Bamboo Innovator

China Is Slow and Unbalanced; The Economy Is Stuttering Without Much Rebalancing

July 15, 2013, 6:19 a.m. ET

China Is Slow and Unbalanced

The Economy Is Stuttering Without Much Rebalancing

AARON BACK

The payoff for slower growth in China is meant to be a more balanced economy with consumption playing a greater role. So far, though, China’s economy is stuttering without much sign of the hoped for rebalancing. Gross domestic product growth was 7.5% in the second quarter. Bank of America BAC +0.73% -Merrill Lynch forecasts growth could slow to around 7.0% in the second half of 2013. While the days of double-digit growth are long gone, the worst fears of a hard landing are also receding given Premier Li Keqiang‘s recent assertion that Beijing won’t let the economy drop beneath an unstated lower threshold. Read more of this post

After Bernanke, make unconventional policy the norm

July 15, 2013 5:58 pm

After Bernanke, make unconventional policy the norm

By Adam Posen

No one interest rate determines or represents modern credit conditions, says Adam Posen

Discussion of Ben Bernanke’s possible successor has focused on who could best manage the US Federal Reserve’s eventual exit from its multiyear monetary expansion. While President Barack Obamashould take that into account, what he should really be looking for in the next chairman is someone who can institutionalise a new policy approach at the central bank and get congressional agreement for doing so. Like it or not, when Mr Bernanke steps down in January, his replacement will have to make unconventional monetary policy conventional, and establish a viable oversight framework for doing so. Read more of this post

McDonald’s to bring Big Mac to Vietnam

July 16, 2013 1:56 am

McDonald’s to bring Big Mac to Vietnam

By Jeremy Grant in Singapore

Vietnam is finally set to get its first taste of the Big Mac after US burger chainMcDonald’s said it would open its first outlet in the communist-run country early next year. The Illinois-based company said it had appointed a Vietnamese businessman, Henry Nguyen, an overseas Vietnamese who returned to the country a decade ago, as “developmental licensee” to “build the [McDonald’s] brand” in the country. The first outlet would be in Ho Chi Minh City, the commercial hub. McDonald’s said the menu would include the Big Mac sandwich, cheeseburgers and fries. The move, which makes Vietnam the 38th Asian country in which McDonald’s operates, highlights how the country is fast becoming one of the most attractive consumer markets in southeast Asia, even as its economy is among the worst performing. Read more of this post

How high-rolling ex-con Li Zeyuan is able to buy Shenzhen Airlines for RMB 2.72 billion without cash; “I don’t have money. I’m just foolishly bold.”

07.12.2013 17:25

How an Airline Buyer’s Buddies Crashed, Burned

A high-rolling ex-con who used his connections to buy Shenzhen Airlines without cash is losing altitude in court

By staff reporters Fu Yanyan and He Xin

Eight years after Li Zeyuan bought an entire airline, earning the wings he still wears today as a legendary investor, the 60-year-old was breathing with an oxygen mask and fighting tears while pleading innocent in a Beijing courtroom.

Li no longer controls Shenzhen Airlines, although he remains on staff as a generously paid senior consultant. He’s also a well-connected financier and ex-con who was in and out of prison before raising via questionable — officials say illegal — means  2.72 billion yuan to buy Shenzhen Airlines. Read more of this post

Industry insiders have warned consumers to be careful when using drinking straws, as 90 percent in the Shanghai market did not meet quality standards

Probes show dangerous straws on sale

2013-07-16 02:52:40 GMT2013-07-16 10:52:40(Beijing Time)  China Daily

Industry insiders have warned consumers to be careful when using drinking straws, as 90 percent in the Shanghai market did not meet quality standards, according to investigators.

The national standard on drinking straws requires a quality safety logo granted by the food quality and safety administration on package labels. Read more of this post

Nepotism? Making buckets off public funds? It’s all part of the Israeli system

Nepotism? Making buckets off public funds? It’s all part of the Israeli system

Alon Hassan, you argue, was ostentatious and crass. But remember all those politicians and businessmen dancing the night away when the kids of tycoons Yitzhak Tshuva and Nochi Dankner got married? The problem is the system, but nobody’s ready to take that on.

By Guy Rolnik | Jun.27, 2013 | 4:20 PM |  3

So Alon Hassan’s been caught. Every businessman, reporter, politician and even the head of an NGO that I ran into last week had nothing but fulsome praise for Haaretz for getting rid of Alon Hassan. His undoing began with a series of articles by reporter Sharon Shpurer, escalated to Channel 2 prime-time news, turned into an opportunity for politicians and has, for the nonce, ended with the ouster of Hassan as union head at Ashdod Port. But between us, what do people want from Alon Hassan? What did he do wrong? He made a fortune providing services by his private companies to Ashdod Port, paid for by public money. So? Thousands of people do that in Israel. Nepotism – that’s also endemic. Israel has whole industries, not least the local governments, manned by relatives of incumbents. Show me a monopoly where that doesn’t happen. Alon Hassan, you argue, was ostentatious and crass, glorying in his misapplied clout. But remember all those politicians and businessmen dancing the night away when the kids of tycoons Yitzhak Tshuva and Nochi Dankner got married? Read more of this post

Israel, startup nation? not anymore, says Google study

Israel, startup nation? not anymore, says Google study

Study says main problem is low productivity rate compared with OECD countries.

By Amir Teig | Jul.16, 2013 | 4:40 AM

A fossilized public sector is causing Israel to fall behind the developed world in adopting new technologies, a study published by Google Israel on Monday said.

“The extent to which the Israeli public sector harnesses information and communications technology – doesn’t match its own national self-perception as a global leader in technology and innovation,” the study said, asserting that a laggard government is holding back the rest of the economy. Read more of this post

Fracking water’s dirty little secret – recycling

Fracking water’s dirty little secret – recycling

12:53pm EDT

By Nichola Groom

LOS ANGELES (Reuters) – The oil and gas industry is finding that less is more in the push to recycle water used in hydraulic fracturing. Slightly dirty water, it seems, does just as good a job as crystal clear when it comes to making an oil or gas well work.

Exploration and production companies are under pressure to reduce the amount of freshwater used in dry areas like Texas and to cut the high costs of hauling millions of barrels of water to oil and gas wells and later to underground disposal wells. Read more of this post

What do Korean superstars like singer Psy, U.S. Ladies Professional Golf Association sensation Park In-bee and Los Angeles Dodgers starting pitcher Ryu Hyun-jin have in common?

2013-07-11 18:30

Psy, Park In-bee and Ryu Hyun-jin

Lee Chang-sup
A diplomat in Seoul asked me: What do Korean superstars like  singer Psy, U.S. Ladies Professional Golf Association sensation Park In-bee and Los Angeles Dodgers starting pitcher Ryu Hyun-jin have in common? I scratched my head over this difficult question. The diplomat joked all of three are chubby. He later revealed the correct answer is that these three personalities are currently some of the most famous Koreans in the world.  Apart from being famous, the three South Korean superstars mentioned above have many other traits in common. For one, they were born during boom periods in Korea. Psy was born in 1977 when Korea’s economy was just taking off; Ryu was born in 1987, just one year before the Seoul Summer Olympics; and Park was born in 1988, merely months before the said Olympics. Read more of this post

China Slump Ripples Globally; Slowed Growth Realigns Industries and Economies as Beijing Switches Strategies

Updated July 14, 2013, 9:34 p.m. ET

China Slump Ripples Globally

Slowed Growth Realigns Industries and Economies as Beijing Switches Strategies

ALEX FRANGOS in Hong Kong and ERIC BELLMAN in Jakarta

As the numbers pile up showing China’s sizzling growth cooling down, industries world-wide—from German paper-cutter makers to Indonesian palm-oil exporters—are confronting an altered landscape of winners and losers. The ones that benefited the most from China’s rise are now being hurt. Others, aiming at China’s 1.3 billion consumers, are faring better. Growth in China, the world’s second-biggest economy after the U.S., has been slowing since 2007’s peak, but that slowdown has accelerated recently. China’s second-quarter gross domestic product released early Monday showed the economy expanded 7.5% from the year earlier, slower than the 7.7% growth in the first quarter. That matches the government’s full-year growth target of 7.5%, a rate that would make this year the slowest since 1990. Some economists figure China will grow even slower than that.

Read more of this post

Altor to buy French ski maker Rossignol; Private equity group looks to revive and expand historic brand

July 15, 2013 2:09 pm

Altor to buy French ski maker Rossignol

By Anne-Sylvaine Chassany, Private Equity Correspondent

Ski maker Rossignol has brought production back to France

Rossignol, the world’s second largest ski manufacturer by sales, is to be sold to Swedish private equity house Altor Equity Partners, after a plan to recover from near bankruptcy involved repatriating 10 per cent of its production back to France from Taiwan. The move away from a country with lower labour costs has helped the century-old French company return to profit five years after California surf gear maker Quiksilver sold it to a group led by Macquarie of Australia. Altor now plans to diversify into outdoor clothing, with the aim of doubling the company’s €207m sales to counter a contracting ski market. The value of the deal was not disclosed. Read more of this post

Caution: Huge home supply in Singapore; Investment homes face declining rental yield

Caution: Huge home supply

Monday, Jul 15, 2013

Christine Li

My Paper

SINGAPORE – Three weekends ago, eager buyers snapped up all of the 738 units (498 condo units and 240 Soho-inspired units) of the J Gateway condominium in the west within 24 hours. The remarkable performance surprised market watchers, including many developers, because the last time a sizeable project was fully sold within such a short span of time was in 2009, with Optima@Tanah Merah. One question that figures is: “Why are people still buying when prices are at a record high?” Read more of this post

JPMorgan, Goldman eye sales of metal warehouse business; An upcoming dehoarding effect in metals?

JPMorgan, Goldman eye sales of metal warehouse business: FT

5:54pm EDT

(Reuters) – JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz) is following a move by rival Goldman Sachs Group Inc (GS.N: Quote, Profile, Research, Stock Buzz) to explore sales of its metal warehouse business, the Financial Times said on Sunday. Citing people familiar with the matter, the newspaper said on its website on Sunday that both U.S. banks have in recent months informally started to seek potential buying interest for their warehouse units. A Goldman spokesman said the firm has no comment. A spokeswoman at JPMorgan did not immediately return calls for comment. In April, Reuters first reported Goldman has explored a sale of its metals warehousing business Metro International LLC, just three years after the investment bank bought the firm for $550 million. A proposed rule change by the London Metal Exchange (LME) to relieve bottlenecks that slow metal delivery out of warehouses could cut into profits for the metal warehouse industry, the FT said. Sources told the FT that JPMorgan has recently started a sales process for its warehousing unit, Henry Bath, although the discussions began before the LME’s rule change proposal. JPMorgan has also discussed sales of some of its physical metal trading book, although there is no direct connection between the two deals, the FT said. Several U.S. banks including Goldman are locked in discussions with the Federal Reserve over their right to keep owning and operating physical commodity assets like warehouses, oil storage tanks, and pipelines following their conversion to bank holding companies during the financial crisis. Under U.S. banking regulations, banks are usually barred from owning physical commodity assets that they operate.

An upcoming dehoarding effect in metals?

Izabella Kaminska

| Jul 15 13:54 | 15 comments | Share

An interesting bit of news, by way of the FT’s Jack Farchy and Daniel Schäfer this week:

JPMorgan Chase and Goldman Sachs are seeking to sell their metal warehousing units just three years after their controversial entry to the industry, even as a proposed rule change by the London Metal Exchange is likely to reduce the attractiveness of the business. Read more of this post

Smuggling rice to Thailand – like coals to Newcastle; “No one can differentiate which one is Thai rice and which one is Cambodian rice. That makes it easy to smuggle rice in and make a profit by selling it to the government”

Smuggling rice to Thailand – like coals to Newcastle

5:25pm EDT

By Apornrath Phoonphongphiphat and Naveen Thukral

SA KAEO, Thailand/SINGAPORE (Reuters) – Hidden in 18-wheeler trucks, carts and pick-up vans, hundreds of thousands of tonnes of rice are being smuggled from Cambodia and Myanmar into Thailand, although the country holds enough stocks to meet half the world’s annual trade in the commodity. A populist program to support prices has led to the Thai government paying its farmers almost double prevailing prices in Cambodia and Myanmar. Farmers and traders in the neighboring countries are trying to take advantage, sending their grain across the border to be sold into the Thai intervention scheme. The equivalent of 750,000 tonnes of milled rice is being smuggled into Thailand a year, mainly from Cambodia and Myanmar, according to estimates of analysts and traders who have studied the illicit shipments. “No one can differentiate which one is Thai rice and which one is Cambodian rice. That makes it easy to smuggle rice in and make a profit by selling it to the government,” said Kiattisak Kalayasirivat, managing director at Thai trader Novel Agritrade. Read more of this post

Hong Kong Horse Bets Exceed Las Vegas Casinos’: Chart of the Day

Hong Kong Horse Bets Exceed Las Vegas Casinos’: Chart of the Day

Bets on horse races in Hong Kong are poised to exceed wagers at Nevada’s casinos for a second straight year, with the city’s sole legal outlet for gambling seeking to lure punters from neighboring Macau.

The CHART OF THE DAY compares the Hong Kong Jockey Club’s annual betting totals with gaming revenue from Nevada’s casinos. Wagers of HK$93.8 billion ($12 billion) from 83 horse-race meetings in the fiscal year to June 30 were 19 percent more than Nevada’s combined take in the 11 months through May. Bets at the club, set up in 1884 when Hong Kong was under British rule, exceeded those in the U.S. gambling hub in fiscal 2012 for the first time in about a decade, according to data compiled from the club and Nevada regulators. Read more of this post

Arguments about whether China will grow at 7% or 7.5% are “pointless” because the economy is already in a financial crisis which may only worsen if the government doesn’t address the country’s crippling debt problem

SUNDAY, JULY 14, 2013 – 16:30

China Govt Advisor Says Economy In Crisis As Debt Costs Spiral

BEIJING (MNI) – Arguments about whether China will grow at 7% or 7.5% are “pointless” because the economy is already in a financial crisis which may only worsen if the government doesn’t address the country’s crippling debt problem, a senior government researcher has warned.

Xia Bin, an economist with the State Council’s Development Research Center and government advisor, said Beijing needs to stop using bland rhetoric about “stabilizing the economy” and focus on tackling a debt burden whose interest payments alone tally nearly CNY6 trillion a year. Read more of this post

Once known as “Atomic Town” in China, Xihai has been transformed into a heaven for cyclists from home and abroad

Atomic Town” now heaven for cyclists

English.news.cn   2013-07-13

XINING, July 13 (Xinhua) — Once known as “Atomic Town” in China, Xihai has been transformed into a heaven for cyclists from home and abroad. Xihai Town, where the country’s first atomic and hydrogen bombs were created in the 1960s, sits along the northern bank of the Qinghai Lake in northwest China’s Qinghai Province. The once-forbidden mysterious town has witnessed cyclists swarming to attend the Tour de Qinghai Lake, an international road cycling race since 2002. “They have come here every year for the past 12 years,” said Gyumtsho, a 77-year-old woman, who was sitting in the shade watching cyclists pass the finishing line of the fifth section of this year’s race, which kicked off on Sunday. Read more of this post

Experts skeptical of Old Summer Palace repairs

Xinhua Insight: Experts skeptical of Old Summer Palace repairs

by Xinhua writers Ji Shaoting, Dai Ying and Yue Ruifang

English.news.cn   2013-07-13

BEIJING, July 13 (Xinhua) — The Old Summer Palace, an ancient royal garden that was nearly destroyed by British and French troops 150 years ago, is experiencing yet another change. The core area of the Old Summer Palace, or “Yuanmingyuan” in Chinese, is undergoing renovations and repairs. However, experts from the Society of Yuanmingyuan believe the repair project is doing more harm than good. The ruins of the palace are among 150 sites designated to be protected and repaired under a plan issued by the State Administration of Cultural Heritage on July 3. Read more of this post

China Protest Forcing Nuclear Retreat Shows People Power; China currently has 17 nuclear power-generating units in operation and 28 under construction

China Protest Forcing Nuclear Retreat Shows People Power

Protests in a southern Chinese city last week that forced local authorities to abandon plans for a uranium-processing facility highlight the growing willingness of ordinary people to challenge the state on environmental issues.

The proposed Longwan Industrial Park project won’t be approved “in order to fully respect the opinion of the masses,” the government of Heshan, Guangdong province, said in a statement on its website on July 13. A “social-stability risk assessment” of the proposal that was released for public awareness generated “much opposition,” it said. Read more of this post

Milk Price War Pits California Dairy Farms Against Cheesemakers

Milk Price War Pits California Dairy Farms Against Cheesemakers

Ray Souza’s voice cracks a bit when he says it, when he tells how his family’s Turlock, California, dairy farm is struggling to pay the bills.

“We go from black to red month by month,” the 66-year-old said. “For us, it’s break even at best.”

Souza is like many other dairy farmers in the state who say the price they’re paid for milk from cheese producers isn’t enough to cover the soaring cost of feeding cows. Those economics have caused a fifth of California’s dairies to shutter since 2007, according to state agricultural figures. Read more of this post

Granny’s Gold Bars Are Key to Vietnam Push to Boost Dong

Granny’s Gold Bars Are Key to Vietnam Push to Boost Dong

The target of Vietnam’s campaign to stabilize its currency is in the locked bedroom wardrobe of retired civil servant Vu Thi Huong: gold bars.

“It’s been my habit for ages, buying gold whenever I can save up some money,” said Huong, 57, who watches the financial news every day to monitor the price of the precious metal. “With gold, I can save my fortune and later on have something valuable to pass down to my children and grandchildren.”

Huong is among millions of Vietnamese who hold an estimated 300 tons to 400 tons of bullion to store their wealth — valued at as much as $19 billion at domestic prices and equal to official U.K. holdings — a legacy of more than a century of war, revolution and economic turbulence. The central bank wants to convert the hoard, much of it smuggled in, into dong deposits to strengthen the currency, which has slid 21 percent against the dollar in five years. Read more of this post