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A potential solution to the problem of printing trillions of dollars by the U.S. government is to bypass the U.S. dollar and resort to Yuan-based trade. Unfortunately, this process takes time.

AFP: China official suggests wider use of yuan: report

"China official suggests wider use of yuan: report
(AFP) – 3 hours ago

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China should reduce its dependence on global reserve currencies, a central bank official has been quoted as saying.

BEIJING — China should reduce its dependence on international reserve currencies, which have contributed to an "unstable" world monetary system, a central bank official was quoted Monday as saying.

Jin Zhongxia, deputy director-general of the People's Bank of China's international department, told a weekend forum that wider use of the yuan currency to settle accounts would help cut risks, the state-run China Daily reported.

"The existing international monetary system, centered on a small number of reserve currencies, is quite unstable," Jin was quoted as saying.

Jin expressed concerns about the dollar, whose value has been falling for three months, and US Federal Reserve moves to buy 600 billion dollars of government bonds to boost domestic growth, which could further drive down the dollar.


Over-printing of reserve currencies "places emerging economies in a dilemma," he said.

Chinese officials have repeatedly expressed concern over the Fed plan, warning it could lead to a flood of speculative investment funds into emerging economies.

Economies that peg their currencies to reserve currencies will thus face an increased risk of fund inflows, capital market bubbles and inflationary pressure, Jin said.

Those whose currencies float freely, on the other hand, face risks posed by exchange rate fluctuations, rising trade costs and variable economic conditions, he said.

Cross-border trade settlement in yuan effectively reduces the risks posed by exchange rate fluctuations to China's trade partners, Jin said.

China plans to boost yuan-denominated cross-border trade with other countries 10-fold to a fifth of its total trade, or more than 2.5 trillion yuan (376.7 billion dollars), the paper said, citing Jin, who did not specify a target date.

By the end of September, cross-border settlements in yuan amounted to 197.1 billion yuan between Chinese companies and 43 economies.
"

I believe the Yuan is already traded freely by come of China's neighbour (Malaysia? and others). This may be the first step to a regional reserve currency.
 
China To Have No. 1 Airline Market By 2030

By Leithen Francis
Singapore

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China is set to overtake the U.S. as the world’s largest market for commercial air travel, but the market’s huge size also means Western aircraft-makers face a challenge from Chinese state-owned manufacturers wanting a large piece of the action.

Statistics from the FAA indicate U.S. carriers had 704 million domestic and international passengers in 2009, and the forecast is for 1.21 billion by 2030. But the Civil Aviation Administration of China has projected that Chinese carriers’ passenger numbers will increase from 230 million in 2009 to 700 million by 2020 and 1.5 billion by 2030.

Airbus China President Laurence Barron says for the last five years, sales in China have accounted for 15% of Airbus’s total production. “This year we have seen a spike up to 20% plus,” he says, adding that “next year will probably not be dissimilar.” The high number of aircraft sales to China “reflects the very significant traffic growth in China.”

China’s international traffic suffered last year, due to the global economic downturn, but Barron says domestic air traffic still grew by 22% in 2009. International and domestic traffic growth, combined, is forecast to be over 17% this year, he says, adding that the increase in the Chinese carriers’ fleets is mostly in narrowbodies such as the Airbus A320. But there are also widebodies, such as the A330-300, flying domestically, he adds.

The government basically controls which aircraft types are bought by airlines in China. Carriers can choose the aircraft they want, but ultimately the government decides which aircraft they get. This is because Chinese airlines don’t actually order directly from manufacturers. Rather, the government orders aircraft in bulk, and then allocates them. Carriers with political clout tend to get what they want, but those that don’t have strong political connections have to make do with what they can get.

Three state-owned carriers dominate China’s airline industry, namely Air China, China Southern Airlines and China Eastern Airlines. All three reported heavy losses in 2008, as higher fuel prices took their toll, but the government responded with financial bailouts. These three continue to make use of their political connections to help succeed in China, which follows a centrally planned, rather than a free market, economic system.

Other Chinese carriers—mainly those unable to rely on government largesse—suffered greatly in 2008 and 2009 and some were forced to merge or shut down. Privately owned East Star Airlines was declared bankrupt in August 2009, making it the first Chinese airline in recent history to close due to financial problems. China Eastern took over Shanghai Airlines, Air China gained control of privately owned Shenzhen Airlines, and Sichuan Airlines Group—which is controlled by that province’s government—took over United Eagle Airlines, China’s very first privately owned airline.

Sichuan Airlines Group has since sold a large stake in United Eagle to state-owned aircraft maker Comac, which is using the airline to showcase its products. United Eagle has since been re-branded Chengdu Airlines and is now set to be the launch operator for the Comac ARJ21, having signed a firm order for 30 of the regional jets.

Comac is also working to develop the 150-seat C919, a direct competitor for the Airbus A320 and Boeing 737. Industry executives in China say Comac will use the Airshow China 2010 as a platform to announce its C919 launch customers. The list is likely to include Air China, China Eastern and China Southern, they say. This would be significant as so farthe ARJ21 has only attracted orders from China’s second-tier carriers.

China’s desire to promote the C919 and AR21 could hamper Western aircraft manufacturers’ sales to China, just as China’s efforts to promote its Xian Aircraft MA60 turboprop have effectively shut out foreign turboprop manufacturers such as ATR. The last time ATR sold an aircraft in China was in the 1990s. It has struggled to gain a foothold partly because turboprops have a bad image in China. But ATR has also failed because Chinese airlines interested in turboprops have faced political pressure to buy local rather than imported aircraft.

A good litmus test for the extent of China’s protectionism will be the government’s decision on whether to let Embraer manufacture its E-190 in Harbin, China. The 90-seat E-190 is a direct competitor to the ARJ21 and if manufactured in China, rather than imported, it will avoid import duties. But whether China is willing to give the E-190 that tax break and let it compete directly against the ARJ21 has yet to be determined.
 
Construction starts on Yangjiang Nuclear Power Station Unit 3 - People's Daily Online November 17, 2010

Construction has begun on the main project of the Yangjiang Nuclear Power Station Unit 3 on Nov. 15.

Yangjiang Nuclear Power Station Unit 3 and follow-up units will adopt CPR1000+ technology programs, and it is a national 11th Five-Year Plan key energy construction project.

The Yangjiang Nuclear Power Plant in Dongping Town, Yangjiang City, is being built by the China Guangdong Nuclear Power Group with an investment of 70 billion yuan (10.1 billion U.S. dollars). On Nov. 21, 2008, the country began the construction of a nuclear power station in the eastern Fujian Province, with an investment of nearly 100 billion yuan.

The plant will have six 1,000-megawatt units with the first unit to begin operation in 2013. All the units will be built by 2017. The nuclear power plant is expected to generate 45 billion kilowatt-hours of electricity annually.

The plant will save 16 million tons of coal and reduce carbon dioxide emissions, the most prominent greenhouse gas, by 36 million tons, according to Zhang Guobao, vice minister of the National Development and Reform Commission.

Vice Premier Li Keqiang once said that "the construction of nuclear power plants id of great importance to safeguarding energy security, sustaining steady economic growth and building a resource-saving and environmentally-friendly society."

The development of China's nuclear power plants has entered a crucial phase, Li said in an instruction.

China plans to develop more nuclear power plants in response to an energy crunch resulting from fast economic growth. The country plans to have 40 million kilowatts of installed nuclear capacity by 2020, which would be 4 percent of projected energy supply or double the current level.

By People's Daily Online
 
Nearly half of China's rare earth exports went to Japan - People's Daily Online November 17, 2010

China exported 16,000 tonnes of rare earth to Japan in the first nine months of the year, equivalent to 49.8 percent of its total rare earth exports, the Ministry of Commerce (MOC) said Tuesday.

The figure was a 167-percent year-on-year rise, MOC spokesman Yao Jian said at a press conference.

Exports to the United States increased 5.5 percent year on year to 62 million tonnes during the same period, equivalent to 19 percent of China's total rare earth exports.

China exported 32,200 tonnes of rare earth in the first nine months of the year at an average price of 14,800 U.S. dollars per tonne.

Yao said the Chinese government has tightened regulations concerning the development, production and export of rare earth out of concern for the environment.

China cut its 2010 rare earth export quota 39 percent year on year while rare earth development and production capacities were reduced by 25 percent and 23 percent, respectively, he said.

In addition, China has added a 15- to 25-percent export duty on rare earth exports while banning the export of 41 rare earth-related processed products.

China's restrictive policies have been criticized by Japan, the United States and European countries. They said China's restrictions on rare earth exports violate World Trade Organization rules. China refutes such claims.

"China's restrictive measures comply with WTO rules, as the steps were taken in the whole process of exploitation, production and export," Yao said.

China continued to export rare earth in recent years even as environmental pressures grew and resource-depletion approached, he added.

He said China hopes other rare earth-rich nations will develop their own resources while adding that China is ready to cooperate with other nations to mine and process rare earth in an environmentally-friendly way.

Rare earth is a key component in the manufacture of high-tech products ranging from computers to airplanes. But mining rare earth is a highly-polluting process.

With a 90 percent share of the world rare earth trade, China's export quotas are a sensitive issue. In early November, the MOC denied suggestions there would be a drastic reduction in 2011 rare earth export quotas.

Source: Xinhua
 
China Outlines Plans for New Light Helicopter


Avic’s helicopter manufacturer Avicopter aims to achieve certification for its light commercial helicopter, the AC311, late next year and also complete first deliveries before the end of 2011.

The 2t helicopter, which had its maiden flight on Nov. 8 near the Avicopter Tianjin assembly plant, has already secured orders from Chinese customers, Avicopter president, Wang Bin, told Aviation Week on the sidelines of Airshow China. The customers are the Guizhou city police force and the Tianjin Binhai police force, each with an order for one AC311, he says.

Avicopter hopes to achieve Chinese certification for the AC311 in November 2011, in time for first customer delivery towards the end of next year. He also says Avicopter plans to market the aircraft overseas.

The AC311 is powered by one Honeywell LTS101-700D-2 turboshaft engine. It has a maximum take-off weight of 2.2t and can seat a maximum of six people.

Avicopter says composite materials are widely used on “the design of the rotor head, main blades and tail blades”.

Wang says the main cabin is made of composite materials, but the “tail structure is made of alluminum to keep the price down”.

The multi-purpose helicopter can be used, for example, for: law enforcement, search and rescue, flight training, tourism, VIP transport and aerial photography.
 
Major railway on trial run in central China - People's Daily Online November 18, 2010

A key railway, linking central China' s Hubei Province and southwestern Chongqing Municipality, began a seven-day trial operation on Wednesday.

Yichang-Wanzhou Railway, linking Hubei' s Yichang City and Chongqing' s Wanzhou District, is a key part of China' s railway system. After being put into operation, the railway will cut the travel time from Wuhan City, capital of Hubei Province, to Chongqing from 22 hours to five hours, said Zhang Mei, head of the Ministry of Railway' s Center of Engineering Management.

Also, the travel time from some cities in central and southwest China to eastern Nanjing and Shanghai cities will be cut to five to nine hours, Zhang added.

The 377-kilometer railway is considered one of the most difficult to build in China as it runs through a rugged region where the Yunnan-Guizhou Plateau meets the Yangtze River Plain.

The railway includes 159 tunnels and 253 bridges. In the most extreme case, it took nearly six years to drill a tunnel through Qiyue Mountain along the route.

Yichang-Wanzhou Railway is also China' s most expensive railway in terms of cost per kilometer. It cost about 60 million yuan to build each kilometer of the railway, compared to 29 million yuan (4.37 million U.S. dollars) for each kilometer of the Qinghai-Tibet Railway, which is also renowned for its construction difficulties.

The railway started construction in 2003 and was completed in Aug. 2010.

Source:Xinhua
 
China's Renewable Energy Industry Beats Out U.S.

China’s Renewable Energy Industry Has the Capitol Complainers Out in Force
by Tony D’Altorio, Investment U Research
Monday, November 15, 2010

My colleague, David Fessler, referenced a recent report from Ernst & Young. In it, it showed America losing its top spot on the renewable energy ladder to China.

Apparently, the Obama Administration doesn’t like that news. In its latest cold war with China over currencies and trade, the U.S. is accusing the other country of unfairly subsidizing its renewable energy industry.

In other words, Washington is accusing Beijing of helping itself out a bit too much. And if it can prove that, it plans on taking it all the way to the World Trade Organization.

On the surface, the dispute is over the Chinese government’s support for green industries. But really, the U.S. is just mad it lost its title…

China Expands Its Renewable Energy Industries

Basically, the American government wants to punish China for its renewable energy industry.

But it might want to focus on its own failures before faulting others’ successes. Because while Washington has talked a lot on the subject, Beijing has walked the walk.

Chinese officials may even make more investments on better grid infrastructure and clean-tech industries. And they’re bandying figures around $600 billion.

You see, they take green technology seriously. To them, renewable energy is a huge step towards their economic restructuring agenda.

China has pushed hard to close older industrial facilities and build more efficient ones. It plans those efforts – and the larger green industry – to provide new economic growth.

In fact, of the nine key emerging industries ordained by Chinese policymakers, six are green technology-related. And it’s wind power equipment effort is already experiencing success.

The country’s demand in that area has more than doubled in each of the past four years. It’s on course to beat its official 30 gigawatts of installed wind power target by 2020.

At that rate, it will easily surpass the U.S.’s capacity.

The same goes for the solar power industry, where the Chinese have proved adept at mastering new techniques and producing them on a large scale. That has resulted in prices dropping quickly, allowing them to grab a large share of the market away from the U.S.

The U.S. Slips to Second

The United States hasn’t helped itself either in how it develops new energy technologies.

For example:

* Silicon Valley promised to create a new, world-beating solar energy industry.
* Venture capitalists loved the sound of that, throwing money willy-nilly at new solar start-ups.
* Most of those newbies were trying out a new technology based on printing thin layers of exotic new materials onto cheap substrates.
* The resulting panels didn’t convert sunlight to power as efficiently as silicon, but they were supposedly cheaper to make and install.

In the end though, many of them just turned out to be expensive and time-consuming science projects. So now, many thin-film solar companies can’t reach the mass production levels they need to properly compete.

Of course, it didn’t help that Silicon Valley vastly underestimated China either.

At the time, China was using older technology based on silicon cells. And Silicon Valley confidently thought its own methods far superior.

Yet today, even First Solar (Nasdaq: FSLR), the leader in thin-film solar technology, is feeling the competition, judging from its recent sharp fall in gross profit margin.

The U.S. Government Blows Hot Air

Lack of government action has caused the U.S. to lag in renewable energy.

In fact, many in the American industry are actually angry at Washington. They don’t like the administration’s overdue recognition that their competitive edge has eroded after years of neglect.

Mike Eckhart, president of the American Council on Renewable Energy, spoke about the Obama Administration’s investigation, saying: “The Chinese did what they said they were going to do, and the U.S. didn’t. The fact that the U.S. didn’t support its renewable energy industry in the same way that other countries did is no grounds for complaining now.”

And while the U.S. points to “unfair” Chinese policies, Chinese companies can’t seem to make much headway here. Just three of their wind turbines in total have sold in the U.S.

And the towers and blades for those were U.S.-made anyway… So I guess it all depends on what your perspective is to determine the definition of “unfair.”

Good investing,

Tony D’Altorio
 
Xinjiang to build 10-million-KW wind power farm - People's Daily OnlineNovember 19, 2010

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A wind farm is seen in Dabancheng, Xingjiang Uygur autonomous region in this October 19, 2010 file photo.(Xin Photo)

China will build a 10.8-million-KW wind power farm in Hami in the far western Xinjiang Uygur autonomous region within five years, a local official said Thursday.

As a matter of comparison, the installed wind power capacity in Hami was only 100,000 KW last year, said Guan Baili, deputy secretary general of the Hami Prefecture Committee of the Communist Party of China.

A 200,000-KW wind power project of China Huadian Corporation has just passed the preliminary review by the local environmental protection bureau. This is just part of a 2-million-KW wind power farm to be built by ten power companies in southeast of Hami.

The potential wind power in Hami is estimated at 75 million KW, accounting for approximately 60 percent of Xinjiang's total.

The wind power boom came as the Chinese government seeks to use more clean energy to reduce over-reliance on electricity generated by polluting coal.

China also plans to build another six 10-million-KW wind power farms by 2020. The seven bases, including Hami, will have a combined capacity of 90 million KW by 2020, accounting for 60 percent of the country's total.

Source:Xinhua
 
Chinese economy to see stable growth: OECD - People's Daily Online November 19, 2010

China's economy in 2011 and 2012 will maintain a stable growth rate of 9.7 percent, lower than this year's estimated 10.5 percent, according to the Organization for Economic Cooperation and Development (OECD).

It said China's renewed buoyancy is projected to continue in 2011-2012, as rising domestic demand offsets a renewed slowdown in exports, stabilizing the current account surplus at around 5.5 percent of the economy.

China has already been listed as an enhanced engagement country of the OECD, which is considering accepting it as member. So far, a total of 33 industrialized economies belong to the organization.

In its latest World Economic Outlook, the OECD also said that acceleration in non-food prices is to be offset by an easing of food price inflation, resulting in the stabilization of inflation at slightly above 3 percent in China this year.

The OECD suggested the stability of the domestic economy would be enhanced if the exchange rate policy were more oriented to allowing an appreciation of the yuan against a basket of currencies.

At a news briefing in Paris on Thursday, Pier Carlo Padoan, chief economist of the OECD, said economic activity in member countries will gradually pick up steam over the coming two years, but that recovery will be uneven and unemployment will remain high.

The organization forecast world economic growth would slow to 4.2 percent in 2011 from 4.6 percent this year, before returning to a rate of 4.6 percent in 2012.

"We see the recovery ongoing but at a somewhat slower pace," Padoan told Reuters in an interview.

With the financial sector returning to normal after the global slowdown, and households and businesses in a position to renew spending and investment, the main challenge facing governments today is moving from a policy-driven recovery toward self-sustained growth.

"As the stimulus is withdrawn, governments will have to provide a credible medium-term framework, to stabilize expectations and strengthen confidence, particularly for the private sector," said the OECD.

Meanwhile, OECD Secretary-General Angel Gurra said: "Enhanced confidence could result in a faster-than-projected recovery."

Gross domestic product (GDP) across OECD is projected to rise by 2.3 percent in 2011 and 2.8 percent in 2012.

In the United States, activity is projected to rise by 2.2 percent in 2011 and then by 3.1 percent in 2012.

Eurozone growth is forecast at 1.7 percent in 2011 and 2 percent in 2012, while in Japan, GDP is expected to expand by 1.7 percent in 2011 and by 1.3 percent in 2012.

Emerging markets are expected to grow at a quicker pace than OECD members, helping to lift global trade growth to more than 8 percent annually in 2011 and 2012.

But uneven growth within the OECD area, as well as between the OECD and emerging economies, will add to global imbalances, which are among the most significant threats to the recovery.

The OECD warns countries against taking unilateral action in response to exchange rate volatility, and says that international cooperation, notably within the G20 process, will be essential in warding off protectionism.

The report also highlights other downside risks that could derail the recovery, including the potential for renewed falls in real estate prices, most notably in the US and the United Kingdom, high sovereign debt in some countries and possible abrupt reversals in government bond yields.

Source:China Daily
 
China's box office rising to number 2
Last Updated(Beijing Time):2010-11-16 13:20

The nation will soon become the world's second largest film market, says a local film mogul.

"The box office gross of 2010 will reach a record 10 billion yuan ($1.47 billion)," according to Han Sanping, chairman of the state-owned China Film Group. He was speaking at a press conference ahead of the release of the blockbuster Let the Bullets Fly, on Dec 16.

"It ranks sixth in the world now and will be next only to the United States in 2011," Han says.

He points out that three new screens have been added every day in China in 2010 and in 2011 the total number of screens is expected to stand at around 8,000.

"While the theaters, screens and viewers are seeing rapid growth, the price of tickets has been falling," he says.

Han also anticipates that in 2011 China will see films that are able to rake in more than 100 million yuan a day.

In December, three blockbusters including Bullets will hit the screens, Han says.

Spearheading the onslaught is Chen Kaige's Sacrifice, a period tragedy about murder, lies, revenge and redemption. It will premiere on Dec 4.

Feng Xiaogang's sequel to last year's smash romantic comedy If You Are the One, will follow Bullets. With renowned writer Wang Shuo on board as scriptwriter and Ge You leading the cast, the film to be released on Dec 22, is widely expected to be a big player during the winter holiday season.

"The three films will significantly up box office earnings in China," Han says.

Of the three upcoming releases, Han speaks most highly of Let the Bullets Fly, a film with a stellar cast of Chow Yun-fat, Jiang Wen and Ge You.

"You will spend two hours watching the film, but more hours to think about it and even longer to discuss it," he says.

Set in the 1930s, the film tells the story of a local official, a bandit and a gangster caught in the chaos of war.

Jiang Wen, who directs the film and also plays in it, says he is ready for the competition from the other two directors.

"Feng did a cameo in my film, and Chen helped with the dubbing," he says. "I hope more good films will hit the theaters. Three are far from enough."

Source:China Daily
 
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Revenues in China's telecom sector up 6.8%
Last Updated(Beijing Time):2010-11-19 08:03

China's telecommunication industry reported core business revenues of 667.51 billion yuan (100 billion U.S. dollars) during the first nine months of 2010, up 6.8 percent year on year, government figures show.

Of this total, revenues from wireless communications hit 465.1 billion yuan, up 12 percent year on year, while revenues from fixed-line business saw a 3.6-percent decline to 202.41 billion yuan, according to figures released Thursday by the Ministry of Industry and Information Technology.

Further, during the first nine months the number of new mobile phone subscribers increased by more than 86 million, bringing the total number of wireless service subscribers to 833.3 million.

During this same period, the number of fixed-line subscribers dropped by more than 12 million, reducing the total number of fixed-line users to around 301.27 million.
Source:Xinhuanet
 
V750 rotary UAV

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The Qingdao Haili Helicopter Manufacturing Co has taken the venerable Brantly B-2B two seat helicopter and developed it into the V750 rotary UAV.
 
I believe the Yuan is already traded freely by come of China's neighbour (Malaysia? and others). This may be the first step to a regional reserve currency.

Lol.. I wouldn't think any other major economies in Asia would want Yuan as a regional currency though..There's a lot mistrust considering the form of government and also other countries wouldn't want to give China a free hand that US enjoys now.

Any reserve currency from now on would be neutral to all countries.
 
Lol.. I wouldn't think any other major economies in Asia would want Yuan as a regional currency though..There's a lot mistrust considering the form of government and also other countries wouldn't want to give China a free hand that US enjoys now.

Any reserve currency from now on would be neutral to all countries.

Politics and economics are two things. China has a huge amount of reserves in Japanese Yen for example, which doesn't mean we like their government or anything.
 
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