The article below
appears to be one of those political “I told you
so” scare tactics when, if fact, it contains true statements (in general) and was sent to me by an ol' workplace Bud, Altho we differ on some political issues, this one is pretty much dead on. My thoughts on this information follows the article.
This article, though aimed at a US audience (thank-you Republicans), gives a
scary insight into China's growing economic power.
A Little Known
Reality.
June 8, 2013. Source: Michael Snyder, Guest Post
In future China
will employ millions of American workers and dominate thousands of small
communities all
Over the United States. Chinese acquisition of U.S.
Businesses set a new all-time record last year, and it is
On pace to shatter
that record this year.
The Smithfield Foods acquisition is an
example. Smithfield Foods is the largest pork producer and processor
In the
world. It has facilities in 26 U.S. States and it employs tens of thousands of
Americans. It directly owns
460 farms and has contracts with approximately
2,100 others. But now a Chinese company has bought it for
$4.7 billion, and
that means that the Chinese will now be the most important employer in dozens of
rural
Communities all over America.
Thanks in part to our massively
bloated trade deficit with China, the Chinese have trillions of dollars to
spend.
They are only just starting to exercise their economic
muscle.
It is important to keep in mind that there is often
not much of a difference between “the Chinese government”
And “Chinese
corporations”. In 2011, 43 percent of all profits in China were produced by
companies where the
Chinese government had a controlling interest
in.
Last year a Chinese company spent $2.6 billion to purchase AMC
entertainment – one of the largest movie theatre
Chains in the United
States. Now that Chinese company controls more movie ticket sales than anyone
else in the world.
But China is not just relying on acquisitions to
expand its economic power. “Economic beachheads” are being
Established all
over America. For example, Golden Dragon Precise Copper Tube Group, Inc.
Recently broke ground
On a $100 million plant in Thomasville, Alabama. Many
of the residents of Thomasville, Alabama will be glad to have
Jobs, but it
will also become yet another community that will now be heavily dependent on
communist China.
And guess where else Chinese companies are
putting down roots? Detroit. Chinese-owned companies are investing
in
American businesses and new vehicle technology, selling everything from
seat belts to shock absorbers in retail stores,
And hiring experienced
engineers and designers in an effort to soak up the talent and expertise of
domestic automakers
And their suppliers. If you recently purchased an
“American-made” vehicle, there is a really good chance that it has a
Number
of Chinese parts in it. Industry analysts are hard-pressed to put a number on
the Chinese suppliers operating in
The United States.
China seems
particularly interested in acquiring energy resources in the United States. For
example, China is actually
Mining for coal in the mountains of Tennessee.
Guizhou Gouchuang Energy Holdings Group spent 616 million dollars
To acquire
Triple H. Coal Co.... In Jacksboro, Tennessee. At the time, that acquisition
really didn't make much news, but now
A group of conservatives in Tennessee
is trying to stop the Chinese from blowing up their mountains and taking their
coal.
And pretty soon China may want to build entire cities in the
United States just like they have been doing in other countries.
Right now
China is actually building a city larger than Manhattan just outside Minsk , the
capital of Belarus .
Are you starting to get the picture? China is on the
rise. If you doubt this, just read the following:
# When you total up all
imports and exports, China is now the number one trading nation on the entire
planet.
# Overall, the U.S. has run a trade deficit with China over the past
decade that comes to more than 2.3 trillion dollars.
# China has more foreign
currency reserves than anyone else on the planet.
# China now has the largest
new car market in the entire world.
# China now produces more than twice as
many automobiles as the United States does. After being bailed out by
U.S.
taxpayers, GM is involved in 11 joint ventures with Chinese companies.
#
China is the number one gold producer in the world.
# The uniforms for the
U.S. Olympic team were made in China.
# 85% of all artificial Christmas trees
the world over are made in China.
# The new World Trade Center tower in New
York is going to include glass imported from China.
# China now consumes more
energy than the United States does.
# China is now in aggregate the leading
manufacturer of goods in the entire world.
# China uses more cement than the
rest of the world combined.
# China is now the number one producer of wind
and solar power on the entire globe.
# China produces 3 times as much coal
and 11 times as much steel as the United States does.
# China produces more
than 90 percent of the global supply of rare earth elements.
# China is now
the number one supplier of components that are critical to the operation of any
national defense system.
# In published scientific research articles China is
expected to become number one in the world very shortly.
MY THOUGHTS:
China is,
indeed buying U.S.
real estate, both commercial and
residential holdings, at a record clip.
Their target is not just the U.S. market however. They are scarfing up distressed properties
world wide. Their initiative was spurred
by the burst of the housing bubble brought on by deregulation (and lack of oversight
on what little reg was left) and the great Recession of 2008/2009. They also own 1.3 trillion (with a T) of U.S.
debt, much of which can be attributed to tax cuts and continued Pork Barrel
spending as well as defense spending on systems no longer applicable to what
the experts say is today’s modern warfare methodology/tactics.
The China
problem actually began simplistically when President Clinton signed the free trade agreement
with them which allowed them entry into the WTO. The problem was exacerbated by President G.W. Bush when he said “My
experiences in business school, China,
and the oil business were converging into a set of convictions: The free market
provided the fairest way to allocate resources. Lower taxes rewarded hard work
and encouraged risk taking. Eliminating barriers to trade created new export
markets for American producers & more choice for our consumers. Government
should respect its constitutional limits.”
Little did he know the consequences?
On the surface, it appeared to be a brilliant
move by both Clinton and Bush in that it allowed U.S.
corporations to export autos, durable goods, etc to them until Corporate greed
took advantage of Third World wages and began
moving operations there. That led to
improving conditions and an increase in wealth for the state which, in turn,
seems to have led to present day conditions.
This presents a conundrum of what to do about it. First, the reality of it is that there seems
to be very little we CAN do about it short of an enormous tax increase (a no-no in a fragile economy) and cutting
spending of EVERYTHING, including defense and entitlements (yes entitlements, I
PAID into SS and Medicare and am therefore entitled to the benefits of
such). So, what to do?
I guess accept it as "it is what it is", today’s reality. A required reading in Macroeconomics was called “The Global
Economy” written, I believe in the late 70's, by a Japanese author (can’t remember the name) that actually foretold and explained the coming
of the global economy in which we now live.
A simplistic, short term approach is to invest in the Chinese real
estate conglomerate E-house, China
holdings LTM. Last price this date was $13.72. Has a 52 week high of 15.14 and low of
3.58. Pays a dividend of 0.15 per
share. Now, how’s that for crass??
