The resurgence of anti-Western sentiment in China, thank you Wall Street!

Old sentiment being bloated into a disproportional size, especially after the recent rock n' roll of Wall Street and the global finance sector. Well, what can you do? Being patriotic is one thing, but being brainwashed by the corrupted doctrine is another. Wake up, China!

A lot of the Mainlander I are all quite anti-West. But for their purpose of getting a Westernized education, understand some Western ideologies before heading straight back home to patronize their country, that ain't so bad. Especially, when most of them are already either middle or upper class citizens in China, turning a blind eye on the impoverished and injustice may serve them well when job-security hinges on no whistle blowing. Even I would say "why not?" But then again that is capitalism at its finest. ;)

Meltdown boosts anti-Western forces in China

GEOFFREY YORK

From Friday's Globe and Mail

October 16, 2008 at 8:43 PM EDT

BEIJING — For the hardliners in China's Communist Party, the global financial crisis has been a golden opportunity to gloat about China's rising power.

“China should no longer be sympathetic and kind toward the United States at this rare moment,” said a commentary this week in Ta Kung Pao, a newspaper in Hong Kong with close links to the Communist Party.

“It should seize the opportunity to teach the United States a lesson,” the newspaper declared. “At the very least, the United States should be made to suffer a little bit more, so that it will learn to be more modest and prudent in the future and treat other countries as equals.”

Since the United States could need financial help from China to get out of its crisis, China should use the chance to extract American concessions on key political issues such as Taiwan and Tibet, the newspaper added.

Although the newspaper is financed by Beijing, the commentary probably does not reflect the mainstream views of China's Communist leaders. But it suggests how the financial crisis is boosting the confidence and influence of anti-Western forces in China, including the old-guard factions that are resisting free-market reforms.

While the Chinese leaders have been muted in their public response to the financial meltdown in the United States, a behind-the-scenes struggle can be glimpsed in the Chinese media. Pro-market liberals are urging Beijing to push ahead with more economic reforms, despite the crisis. Others are exploiting the crisis to proclaim the supremacy of the Chinese system, with its heavy state controls.

The debate comes at a critical time for the country. As it prepares to celebrate the 30th anniversary of its first steps toward free-market capitalism, China still has an unfinished agenda of incomplete reforms. Rural land is still not privately owned. Energy prices are set by the government. The nation's currency is not freely traded. Key sectors such as banking are still dominated by state-controlled companies.

The financial crisis is prompting China to rethink its future. Many liberals are worried that China will use the crisis as an excuse to ditch the reform agenda. They fret that the anti-reform forces could cite the U.S. bailout plan as proof of the need for state dominance in the economy.

“If we take emergency action as normal practice – and second-guess our belief in the free market for China – we might delay China's own market reform,” Hu Shuli, founding editor of Caijing, an influential Chinese financial magazine, said in an editorial this week.

“The current crisis is yet another test. Can we continue the reform? Can we draw a clear line between market and government? The answer will determine China's future.”

A similar note was struck by Ha Jiming, chief economist of China International Capital Corp. “China's future hinges on reforms,” he wrote this month. “Given the latest developments in the global economy, China's reforms have come to a new starting point ...”

But many other Chinese commentators said the financial crisis was evidence that China should not “blindly embrace” liberalism. “Many of the problems of the free-market system have been fully exposed,” said a commentary in Xinhua, the state news agency. “China should take a lesson from the American crisis and be cautious.”

On Chinese websites, some people are citing the crisis as the symbolic moment of China's ascendancy to superpower status, just as the Second World War marked the ascendancy of the United States. “The economic crisis this time is a redistribution of the economic powers of the world,” one person wrote on a website. “China has to be prepared for … a new order.”

The Chinese media gave prominent coverage to a conference in Beijing this week where speakers attacked the United States and globalization in the wake of the financial crisis. One conference organizer said China should “play a leading role” in a “new financial structure” to replace the existing global system. Another participant called for a “multipolarized world,” – code for a system without U.S. dominance.

Willy Lam, a political analyst and professor at the Chinese University of Hong Kong, said the financial crisis will encourage the Chinese government to maintain the status quo – rather than pursue reforms – over the next two years.

“The Chinese leadership is putting its emphasis on stability and growth, not reform,” Mr. Lam said in an interview.

“The leadership is reasonably satisfied with the situation. It seems to have proven that the Chinese model is correct. It feels confident that the cautious policy is the right policy.”

The look of love

A classic from Diana Krall. We all need a little bit of love these days, especially to endure this financial disaster. :)



"The Look Of Love"

The look of love is in your eyes
A look your smile can't disguise
The look of love is saying so much more than just words could ever say
And what my heart has heard, well it takes my breath away

I can hardly wait to hold you, feel my arms around you
How long I have waited
Waited just to love you, now that I have found you

You've got the
Look of love, it's on your face
A look that time can't erase
Be mine tonight, let this be just the start of so many nights like this
Let's take a lover's vow and then seal it with a kiss

I can hardly wait to hold you, feel my arms around you
How long I have waited
Waited just to love you, now that I have found you
Don't ever go
Don't ever go
I love you so

An end to the big red machine?

In the global arena of international trade, a weakening of a gigantic economic power would eventually affect all other major players, irrespective of how strong their economy may be or pretend to be. China, being a net exporter to sustain the North American consumers, would undoubtedly feel the pinch in the oncoming years, when consumers reign in their buying instincts and shun away from Wal-Mart. Indeed, the red machine is hitting speed bump and will halt sooner or later despite what other "experts" may say.

Big red machine hits speed bump

GEOFFREY YORK AND ANDY HOFFMAN

From Monday's Globe and Mail

October 12, 2008 at 10:45 PM EDT

BEIJING AND TORONTO — Less than two months after the excitement of the Beijing Olympics, the economic news from China has suddenly taken a turn for the worse.

Auto sales are slumping. The stock market is nose diving. Developers are offering heavy discounts to promote their unsold houses and apartments.

Even in an economy that is still expected to grow at an impressive 10 per cent this year, the hints of trouble are worrisome. And the problems are concentrated in industries such as construction and automobiles, which have major implications for the commodities that Canada produces.

The slowdown in China is already causing a drop in global commodity prices. This slump could continue for the next year or two, analysts say.

“When you add it up, it's bad news for commodity prices in the short term,” said Arthur Kroeber of Dragonomics, a research firm specializing in the Chinese economy.

“Commodity prices had unrealistically high expectations of Chinese demand built into them,” he said. “We had to have a correction. It will be really bad for the next year, as we see an unwinding of those unrealistic expectations.”

Shares of Canadian mining companies have been decimated in a matter of weeks on the sudden grim reality of falling Chinese demand for commodities. Teck Cominco Ltd., in the process of closing a $14-billion (U.S.) takeover of Fording Canadian Coal Trust, has seen its shares lose nearly a third of their value in a week.

“Everyone's mindset has been affected. This is the most severe thing we've ever seen. You and I have never seen anything like this. Basically, no one in the market has seen anything like it, “ Don Lindsay, Teck's president and chief executive, said in an interview.

The latest data from China are not encouraging. China's passenger car sales, which had grown by 18.5 per cent in the first half of this year, have now declined for two consecutive months. Sales fell by 6.2 per cent in August and a further 1.4 per cent in September.

The property sector is equally weak. Apartment prices have dropped by 10 to 20 per cent in many Chinese cities, and real-estate websites are filled with promotions from developers offering discounts to potential buyers. A leading Chinese financial magazine, Caijing, describes the nation's property market as “a grim scene of slow sales, price cuts and failed land auctions.”

The price cuts have been heaviest in southern Chinese cities such as Guangzhou and Shenzhen, where real-estate prices have dropped by up to 40 per cent in the past year. But even in Beijing, after the Olympic boom, preconstruction sales of residential units fell 76 per cent in September from the same month of last year.

The slump in auto sales and housing construction is having a serious impact on commodities such as steel, copper, iron ore and coking coal. Half of China's steel demand is derived from the property market. Copper wiring in new apartment buildings is a major source of Chinese demand for copper.

“If consumers sit on the sidelines for three months waiting for housing prices to drop, the short-term impact could be fairly severe as people try to clear inventories,” said Howard Balloch, a former Canadian ambassador to China who now heads an investment bank in Beijing. “There's a price correction going on, and core demand is slowing down.”

Chinese consumers are nervous about the market meltdowns and other economic trends, he said. “They're less willing to take on auto financing. They'll delay all sorts of discretionary spending.”

In the long run, however, commodity prices will be pulled back up by China's underlying trends, including the massive migration of rural people to its cities and the government's huge investment in infrastructure such as subways and trains, Mr. Balloch said.

China insisted Sunday that its “overall economic situation” is still good. “The economy is growing quickly and the financial sector is operating steadily,” the ruling Communist Party said in a statement at the end of a four-day meeting of its Central Committee. “The basic momentum of the country's economy remains unchanged.”

But the party admitted that “contradictions and problems” exist in the Chinese economy. “We must enhance our sense of peril and actively respond to challenges,” it said.

The growth of China's manufacturing exports has been slowing because of the weakening of U.S. demand. The Chinese government is trying to boost domestic demand by cutting interest rates, and Mr. Balloch predicts that it will take other measures to stimulate the economy.

Others are highly skeptical that the government will be able to counteract the effects of the U.S. slowdown and the global financial crisis. “The government can't just spend its way out of this,” said Michael Pettis, a finance professor at Beijing University.

“Many of the government's tools simply don't work any more,” he said. “My guess is that commodity prices will soften for the next two years. They were extremely sensitive to the high growth expectations.”

The unprecedented seven-year bull run in commodities, which has been a key driver of the strong Canadian economy, appears all but over.

Analysts are now ratcheting back their commodity price assumptions on the belief that a global economic slowdown will sap demand for resources such as copper, nickel and coal.

Canaccord Adams, a major player in the mining sector, particularly in the junior mining space, slashed 2009 copper price estimates last week from $3.34 (U.S.) a pound to $2 a pound, a decline of more than 40 per cent.

“Global demand is slowing and that includes China. The copper market and commodities in general have had a really good run here,” Canaccord Adams analyst Orest Wowkodaw said in an interview. “Unfortunately, we think we're going to take a pause in the sense that the consumption levels have to come down given the global slowdown we think is happening. The equities are being revalued as an investment class.”

In the hardest evidence yet of the slowing demand, Russian steel giant OAO Severstal last week said it is cutting steel production by as much as 30 per cent because of the sudden shift in industrial demand.

“Demand for all commodities has to slow if credit is tight. There is no way that investment and growth can continue in the levels that we've seen in this type of environment,” Mr. Wowkodaw said.

Financial chaos bites the dragon

I feel this is worth a post, even at 2:21 AM in the morning. :)

Yes, nowhere is immune to the ongoing financial disaster we're seeing down in the state, not even my own shares of mutual fund. :)

Financial chaos bites the dragon

GEOFFREY YORK

From Friday's Globe and Mail

October 10, 2008 at 1:35 AM EDT

BEIJING — For more than a decade, Yang Zhong has profited from the capitalist system. The 39-year-old Beijing businessman earns a comfortable income by buying and selling stocks on Chinese stock markets, the ultimate expression of confidence in global finance.

But his latest investment – about $160,000 that he sunk into Chinese stocks this spring – is looking increasingly disastrous. He estimates that he has lost almost 70 per cent of his money as China's markets have plummeted.

“Look at one of the stocks that I bought, Chongqing Brewery,” he said yesterday, pointing gloomily to the giant electronic screen at a trading hall. “I bought it at 35.9 yuan and now it's at 8.21 yuan. My money has disappeared.”

His losses are now so severe that they have spilled over into his other investments. He was planning to buy a new apartment, but he cancelled the purchase.
A Chinese man walks past a billboard promoting a new property development under construction in Shanghai on Oct. 9, 2008.

“I'm worried that the declines will continue,” he said. “The global financial crisis will affect the lives of the Chinese people sooner or later. In my opinion, the Chinese stock market won't improve for the next three years at least.”

The glum mood is spreading across China's financial community as the global market meltdown continues. A slowdown in its exports, a slump in its construction industry and a collapse in its stock markets have dented China's self-confidence at a crucial time when it was expected to be an engine of world growth.

A year ago, the Beijing trading hall of China Galaxy Securities Co. was a crowded and noisy place, bustling with the excited activity of new investors and traders. Dozens of people stood in queues every day to open their first trading accounts.

Yesterday it was a much more subdued and morose scene. The queues had disappeared. Investors sat quietly in chairs, talking in low voices or watching in silence as their stocks lost value.

Many of China's small-time investors are “recession virgins,” as some analysts call them. They've only seen the boom years. They've never experienced an era when the world is slipping toward a recession, with banks collapsing and markets tumbling. While most Chinese remain confident that their economy will survive, their nerves are rattled.

Qi Fan, a 72-year-old pensioner, says he invested 100,000 yuan (almost $17,000) in the Chinese stock market from his pension income and his savings. Now he has less than a third of his money. The main Shanghai market index has lost two-thirds of its value in the past year, and it plunged a further 9.5 per cent this week after a brief recovery last month.

“Most of us investors are upset and feeling depressed,” Mr. Qi said yesterday. “I have no confidence that the Chinese markets can recover in such a terrible international situation. The U.S. economy is in serious trouble now, and I think an international depression is inevitable.”

He fears that the damage will go far beyond the stock market. “I think China's economy will definitely be affected by the global problems. A sharp drop in exports to the U.S. will affect a lot of exporting companies, and unemployment will follow. What can I do now? I feel helpless.”

Another investor, a 35-year-old man who gave his surname as Wang, said he managed to get out of the stock market near its peak. But he predicted years of stagnation in Chinese markets. He calls it a “war of resistance” against the crisis – borrowing a term from China's war against Japanese invaders in the 1930s and 1940s.

This siege mentality, in turn, could dampen China's economic growth. “In a climate like this, people will tend to postpone their spending,” said Michael Pettis, a finance professor at Beijing University. “The people I know are very worried, very aware of it and nervous about it.”

Many Chinese commentators are eager to blame the United States as the villain of the current crisis. State newspapers, attacking the “greed” of Wall Street bankers, have accused Washington of a lax monetary policy. Some Chinese media have proclaimed the end of U.S. global dominance.

Most analysts expect China's economy to keep growing at a substantial pace for the foreseeable future, but that growth could slow to 7 or 8 per cent next year, down from the current 10 per cent, as China suffers a slowdown of export growth and a sharp decline of 15 to 20 per cent in property prices.

“The blood of the global economy has begun to freeze right from its heart – the United States,” said Ha Jiming, chief economist at China International Capital Corp., in a research note yesterday. He predicted a deceleration of China's economic growth for at least the next three years.

With a report from Yu Mei in Beijing.

Happy Melaween everyone!

Or should I say a melamine-infested Halloween? I'm sure you are very much aware of what's happening with this melamine business in China. Seriously, when are we going to learn that no safe food and produce ever come out from China? Contrary to what the Chinese may say or argue, a country which bases its constitution on an atheistic doctrine is a country of no morale, no conscience and no virtue to speak of. This is especially true for a place where religious freedom is severely handicapped and any religious practice, unless sanctioned by the state, being abolished without any regards. When capitalism outweighs the already eroding morale value, a disaster of unforeseen magnitude is usually waiting to emerge, just is the case with the Sanlu milk tainting scandal.

Put it another way. The ultimate motive of China is to poison and rid of the free-thinkers, dare takers and freedom fighters, by any means necessary, even if it would result in death to its own people.

China, Space Weapons and US Security

An article I found online that may be of interest to some of you. At least it is to me since it has something to do with the security of the Republic of China, i.e., Taiwan. Enjoy~

China, Space Weapons, and U.S. Security

Author:	Bruce W. MacDonald

Council on Foreign Relations Press

September 2008

• DOWNLOAD THE FULL TEXT OF THE REPORT HERE (1.6 MB PDF)

Overview

China’s successful test of an anti-satellite weapon in 2007, followed by the U.S. destruction earlier this year of an out-of-control U.S. satellite, demonstrated that space may soon no longer remain a relative sanctuary from military conflict.

As the United States, China, and others increasingly benefit from the information that military and intelligence satellites provide, the temptation to attack these satellites provides troubling potential for instability and conflict in space that could dramatically affect U.S. military capabilities on earth.

In this Council Special Report, Bruce W. MacDonald illuminates the strategic landscape of this new military space competition and highlights the dangers and opportunities the United States confronts in the space arena. He recognizes that advancing technology has likely made some degree of offensive space capability inevitable but calls on the United States to draw upon all instruments of U.S. power, including a reinvigorated space diplomacy, to lead in establishing a more stable and secure space environment. To this end, he spotlights a series of pragmatic policy, programmatic, and diplomatic steps the United States should take to strengthen its security interests in space and help reduce the chances that the military benefits of space will be cut off when the United States may most need them. In addition, these steps would serve important U.S. and Chinese economic interests and open new channels of communication and understanding between the mid-twenty-first century’s likely two leading powers. This timely report breaks new ground in thinking about the space dimension of U.S. security interests and its growing effect on U.S. security in the twenty-first century, and will be especially useful to those who are unfamiliar with the role of space in U.S. security.

The Author

Bruce W. MacDonald is an independent consultant in technology and national security policy management. From 1995 to 1999, he was assistant director for national security at the White House Office of Science and Technology Policy as well as senior director for science and technology on the National Security Council staff. Earlier, Mr. MacDonald was a professional staff member on the House Armed Services Committee and was defense and foreign policy adviser to Senator Dale Bumpers (D-AK). He also worked for the State Department as a nuclear weapons and technology specialist in the Bureau of Political-Military Affairs, where he led the Interagency START Policy Working Group, served on the U.S. START delegation in Geneva, and dealt with space and missile defense issues. He also supported the OSD SALT Task Force as staff scientist at System Planning Corporation. He is a member of the Council on Foreign Relations and a senior director of the Congressional Commission on the Strategic Posture of the United States. Mr. MacDonald holds a BSE from Princeton in aerospace engineering and two master’s degrees, also from Princeton—one in aerospace engineering, specializing in rocket propulsion, and a second in public and international affairs from the Woodrow Wilson School. He has authored a number of technical and policy papers and reports.