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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?


To: John Pitera who wrote (9353)5/7/2008 6:07:36 PM
From: Jorj X Mckie  Read Replies (2) | Respond to of 33421
 
Hi John,
I recently returned from Australia where I was visiting a couple iron ore mines. It is remarkable to see the 3 and 4 mile long trains with each car filled with iron ore go by one after the other all day long. And the vast majority of the iron ore is going to china (that's not speculation).

China is pushing the growth of their infrastructure at an incredible pace. This in turn has created quite a boom in western australia. The city of Perth looks like a miniature version of those photos of Dubai where the skyline is dominated by cranes.

And of course, considering that most of the chinese population is still living in agrarian conditions, there will be a lot of opportunity for growth in china for a lot of years.

My question to you, is the growth in China a natural sustainable economic growth or is the chinese government doing this through kiting checks? Where the chinese population tends to be very capitalistic, china as a whole isn't a free market and is still quite corrupt.

I tend to believe that the more government meddling in the economy, the greater the gyrations in the economic cycles. In other words, I expect the current boom in china to be followed by a pretty significant bust. And if the current boom in raw materials and oil is being largely stimulated by chinese demand, it would imply that oil and other raw materials would drop rather dramatically.

Thoughts?



To: John Pitera who wrote (9353)5/17/2008 4:01:09 PM
From: John Pitera  Respond to of 33421
 
Crises Cloud China's Olympic Mood as Quake Tests Party's Mettle
(read the article I am responding too as well!)

By Edward Cody
Washington Post Foreign Service
Saturday, May 17, 2008; A07

CHENGDU, China, May 16 -- Eight is an auspicious number in Chinese tradition, and 2008 was supposed to be a joyful year, a time for celebrating at the Beijing Olympics and basking in international recognition of the country's tremendous progress under the careful leadership of the Communist Party.

It has not turned out that way.

An uprising in Tibet on March 14 focused the world's attention on the long-festering issue of China's abuse of human rights. The worldwide Olympic torch relay, conceived as a "journey of harmony," turned into a magnet for protest, embarrassing Olympic organizers, angering nationalistic Chinese and souring the mood for the Beijing Games.

And now a violent earthquake has devastated a broad patch of central China, particularly here in mountainous Sichuan province, killing up to 50,000 people. The scale of destruction is so vast -- and the horizon for a return to normalcy so distant -- that it is difficult to imagine a carefree crowd in Beijing when the Games open Aug. 8.

The clouds over 2008 have not only darkened prospects for a celebratory Olympics. They have compromised what was shaping up as a golden opportunity for President Hu Jintao and other leaders to rally support among China's 1.3 billion people for continuing the party's monopoly on power indefinitely.

Across the country, Chinese had joyfully embraced the role of Olympic host. Most also seemed to buy into the idea that -- during the Olympic year, at least -- the world was ready to overlook the party's Leninist ideology and accept its promises of eventual political reform. If other nations were willing to show patience, the party hoped, the Chinese people would be encouraged to follow suit.

The anger over torch protests and heightened security concerns that followed the Tibet crisis had already created a less friendly environment here for foreigners. The Sichuan earthquake, besides imposing a mournful mood on the whole country, has now presented China's leaders with an immediate political test that is a far cry from the uncomplicated celebration they were planning. The party has long justified its refusal to relinquish power with the argument that it alone can deliver the efficient governance and shrewd guidance China needs. And beginning at 2:28 p.m. Monday, when the 7.9-magnitude earthquake struck, the disaster area was in dire need of both.

Hu and his lieutenants appeared to realize what was at stake, moving swiftly to mobilize the party machinery. He Guoqiang, head of the party's Central Discipline Inspection Commission, publicly warned party officials of all ranks that their careers would depend on how they handled the crisis.

The party's initial response, marshaling a vast relief operation within hours, generated a groundswell of support. Even in their misery, victims expressed satisfaction at seeing rescue teams show up from the People's Liberation Army and People's Armed Police. They were also quick to thank the thousands of party-organized civilian relief workers handing out water, food and tents.

The feeling that the government was going all-out to help extended beyond the affected area to the country as a whole, according to Kang Xiaoguang, a sociologist at Beijing's Renmin University who monitors popular sentiment with opinion surveys.

"Chinese people are quite satisfied with what the government is doing," he said. "The government's response is much better than it has been in the past."

Premier Wen Jiabao, who flew to the disaster zone Monday afternoon, made sure that the party and the government were seen responding to the catastrophe. He spent the entire week visiting devastated towns and villages, sympathizing with bereaved families and giving pep talks to military and civilian rescue teams.

Wen's on-the-scene leadership, recorded by cameras from the party's China Central Television network, was broadcast in great detail on the national news, making him the face of the party at work for the people. Not to be outdone, Hu, the president and party chief, flew down from Beijing on Friday to offer his own on-the-spot display of concern.

The thousands of Chinese civilians who volunteered to help -- or were volunteered by party organizations -- also appeared swept up in the common cause of assisting their countrymen under the party's leadership. Long caravans of relief supplies moved toward the quake zone festooned with red banners bearing party slogans popular since the 1960s.

"Fight the earthquake," they read, recalling the rallying cry of Red Guards after the 1976 earthquake in Tangshan, in northeastern China, that killed 240,000 people.

Many of the younger relief workers wore red scarves around their necks, identifying them as members of the party Youth League in which Hu started his rise in the party bureaucracy. But other volunteer groups were dispatched by private businesses; one convoy of supplies was led by a Porsche Cayenne four-wheel-drive vehicle.

"The whole society is mobilized," Kang said. "People are eager to donate money and blood."

The enthusiasm, he noted, was encouraged by the vigorous initial coverage in the tightly censored Chinese news media. The openness about the scope of the suffering in Sichuan marked a change from coverage of past natural disasters in China and, in the first few days, was matched by friendliness toward reporters and cooperation from police, soldiers and officials involved in relief operations.

As early as Tuesday, however, the Politburo's senior propaganda officials, under Li Changchun of the elite Standing Committee, met to lay down guidelines for further earthquake coverage. They knew, it seemed, that the spontaneous outpouring of good will might not last as the tragedy wears on.

According to the party's official People's Daily newspaper, Li and his lieutenants ordered journalists to make sure their coverage was inspirational and emphasized rescue and relief efforts. A reporter in Beijing said editors also received instructions not to send their own reporters to the scene and to satisfy themselves with the official New China News Agency.

The Standing Committee, meanwhile, met under Hu's leadership Wednesday and issued a statement calling on Sichuan officials to take steps to guarantee "social stability," which is the party's way of saying prevent protests. By Thursday, police, soldiers and local officials began blocking roads leading to the worst-hit areas. Their orders were to keep reporters out, they said, particularly foreign reporters.

By that point, some villagers had begun to complain that rescue officials were bulldozing ruins with people still trapped under debris. In several towns where children were killed when schools collapsed, parents accused local officials of allowing shoddy construction materials to be used in return for bribes. And the Health Ministry in Beijing handed down orders to dispose of bodies swiftly and on the spot to prevent disease.

The crisis, Hu said on his arrival in the quake zone Friday, had entered its "most crucial phase."