Hello Malcolm, I just got back to the hotel room after having dinner with some China mainland state-owned enterprise senior corporate managers (chemical fertilizer, electric power) and private businessmen.
Some random notes:
(a) Chongqin and Changsha are fairly large secondary cities (population 30 mm and 8-9 mm) and the industries there are on a system of 3 days with electricity and one day without. There is a power shortage due to currently insufficient but previously plentiful generating capacity;
(b) China apparently has decided that it will phase out its coal export program and become a coal importing country;
(c) Domestic oil prices have gone up 10% in the last month, and will likely rise again. Activities that can be converted to coal energy has be directed to do so;
(d) There are three critical issues facing the country now, presenting crisis and opportunity, and they are economic overheating (believed to be temporary), food shortage (30% increase in basic foodstuff YTD, but believed to be beneficial for farmers who in turn will use the added income for other goodies), and environmental issues (requiring much money and added GDP to improve);
(e) Gold bars are hard to come by in Beijing because the shops have long lines whenever the bars are in stock;
(f) Corporate borrowing rate is 4.9% for RMB borrowing, and less for USD debt;
(g) Because coal prices are way up in China, and chemical fertilizer price goes up even more (profit increasing), the large chemical fertilizer company is less willing to export their products to the US, however the US buyers have apparently been quite willing to pay more; and
(h) The chemical fertilizer company is converting the USD revenue from export to CAD and RMB because (a) they buy stuff from Canada and (b) they believe RMB will rise against USD at some point.
So, there you have it, and so we must apparently consider buying more:
finance.yahoo.com
finance.yahoo.com
finance.yahoo.com
finance.yahoo.com
finance.yahoo.com
I am unwilling to consider the power generators.
Chugs, Jay |
