The UK’s ambassador to Beijing has warned that China could face isolation internationally, should it fail to give its consent to fresh sanctions against Iran.
“It’s not in China’s interests to find itself isolated from permanent members of the Security Council or the E3+3. It would damage China internationally,” Sebastian Wood said on Friday.
Wood said that China favored a different approach to the Iranian nuclear issue but he hoped that “fluid” talks would persuade Beijing to accompany others in imposing more sanctions against Iran.
“China has emphasized a need for engagement and diplomacy and wants to see the situation resolved soon. We have seen tactical differences in recent weeks but it’s a fluid discussion,” he added. #mce_temp_url#
Considered by many to be the Eighth wonder of the world- The Terracotta warriors and horses are the most significant archeological excavations of 20th century. Work is ongoing at this site, which is around 1.5 kilometer East of Emperor Qin Shi Huang’s mausoleum in Lintong, Xian, and Shaanxi province. It is a sight not to be missed by any visitor to China. The Terracotta army was discovered by accident in 1974, when local farmers digging a well broke into a pit containing 6000 life-sized terracotta figures. Excavation in 1976 revealed two further pits both filled with terracotta warriors. On the eastern side of the tomb smaller pits have been found containing the bones of horses and smaller size terracotta figures of grooms. Since than, discoveries have continued to be made at the site and to date remains of nearly 8000 terracotta figures have been recovered.
The Terracotta warriors were made during the Qin dynasty of ancient China, a dynasty known for fighting. Upon ascending the throne at the age of 13, Qin Shi Huang had begun to work for his mausoleum. It took 11 years to finish. It is speculated that many buried treasures and sacrificial objects had accompanied the emperor in his after life. Qin shi Huang is remembered for instigating the building of the Great Wall of China, and the fanatical fear of death ultimately gave us the legacy of the terracotta warriors. The warriors were intended to protect the emperor’s tomb and support him as he reigned over an empire in the afterlife.
The terracotta warriors are unique, according to historian Sima Qian, construction of this mausoleum began in 246bc and involved 700,000 workers. Not only are they life size and individually modeled in clay, but the detail of the figure is astounding. Qin Shi Huang specifically stated that no two soldiers were to be made alike. Not only can we observe the construction of the body armor of terracotta army, with even the heads of the rivets standing out, but the soles of the shoes of the kneeling warriors are modeled with fine tread pattern. The heads and hands of the warriors were made separately, and each head is reputed to be different and individual. The warriors vary in height, uniform and hair style in accordance with rank. The colored lacquer finish, individual facial features, actual weapons and armor from battle used in manufacturing these figures created a realistic appearance.
The terracotta warriors provide a wealth of information for military historians, and their existence is a testimony to the power and wealth of Qin Shi Huang. The site was listed by UNESCO in 1987 as a world cultural heritage site.
Cheap Flights to China are also one major reason that not only makes this attraction busier but also, affordable for all. Cheap flights to China are operated and provided at large by Chinese Airlines. Some cheap flights from Uk include Indian and Middle East airlines as well. Yet, if you can get some seats available in the promotional offers by British Airways, they beat the rest in being the cheapest flights to China from UK.
It’s Friday so I’m going to keep this light-hearted and keep it brief. I just have a couple of things to show you.
Firstly, Bloomberg’s exceptional interactive piece which illustrates how certain economic variables (in particular Debt) and their trends provide a good fundamental support volatility. This is very easy to use just click on anything which is green to interact and expose more information. I’d encourage you to take a look at this.
One of the potential sources of volatility comes from sovereign risks, another source is China’s policy actions which affect us all over the World, whether we choose to believe it or not. Perhaps the most hotly debated is the Renminbi currency peg. Yesterday Roachie says that Talk of Overheated China Economy is ‘Overblown’. Interestingly, he implies that a certain overcapacity in office space is needed to accommodate the massive rural to urban migration still occurring in China.
Lastly, just to end on a philosophical note, here is a talk I love from Daniel Kahneman, the father of Behavioral Economics. This talk has nothing to do with finance or economics – it’s about happiness. Worth a listen, if you have a few spare moments on a Friday.
Macro Data to Watch:
Japanese Industrial Production
Indian Industrial Production
Spanish Inflation
Canadian Jobs
Markets
I’m not sure if you’ve seen this as the luster of Gold gets all the attention but Platinum is back to its highs again. It’s been slowly creeping up there for the past few weeks.
Another big rally from Citigroup – that stock is up 18% in 3 days on 3 billion shares volume. Time to sit up and take notice – Citigroup’s market cap is now $120 billion.
Source: Bloomberg
Global Stocks to Watch:
Keep an eye on Citi and the financials in general going into the weekend – can we hold on to all those gains?
Earnings:
Taiwan: Formosa Petrochemical and Hon Hai Precision
The three Chinese operators have been readying their smartphone portfolios and services since the 3G licences were awarded in 2009. Here we analyse the different smartphone strategies of China Mobile, China Telecom and China Unicom, and assess the challenges and opportunities presented by the emerging smartphone market.
Table of Contents :
Executive summary
In a nutshell
Ovum view
Key messages
Challenges and opportunities
China Mobile has an early lead, but needs to raise awareness of OPhone brand
Pricing and subsidies are critical in this market
China will benefit from industry-wide focus on low-cost smartphones
China’s censorship system could prevent international vendors from penetrating the Chinese market
Smartphone competition in the Chinese market
Operator strategies for smartphones
OPhone: home-grown by China Mobile
iPhone and GPhone: China Unicom’s hope
RIM’s BlackBerry: China Telecom’s first step
Comparison of OPhone and iPhone
3G showed strong growth in 4Q09
SWOT analysis
China Mobile
Strengths
Weaknesses
Opportunities
Threats
China Unicom
Strengths
Weaknesses
Opportunities
Threats
List of Tables
Table 1: OPhone on China Mobile versus iPhone on China Unicom
Table 2: 3G development by China Mobile, China Telecom and China Unicom
List of Figures
Figure 1: China’s mobile operators compared
Figure 2: Current OPhone models
Figure 3: UI comparison of the OPhone and iPhone
More Information: http://www.aarkstore.com/reports/Smartphones-in-China-market-overview-38140.html
The Sun Behind the Clouds: Tibet’s Struggle for Freedom、 Trailer
Ritu Sarin and Tenzing Sonam’s new documentary looks at the current Tibet situation. As Tibet erupts in flames and exile Tibetans march on their homeland, can the Dalai Lama find a peaceful solution or will the voices from within his own ranks calling for stronger action prevail?
The Sun Behind the Clouds: Tibet’s Struggle for Freedom http://www.whitecranefilms.com/film/sun-behind-clouds.html
While the world markets continue its melt-up, here’s some Big News from China – according to Bloomberg, all loan guarantees by local governments are now declared null and void.
Yes. Null and void.
For those wondering what the BFD is, try putting yourself in the shoes of those who lent approximately US$3.5 Trillion (yes, it’s T, not B) to local governments across the Middle Kingdom.
This is the financial equivalent of “Fire One” in nuclear weapons parlance (haha Gorby – you’re such a kidder). Creditors (fortunately..ahem…Goldman Sachs is one of them) are now wondering which congressman to lobby to get their money back. Opinion is probably divided between creditors: half of them will want the US to launch its entire nuclear arsenal towards Beijing, while the other half are eyeing a 40th story leap as the less painful option.
From Bloomberg, “China to Nullify Financing Guarantees by Local Governments”
China plans to nullify all guarantees local governments have provided for loans taken by their financing vehicles as concerns about credit risks on such debt surges.
The Ministry of Finance will also ban all future guarantees by local governments and legislatures in rules that may be issued as soon as this month, Yan Qingmin, head of the banking regulator’s Shanghai branch, said in an interview. The ministry held meetings on the rules on Feb. 25 with regulators including the China Banking Regulatory Commission and the People’s Bank of China, Yan said March 5.
China’s local governments are raising funds through investment vehicles to circumvent regulations that prevent them from borrowing directly. A crackdown on local- government borrowing, estimated at about 24 trillion yuan ($3.5 trillion) by Northwestern University Professor Victor Shih, could trigger a “gigantic wave” of bad loans as projects are left without funding, Shih said this month.
“Beijing’s fiscal situation probably isn’t as good as it looks at first glance,” said Brian Jackson, an emerging markets strategist at Royal Bank of Canada in Hong Kong. “Perhaps at some stage the central government is going to have to bail out the banks or the regional governments and take it on its own balance sheet.”
Fiscal Risks
Central bank governor Zhou Xiaochuan said March 6 during the National People’s Congress that while “many” local financing vehicles have the ability to repay, two types cause concern. One uses land as collateral, while the other can’t fully repay borrowing, meaning that the local governments may be liable, leading to “fiscal risks.”
Premier Wen Jiabao, at the opening of the annual parliamentary meetings last week, said the central government would sell 200 billion yuan of bonds for a second year to help local governments fund infrastructure projects. Wen also warned of “latent risks” in China’s banking system as he pledged to continue a moderately loose monetary policy and a proactive fiscal stance.
The parliamentary meetings will end March 14 with Premier Wen’s annual press conference in Beijing.
A few cities and counties may face very large repayment pressure in coming years because of debt ratios already exceeding 400 percent, a person with knowledge of the matter said in January. The ratio is of year-end outstanding debt to annual disposable fiscal income.
Regional Concerns
The financing vehicles of large coastal cities are well-funded as most have publicly traded subsidiaries that can raise capital from the markets and rely less on bank loans. Entities in northern and western China are of particular concern, the banking regulator’s Yan said while attending the parliamentary meetings.
The 1998 collapse of Guangdong International Trust & Investment Corp., which borrowed domestically and overseas on behalf of southern China’s Guangdong province, left creditors including Dresdner Bank AG of Germany and Bank One Corp. in the U.S. with $3 billion of unpaid bonds. It marked the first time that Chinese authorities failed to bail out one of the nation’s state-owned trusts.
Commercial banks have already been told to assess their exposure to such lending and stop providing further credit if problems are found, Yan said.
Commercial Banks
Bank of China Ltd. President Li Lihui said in an interview last week that the nation’s third-largest lender has reviewed its exposure to borrowings by local governments and identified some financing vehicles that didn’t have adequate liquidity to make payment. The bank plans to exit projects without proper collateral and reduce new advances to local governments this year, Li said.
Industrial & Commercial Bank of China Ltd. Chairman Jiang Jianqing said the lender found some risks in such borrowing arms. These situations aren’t yet widespread, Jiang said. The bank has already inspected its loans extended to local government financing vehicles in 2008 and 2009 and “so far didn’t find many big problems,” ICBC President Yang Kaisheng said yesterday.
China’s banks doled out a combined 9.59 trillion yuan in new loans last year, helping the government engineer a turnaround in the world’s third-largest economy. The credit binge sparked concern about more bad loans and asset bubbles.
Northwestern’s Shih estimated that borrowing by China’s 8,000 local-government entities may have totaled 11.429 trillion yuan in outstanding debt by the end of last year and they had credit lines with banks for an additional 12.767 trillion yuan. That may result in bad loans of up to 3 trillion yuan.
China’s banks had 497 billion yuan of non-performing loans as of Dec. 31, accounting for 1.58 percent the nation’s total advances, according to the banking regulator.
Considered by many to be the Eighth wonder of the world- The Terracotta warriors and horses are the most significant archeological excavations of 20th century. Work is ongoing at this site, which is around 1.5 kilometer East of Emperor Qin Shi Huang’s mausoleum in Lintong, Xian, and Shaanxi province. It is a sight not to be missed by any visitor to China. The Terracotta army was discovered by accident in 1974, when local farmers digging a well broke into a pit containing 6000 life-sized terracotta figures. Excavation in 1976 revealed two further pits both filled with terracotta warriors. On the eastern side of the tomb smaller pits have been found containing the bones of horses and smaller size terracotta figures of grooms. Since than, discoveries have continued to be made at the site and to date remains of nearly 8000 terracotta figures have been recovered.
Sarah & Kyrre
