Tag: China

Russia signs second gas contract with China

Russia plans to sign a 30-year gas supply contract with China via the western route, Russian energy giant Gazprom’s CEO Alexei Miller told President Vladimir Putin on Wednesday. The route to supply gas to China via western Siberia may be implemented faster than the eastern route, through which Moscow has agreed to ship the fuel to its Asian neighbor in May.

“Gazprom plans to sign a contract to supply China with 30 billion cubic meters of natural gas via western route over thirty years,” Miller said.

The China-Russia West Route natural gas pipeline project connects gas deposits in Western Siberia and the northwestern part of China via Russia’s Altai region, securing the world’s top energy user a major source of cleaner fuel.

The potential of this route is “enormous”, the Gazprom CEO told the Russian President.

“It is even greater than in Eastern Siberia and, without a doubt, we can increase the volume of gas supplies very quickly via the western route, depending on the growth in demand in the Chinese market,” said Miller.

Gazprom is to sign the 30-year contract with China National Petroleum Corporation (CNPC) in November. The deal will directly link Russia’s huge gas fields to Asia’s booming market for the first time.

Miller also said Gazprom might consider more than doubling the volume of supply.

“We plan to sign a contract for a volume of 30 billion cubic metres for 30 years, though the talks have also looked at other figures for new contracts concluded for the western route. We are looking at the possibilities for supplying 60 billion cubic metres or up to 100 billion cubic metres of gas to China,” Miller told Putin in Moscow.

China and Russia signed a $400-billion gas supply deal in May this year, opening up a new market for Moscow as it risks losing European customers over the Ukraine crisis.

The Russian part of the joint venture pipeline, officially dubbed “Power of Siberia”, will be built by Gazprom with a total investment of $55 billion.

Construction of the China- Russia East Route natural gas pipeline started this month in this eastern Siberian city of Yakutsk.

Source: The BRICS Post

Sierra Leone: China to send ebola mobile lab

Mr. Xu Zhou, spokesman of the Chinese Embassy announced in Freetown on Monday, 15th September that China will send a China Center for Disease Control (CDC) medical expert team comprising of 59 personnel and a mobile laboratory to Sierra Leone on Wednesday, 17th September by chartered airplanes to strengthen Sierra Leone’s endeavour to contain Ebola.

He indicated that this was a decision made in consideration of the continuous spread of Ebola in the country and upon the request of the Sierra Leonean government, and it is another veritable gesture of solidarity of the Chinese government and people to the Sierra Leonean government and people.

He noted that this is the third batch of China’s humanitarian aid to support Sierra Leone in fighting against Ebola. Previously, China provided two batches of emergency medical materials valued at RMB 11 million Yuan (equally 1.8 million USD) to Sierra Leone and sent two teams of medical experts to the country.

He added that China announced on 12th September a further 200 million Yuan (equally 32.54 million USD) package of humanitarian aid including food, supplies for disease control, emergency treatment facilities and capital support to African countries and international organizations to help control Ebola. In addition, China will also promote long-term medical cooperation with African countries to help them raise their disease control and response abilities and improve public health systems.

A difficult question: The rigged gold market

In a radio interview recently Alasdair Macleod was asked a question to which he could not easily give a satisfactory reply: if the gold market is rigged, why does it matter?

I have no problem delivering a comprehensive answer based on a sound aprioristic analysis of how rigging markets distorts the basis of economic calculation and why a properly functioning gold market is central to all other financial prices. The difficulty is in answering the question in terms the listeners understand, bearing in mind I was told to assume they have very little comprehension of finance or economics.

I did not as they say, want to go there. But it behoves those of us who argue the economics of sound money to try to make the answer as intelligible as possible without sounding like a committed capitalist and a conspiracy theorist to boot, so here goes.

Manipulating the price of gold ultimately destabilises the financial system because it is the highest form of money. This is why nearly all central banks retain a holding. The fact we don’t use it as money in our daily business does not invalidate its status. Rather, gold is subject to Gresham’s Law, which famously states bad money drives out the good. We would rather pay for things in government-issue paper currency and hang on to gold for a rainy day.

As money, it is on the other side of all asset prices. In other words stocks, bonds and property prices can be expected to rise measured in gold when the gold price falls and vice-versa. This relationship is often muddled by other factors, the most obvious one being changing levels of confidence in paper currencies against which gold is normally priced. However, with bond yields today at record lows and equities at record highs this relationship is apparent today.

Another way to describe this relationship is in terms of risk. Banks which dominate asset markets become complacent about risk because they are greedy for profit. This leads to banks competing with one another until they end up ignoring risk entirely. It happened very obviously with the American banking crisis six years ago until house prices suddenly collapsed, threatening to take the whole financial system down. In common with all financial bubbles everyone ignored risk. History provides many other examples.

Therefore, gold is unlike other assets because a rising gold price reflects an increasing perception of general financial risk, ensuring downward pressure on other financial asset prices. So while the big banks are making easy money ignoring risks in equity and bond markets, they will not want their party spoiled by warning signs from a rising gold price.

This is a long way from proof that the gold market is manipulated. But the big banks, and we must include central banks which are obviously keen to maintain financial confidence, have the motive and the means. And if they have these they can be expected to take the opportunity.

So why does it matter if the gold price is rigged? A freely-determined gold price is central to ensuring that reality and not financial bubbles guides us in our financial and economic activities. Suppressing the gold price is rather like turning off a fire alarm because you can’t stand the noise.

Source: cobdencentre.org

China Gold Congress in Beijing

The China Gold Congress is currently in full flight in Beijing. The three day Congress is China’s biggest gold industry event of the year, drawing in participants from across the Chinese and international gold sectors including central banks, mining companies, bullion banks and refiners.

The event, co-sponsored by the World Gold Council (WGC) and the China Gold Association, showcases China’s gold industry and acts as a focus point for what is now the world’s largest gold market in terms of demand and product innovation.

Discussions and forums during the event cover everything from reserve asset management for the official or central banking sector, through to investment products and mining supply. One of the key themes this year is the internationalisation of the gold market.

China’s gold market accounts for one third of global demand, and according to the WGC, is expected to grow another 20% cumulatively from now until the end of 2017.

In what is still a very centrally planned economy despite many market related reforms, nearly all reported gold activities in China flow through the Shanghai Gold Exchange (SGE) in one form or another.

Both the China Gold Association and the Shanghai Gold Exchange were established with government backing and their growth and success reflect a very deliberate pro-gold strategy on the part of the Chinese Government.

Even though the China Gold Association is a non-for-profit member association, it still primarily acts as a conduit and coordination group between the government and the gold producers.

The Shanghai Gold Exchange is the government’s second central hub in China’s gold market.

SGE approved refiners take in production from China’s fragmented gold mining industry and in imports from Hong Kong and other countries.

The gold then flows through the Exchange after which SGE deliveries flow out to the banking sector, the official government sector, and additionally to the jewellery and technology industries.

The development of the Shanghai Futures Exchange also provides an additional venue for hedging and gold price discovery.

In China gold is money and is accepted as such by the general population.

There really does not seem to be a debate about this in Chinese government circles, and another part of the government’s strategy has been to advocate the increased innovative usage of gold by the Chinese banking sector.

This is quite a simple strategy for the government to implement since the four big Chinese commercial banks and many other Chinese banks are state-controlled.

Gold is now used widely in the banking sector in structured products, as gold collateral, and in gold leasing. The presence of the Chinese bullion banks in the market via the Shanghai Gold Exchange (SGE) provides the necessary liquidity that is turning the Exchange into a world player on the global gold market.

For example, the large Chinese banks such as Industrial and Commercial Bank of China (ICBC), Bank of China and Agricultural bank of China all offer gold accumulation plans to the investing public and the WGC estimates that these products currently represent between 100 and 200 tonnes of gold. The large banks are also active in gold trading on a proprietary basis via the SGE.

Earlier this year, ICBC via its purchase of some of Standard Bank of South Africa’s assets had been rumoured to be interested in buying a seat on the London gold fixing panel when Deutsche Bank left the panel, but a buyer of this seat never materialised.

ICBC is not yet a market making member of the London Bullion Market Association (LBMA), which would be a prerequisite to becoming part of the gold fixing panel, but given that the Chinese gold market is beginning to overtake that of London in terms of physical flows and probably price formation, there may not be a need for ICBC to bother being such an active participant in the London market as gold business continues to migrate to the East.

The Chinese government is also responsible for granting gold import licenses to international bullion banks and has supported the establishment of the Shanghai free trade zone where a gold trading platform has been set up for international banks and trading houses.

In fact, in an announcement that coincides with the China Gold Congress today, the Shanghai Gold Exchange just announced that it is launching an internationally tradable yuan denominated physical gold contracts to be traded in the free trade zone for the popular retail 1kg gold bar, the Good Delivery 12.5kg (400 oz) bar popular with central banks, and a smaller 100 gram bar contract.

The US based CME Group that runs the Comex gold futures exchange also appears to have used this week’s China Gold Congress to announce the launch of their competitor product in the form of a 1kg gold contract to be traded in Hong Kong.

With increased regulatory scrutiny on the London gold and silver fixings and what looks like a defensive attempt by the LBMA in London to protect their proprietary gold and silver price discovery auctions via the recently introduced CME/Thomson platform for silver and probably soon to be introduced similar CME platform for gold, it will be interesting to see how the Chinese government’s pro-gold strategy pans out.

We may soon see global gold hub wars between London and New York on the one hand and the increasingly powerful eastern hubs of Singapore, Shanghai and Beijing on the other.

Source: GoldCore

China, Argentina agree on currency swap

Argentina, which defaulted on its debt in July, will receive the first tranche of a multi-billion dollar currency swap operation with China’s central bank before the end of this year, the South American country’s La Nacion newspaper reported on Sunday.

The swap will allow Argentina to bolster its foreign reserves or pay for Chinese imports with the yuan currency at a time weak export revenues and an ailing currency have put the Latin American nation’s foreign reserves under intense pressure.

La Nacion said Argentina would receive yuan worth $1 billion by the end of 2014, the first payment of a loan worth a total $11 billion signed by Argentina’s President Cristina Fernandez and her Chinese counterpart in July.

The daily newspaper said the presidents of the countries’ two central banks had met on the sidelines of a meeting in Switzerland, but did not say how it had obtained the information.

Fernandez’s government has imposed stringent import and capital controls to safeguard the dwindling reserves, now at around eight-year lows, which it needs to pay its debts.

Source: Reuters

China’s ebola drug obtains manufacturing approval

China’s first drug against Ebola has recently obtained manufacturing approval as a special medication for the People’s Liberation Army. The drug named “JK-05” has been developed by the Institute of Microbiology Epidemiology under Academy of Military Medical Sciences.

For the last five years, Professor Wang Hongquan, led a research team, studying the prevention and treatment of the Ebola virus—one of the most virulent viral diseases known to humankind.

“JK-05 is a micro-molecular chemical, and its pharmacological mechanism is to selectively contain the RNA polymerase of the Ebola virus so as to inhibit virus replication,” Academy of Military Medical Sciences Prof. Wang Hongquan said.

According to Wang’s study JK-05 resisted the replication of Ebola cells during cell experiments and testing on animals.

It has also completed both pre-clinical testing and clinical safety evaluation.

Wang stressed that the application of the drug for Ebola treatment is only allowed in emergency situations at the present time. But the war against the epidemic is one fought on many other fronts.

“Countries bordering the affected countries are more likely to have people moving across. So they have to be extra aware. But the WHO has asked all countries in the world to be prepared in the event of an Ebola case,” WHO Spokesman Nyka Alexander said.

Over 1,500 people in West Africa have already lost their lives to the virus. No Ebola cases have been reported in China so far, but authorities are on guard taking every measure possible, to shield the country from this virulent epidemic.

Source: english.cntv.cn

Bob says AU is failing because of whites

Zimbabwe’s President Robert Mugabe says South Africa is failing to lead the economic development of countries in the African Union (AU) because its economy is in the hands of the white minority.

Speaking at a function attended by African diplomats stationed in Beijing, China, on Monday where Sierra ­Leone ambassador Victor Bockarie Foh and Liberia’s McKinley Thomas heaped praise on him, Mugabe said South Africa was in a compromised situation.

“We would love to see South Africa taking the lead. But the country’s economy is still controlled by the white community, making it difficult [for blacks] to take charge.”

His address took place on his recent two-week tour of China to seek funds for Zimbabwe’s ailing economy.

In response, ANC secretary-general Gwede Mantashe told Voice of America’s Studio 7 on Wednesday that South Africa would not “drive whites into the sea” in a manner that would look like Zimbabwe’s chaotic black empowerment programme.

He said South Africa would not draw inspiration from Zimbabwe in redistributing national resources.

Last year, in a televised interview with Dali Tambo, Mugabe took a dig at Nelson Mandela for being too “friendly” with whites. “Mandela has gone a bit too far in doing good to the non-black communities, really in some cases at the expense of blacks,” said Mugabe.

Since taking over as chair of the Southern African ­Development Community (SADC) earlier this month, ­Mugabe has pushed for South Africa to help other African countries, especially those in the region, instead of using them as a “dumping ground” for surplus products.

He told journalists at the end of the SADC summit: “We also appeal to South Africa, which is highly industrialised, to lead us in this, and to work with us and cooperate with us and not just to regard the rest of our countries as open markets for products from South Africa.”

Before this address, Mugabe had been let down by South Africa which, with Namibia, had refused to sign the Protocol on Trade in Services. It provides for a mandate to progressively negotiate the removal of barriers to the free movement of services.

Source: City Press

China says sanctions could aggravate Ukrainian crisis

Ukraine’s crisis can only be settled politically, and sanctions might only aggravate the situation, Chinese diplomats told ITAR-TASS on Friday.

Earlier, US Department of State coordinator for policy issues Daniel Fried said in an interview with Lithuanian media that the USA was urging different countries to join sanctions against Russia over Ukrainian events.

“The Ukrainian crisis requires a political solution. In a real situation, sanctions do not solve the problem; on the contrary, they might cause new problems which do not meet the interests of all sides and the initial intention to resolve the crisis,” the spokesman for the Chinese Foreign Ministry said in a written response to the ITAR-TASS request to comment on Fried’s remarks.

“China calls upon all the parties to keep calm and exercise restraint, helping to promote peace talks, seek a political solution of the existing problems, and avoid the actions fraught with aggravation of contradictions and escalation of tensions, in order to ensure peace and stability in the region,” the Chinese Foreign Ministry said.

Beijing arrests member of sect for brainwashing members

Over the past three months China has arrested nearly 1,000 members of a sect referred to as a cult by Beijing, state media said on Tuesday.

The group told members that a “female Jesus” had arrived and called on members to overthrow the Communist party, which the group referred to as “the big red dragon”, the state-run Global Times reported.

The crackdown, since June, has focused on members of the Church of Almighty God, a group that has attracted followers in rural areas of China for more than 10 years.

The people arrested include “high-level organisers and backbone members” of the group, the official Xinhua news agency said, citing officials. The agency did not give details of the crimes linked to the suspects, who are said to come from more than six provinces.

Beijing has for years struggled to suppress the Almighty God group, with state media reporting the arrest of nearly 1,000 followers in 2012 when the organisation was under the spotlight for predicting an apocalypse.

State media said the group brainwashed its members and encouraged them to isolate themselves from family and friends.

This year’s crackdown follows the murder in May of a woman at a McDonald’s restaurant in the eastern province of Shandong, which police blamed on members of Almighty God. The movement’s founder is reported to have fled to the US.

On Thursday five people will go on trial in connection with the murder, Xinhua said.

China tightly controls religious expression, permitting worship only at government-controlled Buddhist, Daoist, Muslim, Protestant and Catholic establishments but banning other religious organisations.

Source: The Guardian

Classified information on missing MH370 stolen

Classified information from the computers of officials involved in the investigation into the disappearance of Malaysia Airlines MH370 has been stolen, The Star Online reported Wednesday.

The computers of the high-ranking officials are said to have been hacked and the stolen information was allegedly being sent to a computer in China before the Malaysian Science, Technology and Innovation Ministry blocked the transmissions, the website reported.

The national cyber security specialist agency CyberSecurity Malaysia said that the malware that led to the information leak was sent to the officials via email on March 9, one day after the aircraft disappeared en route from Kuala Lumpur to Beijing, according to The Star Online.

According to the security agency’s estimates, about 30 computers were infected by the malware. The agency is said to be working with Interpol on the incident at the moment. CyberSecurity Malaysia suspects that the motivation for the attack was the accusations of the Malaysian government made by some people of concealing crucial information about the investigation.

The Malaysia Airlines Boeing 777-200 flight MH370 traveling from Kuala Lumpur to Beijing vanished on March 8 with 239 people on board, of which there were 227 passengers and 12 crew members. On March 24, Malaysian Prime Minister Najib Razak said that, according to the satellite data, MH370 crashed in the southern part of the Indian Ocean.

Is World War III coming?

Nouriel Roubini, Kyle Bass, Hugo Salinas Price, Charles Nenner, James Dines, Jim Rogers, David Stockman, Marc Faber, Jim Rickards, Paul Craig Roberts, Martin Armstrong, Larry Edelson, Gerald Celente and others warn of wider war

Paul Craig Roberts – former Assistant Secretary of the Treasury under President Reagan, former editor of the Wall Street Journal, listed by Who’s Who in America as one of the 1,000 most influential political thinkers in the world, PhD economist – wrote an article yesterday about the build up of hostilities between the U.S. and Russia titled, simply: “War Is Coming”. In the article, Roberts notes:

As reported by Tyler Durden of Zero Hedge, the Russian response to the extra-legal ruling of a corrupt court in the Netherlands, which had no jurisdiction over the case on which it ruled, awarding $50 billion dollars from the Russian government to shareholders of Yukos, a corrupt entity that was looting Russia and evading taxes, is telling. Asked what Russia would do about the ruling, an advisor to President Putin replied, “There is a war coming in Europe.” Do you really think this ruling matters?”

In January, well-known economist Nouriel Roubini tweeted from the gathering of the rich and powerful at the World Economic Forum in Davos:

Many speakers compare 2014 to 1914 when WWI broke out & no one expected it. A black swan in the form of a war between China & Japan?

And:

Both Abe and an influential Chinese analyst don’t rule out a military confrontation between China and Japan. Memories of 1914?

Billionaire hedge fund manager Kyle Bass writes:

Trillions of dollars of debts will be restructured and millions of financially prudent savers will lose large percentages of their real purchasing power at exactly the wrong time in their lives. Again, the world will not end, but the social fabric of the profligate nations will be stretched and in some cases torn. Sadly, looking back through economic history, all too often war is the manifestation of simple economic entropy played to its logical conclusion. We believe that war is an inevitable consequence of the current global economic situation.

Reagan’s head of the Office of Management and Budget – David Stockman – is posting pieces warning of the dispute between the U.S. and Russia leading to World War 3.

Investment adviser Larry Edelson wrote an email to subscribers entitled “What the “Cycles of War” are saying for 2013″, which states:

Since the 1980s, I’ve been studying the so-called “cycles of war” — the natural rhythms that predispose societies to descend into chaos, into hatred, into civil and even international war.

I’m certainly not the first person to examine these very distinctive patterns in history. There have been many before me, notably, Raymond Wheeler, who published the most authoritative chronicle of war ever, covering a period of 2,600 years of data.

However, there are very few people who are willing to even discuss the issue right now. And based on what I’m seeing, the implications could be absolutely huge ….

Former Goldman Sachs technical analyst Charles Nenner – who has made some big accurate calls, and counts major hedge funds, banks, brokerage houses, and high net worth individuals as clients – says there will be “a major war”, which will drive the Dow to 5,000.

Veteran investor adviser James Dines forecast a war is epochal as World Wars I and II, starting in the Middle East.

Economist and investment manager Marc Faber says that the American government will start new wars in response to the economic crisis:

“The next thing the government will do to distract the attention of the people on bad economic conditions is they’ll start a war somewhere.”

Martin Armstrong – who has managed multi-billion dollar sovereign investment funds – wrote in August:

Our greatest problem is the bureaucracy wants a war. This will distract everyone from the NSA and justify what they have been doing. They need a distraction for the economic decline that is coming.

Source: Washington’s Blog

China seals off city with bubonic plague

A city in China has reportedly been sealed off after one resident died from bubonic plague, but this way of trying to contain the disease is puzzling to infectious disease experts, who say the response seems extreme given the information released about the case.

According to news reports, Chinese officials have blocked off parts of Yumen, a city in northwest China, preventing about 30,000 of the city’s people from leaving.

A man in the city became ill after he handled a dead marmot (a large wild rodent), and died last week from bubonic plague. No other cases of the plague have been reported, according to the Guardian. About 150 people who had contact with the plague victim have been placed under quarantine.

Plague is an infectious disease caused by the bacteria Yersinia pestis that is carried by rodents, and can be transmitted to people through flea bites or by direct contact with the tissues or fluids of an animal with plague, according to the Centers for Disease Control and Prevention. The disease is known for killing millions of people in Europe in the 1300s, in a pandemic called the Black Death.

Today the illness is treatable with antibiotics, the CDC says. Now there are fewer than 5,000 cases of plague per year worldwide, with most cases occurring in Africa, according to the Mayo Clinic.

Source: Yahoo

Bank Of England leads drive for deposit confiscation

Talks under the auspices of the global Financial Stability Board (FSB) over the summer are approaching a key stage as officials aim to clinch an agreement on bail-ins and the bailing in of creditors including depositors of banks.

Finance officials are hoping to pave the way for proposals to be tabled at the G20 leaders meeting at the Brisbane summit in November.

The issue is of major consequence to globally systemic lenders such as Citigroup, Barclays and BNP Paribas, as some will have to issue billions of dollars of fresh bonds earmarked to carry losses.

The issue is of major consequence also to depositors who could see their savings confiscated as happened in Cyprus.

The complexity of the topic and differences between countries’ legal regimes and corporate structures are raising questions over how detailed any framework will be.

Bank of England officials led by Mark Carney, the Bank of England governor, are attempting to bridge sharp differences among leading G20 countries as they prepare a landmark set of proposals aimed at tackling the problem of “too big to fail” banks according to the Financial Times today.

Japan is one of the countries with problems with bail-in plans amid concerns that they are not easily compatible with the structure of its banking system. Its banks are heavily deposit-funded, and officials are uncomfortable about the idea of bail-ins.

Japanese banks are already vulnerable and bail-ins could hurt consumer sentiment in the already struggling Japanese economy. Concerns in Tokyo are said to be sufficiently profound for it to push its case right up to the summit itself.

China is also sceptical about the notion of private sector bail-ins given its banks are state-owned. “There are some very entrenched positions,” one official told the FT.

Russia is likely to oppose the coming bail-in regime as well as many other large creditor nations.

Mr Carney, who also chairs the FSB, said in March he wanted to “break the back” of the too big to fail issue this year. He said regulators sought by Brisbane to have cracked two major issues – on the loss absorbing capacity that big banks have to hold and on contractual provisions in derivatives contracts.

Bail-ins are coming to banks in the western world with consequences for depositors.

Source: CoreGold

Swiss and Chinese central banks enter into currency swap

The Swiss National Bank and the People’s Bank of China reached a currency swap agreement on Monday, allowing the two central banks to buy and sell their currencies up to a limit of 150 billion renminbi, or 21 billion Swiss francs ($23.4 billion).

The deal will also allow the Swiss central bank to invest some of its huge accumulation of foreign exchange reserves in the Chinese bond market, the SNB said in a statement Monday.

The Zurich-based SNB said the agreement will further strengthen collaboration between it and its Chinese counterpart and is a “key requisite for the development of a renminbi market in Switzerland.” It could also facilitate trade and investment between the two countries, the PBOC said.

Switzerland is the latest of a series of countries to set up swap lines with China, which is keen to promote the international use of the yuan.

Last year China signed swap agreements with the European Central Bank and a clutch of others, including the U.K., Brazil and Indonesia.

The agreement between China and Switzerland has a term of three years and can be renewed thereafter, the PBOC said. – Dow Jones Business News