China in your future

(News & Editorial: China in your future)

 A.  A little known reality
24 Aug 2013,, by Michael Snyder
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china urban landscape[Chinese city – Chinese auto manufacturing plant – Chinese garment factory
Chinese freeway – Chinese suburbs- Chinese supermarket]

 [Anything look terribly unfamiliar in the photo collage above? These Internet images show scenes  similar to what we are used to seeing in the USA; however now, with the Red industrial star rising, the good ol’ white star’s aging service economy  is in decline.  Mr. Larry]

 In the future China will employ millions of American workers and dominate thousands of small communities all over the United States. Chinese acquisition of U.S. businesses set a new all-time record last year, and it is on pace to shatter.that record this year.

The Smithfield Foods acquisition is an example. Smithfield Foods is the largest pork producer and processor in the world. It has facilities in 26 U.S. states and it employs tens of thousands of Americans. It directly owns 460 farms and has contracts with approximately 2,100 others. But now a Chinese company has bought it for $ 4.7 billion, and that means that the Chinese will now be the most important employer in dozens of rural communities all over America.

Thanks in part to our massively bloated trade deficit with China, the Chinese have trillions of dollars to spend. They are only just starting to exercise their economic muscle. It is important to keep in mind that there is often not much of a difference between “the Chinese government” and “Chinese corporations”. In 2011,43 per cent of all profits in China were produced by companies where the Chinese government had a controlling interest in.

Last year a Chinese company spent $2.6 billion to purchase AMC entertainment-one of the largest movie theater chains in the United States. Now that Chinese company controls more movie ticket sales than anyone else in the world.
But China is not just relying on acquisitions to expand its economic power. “Economic beachheads” are being established all over America. For example, Golden Dragon Precise Copper Tube Group, Inc. recently broke ground on a $100 million plant in Thomasville, Alabama. Many of the residents of Thomasville, Alabama will be glad to have jobs, but it will also become yet another community that will now be heavily dependent on communist China.

And guess where else Chinese companies are putting down roots? Detroit. Chinese-owned companies are investing in American businesses and new vehicle technology, selling everything from seat belts to shock absorbers in retail stores, and hiring experienced engineers and designers in an effort to soak up the talent and expertise of domestic automakers and their suppliers. If you recently purchased an “American-made” vehicle, there is a really good chance that it has a number of Chinese parts in it. Industry analysts are hard-pressed to put a number on the Chinese suppliers operating in the United States.

China seems particularly interested in acquiring energy resources in the United States. For example, China is actually mining for coal in the mountains of Tennessee. Guizhou Gouchuang Energy Holdings Group spent 616 million dollars to acquire Triple H Coal Co. in Jacksboro, Tennessee. At the time, that acquisition really didn’t make much news, but now a group of conservatives in Tennessee is trying to stop the Chinese from blowing up their mountains and taking their coal.
And pretty soon China may want to build entire cities in the United States, just like they have been doing in other countries.

 Right now China is actually building a city larger than Manhattan just outside Minsk, the capita! of Belarus. Are you starting to get the picture? China is on the rise. If you doubt this, just read the following:

  • When you total up all imports and exports, China is now the number one trading nation on the entire planet.
  • Overall, the U.S. has run a trade deficit with China over the past decade that comes to more than 2.3 trillion dollars.
  • China has more foreign currency reserves than anyone else on the planet.
  • China now has the largest new car market in the entire world.
  • China now produces more than twice as many automobiles as the United States does. After being bailed out by

U.S. taxpayers, GM is involved in 11 joint ventures with Chinese companies.

  • China is the number one gold producer in the world.
  • The uniforms for the U.S. Olympic team were made in China.
  • 5 per centa of all artificial Christmas trees the world over are made in China.
  • The new World Trade Center tower in New York is going to include glass imported from China.
  • China now consumes more energy than the United States does.
  • China is now in aggregate the leading manufacturer of goods in the entire world.
  • China uses more cement than the rest of the world combined.
  • China is now the number one producer of wind and solar power on the entire globe.
  • China produces 3 times as much coal and 11 times as much steel as the United States does.
  • China produces more than 90 percent of the global supply of rare earth elements.
  • China is now the number one supplier of components that are critical to the operation of any national defense system.
  • In published scientific research articles China is expected to become number one in the world very shortly.

And what we have seen so far may just be the tip of the iceberg. For now, I will just leave you with one piece of advice – learn to speak Chinese. You are going to need it!

B.  China Announces That It Is Going To Stop Stockpiling U.S. Dollars
21 Nov 2013, By Michael Snyder, on November 21st, 2013
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China just dropped an absolute bombshell, but it was almost entirely ignored by the mainstream media in the United States.  The central bank of China has decided that it is “no longer in China’s favor to accumulate foreign-exchange reserves”.  During the third quarter of 2013, China’s foreign-exchange reserves were valued at approximately $3.66 trillion.  And of course the biggest chunk of that was made up of U.S. dollars.  For years, China has been accumulating dollars and working hard to keep the value of the dollar up and the value of the yuan down.  One of the goals has been to make Chinese products less expensive in the international marketplace.  But now China has announced that the time has come for it to stop stockpiling U.S. dollars.  And if that does indeed turn out to be the case, than many U.S. analysts are suggesting that China could also soon stop buying any more U.S. debt.  Needless to say, all of this would be very bad for the United States.

china dollar

For years, China has been systematically propping up the value of the U.S. dollar and keeping the value of the yuan artificially low.  This has resulted in a massive flood of super cheap products from across the Pacific that U.S. consumers have been eagerly gobbling up.

For example, have you ever gone into a dollar store and wondered how anyone could possibly make a profit by making those products and selling them for just one dollar?

Well, the truth is that when you flip those products over you will find that almost all of them have been made outside of the United States.  In fact, the words “made in China” are probably the most common words in your entire household if you are anything like the typical American.

Thanks to the massively unbalanced trade that we have had with China, tens of thousands of our businesses, millions of our jobs and trillions of our dollars have left this country and gone over to China.

And now China has apparently decided that there is not much gutting of our economy left to do and that it is time to let the dollar collapse.  As I mentioned above, China has announced that it is going to stop stockpiling foreign-exchange reserves…
The People’s Bank of China said the country does not benefit any more from increases in its foreign-currency holdings, adding to signs policy makers will rein in dollar purchases that limit the yuan’s appreciation.
“It’s no longer in China’s favor to accumulate foreign-exchange reserves,” Yi Gang, a deputy governor at the central bank, said in a speech organized by China Economists 50 Forum at Tsinghua University yesterday. The monetary authority will “basically” end normal intervention in the currency market and broaden the yuan’s daily trading range, Governor Zhou Xiaochuan wrote in an article in a guidebook explaining reforms outlined last week following a Communist Party meeting. Neither Yi nor Zhou gave a timeframe for any changes.

It isn’t going to happen overnight, but the value of the U.S. dollar is going to start to go down, and all of that cheap stuff that you are used to buying at Wal-Mart and the dollar store is going to become a lot more expensive.

But of even more importance is what this latest move by China could mean for U.S. government debt.  As most Americans have heard, we are heavily dependent on foreign nations such as China lending us money.  Right now, China owns nearly 1.3 trillion dollars of our debt.  Unfortunately, as CNBC is noting, if China is going to quit stockpiling our dollars than it is likely that they will stop stockpiling our debt as well…
Analysts see this as the PBoC hinting that it will let its currency fluctuate, without intervention, thus negating the need for holding large reserves of the dollar. And if the dollar is no longer needed, then it could look to curb its purchases of dollar-denominated assets like U.S. Treasury’s.
“If they are looking to reduce these purchases going forward then, yes, you’d have to look at who the marginal buyer would be,” Richard McGuire, a senior rate strategist at Rabobank told CNBC in an interview.
“Together, with the Federal Reserve tapering its bond purchases, it has the potential to add to the bearish long-term outlook on U.S. Treasury’s.”

So who is going to buy all of our debt?

That is a very good question.

If the Federal Reserve starts tapering bond purchases and China quits buying our debt, who is going to fill the void?

If there is significantly less demand for government bonds, that will cause interest rates to rise dramatically.  And if interest rates rise dramatically from where they are now, that will set off the kind of nightmare scenario that I keep talking about.

In a previous article entitled “How China Can Cause The Death Of The Dollar And The Entire U.S. Financial System”, I described how China could single-handedly cause immense devastation to the U.S. economy.

China accounts for more global trade that anyone else does, and they also own more of our debt than any other nation does.  If China starts dumping our dollars and our debt, much of the rest of the planet would likely follow suit and we would be in for a world of hurt.

And just this week there was another major announcement which indicates that China is getting ready to make a major move against the U.S. dollar.  According to Reuters, crude oil futures may soon be priced in yuan on the Shanghai Futures Exchange…
The Shanghai Futures Exchange (SHFE) may price its crude oil futures contract in yuan and use medium sour crude as its benchmark, its chairman said on Thursday, adding that the bourse is speeding up preparatory work to secure regulatory approvals.
China, which overtook the United States as the world’s top oil importer in September, hopes the contract will become a benchmark in Asia and has said it would allow foreign investors to trade in the contract without setting up a local subsidiary.

If that actually happens, that will be absolutely huge.

China is the number one importer of oil in the world, and it was only a matter of time before they started to openly challenge the petrodollar.

But even I didn’t think that we would see anything like this so quickly.

The world is changing, and most Americans have absolutely no idea what this is going to mean for them.  As demand for the U.S. dollar and U.S. debt goes down, the things that we buy at the store will cost a lot more, our standard of living will go down and it will become a lot more expensive for everyone (including the U.S. government) to borrow money.

Unfortunately, there isn’t much that can be done about any of this at this point.  When it comes to economics, China has been playing chess while the United States has been playing checkers.  And now decades of very, very foolish decisions are starting to catch up with us.

The false prosperity that most Americans are enjoying today will soon start disappearing, and most of them will have no idea why it is happening.

The years ahead are going to be very challenging, and so I hope that you are getting ready for them.


C.  China to Build Cities and Economic Zones in Michigan and Idaho
20 May 2012,, by Henry Zheng
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china us- chinese symbolsChina’s meteoric rise has caused much concern in the United States due to its dominating presence in Asia. China has territorial claims in the South China Sea and the South Asian region, and is establishing substantial economic and infrastructural inroads with countries such as Myanmar that have long been neglected by the West.

Now Chinese companies and businessmen are planning to make their home in the United States.  The mainland Chinese company Sino-Michigan Properties LLC has paid $1.9 million for 200 acres of undeveloped land in Milan, Michigan.

Currently a city of 6,000 residents, Milan could be the site of a “415-unit housing complex complete with artificial lakes and up to 6,000 square-foot homes, as well as a cultural center” for mainland Chinese. The location is about a 40-minute commute to the industrial centers of Toledo and Detroit, and less than half an hour from the University of Michigan in Ann Arbor (a hub for international Chinese students).

This “Chinese city” has undoubtedly contributed to local concerns over the uncertainty of allowing such a high concentration of Chinese immigrants who may not integrate with the community and possibly bring a slice of Communist rule onto American soil.

Mayor Mike Bell of Toledo, Ohio, does not seem fazed by this potential political encroachment.  Instead, he has embraced Chinese investors from the Dashing Pacific Group, who have already purchased the Docks restaurant complex and offered $3.8 million to purchase 69 acres of the Marina District for residential and commercial development.

Mayor Bell had been on a nine-day trip in China discussing these deals when he made the announcement. As if anticipating concerns back home, Bell reassured that “[t]hese are not folks who are coming to Toledo to do a business deal, generate profits, and bring the money back to China. They are interested in investing in our community and being a part of the community beyond just investing in property.”

 And generating profits is certainly at the heart of these developments. Instead of U.S. companies solely going to China to develop, Chinese companies are now eager to build in the United States. This trend reversal is seen in the ambition of companies such as China National Machinery Industry Corp (also known as Sinomach), China’s third largest contractor with projects in over 130 countries.

 Sinomach is one of the many companies that have expressed an interest in developing a 10,000 to 30,000-acre technology zone for “reinvigoration of the American industrial base.” The company proposes to establish a special economic zone like Shenzhen where there would be preferential policies conducive to Chinese businesses such as tax incentives and easing of trade regulations. The Michigan and Idaho projects are still in their preliminary stages and have yet to be approved.

 In a more successful maneuver, the state-owned China National Offshore Oil Corporation’s (CNOOC) $2.2 billion investment in U.S.-owned Chesapeake Energy is the largest purchase of an interest in U.S. energy assets.

This is not the first time that CNOOC tried to make its foray into the U.S. market. In 2005, political opposition over CNOOC’s bid of California-based Unocal led the company to withdraw its $18.4 billion offer.

Now, a faltering U.S. economic climate has resulted in less resistance to the influx of Chinese capital. And the possibility of creating 20,000 local jobs in South Texas doesn’t hurt, either.  Instead of taking these local jobs, the Chinese energy giant is interested in “gaining technical insight” so they can use the technology to extract “gas and oil locked in [China’s] plentiful shale formations.”

 The United States has displayed increasing caution as China increases its economic power and military strength. A study co-authored by Wang Jisi and Kenneth Lieberthal observes that mutual distrust between both governments is deeper than previously imagined.

Wang Jisi, whose unique position as an advisor to the Chinese Communist Party has generated a rare insider’s look into the Chinese position that cuts through the usual official talk, observes a change in the Chinese character.

He writes that Chinese leadership “believes that China’s turn in the world has arrived” and that “keeping a low profile” is over. “It is now a question of how many years, rather than how many decades, before China replaces the United States as the largest economy in the world.”

Lieberthal of Brookings writes that findings from American intelligence indicate that top Chinese officials have assumed a zero-sum approach when discussing issues related to the two countries’ relations, in which China or the U.S. would emerge as the victor with little possibility of co-existence in the top spot. This language suggests that China’s growing sense of distrust towards the U.S. risks breaking into open conflict if these antagonistic feelings are not reconciled.

 However, these political problems have not hindered Chinese business interests in the U.S. The allure of America’s business and industrial climate has drawn Chinese investors and developers who are, among other reasons, avoiding exorbitant real-estate prices in China’s metropolitan areas.  Exactly why Milan and the other places are being chosen has been largely left to local speculation.

Whether the Chinese government or businessmen have other agenda besides economic development remains to be seen, but for the time being, there are American states and towns willing to embrace an influx of capital, regardless of where it’s from. Because as Idaho’s Lieutenant Governor Brad Little says, “Asia’s where the money is.


D. China’s growing military might: top 4 concerns for the Pentagon
2013, The Christian Science Monitor, by Anna Mulrine, Staff writer
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China continues to increase spending to grow its already considerable military, and top Pentagon officials continue to watch the developments carefully.
In a report issued this week, the Department of Defense for the first time directly accused China’s military of using cyberattacks to spy on US networks.
In this arena and others, “China’s military buildup shows no signs of slowing,” said David Helvey, deputy assistant secretary of Defense for East Asia, who presented the congressionally mandated report on the state of China’s military activities.

Here are Pentagon officials’ top four concerns as they carefully monitor the growth of China’s military.
1. Frequent cyberwarfare attacks, other espionage efforts
China has long been accused of engaging in cyber attacks and espionage on US networks, but for the first time the US military directly attributed some of those attacks to its counterparts in China, the People’s Liberation Army (PLA).

“In 2012, numerous computer systems around the world, including those owned by the United States government, continued to be targeted for intrusions, some of which appear to be attributable directly to the [Chinese] government and military organizations,” Mr. Helvey said during a Pentagon briefing this week.

The report points to cyberespionage, along with other activities – with the aim of bolstering China’s military advantages:

“China continues to leverage foreign investments, commercial joint ventures, academic exchanges, the experience of repatriated Chinese students and researchers, and state-sponsored industrial and technical espionage to increase the level of technologies and expertise available to support military research, development, and acquisition.”

2. Use of space to thwart the US military
In 2012, China conducted 18 space launches to expand its intelligence and surveillance satellites.

At the same time, China is working quickly to “improve its capabilities to limit or prevent the use of space-based assets by adversaries during times of crisis or conflict,” according to the report.

Indeed, “PLA writings emphasize the necessity of ‘destroying, damaging, and interfering with the enemy’s reconnaissance … and communications satellites,’ ” the DOD report notes, adding that such attacks would serve to “blind and deafen the enemy.”

The same PLA analysis also points out that “destroying or capturing satellites and other sensors … will deprive an opponent of initiative on the battlefield and [make it difficult] for them to bring their precision-guided weapons into full play.”

3. Development of ‘carrier killer’ missiles
China is developing specialized, precision anti-ship ballistic missiles that are capable of hitting US aircraft carriers from a range of about 600 to 1,800 miles, according to the report.

“This is something that China has invested in, and we’re watching very carefully as it’s developing that program,” Helvey said.

These weapons could potentially affect the US aircraft-carrier presence in the region. “We’re concerned about the ability of China to develop missiles that can project its military power with precision at great distances from China,” he added. “Obviously, something that can hold at risk large surface ships, including aircraft carriers, is something we pay attention to.”

4. Development of sophisticated ships, planes, and drones
The Chinese military is working quickly to improve its array of increasingly sophisticated fighter jets and attack helicopters.

Indeed, China is developing fourth- and fifth-generation aircraft that incorporate stealth technology, some of which, the report says, use technology captured by Chinese spies.

China has also launched its first aircraft carrier, which senior US military officials say they are watching carefully and which is “the most significant development in the [Chinese] Navy over the past year,” according to the report.

“The formation of carrier battle groups will enable the PLA Navy to conduct comprehensive operations and enhance its long-range operational capabilities,” it says.

The PLA is also “investing heavily in a robust program for undersea warfare,” developing nuclear-powered attack submarines, Helvey said.

Like the US, China is also interested in expanding its fleet of drones – as well as selling its technology. “We have seen some reports of China marketing unmanned air systems in air shows around the world,” Helvey added, “so that’s something we’ll have to continue monitoring very carefully.”


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