Japan selling China buying hmm

[Hotrod]

Heres some interesting info about MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES

http://www.treas.gov/tic/mfh.txt

[Hotrod]

http://sfgate.com/cgi-bin/article.cgi?f=/n/a/2007/05/22/national/w093004D29.DTL

The United States and China opened a new round of high-level economic talks on Tuesday with the leader of China's delegation bluntly saying that any effort to politicize economic differences between the two nations was not acceptable.

The Bush administration was pushing for concrete results to show to an increasingly restive Congress, where lawmakers blame America's soaring trade deficits and the loss of one in six manufacturing jobs since 2000 in part on China's trade practices in such areas as currency manipulation and copyright piracy.


The U.S. delegation also raised the issue of food safety highlighted by such incidents as the deaths of pets who had eaten pet food made with tainted wheat gluten imported from China.


U.S. Trade Representative Susan Schwab, who briefed reporters on the discussions, said food safety was raised over breakfast by Agriculture Secretary Mike Johanns and Health and Human Services Secretary Michael Leavitt.


"They know this is an issue that concerns us and concerns the American people," said Commerce Secretary Carlos Gutierrez, who said the issue would be addressed more formally in a later session before the talks conclude on Wednesday.


In opening remarks delivered in an ornate government auditorium decked out in flags from both nations, Chinese Vice Premier Wu Yi cautioned the United States against pursuing a blame-game.


"We should not easily blame the other side for our own domestic problems," Wu said, speaking through an interpreter. "Confrontation does no good at all to problem-solving."


Wu, who gained a reputation for tough speaking when she was China's top trade negotiator, said that both sides should "firmly oppose trade protectionism." She said that any effort to "politicize" the economic relationship between the two nations would be "absolutely unacceptable."


Wu and her delegation were scheduled to meet behind closed doors on Thursday with key leaders of Congress, including House Speaker Nancy Pelosi, who has been a vocal critic of China's human rights policies. Lawmakers are pushing a variety of bills that would impose economic sanctions on China in the wake of a trade deficit with China that last year hit $232.5 billion, accounting for one-third of America's total record deficit of $765.3 billion.

Treasury Secretary Henry Paulson created the Strategic Economic Dialogue last year as a way to get the country's top policymakers together twice a year to achieve results that will ease trade tensions. The first meeting was held in Beijing last December.


Breakthroughs at this meeting were expected in the area of cutting tariffs on sales of American energy technology products and services in China and increasing U.S. airline passenger and cargo flights to China.


However, success in another area — getting China to boost the stake that American firms can own in Chinese financial service companies — seemed less certain. The current cap on foreign ownership of Chinese banks is 25 percent.


U.S. officials tamped down expectations of any big outcomes, saying the meetings were not meant to be negotiating sessions.


But Gutierrez said there was impatience on the U.S. side. He spoke of the "need to make progress in all areas as soon as possible."


Addressing the rising anger in Congress, Schwab said, "This is not necessarily reflective of more protectionism or anti-Chinese sentiment, but rather that there are concerns there and we need to be responsive."


American manufacturers contend that China is manipulating its currency to keep it undervalued against the dollar by as much as 40 percent, making Chinese goods cheaper in the U.S. market and American products more expensive in China.


But there was no expectation of further progress in this area after China's surprise announcement last Friday that it was slightly widening the range its currency could move against the dollar in a single day from 0.3 percent to 0.5 percent. Critics were unimpressed by the small widening of the currency band.


There were reports that China considered calling off this round of talks after the Bush administration, in an effort to pre-empt tougher actions in Congress, imposed penalty tariffs on Chinese paper products in a fight over government subsidies, and filed cases against China before the World Trade Organization complaining about lax enforcement of copyright protections for American movies, music and other products.


China in recent days has made a number of moves in an effort to defuse American unhappiness. In addition to announcing the slight change in its currency band, China earlier in the month said it would purchase $4.3 billion in American high-technology products and in recent days announced that it would invest $3 billion of its $1.2 trillion in foreign currency reserves in Blackstone Group LP, the second-largest U.S. private equity firm

[Hotrod]

http://news.yahoo.com/s/ap/20070511/ap_on_re_us/military_secrets_china

"SANTA ANA, Calif. - After a six-week trial, a federal jury convicted a Chinese-born engineer of conspiring to export U.S. defense technology to China, including data on an electronic propulsion system that could make submarines virtually undetectable."

"The government accused Mak, a naturalized U.S. citizen, of taking thousands of pages of documents from his defense contractor employer, Power Paragon of Anaheim, and giving them to his brother, who passed them along to Chinese authorities over a number of years.

Mak was arrested in 2005 in Los Angeles after FBI agents stopped his brother and sister-in-law as they boarded a flight to Hong Kong.

Investigators said they found three encrypted CDs in their luggage that contained documents on a submarine propulsion system, a solid-state power switch for ships and a Power Point presentation on the future of power electronics."

[Hotrod]

http://www.marketwatch.com/news/story/kuwait-unhooks-dinar-dollar-signaling/story.aspx?guid=%7B8A343040%2DAA8A%2D4D07%2D948A%2 D0E0D58C1AF98%7D

NEW YORK (MarketWatch) -- The Central Bank of Kuwait's decision over the weekend to untie its currency from the U.S. dollar might signal a growing trend among global central banks, especially those with large foreign-exchange reserves, to more actively manage their currencies.
And such a shift is likely to put the U.S. dollar under increasing pressure, analysts said. Kuwait on Sunday, in a move to combat inflation, abandoned its dinar's peg to the U.S. dollar in favor of a basket of international currencies. The dinar had been pegged against the dollar since 2003. The central bank has not announced the composition of its currency basket. Kuwait also announced it would revalue the dinar by 0.37% against the dollar.
Weakness in the U.S. dollar has pushed up inflation and hurt the domestic economy, the central bank said.
"The significant drop in the exchange rate of the American dollar against most other major currencies had a negative impact on the Kuwaiti economy over the past two years," Sheikh Salem Abdel Aziz Al Sabah, governor of the central bank, told the official Kuwait news agency.
"In the Middle East, it's a story of dollar-concentration risk," said Stephen Roach, chief economist of Morgan Stanley. Kuwait's just-announced decision "may well be the first step in a regional diversification strategy that attempts to temper such risks," he said.
Oil producers in the Gulf not only price their one commodity -- oil -- in dollars, but their currencies for the most part are also dollar-pegged, Roach said.
"As a result, their foreign exchange reserves are massively overweight dollars," he said. "The region worries increasingly about excessive exposure to a chronically weak dollar scenario as an unavoidable outgrowth of a prolonged U.S. current account adjustment."


The news from Kuwait "cannot be seen as U.S.-dollar supportive," said Dennis Gartman of the Gartman Letter. "For if Kuwait, who owes the U.S. so much for having liberated it from Iraq's clutches in the war there during Bush senior's tenure in office, abandons the dollar, what then of the other currencies of the world still pegged to the dollar?"

[alkemical]

http://en.rian.ru/world/20070523/65966459.html

Regional currency to replace dollar in Argentina-Brazil trade

[defenseman]

http://news.yahoo.com/s/ap/20070511/ap_on_re_us/military_secrets_china

"SANTA ANA, Calif. - After a six-week trial, a federal jury convicted a Chinese-born engineer of conspiring to export U.S. defense technology to China, including data on an electronic propulsion system that could make submarines virtually undetectable."

"The government accused Mak, a naturalized U.S. citizen, of taking thousands of pages of documents from his defense contractor employer, Power Paragon of Anaheim, and giving them to his brother, who passed them along to Chinese authorities over a number of years.

Mak was arrested in 2005 in Los Angeles after FBI agents stopped his brother and sister-in-law as they boarded a flight to Hong Kong.

Investigators said they found three encrypted CDs in their luggage that contained documents on a submarine propulsion system, a solid-state power switch for ships and a Power Point presentation on the future of power electronics."

Put this guy on a boat headed out on weekly ops, I'm sure the crew can arrange for a quick tube cleaning courtesy of Mr. Mak. Reminds me of walker in the eighties...........dman

[defenseman]

http://en.rian.ru/world/20070523/65966459.html

Regional currency to replace dollar in Argentina-Brazil trade

I've been looking at some information lately where we could be headed for stagflation. That would be bad indeed...dman

[alkemical]

Greenspan fears China market fall (http://news.bbc.co.uk/1/hi/business/6686453.stm)

Chinese shares have fallen after former US Federal Reserve head Alan Greenspan said its stock market was overvalued and due for a "dramatic contraction".
His remarks had an impact on markets in the US, Europe and Asia, fanning already prevalent fears of a slowdown in China's booming economy.

Signs that Beijing was trying to rein in its startling growth earlier this year led to a temporary fall in shares.

But markets have since risen to levels Mr Greenspan said were "unsustainable".

Market bubble?

The Shanghai Composite Index dropped as much as 1.5% following Mr Greenspan's comments before closing down 22.58 points, or 0.5%, at 4151.13.



He said Chinese markets had risen by 50% since the start of the year and that this trend could not continue for much longer.

Analysts were divided over Mr Greenspan's comments, some fearing a bursting of the stock market bubble but others suggesting his views were overstated.

"The Chinese market is something that Greenspan does not know very well," commented Zhou Fengwu, an analyst at Orient Securities.

"Many Chinese industries have huge potential to expand in coming years and long-term prospects for the market are still very bullish."

Since the beginning of the year, millions of ordinary Chinese citizens have invested in the stock market, many taking money from their savings accounts, where interest rates are relatively low.

The Chinese government recently made it clear it would not intervene to prop up the market.

Other global markets were affected by nervousness over China with Australia's benchmark index falling more than 1% and Japan's main exchange trading flat.

In Europe, markets in London, Frankfurt and Paris were all down on the day in afternoon trading.

[alkemical]

China warns of countermeasures if US Congress passes trade bill (http://rawstory.com/news/afp/China_warns_of_countermeasures_if_U_06122007.html)


China warned Tuesday of unspecified countermeasures if the US Congress adopts a bill on Beijing's foreign exchange regime that could lead to higher US tariffs on Chinese imports.

"China has all along held that the development of Sino-US bilateral trade is in the interest of both sides," foreign ministry spokesman Qin Gang told reporters.

But "the US Congress could pass this legislation which will lead to the problem of higher tariffs on Chinese goods... If this happens then the Chinese departments concerned will make a response."

US lawmakers are to unveil a proposed law this week that could address concerns China is keeping its currency undervalued, Congressional staff said Monday.

US lawmakers say China grossly undervalues the yuan, making US-bound exports cheaper and fuelling a ballooning US-China trade deficit which hit 232.5 billion dollars last year.

Despite heavy US dependence on imports from China, some lawmakers want trade sanctions, including a possible 20 percent across-the-board tariff on Chinese goods.

"Fundamentally misaligned currencies distort global markets and put US manufacturers and farmers at a competitive disadvantage," said a statement by the Senate finance panel, which has jurisdiction over US trade policy.

Qin disputed this on Tuesday, asking: "Is the yuan high or low? The US Congress says it is high, but whose standard is this? It is the US standard," he said.

He said that China would listen to US complaints on the yuan and seek to appropriately resolve trade disputes but insisted that Washington had no right to determine the value of the Chinese currency.

"The (yuan) exchange rate should be conducive to China's current conditions and should be in the interests of China's economic development and global economic development," Qin said.

"The reform of the yuan exchange rate is ongoing and is dependent on market demand and supply."

He said trade disputes needed to be solved as Sino-US economic and trade cooperation continued to develop, "by taking into consideration the concerns of the other."

"We must especially not politicise economic and trade issues. We also must not take the concerned issues, especially American domestic issues and transfer them into the Sino-US bilateral economic and trade relationship," he said.

Qin made the announcement a day after China announced its May trade surplus surged nearly 73 percent from a year earlier to 22.45 billion dollars.

It set China on course for a massive surplus for all of 2007 despite a series of measures by the government to cool exports and thereby ease tensions with the United States and its other major trading partners.

Based on current trends, the surplus could this year surpass 320 billion dollars, 10 times more than the level in 2004, London-based Capital Economics said.

[Hotrod]

Rock and hard place.