China's stock market the only option.
"If it was a normal market it would be overheated, but it's a closed system here," says Mr Ruffle, who manages a $3bn fund for Martin Currie, an investment management business with its headquarters in Edinburgh.
Mr Ruffle says that companies have enjoyed explosive profit growth of 30% in recent years and this could pick up pace as management techniques at state-run firms improve.
"Attitudes are changing. Managers regard themselves as executives rather than civil servants," says Mr Ruffle.
He plans to steer clear of big-name Chinese companies like PetroChina, but says he can still find good value firms in sectors such as healthcare, where the Chinese government is channelling investment.
Record listing
One factor behind the market's white-hot rally has been a slew of stock market listings. In the third quarter alone, China hosted 75 share offerings.
Many recent debuts have been household names in China and a big draw for local investors' cash.
BIGGEST FIRMS BY MARKET VALUE
ExxonMobil
PetroChina
General Electric
China Mobile
ICBC
Gazprom
Sinopec
AT&T
BP
China Life
Source: Reuters
PetroChina, which is also listed in Hong Kong and New York, said this week it raised almost $9bn from its share sale, the largest amount raised in Shanghai to date.
"Prior to 2006, there were few big heavyweight firms listing in Shanghai," says Professor Yao Shujie, at Nottingham University's China Policy Institute.
"If prices continue to rocket when it's smaller firms doing [initial public offerings], to me that's a much clearer sign of a bubble."
Chinese authorities have taken some steps to cool the market but investors have so far paid little heed.
There is a strong conviction that the government will not allow a huge crash in share prices.
"People have a bullish feeling before the Olympics," says Professor Yao.
"They believe the government will do what it can support the market in case of difficulty therefore they are not so cautious about protecting their investments."
Political fallout
A crash would have political ramifications for China's leaders, who have staked their legitimacy on maintaining a breakneck pace of economic growth.
Ordinary urban Chinese would be the biggest victims of any crash, with foreign investment in the Shanghai market still subject to limits.
"When it does fall it will be the middle classes marching on the streets," says Kerry Brown, associate fellow at international affairs think tank Chatham House.
"It would cause unease among those that have kept out of politics for the past two decades and dent confidence in the Communist Party's economic management."
The stock market boom has given China five of the world's 10 biggest companies by market value.
For now this is a source of pride for China's government, but it is an honour that could turn into a big headache.
Tuesday, October 30, 2007
China Netcom to open London headquarters
China Netcom, China's second largest fixed-line telephone company, will on Thursday open a London office that will be its European headquarters.
China Netcom is looking to use its global telecoms network to serve the voice and data needs of Chinese companies with operations in Europe, said one person familiar with the situation. It also wants to serve the telecoms needs of European companies with operations in China.
The move by China Netcom is part of efforts by Chinese companies to expand overseas under the Beijing government's "go global" policy. The government wants to ensure that Chinese companies can compete with US, Japanese and European companies.
China Netcom's telecoms network extends to cities in Asia, Europe and the US, and it is looking to expand it further, said the person familiar with the company's plans.
The London office will be opened by Jidong Zhao, China Netcom's senior vice-president.
Its efforts to serve the voice and data needs of multinationals will pit it against European and US telecoms companies such as BT, AT&T and Verizon Communications (NYSE:VZ).
China Netcom is not the first Chinese telecoms company to open a London office. China Telecom, China's largest fixed-line company, opened a London office in 2005. Like China Netcom, China Telecom is looking to serve the telecoms needs of Chinese companies with operations in Europe.
Huawei and ZTE, the increasingly powerful Chinese telecoms equipment makers, opened London offices in 2002 and 2004. They were initially sales offices but now also focus on financing.
Telefónica, the Spanish telecoms company with a leading presence in Latin America, on Tuesday said it hoped to increase its minority stake in China Netcom to 10 per cent by the end of the year. Vodafone, the UK mobile phone group, has a 3 per cent stake in China Mobile, China's largest mobile operator, which plans to open a London office early next year.
China Netcom is looking to use its global telecoms network to serve the voice and data needs of Chinese companies with operations in Europe, said one person familiar with the situation. It also wants to serve the telecoms needs of European companies with operations in China.
The move by China Netcom is part of efforts by Chinese companies to expand overseas under the Beijing government's "go global" policy. The government wants to ensure that Chinese companies can compete with US, Japanese and European companies.
China Netcom's telecoms network extends to cities in Asia, Europe and the US, and it is looking to expand it further, said the person familiar with the company's plans.
The London office will be opened by Jidong Zhao, China Netcom's senior vice-president.
Its efforts to serve the voice and data needs of multinationals will pit it against European and US telecoms companies such as BT, AT&T and Verizon Communications (NYSE:VZ).
China Netcom is not the first Chinese telecoms company to open a London office. China Telecom, China's largest fixed-line company, opened a London office in 2005. Like China Netcom, China Telecom is looking to serve the telecoms needs of Chinese companies with operations in Europe.
Huawei and ZTE, the increasingly powerful Chinese telecoms equipment makers, opened London offices in 2002 and 2004. They were initially sales offices but now also focus on financing.
Telefónica, the Spanish telecoms company with a leading presence in Latin America, on Tuesday said it hoped to increase its minority stake in China Netcom to 10 per cent by the end of the year. Vodafone, the UK mobile phone group, has a 3 per cent stake in China Mobile, China's largest mobile operator, which plans to open a London office early next year.
State funds and banks lead China's hunt
China's National Council for Social Security Fund is an unlikely candidate to buy into US private equity groups, but the disclosure in Tuesday's Financial Times that it has held preliminary talks about buying stakes in companies such as Carlyle and Kohlberg Kravis Roberts underlines how dramatically China's global ambitions have grown.
The fund joins a number of large state institutions investing overseas, such as China Investment Corp, the newly-established sovereign fund, and China Development Bank, a specialist lender for infrastructure projects.
Industrial & Commercial Bank of China, the country's largest lender, last week struck a deal to pay $5.56bn for a stake in Standard Bank in South Africa, and Citic Securities recently bought into the troubled US firm Bear Stearns. Other big Chinese commercial banks are hunting for deals.
The sudden flood of overseas deals runs parallel with a wave of foreign equity investment by Chinese entities through mandates issued by the securities regulator.
Since September, $37bn (£17.9bn, EU25.6bn) in subscriptions has been received by four funds each approved to raise $16bn. JPMorgan says it expects Beijing to approve another $20bn by mid-December and a total of up to $90bn by the end of next year.
The broad framework allowing investment overseas has been laid down gradually by the central government in the last three years or so, with a variety of policy objectives in mind.
The portfolio investment is driven by a need to gain greater returns and spread risks away from the domestic market, as well as relieve the pressure on the financial system from huge capital inflows.
CDB, meanwhile, is heading overseas with a quite different mandate - to support Chinese investment in Africa and to test its ambitions to become a force in global development finance.
The drive offshore by China's big state banks, although under the wary eye of the regulators, is more driven by their commercial ambitions than acentral government plan.
"I don't really see [the banks] as being driven by the state pushing people out the door, overseas," said Jonathan Anderson, of UBS, in Hong Kong. "This is primarily being driven by the corporates themselves."
For deal-hungry global investment banks, the Chinese institutions they once chased for overseas stock market listings are now becoming valuable merger and acquisition clients.
"Chinese companies are being assiduously courted by dealmakers - and no wonder. They are cash-rich and the beneficiaries of a bull market," said Jing Ulrich, of JPMorgan, in Hong Kong.
However, one common challenge facing the Chinese institutions is the lack of global experience, both in investing overseas and running enterprises in foreign countries.
In the case of the social security fund, its most experienced global manager, Gao Xiqing, who has extensive experience on Wall St, has been shifted in recent months to a senior post at the sovereign fund.
The fund's talks with US firms surprised some market observers, who say they would not have expected it to tie up money in large, illiquid investments.
However, the fund might be being driven by a sense of competition with other Chinese state investors and may have pressed to be allowed access to similar investment opportunities.
For all the headlines, the wave of Chinese capital heading overseas is at an early stage and its impact on markets, perhaps aside from Hong Kong, is limited in terms of investments flows. "They are very small players at the moment," said Mr Anderson.
Politically and psychologically, however, the impact is much larger.
Background
Established in 2000, the National Council for Social Security Fund was part of China's strategy to fill the gaping holes left in its pension policies by the collapse of large swathes of state industry.
The NCSSF does not attempt to cover the entire country's pension needs, but is a kind of national pension fund of last resort, with no designated members eligible for benefits. It has assets Rmb460bn ($62bn, EU43bn, £30bn).
Much revenue came from the offshore initial public offerings of state companies, which had to put 10 per cent of money raised into the fund.
The fund joins a number of large state institutions investing overseas, such as China Investment Corp, the newly-established sovereign fund, and China Development Bank, a specialist lender for infrastructure projects.
Industrial & Commercial Bank of China, the country's largest lender, last week struck a deal to pay $5.56bn for a stake in Standard Bank in South Africa, and Citic Securities recently bought into the troubled US firm Bear Stearns. Other big Chinese commercial banks are hunting for deals.
The sudden flood of overseas deals runs parallel with a wave of foreign equity investment by Chinese entities through mandates issued by the securities regulator.
Since September, $37bn (£17.9bn, EU25.6bn) in subscriptions has been received by four funds each approved to raise $16bn. JPMorgan says it expects Beijing to approve another $20bn by mid-December and a total of up to $90bn by the end of next year.
The broad framework allowing investment overseas has been laid down gradually by the central government in the last three years or so, with a variety of policy objectives in mind.
The portfolio investment is driven by a need to gain greater returns and spread risks away from the domestic market, as well as relieve the pressure on the financial system from huge capital inflows.
CDB, meanwhile, is heading overseas with a quite different mandate - to support Chinese investment in Africa and to test its ambitions to become a force in global development finance.
The drive offshore by China's big state banks, although under the wary eye of the regulators, is more driven by their commercial ambitions than acentral government plan.
"I don't really see [the banks] as being driven by the state pushing people out the door, overseas," said Jonathan Anderson, of UBS, in Hong Kong. "This is primarily being driven by the corporates themselves."
For deal-hungry global investment banks, the Chinese institutions they once chased for overseas stock market listings are now becoming valuable merger and acquisition clients.
"Chinese companies are being assiduously courted by dealmakers - and no wonder. They are cash-rich and the beneficiaries of a bull market," said Jing Ulrich, of JPMorgan, in Hong Kong.
However, one common challenge facing the Chinese institutions is the lack of global experience, both in investing overseas and running enterprises in foreign countries.
In the case of the social security fund, its most experienced global manager, Gao Xiqing, who has extensive experience on Wall St, has been shifted in recent months to a senior post at the sovereign fund.
The fund's talks with US firms surprised some market observers, who say they would not have expected it to tie up money in large, illiquid investments.
However, the fund might be being driven by a sense of competition with other Chinese state investors and may have pressed to be allowed access to similar investment opportunities.
For all the headlines, the wave of Chinese capital heading overseas is at an early stage and its impact on markets, perhaps aside from Hong Kong, is limited in terms of investments flows. "They are very small players at the moment," said Mr Anderson.
Politically and psychologically, however, the impact is much larger.
Background
Established in 2000, the National Council for Social Security Fund was part of China's strategy to fill the gaping holes left in its pension policies by the collapse of large swathes of state industry.
The NCSSF does not attempt to cover the entire country's pension needs, but is a kind of national pension fund of last resort, with no designated members eligible for benefits. It has assets Rmb460bn ($62bn, EU43bn, £30bn).
Much revenue came from the offshore initial public offerings of state companies, which had to put 10 per cent of money raised into the fund.
Nufarm Surges on Report of Blackstone, China's BlueStar Bid
Oct. 31 (Bloomberg) -- Nufarm Ltd. surged the most in nine years after the South China Morning Post said Australia's biggest supplier of farm chemicals may receive a takeover bid from Blackstone Group LP and China National BlueStar Group Corp.
The companies may make a revised bid after Melbourne-based Nufarm rejected an offer at $2.7 billion, or A$17.10 a share, the newspaper said, citing sources it didn't identify. The stock surged A$1.81, or 13 percent, to A$15.67 at 12:24 p.m. in Sydney, its biggest gain since July 1998.
The new bid, to be lower than A$20 a share, would be the first acquisition for closely held BlueStar, according to the newspaper.
Nufarm missed its profit forecast in September as Australia's worst drought dented demand. Net income rose to A$148.8 million ($137 million) in the year ended July 31, from A$117.2 million a year earlier. The company forecast full-year profit of A$160 million in March.
The drought is reducing water supplies used for fruit, grape and cotton crops, and forcing forecasters and farmers to cut expectations for wheat and barley output.
A spokeswoman for Nufarm wasn't immediately able to comment on the report when contacted by Bloomberg.
The companies may make a revised bid after Melbourne-based Nufarm rejected an offer at $2.7 billion, or A$17.10 a share, the newspaper said, citing sources it didn't identify. The stock surged A$1.81, or 13 percent, to A$15.67 at 12:24 p.m. in Sydney, its biggest gain since July 1998.
The new bid, to be lower than A$20 a share, would be the first acquisition for closely held BlueStar, according to the newspaper.
Nufarm missed its profit forecast in September as Australia's worst drought dented demand. Net income rose to A$148.8 million ($137 million) in the year ended July 31, from A$117.2 million a year earlier. The company forecast full-year profit of A$160 million in March.
The drought is reducing water supplies used for fruit, grape and cotton crops, and forcing forecasters and farmers to cut expectations for wheat and barley output.
A spokeswoman for Nufarm wasn't immediately able to comment on the report when contacted by Bloomberg.
China's Africa Dream
Oct. 31 (Bloomberg) -- It's rare that a business deal intrigues investors and political scientists alike. Industrial & Commercial Bank of China Ltd.'s move to buy 20 percent of Africa's largest bank is such a transaction.
It's the biggest overseas investment by a Chinese company, in this case the world's No. 1 bank by market value. ICBC's $5.6 billion purchase of the Standard Bank Group Ltd. stake is the largest in South Africa since apartheid ended in 1994.
Yet there's something even bigger at play here. This is arguably the first Chinese investment in Africa that doesn't carry a whiff of political strategy. Nor is it directly related to China's desire for resources, which can often help despots more than African households.
ICBC's Standard Bank deal may be the watershed that begins propelling China's designs on Africa from talk to just plain business, and smart business at that.
``From the regulators' point of view, this kind of diversification is a great idea,'' says Michael Pettis, a finance professor at Peking University. ``Chinese banks are too highly concentrated in China and it's not in their best interest that banks depend exclusively on Chinese growth. That kind of dependence is highly pro-cyclical and can feed booms and busts.''
Standard Bank has offices in 18 African countries, including Nigeria and Kenya, and 21 other nations such as Argentina and Taiwan. The Johannesburg-based bank has 713 branches in South Africa and 240 throughout the continent. The deal is a sign that even if the Chinese Communist Party has strategic reasons for investing in Africa, companies are heading there for the economic potential.
See No Evil
Until now, China's Africa push has raised warning flags around the globe, and rightfully so. To get resources to feed its 11.5 percent growth, China has hopped into bed with some of Africa's most unsavory regimes, such as Sudan's and Zimbabwe's. That see-no-evil-hear-no-evil approach is raising eyebrows.
Warren Buffett can deny it all he wants, but it's hard to believe that his Berkshire Hathaway Inc. would have dumped its entire holding of PetroChina Co., Asia's biggest oil company, without the public criticism over China's support of Sudan.
PetroChina's state-controlled parent is the biggest foreign investor in Sudan. PetroChina's stock gained more than 11-fold since Buffett first bought it in 2003. And yet he recently abandoned what he says is ``absolutely a first-class company.''
Buffett was under increasing pressure from human-rights groups over accusations that the Sudanese government supports genocide. There was even a role for actress Mia Farrow, who helped publicize the worldwide campaign to dub next year's games the ``Genocide Olympics.''
No Baggage
ICBC's stake in Standard Bank comes without that kind of baggage. It's a state-controlled China bank, making it hard to figure out where politics end and business begins. Yet the deal shows China is now making bets on Africa's economy.
Standard Bank is gaining access to the fastest-growing major economy and fattening its capital base. China is getting a foothold into Africa's nascent investment-banking and insurance industries. It's also a way for China to use its growing cash piles overseas rather than making fresh domestic loans that may go bad or fuel inflation.
All this is stellar news for Africa, which usually suffers from the ``paradox of plenty.'' All too often, inhabitants of resource-rich nations fail to prosper while corrupt politicians and their cronies get wealthy and ignore the development needs of the struggling masses.
That has been Africa's experience for far too long. And the failure of Western efforts to reverse the dynamic left the region's leaders open to Chinese investment.
Investment, Not Aid
One interesting element of ICBC's deal is how different it is from the usual overture from Western banks. It didn't come laden with demands about how much control ICBC will have over Standard Bank. It didn't require pledges for financial change. It's merely one bank buying a piece of another with transparent terms and conditions. It's a sign Chinese managers are willing to treat Africans as peers.
The West hasn't learned that lesson with its aid programs and lecturing. By trying a new tack, China may be testing what development economists have argued for years: Africa doesn't need more aid, it needs more genuine investment and trade.
Bono and Columbia University's Jeffrey Sachs will keep plugging away, and thank the gods for that. But Chinese companies appear to see something in Africa many in New York, London and Tokyo don't. Africa represents huge and lucrative business opportunities if it gets its act together.
That's a big ``if.'' With the exception of Botswana and Ghana, Africa's biggest consistency seems to be to pull the rug out from under wide-eyed investors. China's interests are offering Africa a rare opportunity to boost its economies.
China's Money
Another interesting angle here concerns investors. Looking at ICBC along with other Chinese deals of late -- like Citic Securities Co. buying a stake in Bear Stearns Cos. -- it's clear something transformational is afoot.
In recent years, China sought foreign investments in financial firms to shore up capital and gain expertise. Now, cash-rich from trade, stock offerings and surging share prices, China no longer needs Wall Street's money. Increasingly, it's foreigners who want a cut of China's money.
``Getting access to China's market may no longer require putting money in China,'' says Brad Setser, director of research at Roubini Global Economics LLC in New York. ``It may instead require accepting investment from China.''
China may have just found a way to tame its own pressures and tap Africa without the baggage of the past.
It's the biggest overseas investment by a Chinese company, in this case the world's No. 1 bank by market value. ICBC's $5.6 billion purchase of the Standard Bank Group Ltd. stake is the largest in South Africa since apartheid ended in 1994.
Yet there's something even bigger at play here. This is arguably the first Chinese investment in Africa that doesn't carry a whiff of political strategy. Nor is it directly related to China's desire for resources, which can often help despots more than African households.
ICBC's Standard Bank deal may be the watershed that begins propelling China's designs on Africa from talk to just plain business, and smart business at that.
``From the regulators' point of view, this kind of diversification is a great idea,'' says Michael Pettis, a finance professor at Peking University. ``Chinese banks are too highly concentrated in China and it's not in their best interest that banks depend exclusively on Chinese growth. That kind of dependence is highly pro-cyclical and can feed booms and busts.''
Standard Bank has offices in 18 African countries, including Nigeria and Kenya, and 21 other nations such as Argentina and Taiwan. The Johannesburg-based bank has 713 branches in South Africa and 240 throughout the continent. The deal is a sign that even if the Chinese Communist Party has strategic reasons for investing in Africa, companies are heading there for the economic potential.
See No Evil
Until now, China's Africa push has raised warning flags around the globe, and rightfully so. To get resources to feed its 11.5 percent growth, China has hopped into bed with some of Africa's most unsavory regimes, such as Sudan's and Zimbabwe's. That see-no-evil-hear-no-evil approach is raising eyebrows.
Warren Buffett can deny it all he wants, but it's hard to believe that his Berkshire Hathaway Inc. would have dumped its entire holding of PetroChina Co., Asia's biggest oil company, without the public criticism over China's support of Sudan.
PetroChina's state-controlled parent is the biggest foreign investor in Sudan. PetroChina's stock gained more than 11-fold since Buffett first bought it in 2003. And yet he recently abandoned what he says is ``absolutely a first-class company.''
Buffett was under increasing pressure from human-rights groups over accusations that the Sudanese government supports genocide. There was even a role for actress Mia Farrow, who helped publicize the worldwide campaign to dub next year's games the ``Genocide Olympics.''
No Baggage
ICBC's stake in Standard Bank comes without that kind of baggage. It's a state-controlled China bank, making it hard to figure out where politics end and business begins. Yet the deal shows China is now making bets on Africa's economy.
Standard Bank is gaining access to the fastest-growing major economy and fattening its capital base. China is getting a foothold into Africa's nascent investment-banking and insurance industries. It's also a way for China to use its growing cash piles overseas rather than making fresh domestic loans that may go bad or fuel inflation.
All this is stellar news for Africa, which usually suffers from the ``paradox of plenty.'' All too often, inhabitants of resource-rich nations fail to prosper while corrupt politicians and their cronies get wealthy and ignore the development needs of the struggling masses.
That has been Africa's experience for far too long. And the failure of Western efforts to reverse the dynamic left the region's leaders open to Chinese investment.
Investment, Not Aid
One interesting element of ICBC's deal is how different it is from the usual overture from Western banks. It didn't come laden with demands about how much control ICBC will have over Standard Bank. It didn't require pledges for financial change. It's merely one bank buying a piece of another with transparent terms and conditions. It's a sign Chinese managers are willing to treat Africans as peers.
The West hasn't learned that lesson with its aid programs and lecturing. By trying a new tack, China may be testing what development economists have argued for years: Africa doesn't need more aid, it needs more genuine investment and trade.
Bono and Columbia University's Jeffrey Sachs will keep plugging away, and thank the gods for that. But Chinese companies appear to see something in Africa many in New York, London and Tokyo don't. Africa represents huge and lucrative business opportunities if it gets its act together.
That's a big ``if.'' With the exception of Botswana and Ghana, Africa's biggest consistency seems to be to pull the rug out from under wide-eyed investors. China's interests are offering Africa a rare opportunity to boost its economies.
China's Money
Another interesting angle here concerns investors. Looking at ICBC along with other Chinese deals of late -- like Citic Securities Co. buying a stake in Bear Stearns Cos. -- it's clear something transformational is afoot.
In recent years, China sought foreign investments in financial firms to shore up capital and gain expertise. Now, cash-rich from trade, stock offerings and surging share prices, China no longer needs Wall Street's money. Increasingly, it's foreigners who want a cut of China's money.
``Getting access to China's market may no longer require putting money in China,'' says Brad Setser, director of research at Roubini Global Economics LLC in New York. ``It may instead require accepting investment from China.''
China may have just found a way to tame its own pressures and tap Africa without the baggage of the past.
Monday, October 29, 2007
GM sets up clean fuel research lab in China
US giant General Motors said Monday it would launch a 250-million-dollar alternative fuel research centre in China, as it looks to dramatically ramp up production of more environmentally friendly cars.
The new centre in Shanghai, which will conduct research into fuels and vehicles, will be launched in conjunction with the firm's Shanghai auto partner, SAIC, GM's chief executive Rick Wagoner told reporters.
GM also said it would begin selling a hybrid vehicle model in China next year using locally made engines.
"GM is proud to be announcing one of the most important and far-reaching collaborative strategies to promote energy efficiency and environmentally friendly transportation in China and around the world," Wagoner said.
GM expects hybrid and biofuel vehicles will comprise around 10 percent of its worldwide production of 9.2 to 9.4 million units this year.
"(But) if you look out five years or so, I think that number is going to be significantly higher. It could be 50 percent of global production," Wagoner said.
The first phase of construction, in which the Chinese government is a partner, will be completed next year.
The centre will focus on developing bio and other alternative fuels, and the engines for them, Wagoner said.
An additional agreement with SAIC and Beijing's Tsinghua University will establish a five-million-dollar clean fuel research laboratory in the Chinese capital.
"The centre is responsible for reducing China's dependence on petroleum-based fuels," Wagoner said.
"China has the potential to become the market leader in the adoption of alternative propulsion systems."
With climate change and pollution in the global spotlight, China's auto industry, one of the main engines of its booming economy, has come under scrutiny.
A recent report from the State Environmental Protection Administration said car fumes caused 79 percent of air contamination in China's highly polluted cities on bad days.
Auto sales in China, the world's second largest car market after the United States, soared in the first nine months of 2007 to 4.58 million units, a 23.84 percent increase from a year ago, Chinese state media said.
Detroit-based General Motors expects to sell more than one million vehicles in China for the first time this year, compared with 876,747 units in 2006.
For his part, SAIC chairman Chen Hong said his company planned to produce 10,000 hybrid fuel vehicles a year by 2010, as it steps up a commitment to find cleaner ways to power vehicles.
The global automobile industry is in the process of movoing production away from highly-developed countries and into emerging markets.
Sales in countries like China, India, Russia and South Africa have taken off. GM said in August these markets will account for a quarter of its new car sales, exceeding North America.
The new centre in Shanghai, which will conduct research into fuels and vehicles, will be launched in conjunction with the firm's Shanghai auto partner, SAIC, GM's chief executive Rick Wagoner told reporters.
GM also said it would begin selling a hybrid vehicle model in China next year using locally made engines.
"GM is proud to be announcing one of the most important and far-reaching collaborative strategies to promote energy efficiency and environmentally friendly transportation in China and around the world," Wagoner said.
GM expects hybrid and biofuel vehicles will comprise around 10 percent of its worldwide production of 9.2 to 9.4 million units this year.
"(But) if you look out five years or so, I think that number is going to be significantly higher. It could be 50 percent of global production," Wagoner said.
The first phase of construction, in which the Chinese government is a partner, will be completed next year.
The centre will focus on developing bio and other alternative fuels, and the engines for them, Wagoner said.
An additional agreement with SAIC and Beijing's Tsinghua University will establish a five-million-dollar clean fuel research laboratory in the Chinese capital.
"The centre is responsible for reducing China's dependence on petroleum-based fuels," Wagoner said.
"China has the potential to become the market leader in the adoption of alternative propulsion systems."
With climate change and pollution in the global spotlight, China's auto industry, one of the main engines of its booming economy, has come under scrutiny.
A recent report from the State Environmental Protection Administration said car fumes caused 79 percent of air contamination in China's highly polluted cities on bad days.
Auto sales in China, the world's second largest car market after the United States, soared in the first nine months of 2007 to 4.58 million units, a 23.84 percent increase from a year ago, Chinese state media said.
Detroit-based General Motors expects to sell more than one million vehicles in China for the first time this year, compared with 876,747 units in 2006.
For his part, SAIC chairman Chen Hong said his company planned to produce 10,000 hybrid fuel vehicles a year by 2010, as it steps up a commitment to find cleaner ways to power vehicles.
The global automobile industry is in the process of movoing production away from highly-developed countries and into emerging markets.
Sales in countries like China, India, Russia and South Africa have taken off. GM said in August these markets will account for a quarter of its new car sales, exceeding North America.
Friday, October 26, 2007
China will pursue exchange rate reform: deputy central bank head
MADRID (AFP) - China will pursue exchange rate reform, the deputy head of the Chinese central bank pledged here Friday in the face of mounting pressure in the West for Beijing to ease restrictions on its currency.
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"We will continue to promote exchange rate reforms," Liu Shiyu told the closing session of a Spanish-Chinese financial forum.
The United States and other key trading powers have repeatedly complained that the Chinese currency, the yuan, has been artificially undervalued by Beijing's relatively inflexibile exchange rate policies, giving Chinese exports an unfair advantage.
Group of Seven finance chiefs meeting in Washington last week hailed China's stated willingness to allow the yuan to float more freely but said that "in view of its rising current account surplus and domestic inflation we stress its need to allow an accelerated appreciation of its effective exchange rate."
US Treasury Secretary Henry Paulson on Tuesday reiterated the G7 appeal, arguing that "prospects for achieving sustained, balanced growth in China and in the world economy (would be) much greater, if the Chinese increase the pace of appreciation in the short term and implement a fully market-determined currency in the medium-term."
The following day the yuan broke through the key 7.5-to-the-dollar level for the first time in Wednesday trade but there was little expectation the rise would allay concerns in the United States.
"Psychologically this has a rather large impact, but technically the impact isn't huge," said Cai Sijuan, a forex dealer with Guangzhou Commercial Bank.
Speaking in Madrid Friday, Liu Shiyu also insisted that "China doesn't deliberately look for a trade surplus."
China routinely records large trade surpluses with the United States, which are seen in some of its trading partners as contributing to imblances in the global economy, notably in light of Washington's huge trade deficit.
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"We will continue to promote exchange rate reforms," Liu Shiyu told the closing session of a Spanish-Chinese financial forum.
The United States and other key trading powers have repeatedly complained that the Chinese currency, the yuan, has been artificially undervalued by Beijing's relatively inflexibile exchange rate policies, giving Chinese exports an unfair advantage.
Group of Seven finance chiefs meeting in Washington last week hailed China's stated willingness to allow the yuan to float more freely but said that "in view of its rising current account surplus and domestic inflation we stress its need to allow an accelerated appreciation of its effective exchange rate."
US Treasury Secretary Henry Paulson on Tuesday reiterated the G7 appeal, arguing that "prospects for achieving sustained, balanced growth in China and in the world economy (would be) much greater, if the Chinese increase the pace of appreciation in the short term and implement a fully market-determined currency in the medium-term."
The following day the yuan broke through the key 7.5-to-the-dollar level for the first time in Wednesday trade but there was little expectation the rise would allay concerns in the United States.
"Psychologically this has a rather large impact, but technically the impact isn't huge," said Cai Sijuan, a forex dealer with Guangzhou Commercial Bank.
Speaking in Madrid Friday, Liu Shiyu also insisted that "China doesn't deliberately look for a trade surplus."
China routinely records large trade surpluses with the United States, which are seen in some of its trading partners as contributing to imblances in the global economy, notably in light of Washington's huge trade deficit.
Monday, October 22, 2007
Why Beijing Maintains Its Hearty Thirst for Crude
By NATALIE OBIKO PEARSON and DAVID WINNING
The Wall Street Journal Online
LONDON -- Most of the world winced as crude-oil prices tiptoed above $90 a barrel, yet China -- the world's second-largest oil consumer behind the U.S. -- appears set to continue sucking up oil at ever higher prices.
Experts say the country isn't entirely immune to oil's price, but a timely combination of robust finances, strong political incentive to uphold costly fuel subsidies, and less exposure to world oil-price fluctuations than many realize is keeping China's oil demand seemingly insatiable.
Chinese consumers, though less energy-efficient than their Western counterparts, are shielded from the impact of surging oil prices by hefty government subsidies. The burden falls primarily on Chinese oil companies China National Offshore Oil Corp. and PetroChina Co., which are obliged to pay a windfall oil tax whenever the price rises above $40 a barrel. In the first half, the companies shelled out more than $2.3 billion. "There will be at some point a limit to that, unless [the companies] get additional funds from the Chinese government," said Simon Wardell, an energy analyst at Global Insight in London.
The Chinese government is comfortably positioned to offer such funds, sitting on $1.43 trillion in foreign-exchange reserves as of the end of September.
The Paris-based International Energy Agency said in its monthly oil-market report this month, that Beijing was likely to take whatever steps necessary to maintain stability. Talk of rolling back subsidies or imposing a fuel tax on consumers, "should probably not be taken at face value," it said.
Zhu Zhixin, a vice minister with the National Development and Reform Commission -- China's economic planning agency -- indicated last week that China was comfortable with record oil prices, hoping they would aid its drive to increase energy efficiency.
While the dollar hit a new low against the euro Friday, oil surged to an intraday record of $90.07 before closing down 87 cents at $88.60 on the New York Mercantile Exchange.The dollar's weakness has supported high oil prices because a lower dollar makes oil cheaper in countries paying in other currencies.
China hasn't benefited from the currency cushion as much as other nations because its currency is pegged to trade in a narrow band with the dollar. That is offset by the stimulus a low exchange rate gives its roaring exports. The yuan's depreciation against the euro in recent months has made Europe China's largest export market.
China's export sector could face weaker demand from the U.S. and Europe because of subprime-credit woes and market turmoil. But "this pessimistic scenario is far from certain," as the government would be likely to step in, the IEA said.
China also isn't as exposed as some might think: It still depends overwhelmingly on coal for energy, while 10% of its energy consumption comes from domestically produced oil. That means only about 10% of its energy consumption is exposed to world oil-price fluctuations -- though that is still a sizable 3.3 million barrels a day.
Meanwhile, imports from less traditional sources, such as the 50.5 million barrels of oil provided by Sudan between January and August, have offered some protection. Sudan's Dar Blend crude is highly acidic so it trades at a substantial discount to market prices and reduces China's need to tap more expensive sources.
Yet China isn't impervious to oil prices. Demand is expected to have grown a relatively sluggish 3%-5% in September from a year earlier. China also is more exposed to sudden disruptions because its stockpiles are lower than those in major industrialized countries, about 21 days' worth compared with 53.5 days for members of the Organization for Economic Cooperation and Development.
The Wall Street Journal Online
LONDON -- Most of the world winced as crude-oil prices tiptoed above $90 a barrel, yet China -- the world's second-largest oil consumer behind the U.S. -- appears set to continue sucking up oil at ever higher prices.
Experts say the country isn't entirely immune to oil's price, but a timely combination of robust finances, strong political incentive to uphold costly fuel subsidies, and less exposure to world oil-price fluctuations than many realize is keeping China's oil demand seemingly insatiable.
Chinese consumers, though less energy-efficient than their Western counterparts, are shielded from the impact of surging oil prices by hefty government subsidies. The burden falls primarily on Chinese oil companies China National Offshore Oil Corp. and PetroChina Co., which are obliged to pay a windfall oil tax whenever the price rises above $40 a barrel. In the first half, the companies shelled out more than $2.3 billion. "There will be at some point a limit to that, unless [the companies] get additional funds from the Chinese government," said Simon Wardell, an energy analyst at Global Insight in London.
The Chinese government is comfortably positioned to offer such funds, sitting on $1.43 trillion in foreign-exchange reserves as of the end of September.
The Paris-based International Energy Agency said in its monthly oil-market report this month, that Beijing was likely to take whatever steps necessary to maintain stability. Talk of rolling back subsidies or imposing a fuel tax on consumers, "should probably not be taken at face value," it said.
Zhu Zhixin, a vice minister with the National Development and Reform Commission -- China's economic planning agency -- indicated last week that China was comfortable with record oil prices, hoping they would aid its drive to increase energy efficiency.
While the dollar hit a new low against the euro Friday, oil surged to an intraday record of $90.07 before closing down 87 cents at $88.60 on the New York Mercantile Exchange.The dollar's weakness has supported high oil prices because a lower dollar makes oil cheaper in countries paying in other currencies.
China hasn't benefited from the currency cushion as much as other nations because its currency is pegged to trade in a narrow band with the dollar. That is offset by the stimulus a low exchange rate gives its roaring exports. The yuan's depreciation against the euro in recent months has made Europe China's largest export market.
China's export sector could face weaker demand from the U.S. and Europe because of subprime-credit woes and market turmoil. But "this pessimistic scenario is far from certain," as the government would be likely to step in, the IEA said.
China also isn't as exposed as some might think: It still depends overwhelmingly on coal for energy, while 10% of its energy consumption comes from domestically produced oil. That means only about 10% of its energy consumption is exposed to world oil-price fluctuations -- though that is still a sizable 3.3 million barrels a day.
Meanwhile, imports from less traditional sources, such as the 50.5 million barrels of oil provided by Sudan between January and August, have offered some protection. Sudan's Dar Blend crude is highly acidic so it trades at a substantial discount to market prices and reduces China's need to tap more expensive sources.
Yet China isn't impervious to oil prices. Demand is expected to have grown a relatively sluggish 3%-5% in September from a year earlier. China also is more exposed to sudden disruptions because its stockpiles are lower than those in major industrialized countries, about 21 days' worth compared with 53.5 days for members of the Organization for Economic Cooperation and Development.
Bear Stearns, China's CITIC Securities forge alliance
US investment bank and brokerage Bear Stearns and China's CITIC Securities Co. Ltd announced a strategic alliance Monday in a deal involving investments of at least two billion dollars.
Under its terms, the two securities firms will seek new business opportunities in China's rapidly-growing economy while forging a joint venture company to combine the existing businesses of both groups in Asia.
Bear Stearns will invest one billion dollars in CITIC, and the Chinese company will invest one billion dollars in the storied Wall Street investment firm giving it a six percent shareholding in Bear Stearns.
The firms said CITIC could potentially raise its shareholding in Bear Stearns to 9.9 percent. Bear Stears is seeking Chinese regulatory approval to acquire a similar stake in CITIC for around one billion dollars.
"This groundbreaking alliance will give Bear Stearns a unique footprint in one of the world's fastest-growing economies," Bear Stearns chairman and chief executive James Cayne said in a statement.
Wang Dongming, the chairman of CITIC Securities, praised the deal's prospects, saying the tie-up would enable the Chinese firm to expand its securities, investment banking and asset management operations.
China's government is CITIC's biggest shareholder through the CITIC Group.
As part of the accord, which has won approval from both companies' boards of directors, Bear Stearns and CITIC will form a new Hong Kong-based company which they said would offer "a broad range" of capital markets services on a pan-Asian basis.
Executives plan to market the companies' services to international companies seeking access to Asian capital markets as well as to Chinese companies looking to expand internationally.
The alliance was unveiled days after CITIC sought to squash market rumors Thursday that it had entered talks to buy a stake in Bear Stears.
Bear Stearns, which traces its history to 1923, has had a troubled year.
Earlier this month, it was forced to merge two mortgage subsidiaries and eliminate 310 jobs due to the downturn in the US housing market.
The job cuts came after Bear Stearns in late July disclosed hefty losses endured by two hedge funds it managed for wealthy clients.
It was forced to close down its Enhanced Leverage Fund following losses of hundreds of millions of dollars tied to risky bets in mortgage-backed securities.
A separate fund that Bear Stearns ran, the High-Grade Fund, also floundered because of similar wagers tied to subprime mortgages.
Such mortgage loans, granted to Americans with stretched finances, have been plagued by late payments and a rising tide of home foreclosures.
Bear Stearns overhauled its top management ranks in the wake of the hedge fund losses.
Investment funds controlled by British billionaire Joseph Lewis earlier this year amassed a seven percent stake in Bear Stearns for over 860 million dollars.
The tie-up between Bear Stearns and CITIC is subject to regulatory approvals in the United States and China.
Under its terms, the two securities firms will seek new business opportunities in China's rapidly-growing economy while forging a joint venture company to combine the existing businesses of both groups in Asia.
Bear Stearns will invest one billion dollars in CITIC, and the Chinese company will invest one billion dollars in the storied Wall Street investment firm giving it a six percent shareholding in Bear Stearns.
The firms said CITIC could potentially raise its shareholding in Bear Stearns to 9.9 percent. Bear Stears is seeking Chinese regulatory approval to acquire a similar stake in CITIC for around one billion dollars.
"This groundbreaking alliance will give Bear Stearns a unique footprint in one of the world's fastest-growing economies," Bear Stearns chairman and chief executive James Cayne said in a statement.
Wang Dongming, the chairman of CITIC Securities, praised the deal's prospects, saying the tie-up would enable the Chinese firm to expand its securities, investment banking and asset management operations.
China's government is CITIC's biggest shareholder through the CITIC Group.
As part of the accord, which has won approval from both companies' boards of directors, Bear Stearns and CITIC will form a new Hong Kong-based company which they said would offer "a broad range" of capital markets services on a pan-Asian basis.
Executives plan to market the companies' services to international companies seeking access to Asian capital markets as well as to Chinese companies looking to expand internationally.
The alliance was unveiled days after CITIC sought to squash market rumors Thursday that it had entered talks to buy a stake in Bear Stears.
Bear Stearns, which traces its history to 1923, has had a troubled year.
Earlier this month, it was forced to merge two mortgage subsidiaries and eliminate 310 jobs due to the downturn in the US housing market.
The job cuts came after Bear Stearns in late July disclosed hefty losses endured by two hedge funds it managed for wealthy clients.
It was forced to close down its Enhanced Leverage Fund following losses of hundreds of millions of dollars tied to risky bets in mortgage-backed securities.
A separate fund that Bear Stearns ran, the High-Grade Fund, also floundered because of similar wagers tied to subprime mortgages.
Such mortgage loans, granted to Americans with stretched finances, have been plagued by late payments and a rising tide of home foreclosures.
Bear Stearns overhauled its top management ranks in the wake of the hedge fund losses.
Investment funds controlled by British billionaire Joseph Lewis earlier this year amassed a seven percent stake in Bear Stearns for over 860 million dollars.
The tie-up between Bear Stearns and CITIC is subject to regulatory approvals in the United States and China.
China halts probe on U.S. exports
GENEVA, Switzerland (AP) -- China blocked the establishment of an investigation by the World Trade Organization into its restrictions on the sale of American movies, music and books that the United States requested Monday.
Under WTO rules, China has the right to block the investigation once. But it cannot delay the panel's establishment a second time, meaning the investigation will most likely be authorized next month.
The U.S. requested the probe at a meeting of the WTO's dispute settlement body, trade officials said.
The case is seen as concerning American filmmakers, online music providers and other U.S. media suppliers who claim to be suffering from what the U.S. calls "less favorable distribution opportunities" in China.
The WTO is already investigating three trade disputes between China and the United States. Washington accuses China of illegally hindering the import of foreign auto parts, providing government subsidies to a number of Chinese industries, and effectively providing a safe haven for product piracy and counterfeiting through excessively high thresholds for criminal prosecution.
China has filed its own complaint over the antidumping duties the United States applies on Chinese paper imports, the first case initiated by Beijing against Washington in five years.
U.S. consultations with China have failed to resolve the differences.
"Those consultations provided some helpful clarifications but unfortunately did not resolve the dispute," said the U.S. delegation to the WTO in its written communication to the chairman of the body.
Washington first brought the case to the WTO in April alongside its complaint over rampant product piracy in China, alleging that Beijing had failed to remove import and distribution restrictions on copyrighted U.S. goods including newspapers, magazines, CDs, DVDs and video games.
For some products, distribution is limited to Chinese state-owned companies, the U.S. said. For others, foreign companies face censorship rules that do not extend to Chinese competitors.
Under WTO rules, China has the right to block the investigation once. But it cannot delay the panel's establishment a second time, meaning the investigation will most likely be authorized next month.
The U.S. requested the probe at a meeting of the WTO's dispute settlement body, trade officials said.
The case is seen as concerning American filmmakers, online music providers and other U.S. media suppliers who claim to be suffering from what the U.S. calls "less favorable distribution opportunities" in China.
The WTO is already investigating three trade disputes between China and the United States. Washington accuses China of illegally hindering the import of foreign auto parts, providing government subsidies to a number of Chinese industries, and effectively providing a safe haven for product piracy and counterfeiting through excessively high thresholds for criminal prosecution.
China has filed its own complaint over the antidumping duties the United States applies on Chinese paper imports, the first case initiated by Beijing against Washington in five years.
U.S. consultations with China have failed to resolve the differences.
"Those consultations provided some helpful clarifications but unfortunately did not resolve the dispute," said the U.S. delegation to the WTO in its written communication to the chairman of the body.
Washington first brought the case to the WTO in April alongside its complaint over rampant product piracy in China, alleging that Beijing had failed to remove import and distribution restrictions on copyrighted U.S. goods including newspapers, magazines, CDs, DVDs and video games.
For some products, distribution is limited to Chinese state-owned companies, the U.S. said. For others, foreign companies face censorship rules that do not extend to Chinese competitors.
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