Concerns mount regarding Chinese economy

David Ignatius is one of the more balanced commentators you’ll find, so when he write a piece stressing “warning signs” in China, it’s worth a read.

The government in China is trying to address the staggering amount of corruption, yet this effort seems to be having a destabilizing effect. Also, there are tons of bad loans in China and what appears to be a massive real estate bubble.

All of this spells trouble, and recent real estate sell-offs and bond sale cancellations have observers worried.

Macau – A gambling Revolution

Despite gambling now being a worldwide craze, China and many countries in Asia continue to ban it in many places, as a result many tourists who head over to China now head over to Macau to let their hair down and go to a casino.

Due to gambling being illegal in most of China, many visitors decide to take a trip to Macau in order to enjoy some casino entertainment. Macau is now considered as serious competition to Las Vegas when it comes to attracting tourists who are interested in playing casino games.

Macau offers a gambling experience that is different to that which is on offer at many western casinos, as many of the casinos on offer eastern variants on traditional casino games that you will not find at any of the top western casino resorts.

Furthermore Macau also offers historic and famous casinos that should be of interest to any visitor. Two of the oldest casinos in Macau are the Casino Lisboa and Grand Lisboa, which create a distinct historic interest for anyone who wants to learn more about the development of casino gambling there.

However Macau also has a modern feel and offers much more to offer visitors in 2013, including the quite spectacular vision it provides at night. Every evening the lights on the outside of the building are switched on to create the effect of an giant neon pineapple. At the same time the interior décor retains serious kitsch appeal – since it has remained the same since the place was opened back in the 1960s

With its mix of culture and history mixed up with a feel of being in Las Vegas, there’s no wonder many people are visiting Macau to experience a casino feel incomparable to playing Lucky Nugget online slots.

China pushes its economic leverage

Chinese woman working on laptop

The rise of China and its impact on economies all over the world isn’t a new story, but this overview in the New York Times is worth reading. The tone is one of looking at the downside of China’s economic empire and the unwillingness of desperate partners like European nations to assert themselves. But there is an upside, as China can provide much needed capital to struggling countries, and this also gives China a huge stake in stability around the world. There are certainly concerns on issues like the environment and human rights, but one needs to look at the big picture as well. Fortunately, President Obama’s foreign policy is aimed at engaging but also containing China, and he has been willing to use our own leverage in this relationship.

Challenges for shale gas in China

drilling rig at sunset

The shale gas fracking boom in the United States has been a game-changer for the US economy and energy needs. Now other countries are looking to exploit this potential in their own country, and the potential in China is huge. That said, there are also many challenges to making this a reality in China.

In China there’s a giddy feeling that the next energy gold rush is about to begin. Beneath the mountains of Sichuan province, the deserts of Xinjiang, and elsewhere, China contains twice the shale- gas reserves as the U.S., says the U.S. Energy Information Administration. China’s national planners enthusiastically back boosting natural gas production, which accounts for just 4 percent of the country’s total energy mix now. The government wants to double that share by 2015. “There’s a lot of exuberance,” says Zhou Xizhou, who leads the research firm IHS Cera’s China Energy practice. “In Beijing, if you work in energy, you probably receive a shale-gas conference notice every week.”

The impact of a shale-gas boom in China will be enormous, with the potential benefits and likely environmental costs perhaps even greater than in the U.S. So far, though, the output in China has been a trickle because of the challenging geography and the monopolistic structure of China’s oil and gas sector. While about 200,000 of the horizontal wells used in fracking have been drilled in the U.S., China has about 60. China has 1,275 trillion cubic feet of shale-gas reserves, compared with 637 trillion cubic feet for the U.S.

The U.S. shale-gas revolution was launched largely on the flatlands of Texas, North Dakota, Pennsylvania, and other accessible areas. In China’s mountainous Sichuan basin, “the formations seem to be more faulted and folded, which makes it more difficult and less economic to drill long horizontal well bores,” says Briana Mordick, an Oil & Gas Science Fellow at the Natural Resources Defense Council and formerly a geologist at Anadarko Petroleum.

It will be interesting to see how this develops. Some environmentalists hate the fracking boom, while others acknowledge that new natural gas tends to replace the much dirtier coal as an energy source, which is a huge plus for the environment. China’s future coal plans have terrified the rest of the world. If they can figure out fracking, perhaps the net gains in carbon emissions can be mitigated.

Life in Macau


Free image courtesy of FreeDigitalPhotos.net

Here’s an interesting article that explains how there’s much more to Macau than just huge casinos.

Order a generous slice of Macau and you’d be brave to swallow it whole. This is a historical layer cake of clashing flavours. Long, unremarkable centuries of sleepy ancient Chinese fishing villages infused with a whiff of incense from Taoist temples. A slab of Portuguese colonialism – rich, centuries-thick and packed with spices. And on top, a great slathered-on crust of neon candy – luminescent pink, saccharine sweet, saliva-inducing.

It sounds great.

Caterpillar gets duped in China deal

Well, this is embarrassing.

Caterpillar, based in Peoria, Ill., disclosed on Jan. 18 that it had uncovered “deliberate accounting misconduct” at Zhengzhou Siwei Mechanical & Electrical Manufacturing Co., a maker of roof-support equipment for underground coal mines that it had acquired last June. Siwei is a subsidiary of ERA Mining Machinery, a Hong Kong-listed firm controlled by a shell company whose principals are two American entrepreneurs in China. Caterpillar paid about $700 million for ERA but said earlier this month it was writing down the value of that company by $580 million. “It’s disappointing,” Oberhelman said. “But how we respond defines us.”

Of course this stuff doesn’t only happen in China. Fraud occurs everywhere. But you would think that a company like Caterpillar would be a little more careful here.

Is China Still Developing?

China has officially surpassed Japan to become the second largest economy of the world. No major world actions are taken without China taking part in the process. But still the tag of a developing country is used to describe China. Till when is a country considered to be Developing? Does the sheer size of the country’s population give it the unfair advantage of a developing nation forever? China has become the manufacturing hot spot for automobiles, toys, electronic goods, cell phones, laptops, etc. Apart from that, now thousands of Americans are going to China for jobs. The postcards that are being sent by these people do not say anything about the developing status of China. In fact it can be called as a developed country with problems associated with over explosion of population.

Recently China at the G77 developing nations conference suggested moves to curb climate change by forcing developed countries to give assistance to developing countries like China. The Chinese received a stern reply form United States who completely deny China still being a developing country. The United States have agreed to pay every other developing country except China, rightly so. Instead United States is urging China to invest in carbon caps in other developing nations.

China has one of the worlds largest GDP, but the same can not be said about its annual per capita income, which is around $2,500. This is 4 percent of what the GDP per capita is in United States. Hence the line between developed and developing country is badly drawn. Although million have been successfully lifted from poverty, still millions are left in the same hole. It can be termed as a process of non-trivial wealth. Hence unless the problem of developed or developing country is not solved, there seems to be no solution to the climate change agreements.

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