CEO Roger Agnelli of Vale, a Brazilian iron ore producer, says it expects its iron ore sales to China to be only slightly below 2009 levels. That’s another data point that the Chinese economy is still doing fine.
Not gangbusters like the previous 5-6 years, but still growing at a steady pace.
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The State Administration of Foreign Exchange (SAFE) is the manager of the China’s $2 trillion of cash reserves.
Opps! SAFE began diversifying into equities early in 2007, a move that proved disastrous. Its two biggest blunders were takeover specialist Blackstone and Morgan Stanley. It is estimated that China has lost $80 billion of the $160 billion it invested in U.S. equities.
Think China will be interested in investing a lot more money in the U.S. stock market any time soon?
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Even mighty Toyota is stumbling from the U.S. recession.
Due to slumping sales, Toyota reported its first annual loss in 59 years — $3.6 billion of losses. Business is so bad that Toyota has its hand out for some government money.
I believe that Toyota is the very best car company you could own…but I wouldn’t want to own it today.
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Communications chip-maker Altera (ALTR: 34.35 0.00 0.00%) reported better-than-expected profits today. Positive earnings surprises are few and far between but I’ve noticed that the companies reporting strong results often do so because of their strong Asia sales.
AThe improved outlook was “largely attributable to better than expected” demand for products for China’s 3G wireless networks.”
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The smoking rate for Chinese males is over 90% and even physicians smoke like chimneys.
A staggering 56% of Chinese doctors smoke and the Chinese government is now asking doctors to quit smoking to set a good example for their patients. I suspect that the socialized medicine costs of smoking-related diseases is getting out of control.
By the way, Phillip Morris International (PM: 84.74 0.00 0.00%) is making zillions in Asia.
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One of the companies I visited during my last trip to Beijing was Sinovac (SVA: 1.78 0.00 0.00%), the largest manufacturer of flu vacinne in China. I didn’t recommend the company for several reasons (and I’m glad I didn’t becuase its stock has taken a big hit) but it is one that I continue to monitor.
Sinovac’s recently opened plant was given a GMP (Good Manufacturing Practices) certification by the Chinese government and is now ready to expand production and its product line.
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One thing I admire about Warren Buffett is that he always told it like it is…good or bad. And he has usually been right too.
According to Buffett, things aren’t going to get better any time soon. The “economy will be in shambles throughout 2009 and, for that matter, probably well beyond.”
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China Shuangji Cement is a large Chinese cement producer and it is about to double its production when it opens a new high-volume plant. The Chinese government is still spending on infrastructure projects like crazy.
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Chinese officials think their stimulus plan is working. The Deputy Chairman of the Cabinet’s National Development and Reform Commission, Liu Tienan, said:
“We have set a growth rate of about 8 percent for 2009. I think we have the conditions, the possibility and the confidence to deliver that. Despite the downward pressure on the Chinese economy since the fourth quarter of last year, we have nonetheless seen some signs of recovery compared with previous months.”
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It seldom gets any media attention over here, but China has been suffering from one of its worst droughts in history. This article in the International Herald Tribune explains how dire the food situation is becoming.
Water supplies have been drying up for decades, the result of pervasive overuse and waste. Underground aquifers have been so depleted that, in some farming regions, wells probe more than 800 meters deep before striking water.
Some food and agricultural companies — like Potash (POT: 39.74 0.00 0.00%) and Archer Daniels Midleand (ADM: 32.17 0.00 0.00%) could be beneficiaries from China’s agricultural woes.
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