Tagged: China

China to introduce deposit insurance — and more!

China is to adopt a deposit insurance scheme to better protect savers and free up interest rates.

The Legislative Affairs Office of China’s State Council published a set of draft regulations containing 23 articles on its website on Sunday to solicit public opinion…

Financial institutions will be required to pay insurance premiums to a special fund and an agency will be set up to manage the money. Domestic banks’ overseas branches and foreign banks’ China branches are exempt.

The fund will pay maximum compensation of 500,000 yuan ($81,500) per depositor if a bank suffers insolvency or bankruptcy.

This covers 99.6% of China’s depositers.

Banks will cover losses more than 500,000 yuan with their own assets, according to the regulations.

The scheme will significantly improve the competitiveness of medium and small-sized banks as the insurance will assure depositors of the safety of their savings, according to the central bank…

Deposit insurance is implemented in 112 economies to protect depositors, in full or in part, from losses caused by a bank’s inability to pay its debts when due…

“With the scheme in place, the government will retreat and leave banks to bear their own risks,” said Guo Tianyong, a banking researcher with the Central University of Finance and Economics.

The deposit insurance scheme is considered a precondition for China to free up deposit rates — the last and most important step of interest rate liberalization, according to Lian Ping, chief economist with the Bank of Communications.

The important paragraph in this post is next-to-last above. The way this proposal is being promulgated – there will not be any possibility of banks treated as Too Big To Fail.

Hmmm. Didn’t we used to have a similar style of management in the United States? Before George W. Bush’s second term, anyway.

China pledges $2 trillion leading fight against climate change

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Click to enlarge — Winter wind in Inner Mongolia

Chinese President Xi Jinping agreement last week with President Barack Obama requires a radical environmental and economic makeover. Xi’s commitment to cap carbon emissions by 2030 and turn to renewable sources for 20 percent of the country’s energy comes with a price tag of $2 trillion.

The pledge would require China to produce either 67 times more nuclear energy than the country is forecast to have at the end of 2014, 30 times more solar or nine times more wind power. That almost equals the non-fossil fuel energy of the entire U.S. generating capacity today. China’s program holds the potential of producing vast riches for nuclear, solar and wind companies that get in on the action.

“China is in the midst of a period of transition, and that calls for a revolution in energy production and consumption, which will to a large extent depend on new energy,” Liang Zhipeng, deputy director of the new energy and renewable energy department under the National Energy Administration, said at a conference in Wuxi outside of Shanghai this month. “Our environment is facing pressure and we must develop clean energy…”

By last year, China had already become the world’s largest producer of wind and solar power. Now, with an emerging middle class increasingly outspoken about living in sooty cities reminiscent of Europe’s industrial revolution, China is looking at radical changes in how its economy operates…

Meeting the challenge is anything but assured. China has already run into difficulty managing its renewables. About 11 percent of wind capacity sat unused last year because of grid constraints, with the rate rising to more than 20 percent in the northern provinces of Jilin and Gansu, according to the China Renewable Energy Engineering Institute.

I wonder if paragraphs like this are deliberately constructed to satisfy editorial jingoism or are the product of reporters who know nothing about alternative energy. Grid tie constraints is the single biggest problem – after flat earth politicians – facing all wind and solar installations, invariably built away from existing power transmission grids.

Xi sees no alternative to going big. “Letting children live in a good ecological environment is a very important part of the Chinese dream,” he said last week as he welcomed Asian leaders to a summit in Beijing. His words aren’t just lip service — pressure is building…

The targets Xi announced alongside Obama have been hailed as a boost for negotiations at a United Nations conference beginning Dec. 1 in Lima, Peru. Envoys from more than 190 nations are seeking to craft a global pact that world leaders will sign next year in Paris…

“The fact is the Chinese government know they need to clean things up,” Martijn Wilder, head of the global environmental markets practice at law firm Baker & McKenzie, said by phone from Sydney. “China is a developing country. There are challenges, but those are rapidly being addressed.”

RTFA for the useful bits scattered and there. The article isn’t the sort of State Department puppetry the NY TIMES has been famous for – since the start of the Cold War – but, it’s still a crap shoot which Bloomberg editor ends up providing “guidance”.

There is no mention that Congress will be controlled by dillweeds who not only won’t back up President Obama’s pledge to China and the world – they will actively work to promote the very opposite since they’re uniformly a clot of bought-and-paid-for climate change deniers.

When Jack Ma throws a one-day sale, he ain’t just kidding!

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Alibaba Group Executive Chairman Jack Ma looks back at a giant electronic screen showing real-time sales figures of the company’s Taobao.com and Tmall.com, on the “Singles’ Day” online shopping festival, at the company headquarters in Hangzhou, China.

Watching the sidebar on Bloomberg TV, they reported over $9.3 billion in the 24-hour sale. The first billion$ took 12 minutes. During peak hours, Alibaba was processing 19,000 sales per second.

Pic of the Day


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Anonymity for lottery winners is respected in China. But, regulations require winners to show up publicly to claim their winnings. So, a tradition has grown of winners arriving in disguise, in costume.

This week – the largest win in history happened – half a billion yuan/ab’t 80 million US dollars.

The winner chose to be a comic book bear.

A couple of new architectural delights


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Dutch law now dictates that meat and fish markets must be covered for hygiene purposes. Rotterdam’s Markthal (literally, Market Hall) has undergone a redesign to accommodate the requirements. The new market is housed under a huge arch from which apartments look down upon it.


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Waking up with the rising sun is one thing, but waking up inside the rising sun is quite another. Visitors to the recently completed Yanqi Lake Kempinski Hotel in China can do just that, though. The hotel has been designed to look like the sun rising over the Yanqi Lake.

Surely a couple of spots worth visiting, staying in, shopping – and just taking the time to marvel at what architectural design cen do with modern materials.

Fossil fuel electricity under real threat from solar and wind power

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Click to enlargeStiftung OFFSHORE-WINDENERGIE

Of all the developed nations, few have pushed harder than Germany to find a solution to global warming. And towering symbols of that drive are appearing in the middle of the North Sea.

They are wind turbines, standing as far as 60 miles from the mainland, stretching as high as 60-story buildings and costing up to $30 million apiece. On some of these giant machines, a single blade roughly equals the wingspan of the largest airliner in the sky, the Airbus A380. By year’s end, scores of new turbines will be sending low-emission electricity to German cities hundreds of miles to the south.

It will be another milestone in Germany’s costly attempt to remake its electricity system, an ambitious project that has already produced striking results: Germans will soon be getting 30 percent of their power from renewable energy sources. Many smaller countries are beating that, but Germany is by far the largest industrial power to reach that level in the modern era. It is more than twice the percentage in the United States.

Germany’s relentless push into renewable energy has implications far beyond its shores. By creating huge demand for wind turbines and especially for solar panels, it has helped lure big Chinese manufacturers into the market, and that combination is driving down costs faster than almost anyone thought possible just a few years ago.

Electric utility executives all over the world are watching nervously as technologies they once dismissed as irrelevant begin to threaten their long-established business plans. Fights are erupting across the United States over the future rules for renewable power. Many poor countries, once intent on building coal-fired power plants to bring electricity to their people, are discussing whether they might leapfrog the fossil age and build clean grids from the outset.

A reckoning is at hand, and nowhere is that clearer than in Germany. Even as the country sets records nearly every month for renewable power production, the changes have devastated its utility companies, whose profits from power generation have collapsed.

Professional naysayers, bought-and-paid-for skeptics, conservative ideologues rooted to political failures like Ayn Rand see the fruit of their labors rejected by economic reality – as usual. Solid facts, real advances are beginning to progress as predicted – or better. That won’t shut them up. The money tap remains wide open. But, ordinary folks, working class, middle class, however you slice and dice your class analysis, are starting to reap the benefits of the new means of renewable energy production.

No one is more tradition-bound than public utilities. They function like constipated manure machines. They’ve been producing cowshit for research and analysis for so many generations they are incapable of changing their business model to match a dynamic economic landscape.

Meanwhile, globalized competition encouraged by the group of nations acting responsibly to counter climate change are affecting the cash flow and profits of corporations sitting around like children in a temper tantrum – demanding the people who recognized the need for change now spend tax dollars to bail them out of their self-generated disaster.

They should be replaced by common sense, scientific, economic solutions. Send them away. Build them a leaky rest home next to one of the Koch Brothers coal heaps.

China ready to spend $16 Billion on charging stations for electric cars

China is considering providing as much as $16 billion in government funding to build electric-vehicle charging facilities and spur demand for clean cars, according to two people familiar with the matter.

The policy will be announced soon, said the people, who asked not to be named because the discussions are private. The people declined to provide further details of the plan such as how long the program would last or whether the chargers would be compatible with cars made by Tesla Motors…

Increased state funding would be a tailwind for carmakers coping with consumer concerns over the price, reliability and convenience of electric vehicles. It would also build on the tax breaks announced by China, the world’s biggest carbon emitter, to fight pollution and cultivate its local EV industry, which includes BYD Co. and Kandi Technologies Group…

Among recent government initiatives, China will exempt new-energy vehicles — defined as electric cars, plug-in hybrids and fuel-cell vehicles — from a purchase tax starting next month, and has ordered government departments to buy such vehicles for their official fleets.

Supporting a strategic and emerging industry like new-energy vehicles is a “win-win” for industrial development and environmental protection, the central government said last month in the statement announcing the waiver of the purchase tax. Developing new-energy autos is important for spurring innovation, promoting energy savings and reductions in emissions, and will help to drive domestic demand and nurture new avenues of growth, according to the notice.

Chinese governmental departments target a minimum of plug-in vehicles to 30% over the near term.

Let’s see. I’ll go peek at what the United States target is. Golly – a million EV’s on the road in another decade. Based on federal tax breaks for consumers.

There is a grouping of eight Democrat-dominated state legislatures collectively aiming for over three million electric vehicles and plug-in hybrids on the road in the same sort of timeframe. Triple the federal goal!

Oh, that’s right. There’s a clot of bought-and-sold politicians in the way of any such national spending. It’s called Congress. Stuffed full of cowards and decrepit ideologues.

What a free trade zone is all about – Amazon ready to expand in China!

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Amazon.com will set up shop in China’s Shanghai free trade zone, the company said on Wednesday, aiming to take advantage of less stringent trade regulations to sell a wider range of products in the country.

The U.S. online retailer’s move shows an intent not only to remain in China but to beef up its presence in an e-commerce market dominated by Alibaba Group Holding and Beijing-based JD.com, the second-biggest player.

Amazon did not say when the company is likely to begin operations in the free trade zone, which enjoys more relaxed import and export regulations than the rest of China.

The company is also pushing its Amazon Web Services (AWS) cloud computing business in China and said in December that the country will have its own AWS region to improve speeds for its mainly corporate customers…

Amazon’s move to the free trade zone comes nearly a year after the zone was launched, attracting attention from overseas businesses and hailed as one of China’s boldest reforms in decades. However, there has been a lack of specific policy details since the initial fanfare.

Foreign banks, such as Citigroup and HSBC Holdings have set up branches in the zone, but many foreign companies have been reluctant to follow suit, citing a lack of clarity on what will and will not be allowed in the zone.

The 2nd half of that last sentence is representative of what investors call the chickenshit index. Since Reuters was purchased by Thomson you’re bound to find some editorializing by omission. It’s the imperial disease.

In truth, this first free trade zone has been so successful that another dozen or more cities around China are lobbying to follow Shanghai’s model.

Impressive construction projects — 2014


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The Dutch have a complex relationship with water – living in a country that floods a lot will do that to you. So one of the most unique new residential buildings in the Netherlands takes a particularly interesting approach to the problem. The Citadel is the world’s first floating apartment complex, consisting of 60 units atop a floating platform on a lake in the “New Water” development in Naaldwijk. Each apartment has a unique floor plan created from modular elements, and when completed the complex will float in water that’s 12 feet deep. It will be connected to the mainland by a floating bridge.

And here’s a link to the site showing all ten of the construction projects.

Thanks, Ursarodinia

BRICS nations found bank to rival Western-dominated World Bank and IMF

The so-called BRICS countries agreed to form an international development bank with aspirations to challenge the dominance of the World Bank and the International Monetary Fund.

Leaders of Brazil, Russia, India, China and South Africa said Tuesday that the New Development Bank will start with $50 billion in capital and $100 billion as a currency reserve fund for liquidity crises…

Still, the BRICS bank, which could add more member nations, represents a bid to expand the influence of the BRICS emerging markets and act as a counterbalance to institutions run by the U.S. and other developed nations…

As developing countries began playing a larger role in the world economy, their leaders repeatedly complained that they have not been given correspondingly larger voices in international financial institutions such as the World Bank and the IMF, both based in Washington. The U.S. typically appoints the World Bank president, and European countries appoint the IMF chief.

“International governance structures designed within a different power configuration show increasingly evident signs of losing legitimacy and effectiveness,” said the official statement signed by the BRICS leaders, who met in Fortaleza, Brazil, on Tuesday. “We believe the BRICS are an important force for incremental change and reform of current institutions toward more representative and equitable governance.”

Brazilian President Dilma Rousseff, Russian President Vladimir Putin, Indian Prime Minister Narendra Modi, Chinese President Xi Jinping and South African President Jacob Zuma hammered out some of the final details before signing the agreement Tuesday.

Among the terms are that the bank will be in Shanghai, its first president will be from India, and the first chair of the board of directors will be from Brazil…

Analysts expect that other countries – like Indonesia, Mexico or Turkey – will join the bank over time. Certainly, they and their neighbors have no shortage of conflicts with restrictions important to the fiscal bears directing the IMF or the World Bank.

I doubt anyone expects either of the banks under the thumb of the US [and to a lesser extent, the EU] to modernize, to actively support the developing nations in any goal beyond being a source of cheap labor, raw materials, for Western corporations.