TRANSCRIPT: Chinese shares still
bearish, China turns to Africa for new oil supplies,
and just who is behind the boycott Beijing Olympics
campaign?
Sinomania! Volume II Webisode 55, April 8, 2008
Chinese stocks remain down despite
a brief recovery from the dramatic lows of last
week but Hong Kong and Taiwan continue to perform
better. The Hang Seng Index closed April 8 at
24,311 down one percent but close to 25,000 for
the first time since the start of the year. The
Hang Seng China Enterprise Index recovered
some but remains very volatile; it closed April
8 at 13,196, down almost two percent.
Shanghai shares are mostly flat
with modest gains of around one percent. The Shanghai
Composite Index closed Tuesday at 3,612.54
a slight recovery from its lows last week – at
one point it dipped below 3,300. Some analysts
said last fall the index was sustainable at 3,600
based on reasonable valuations. The question now
may be can the index move higher if listed companies’
earnings start to slow or even fall?
The CSI 300 Index was back
up April 8 but not by much rising one percent
to 3,891. Shanghai B shares closed at 255.61 April
8 up a percent – have they hit bottom? ShenZhen
Bs remain flat closing at 560.
On Taiwan the TAIEX closed
April 8 at 8,672.85 down some points Tuesday but
already up over 1,000 points since the first quarter
‘08 lows.
CHINA ENERGY
At the end of 2007 Beijing released
a white paper of China’s energy situation and
policies. As part of the government shake up in
the new 11th National People’s Congress, there
is now a National Energy Commission and a National
Energy Bureau.
A study commissioned for these new
ministries was just released by the Chinese Academy
of Social Sciences and projects oil consumption
in China to grow sixty-two and a half percent
from 2006 levels by 2020 to 536 million tons a
year about half the level of total consumption
in the United States.
To give an idea on how China will
impact oil markets into the future, oil demand
is expected to grow on average 3.3 percent a year
to 2020 but oil products demand will grow higher
at 4.2 percent a year. Gasoline demand is projected
to grow at almost six percent a year, diesel at
over four percent, and kerosene at five percent
per year to 2020.
China is racing to diversify its
sources of oil imports with particular focus on
Africa as a supplier. The head of the China Petroleum
and Petrochemical Industry Association, Zhiming
Zhao, told an energy conference in South Africa
last month that China hoped to get 40% of its
oil from Africa within a decade. To date China
has invested $30 billion US dollars in African
oil and gas industries.
China National Petroleum Corp. or
CNPC the parent of Shanghai, Hong Kong and New
York listed PetroChina (PTR),
recently began its first deep water exploration
project off the coast of Equatorial Guinea.
All Chinese oil and gas majors (CNPC
and subsidiaries, Sinopec (SHI),
CNOOC) are busy in Nigeria, the biggest oil producer
of Africa and the USA’s number four supplier.
This past Sunday, CNPC and the
American Chevron (CVX)
Corporation began a joint venture for gas exploration
and production in the Chuandongbei area of Sichuan
Province, a project first reported by The Sinomania!
Show on December 20 last year. The block will
be run by Chevron and has 176 billion cubic meters
of proven gas reserves of high sulphur type.
Yesterday, April 7, the German Energy
Bureau and the Chinese State Administration of
Foreign Experts Affairs signed an agreement to
train hundreds of energy managers in China to
2010. Also in Germany, Siemens (SI)
Energy announced today a major order of gas pipeline
equipment for China Petroleum Material Equipment
Corp. (CPMEC), another subsidiary of PetroChina’s
parent company, to expand the Shanjing II natural
gas pipeline from Shanxi to Beijing.
Meanwhile SinoUranium and other
Chinese companies are busy securing uranium supplies
in Niger and Australia to feed China’s ambitious
atomic power program.
BOYCOTT BEIJING?
Despite exaggerated coverage by
mainstream TV and newspapers in America and parts
of Europe the Beijing Olympics boycott movement
has failed to garner any real support. Last night
a CNN reporter in London told newsreader Campbell
Brown that the Chinese were shown pictures of
Big Ben and the Tower of London and didn’t know
about the small group of protesters that disrupted
the Olympic torch relay there. Nothing however
could be further from the truth. Chinese television
broadcast video from London and Paris in great
detail. And why not? The disruption of the torch
relay in both cities only proves Beijing’s point
that it is the boycott crowd who resorts to violence
and hate.
Seven years in and the Reporters
Without Borders led campaign to derail the 29th
Olympiad in Beijing this summer is faltering.
Despite funding from American taxpayers via the
National Endowment for Democracy, money from Taiwan’s
TECRO network, and free publicity from a bevy
of Hollywood has beens, protests have been small,
short, and ineffective. Crowds in London
and Paris where “spectacular” protests were
promised by RSF’s advance press releases, barely
numbered in three digits and were so small that
police appear to have arrested the same guy trying
to snuff out the Olympic flame in both cities.
The calls for boycott by politicians
Nancy Pelosi and Hillary Clinton in the USA and
Nicolas Sarkozy in France are due to their abysmal
approval ratings and need to pander to a disenchanted
electorate. The Summer Olympics in Beijing will
go on. The Prime Ministers of Britain, Canada,
Australia, President Bush, and the Dalai Lama
himself – just to name a few – are all against
a boycott.
