China Readings for September 13th

"Sinocism is the Presidential Daily Brief for China hands"- Evan Osnos, New Yorker Correspondent and National Book Award Winner

  • 8 Ways That Sina Weibo Will Shut You Up, or Shut You Down | Penn-Olson
  • The Renminbi: The Political Economy of a Currency – By Arthur Kroeber | Foreign Policy – Why it’s a mistake for the United States to fear the yuan.
  • Analysis: Suspicion greets China’s Europe expansion -Reuters – For cash-strapped Europe, China is an appealing source of financing. But the response to an attempt by a Chinese businessman to open a leisure resort in Iceland suggests growing suspicion and a potential backlash that could stifle the relationship.
  • 审查VIE下的伪恐慌:和中国互联网没太大关系-搜狐IT– New M&A rules actually no threat to Chinese Internet firms with VIEs. threat exaggerated?新政一出台,便有媒体称,引发了VC(风险投资)、PE(私募基金)们的恐慌,尤其是中国几乎所有大型互联网企业都采用VIE结构,涉及资产至少上万亿美元。然而,《IT时报》记者仔细研读新规,并采访业内人士发现,所谓“恐慌”颇有夸大之嫌,事实上,新规之于中国大多数互联网企业,并无太大关系。
  • China trade deal brings Taiwan exports boom – – Taiwan’s total exports in the first eight months of the year rose 15.7 per cent compared with a year ago to US$208bn. Direct exports to China expanded at a slightly slower rate of 12 per cent over the same period, but some industries helped by the Ecfa deal saw phenomenal growth. Taiwan is the world’s fourth-biggest exporter of machine tools, behind Japan, Germany and Italy. Machine tool exports to China in the first half of the year rose 62 per cent compared with a year earlier to US$360m, while agricultural exports to China grew more than fourfold over the same period.
  • More Clues Of A Mega Mortgage Refinance Plan On The Way-Krasting– Subprime Nation//We are going to see a ReFi proposal along the lines described above announced in the next few weeks. This will justify the Fed to initiate $1 trillion of Operation Twist. That announcement will come on September 21st.

    MBS holders will get hit on the head to the tune of $25b. But no one cares about them any longer. Punish the savers.

  • Goldman’s Jim O’Neill Bets The (Horse) Farm On Chinese Decoupling All Over Again | ZeroHedge – Goldman’s Jim O’Neill, who refuses to acknowledge that decoupling between the US and the BRICs not only never existed, but was always a flawed premise to begin with, has released his latest dose of Kool-Aid, in which he bets the horse track on, you guessed it, Chinese decoupling…. Sigh. Then again what can one expect: just like Bernanke will keep trying QE until QE succeeds (it won’t) or the market breaks; and just like the Krugmanites will keep pushing for an ever bigger fiscal stimulus (because the last one is never big enough, regardless of how big it is), why should one expect the latest addition to Goldman’s biggest loss leader (GSAM) be any different. And what makes this particular episode not only tragic but very much comic, is that the former “Red Knight” now sees the Chinese launch of a fully convertible and floating Yuan by 2015 as the panacea to the US stock market, and Goldman bonus doldrums (because when one cuts to the chase, that’s really what it’s all about). Little does it bother the BRICer that the advent of a new reserve currency would have a devastating impact not only on existing risk markets, but on so-called risk free ones as well. Remember that 0.000% yield on last week’s 4 week bond auction?