PRC Economy and Industry: News and Discussions

[rundstedt]

Fearing China

President Obama has finally selected his ambassador to China—and not a moment too soon. Because Ambassador-designate Jim Huntsman was a rumored GOP presidential candidate for 2012, most of the press reaction has been about the domestic political ramifications of the pick. This inside-the-Beltway focus overlooks a minor fact: Huntsman is about to become the point man for the most important bilateral relationship in the world.

The Chinese government has not been sitting idly by while the Obama administration has gotten into gear. Put another way, there has been chaos under heaven, and Beijing's situation is excellent. Over the past two months, Beijing has made a series of moves that could be interpreted as a challenge to the American-led economic and financial order. In March, Prime Minister Wen Jiabao explicitly voiced concerns about the direction of U.S. fiscal policy at his annual press conference. Later in March, China's central bank governor, Zhou Xiaochuan, argued that the costs of relying on the dollar as the world's reserve currency now exceeded its benefits. He proposed the creation of "a super-sovereign reserve currency" patterned after the IMF's Special Drawing Rights (SDRs) as a way to diversify away from the dollar. At the G20 summit in London, Wen seemed to advance that goal with an agreement to expand IMF lending in SDRs by up to $250 billion. In what the Financial Times claimed was an effort to diversify away from the dollar, China has doubled its gold holdings over the past five years. In an effort to promote greater global use of the yuan, the People's Bank of China initiated $95 billion of bilateral currency swaps with countries as diverse as Belarus, Malaysia and Argentina. China also strongly supported expanding the Chang Mai Initiative, a burgeoning ASEAN+3 arrangement of currency swaps. According to the Financial Times, Brazil is in preliminary negotiations with China to eliminate the use of the dollar from their bilateral trade.

[vsudhir]

Arrests at Chinese Factory for Slavelike Conditions

Psy-ops onlee. How can the glate utopia with the mandate of heaven commit such climes?

[rundstedt]

China Outpaces U.S. in Cleaner Coal-Fired Plants

TIANJIN, China — China’s frenetic construction of coal-fired power plants has raised worries around the world about the effect on climate change. China now uses more coal than the United States, Europe and Japan combined, making it the world’s largest emitter of gases that are warming the planet.
But largely missing in the hand-wringing is this: China has emerged in the past two years as the world’s leading builder of more efficient, less polluting coal power plants, mastering the technology and driving down the cost.

While the United States is still debating whether to build a more efficient kind of coal-fired power plant that uses extremely hot steam, China has begun building such plants at a rate of one a month.

Construction has stalled in the United States on a new generation of low-pollution power plants that turn coal into a gas before burning it, although Energy Secretary Steven Chu said Thursday that the Obama administration might revive one power plant of this type. But China has already approved equipment purchases for just such a power plant, to be assembled soon in a muddy field here in Tianjin.

“The steps they’ve taken are probably as fast and as serious as anywhere in power-generation history,” said Hal Harvey, president of ClimateWorks, a group in San Francisco that helps finance projects to limit global warming.

Western countries continue to rely heavily on coal-fired power plants built decades ago with outdated, inefficient technology that burn a lot of coal and emit considerable amounts of carbon dioxide. China has begun requiring power companies to retire an older, more polluting power plant for each new one they build.

Cao Peixi, the president of the China Huaneng Group, the country’s biggest state-owned electric utility and the majority partner in the joint venture building the Tianjin plant, said his company was committed to the project even though it would cost more than conventional plants.

“We shouldn’t look at this project from a purely financial perspective,” he said. “It represents the future.”

Without doubt, China’s coal-fired power sector still has many problems, and global warming gases from the country are expected to continue increasing. China’s aim is to use the newest technologies to limit the rate of increase.

Only half the country’s coal-fired power plants have the emissions control equipment to remove sulfur compounds that cause acid rain, and even power plants with that technology do not always use it. China has not begun regulating some of the emissions that lead to heavy smog in big cities.

Even among China’s newly built plants, not all are modern. Only about 60 percent of the new plants are being built using newer technology that is highly efficient, but more expensive.

With greater efficiency, a power plant burns less coal and emits less carbon dioxide for each unit of electricity it generates. Experts say the least efficient plants in China today convert 27 to 36 percent of the energy in coal into electricity. The most efficient plants achieve an efficiency as high as 44 percent, meaning they can cut global warming emissions by more than a third compared with the weakest plants.

In the United States, the most efficient plants achieve around 40 percent efficiency, because they do not use the highest steam temperatures being adopted in China. The average efficiency of American coal-fired plants is still higher than the average efficiency of Chinese power plants, because China built so many inefficient plants over the past decade. But China is rapidly closing the gap by using some of the world’s most advanced designs.

After relying until recently on older technology, “China has since become the major world market for advanced coal-fired power plants with high-specification emission control systems,” the International Energy Agency said in a report on April 20.

China’s improvements are starting to have an effect on climate models. In its latest annual report last November, the I.E.A. cut its forecast of the annual increase in Chinese emissions of global warming gases, to 3 percent from 3.2 percent, in response to technological gains, particularly in the coal sector, even as the agency raised slightly its forecast for Chinese economic growth. “It’s definitely changing the baseline, and that’s being taken into account,” said Jonathan Sinton, a China specialist at the energy agency.

But by continuing to rely heavily on coal, which supplies 80 percent of its electricity, China ensures that it will keep emitting a lot of carbon dioxide; even an efficient coal-fired power plant emits twice the carbon dioxide of a natural gas-fired plant.

Perhaps the biggest question now is how much further China can go beyond the recent steps. In particular, how fast will it move toward power plants that capture their emissions and store them underground or under the seafloor?

That technology could, in theory, create power plants that contribute virtually nothing to global warming. Many countries hope to develop such plants, though progress has been halting; Energy Secretary Chu has promised steps to speed up the technology in the United States.

China has just built a small, experimental facility near Beijing to remove carbon dioxide from power station emissions and use it to provide carbonation for beverages, and the government has a short list of possible locations for a large experiment to capture and store carbon dioxide. But so far, it has no plans to make this a national policy.

China is making other efforts to reduce its global warming emissions. It has doubled its total wind energy capacity in each of the past four years, and is poised to pass the United States as soon as this year as the world’s largest market for wind power equipment. China is building considerably more nuclear power plants than the rest of the world combined, and these do not emit carbon dioxide after they are built.

But coal remains the cheapest energy source in China by a wide margin. China has the world’s third-largest coal reserves, after the United States and Russia.

“No matter how much renewable or nuclear is in the mix, coal will remain the dominant power source,” said Ashok Bhargava, a China energy expert at the Asian Development Bank in Manila.

Another problem is that China has finally developed the ability to build high-technology power plants only at the end of a national binge of building lower-tech coal-fired plants. Construction is now slowing because of the economic slump.

By adopting “ultra-supercritical” technology, which uses extremely hot steam to achieve the highest efficiency, and by building many identical power plants at the same time, China has cut costs dramatically through economies of scale. It now can cost a third less to build an ultra-supercritical power plant in China than to build a less efficient coal-fired plant in the United States.

[Vipul]

Chinese economic recovery may be 'a false dawn'.

In recent months, a slew of economic data from China gave rise to hopes that the world's third-largest economy may have bottomed out and a recovery may be around the corner.

Indicatively, the Purchasing Managers' Index (PMI), a measure of the health of the manufacturing economy, rose for five consecutive months and back into expansionary territory; bank loan growth surged in the first quarter of this year; property transactions in Beijing, Shanghai and Shenzhen, which had virtually frozen in late-2008, rebounded sharply in the past three months; and car sales rose 37% in April, propelling China as the world's biggest auto market, with 2.8 million units sold in the first four months of this year.

But increasingly, economists are coming around to the view that these 'green shoots of recovery' may merely be signalling a false dawn in China, and that the rebound may not be as robust as had been believed -- and may even be reversed.

"Economic activity has softened since the second half of April, and the trend has become more visible in May," says Credit Suisse economist Dong Tao. "The economy is still recovering, but the pace has slowed, and even reversed in some sectors."

In fact, Tao reckons that the PMI runs the risk of slipping back below 50 over the next few months -- which would signal a contraction in industrial activity -- due to weaker activity and seasonality. "Should the PMI dip below 50, it would be negative for commodities and for the rest of the world," he adds. "It would also make the recent optimism seen throughout the commodity world and the shipping industry seem out of touch with the reality in China."

China's exports situation remains "grim," points out Moody's Economy.com associate economist Alaistair Chan. Exports fell 22.6% year-on-year in April, on top of a 17.1% drop in March. Sales to the US and Europe remain soft, and there is no sign of a bottoming in demand from those markets so far.

Indicatively, the Canton Trade Fair in April-May, the largest trade fair in China, reported a 31.4% y-o-y drop in export orders (in US dollar terms), notes Deutsche Bank's Greater China chief economist Jun Ma, who has long held that China's recovery path will be W-shaped (with another dip in growth), not V-shaped (with a sharp rebound).

Given that the Canton fair order leads actual export performance by 3-6 months, this bodes ill for exports, on which China still remains excessively dependent.

"Shipping port operators say there are mountains of containers lying idle at the ports," says JP Morgan chief of China equities Jing Ulrich. In fact, access roads to ports have been sealed off because there is no room for any more containers.

And although China's inland provinces -- like Sichuan, Shaanxi and Inner Mongolia -- appear to be decoupling and registering relatively higher GDP growth, the coastal regions are still struggling, adds Ulrich.

Does this mean the Chinese government's 4 trillion yuan ($585 billion) stimulus package isn't working well enough?

Much of the government's stimulus has been monetary in nature, points out Chan. Bank lending has surged, but the monetary stimulus has been uneven. "The vast bulk of the 5.17 trillion yuan ($757 billion) lending during the first four months of the year has been to state-owned enterprises. Meanwhile, struggling smaller businesses have found loan applications repeatedly rejected."

This may be because lending to state-owned enterprises is relatively safer, as it carries an implicit government backing, "but there are nevertheless growing fears of a vast tranche of non-performing loans in the coming years," adds Chan. And although the government has the ammunition to deal with banking problems that may crop up, "another series of bank restructuring and recapitalisations will take another hit on the government's finances and China's future growth rate."

In other words, says Chan, China may have achieved "a short-term recovery at the cost of lower long-term growth."

[shynee]

China stuck in ‘dollar trap’

China’s official foreign exchange manager is still buying record amounts of US government bonds, in spite of Beijing’s increasingly vocal fear of a dollar collapse, according to officials and analysts.

Senior Chinese officials, including Wen Jiabao, the premier, have repeatedly signalled concern that US policies could lead to a collapse in the dollar and global inflation.

But Chinese and western officials in Beijing said China was caught in a “dollar trap” and has little choice but to keep pouring the bulk of its growing reserves into the US Treasury, which remains the only market big enough and liquid enough to support its huge purchases.

In March alone, China’s direct holdings of US Treasury securities rose $23.7bn to reach a new record of $768bn, according to preliminary US data, allowing China to retain its title as the biggest creditor of the US government.

“Because of the sheer size of its reserves Safe [China’s State Administration of Foreign Exchange] will immediately disrupt any other market it tries to shift into in a big way and could also collapse the value of its existing reserves if it sold too many dollars,” said a western official, who spoke on condition of anonymity.

[shynee]

The (almost) $2.5 trillionaire …

Here is a funny comment

Cedric Regula responds:
Ya, but we still got the Big Spender Award. $1.8 Trillion just this year!

Trillions ain’t worth nothin’ if you don’t spend it. What are they gonna do? Take it with ‘em? Commies don’t even go to Heaven!

[rundstedt]

The (almost) $2.5 trillionaire …

Here is a funny comment

Cedric Regula responds:
Ya, but we still got the Big Spender Award. $1.8 Trillion just this year!

Trillions ain’t worth nothin’ if you don’t spend it. What are they gonna do? Take it with ‘em? Commies don’t even go to Heaven!

begger's wail:Trillions ain’t worth nothin’ if you don’t spend it.

[rundstedt]

China stuck in ‘dollar trap’

China’s official foreign exchange manager is still buying record amounts of US government bonds, in spite of Beijing’s increasingly vocal fear of a dollar collapse, according to officials and analysts.

Senior Chinese officials, including Wen Jiabao, the premier, have repeatedly signalled concern that US policies could lead to a collapse in the dollar and global inflation.

But Chinese and western officials in Beijing said China was caught in a “dollar trap” and has little choice but to keep pouring the bulk of its growing reserves into the US Treasury, which remains the only market big enough and liquid enough to support its huge purchases.

In March alone, China’s direct holdings of US Treasury securities rose $23.7bn to reach a new record of $768bn, according to preliminary US data, allowing China to retain its title as the biggest creditor of the US government.

“Because of the sheer size of its reserves Safe [China’s State Administration of Foreign Exchange] will immediately disrupt any other market it tries to shift into in a big way and could also collapse the value of its existing reserves if it sold too many dollars,” said a western official, who spoke on condition of anonymity.

poorest boaster without qualification could never go on the trap,

[Sanjay M]

Is China Moving to Replace USD with Yuan?

http://www.businessweek.com/globalbiz/c ... 665312.htm

Businessweek thinks so.

[ArmenT]

Is China Moving to Replace USD with Yuan?

http://www.businessweek.com/globalbiz/c ... 665312.htm

Businessweek thinks so.

This is a tough call for them.

On one hand, they got themselves so dependant on the dollar that when it goes down in value, they get screwed. Hence switching over to Yuan for trade makes sense to them.

On the other hand, the reason why so much manufacturing shifted over to China was because they controlled the yuan's value against the dollar artificially and thus the costs were kept low. If they let it be used as a currency for international trade, then the value of the yuan will be much harder to control and will rise, which will make goods from China much more expensive. This will make it harder for their manufacturers to compete.

Interesting times...

[Singha]

the yuan's true value vs other big currencies is likely 30% higher than the small artificial range it moves in.

for chinese manufacturers who operate on 5% margins and enormous scale this will be a killer blow.

they will make a beeline for laos, cambodia, vietnam and philipines overnight. its already happening actually. cheaper to produce in these countries in labour cost and all are close to the sea and have business friendly govts.

[vina]

Saw an article of a book review in e- CON 'omist about bad manufacturing in China. The book is by a China expert. It seems that the Chinese make great efforts to win outsourcing orders from western firms at next to no profit. Once they take care of teething troubles and quality standards are met, then the next effort is to reduce costs internally , to try and get margins up.

That is when things start getting dodgy. Environmental protections, labor protections etc are given the go by , packaging is cheapened, materials are changed, compromising basic quality and safety and it is a downward spiral.

Now he goes on to say, for countries with strong IP protections and innovative products, they are given the low prices because the factories can then sell knock off products in countries with less stringent IP protections ! He calls it "factory arbitrage " (cheating in other words and stealing from the IP owners really).

The customers are squeezed too. They cannot admit they bought and sold unsafe and dodgy products , because they will get into liability issues. There is every attempt to cover up. The thing usually comes to light only when a scandal blows up at the end customer level like the tainted pet food and toys with lead etc.

Hmm. The Chinese seem to approach the "problem" from the other end. Yindoos see where competitive advantages are, and sell with margins and then go all out to defend the margins , while trying for growth. Chinese on the other hand start with zero margins and then try to EXPAND margins in an environment of capped /falling prices by trying to take out costs and end up doing some real dodgy things.

[Singha]

chinese robber capitalists have access to lines of credit from state owned banks based on people's personal savings. this take care of initial low margin phase and risk. if the business fails, too bad - the NPA are kept under carpet and the next venture rolls out.

the machine will die if volumes come down or growth is not fast. they must keep moving...

[rundstedt]

In the year of 2006 and 2007, under the pressure of going up exchange rate and raw and processed materials price, some hongkong/taiwan textile manufacturers moved their factories to India. But all of them failed. Indian laborforces are very cheap than chinese (1/3 or 1/4), but terrible infra(several power cuts one day and awful logistics) and broken industry chain(dye and ornaments must import from China) make Indian factories none of competitive power. These factories were faced on european and american markets, fly-by-night fashions in clothing markets, and higher quality, Indian could not do replace China under current conditions, but Vietnam and Indonesia did.

[vina]

In the year of 2006 and 2007, under the pressure of going up exchange rate and raw and processed materials price, some hongkong/taiwan textile manufacturers moved their factories to India. But all of them failed. Indian laborforces are very cheap than chinese (1/3 or 1/4), but terrible infra(several power cuts one day and awful logistics) and broken industry chain(dye and ornaments must import from China) make Indian factories none of competitive power.

Yeah. That part is true. India's infrastructure , logistics, ports etc are still very inadequate and don't even talk about power (the situation is terrible in power), together with labor laws and high land prices means India is simply not competitive when it comes to large volumes commodity businesses like textiles and we simply cannot compete with the Chinese , leave alone Vietnames, Cambodians etc.

India can however compete where in niches where it has comparative advantages, volumes are low and it can thereby overcome it's infrastructural handicaps and short comings.

I hope that the new govt that got elected focuses heavily on infrastructure in the next 5 years and roads, ports , airports and power situation improves dramatically. Only then can India get into the large scale export oriented manufacturing that the East and South East Asian countries do so well. Even if not for exports, manufacturing is vitally important for a country like India to help lift it's vast numbers of peasants into blue collar workforce.

[Katare]

Cost of production in India has always been competitive with China (see the recent cost study in indian economy thread) but we have never even came close to competing with china on scale nor can we get there in next few years. The abilit to execute large projects (including infrs) on timely basis, law and order conditions in parts and political stability/clarity has been the biggest chellange which has prevented India from exploiting those labor/cost advantages.

It seems for first time in last 2 decades we'll have relatively much more improved stability and continuity in political setup. But certain chellanges of law/order and political oppertunism of opposition/regional parties would continue.

Still things have happened in last five years which gives me enormous hope. Fixed invest has risen to Chinise level's of ~40% from mid 20s. FDI as percentage of GDP has outmatched Chinese levels from 1/10th levels just few years back. In 2004 no one would have beleived that India will have $40BB in FDI and 40% fixed investment rates in next five years. Things do take off fairly quickly in India once policies are finalized and implemented.

[vsudhir]

All of India doesn't have to compete with all of PRC.

The best locations in India (say, a Gujrat) can and should benchmark with the best of PRC - learn, listen, experiment and improve on a continuous basis.

JMTs of course.

[Katare]

VSudhir,
Largely you are right but our system is that of a very strong federal state. For instance Gujarat can't pass a labor reform law for Gujarat’s industry. Neither can they pass a land acquisition law (aka imminent domain in US) independent off Indian state. Much like Modi can’t have his Gujrati POTA. The interest rates and inflation or debt ratings can't be higher than sovereign ratings (for foreign debt) for Gujarat regardless of their efficiency or solvency. Although a strong administrator in a chief minster can plug a lot of these gaps by different means.

[rundstedt]

http://img23.imageshack.us/img23/5958/2 ... 7cf148.jpg

http://img243.imageshack.us/img243/516/ ... 6c0506.jpg

http://img243.imageshack.us/img243/9909 ... b55a21.jpg

http://img25.imageshack.us/img25/6031/2 ... 97dd93.jpg

http://img27.imageshack.us/img27/2606/2 ... 029101.jpg

http://img16.imageshack.us/img16/818/20 ... 5d88b2.jpg

http://img140.imageshack.us/img140/2723 ... 846d52.jpg

http://img25.imageshack.us/img25/9122/2 ... b00324.jpg

http://img25.imageshack.us/img25/7868/2 ... 5da5f0.jpg

http://img21.imageshack.us/img21/3168/2 ... cc03fd.jpg

http://img140.imageshack.us/img140/797/ ... b7e274.jpg

[derkonig]

^^
Ok Chinese have trains. So?

[rundstedt]

Moderator note: Deleted baiting response.

The other poster asked a legitimate question. You just posted a bunch of pictures with no background or context, as if we we were expected to look at them and blindly praise, without asking questions. BRF is not the place that. Some freewheeling SinaBB with a peanut gallery of Chinese posters would a better option.

[rundstedt]

Tropic
http://img190.imageshack.us/img190/126/383027.jpg
Polar
http://img190.imageshack.us/img190/4913/123z.jpg
Robbed peseants take this train
http://img36.imageshack.us/img36/2346/364h.jpg

[Tanaji]

<edited>

Ah, So this is what a train looks like... Thank you sir, for the education. This poor Yindoo had never seen one before you see, glory be to the People's Republic of China for the shiny trains!

[Raju]

beautiful, manly, modern-looking chinese trains. Wow... what a train !

[rundstedt]

[bhavin]

Rundstedt - a simple request - Can you please put some commentary or information on pictures that you post ... That way we can understand what you are trying to convey... Just pasting pictures means nothing without proper context.

[derkonig]

This is thread pollution of the highest order, adminullahs plz take note.

[edited]

[archan]

The End of the Big Business-China Love Affair: Time

The Chinese government has begun turning a cold shoulder to Western corporations hoping to cash in on its consumers. Meanwhile, corporations are paying much closer attention to the risks and hidden costs of supplying their home markets with stuff made thousands of miles away in China. None of this necessarily means an end to the extraordinarily co-dependent economic relationship that China and the U.S. in particular have built up over the past decade. But it does mean big changes.

[Kakkaji]

X-posting from the military (armored vehicles) thread:

Won't this help China upgrade its heavy military transports technology?

GM deals Hummer to Chinese buyer

[bhavin]

X-posting from the military (armored vehicles) thread:

Won't this help China upgrade its heavy military transports technology?

GM deals Hummer to Chinese buyer

Kakkaji,

It is mentioned in the article that military humvees are made by A M General and is a completely different company. GM has just bought the rights to the Hummer name... So it looks like the sale will go through and hopefully the military tech will not pass hands.

[ArmenT]

X-posting from the military (armored vehicles) thread:

Won't this help China upgrade its heavy military transports technology?

GM deals Hummer to Chinese buyer

Kakkaji,

It is mentioned in the article that military humvees are made by A M General and is a completely different company. GM has just bought the rights to the Hummer name... So it looks like the sale will go through and hopefully the military tech will not pass hands.

Two Chinese companies already build a clone of the military humvees.
http://en.wikipedia.org/wiki/PRC_HMMWVs
Dongfeng also export the clone to Zimbabwe.

I think they're buying the Humvee for the brand name so that they don't have to spend marketing money to popularize the Dongfeng brand.

[Liu]

china to block non-RMB trade fund-flow with "rogue states"?

well, acording to some buddies working for banks in China, Chinese center bank has notice in oral way all banks in China that all fund-flow under trade Item with the countries on the following list should be forbidden.

However, the fund-flow settled with RMB is free from the blockage.

http://www.ccthere.com/article/2222493

the black list of fund-flow blockage:

Balkan countries;

N.korea;

Burma;

Belarus:

Cuba:

Iran;

Iraq:

Syria;

Lebanon:

Liberia;

Somalia;

Sudan

Sierra Leone;

Congo;


The Ivory Coast

[Liu]

well, the black list is sent to all banks in CHina by Chinese center bank in oral way.

the formal paper notice will be sent later.

of course, the blockage is only limited to the fund-flow of Non-RMB under trade Item.

it means that all trade between CHina and the countries on the list will be forbidden, unless those trade are settled with RMB.

Geithner is visiting CHina.

is the fishout of the black list a gife to Yankee,or a way to increase the settlement of RMB?

[Liu]

of course, it also may be a way to make those countries increase trade settled with RMB...I think.

As we know, China has signed the agreement of currency-swap just now with many countries on the list.

the forbid of non-RMB trade fund-low will make those countries give up USD and turn to RMB.

[Chinmayanand]

Pakistan is missing in that rogue list. China itself is the father of all rogues.It nurtures all rogue states in some way or the other.The master of nuke proliferation aka China name calling others.What a farce!

[Suraj]

Chinalco blames Rio Tinto for deal collapse

THE biggest investment deal in both Australian and Chinese corporate histories has collapsed, with Rio Tinto expected overnight to withdraw its board support for a $US19.5 billion investment from Chinalco.

The shock end to the controversial deal will spare the Rudd Government the political and diplomatic headache of whether to accept or block the deal on national interest grounds.

The Foreign Investment Review Board was due to make its decision by June 15.

But it will spark a major spat between the Anglo-Australian miner and the Chinese aluminium giant, with Chinalco demanding that Rio pay a $US195 million break fee.

Reports in London last night said negotiations had broken down between the companies.

But sources in Beijing said it had become increasingly clear over the week that Chinalco had been willing to be flexible but the Rio board no longer supported any deal with Chinalco.

"Rio Tinto has informally notified Chinalco over the past day or so it will be withdrawing its recommendation and would be replacing it with a $15 billion rights issue," said a source close to Chinalco late last night.

[vina]

Suraj,

I have always maintained that the only way Chipanda can get out of the dollar trap is to swap that Wampum with real assets like minerals, ore etc. Now that assumes that there are other suckers out there who will take Wampum and give out real assets! .

I had posted a question on how the global iron ore market is an effective oligopoly with Brazil and Australia as the leaders with high quality ore supplies and Chankian Indians darting in and taking a bite from selling lower quality ore and husbanding the high grade resources.

Now the Bellary iron ore barons must be raising a toast at this failed deal. Yup Chipanda will need to keep buying from the Yindians , atleast if for nothing else, to gains some negotiating leverage with the Aussies and Brazilians.

Long term, Chipanda is shafted. Make half of all the world's steel aye ?. Well, the iron ore sellers are going to get more than their pound of Chipanda flesh for every pound of steel those guys make.

[AnimeshP]

Not sure if this has been posted here before ...

Shanghai steel fails basic safety test

.......
Nearly a quarter of the tested samples failed tension tests, meaning structures built with them would not be able to withstand earthquakes and would be more likely to decay over time.

.....
Some batches were nearly five times lighter than the legal standard, meaning that they were less than the weight of iron, steel’s primary ingredient. “If your steel is less than the weight of iron, that’s pretty incredible,” says Christopher Earls, professor of civil engineering at Cornell University. “That means you’re replacing the iron with something else, so what you have isn’t really steel at all.”

.........

Adam Minter, a Shanghai-based journalist who blogged the story after it broke, asked, “What will happen to twenty-year home mortgages taken out on Shanghai apartments which will only last—structurally—for ten years? At some point, I’m pretty sure this is going to become an issue.”

[rundstedt]

china to block non-RMB trade fund-flow with "rogue states"?

well, acording to some buddies working for banks in China, Chinese center bank has notice in oral way all banks in China that all fund-flow under trade Item with the countries on the following list should be forbidden.

However, the fund-flow settled with RMB is free from the blockage.

http://www.ccthere.com/article/2222493

the black list of fund-flow blockage:

Balkan countries;

N.korea;

Burma;

Belarus:

Cuba:

Iran;

Iraq:

Syria;

Lebanon:

Liberia;

Somalia;

Sudan

Sierra Leone;

Congo;


The Ivory Coast

That's a totally fake news.

[Akshut]

That's a totally fake news.

I don't think that the news is from Xin-hua