China’s Command Innovation

Image: Visual Capitalist

 

Hardly a day passes without some sort of China news in the financial headlines. There’s a good reason, too. China is the global economy’s 600-pound gorilla, second in size only to the US. Yes, it was largely a copycat business economy up until the early 2000s, but Chinese entrepreneurs have really taken charge in the last 10 years. Fueled by the profits from huge consumer demand, they are expanding not only in China but globally. This story is largely ignored in the US and in much of Europe. We hear about a few projects here and there, but we don’t understand the extent.

China is on its way to becoming the largest economy in the world, which because of its population, it should be (possibly with the exception of India, if they ever get their act together). Short-term events and arguments sometimes obscure this longer-term reality. China’s transition from rural poverty to export powerhouse to consumer goliath may be the most consequential economic event in centuries. Possibly ever—I can’t think of a historical example to rival it. Historians might argue the British Empire or even the US from 1800–2000, but that took centuries. China has done it in a little over 30 years.

China Orders Banks in Some Hubs to Limit Dollar Buying

SHANGHAI (Reuters) – China’s foreign exchange regulator has ordered banks in some trading hubs to limit dollar purchases this month, three people with direct knowledge said on Friday, in the latest attempt to stem capital outflows.

Capital exodus from China reaches $800bn as crisis deepens

Outright ignore the whitewashing within the article. China is in full-blown crisis mode.

The only reason this article made it to the front page here is because it was an $800 billion loss. Morever, the Chinese Communist Party (CCP) has been outright forcing people to stay in the markets by banning sell-offs and to take a hit, possibly losing it all. Otherwise, the economy would likely crash. The CCP is fully panicked and they’re running out of tricks to keep the can being kicked down the road.

 

 

China is reverting to credit stimulus after attempts to engineer a stock market boom failed horribly. The day of reckoning is delayed again

China is engineering yet another mini-boom. Credit is picking up again. The Communist Party has helpfully outlawed falling equity prices.

Economic growth will almost certainly accelerate over the next few months, giving global commodity markets a brief reprieve.

Yet the underlying picture in China is going from bad to worse. Robin Brooks at Goldman Sachs estimates that capital outflows topped $224bn in the second quarter, a level “beyond anything seen historically”.

As Beijing Becomes a Supercity, the Rapid Growth Brings Pains

For decades, China’s government has tried to limit the size of Beijing, the capital, through draconian residency permits. Now, the government has embarked on an ambitious plan to make Beijing the center of a new supercity of 130 million people.

The planned megalopolis, a metropolitan area that would be about six times the size of New York’s, is meant to revamp northern China’s economy and become a laboratory for modern urban growth.

China bans major shareholders from selling their stakes for next six months

Regulator seeks to slow stock market plunge with threat to punish those who flout ban as other markets continue to suffer

China’s securities regulator took the drastic step of banning shareholders with stakes of more than 5% from selling shares for the next six months in a bid to halt a plunge in stock prices that is starting to roil global financial markets.

The China Securities Regulatory Commission (CSRC) said on its website late on Wednesday that it would deal severely with any shareholders who violated the rule.

The prohibition is also seen applying to foreign investors who hold stakes in Shanghai- or Shenzhen-listed companies, although most of their holdings are below 5%.

Special Report: How China’s shadowy agency is working to absorb Taiwan

This is a Chinese ‘charm offensive’ in full motion. It’s of course more wise than gunboat diplomacy, for which they already have thousands of missiles ready at a moment’s notice to rain down on Taiwan, but equally as dangerous in the long-term for the United States. The end-game aim for China is to push America completely out of Asia, for a regional Asian bloc and have nations (for example) such as Japan, both Koreas and Vietnam under its protectorate umbrella.

 

(Reuters) – Ever since a civil war split the two sides more than 60 years ago, China has viewed Taiwan as a renegade province that needs to be absorbed into the mainland. To that end, the legion of Taiwanese businessmen working in China is a beachhead.

In June, hundreds of those businessmen gathered in a hotel ballroom in the southern Chinese city of Shenzhen. They were there to toast the new head of a local Taiwan merchants’ association. They sipped baijiu liquor and ate seafood as a troupe performed a traditional lion dance for good luck. An honored guest, senior Communist Party official Li Jiafan, stood to deliver congratulations and a message.

“I urge our Taiwanese friends to continue to work hard in your fields to contribute to the realization of the Chinese dream as soon as possible,” said Li, using a nationalist slogan President Xi Jinping has popularized. “The Chinese dream is also the dream of the people on both sides of the Taiwan Strait – our dream of reunification.”

Li, who ended his speech to beating drums and loud applause, is a department chief in the Shenzhen arm of the United Front Work Department, an organ of the Communist Party’s Central Committee. Its mission: to spread China’s influence by ultimately gaining control over a range of groups not affiliated with the party and that are often outside the mainland.

United Front documents reviewed by Reuters, including annual reports, instructional handbooks and internal newsletters, as well as interviews with Chinese and Taiwanese officials reveal the extent to which the agency is engaged in a concerted campaign to thwart any move toward greater independence by Taiwan and ultimately swallow up the self-ruled island of 23 million.

Beijing wants to hire 100,000 volunteers as ‘anti-terror informants’

Beijing’s plan to recruit up to 100,000 volunteers as “anti-terror informants” has been met with doubt by some members of the public.

They fear efforts to collect information could lead to dangerous confrontations with strangers, and point to concerns about living in a community where suspicion of one’s neighbours is rife.

The chief of the municipal Public Security Bureau, Fu Zhenghua, announced late last month that the capital aimed to enlist people from across society, including cleaners, security guards and deliverymen, to act as lookouts for possible terrorist activity. The announcement came a few months after Beijing police began offering up to 40,000 yuan (HK$50,280) for tip-offs on suspected plots.

China allows gold imports via Beijing, sources say, amid reserves buying talk

(Reuters) – China has begun allowing gold imports through its capital Beijing, sources familiar with the matter said, in a move that would help keep purchases by the world’s top bullion buyer discreet at a time when it might be boosting official reserves.

The opening of a third import point after Shenzhen and Shanghai could also threaten Hong Kong’s pole position in China’s gold trade, as the mainland can get more of the metal it wants directly rather than through a route that discloses how much it is buying.

China does not release any trade data on gold. The only way bullion markets can get a sense of Chinese purchases is from the monthly release of export data by Hong Kong, which last year supplied $53 billion worth of gold to the mainland.

“We have already started shipping material in directly to Beijing,” said an industry source, who did not want to be named because he was not authorised to speak to the media. The quantities brought in so far are small, as imports via Beijing have only been allowed since the first quarter of this year, sources said.

Chinese tycoon Chen Guangbiao says he is in talks to buy New York Times

First he handed out cash to victims of China’s 2008 earthquake. Then he sold “canned fresh air” to residents of smog-ridden Beijing.

Now Chen Guangbiao, listed as one of China’s 400 richest people and a man known as much for his publicity stunts as his wealth, claims he is in talks to buy the New York Times.

“Soon, I will go to America to do three things,” Chen told a crowd Monday night at a news media award reception in the southern Chinese boom town of Shenzhen, according to the semi-official China News Service.

The first, he said, “is to go discuss the acquisition of the New York Times”.

Chinese Cities Coming to America

A Chinese Group Plans To Construct A 200 Acre “China City” In Michigan

A Chinese group known as “Sino-Michigan Properties LLC” has bought up 200 acres of land near the town of Milan, Michigan.  Their plan is to construct a “China City” with artificial lakes, a Chinese cultural center and hundreds of housing units for Chinese citizens.  Essentially, it would be a little slice of communist China dropped right into the heartland of America.

This “China City” would be located about 40 minutes from both Detroit and Toledo, and it would be marketed to Chinese business people that want to start businesses in the United States.  Unfortunately, this is not just an isolated incident.  In fact, Chinese companies have been buying up land and businesses all over the country in recent years.  There has even been talk of establishing “special economic zones” inside the United States modeled after the Chinese city of Shenzhen.  It was inevitable that the Chinese were going to do something with the trillions of dollars that they have made flooding our shores with cheap products.  Now they are rapidly buying up pieces of America, and many of our politicians are welcoming them with open arms.

The town of Milan, Michigan is a small farming community of only about 6,000 people, but big changes are coming their way.  The following is from a recent Dayton Daily News article about this new project….

A group of mainland Chinese known as Sino-Michigan Properties LLC paid $1.9 million for 200 acres of farmland on Milan city limits in purchases this year and in 2011, according to local officials and property records.

Unfortunately, the goal does not appear to be to integrate this new “city” into the existing community in and around Milan.

Rather, it appears that all of the new housing will be sold to people coming over from China.  According to the Milan News Leader newspaper, the new housing units “would be marketed to Chinese business people who want to start companies in the United States”.

In essence, we would be looking at a new Chinese city right in the middle of Michigan.

Doug Smith, senior vice president for business and community development for the Michigan Economic Development Corp., recently said the followingabout what the Chinese group plans to do….

“It’s a group that wants to build a China city, starting with housing over there in Milan”

Milan is not far from the University of Michigan in Ann Arbor, which is a very popular destination for Chinese students.  Apparently that is one reason why Milan was chosen.

This new project would be a Chinese community built by Chinese and specifically designed for Chinese.

But isn’t this supposed to be America?

Fortunately, the project does not have final approval yet.  It still must be approved by the two townships outside of Milan where the land is located.

For some reason, the Chinese seem to be particularly interested in this area of the country.

For example, a different Chinese investment group has been busy buying up chunks of real estate over in nearby Toledo, Ohio.  The following is from an article in the Toledo Blade on May 26th, 2011….

Dashing Pacific Group Ltd., which has already purchased the nearby Docks restaurant complex for $2.15 million, put its $3.8 million offer to buy the southern 69 acres at the Marina District in East Toledo back on the table for approval by Toledo City Council. Additionally, Dashing Pacific Chairman Yuan Xiaohong, in a letter signed in Hangzhou, said the firm wants a two-year option to buy the decommissioned Toledo Edison power plant property on the site.

So should we be alarmed that the Chinese are buying up pieces of America?

Well, if they simply wanted to enjoy living in America and wanted to integrate into the wider community that would be one thing.

But it is another thing altogether to start dropping slices of communist China inside of U.S. territory.

In a previous article entitled “China Wants To Construct A 50 Square Mile Self-Sustaining City South Of Boise, Idaho“, I discussed a potential deal that Sinomach (a company controlled by the Chinese government) was exploring with the government of Idaho.  The following is a description of that potential project from an article in the Idaho Statesman….

A Chinese national company is interested in developing a 10,000- to 30,000-acre technology zone for industry, retail centers and homes south of the Boise Airport.

Full article: Chinese Cities Coming to America (Right Side News)