In spite of surging fuel costs, Japan Airlines' operating profit for the year ended March 31 more than quadrupled to ¥90.01 billion.

The overall inflation rate for the April in China rose to 8.5%. That headline doesn't tell the real story though.

Food inflation is much higher while the price of everything else is barely budging.

Overall food prices increased by 22.1% in April from a year earlier but non-food prices increased by only 1.8%.

NOTE: Pork, the favorite meat for the vast majority of Chinese, rose by 68.3% in the last year.

Textiles, toys, apparel, shoes, and electronics are just a few of the industries that have disappeared from the U.S.

Those industries haven't withered up and died. They just moved across the Pacific Ocean to China.

The worst thing any U.S. industry can hear is that China has decided to enter your business. Between China's dirt-cheap wages and government backing, competing against the Chinese is the kiss of death.

The Chinese government has a new industry in its sight and while it will take a couple years for them to become a full competitor, one U.S. company (and its shareholders) should be shaking in their boots.

Who is that company? Boeing!

Commercial Aircraft Corporation of China on Sunday has the backing of the top level of government and intends to become a major player in the global aircraft market as well as meet its own growing airline needs.



"China should by all means conduct overall design and final assembly of large aircraft by itself," said Chinese Premier Wen Jiaboa.

The Chinese government seeded the company with $2.7 billion and I have no doubt that Boeing is going to find life a whole lot tougher down the road.

If I owned Boeing stock (which I don't), I wouldn't sell it today, but you gotta' believe that Boeing future just got a whole lot dimmer.

The United States-China Business Council reported that exports to China have increased by 300% from 2000 to 2007.

"While there are some very significant concerns the U.S. has with China, at the same time there are some (U.S.) companies that are benefiting from the trading relationships."

What this means is that the companies competing against the Chinese are screaming bloody murder, U.S. companies that are selling to China are whistling to the bank.

This is just another version of the same song I've been singing for years.

You need to get long whatever the Chinese are buying, stay the heck out of China's way, and make sure any U.S. stocks that you own have a strategy to expand their business to China.

The Chinese central bank ordered banks to increased their reserve for the fourth time this year, increasing the reserve ratio from 16% to 16.5%.

The increase will remove around $30 billion from the Chinese banking system.

The reserve ratio has been raised a 7.5% since the start of 2007.

Funny, the communist central bankers seem to know more about fighting inflation than the guys at the U.S. Federal Reserve.

You and I keep talking about the rising cost of filling up our gas tank, but Asians care a heck of a lot more about the price of rice.

Rice futures have jumped by 61% so far this year and the floods in Burma (a major rice producer) have made the supply situation even worse.

The International Monetary Fund (IMF) lowered its forecasts for the global economic growth in 2008 downward to under 4%.

"The outlook for the global economy today is much worse than it was a year ago."

How about China? The IMF still expects China to grow by more than 9% in 2008.

China has about 40% of the world's farmers and 1.4 billion hungry mouths to feed, but it has only 9% of the world's arable farming land.



There is only one solution to that problem. The Chinese government is readying to facilitate and encourage the purchase of farmland to help guarantee its food supply.

The Chinese government is taking serious measures to keep the Beijing Olympics safe from terrorists

Step one is to tighten conditions for obtaining visas. A Foreign Ministry spokesman said: "We are more strict and more serious with the procedure" of issuing visas.

The more visible action is the "Peaceful Olympic Action" teams that are pounding on the apartment doors of foreigners and demanding to see residency permits and visas. Even foreigners walking on the streets are being stopped and questioned.

Never forget that China is a communist country and that the government can do whatever darn well they please. That includes stopping people on the street....or keeping their stock market from falling.

The May 16 IPO of E-Land Fashion, a woman clothes retailer,  has been delayed indefinitely.

E-Land has the potential to be a big, big winner and a stock I will be watching.

IPO is a mainland Chinese company but will be listing its shares on the Hong Kong stock exchange.

Prices on the wholesale level increased by 8.1% in April in China. The majority of the increase was for food and energy, which all the Wall Street experts like to back out of the inflation calculation when they try to downplay U.S. inflation.

Inflation is a worrisome problem in China, but I've said before that high oil prices don't affect a country of bike and subway riders like it does in the U.S. And even the food inflation can be controlled because the Chinese government controls the prices of many agricultural and food products.

Toyota warned that for the first time in nine years, it profits would fall from the previous year.

The problem was weak U.S. sales, falling from 16.1 million in 2007 to an estimated 15 million this year.

Sales in China, however, ballooned by 40%.

China allocated about three-quarters of its seven million Olympic event tickets to the mainland Chinese and those 1.38 million tickets sold out in a matter of hours.

The new third generation or 3G wireless networks that offer blazing speed and image/video/data-rich content for cell phones will expand to 10 cities this fall.

3G service has started in Beijing, Shanghai, Tianjin, Guangzhou, Shenzhen, Qinhuangdao, Shenyang and Xiamen,

The company providing 3G service to those cities is China Mobile (NYSE:CHL), which by the way was the very first China stock I ever recommended. And still do.

Did you know that China has an arsenal of nuclear weapons estimated to be between 100 and 200 warheads. That gives China the 5th largest nuclear arsenal in the world after United States, Russia, Britain and France.

Microsoft is spending $280 million to build a new R&D campus that will house 5,000 employees in Beijing and will become its largest research center outside the United States when opened in 2010.

Microsoft already has 3,000 employees in China and has been doing business there since 1995.

Gee, do you think Bill Gates sees a long-term opportunity in China?

Singapore Airlines said Wednesday it will increase the fuel surcharge on all its flights beginning next week because of rising fuel costs.

The surcharge on routes to Southeast Asian countries will increase to $35 per flight and flights to the U.S. and Canada will rise to $150.

Why do you think I don't have any Asian airlines in the my Asia Stock Alert portfolio?

Fuel Tech reported their Q1 results and they were great. Its air pollution control business increased by 36% and the Fuel Chem division saw a 15% increase in revenue.

Fuel Chem added 8 new customers in Q1 and puts it well ahead of the pace to beat the 13 customers it added in all of 2007. Remember, a new customer is like an annuity to Fuel Tech because of the ongoing revenue stream.

The comments about China from CEO John Norris really got me excited. Here is what he said.

"In the near term, one to two years, it’s pretty awesome—far beyond what we have in our business plan and in our expectations even as much as a year ago, but I’m not going to count those chickens until they hatch, and we’re probably not going to give out those numbers on our expectations. I will tell you that we’ve said before that the number of leads that we are chasing in China is into triple digits on the APC side, and those leads are turning into real prospects a lot faster than we had anticipated."

I can't tell you when those Chinese orders are going to come in, but when they do, Fuel Tech's profits are going to EXPLODE.

America may be a nation of beef eaters, but Asians love their seafood, pork, and chicken. That is why Yum Brands' KFC stores are such a super success in Asia.

25% of Yum Brands' profits came from China and that number is going to keep climbing. Yum Brands ultimately expects to open 20,000 stores in China.

You don't have to invest in Chinese stocks to get significant exposure to China.