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."

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.

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

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