Potentially big news in China

“It hasn't got played up much in the major press here, but I at dinner last night, I heard from someone I know who is very plugged into events in East Asia and did some research this AM.

The Chinese government has been encouraging anti-Japanese rallies lately. They seem to play this card whenever they want to deflect popular anger from their policies and the state of things. For example, this month they are shutting down the most independent TV station they have (the only one that covered the SARS before the cover-up totally crumbled).

However, these demonstrations got out of hand. My source got email text from one of the Japanese diplomats in Beijing. There was a massive riot with stones hurled at embassy and diplomatic housing. For four hours the places were under assault and the cops just watched. This is now getting major play in Japan, with much public fury. China so far has totally censored the new of the riots and of Japanese anger. This is a time of potentially big tension between China and Japan, as China seems to be in the process of blowing past Japan and moving to the front as tghe exclusive #1 power in the region, economically and politically as well as militarily (which they have acheived some time ago). Anyhow, this is big news in that part of the world - and indicative of major tensions for the future. I don't think anything really enormous will erupt, but having taken the role of Japan's protector and being the one's who hold their nuclear umbrella - we need to maintain a watchful eye.

I'm not saying this because I have an opinion as to what we should be doing other than watching and formulating contingencies (and I assume that is happening) opr how well we are doing - just because these are big tensions.

China remains furious over WWII and the Japanese occupation that preceeded it, and is adamant against Japan getting a permanent UN seat, as well as furious over the way some Japanese textbooks look at the war. My son was in Xian when anti-Japanese riots took place. The combination of history and current rivalry is a formula for much tension.”

“Anything to keep the peasants' minds off the rickety economy. It's about time to let the Japs assume a lions-share of the security duties in SE Asia anyway. Hopefully this will speed up their military buildup.”

“Why worry? Buy Avon!

Chinese government OKs Avon sales test
By Dan Burrows, MarketWatch

Avon's sales in China amounted to about $225 million in 2004. The company projects a 33% increase to more than $300 million in 2005 and forecasts $600 million in China sales for 2007.

http://www.marketwatch.com/news/story.asp?dist=¶m=archive&siteid=mktw&guid=%7B4045501A%2DA08C%2D4D87%2D8F12%2DC0E6424546CE%7D&garden=&minisite=
last edited: 4/11/05 9:15:10 AM”

“I hadn't read a thing about that.

Thanks for the heads up ped.

I haven't been anxious enough lately.”

“This could be a diversion to cover a takeover of Taiwan.

Escalate tension with Japan with a pretense of trying to downplay it, get everyone focussed on Japan and then grab something else.”

“No, it's the economy, stupid.”

“Well, the Chinese economy has been gangbusters for years. That's part of the tension and the Chinese ambition. Check out their economic growth rates. The problem is, with the rise of a comparatively prosperous middle class comes "Bourgeois" ambitions for democracy, fair competition economically, freedoms from some kinds of intrusions, freedom of information, etc. The phenomonal growth rates in official statistics have been challenged, but China is definitely booming. They are not free from discontents, but by CIA figures China became the second largest economy in the world in 2003 with a real GDP growth rate of 9.1%. GDP has quadrupled since 1978.

Having been there myself, I can tell you that economic progress while selective is startling. People have disposable income. Beijing has more than 30 Starbucks in the area (and an IKEA). My host in Xian told me that 20 years ago, people like him tasted pork once a year (in steamed buns for New Years) now it's nothing special and he has some almost every day.”

“Eating pork causes violent scapegoating?”

“pedxing, the problem isn't with the part of the economy that's booming - it's the state-owned dead weight. It's the corruption. It's the rebellious regional govenors. The Chicoms are just trying to do what little they can to fix it with minimal social upheaval. This fit of nationalism is simply a tool of distraction.”

“I heard a brief news report about this this past weekend on PBS radio. I've heard that in the past the Chinese government has let younger citizens (mostly males) blow off steam about Japan's occupation of China during WWII.
>
It just goes to show you that there is nothing unique about flashing shiny objects in front of the "crows" to distract them from the real story. Here it was Iraq's WMDs and Iran nuclear ambitions as a cover for our naked aggression to control oil sources. Over there it's the Japanese occupation when the government is about to close down government owned businesses. I read that is going on and throwing a lot of Chinese out of work.
>
Another real demographic problem the Chinese are facing is there are not enough women for the men to marry. The one child policy and the Chinese desire to have sons has caused abortions, abandonment, and even the murder of female newborns. I know this sounds like a joke but ....well the Trojan War was fought over a woman. :) G_D they're wonderful aren't they?
>
What really ironic is that all that pork those Chinese get to eat everyday is in a large part due to the fact that the Japanese government gave and has continued to give the Chinese seed money to start businesses and even whole industries. So in some ways if it wasn't for the Japanese, the Chinese would still be running around in Mao suits waving little red books in the air.”

“Sol: It has been shown that when there is a bad imbalance with too many men, not enought women that war and violence is more likely. So I agree with you. I'm not sure how important Japanese seed money was. I know a lot came from overseas Chinese - many of whom had fled communism in the first place. I also agree about otehr countries including ours using natyionalism and foreign enemies to shor up domestic support.

Oryx: I definitely agree that this bit of nationalism was a distraction from the countries problems. It may also be connected to Chinese ambitions in the region. It's interesting to me that it comes a week before they plan to close down the one TV station that broke the SARS story domestically. I just bthink saying "it's the economy" is oversimplifying things. I agree with you about corruption being a major problem. The loss of job security as the economy refers is a big problem. I think the Communist Party leaders are hoping that they can grow their way out of these problems. That if the country becomes rich enough, everyone will be happy and people won't mind that corrupt bosses get their share.
last edited: 4/11/05 3:45:37 PM”

“Historically, China has good reason to hate the Japanese, WWII.
Still, I agree, all this saber rattling is to cover internal problems.”

“China berates U.S. over Unocal vote Wed Jul 6, 9:02 AM ET

BEIJING (Reuters) - China criticized the U.S. House of Representatives on Wednesday for demanding a review of an attempted takeover of California-based oil producer Unocal Corp. (NYSE:UCL - news) by China's CNOOC Ltd (0883.HK).

"We demand that the U.S. Congress correct its mistaken ways of politicizing economic and trade issues and stop interfering in the normal commercial exchanges between enterprises of two countries," the Foreign Ministry said in a faxed statement.

The House last Thursday voted 333-92 in favor of a measure to block the Bush administration from approving CNOOC's $18.5 billion bid.

It also passed, with an overwhelming majority, a nonbinding resolution calling on the Bush administration to immediately conduct a review of the possible takeover, noting that it could threaten U.S. national security.

The bid by CNOOC, China's top offshore oil producer, topped a $16 billion-plus cash and stock offer that Unocal had already accepted from Chevron Corp (NYSE:CVX - news).

CNOOC's largest shareholder is the Chinese government.

The Chinese firm's bid has become a complicating factor in diplomatic ties between China and the United States and comes at a sensitive time when oil prices are near record highs.

Secretary of State Condoleezza Rice is scheduled to visit China on Saturday and Sunday”

“#&%!$ china. in the ear.”

“I imagine CNOOC is subsidized at least in these purchase efforts by the Chinese government so this would not actually be an example of a 'normal commercial exchange'!”

“All I can say is WOOOOOOOOOOOOOOOOOOO! HOOOOOOOOOOOOOOOOOOOO!

Whoever the 92 that opposed are screw you, you bastards!”

“yeah I would like to see who voted to approve (not block) it. Glad the others stood up to the Bush administration and thought about what was best for this country.”

“Only one person went on record to oppose this vote and it was Republican Congressman Mark Kirk from Illinois.”

“not sure if this is the right bill but it does deal with it.

http://clerk.house.gov/evs/2005/roll360.xml”

“I heard that most UNOCAL's fields are in Burma and Indonesia and other parts of SE Asia.


It's not exactly like they are trying to buy a piece of the U.S.”

“Ewker, most of us that do 'cut n paste' news clips show a link to the source.
I see that it is a Reuters piece but the website it came from needs to be shown. Some sites edit their pieces badly.

Usually, if the link is not shown, it's because the TT poster does not want you to read the whole thing. It may turn out to mean something different than what he wanted. The VileMan has been known to do this a time or two. LOL
last edited: 7/07/05 2:05:30 PM”

“China tells US to stay out of oil company takeover

Shanghai Bund
By Kathy Fong
THE Chinese Government on Monday sharply criticised the United States for attempting to prevent China's CNOOC Ltd from taking over American oil company Unocal Corp.

Four days after the US House of Representatives overwhelmingly approved a resolution urging the Bush administration to block the proposed transaction as a threat to national security, China's Foreign Ministry excoriated Congress for injecting politics into what it characterised as a standard business matter.

“CNOOC's bid to take over Unocal is a normal commercial activity between enterprises and should not fall victim to political interference. The development of economic and trade co-operation between China and the United States conforms to the interests of both sides.”

Those words officially elevated the takeover battle for Unocal into a bilateral issue involving Washington and Beijing, raising the stakes of the outcome.

CNOOC's bid has taken China across a new threshold: It has unleashed the first takeover battle between a Chinese company and a US firm, the oil giant Chevron Corp, which was prepared to buy Unocal for US$16.5bil (RM62.7bil). If completed, CNOOC's purchase – its bid price is US$18.5bil (RM70.3bil) – would be the largest foreign takeover ever by a Chinese firm.

But as the price of oil continues to soar, underscoring the finite supply of global stocks, some members of Congress portrayed China's appetite for energy as a threat to US interests. They are painting CNOOC's effort to buy Unocal as an attempt to siphon off oil that would otherwise land in the United States, a proposition that analysts call dubious because most of Unocal's outstanding contracts supply customers in Asia.

Meanwhile, the speed of development in coastal cities, such as Shanghai, Guangdong and Shenzhen, are representative of China's 20 years of robust economic growth.

Income per capita and the standard of living here are much higher compared with the inner regions of the vast mainland.

But not everyone is riding on the economic boom.

Statistics show that a small group of the rich have got the lion’s share of the wealth and the portion is growing over the years at the expense of the poor.

A recent survey by China’s National Bureau of Statistics found that city folk in the highest-income bracket earned 11.8 times more than those at the other end of the scale in the first quarter of this year.

According to the Ministry of Labour and Social Security, the richest 10% of households own 45% of urban wealth.

The poorest 10% of urban households have less than 1.4% of the wealth in Chinese cities.

All this point to a yawning gap between the rich and the poor in the cities which poses another big challenge to the Chinese Government which is working hard to improve the less developed regions.



I am not Violin, I c&p the whole article.
last edited: 7/07/05 2:10:43 PM”

“How is that different than anywhere else? THere will always be huge gaos between the obscenely rich and the poor. No matter where you go. Besides, China is a Communist country. Look at the revalations that have come out of Russia about the graft and corruption there. Worker's paradise??”

“Report: CNOOC May Raise Its Unocal Bid 1 hour, 54 minutes ago

BEIJING - Chinese oil company CNOOC Ltd. is considering raising its $18.5 billion bid for Unocal Corp., according to a published report Wednesday.

The state-controlled company's board also was expected to consider making other changes to its bid, the Financial Times said, citing unidentified sources. It didn't say what the higher offer might be.

Spokesmen for Hong Kong-based CNOOC didn't immediately return telephone calls seeking comment.

A higher bid would reflect the state-controlled Chinese firm's determination to woo Unocal shareholders away from a competing bid of $16.6 billion by Chevron Corp.

"The board is unified. The board is interested in winning. Everyone is on the same page," the Financial Times quoted an unidentified person close to the Chinese offer as saying.

Unocal's 10-member board was expected to gather Wednesday to consider whether to recommend shareholders accept the CNOOC offer, revoking its earlier support for Chevron.

CNOOC and Unocal executives have been in talks on what changes to the Chinese bid might lead to it being declared superior to Chevron's by Unocal directors, according to the FT.

The Chinese firm says its all-cash offer is better than Chevron's promise of a mix of cash and stock because it would pay shareholders more and wouldn't result in as many job losses.

The CNOOC offer has prompted opposition from U.S. critics who say letting a Chinese state-controlled firm take over Unocal, the nation's ninth-largest oil company based in El Segundo, Calif., could endanger national security.

CNOOC has promised to cooperate with a U.S. government security review and says it would consider selling some assets in the United States and placing others under American control if necessary.



This is not a good idea to let them buy a oil company based in the US esp the way we are needing oil.”

“Most of UNOCAL's fields are in southeast Asia.

The U.S. needs to import less oil anyway.

The U.S. can supplant what little comes from UNOCAL to the U.S. with Bio Diesel........homegrown

Trade in your gas-guzzler for a small diesel before the price of used gas guzzlers plummets.
last edited: 7/13/05 10:39:35 AM”

“And especially while they aren't allowing reasonable ownership and control over Chinese companies by US ones.”

“MarkO, most oil fields are someplace else but here. The ones we do have are capped and the oil companies won't uncap them.

It is more about allowing a govt controlled company own a US company esp when we aren't on that great of terms with them.

No telling how much in this country is already owned by the Chinese, Japanese or other countries”

“In the long run foreign ownership isn't that big a deal.

What are they gonna do, take U.S. real estate home with them?

Relations ought to be improved also.

Why not work with these mooks instead of the adversarial stance?

U.S. companies(Wall Street) have been making fortunes from cheap Asian labor for years.

I still believe fears about China are way over-blown.

China will sink under the weight of it's domestic problems......over-population, polution, etc”

“I had a small diesel car for two years. I loved it! Got great fuel ecomnomy and it ran like a top (until I forgot to put the oilcap back on and ran it dry....I was seventeen). I'd love to get another if companies came out with an affordable one. Mine was a mercury lynx, like an escort.”

“With the approach of Peak Oil the hand writing is on the wall.

The VW diesels are bio diesel-ready.

Others need only small changes, like the fuel lines need to be changed from rubber to steel.”

“SHANGHAI -- Until recently, China's view of the global energy map focused narrowly on the Middle East, which holds roughly two-thirds of the world's oil. Special attention was directed toward one well-supplied country: Iraq.

Through cultivation of Saddam Hussein's government, China sought to develop some of Iraq's more promising reserves. Beijing advocated lifting the United Nations sanctions that prevented investment in Iraq's oil patch and limited sales of its production.

Then the United States went to war in Iraq in 2003, wiping out China's stakes. The war and its aftermath have reshaped China's basic conception of the geopolitics of oil and added urgency to its mission to lessen dependence on Middle East supplies. It has reinforced China's fears that it is locked in a zero-sum contest for energy with the world's lone superpower, prompting Beijing to intensify its search for new sources, international relations and energy experts say.

As a vocal camp in Congress recoils at the prospect of a Chinese state-owned company, Cnooc Ltd., taking control of the California-based Unocal Corp., the Bush administration's decision to wage the war in Iraq stands out as a crucial factor in explaining how China came to scour the earth for energy and why the effort is likely to remain central to U.S.-Chinese relations for some time, those analysts say.

more...”

“LOS ANGELES - Daredevil skateboarder Danny Way rolled down a massive ramp at nearly 50 mph and jumped across the Great Wall of China on Saturday, becoming the first person to clear the wall without motorized aid, an event sponsor said.

Way botched the landing on his first attempt but then successfully completed the jump across the 61-foot gap four times, adding 360 degree spins on his last three tries, sponsor Quiksilver, Inc. said.

"I was aware of the dangers and my heart was pumping in my chest the whole time, but I managed to pull it off with the help of my team, and I'm honored to have my visions embraced by the people of China," Way said in a statement.

A crowd of several thousand people, including China's ministers of extreme sports (?!!) and culture, gathered at the Ju Yong Guan Gate about a 40-minute drive from Beijing, Quiksilver's greater China marketing director Ryan Hollis said.

"It was pretty fantastic," Hollis said in an interview from Beijing. "He really has spent quite a few years even thinking about this whole idea. It's been in logistical planning for about eight months. ... It was pretty amazing today to see this happen, to see it adopted by the culture, adopted by the government."

Way's made the jump on an adaptation of the so-called mega ramp, a gigantic structure that he helped create near his home in the Southern California desert. He set a skateboard jump world record for distance (79 feet) on a mega ramp at last summer's X Games, and in 2003 set the height record of 23 1/2 feet at the desert ramp.

http://news.yahoo.com/s/ap/20050710/ap_on_re_as/china_skateboarder_leap;_ylt=AoQDUdjQYwUYV7EHdD8sxx6s0NUE;_ylu=X3oDMTA3NW1oMDRpBHNlYwM3NTc-”

“Some 40 grams of pig sperm will be taken on board the Shenzhou VI spacecraft for its October launch.

Some of the sperm will be kept outside the spacecraft's biological capsule and some inside, according to China's Xinhua news agency.

Surviving sperm will be returned to Earth and used to understand better the processes involved in pig reproduction.

The pigs chosen are a breed called Rongchang, named after an area in the southwest of the country and famed for their physique and for the quality of their meat.

Agricultural experts hope to use the sperm to fertilise pig eggs back on Earth - to see what effect a period of microgravity will have had on the sperm's activity.

http://news.bbc.co.uk/2/hi/asia-pacific/4690651.stm”

“China calls its rise an opportunity, not a threat Wed Jul 27, 6:52 PM ET

WASHINGTON (Reuters) - China's rapid development is an opportunity rather than a threat to the world, a senior Chinese official said on Wednesday, seeking to stem a rising tide of anti-Beijing sentiment in the United States.

State Councilor Tang Jiaxuan, in a speech, advised Americans not to "politicize" or "get emotional" about trade issues. He also said Beijing would improve intellectual property rights protections and promised to work with Washington to promote world peace.

Tang, who recently visited North Korean leader Kim Jong-il in Pyongyang as an envoy of Chinese President Hu Jingtao, also predicted the Korean peninsula eventually would be peacefully reunified.

Experts said his remarks to a luncheon sponsored by the National Committee on U.S.-China Relations and the U.S.-China Business Council broke little new ground but was clearly an attempt by Beijing to portray a benign face.

Anti-China sentiments have been rising, mostly in the U.S. Congress, over worries about Beijing's expanding economic might, its growing trade surplus with the United States and a steady military buildup.

"China's development is an opportunity instead of a threat to the world. That is becoming the consensus of the international community," Tang said.

"The more China gets developed, the more it can contribute to world peace, stability and prosperity and the more opportunities it can bring to the rest of the world," he said.

With China now the United States' third largest trading partner and fastest growing export market, frictions are expected but the two sides must "work out the problems with equal-footed consultations and strive for a win-win result," Tang said.

"To politicize trade issues or to get emotional about them does not help solve problems," he added.

Tang said China does not strive for a prolonged trade surplus with the United States and is determined to make good on its World Trade Organization commitments .

"The Chinese government attaches great importance to IPR (intellectual property rights) protection and will step up measures in this regard," he said.

Tang, in Washington to help prepare for Hu's visit to the United States later this year, met Secretary of State Condoleezza Rice on Wednesday. The agenda included trade, the WTO, Taiwan and the fourth round of six-party talks on North Korea's nuclear program now under way in Beijing.

State Department spokesman Sean McCormack described the meeting as a good one and said Rice "underscored the importance of China maintaining its WTO obligations, as well as looking out for intellectual property rights issues."

On North Korea, the two officials "compared notes" on what has taken place at the Beijing talks, McCormack said.

Answering questions after his speech, Tang said the United States and China had a shared duty and responsibility to ensure the six-party talks produce "real progress" in this round and advance regional stability.

He expressed confidence that ultimately, the Korean peninsula will realize its independent and peaceful reunification but complained that Taiwan was blocking Beijing's friendly overtures, including not allowing the communist mainland to give the self-ruled island a gift of pandas.”

“China calls its rise an opportunity, not a threat

Yeah, right:

http://www.theage.com.au/news/world/zimbabwe-finds-a-steady-backer-in-beijing/2005/07/27/1122143906258.html?oneclick=true

Zimbabwe finds a steady backer in Beijing
By Richard Spencer
Beijing
July 28, 2005


Zimbabwe has won trade, aid and sympathy from China as President Robert Mugabe was given a warm welcome to Beijing.

Mr Mugabe and his opposite number, Hu Jintao, signed an economic and technical co-operation agreement. Details were not released but a Zimbabwean spokesman had earlier said that his country was seeking lines of credit.

Chinese media said that Beijing had agreed in principle to finance construction of a power plant and had sold a civilian aircraft to Harare.

Mr Mugabe, whose regime is under international attack for the violent clearance of shantytowns, thanked Beijing for its aid over the past 25 years.

Mr Mugabe, who is on a six-day visit to China, has been greeted as "an old friend" by President Hu Jintao.

At the same time, Britain was calling for a Security Council meeting on the slum demolition campaign. UN chief Kofi Annan has ruled out a visit to Zimbabwe until Harare ends the evictions and allows humanitarian aid in.

Council members said Harare's campaign of razing shantytowns had left 700,000 people destitute and affected a further 2.4 million. But there was no consensus on holding formal consultations.
AdvertisementAdvertisement

Diplomats said China, one of the few countries to publicly back Mr Mugabe's drive to demolish illegal housing, was one of the countries that expressed reluctance to have a formal debate.

Mr Mugabe has already bought 12 fighter jets, 100 military vehicles and two airliners from China this year and been given another aircraft and eight military trainer jets as a gift.

He says his Look East policy had been forced upon him by the refusal of Western partners to respond to his economic problems. Inflation in Zimbabwe is in triple figures, unemployment is at 70 per cent and the country has heavy foreign debts.

A report written recently by the Roman Catholic Archbishop of Bulawayo, Pius Ncube, an academic and the head of Johannesburg-based Africa Fighting Malaria, directly links Chinese investment with Zimbabwe's township clearance program.

"Speculation over the motives … has pointed to the removal of local competition threatening newly arrived Chinese businessmen whose stores sell cheap and often poor quality goods," said the report for the American Enterprise Institute.

It estimated that up to 10,000 Chinese citizens had moved into the country under the Look East policy, some moving on to tobacco farms confiscated under Mr Mugabe's "land reform" policies. China has expressed public support for Zimbabwe's reforms.

In a statement issued by the Foreign Ministry, Beijing gave its standard defence of its willingness to deal with pariah regimes, saying China did not "interfere with other countries' internal affairs".

Speaking before his meeting with Mr Mugabe, Mr Hu said: "You have made major contributions to the friendly relations between our two countries."

China's relations with African states go back to its days as a Marxist friend of liberation movements. Although it has shed some of the ideology of that era, and certainly the economics, the old relationships have found new life with China's recent economic and diplomatic expansion.

- Telegraph”

“CNOOC Withdraws $18.5B Bid for Unocal 19 minutes ago

NEW YORK - China's CNOOC Ltd. said Tuesday it has withdrawn its $18.5 billion cash offer for Unocal Corp., stating it considered raising its bid, and "would have done so but for the political environment in the U.S."

CNOOC's withdrawal frees the way for Chevron Corp. to clinch its $17.4 billion bid for El Segundo, Calif.-based Unocal.

Late last week, reports said Hong Kong-based CNOOC was trying to decide between raising its bid for Unocal to as much as $20 billion or to drop it entirely due to objections by critics who contend the acquisition might imperil U.S. energy security.

CNOOC's parent company, the China National Offshore Oil Corp., is 70-percent owned by the Chinese government.

Chevron, the second largest U.S. oil company behind Exxon Mobil Corp., last week raised its cash-and-stock offer for Unocal to $63.01 share, from $16.7 billion, or $60.51 a share.

Unocal's board has endorsed Chevron's offer and its shareholders are set to vote on the deal Aug. 10.

CNOOC's bid sparked concerns in Congress that the proposed deal presented risks to America's economic and national security. A flurry of legislation intended to derail CNOOC's offer has been introduced in both houses of Congress.

Influential investment advisory group Institutional Shareholder Services on Monday endorsed Chevron's bid, ISS estimated it would take six to nine months for CNOOC's bid to navigate through all the political and regulatory hurdles in the United States and China, with no guarantee that the deal would ever be completed.

In a statement Tuesday, the Chinese oil company said "the unprecedented political opposition that followed the announcement of our proposed transaction was regrettable and unjustified. This is especially the case in light of CNOOC's purely commercial objectives and the extensive commitments that CNOOC was prepared to make to address any legitimate concerns U.S. officials may have had regarding our acquisition."

The company said that the political environment created "a level of uncertainty that presents an unacceptable risk to our ability to secure this transaction."

Unocal shares closed Monday at $64.37 on the New York Stock Exchange, and fell 67 cents to $63.70 in premarket activity”

“This is especially the case in light of CNOOC's purely commercial objectives

LOL”

“They're coming to get you!!!”

“Well, they're going to try. And they're going to go down in flames, particularly when India's resurgence passes China's.”

“Going to try?

You mean like to take over?

It's not logistically possible.”

“They're going to try to compete for strategic resources and to establish military dominance in the South China Sea. They're already trying.”

“Good luck to the Chinese with that.

Their environmental problems and economic ties with the U.S. and other countries will stifle any attempts to "expand".

I'm not concerned........ya know, I'm a blissninny.”

“Analysis of China's increasing FDI:

China: A Closer Look at Rising FDI
August 11, 2005 18 22 GMT


Summary

Foreign direct investment into China continues to rise, signaling
China's relentless march to the pinnacle of economic development --
right? It is a nice theory, but a closer look at those numbers belies a
very different reality.

Analysis

Foreign direct investment (FDI) into China has been rising year-on-year
for nearly three decades, hitting a fresh high of $60.6 billion in
2004. In 2003, China overtook the United States to become the world's
single largest FDI recipient in history. A great sign as to how the
Asian economy is an unstoppable juggernaut well on its way to global
dominance, right?

Wrong.

While the headline chart is indeed impressive, a quick breakdown of
Chinese FDI figures indicates that more than half of the "foreign"
money flowing into the country is not actually foreign at all. Leading
"investors" into China include Hong Kong, the British Virgin Islands,
Western Samoa and the Caymans.

The money trail is actually quite simple. China grants special tax
privilege to foreign direct investors that it does not grant to
domestic investors. In order to take advantage of those policies,
domestic businesses regularly smuggle money offshore and then
recirculate it using one of the world's many offshore financial nodes.
The result is huge amounts of not-quite-so-foreign direct investment.

But even with all that domestic money removed from the equation, there
is still about $26.6 billion of FDI -- a hefty chunk of change by any
measure, roughly equivalent to the level of FDI into France. After all,
billions of dollars in U.S. investment regularly flood into China,
right?

Wrong.

Realized investment by Western economies peaked back in 2003 and has
not been an impressive proportion of the total for years. Stratfor has
noted for some time how the shine is coming off of China, something
that direct investors have been acting on -- if not consciously
realizing -- for two years now.

The only exceptions to the trend -- and the ultimate drivers behind all
the media buzz -- are Asian investors. This should not come as a
particular surprise. The Chinese economic model of using endless
amounts of artificially cheap money is a derivation of the wider Asian
model. It makes sense that, not only would Asian investors be more
comfortable dealing with the peculiarities of Chinese practices, they
have oodles of cash from similar economic frameworks back home.

And we all know how Asian economies are paragons of virtue, efficient
allocators of capital, champions of efficiency and overall bastions of
stability, right?”