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Sinomania! the truth about china
China SEARCH Engine
Volume II, Episode 52
March 17, 2008
Shanghai Bubble Burst? Beijing Elects Leaders Old & New - A Special Comment on Tibet

March 12, 2008

Beijing Plays Musical Chairs: Report on the National People’s Congress - Chinese Stocks Tank!
March 5, 2008

Markets Plunge - Sovereign Wealth Fund - IPOs - National People's Congress convenes

February 21, 2008

Private Equity Buys Chinese - Macro Update - Sovereign Wealth Fund IPOs - more!

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: Chinese stocks plummet with signs of a bear market, the National People's Congress holds elections and six out of ten are new politicians, and is inflation and poverty the real issue in Tibet ...
Sinomania! Volume II Webisode 52, March 17, 2008

The Panic of ’08 Hits Shanghai!
Beijing Throws an Election.
And a Special Comment on Tibet.


Chinese markets plummeted on March 17 and as we speak are falling an further. In Hong Kong, the Hang Seng Index fell over five percent to just over 21,000, a seven month low. The Hang Seng China Enterprise Index, charting Chinese Red Chips, sank over seven percent. In Shanghai the Shanghai Composite fell over three and half percent to 3,820 below 4,000 again and as we speak it is down to 3,722. The CSI 300 fell almost five percent to close at 3,965 March 17. Shanghai B shares were down over six percent to just above 270; ShenZhen Bs sank over five percent down to 542.69.

Although the first quarter is not yet over, at this point the only one of my four scenarios for the Shanghai market this year that predicted markets at this level is the “flat” scenario with Shanghai ending the year at less than the 2007 peak.


Hu Jintao was reelected President of China for a second and final 5 year term. Hu won by a wide margin but there were 3 votes against him and 5 abstaining. Xi Jinping was elected Vice President, a move widely interpreted as meaning he is in line for the presidency in 2013. Wen Jiabao was reelected as Premier or Prime Minister and Li Keqiang as a Vice Premier and his possible successor. As I’ve pointed out before, however, Li could win out over Xi for the presidency if Jiang Zemin’s power finally fades.

All told nearly sixty percent of the Chinese cabinet was replaced with new officials. Along with the creation of new central ministries 2008 marks a significant shake up in the Chinese central power structure. The National People’s Congress will adjourn by mid-week.


There are 2.8 million people living in Tibet, an autonomous area of China called Xizang in Chinese or “Western Storehouse.” About 486,000 live in towns and cities most of them in urban Lhasa, the capital of Tibet.

Last Friday in Lhasa a group of mostly young Tibetan men in their twenties, according to eyewitness reports, rioted by smashing up Chinese owned shops and markets, overturning cars, and burning piles of looted debris in the streets. The fires spread to buildings including shops, temples, and apartments. There are an unknown number of dead. The city remains under a lockdown with many residents – Tibetan and Chinese alike – afraid to go outside and government orders to stay put.

Tibet and Tibetans have been negotiating their status vis-à-vis China and Chinese for centuries and centuries and there is plenty of historical evidence to support claims on both sides. Starting around 1854 the British and about a century later the Americans are also involved in the struggle with competing strategic aims.

There is a real story here but it is lost in the din of propaganda emanating from Beijing on one side and Dharamsala, Nepal, on the other. Foreign press, particularly the Anglo-American mainstream media only reports on Tibet through the prism of Tiananmen Square 1989.

Caught in the middle of course are the Tibetans most of whom are not monks or members of the party but very poor. Like native peoples in many parts of the world from the Northern Plains Native American counties, remnants of the Sioux and Dakota nations, to Aborigines in Australia, Tibetans are paupers in their own country.

I believe the real culprit behind the trouble in Lhasa is inflation and poverty. Food prices are up over 23% on average in China. Prices for all goods and staples are rising dramatically including fuel and cooking oil. Remember, it was a surge in cooking oil prices that sent the Burma monks over the edge last fall.

Reports are that inflation may run as high as 300% in Tibet. The Chinese state statistical bureau does not publish individual data on Tibet. Ethnic Chinese dominate the day-to-day markets and businesses of Lhasa and the urban areas of the region. When we see shops looted, markets ablaze, and overturned Audis set afire in the streets, something other than “democracy” is at issue.

Beijing will probably begin to tackle inflation very seriously now and even risk a hard landing in order to quell popular discontent. That will mean a more restrictive monetary policy, possible bear market in stocks, but greater state investment, and a faster appreciation of the Yuan. Some forecasters now see the Yuan reaching 6.6 to the dollar by year’s end.

I’ll see you next time with a new Alpha Bet!


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