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3 posts from February 2009

How will China Spend its 2 trillion Foreign Exchange Reserves?

By the end of 2008, China's foreign exchange reserves reached US$ 1.95 trillion, its holding of US treasury US$696.2 billion, an increase of 44.9% from its holding by the end of 2007. Will the US see the same increase of China's treasury holding in 2009? I doubt it. Chinese are going to spend, spend and spend. What are they going to spend it on? A big amount of money will pour into acquisition of natural resources. Chinese have suffered from soaring commodity prices and its dependence on other countries in the past decade due to its fast growing demand for resources such as oil and ores. The global financial crisis provides a perfect timing for China to acquire resource companies from overseas when everybody else is cash-strapped. A few examples: US $19.5 billion investment in Rio Tinto by Aluminum Corp. of China for 18% stakes China Minmetals paying US $1.7 billion for Australia's OZ Minerals Ltd (pending) US $10 billion loans to BRAZIL in exchange for supply up to 100 million barrels of crude oil a day to China US $25 billion loans to two Russian energy companies in exchange for more oil supply US $2.23 billion purchase of goods... Read more →

More Details of Stimulus Plan will be Unveiled during China's Congress Meetings in March

During the annual meetings of the NPC and CPPCC to be held in March in Beijing, some important topics will be covered: improvement of employment, sustaining GDP growth, developing agricultural area,stabilizing capital market, medical reform, establishing social security. In 2009 25 million people are looking for jobs and in the second half of the year it will increase to 31.1million when students graduate from schools. 2009 turns out to be the most challenging year for people who are looking for a job in the past 30 years. Another focus is how to sustain the growth of GDP. Some scholars and government officials are optimistic about achieving a growth of 9% in 2009, the other are less optimistic. Other topics to be covered include the agricultural area, stabilization of the capital market, adjustment of real estate pricing, medical care reform, establishment of social security, safety of grains, safety of food, education reform. Among these topics, most attention will pour into the discussion of how to improve the agricultural area, how to stimulate consumer’s demand, how to develop the economy in towns and counties, how to reduce emission and energy consumption and protect environment, how to help the growth of SMEs, and... Read more →

Opportunities in China’s Infrastructure for 2009 - Waterborne Transport

For 2009, Chinese government has committed RMB 9 trillion or US $1.3 trillion to investment in transportation infrastructure, in which US $118 billion or 9% will be invested in building new seaports and river ports and expanding existing ones. By the end of 2007, among all the berths with tonnage capacity up to 10,000, 190 are for bulk cargo, 309 for general cargo, 754 for specialized cargo. Between 2003 and 2007 the total tonnage handled by ports in China is as follows: 2003: 1.7 billion tons 2004: 2.3 billion tons 2005: 2.8 billion tons 2006: 3.1 billion tons 2007: 3.6 billion tons The major Chinese players of bulk cargo equipment are Shanghai ZPMC, DHI-DCW of Dalian, Hangzhou Huaxin Mechanical and Electrical Engineering and Nanjing Port Machinery Plant. Crane-type bulk cargo handling equipment and ship loaders are dominated by Chinese manufacturers. Chinese companies lag behind in continuous conveyance of large scale. International players active in China include: BMH, BÜHLE, VIGAN and SIMPORTER. In 2009 and 2010, the seaports Tianjin, Qingdao, Rizhao and Yantai in Shandong Province, Shanghai, Dalian in Liaoning Province, Guangzhou and Zhanjiang in Guangdong Province, and river ports along Yangtze River and the Pearl River, each will receive about... Read more →