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A super power in decline
By Khurram Husain
Published: August 10, 2011

khurram.husain@tribune.com.pk

As little as a decade ago you needed special training to be able to understand the fact that America was a superpower in decline, buying time for itself with borrowed money. To see that reality you needed a working knowledge of the gold standard and know something about the Bretton Woods regime of fixed exchange rates and its abandonment in 1971. You would need to understand how a fixed and undervalued currency in China could lead to a virtually endless recycling of Chinese trade surpluses into American debt instruments, a curious phenomenon that was dubbed ‘Bretton Woods II’ in some sections of literature. You needed to understand the meanings of esoteric words like ‘seigniorage privilege’ and minimally technical formulations like ‘the n-1 problem’.

Today all you need is a pair of eyes and ears. Listen to the lecture the Chinese have just given to Uncle Sam, every word of which is worth weighing carefully. Here are some of my favourite lines from the official comment published in Chinese state controlled media: “China, the largest creditor of the world’s sole superpower, has every right now to demand the US to address its structural debt problems and ensure the safety of China’s dollar assets”. And also this: “To cure its addiction to debts, the US needs to re-establish the common sense principle that one should live within its means”.

After lecturing the superpower to “live within its means,” the commentary goes on to touch two hot buttons. In one line it says that “international supervision over the issue of US dollars should be introduced…” and in another line, it calls for “substantial cuts… to the US gigantic military expenditure and bloated social welfare costs”. This may be the first time the Chinese finger has wagged so clearly and publicly at the superpower, but it’s not the first time these themes have been touched on by the Chinese government. In 2009, for instance, China’s central bank governor called for creating a new reserve currency to replace the dollar. Days later, the Chinese government began a push for far-reaching monetary reforms at a G20 summit in London, with western governments struggling to reckon with the depths of their economic crisis as the backdrop. To get an idea of how far things have come between the US and their Chinese creditors, recall that in the 1990s it was an annual ritual for the Clinton administration to first issue a certification that China was not engaging in human rights violations before renewing America’s most-favoured-nation trade status with the emerging Asian powerhouse. In 1994, Clinton formally dropped the linkage between human rights and trade, arguing that America’s relationship with China was far bigger than “just human rights”, and trade issues would not be subordinated to other issues. With the turn of the century, the next big issue that American politicians picked with the Chinese was the value of the yuan, the Chinese currency, that many American leaders argue has been kept artificially undervalued to promote Chinese products in global markets. By some estimates presented last year, China was spending more than a billion dollars a day to keep its currency from appreciating, thereby ensuring that its products would be the cheapest in the world.

For many years, American leaders tried to make this an issue between the governments of the two countries. The International Monetary Fund has stated as recently as a month ago that the Chinese yuan “remains substantially undervalued” and the US government continued its pressure to get China to allow the yuan to rise as late as January of 2011. But then they folded their hand as the Treasury department released a report saying categorically that China was not a “currency manipulator”. In every stand-off with the Chinese government, America has ultimately folded its hand. Eyes and ears are all you need now to know that the economic strength of the world’s sole superpower has withered before its eyes. For over two decades now, the US has urged other countries to trim wasteful expenditures, to limit government commitments in light of fiscal reality, to be more responsible in running up debt to pay for runaway spending. Today, its largest creditor is telling the US that the time has come for America to heed its own advice. In other words, America needs to undergo the kind of structural adjustment that it has crafted for the rest of the world, that it hoisted upon Russia in the 1990s, Latin America in the 1980s, East Asia following the financial crisis of 1997. Its time for America to swallow some of its own medicine, and discover the awful taste of choosing between what commitments to retain and which ones to dump.
 
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China's Long March III B launches with Paksat-1R satellite payload

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"China successfully launches communications satellite in Pakistan 1R
August 12, 2011 1:27

Xinhua Xichang August 12 (Xinhua Li Qinghua, Zhang Liwen) at 0:15 on the 12th, China's Xichang Satellite Launch Center in the "Long March III B" carrier rocket, will be Pakistan's communications satellite 1R (Paksat-1R) successful delivery into orbit. This is my first time to Asia the user to "in-orbit delivery 'exports of satellites, but also our first time this year to provide commercial satellite for international users export services.

About 26 minutes after the rocket launch, Xi'an satellite monitoring center of the data showed that normal star separated from the rocket, the satellite perigee of 204 kilometers into accurate, apogee 41,985 km, orbital inclination of 24.8 degree geostationary transfer orbit, launching a complete success.

The launch tasks in accordance with China Great Wall Industry Corporation and Pakistan's Space and outer atmosphere, the Research Council in 2008, Pakistan signed 1R communications satellite in-orbit delivery contract implementation. According to the contract, Pakistan, China Great Wall Industry Corporation will deliver a high-power in-orbit communication satellites, provide training and assist in building the ground in Pakistan, two control stations.

"Pakistan star 1R" communications satellite project, in July 1990 following the Long March II rocket carrying bundled Pakistan launched a small satellite (BADR-A), the Pakistani cooperation in the aerospace field again. In Pakistan the 60th anniversary of establishment of diplomatic relations, "Pakistan star 1R" the successful launch of the "Sino-Pakistani friendship year" has added new luster.

"Pakistan star 1R" communications satellite and the "Long March III B" carrier rocket, by the China Aerospace Science and Technology Corporation China Academy of Space Technology and China Academy of Launch Vehicle Technology Development. "Pakistan star 1R" use "East is Red IV" satellite platform, satellite loaded with two 30-band transponders and three road antenna, satellite beam coverage in South Asia, Middle East, Africa and eastern Europe, some cities and regions, mainly used to meet Pakistan in the telecommunications, broadcasting and broadband multimedia services and other areas of communication needs.

"Long March III B" is our ability to geosynchronous transfer orbit carrying the largest launch vehicle, can be mass 5500 kg payload into geosynchronous transfer orbit. The launch is the "Long March III B" rocket's 15th launch, is the Long March series of carrier rockets of the first 143 flight."

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Paksat-1R uses China's most-advanced DFH-4 satellite platform with a 15-year service life

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Long March III B rocket

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Paksat-1R technical specifications

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A closer look at the Paksat-1R solar panels

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YouTube video

[Note: Thank you to Antibody for the post and HouShanghai for the video.]
 
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The characteristics of a modern communications satellite are:

1. It is the size of a city bus and weighs about 10,000 pounds.

2. It lasts for 15 years.

3. It has approximately 32 transponders.

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China's DFH-4 satellite bus (or platform) designed and built by CGWIC (i.e. China Great Wall Industrial Corporation)

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DFH-4 satellite technical specifications

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"A typical satellite has 32 transponders. Transponders each work on a specific radio frequency wavelength, or “band.” Satellite communications work on three primary bands: C, Ku and Ka. C was the first band used and, as a longer wavelength, requires a larger antenna. Ku is the band used by most current VSAT systems. Ka is a new band allocation that isn’t yet in wide use. Of the three, it has the smallest wavelength and can use the smallest antenna."
(Source: Beyond line of sight communications)

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(Source: User:Bhamer/sandbox - Wikipedia, the free encyclopedia)


China's DFH-4 is comparable to Western satellites. Its 30 transponders (or perhaps the Pakistanis weren't willing to buy more than 30 transponders) are very close to the average of 32 transponders on a modern satellite. At 5,200 kg or 11,440 pounds, it is approximately the same weight as Western satellites in the 10,000-pound class. The DFH-4 uses the "three primary bands: C, Ku, Ka," and L bands. Its solar panels generate the standard 8 kW of power.

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http://www.spacenews.com/archive/archive06/chinadfh_1016.html

"China Looks To Boost Satellite Manufacturing With DFH-4 Line
By PETER B. de SELDING
Space News Staff Writer
posted: 18 October 2006
03:30 pm ET
...
PARIS -- The first of a new line of high-power telecommunications satellites produced in China and already sold to two export customers is scheduled for launch in late October for China's Sinosat direct-broadcast television provider, Chinese space officials said.

The Sinosat-2 satellite, the first of the DFH-4 spacecraft built by the China Academy of Space Technology (CAST), has faced several delays but is now expected to be launched in the coming weeks by a Chinese Long March 3B rocket from China's Xichang Satellite Launch Center in southwest China's Sichuan Province.

If it functions as planned, the DFH-4 satellite design will bring China's domestic satellite manufacturing industry closer to the level of its U.S., European and Japanese counterparts.

DFH-4 is the third generation of China-built telecommunications spacecraft and carries some 800 kilograms of payload -- four times the capacity of the previous Chinese product, the DFH-3. Weighing up to 5,300 kilograms at launch, the DFH-4 platform is built to operate for 15 years -- double the DFH-3's life expectancy -- and provide up to 10 kilowatts of power at the end of its service life.
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Wang said CAST has tested the DFH-4 design to a maximum capacity of 54 transponders, 38 in Ku-band and 16 in C-band. The satellite's upper limit would be around 5,600 kilograms, he said in the presentation. (article continues)"
 
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China becomes ASEAN’s largest trade partner

"China becomes ASEAN’s largest trade partner
Updated : 8:40 AM, 14/08/2011

China has become the largest trade partner of the Association of Southeast Asian Nations (ASEAN), with two-way trade last year reaching US$230 billion.

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Indonesian Vice Minister of Trade Mahendra Siregar made the statement on the sidelines of the ASEAN - China Economic Ministers’ Meeting in Manado, Indonesia on August 12.

ASEAN total exports to China was US$113.5 billion last year, representing a year-on-year rise of 39.1 percent, while the bloc’s imports from China were up 21.8 percent to US$117.7 billion.

The same day, at the 14th ASEAN+3 Economic Ministers’ Meeting in Indonesia, Chinese Trade Minister Chen Deming underlined that China considers ASEAN, Japan and the Republic of Korea (RoK) as its important trade and investment partners.

Last year, total trade turnover between China and ASEAN, Japan and the RoK accounted for 27 percent of China’s trade turnover. Meanwhile, the total amount of capital ASEAN, Japan, and the RoK poured into China made up 12.4 percent of the total foreign investment in the country.

Therefore, China attaches importance to trade cooperation among ASEAN+3 member countries. China is willing to promote economic cooperation in the East Asian region, contributing to the economic development in the region and common prosperity among the East Asian countries.

VNA/VOVNews"

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My post from last year:

The China-ASEAN FTA (i.e. free trade agreement) came into full effect on January 1, 2010. You can read the economic ramifications of the China-ASEAN FTA at the following link:

China-ASEAN free trade area starts operation_English_Xinhua

"China-ASEAN free trade area starts operation
XINHUANEWS 2010-01-01 13:13:26

NANNING, Jan. 1 (Xinhua) -- China and the Association of Southeast Asian Nations (ASEAN) kicked off their free trade area (FTA) on Friday.

The world's largest FTA embracing developing countries covers a population of 1.9 billion and China-ASEAN FTA sets stage for economic integration involves about 4.5 trillion U.S. dollars of trade volume.

The average tariff on goods from ASEAN countries to China is cut down to 0.1 percent from 9.8 percent."

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Big jump in exports to China

"Big jump in exports to China
Thursday April 1, 2010

MALAYSIA’S exports to China increased by 143% last year compared with 2006, said International Trade and Industry Minister Datuk Mustapa Mohamed.

The export value was RM8.4bil last year with a total of 23,424 certificates of origins issued, he said.

“This means that Malaysian companies are benefiting from increasing exports after the implementation of the Asean-China Free Trade Agreement (FTA) in July 2005,” he said.

Under the Asean-China FTA, the import duties were reduced in stages.

On Jan 1, import duties were abolished when 90% of products traded in Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and China became duty free.

“The import duties of the remaining 10% would be reduced eventually,” he said in his reply to Charles Santiago (DAP-Klang).

Mustapa said products exported to China included rubber, vegetable oil, stearic acid, raw palm oil and acetic acid.

Total exports of Malaysia to China was RM67.24bil while imports from China was worth RM60.66bil last year.

“Malaysia enjoys a trade surplus of RM6.58bil with China,” he said.

Mustapa said the ministry had yet to receive any negative feedback from local industries on the implementation of Asean-China FTA.

“The iron and steel industry sector is worried about the stiff competition from China,” he said.

Mustapa said the Government would monitor the impact of the FTA and would take the necessary steps to ensure that the local industry could compete with China.

“Malaysia will continue to discuss with other Asean countries to ensure that Asean-China FTA would not bring adverse effects to Asean,” he said.

Currently, the Government ensures that imported products from China met the standards in all aspects including health and security."
 
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ZTE claims two million sales for the ZTE Blade / San Francisco. (Source: ZTE claims two million sales for the ZTE Blade / San Francisco)

ZTE now 5th largest mobile phone maker - China.org.cn

"ZTE now 5th largest mobile phone maker
China.org.cn, August 12, 2011

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ZTE has become the fifth largest phone maker in the world. Its market share growing from 1.8 percent to 3.0 percent.

Overall sales of mobile devices to end users totalled 428.7 million units in the second quarter this year, up 16.5 percent from the same period in 2010, said Gartner, an industry research firm based in the U.S., in a report released Thursday, Sina.com reported Friday.

According the report, Nokia sold 97.87 million phones, compared to 111.5 million in the second quarter of 2010. Its market share dropped from 30.3 percent to 22.8 percent. Samsung's market share fell from 17.8 percent to 16.3 percent. LG's overall share slid from 8 percent to 5.7 percent. Apple came in fourth, going from 2.4 percent to 4.6 percent. ZTE has become the fifth largest phone maker in the world, its market share growing from 1.8 percent to 3.0 percent.

"We expect manufacturers and distributors to remain cautious about raising their stock levels in the second half of 2011, following the recent uncertainty on the world financial markets," said Gartner analyst Annette Zimmermann.

The industry research company also expects the overall market of mobile devices to grow by 12 percent in 2011."
 
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Second Reactor Using New Chinese Design Begins Operation Near Hong Kong.
The second unit at the new Ling Ao II nuclear power plant in southern China entered commercial operation Sunday (August 7, 2011), Chinese state media reported. It is the second reactor to use China’s new CPR-1000 pressurized water reactor design and the fourth reactor built at Ling Ao’s two plants in the last decade. Like the first unit at Ling Ao II that went online last fall, the new unit produces 1,080 megawatts per hour. (Source: Second Reactor Using New Chinese Design Begins Operation Near Hong Kong - Nuclear Power Industry News - Nuclear Power Industry News - Nuclear Street - Nuclear Power Portal)

Ditching Nuclear Risks Third ‘Lost Decade’ in Japan on Increased Oil Costs

"Ditching Nuclear Risks Third ‘Lost Decade’ in Japan on Increased Oil Costs
By Aki Ito and Maki Shiraki - Aug 14, 2011 8:15 PM ET
...
Japan relied on imports to meet 80 percent of its energy needs in 2009, World Bank data show, against 60 percent for Germany and 22 percent for the U.S. China imported 6 percent of its energy in 2008, according to the latest data available. (article continues)"
 
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China's overall energy use in 2008 was 2,131 million tons of oil equivalent (Mtoe) (see China v US energy consumption: the data | Business | guardian.co.uk). Six percent of 2,131 Mtoe is 128 Mtoe.

In 2008, China's import of energy was 2,148 Terawatt-hours (TWh). Since one Mtoe equals 11.63 TWh, China's imports were 185 Mtoe. (See Energy policy of the People's Republic of China - Wikipedia, the free encyclopedia). [185 imported Mtoe / 2,131 total Mtoe] * 100 = 8.7% imported Mtoe.

It does appear the journalist was wrong. China's total imports of energy in 2008 was 8.7% (e.g. [2,148 TWh imported / 24,614 TWh total] * 100 = 8.7%). (See Energy policy of the People's Republic of China - Wikipedia, the free encyclopedia)

Nevertheless, China is still the most energy-independent among the world's four-largest economies.

1. China - 8.7% reliance on energy imports
2. U.S. - 22%
3. Germany - 60%
4. Japan - 80%

Total domestic energy produced is the sum of domestic coal, hydropower, nuclear, oil, natural gas, wind, solar, geothermal, and biomass. Imported oil comprises only a small portion of China's overall energy use.
 
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China Debuts a Drone at Robotics Show - WSJ.com

"China Debuts a Drone at Robotics Show
By NATHAN HODGE
AUGUST 18, 2011

China made its debut this week at the world's largest robotics trade show when a Shenzhen-based firm showcased its F50, a small drone with a high-definition video camera that a company brochure billed as a tool for monitoring protests, or responding to building fires.

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AEE Technology's F50 drone was shown at the world's largest robotics trade show in Washington on Tuesday. (Credit: Charlie Shoemaker for The Wall Street Journal)

The appearance of AEE Technology Co.'s relatively small, short-range drone—about the size of a pizza pan—in the drone market underscores the burgeoning international competition in the market for unmanned aerial vehicles and military robots.

State-run and private Chinese companies have invested heavily in recent years in developing drones both for export and for China's military and domestic security needs.

Western defense officials and experts were taken by surprise in November, when at least 25 Chinese drone models were on display at an air show in south China. Several models were also shown at an exhibition of police and antiterrorism equipment in Beijing in May.

"The market for military robotics has gone global, and China is looking to be a major producer and exporter in that market, just like the U.S.," said P.W. Singer, the author of "Wired for War," a book about the revolution in military robotics.

China's investment in new military technology, including the recent launch of an aircraft carrier and the development of a stealth jet, has prompted concern in U.S. military circles. Military analysts have suggested that China is focused on capabilities that could threaten U.S. military vessels in a confrontation over Taiwan. The most recent Defense Department report to Congress on China's military capabilities notes Beijing's push to develop longer-range unmanned aircraft, including armed drones, "expands China's options for long-range reconnaissance and strike."

But AEE's information brochure—which shows an overhead image of protesters hemmed in by riot police, as well as a building on fire—suggests a similarly strong interest in domestic security.

AEE was the first Chinese company to exhibit its wares at Unmanned Systems North America, an annual exposition in Washington that features robotic hardware from around the world. In a small booth on the edge of the showroom floor, Wendy Wei, the firm's overseas sales department manager, said the company was looking to drum up international sales—and potential orders from military and police customers.

"We had a customer yesterday who wants to use it to survey ground for the mining industry," she said. "Anywhere you need someone to do detecting or you need to take videos in a place that human beings cannot go you can use it, so it's a huge market actually."

Michael O'Hanlon, a defense expert at the Brookings Institution in Washington, said China's interest in developing unmanned aircraft as a tool for policing crowds or responding to emergencies was "totally understandable, and legitimate."

Broadly speaking, Mr. O'Hanlon said China lagged behind the U.S. in conventional military power, but added that China was "quick in reacting to opportunities, particularly in the smaller weapons areas."

While China's progress on military drones is of concern to the U.S. and Israel and could worry China's neighbors, its development of drones such as AEE's F50 could also have implications for other countries that have sought to acquire drones not just for military purposes but for police surveillance and antiterrorist operations.

The U.S. currently dominates the robotics industry and has made drones a centerpiece of its military arsenal. That its drone technology far outstrips that of its rivals was underscored by other equipment on display at the show, such as the A160 Hummingbird, a full-sized robotic helicopter developed by Boeing Co., or a self-driving seven-ton truck being developed by Oshkosh Corp. unit Oshkosh Defense.

In April, a small robot made by U.S.-based iRobot Corp. was used to explore a reactor building at Japan's crippled Fukushima Daiichi nuclear plant. A Global Hawk, a high-flying pilotless spyplane made by Northrop Grumman Corp., was used to survey the damage above the plant. In Libya, the U.S. military has sent armed Predator drones, made by General Atomics Aeronautical Systems Inc., to strike targets in Libya.

As competition heats up, U.S. defense executives are increasingly complaining that export controls are making it harder to compete internationally. In a keynote address at the convention Wednesday, Wes Bush, Northrop's CEO, complained that the U.S. export-control regime, which treats unmanned aircraft as extremely sensitive military hardware, made it hard to compete for global customers.

"Today's export restrictions are hurting this industry in the U.S. without making us any safer," he said. "And they could cause the U.S. to relinquish to other nations ultimately its lead in these technologies."

Mr. Bush compared the situation to earlier U.S. restrictions on the sale of communications satellites, which spurred other countries to develop their own technologies.

The Obama administration last year kicked off an effort to overhaul and streamline the system that governs the export of weapons and commercial products that have a potential for military use. The initiative was billed as a way to boost the competitiveness of U.S. manufacturing and technology sectors.

Kenneth Juergens, a vice president for Oshkosh Defense, said export restrictions made it more difficult to do business internationally, even as U.S. companies look to markets abroad to offset declining U.S. defense budgets. "We need help to get some of those barriers moved or at least streamlined so the approval process moves faster," he said.

U.S. export controls on things like drones are also a subject of frustration for long-standing customers of U.S. military hardware. Yousef Al Otaiba, the ambassador of the United Arab Emirates to the U.S., said that unmanned aircraft were a "very, very tightly controlled technology" that was pushing countries to develop their own domestic technology...."
 
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Looking East to cure recession
By Dr Pervez Tahir
Published: August 18, 2011

The writer is a former chief economist of the Planning Commission and is based in Lahore pervez.tahir@tribune.com.pk

Preachers of austerity have brought growth in the United States and Europe to a grinding halt. Interest rates and inflation are extremely low. But no one — consumers, investors or governments — is spending except on the bare essentials. In the US, this spending drought is bringing the feared double-dip — recessions in quick succession — that much closer. Asia, on the other hand, has continued to enjoy high growth. Can it provide demand for more goods and services from the US and Europe to steer the world out of recession? After all, Asia’s growth depends largely on exports, which will eventually be affected by the demand constraint. In the process, can an Asian currency replace the ailing dollar?

The second and the third largest economies of the world after the United States, China and Japan, are in Asia. The Japanese economy has been shrinking after this year’s earthquake and tsunami and due to an appreciating yen. Real and substantive action is expected of from China, the leading member of the high-growth league. With ownership of $1.1 trillion in US treasury bills and total foreign exchange reserves of $3.2 trillion, she is the largest external creditor of the US and the largest foreign currency holder of the world. Her trade surplus in July alone was $32 billion. Leaving aside their traditional circumspection on economic matters, the Chinese have admonished the sole superpower on living beyond its means. They are also worried about the security of their dollar-denominated assets. US Vice-President Joe Biden is visiting China to complain, yet again, about the undervaluation of the renminbi (RMB) and a restrictive import regime. China will be asked to import more and export less. This will spur demand and jobs in the West. The proposed mechanism is to allow the Chinese exchange rate to appreciate. The IMF estimates the RMB’s undervaluation at 20 per cent. For years, China has resisted the pressure to appreciate its currency. Now this may begin to happen under the pressure of economic forces. In fact, the RMB is already beginning to appreciate. The resulting cheapening of imports will be an antidote to inflation, running at 6.5 per cent and threatening to rise. Costlier exports will yield fewer reserves, investment of which is becoming riskier and unmanageable. Exports are also beginning to be expensive as labour costs rise. Although labour costs are far lower in China than in the United States, they are rising to the extent that some Chinese manufacturers are resorting to substitute robots for labour. This will have its own implications in a country which still has a vast pool of surplus labour in rural areas. Such efforts will undermine plans to develop the domestic market. As for gains to the United States, the latest IMF estimates suggest inconsequential impact on job creation. Another study shows that more than half of a dollar spent on an import from China is attributable to the services sector in the United States. These gains could increase if the two central banks coordinate policy. The Federal Reserve’s announcement to keep nominal interest rate near zero for the next two years does provide such an opportunity. Whether China will respond in kind is another matter, especially when economists in Germany, with the third largest trade surplus in the world, are proposing a farewell to eurozone rather than bailing out weaker EU economies.

These currency battles are hastening the internationalisation of the RMB, but not its convertibility. The war to overcome the might of the dollar does not enter a decisive phase until the 2030s, when China is likely to become the largest economy of the world.
 
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Chinese automotive workers check Chery QQ6 model cars as they come off the assembly line at their factory in Wuhu, Anhui Province in 2007.

Chery to open Kenyan plant | Companies | chinadaily.com.cn

"Chery to open Kenyan plant
Updated: 2011-08-12 09:11
By Beatrice Gachenge (China Daily)

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Chery Automobile Co Ltd's booth at an auto show in Beijing. The company aims to sell 120,000 vehicles overseas this year, which would be an increase of more than 30 percent. [Photo / China Daily]

Automaker tries to secure $50m to fund its new East African facility

NAIROBI, Kenya - Chery Automobile Co Ltd is to become the second Chinese vehicle maker to build an assembly plant in Kenya. The move will see Chery Automobile join the truck manufacturer Beiqi Foton Motors Co Ltd as the companies attempt to tap East African demand and will further strengthen Chinese links with the continent.

"They (Chery) are discussing with the (Chinese) government so that they can get some $50 million to invest in Kenya through an assembly plant," said Justus Nguu, the director of Stantech Motors Ltd, Chery Automobile's franchise holder in Kenya.

China has made big inroads in Africa, where it is seeking to secure energy, minerals and food.

Chery Automobile, which started selling cars overseas in 2002, and is now China's biggest auto exporter, aims to set up its plant next year. In 2010, the company tested the market by venturing into Kenya through a franchise.

The automaker sold a modest 120 cars last year, but aims to produce 1,000 units in 2013 at its plant which will serve Kenya, East Africa's biggest economy, and other countries in the region.

Chery Automobile, China's largest indigenous automaker, aims to increase exports by more than 30 percent this year to 120,000 vehicles. The firm is targeting developing nations in Southeast Asia, the Middle East, South America and Africa.

Chery operates 16 assembly plants overseas.


The Chinese will have to battle Japanese vehicles, which have saturated the Kenyan car market.

Toyota Motor Corp controls about 65 percent of the market, mainly through the second-hand segment.

The truck business is dominated by established players CMC Holdings Ltd and the Kenyan unit of General Motors Co.

General Motors East Africa Ltd, Associated Vehicle Assemblers Ltd and Kenya Vehicle Manufacturers Ltd are the established players in Kenya's motor vehicle assembly sector.

Analysts said proximity to growing markets was the key driver for the companies planning to set up in Kenya.

"(The delay in) lead time for orders ... has made it strategically important for auto manufacturers targeting Africa to want a serious presence in Africa," said Hanningtone Gaya, an independent regional vehicle analyst based in Nairobi.

China's truck maker, Shanghai-listed Beiqi Foton Motors, a unit of Beijing Automotive Industry Holdings Co (BAIC), plans to begin construction of an assembly plant in Kenya this year, to help it nudge up sales on the continent.

The company plans to double sales in Africa to 20,000 units by 2013 from last year by ramping up sales to economies that require heavy commercial vehicles for use in the construction of their infrastructure projects, including roads, rails and ports.


"When you look at the international markets, we are still young. Africa is a good market for us," Calvin Guo managing director of the Kenyan subsidiary of Beiqi Foton Motors.

Reuters"

[Note: Thank you to Grey Boy 2 for the post.]
 
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Work on Xiluodu, China's second-largest hydroelectric power station after the Three Gorges Dam, is expected to be completed in 2015. (Photo/Xinhua)

Last year, China consumed 4,190 Terawatt-hours of electricity. Electricity consumption growth for this year is 12%, which means China's projected total 2011 electricity consumption is 4,693 Terawatt-hours.

The growth in China's 2011 electricity consumption will be 503 Terawatt-hours, which is nearly the total amount of electricity consumed in Germany or India for an entire year! China will consume as much electricity this year as the United States and India combined!

[Note: Caption credit -- Four hydropower plants planned on Yangtze tributary. Xinhua photo of Xiluodu dam (shown above) is from March 22, 2009.

In a previous post, I noted CNN reported China's Three Gorges Dam (84.7 billion kilowatt-hours) produces the electricity of 21 Hoover Dams (4 billion kilowatt-hours). (See China fills Three Gorges Dam to capacity - CNN)

China's new Xiluodu dam is expected to generate 64 Terawatt-hours (TWh), which is equivalent to 16 Hoover Dams. (See right-hand-side chart at Xiluodu Dam - Wikipedia, the free encyclopedia)]

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China's power consumption up 12.2 pct in first seven months of 2011

"China's power consumption up 12.2 pct in first seven months of 2011
English.news.cn 2011-08-14 11:25:28

BEIJING, Aug. 14 (Xinhua) -- China's National Energy Administration (NEA) announced Sunday that the country's total electric power consumption rose 12.2 percent from a year earlier to 2.69 trillion kilowatt-hours (kwh) during the first seven months of this year. (article continues)"

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From my post earlier this year:

China overtakes United States as world's-largest electricity consumer

In 2010, China became the first country in the world to exceed the 4,000 terawatt-hours threshold. China consumed 4,190 terawatt-hours of electricity. The United States fell into second place by consuming only 3,876 terawatt-hours of electricity. All hail the new king!

China's power consumption up 14.56 pct in 2010 -Xinhua | Energy & Oil | Reuters

"China's power consumption up 14.56 pct in 2010 -Xinhua
Mon Jan 17, 2011 2:18am GMT

BEIJING Jan 17 (Reuters) - China's total power consumption in 2010 rose 14.56 percent year on year to more than 4.19 trillion kilowatt-hours, official news agency Xinhua said, citing data from the China Electricity Council."

2011 Electricity Demand To Fall Slightly On More Normal Temps - EIA - WSJ.com

"2011 Electricity Demand To Fall Slightly On More Normal Temps - EIA
JANUARY 11, 2011, 2:16 P.M. ET

NEW YORK (Dow Jones)--Electricity demand consumed across the U.S. is expected to fall in 2011 after surging higher last year on extreme hot and cold temperatures, according to the Department of Energy's short-term energy outlook released Tuesday.

Electricity consumption closely tracks growth in economic activity. But last year unusually hot and cold weather caused demand to rebound sharply as households cranked up their air conditioners and heaters, depending on the season. This activity snapped a rare two-year decline in power demand, caused by the housing crisis that deepened into the worst economic downturn seen in the U.S. in decades.

Total U.S. energy consumption, which rose 4% last year to 10.62 billion kilowatt hours a day, is now expected to significantly lag economic activity amid the return to "more normal temperatures," according to the Energy Information Administration's monthly short-term energy outlook."

[Calculation: 10.62 terawatt-hours a day * 365 days per year = 3,876 terawatt-hours of electricity consumed by U.S. in 2010]

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From my post last year:

Is China's Real Economy Already the Size of the U.S.?

Electricity is a good reflection of the real size of an economy. According to Lester Thurow (a famous economist and former dean at the MIT Sloan School of Management), electricity is a fundamental component of economic activity. The measurement of electricity consumption does not suffer from monetary exchange rate distortions caused by currency traders.

In 2009, China consumed almost as much electricity as the United States (i.e. 3,643 vs. 3,741 terawatt-hours). Using electricity consumption as the measurement standard, China's economy is already approximately the size of the U.S. economy.

Why do we think that China's economy will keep booming for the next ten years? China has been busy signing Free Trade Agreements (i.e. FTAs) with Southeast Asia and Latin America that come into effect this month. (See Kevin Holtsberry: The Big Thing in the New Year? It's in Asia and China-Peru FTA to take effect in mid-Jan)

Based on new information, I amended the data in the following table on estimated Chinese power consumption.

Electricity - consumption(kWh) 2010 country ranks, By Rank

Rank.....Country.............Value (kW-hours)............Date of Info
1..........United States....3,741,485,000,000.......2009 (actual, see below)
2..........China................3,643,000,000,000.......2009 (actual, see below)
3..........European Union....2,884,000,000,000..........2007 est.
4..........Russia................1,023,000,000,000 ..........2007 est.
5..........Japan.................1,007,000,000,000 ..........2007 est.
6..........India.....................568,000,000,0 00...........2007 est.
7..........Germany................547,300,000,000. ..........2007 est.
8..........Canada..................536,100,000,000 ...........2007 est.
9..........France...................447,200,000,00 0...........2007 est.
10........Brazil.....................404,300,000,0 00...........2007 est.

References:

United States: International Energy Statistics

China: China's power consumption grows 6% in 2009_English_Xinhua

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The world's five largest PC manufacturers are:

1. HP - wants to get out of low-margin PC business and undo Compaq acquisition from 2001
2. Dell - "has already stated that it’s heading to higher ground with storage, networking and services."
3. Lenovo - Chinese company "growing fast and has a lot of cash."
4. Acer - Taiwanese company known for Acer notebook computers and dual-screen Iconia tablet
5. Asus - Taiwanese company famous for Asus Transformer tablet with 400,000 sold last month alone

IBM vacated the PC business and sold it to Lenovo in 2004. Today, HP is trying to follow in IBM's footsteps and become a higher-margin software and services company. Dell has stated it wants to move in a similar direction.

The conclusion is inescapable. There is no future in competing against a core Chinese strength in PC manufacturing. Lenovo's size is scaling upwards in lockstep with Chinese economic growth. In the next ten to fifteen years, Lenovo should become the world's largest PC manufacturer.

Reference:

HP: Potential Winners, Losers And Buyers for HP PC Business | The VAR Guy

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Lenovo Smartphone, Skylight and IdeaPad U1

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Lenovo LePad Slate

Lenovo posts record $5.9b sales revenue|Business|chinadaily.com.cn

"Lenovo posts record $5.9b sales revenue
Updated: 2011-08-19 07:57
By Tuo Yannan (China Daily)

BEIJING - The technology giant Lenovo Group, the third-largest PC maker by market share, on Thursday reported quarterly sales revenue of $5.9 billion for April through June and pre-tax net profit of $123 million, nearly double compared with the same period last year.

Lenovo attributed the result - the company's highest in 27 years - to pre-tax net profit of $77 million in mature markets such as the United States, Japan and Western Europe. It was facing $9 million in losses for the same period last year.

Lenovo's sales revenue in mature markets was $2.1 billion in the quarter ended June, accounting for 34.6 percent of the company's global figure.

According to the company, it will shift its emphasis from market share to profit-generating projects in those regions.

Lenovo Chairman Liu Chuanzhi at the earnings call said the company has been placing its focus on mature markets since the beginning of this year.

In January, the company announced a $175 million joint venture with Japan's NEC Corp. In July, Lenovo completed its acquisition of Medion AG, a German multimedia and consumer electronics maker.

"Our results show that Lenovo's acquisition of IBM's PC business has become a success. In future quarters, we will take what we've learned from this acquisition and apply that knowledge toward our joint venture with NEC in Japan and our acquisition of Medion in Germany," Lenovo's CEO Yang Yuanqing said.

Lenovo Group surpassed Acer Inc to become the world's third-largest PC maker with a market share of 12.2 percent in the latest quarter and has benefited from its expanded distribution channels through acquisitions, according to the US-based research company IDC.

Yang said the company will continue to focus its acquisition targets on overseas PC companies that occupy a large portion of local markets.

The PC sector has been Lenovo's main business after its acquisition of IBM's Personal Computing Division in 2005. The company said it will focus on the more lucrative business-computing sector, where the company has leverage in domestic and overseas markets.

"Although Lenovo's market share in mature markets is still relatively small, it has a very strong advantage in the Chinese market. We forecast China will continue to experience rapid growth over the next quarter, especially in the mobile Internet sector," said Kitty Fok, vice-president of the research company IDC Asia-Pacific.

Apple Inc received $3.8 billion in sales revenue in China last quarter through sales of iPhones and iPads, while Lenovo saw $2.8 billion in the same period.

Lenovo said it will place greater emphasis on its LePhone smartphone and LePad tablet PC in order to grab a greater share of the mobile Internet sector.

In the earnings call on Thursday, the company said it sold 81,000 LePads in the last quarter and aims to occupy 20 percent of China's tablet PC market by the end of this year to compete with Apple."
 
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Apple A6 Chip in Early Production Stages at TSMC

"Apple A6 Chip in Early Production Stages at TSMC
8:00 PM - August 21, 2011 by Marcus Yam -
source: Tom's Hardware US

TSMC could score yet another contract for a fancy chip.

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Apple A4 iPad CPU

Samsung is Apple's chip partner with its ARM-based A4 and A5 that have been the brains of the latest iPod touch, iPhone, iPad and Apple TV devices. Of course, the two companies aren't friends in the legal realm right now, so perhaps Apple is just looking for a new friend with a factory.

The Taiwanese Economic News reports that Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC) has allegedly started trial production of Apple's A6 chip, which will likely be used in future generations of Apple mobile devices.

TSMC is lending its 28nm process with 3D chip stacking technology to Apple's A6 chip, with plans to be taped out in Q1 2012. The A6 could hit real products as soon as Q2.

Sadly, there are not any details yet regarding the chip, but hopefully it'll give Nvidia's quad-core Kal-El a run for its money. Yay for competitive progress, right?"

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Nvidia: We Are Well Prepared for 28nm Process Technology - X-bit labs

"Nvidia: We Are Well Prepared for 28nm Process Technology.
Nvidia: We Have Working 28nm Silicon
[08/11/2011 11:26 PM]
by Anton Shilov

Nvidia Corp. said it had learnt the lessons with 40nm process technology and would not repeat its mistakes with the 28nm fabrication process. The company spent time on learning the peculiarities of the 28nm manufacturing technology from Taiwan Semiconductor Manufacturing Company and already has working 28nm chips.

"We are far better prepared for 28nm than we were for 40nm. Because we took it so much more seriously. We were successful on so many different nodes for so long that we all collectively, as an industry, forgot how hard it is. So, one of the things that we did this time around was to set up an entire organization that is dedicated to advanced nodes. We have had many, many tests chips run on 28nm, we have working silicon," said Jen-Hsun Huang, chief executive officer of Nvidia.

TSMC's 40nm manufacturing process was plagued with low yields conditioned by problems with the technology itself, manufacturing issues and design errors. Nvidia started to develop its 40nm lineup without knowing about the potential issues and when it ran into a set of unexpected problems it had to delay launch of its key-products based on Fermi architecture. With 28nm process technology, the company seems to be better prepared.

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Taiwan Semiconductor Manufacturing Company (TSMC) fabrication facility

"[Our experience with 28nm] is looking really good, it is looking much better than our experience with 40nm. It is just a comprehensive, across-the-board engagement between TSMC and ourselves making sure that we are ready for production ramp when the time comes. So I feel really good about 28nm," said Jen-Hsun Huang.

Nvidia said earlier this month that it plans to test-drive its next-generation Kepler graphics processing unit (GPU) this year and introduce the new chips commercially in 2012.

Kepler is Nvidia's next-generation graphics processor architecture that is projected to bring considerable performance improvements and will likely make the GPU more flexible in terms of programmability, which will speed up development of applications that take advantage of GPGPU (general purpose processing on GPU) technologies. Some of the technologies that Nvidia promised to introduce in Kepler and Maxwell (the architecture that will succeed Kepler) include virtual memory space (which will allow CPUs and GPUs to use the "unified" virtual memory), pre-emption, enhance the ability of GPU to autonomously process the data without the help of CPU and so on."

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AMD to "Kill" APU in 2012; Move to SOC with 28nm Krishna and Wichita - Bright Side Of News*

"AMD to "Kill" APU in 2012; Move to SOC with 28nm Krishna and Wichita
by Theo Valich
8/16/2011
...
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AMD Fusion Roadmap for 2012: 32nm Trinity will be made by GlobalFoundries, while 28nm Krishna and Wichita come out of TSMC

Instead of being a long-term architecture, APU with its CPU, GPU and memory controller bolted together will only fly for a generation or two, before AMD releases a fully-blown SOC (System-on-a-Chip) design. With the low-power Bobcat core, which targets entry-level computing devices such as tablets, netbooks and low-end notebooks and desktops, the APU-to-SOC shift is going to happen with the second generation already.

59B8i.jpg

AMD Krishna and Wichita SOC designs: Future C-, E- and Z-Series APUs, all fitting inside the 18W TDP bracket. You can expect further decreases, to the tune of 8W and 16W SOC designs, even though Krishna and Wichita incorporate more parts in silicon

The 2012 platform is codenamed "Deccan" and will consist out of Krishna and Wichita processors (successors of Ontario and Zacate, the current C-, E- and Z-Series APUs). Both designs will be manufactured using 28nm process over at TSMC, featuring up to four Bobcat cores, up to 2MB of L2 cache and naturally, a support for Turbo core mode.

Both Wichita and Krishna will pack 25% boost in graphics processing department, with the GPU design being brought up to Northern Islands standard, supporting UVD 3 with Secure Asset Management Unit (SAMU) and further improvements to multimedia standards (read: hardware acceleration for more codecs and technologies such as stereoscopic 3D).

The big change is the SOC part of the silicon: Yuba Fusion Controller Hub is moving onto the APU silicon, making these parts first SOC designs coming out of AMD stable.

Yuba FCH supports single PCIe x16 and four x1 ports, DVI, HDMI and Analog VGA, SATA 6Gbps, HD Audio, USB (dedicated 2.0 and 3.0 ports) legacy PCI, LPC and SPI. As you can imagine, all of these changes cannot fit inside the current Socket FM1, which is the main reason why Wichita and Krishna will utilize Socket FM2 in a discrete or embedded (BGA - Ball Grid Array) form factor.

It is expected that Trinity, the 32nm Bulldozer-based APU will continue to use Socket FM1 and evolve from APU to a SOC design in 2013.

Late 2012 and early 2013 are shaping up to be the time of SOC: 22nm Intel Atom Z Series, 28 and 32nm AMD Fusion, NVIDIA Project Denver, Qualcomm Snapdragon 8974, TI OMAP5 and many more.

To us, it looks that AMD has the upper hand, with NVIDIA's ability to surprise. Qualcomm Snapdragon 8974 slipped by more than two quarters and naturally, Intel can always come in with 22nm Medfield and wipe the floor with unconcerned competition."
 
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Mustang's revolutionary roll-to-roll vacuum deposition systems deposit uniform thin-film coatings (Front Contact -TCO e.g. ZnO, Window Layer - CdS, Absorber - CIGS, Back Contact Molybdenum).

Taiwan's newly-developed domestic roll-to-roll photovoltaic sputtering machine (US$1.03 million) is 20 times less expensive than comparable imported machinery (US$20.6 million).

Taiwan develops roll-to-roll photovoltaic sputtering machine | Eco-Business

"Taiwan develops roll-to-roll photovoltaic sputtering machine
Published: Monday, August 22nd, 2011
By: Taiwan Today

Taiwan chalked up a significant breakthrough in solar cell manufacturing Aug. 22 following the unveiling of its first homegrown roll-to-roll sputtering machine, according to the Ministry of Economic Affairs.

“The prototype will slash manufacturing costs by a third while satisfying international environmental protection standards,” MOEA officials said. “We expect this machine to give local firms a competitive edge by 2012.”

According to the ministry, environmentally friendly roll-to-roll vacuum deposition systems are utilized worldwide by major manufacturers to apply photovoltaic coatings in a low-cost and efficient manner. The technology is rarely used in Taiwan due to the exorbitant price of the machine and complicated manufacturing process.

MOEA officials estimate that the locally made device will cost NT$30 million (US$1.03 million) and NT$80 per sputtered square meter; this compares to NT$600 million and NT$240 for comparable machines from abroad.

Developed under a public-private sector program overseen by the MOEA, the roll-to-roll sputtering machine represents ongoing efforts to bolster Taiwan’s solar energy industry in the global market, officials said."

[Note: The picture (above) shows an expensive foreign roll-to-roll photovoltaic sputtering machine.]
 
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China Construction Bank (中国建设银行) [Photo credit: Laozhou]

To put the net profit of China Construction Bank into perspective, let's compare the 2011 net profits of the two-most profitable Chinese and American companies from each country. As you can see, Chinese companies have achieved the same gargantuan profit levels as their American counterparts.

1. Exxon Mobil: $32.3 billion
2. Industrial and Commercial Bank of China (ICBC): $31 billion
3. China Construction Bank: $29 billion
4. Microsoft: $23.2 billion

References:

Exxon Mobil: The 10 Most Profitable Companies In 2011 - 24/7 Wall St. - Business - The Atlantic
ICBC: ICBC's net profit may rise 21% - China.org.cn
China Construction Bank: See article below and double the first-half profit
Microsoft: Dodge & Cox Finds Value in Tech: Microsoft and HP

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AFP: China Construction Bank net profit jumps 31%

"China Construction Bank net profit jumps 31%
(AFP) – 12 hours ago

SHANGHAI — China Construction Bank said its first-half net profit jumped 31 percent thanks to higher interest rates and strong growth in fee-based businesses such as financial consulting and advisory services.

The bank, in which Bank of America owns a 10 percent stake, earned 92.8 billion yuan ($14.5 billion) in the six months to the end of June, compared with 70.7 billion yuan a year earlier, the company said in a statement filed to the Shanghai Stock Exchange late Sunday.

Net interest income, which accounts for more than 70 percent of its profit, grew 23.7 percent year-on-year in the first half to 145.7 billion yuan after the government hiked benchmark interest rates a number of times this year.

Fee and commission income also surged 41.7 percent from the same period last year to 47.7 billion yuan.

"The group was actively engaged in service and product innovation which boosted the growth in the fee-based businesses. As a result, net fee and commission income rose substantially," the bank said.

Shanghai-listed shares in China Construction Bank closed down 0.89 percent at 4.45 yuan in a weak market.

Lending growth of Chinese banks has slowed since China introduced a slew of measures to rein in liquidity to fight inflation, which hit the highest level in three years at 6.5 percent in July.

The central bank raised its benchmark interest rates twice in the first half of the year and the amount of money banks must keep in reserves with the central bank six times.

China Construction Bank said its outstanding loans stood at 5.99 trillion yuan as of the end of June, up 8.3 percent from the end of December. That growth was slower than the 11.1 percent recorded in the first half of 2010.

But net interest margin, a gauge of lending profitability, widened to 2.66 percent at the end of June from 2.41 percent the same time a year ago on the interest rates hikes, the bank said, offsetting the negative impact of slower growth in new loans.

The bank's non-performing loan ratio stood at 1.03 percent at the end of June, lower than 1.14 percent at the end of December."
 
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