It is interesting that China is now acting as a global banker for the US, and large US companies see China as a good investment opportunity, while factories are closing in China at a rapid rate, its exports, which make up the majority of its economy are down by nearly half, and world wide confidence in Chinese products is way down after the several food contamination scandals in the past couple of years. Worker riots have been frequent in China and are becoming larger and more frequent with the economic problems and corruption scandals in business and government. It is conceivable that if the Chinese economy continues to deteriorate, the current authoritarian government could be in danger.
The government has proposed a shopping voucher plan for all Chinese citizens, in hopes that it will boost the local economy. The vouchers will go out about January 19. Bush’s citizen rebate plan did not do much for the American economy, as the $600 we received (on a loan from China), was hardly a drop in the bucket to what most people needed. Some people bought a camera or a TV, more paid on their credit cards and bills. It was quickly forgotten. How will it go in China? Or do the powers that be in China plan to float on global business ventures alone?
China in talks to buy stake in AIG unit
TOKYO — A consortium led by Chinas sovereign wealth fund is in talks with struggling US insurance giant American International Group to acquire a stake in one of its units, a Japanese daily reported Friday.The purchase would open the door for future capital and business tie-ups between AIG and Chinese investors, paving the way for the Asian giant to become a major player in the global insurance market.
AIG and China Investment Corp. aim to reach a conclusion by the end of this year, the Nikkei business daily reported, without naming its sources.
Top Gansu official meets rioters in China
BEIJING — The governor of a Chinese province sat down with protesters after they fought pitched battles with police, a rare concession by a leader and a sign of government concerns about stability as the economy slows.Xu Shousheng held a meeting with 10 representatives in Wudu in the poverty-stricken northwestern province of Gansu two days after the riot in which dozens were injured, state media said.
Minister of Human Resources and Social Security Yin Weimin said on Thursday stabilizing employment was the top priority for China as he revealed a rise in jobless workers triggered by a weakened export sector.
The protests were sparked by local residents worries about a government resettlement plan after the May 12 earthquake killed more than 80,000 people, and in Gansu alone made 1.8 million people homeless.
Xu told the group he met that the changes in Wudu were only in the planning stage and could be vetoed by the central government. He also promised to protect their livelihoods if the resettlement gets the go ahead.
After decades of solid economic growth, China is battling an unknown as falling demand for its products triggers factory closures, sparks protests and raises fears of popular unrest.
Taxi drivers in Shantou, a rich city in southern Guangdong province, went on strike on Thursday in protest at the growing number of unlicensed cabs, Chinanews news agency reported.
A taxi driver strike in the southwestern city of Chongqing early this month provoked a series of similar strikes around the nation.
Some 90 petitioners from a rural area protested in front of the provincial government compound in Harbin, capital of Heilongjiang province, on Wednesday, local web portal Dongbei said.
Police detained three of the petitioners, who held banners and blocked the street in front of the compound for an hour, the report said, without giving the cause of the protest.
On the same day, nearly 400 people angry at losses in an illegal Chinese fund-raising scheme gathered in Beijing, Xinhua news agency said.
Estimates of the number who joined in the Gansu violence on the streets of Wudu range from an official total of 2,000 to as high as 20,000 cited by local residents.
They destroyed local buildings, including trade union and commerce offices and a Communist Party discipline headquarters, and afterwards grocery prices went up by nearly half. The riot was broken up with tear gas and at least 30 people were arrested.
Xu said Beijing plans to invest over 20 billion yuan ($2.93 billion) in the areas infrastructure over the next three years and a major train line set to run through the town should also provide a boost to the local economy.
Bank of America doubles down on China
bloggingstocks.com
While the growth in China is slowing, the fact remains that things are still fairly robust especially compared to many other global economies. As a result, investors still want to put money into the country. After all, with China’s huge domestic economy, there is likely to be strong long-term growth.So this week, Bank of America (NYSE: BAC) agreed to exercise its option to double its position in China Construction Bank (CCB), which is the #3 financial institution in China. The stake comes to about 19.1%.
Keep in mind that Bank of America got a sweet discount on the option. Thus, the position is in-the-money the investment has tripled in value to $14.5 billion — and it may be tempting for the firm to start dumping shares. In fact, shares of China Construction Bank have taken a hit because of the this possibility.
And, as for Bank of America, it could be a savvy move. Of course, the firm had to slash its dividend and must integrate the huge acquisitions of Merrill Lynch (NYSE: MER) and Countrywide. At the same time, Bank of America’s stock price continues to deteriorate. So, bagging a couple extra billion is probably a good bet right now.
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