China to Fed: No more Treasuries we want land??

 Looks like history could be repeating itself.  Now we've known for some time that the Chinese were getting weary about buying and holding US-Dollar demominated government securities.  They've been pairing back from the longer dated maturity paper to shorter ones.  

Slowly but surely, they want to move away from American debt.  All that money we've been shoveling their way, a byproduct to our trade imbalance, has gone into things showing their diversification plan, from farm lands in Africa to purchasing major steaks in mining firms to buying precious metals and oil.  Now it seems, according to one Li Liangzhong, want to extend into further real estate purchases in the US.  

 

 

By MarketWatch

LOS ANGELES (MarketWatch) -- A top Communist Party research chief said Thursday that China should buy gold and U.S. real estate rather than Treasurys, according to a Reuters report.

Li Lianzhong, who is head of economics at the party's policy research office, said the U.S. dollar is poised for a fall, making gold and land better investments for China's $1.95 trillion in foreign exchange reserves, the report said.

It quoted Li as saying Beijing should also focus on buying up energy and natural resources.

 

- excerpt from "Chinese official urges buying of gold, U.S. land: report", 6/24/2009, Marketwatch

 

 

 

Now Mr. Liangzhong isn't just your average aparatchik in the Communist Party aparatus.  He's the head of the party's economic think tank, and according to many like Jim Rogers, he has a lot of clout.  A while back, Liangzhong was the first to echo a move into purchasing farmland wherever China could find it, Rogers always the keen opportunist started moving his funds into farmland.  One can guess who he is aiming to sell that land to.  Indeed, Liangzhong has a history of making similar advice into tangible assets, primarily US-based assets.

 

 

But there’s hope for deal makers trying to connect Chinese cash to the U.S. Word from Beijing indicates that Communist Party bureaucrats are still backing Chinese companies looking at the U.S. market. Li Lianzhong, a senior researcher at the Communist Party’s elite Central Policy Research Office, said Friday: “We should encourage Chinese enterprises to buy U.S. industrials and banks to achieve low-cost expansion.” He pointed to a weak U.S. dollar as an important reason to buy American now.

One key test of whether China is able to outbid rivals is General Electric’s sale of its appliance business. White-goods maker Haier Group of China is one of the top candidates in the deal, expected to fetch between $5 billion and $8 billion. Haier has made no secret of its ambitions to grow into the U.S., having lost out in the bidding for Maytag to Whirlpool a few years ago.

 

- excerpt from "China Still Hungry for the American Dream", WSJ.com, 9/2008

 

Then there's this one from Forbes magazine a bit back.

 

 

BEIJING (XFN-ASIA) - China should pursue overseas resources, including food, as a means of maintaining the value of its currency reserves, the South China Morning Post reported, citing Li Lianzhong, head of the economic bureau of the Communist Party of China Central Committee's Policy Research Center.

'You can maintain the value of the reserves by stockpiling natural resources, such as energy and iron ore, through purchasing mineral resources overseas or acquiring stakes in major oilfields. We should also find a way to turn those monetary reserves into food reserves, such as planting crops in other countries and sending the harvest back to China,' Li said.

 

- excerpt from "China must invest reserves in overseas resources, including food

 

I remember almost 20 years ago, everyone talked about Japan replacing America.  That the Japanese were going to own our country.  The problem with the Japanese, that no one realized at the time, was that there growth was based on leverage (sound familiar?).  The process was the same as we see it now, with one minor twist.  Japan expanded industrially, selling us goods and using our money to invest. With all that cash coming in, it was used to establish more loans exponentially.  Culturally, we couldn't take it, I remember the uproar when Rockefeller Center and Pebble Beach was sold to Japanese business concerns.  Eventually, though, leverage caught up with them, and soon the party ended.

 

Japan though, unknowingly, had a pupil, China...well mainland China.  Hong Kong and Taiwan had been at this for a while now, but the real sleeping giant was the PRC.  It studied Japan and the others.  Indeed, the Chinese, like their other asian counterparts, are excellent students.  The Chinese love history, and thing longer term than even their economic rivals in Tokyo.  They studied how we grew, how Japan grew, how Korea grew, how German and Europe grew after the war.  But they also studied how we also faild.  Like I said, there is a twist in the process.  Now the process is repeating, but unlike the Japanese, the Chinese are intent on keeping their investments paid for by their mercantile trade system. The question begs, though, if they start buying up farm land here, what happens when we need the grain?

 

 

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sure did

of their economic teams, many have engineering education as well. But I think while their population is an obvious drain, they are playing the cheap labor market until they reduce their population with draconian methods. But they have the resources, minerals, land, building up technical expertise (adept at stealing it we should add), but most importantly massive strategic planning on their economy.

So while they do China, we get crap about Buy America and China responds with Buying America...literally, awesome!

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China is buying up Iraqi Oil.

China owned Sinopec bought Addax Oil Company. According to FT, Addax is a long established player in Iraqi Kurdistan.

OECD forecast China's GDP growth: +7.7%. The financial power balance has definitely shifted in favor of China.

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World Bank Report

Both China & India were left out of the World bank dire global economic forecasts.

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China is now a CT- but for once, the theory is right

All of the Survivalist boards have been posting this information for the last 5 years, as China bought up large portions of Africa and the Middle East.

And the moral lesson was always the same- China is right, tangibles rule, if you don't have tangibles then all the FRNs in the world aren't going to help you when the crash comes.
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Maximum jobs, not maximum profits.

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Maximum jobs, not maximum profits.

China a comunist with brains.

Well while Elvis was making movies, the beatles were conquering the world. While the US is busy, expending money in wealthy middle east countries who shold be able to fiance their own security, and passing bills like the progress killer bill like CAP & TRADE, China is buying up the world natural resources,because the chinese like the rest of the world knows that in order to produce we have to have the raw material,so they make sure they have the raw material so can produce more and cheapper, we will be all making them a profit no matter what.
The US are not investing in manufactoring , in fact the CAP & trade bill will make harder to open up plants here anywhere in the 50 states .China act as a business man, no matter what happens in the world, China dont interferes with it, they do business with any country as long as it brings a profit. Too bad US dont know how to mind its own business....

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