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Sat, 27th May 2017

Anirudh Sethi Report

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Archives of “china” Tag

Muhammad No More: China Bans Muslim Names for Newborns

In response to unrest in the predominantly Muslim portions of far western China, Beijing has banned baby names that refer to Islam.

Local authorities in the far western reaches of the world’s fourth-largest country have received notice that babies can no longer be named as anything that could be construed as “overly religious,” in an expansion of rules implemented in 2015 which restricted the use of Muslim proper names, including Fatima or Saddam, for newborns, according to Ft.com.

A public official in the Xinjiang capital of Urumqi stated, “We received a notice from municipal authorities that all those born in Xinjiang cannot have overly religious or splittist names.”

“If your family has circumstances like this,” the official is quoted as saying, “you should change your child’s name.”

Those who do not comply face more than just social ostracization, as families that refuse the order will be denied a hukuo, a key identification document that allows for access to education, employment and other social benefits.

World’s Biggest Aluminum Producer Faces Default, Warns Of “Dramatic Social Unrest” Without A Beijing Bailout

Step aside China Huishan Dairy Holdings – China’s largest dairy producer which cratered last month after a negative Muddy Waters research report brought attention to a company we knew for one year was collateralizing its cows to fund stock buybacks – and make way for what may be the next Chinese megafraud.

While China Hongqiao Group may be best known for being the world’s largest aluminum producer, it has in recent months featured just as prominently among short-seller reports who have accused the company of being a fraud. As the WSJ’s Scott Patterson writes, questions about China Hongqiao’s finances first emerged in November, when an anonymous short seller wrote on a website called Hongqiao Exposed that the company’s profits are “too good to be true.” China Hongqiao in the March 31 statement called the report “untrue and unfounded.”

A subsequent 46-page report on Feb. 28 by Emerson Analytics, a trading firm focused on Chinese stock-market fraud, disclosed more allegations of fraud involving the Chinese commodity giant.

 Emerson accused China Hongqiao of “abnormally high” profits generated by underreporting production costs and disclosing electricity expenses—one of the biggest costs for aluminum producers—as much as 40% below their true cost. Emerson said it investigated Chinese electricity costs, spoke to former China Hongqiao employees and compared the company’s costs and profits with other comparable companies.

Additionally, China Hongqiao has been more profitable than some Chinese competitors. For instance, China Hongqiao earned an average operating profit margin of 27% in the past five years, compared with minus-1.7% for state-owned Aluminum Corp. of China , known as Chalco, and 5.9% for Alcoa, according to FactSet. “People were always skeptical about how they managed to be more profitable than their peers,” said Sandra Chow, a credit analyst at CreditSights.

Putin Plans to Visit China in May to Attend ‘One Belt, One Road’ Forum

China’s “One Belt, One Road” strategy was launched in 2013 and is aimed at developing infrastructure and strengthening ties between the Eurasian countries, focusing on the land-based Silk Road Economic Belt (SREB) and the 21st-century Maritime Silk Road.

“I plan to participate in the work of the international ‘One Belt, One Road’ forum at the invitation of Chinese President [Xi Jinping] and therefore I plan to pay a working visit to Beijing,” Putin said at a meeting with Chinese First Vice Premier Zhang Gaoli.

In turn, Zhang said the Chinese leader attached great importance to Putin’s participation in the forum, while his reciprocal visit to Russia would take place in June.

He once again expressed condolences on China’s behalf over the terror attack in the St. Petersburg metro last week, which claimed lives of at 14 people.

Putin and Xi held a meeting in November 2016, on the sidelines of the Asia- Pacific Economic Cooperation (APEC) summit in Peru’s capital Lima, during which they discussed bilateral Russian-Chinese cooperation.

China Warns North Korea Situation Has Hit “Tipping Point”, Threatens “Never Before Seen” Measures

After warnings yesterday, and on the heels of a “very good call” with President Trump, China has escalated its threats to North Korea over its nuclear tests. In another Global Times op-ed, China warns “if the North makes another provocative move this month, the Chinese society will be willing to adopt severe restrictive measures that have never been seen before…”

Yesterday’s editorial in the military-focused Global Times tabloid, owned and operated by the Communist Party’s People’s Daily newspaper, said that North Korea’s nuclear activities must not jeopardize northeastern China, and that if the North impacts China with its illicit nuclear tests through either “nuclear leakage or pollution”, then China will respond with force.

 “China has a bottom line that it will protect at all costs, that is, the security and stability of northeast China… If the bottom line is touched, China will employ all means available including the military means to strike back. By that time, it is not an issue of discussion whether China acquiesces in the US’ blows, but the Chinese People’s Liberation Army (PLA) will launch attacks to DPRK nuclear facilities on its own.”

This, as the editorial puts it, is the “bottom line” for China; should it be crossed China will employ all means available including the military means to strike back,” warned the editorial.

Watching and waiting for China’s capital-control-induced bubble

Anyone in mainland China with a lot of money to move — companies foreign or domestic, or individuals — now seems likely to run into the capital controls that the authorities have thrown up in hopes of stopping a sell-off in the currency.

Real estate tycoon Pan Shiyi has given up on selling the Hongkou Soho, a striking Shanghai office tower whose tenants include Japanese electronics group Panasonic. Located just north of the Bund, the city’s iconic waterfront, the building was designed by Japanese architect Kengo Kuma. Pan had been looking to invest proceeds from the sale overseas but sees little hope of gaining approval for that.

 Similar cases of apparent official obstruction have surrounded other foreign deals. Online game developer Giant Interactive’s agreed-on purchase of an Israeli peer for 30.5 billion yuan ($4.42 billion) remains under review. Technology group LeEco and conglomerate Dalian Wanda Group have yet to complete their respective U.S. acquisitions of television maker Vizio and TV studio Dick Clark Productions.

Meanwhile, total social financing, China’s broad measure of credit and liquidity, continues rising by double digits. With limited outlets to overseas, Chinese money has nowhere to go but domestic assets.

Trump Says U.S. Would Act Alone on North Korean Nuclear Threat

President Donald Trump said the U.S. can “totally” address North Korea’s nuclear threat unilaterally if China doesn’t cooperate to put pressure on that nation, according to the Financial Times.

“If China is not going to solve North Korea, we will. That is all I am telling you,” Trump said in an interview published on Sunday. When pressed about whether he could do it one-on-one without China’s help, the president said, “I don’t have to say any more. Totally.”

The comments come ahead of Trump’s planned summit with Chinese President Xi Jinping at the president’s Mar-a-Lago resort in Palm Beach, Florida. The North Korean threat is expected to take center stage at the April 6-7 talks. Trump said he’ll discuss North Korea and the scope for cooperation when he hosts the Chinese leader.

“China has great influence over North Korea,” Trump said in the interview. “And China will either decide to help us with North Korea, or they won’t.” Cooperation with the U.S. “will be very good for China,” he said. If they don’t cooperate, “it won’t be good for anyone.”

 

North Korea has been developing and testing its ballistic missile technology, and South Korean intelligence has warned that North Korea could conduct its sixth nuclear bomb test in the first week of April to “overshadow” the summit.

Trump declined to reveal how he’d pursue the subject, or whether he would begin the talks with the Chinese president by bringing up North Korea and then pivoting to trade with China. He suggested a change in strategy from the past, saying his predecessors telegraphed their actions such as military strikes in the Middle East.

Asia needs $26tn for infrastructure through 2030: ADB report

Asia will need $26 trillion of infrastructure investment in the 15 years from 2016 to 2030, said a report published on Tuesday by the Asian Development Bank.

According to the report, titled Meeting Asia’s Infrastructure Needs, the region needs electricity supply chains to deliver power to the 400 million people who still live without electricity.

 Infrastructure investment in Asia currently meets only about half the demand. Aid from development agencies, such as the ADB, remains a mere 2.5% of total investment. The report calls on regional economies to provide financing through fiscal measures and to make use of private-sector money.

The report covered 45 countries and territories including China and India. To sustain the current level of economic growth, Asia needs $26 trillion over the 15-year period.

In the previous report, released in 2009, the ADB estimated that Asia would need $8 trillion of infrastructure investment between 2010 and 2020.

Japan hosted over 24 million foreign visitors in 2016

Image result for japan visitorJapan’s Land, Infrastructure, Transport and Tourism Minister Keiichi Ishii said on Tuesday the number of foreign visitors to Japan rose around 20% last year to 24.039 million, marking a record figure and a five-year growth streak. Visitors from Southeast Asia notably increased.

Ishii stressed the record number “is a result of measures such as relaxation of visa requirements and improvements of consumption tax exemptions” as Japan considers the tourism industry a pillar of its growth strategy. 

Plenty of travelers last year came from China and South Korea, but growth was slow compared with 2015, when visitors skyrocketed 50% on a weak yen and loosened visa requirements. The yen’s temporary surge and earthquakes in Kumamoto Prefecture hampered growth in 2016, as did the Chinese economic slowdown.

Visitors, however, rose significantly from Southeast Asian countries such as Malaysia, Indonesia, the Philippines and Vietnam. Tourism campaigns in those countries helped attract more travelers, as did added airplane routes.

China’s FX reserves end-Dec USD 3.011trln vs USD 3.052trln prev

Chinese FX reserves data published a short while ago 7 Jan

  • total reserves now near 6-year lows
  • gold reserves USD 67.878bln vs 69.785bln prev
  • gold reserves 59.24mln troy oz vs 59.240mln prev

A drop in reserves of $41bln, albeit less than the $51bln expected versus a $69bln drop in November and the 6th straight month of declines.

The PBOC has now been forced to reduce its reserves by half a trillion USD since Aug 2015 after it devalued the yuan in a surprise move.

Plenty of fun and games this past week for the offshore and onshore yuan with o/n depo rates surging above 95% at one point.

Yesterday the PBOC hiked CNY by the biggest amount in 11 years vs USD and the onshore pair closed at 6.9230. The Chinese MOFCOM also had this to say on outflow curbs.

Bitcoin Surges Above $1,000 As China Unveils New Capital Controls

As noted yesterday, for the first time in three years, and only the second time in history, bitcoin rose above $1,000 in Yuan-denominated Chinese trading, however it was limited to the lower side of this “round number” psychological barrier in US trading, as BTC flirted with $999.99 for most of the day on the popular Coinbase exchange, without crossing it.

Overnight, however, Chinese demand proved too great and US markets had no choice but to arb the difference. So with Bitcoin trading in China at an implied price of over $1,050 at this moment, bitcoin finally soared above $1,000 in the US as well, trading just around $1,024 on Coinbase as of this moment.