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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: Square_Dealings who wrote (20157)1/2/2005 11:50:20 AM
From: RealMuLan  Read Replies (1) of 116555
 
"Collision" is a too big word to use<g>. Some dispute over trade, that is all<g> Whether it is EU or the US or Japan, they now all have way too much interest in China to see China fail.

And it is true that China now is the biggest consumer for commodities. Yet, China has not had a bit of pricing power over pretty much everything. China is the biggest oil importer in 2004 (?), yet still have to pay >$1 premium for every barrel of oil they bought (comparing to the US paid price). That is why China is eager to set up some of their own commodity market.

I read that there are some international coordinated efforts to trap some stupid Chinese boss like Chen Jiulin (there was a similar case back in 1998 or so, although the loss is not this big). In most of cases (from other countries), when a trader loses this big, the only thing they can do is to file bankruptcy and the creditors can claim very little eventually. But it is usually not the case in China, since a lot of those companies are state owned and seems to have unlimited resource. That is why international traders want to trap Chinese ones. Although I think in Chen's case, China refuses to back the company up, so it is up to the creditors and investors themselves to work out some deal or eat the loss. China's state owned bank was not the major creditor in this case.

I think China has enforced some regulation to prevent this sort thing happening again. That said, since China has little experiences in commodity trading, so some tuition is expect<ng>
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