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Volume II, Episode 56
April 21, 2008
The Price of Rice - 1Q Macro Report - IPOs - Boao Forum Brings CCP and KMT Together

April 8, 2008

Chinese Stock Market Doldrums - China Wants Africa's Oil - Boycott Beijing 2008 Olympic Games?

April 2, 2008

Chinese 3G Wireless Testing - Bear Market Blues - GSM Mekong Summit

March 24, 2008

Kuomintang Wins Taiwan - Business Gains on Gradual Reunification - Chinese Markets Bearish

March 17, 2008

Shanghai Bubble Burst? Beijing Election - 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: Is there a crisis in rice? An IPO bright spot in Shanghai; China First Quarter 2008 macro data; and the Boao Forum sets stage for historic moment between CCP and KMT... Sinomania! Volume II Webisode 56, April 21, 2008

Is Rice the New Oil?
1st Quarter Macro Numbers;
My report on the Boao Forum;
And more!


The United Nations special envoy for the Right to Food, Monsieur Jean Ziegler, created a firestorm when he announced with some fanfare that rice supplies would not hold up and that financial speculators were driving prices and potentially creating a “silent famine.”

The price of rice is up dramatically and well-publicized riots over supply in poorer countries has lead to hoarding from Southeast Asia to Silicon Valley.

The UN buys large quantities of rice for its World Food Program and Monsieur Ziegler also blamed diversion for bio-fuel production in some countries for exacerbating the rice crisis. President Lula of Brazil however struck back. Speaking at the opening of the FAO summit in Brazil, Lula said the agricultural subsidies of rich nations, particularly the EU, are more to blame.

Fact is, the supply of rice for international trading in 2008 is forecast at just under 30 million tons, down only one percent from 2007. Large new harvests are expected in the second half from Latin America and South Asia leading to an increase in supply by the fourth quarter.

While speculation in rice is probably occurring in some cases it is doubtful rice will become a hedge commodity. Only four to five percent of global rice production is traded. The largest rice wholesaler in Hong Kong, Golden Resources, says prices are near the peak barring a big natural disaster. Rice is not wheat.


The Chinese bear market continues. The Shanghai Composite Index remains down almost 50% from its peak October 2007. It is the worst performing major index in world and closed April 21 at 3,116.98. The CSI 300 Index is flat and closed Monday at 3,267.55. B shares barely move, Shanghai Bs closed April 21 at 219.36, ShenZhen Bs at 517.33, both up on moderate gains from their recent plunge.

On the upside, the Hang Seng China Enterprise Index appears to have bottomed out, closed April 21 at 13,015.25, up over two and a half percent on the strength of PetroChina shares. On Taiwan the TAIEX index continues its climb back and gained just around a percent today to close at 9,083.32.

One bright spot in Shanghai is the IPO of Jinduicheng Molybdenum (601958.SS), first mentioned last year on The Sinomania! Show, on the Shanghai domestic exchange only the third IPO of the year in Shanghai. The stock rose over 36% on its trading debut late last week, and raised over one and one quarter billion US dollars. It has since declined and was down nine percent today.

So far less than $8 billion US dollar value has been raised this year in Shanghai down almost a third from a year ago.


This show’s Alpha Bet starts with 2899.HK, for the H share of Zijin Mining trading on Hong Kong. Zijin is expected to make its Shanghai debut in May. The company is one of China’s biggest gold miners and according to the Shanghai Securities Times it could raise over $1 billion US dollars.

Next SGQ.V for coal miner South Gobi Energy Resources trading on the Canadian stock market. The coal group plans a secondary share offering in Hong Kong sometime in the second half.


China is now the world’s second biggest exporter behind Germany and ahead of the USA with merchandise exports in 2007 valued at $1.2 trillion US dollars.

Real GDP growth slowed to just above ten and half percent in the first quarter. Exports grew over twenty percent in dollar terms but in Renminbi terms only twelve percent considerably less than first quarter ’07, the slowest growth since 2002. And China’s trade surplus was down eleven percent.

Retail sales rose over twenty percent the first quarter, 12.3 percent in real terms. Consumer inflation was down marginally to 8.3 percent in March with food inflation down slightly to 21.5 percent according to Morgan Stanley estimates.

However energy and raw materials continue up, the latter rising almost ten percent for the quarter. And fixed investment surprised analysts by surging almost twenty-six percent in the first quarter.


The recently concluded annual session of the Boao Forum, the Chinese Davos, shows evidence of political shifts in Asia. The new Mandarin speaking Prime Minister of Australia Kevin Rudd was there along with leaders from Chile, Kazakhstan, Mongolia, Pakistan, Qatar, Sri Lanka, Sweden, Tanzania, UN Secretary General Ban Kee-moon, former British Prime Minister Tony Blair, former French President Jacques Chirac, and former U.S. Secretary of State Colin Powell, along with large contingents of business executives and dealmakers. Presiding over it all was Chinese President Hu Jintao.

The biggest development by far was the roundtable discussion between Hu and Vice-President elect of Taiwan Vincent Siew. The twenty-minute meeting was the longest and highest level dialogue between the Chinese Communist Party and the Kuomintang Party in many years.

At its conclusion Vincent Siew issued a sixteen-character statement saying the two sides should “face reality, take sight of the future, shelve disputes and pursue a win-win scenario.” Siew told reporters that the meeting "turned a new page in history."

We can only hope so!

I’ll see you next time on The Sinomania! Show.

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