Here's a great resource for the ongoing milk scandal, from the Economic Observer.
隐秘隔绝 战斗力强：揭开中国“东突”圣战者的神秘面纱 - 【博闻社】他们的纵横范围从新疆到叙利亚，组织隐秘、与外界隔绝、战斗力强——在叙利亚参加战斗的“突厥斯坦伊斯兰党 […]...
I'm now completely taken with my good luck at getting a real test drive from the Chairman, looking back at the BYD booth now 100 feet away. I was convinced that this was the end of the trip and the car would be backed up to the booth. And then the car sped up to about 10 mph, which is an uncomfortable speed in the middle of a convention center. There was only one obstacle in the way: a press conference.
The American Le Mans Series was holding a press conference to discuss the environmental innovations they were making in their racing (including the introduction of E85 ethanol to the racing series). It was fitting then that the chairman of the small chinese automaker, that sells annually in China what Honda sells in a month in the US, was pointing his answer to the environmental question right at them.
And we mean right at them. Right in front of the car was a soon-to-be confused production assistant with a headset going through the sequences of the conference on her walkie-talkie on the area in front of the press, completing the tasks she probably rehearsed all day.
We suggest that sooner or later the persistent tightening will burst the bubble and plunge China’s economy into an economic downturn. The burst of China’s bubble activities can happen at any time. This in turn could disrupt the flow of real savings to the US. Now if we were to assume that China’s bubble activities may hold for another year then a serious economic downturn in the US and the rest of the world is likely to take place during 2009.
Companies that hoard goods or try to fix prices can be fined up to 1 million yuan, or $130,000, up to 10 times the previous penalty, the cabinet said on its Web site.
``As foreign demand deteriorates, China may overdo its tightening of policy and cause a sharp economic slowdown,'' says Frank Gong, Hong Kong-based chief China economist at JPMorgan Chase & Co. ``If the central bank raised interest rates too much, it would damp domestic demand and increase the danger of economic downturn.''
``The number of hectares devoted to wheat farming has been declining for 30 years, the inventory levels of food are at the lowest level since 1972,'' Rogers said. ``Suppose we start having droughts again. God knows how high the price of agriculture is going to go, so that's where I'm putting more of my money now than in other things.''
He added, ``I think I'm going to make more money in agriculture than I make in precious metals.''
Through the quarter-century in which China has been opening to world trade, Chinese leaders have deliberately held down living standards for their own people and propped them up in the United States. This is the real meaning of the vast trade surplus—$1.4 trillion and counting, going up by about $1 billion per day—that the Chinese government has mostly parked in U.S. Treasury notes. In effect, every person in the (rich) United States has over the past 10 years or so borrowed about $4,000 from someone in the (poor) People’s Republic of China. Like so many imbalances in economics, this one can’t go on indefinitely, and therefore won’t. But the way it ends—suddenly versus gradually, for predictable reasons versus during a panic—will make an enormous difference to the U.S. and Chinese economies over the next few years, to say nothing of bystanders in Europe and elsewhere.
There's no denying that $769 billion is a big number. But still--and here's another surprise for my friendly congressman--it's not big enough. China must have reserves to accommodate routine foreign transactions. Taking into account the size of the Chinese economy, its money supply and its imports, I estimate these to be $455 billion. In addition, it needs reserves for exigencies beyond normal transactions. Now that the U.S. is demanding a wholesale opening of China's financial sector, China will have to fill in the sinkhole of bad loans that threaten to undermine its banking system. This task, now under way on a timid scale, is ultimately going to cost perhaps $650 billion.
To complete a wholesale opening of the financial sector, China will also have to make the yuan convertible. This will require at least another $200 billion. Add it all up, and you have needs for foreign reserves in the neighborhood of $1.3 trillion. It's only halfway there. Stop complaining.
The fastest bucks are to be made by front-running. Known in Chinese as laoshu cang (老鼠藏）, or "rat storage," front-running is illegal, just as in Western markets. The rat in question, a manager of a mutual fund, buys shares for himself privately before his fund buys, then sells for a profit after the fund's much bigger purchase helps drive up the share price. The rat stores away some cheese for himself and moves on to the next trade. Or he teams with a Lin sort for a bigger nibble.
Regulators acknowledge front-running to be a widespread problem, but virtually nobody gets caught. The only exception in the last two years proves the rule. Shanghai fund manager Tang Jian, fired last May from China International Fund Management, a joint venture between JPMorgan Fleming and a Shanghai securities company, had raised just about every red flag possible to bring about his own downfall. According to state media reports, within months of taking over a stock fund in 2006, he complained about his salary in an e-mail at work, talked about front-running on firm-monitored telephone calls, opened a trading account with his father's government identity card, bought an expensive home and a BMW, divorced his wife and ran off with an office intern on a quickie honeymoon to Brisbane, Australia. He tallied at least $200,000 for his rat cellar.