Monday, August 02, 2010

Chinese Monday

This shouldn't come as a surprise to readers here, but it appears as though China's property bubble is getting pumped up by state-owned companies. That will end well I'm sure.

"The Anhui Salt Industry Corporation is a state-owned company that has 11,000 employees, access to government salt mines and a Communist Party boss.

Now it has swaggered into a new line of business: real estate.

The company is developing a complex of luxury high-rises here called Platinum Bay on a parcel it acquired last year by outbidding two other developers to win a local government land auction.

Anhui Salt is hardly Likewise, the China Ordnance Group, a state-led military manufacturer best known for amphibious assault weapons, paid $260 million for Beijing property where it plans to build luxury residences and retail outlets.

And in one of China’s biggest land deals yet, the state-run shipbuilder Sino Ocean paid $1.3 billion last December and March to buy two giant tracts from Beijing’s municipal government to develop residential communities.

All around the nation, giant state-owned oil, chemical, military, telecom and highway groups are bidding up prices on sprawling plots of land for big real estate projects unrelated to their core businesses."

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Ok, fake Prada and Fendi bags seemed to be a harmless little trademark infringement by the Chinese, but fake toilet paper? I know many members of my family that might be willing to draw a line in the sand over that issue.

"After years of knocking off luxury products like $2,800 Louis Vuitton handbags, criminals are discovering there is money to be made in faking the more ordinary — like $295 Kooba bags and $140 Ugg boots. In California, the authorities recently seized a shipment of counterfeit Angel Soft toilet paper."

This might sum up the perverse US Consumer/Chinese relationship better than any other statement I've seen recently -

"And, bizarrely, imitations that are more expensive than the real ones: In 2007, Anya Hindmarch sold canvas totes that said “I’m Not a Plastic Bag” for $15. Now fakes are available on the Web for $99."

Only in America would you pay 6 times retail for a fake.

Oh, and the growth of Chinese manufacturing slowed to a 17-month low in June so expect more empty factories in China looking to find something to manufacturer.

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Markets are en fuego based on European bank "earnings". We'll see how long it continues.

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