Currency Newswire » china

Chinese Sub Pops Up in Middle of U.S. Navy Exercise

admin — Fri, 12 Nov 2010 07:13:44 +0000

When the U.S. Navy deploys a battle fleet on exercises, it takes the security of its aircraft carriers very seriously indeed.

At least a dozen warships provide a physical guard while the technical wizardry of the world’s only military superpower offers an invisible shield to detect and deter any intruders.

That is the theory. Or, rather, was the theory.

American military chiefs have been left dumbstruck by an undetected Chinese submarine popping up at the heart of a recent Pacific exercise and close to the vast U.S.S. Kitty Hawk – a 1,000ft supercarrier with 4,500 personnel on board.

By the time it surfaced the 160ft Song Class diesel-electric attack submarine is understood to have sailed within viable range for launching torpedoes or missiles at the carrier.

According to senior Nato officials the incident caused consternation in the U.S. Navy.

Read more about the Chinese sub…

Is China’s Renminbi Already the New Reserve Currency?

admin — Tue, 09 Nov 2010 18:38:20 +0000

With the dollar tumbling overnight, many were scratching their heads as to what caused the move in the dollar. Citi’s Stephen Englander provides a useful explanation, which fits perfectly with the commentary from PBoC advisor Li’s earlier that the dollar’s position as a reserve currency is now “absurd”: namely that more and more in the world are starting to look at the CNY as the new reserve currency. And as we pointed out earlier, its fixing surge of over 0.5% overnight caused many to blink. Is China finally pushing to aggressively force the dollar out?

Read more about China’s Renminbi…

China Says G20 Should Monitor US Fed

admin — Tue, 09 Nov 2010 18:01:02 +0000

China’s state media has issued a new broadside at the US Federal Reserve’s move to prime the US economy, suggesting the Group of 20 should monitor policy shifts by the US central bank.

The Xinhua news agency said in a commentary the Fed was “risking the global recovery by following its own track for economic revival” by spending an extra $US600 billion ($A593.65 billion) buying Treasury bonds to stimulate the US economy.

Read more…

China Reiterates Claim to Diaoyu Islands

admin — Wed, 03 Nov 2010 18:54:08 +0000

China has rejected U.S. mediation between Tokyo and Beijing over the disputed Diaoyu Islands and reiterated that they are sovereign Chinese territory.

China also brushed aside any suggestion by either Japan or the United States that the issue of sovereignty over the island falls within the scope of a Japanese-U.S. security treaty.

“I’d like to clarify the discussions between Chinese Foreign Minister Yang Jiechi and U.S. Secretary of State Hillary Clinton in Hanoi last week,” Chinese Foreign Ministry spokesman Ma Zhaoxu said. “I’d like to stress that this is only the thinking of the U.S. side.”

Read more about the Diaoyu Islands…

China Accuses US of “Out Of Control” Dollar Printing

admin — Tue, 26 Oct 2010 20:12:51 +0000

After taking heat from the White House for nearly a year for its currency peg, a fact that in itself will never get China to loosen its regime as it would be perceived as yielding to pressure from D.C., China has once again gone on the offensive, this time via its commerce minister who earlier today said that dollar issuance in the U.S. is “out of control” which in turn is leading to an inflation assault on China.

Of course, one simple way to deal with said assault would be to revalue the currency, but why do so if the world’s biggest export economy benefits from the stupidity of the Federal Reserve. After all, the Fed’s China monetary policy allows the US to continue to export inflation and to provide cheap Chinese goods to America’s great unwashed masses of Wal Mart shoppers who enjoy cheap (but increasingly more expensive) products.

Read more about China…

China Raises Retail Fuel Prices 3%

admin — Mon, 25 Oct 2010 17:08:15 +0000

China, the world’s biggest energy consumer, increased retail gasoline and diesel prices by 3 percent today as part of government measures to cool the economy and to meet energy-saving targets.

The ceiling for gasoline prices will rise by 230 yuan ($34.50) a metric ton and diesel prices will gain 220 yuan a ton, the National Development and Reform Commission, the top economic planner, said in a statement on its website yesterday.

The economy grew 9.6 percent in the third quarter, the least in a year, as the government curbed credit growth, clamped down on property speculation and chased energy-efficiency and pollution targets. The NDRC’s last fuel-price adjustment was in June, when the cost of gasoline and diesel was cut.

Read more about China…

Greek Dollar Swap Window

admin — Wed, 20 Oct 2010 21:17:40 +0000

The Chinese are clever people. Their leaders play a good game of chess in the global scramble for commodity supply and financial dominance. Their patient strategy has tied the arms & legs of the USGovt, using their own debt securities as the binding rope.

While much attention has come to saber rattling over currency manipulation and tiny 25 basis point interest rate hikes, even battles over rare earth metals, something has been happening in Europe of importance that involve a Chinese back door to dump USTreasurys.

To be sure, the USGovt deficits and monetary policy have invited a selloff in the USDollar. In the latter months of 2009 and early months of 2010, the Jackass wrote frequently about the absurd notion of an Exit Strategy from 0% and Quantitative Easing. The USFed lost heavy credibility and looked just plain obtuse and braindead. The Japanese ZIRP and QE twin diseases were not the monogrammed cufflinks the USFed would choose for sartorial splendor. My forecast was for no Exit from 0%, but rather an embrace of QE2, the exact opposite. We have it. Only the details remain on the QE2 initiative, including lapel pins to match the cufflinks for Bernanke. But the lapel pins are pure gold and silver, in complementary style. Bernanke looks scared, haggard, and a little desperate, like a captain on a ship listing to port and taking on significant water in the lower chambers. At least the water is at zero cost.

Upcoming Wholesale Tariffs with China

admin — Wed, 20 Oct 2010 17:25:18 +0000

Today’s very remarkable analysis from Albert Edwards presents a stunning spin on the China-US Nash Equilibrium, concluding that wholesale tariffs with China are now inevitable: “If another round of credit-fueled investment is about to be unleashed onto a global economy, already on the verge of deflation ” it will simply not be tolerated. Watch the trade data closely. Watch the US unemployment rate closely.

The US public is on the verge of revolt which is increasing likely to end in across-the-board tariffs.” Why has the SocGen strategist come to this conclusion? Simple – he now believes that “China is becoming a malevolent influence (my words) on the global economy and strong action is necessary.” As to who gets to buy US bonds should China start a boycott or outright dumping? Who else: “Why, Mr Bernanke is just waiting for his chance.”

The core if Edwards’ argument is that the US public is angry. And we agree: “Some 42 million Americans were in receipt of food stamps in July, up some 18% yoy (see chart below).

Read more about tariffs with China…

The Chinese are Hoarding Silver

admin — Wed, 20 Oct 2010 01:23:22 +0000

“Jesse” of Jesse’s Cafe Americain link brought the article below to my attention. Silver exported from China has declined 40% this year because of the strong internal demand:

“The demand is coming from all areas, including jewelry, investment and fabrication and this has resulted in a physical market shortage in the Far East…” “There are Chinese investors now hoarding silver, along with other resources, amid anticipation of higher inflation,” Feng said. “China is short of resources so these investors believe the metals will be more valuable in the future.”

Here’s the link to the news report: China hoards silver.

Not much commentary is needed to highlight the implications of that report. I will, however, point out a couple of things: 1) the Comex paper short in silver is absurdly several multiples higher than the ability of those who are short (JP Morgan, HSBC mostly) to deliver actual physical silver if the buyers make that demand; 2) The gold/silver ratio is currently around 56; historically this ratio has been fixed as low as 8 (ancient Rome) and usually reverts down to its long term historical ratio of approximately 16 from time to time; 3) It is clear that even if gold were to remain at the current price level, the “poor man’s gold” is ridiculously cheap in relation to golden gold.

Read more about silver…

China Halts Rare Mineral Exports to US and Europe

admin — Tue, 19 Oct 2010 20:13:49 +0000

The latest escalation in the binary version of modern warfare (i.e., that fought with a Bloomberg instead a stealth fighter), comes from China, which the NYT reports has just halted shipment of rare minerals to the US: “China, which has been blocking shipments of crucial minerals to Japan for the last month, has now quietly halted shipments of some of those same materials to the United States and Europe, three industry officials said on Tuesday.”

Read more about rare mineral exports…

China Vice-President Xi Jinping Given Key Military Job

admin — Mon, 18 Oct 2010 16:37:26 +0000

China’s Vice-President Xi Jinping has been named vice-chair of the powerful Central Military Commission, in a move widely seen as a boost to his likely succession of President Hu Jintao.

It comes on the last day of the ruling Communist Party’s annual meeting.

Hu Jintao must retire as head of the party in 2012 and as president in 2013.

Read more…

U.S. Alarmed by Harsh Tone of China’s Military

admin — Thu, 14 Oct 2010 17:05:06 +0000

Defense Secretary Robert M. Gates met his Chinese counterpart, Liang Guanglie, in Vietnam on Monday for the first time since the two militaries suspended talks with each other last winter, calling for the two countries to prevent “mistrust, miscalculations and mistakes.”

His message seemed directed mainly at officers like Lt. Cmdr. Tony Cao of the Chinese Navy.

Days before Mr. Gates arrived in Asia, Commander Cao was aboard a frigate in the Yellow Sea, conducting China’s first war games with the Australian Navy, exercises to which, he noted pointedly, the Americans were not invited.

Nor are they likely to be, he told Australian journalists in slightly bent English, until “the United States stops selling the weapons to Taiwan and stopping spying us with the air or the surface.”

Read more about China’s military…

Chinese Dissident Liu Xiaobo Wins Nobel Peace Prize

admin — Fri, 08 Oct 2010 18:50:54 +0000

Jailed Chinese dissident Liu Xiaobo won the 2010 Nobel Peace Prize on Friday for championing reform and human rights in a move that is certain to anger Beijing.

The writer and university professor was honoured “for his long and non-violent struggle for fundamental human rights in China,” Norwegian Nobel Committee president Thorbjoern Jagland said in his announcement.

China offered no immediate reaction to the award which is sure to infuriate the country’s communist rulers who jailed 54-year-old Liu for 11 years for subversion last year.

Read more…

China Denies Military Exercise Aimed at U.S.

admin — Tue, 29 Jun 2010 15:21:46 +0000

China denied on Tuesday media reports that an artillery drill in the East China Sea was in response to a planned military exercise between South Korea and the United States.

The 6-day, live ammunition exercise starting on Wednesday in the East China Sea off China’s coast was seen by some analysts as a “response to a (planned) joint exercise between the United States and Republic of Korea navies in the Yellow Sea,” said the China Daily, the country’s official English-language newspaper.

China Commodities Undercut US Dollar

admin — Thu, 18 Jun 2009 16:44:26 +0000

By: Jim Willie CB, GoldenJackass.com

China is directing their mountain of reserves away from acquired mining firms and toward managed hedge funds. This is a new direction for Beijing, clearly in response to the refusal by Rio Tinto to permit a $19 billion stake from the Chinese aluminum giant Chinalco. They were frustrated and angered by the other refusal with the failed Unocal dea in 2005. Clearly, whether stated openly or not, the Chinese are thwarted by USGovt and UKGovt hidden leaders from investing in strategic firms. From their point of view, tarnished by ill feelings, their money is good for credit supply but not good for commodity supply lines. So China will continue its pursuit of significant interests in commodity firms, both metals and energy related, and will amplify the pressures by taking scattered interests in hedge funds,

Felix Chee is a key adviser to China’s $200 billion sovereign wealth fund. At the prestigious GAIM International hedge fund conference in Monaco this week, Chee stated “We will have a preference for managed accounts. The platform would like a core of single manager funds and fund of funds. We are looking for the best managers and a handful of fund of funds, and when I say handful I mean five or less.” Chee will initially run the China Investment Corp hedge fund and its proprietary trading desk. Chee previously managed the endowment at the University of Toronto, whose $1 billion portfolio centered on hedge fund assets. Read more…

Zoellick Says China May Diversify Currency Reserves

admin — Tue, 09 Jun 2009 03:02:46 +0000

World Bank President Robert Zoellick said China may seek to diversify its foreign currency holdings over time, moving away from U.S. dollar reserves.

“Over time I could see China moving to some further diversification of its reserves,” Zoellick said at a conference today in Montreal. Still, he said, “China has been very sensitive about maintaining its exchange rate versus the dollar. You cannot do that unless you are buying dollars.”

People’s Bank of China Governor Zhou Xiaochuan in March urged creation of a “super-sovereign reserve currency” after Chinese Premier Wen Jiabao said he’s “worried” a weaker dollar might hurt China’s investment in U.S. Treasuries. Zhou proposed using the International Monetary Fund unit of account, known as “special drawing rights,” as an alternative. Read more about China…

Geithner & China: Who Are You Fooling?

admin — Tue, 02 Jun 2009 20:27:16 +0000

Treasury Secretary Tim Geithner’s trip to Asia has been heralded as a sales trip aimed at convincing the Chinese to keep buying U.S. Treasuries and thereby finance U.S. deficits. Such headlines are, in my humble opinion, an insult to the Chinese. Over and over again, we fall victim of the temptation to believe that Chinese leaders act in a vacuum, dictating policies out of a closet. Chinese leaders know very well the state of the Chinese, the U.S., and the world economy; they don’t need a sales pitch. So what’s the purpose of Geithner’s trip then? Read more about Geithner and China…

Peter Navarro On The China Problem

admin — Tue, 02 Jun 2009 16:03:29 +0000

In another surprisingly unmoderated interview on CNBC, UC Irvine professor Peter Navarro brings some relevant insight on why the Chinese problem is much more than the simplified question of whether or not they will keep buying Treasuries. Also, the commentary on Chinese students laughing in Geithner’s face is always refreshing, and shockingly uncensored for a CNBC audience. (shouldn’t every statement out of CNBC carry the disclaimer that it is owned by GE, whose GECC sub is one of the companies with the biggest percentage exposure in bad loans and toxic assets, but as is not a BHC is the most interested in a confidence rally).

Gold Spikes To $900/oz As US China Tension Rises

admin — Mon, 26 Jan 2009 16:50:56 +0000

Gold spiked to within two dollars of $900/oz in holiday leaden Asian trading as saber rattling between US and Chinese officials regarding the manipulation of the yuan ratcheted the tension in global capital markets. Last week Treasury Secretary-designate Timothy Geithner stated that China was a currency manipulator sending shock waves through the financial markets as the Obama administration appears to have taken a much more confrontational stance with Chinese authorities than its predecessor.

MAN to Sell Stake in Unprofitable China Bus Venture for 1 Euro (Bloomberg)

admin — Fri, 23 Jan 2009 16:54:09 +0000

Jan. 23 (Bloomberg) — MAN AG , Europe’s third-largest truckmaker, plans to sell its 50 percent stake in an unprofitable China bus venture for 1 euro ($1.30), its Chinese partner said in a statement to Shanghai’s stock exchange today.