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Sinomania! the truth about china
China SEARCH Engine
Volume II, Episode 48
February 13, 2008
General Motors Turns Chinese - New China Funds - Coal Boom?

February 6, 2008

Macro Effects of Winter Storms - IPOs - Happy Year of the Rat! - more

January 29, 2008

Chinese Stocks: Correction or Bear? Davos 2008 - IPOs!

January 20, 2008

Four predictions for where Chinese stocks will be in 2008 - plus more!

December 31, 2007

A brief look back at some of the images of 2007

December 20, 2007

Markets Sag - Chevron Gas Deal - Aging Time Bomb? - Property ETF - IPOs - more!

December 10, 2007

US-China Summits in Beijing - QFII Up to $30 Billion (US) - IPOs losing steam?

November 27, 2007

Chinese Stock Prices Melt - Sarkozy Up to Beijing - IPO Updates - Will Trent Lott Lobby for Taiwan?

November 20, 2007

Currency Crisis! Dollars Drained by China, OPEC Continue Down - Inflation

November 14, 2007

Time to Short China's Yo-Yo Market? - Mining In or Out? IPOs - more

November 2, 2007

Oil Shock! Price Problems At the Chinese Pump - Stocks: Where's the Correction?

October 24, 2007

SPECIAL REPORT: 17th Party Congress - Shanghai Bubbles? - Market Numbers

October 15, 2007

China Bull Run Gets New Highs - PetroChina - IPOs - Money - more

October 9, 2007

Chinese Stocks Up & Up - IPOs - Iron & Steel - Pacific Pipeline - more

October 4, 2007

Hong Kong Booms - Commodities, Inflation, Oil at $100 a barrel? - more

September 25, 2007

UAW Tells GM No Jobs For China - Markets Hit 5,500 - China's Auto Industry - IPOs

September 19, 2007

New IPOs Rock Shanghai! But is Resistance Building? A Big Push for Private Equity…

September 10, 2007

Report on APEC 2007 - Energy Security - Markets Update - IPOs in Hong Kong

August 30, 2007

Chinese Stocks Stay Up - Big Bond Sale - IPOs - Upcoming Party Congress

August 22, 2007

China Stock Markets Get Higher But For How Much Longer? - Surprise Rate Hike - IPO Update

August 14, 2007

China Toy Recall - Markets & IPOs - Western Banks Catch Asian Flu?

August 6, 2007

Shanghai Composite Busts Past 4,600 - Beijing Bets on Banks - Chinese IPOs in Japan

July 31, 2007

China Stocks Up Again & Again! - Pussyfooting Around Currency? - Democracy in Japan?!

July 25, 2007

Will Barclay's Turn Chinese? 2Q/H1 Macro Report + IPOs!

July 19, 2007

Food Fight! China-USA sling hash / Peak Oil? / Markets Flat Line...

July 10, 2007

Chinese markets confused? Big IPOs - Chery+Chrysler

June 27, 2007

COSCO - China Mobile - IPOs - Telecom Mergers & Acquisitions

June 21, 2007

New Record Highs in Hong Kong, Shanghai: Will Beijing Put On the Squeeze? - IPOs & more

June 15, 2007

Fundamental Misalignment: US-China currency war - stock markets up & IPOs

June 7, 2007

China Stock Pop - Hot News items - climate change, tainted food...

May 31, 2007

Chinese stock markets hiccup - IPOs - USA-China Trade Gap

May 25, 2007

Report on the 2nd USA/China Strategic Economic Dialogue: Win-Win or When-When? - Market numbers - New IPOs

May 18, 2007

New life for Hong Kong? IPO Update - USA/China summit

May 11, 2007

Will Shanghai end up like NASDAQ or Nikkei? - IPOs

April 30, 2007

Tulips to Dotcom - is Sino Mania the next big bubble?

April 20, 2007

The Heat is on! - IPO Report - Air Pollution in China

April 15, 2007

China markets, IPO update, Beijing Ready for Olympics?

March 30, 2007

China markets up, up, up! Sinomania! goes to China

March 23, 2007

Focus on National People's Congress... Hi-Tech, IPOs

March 17, 2007

China's new investment strategy, IPOs, the Wrap...

March 7, 2007

China syndrome or hong bao bounce? New IPOs... more!

February 27, 2007

China Stock Market Yo-yo, new IPO issues, the wrap

February 17, 2007

Chinese New Year edition! Will China buy Chrysler & more!

February 9, 2007

The USA-China WTO trade dispute and New IPOs

February 1, 2007

IPOs: New Red Chip — Bubble Burst? — USA-China

January 26, 2007

BUBBLE TROUBLE? — IPOs on NASDAQ — Renminbi Yuan

January 20, 2007

IPOs in 3 hot sectors — BAOSteel — Macro Report

HKEX Hang Seng Shanghai
SSE Shanghai Hong Kong
SZEX Shenzhen Beijing
MUSIC in China: Listen!

TRANSCRIPT: General Motors puts its future in China, Chinese demand pressures coal prices - a new commodity boom, new Chinese investment funds, and a markets update...
Sinomania! Volume II Webisode 48, February 13, 2008

Is GM Turning Chinese?
Is Coal the new Oil?
New Chinese Funds, And a Market Update…


General Motors posted another record loss this week and now wants to lose its union labor force. GM is offering buyouts to all 74,000 union workers in the United States. This is yet another sign that GM is shifting its production overseas and I expect a lot of it will end up in China.

GM says its China operations are the one bright spot for its future. Last year GM sold over one million cars in China, a surge of 18 and a half percent. Indeed GM is poised to overtake Volkswagen in the success of its Chinese investments.

Just last month, GM and Shanghai Automotive Finance sold almost $2 billion Yuan worth of bonds backed by its car loans, the first ever securitization of car loans by an automobile financer in China.

In its efforts to fast track production of the Chevy Volt electric car, GM announced Monday a new global organization for hybrids and electric cars that will be partially based in Shanghai. Through a German consulting firm GM is recruiting engineers and senior managers for a future operation in Shanghai.

And visitors to Detroit’s new international air terminal are greeted with Chinese announcements, signs, and even a China UnionPay ATM. UnionPay is the ironically named debit card network in China. Detroit is ready for an influx of Chinese moneymen and business travelers when the new Northwest Airlines Detroit – Shanghai route starts a year from now.

Across the Detroit River in Ontario, the Canada China Business Council is actively encouraging Chinese direct investment in the region’s depressed auto and auto parts industries. China’s actual foreign direct investment in Canada is nearly one and a half billion dollars with more anticipated.

All this activity makes me wonder why opportunistic politicians in America are so worried about the Mexican border when parts of Michigan and Ontario may become Shanghai suburbs.


Stock markets reopened and are broadly down with what I call a “hong bao” effect, cashing out in the wake of spending on New Year lai see or gifts of cash and other expenses such as traveling or partying the nights away during the week long holiday.

The Shanghai Composite Index fell sharply in the first hour of trading February 13, struggled to make its way to my 4,600 baseline, and closed down at 4,490.72. The CSI 300 Index, Shanghai and ShenZhen B shares, were much the same with two or more percent declines February 13. Markets in Hong Kong rebounded by about the same amount while Taiwan shares are flat.

There is renewed bullishness on Chinese stocks from big investors. Morgan Stanley’s call is up for emerging markets equities and there are several new funds. The investment targets are Chinese financials, property or real estate, select big Chinese state-owned and mixed ownership conglomerates, Hong Kong Red Chips, and investment is aimed at greater China with Hong Kong, Taiwan, and Singapore all in the mix. The trend is China’s domestic growth and the companies that benefit from the unstoppable urbanization of Chinese society.

Barings Asset Management of London will premier two new China funds in May: the Baring China Growth Fund and the Baring China Select Fund. The select fund will be open ended. The funds will be managed by Baring’s Hong Kong China Fund team. Another London listed fund, JP Morgan Chinese Investment Trust claims it can pick the “long-term winners” among Chinese stocks. Manager Emerson Yip told the London Financial Times the fund looks for strength in return on equity and focuses on industry leaders such as China Mobile which makes up almost ten percent of the fund’s holdings.

Legg Mason and Citibank China will bring mutual funds to Chinese individual investors this year. Many Chinese want to invest in other emerging markets and the potential is enormous. According to one market analysis, Chinese mutual funds assets may grow to almost one and a half trillion US dollars by 2016. At the end of last year China passed Japan in net flows to long-term mutual funds. Remember, as Chinese invest in these mutual funds capital amassed in China will be returned to China’s traders and investors.


Will 2007 be remembered like 1993, the year China became a net importer of oil with massive implications for world oil supply, prices, and “energy security”? Last year, China became a net coal importer despite being the world’s largest producer of coal with the third of fourth largest coal reserves.

The reasons behind China’s coal squeeze are many: reform and consolidation in China’s mining industry – Beijing shut down around 10,000 inefficient and dangerous mines, transport remains a problem despite great expansion of railways and highways, incredible demand for coal by China’s power industry and huge rural population, and a recent ban on exports from Beijing to build up coal reserves after the unusual and unusually long winter cold snap in central and southern China.

The result of China’s hunger for coal is major pressure on world prices as global demand can’t be met. Japan normally relies on China for a tenth of its coal imports. Both the US and China have many new coal-fired power plants under construction as they turn to coal to lessen their dependence on Middle East oil.

The question then, as featured on page one of Tuesday’s Wall Street Journal, is will Chinese demand do to global coal prices what Chinese demand did for oil? If so, it could lead to further inflation as some major economies shrink – the perfect recipe for stagflation in America, Japan, and maybe even Europe.

Of course for investors, there’s always an upside: Appalachian coal futures doubled over last year’s levels and exports of coal to China is opening mines and creating jobs in many of the most declined areas of the United States.

I’ll see you next time!


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