China Buys Up All Of Bank Of America In Asia

Elaine Meinel Supkis

The Chinese continue takeovers of important industries and institutions. They just took over 100% of Bank of America's Asian holdings, for example. They will be this year, the world's #3 auto makers. The yuan continues to climb in value vis a vis the dollar. I keep saying, it is an ancient Chinese curse, 'May your wishes come true.'

&hearts This bank takeover it total--a sign of Chinese fiscal strength.

BEIJING, Dec. 30 (Xinhua)-- China Construction Bank (CCB) announced Friday it had completed the acquisition of Bank of America (Asia) Ltd, the wholly-owned subsidiary of Bank of America in Hong Kong, acquiring 100 percent of the equity.

The branch offices and bank documents of Bank of America (Asia)Ltd will soon bear the logo and name of China Construction Bank Asia Ltd.

The two sides inked an agreement worth 9.71 billion Hong Kong dollars in August, and the deal was later approved by Chinese and overseas banking authorities and by CCB shareholders.

The last 'industry' for America has been financing. Of course, a nation without money and with just printing presses can manufacture only inflation. And the dropping dollar shows just that: our fiscal health is very ill and it is going to get much worse. Our addiction to deficit spending is a disease that will lead to the death of our nation.

Hidden nearly entirely from view is the ongoing firesale of everything in our nation: highways, ports, airports, lands, factories, water systems, railroads, everything is for sale...to foreigners. The Chinese have a fist full of dollars and they are now spending it, consolidating their own powers, increasing the wealth of their nation.

In the news this week is the series of purges for corruption going on secretively in China. The Chinese communists are still totalitarian communists. I keep warning people that they are quite capable of slamming capitalist millionaires into the ground if they feel they need to do this. They don't want a corrupt system because they fear unrest which lurks just below the surface. Last year, a number of spontaneous peasant rebellions had to be suppressed because of anger over corruption.

&hearts The Chinese plan to raise the value of the yuan.

BEIJING, Jan. 1 (Xinhua) -- The exchange rate of Renminbi, the Chinese currency, is expected to appreciate by some five percent to one U.S. dollar for 7.44 yuan, according to Xinhua Economic Analysis Report released Monday.

The report projected that the pace of RMB appreciation would be faster in the first half of 2007 than in the second half.

Xinhua Economic Analysis Reports are regular products by a team of more than 80 economic analysts under Xinhua Economic Information Department. The latest issue of the reports reviewed the country's ten key indices in the economic and financial sectors and made projections on possible changes in the coming year.

The Chinese don't want the Japanese model of forever subsidizing trade by making things expensive at home and cheap in America. They are in a much bigger nation that has a population that dwarfs Japan's own, which is now falling due to lack of babies. Unlike the Japanese, the Chinese intend to eventually eclipse the dollar and make the yuan the default currency in the world one day. Japan will switch from trying to keep the American market going and will, by necessity, support trade with mainly China.

This still seems far off except this year, trade with China surpassed trade with the USA already! This is why the Japanese suddenly stopped the China-bashing and are now reaching out to make nice finally.

&hearts The Japanese are very interested in the future Chinese auto markets.

BEIJING, Dec. 31 -- China's auto industry has grown so rapidly in the five years since the nation joined the WTO that it will soon become the world's third largest auto manufacturer behind the United States and Japan.

Since 2001, China's annual auto output has tripled and the nation has gone from being the fifth largest car manufacturer in the world in 2002 to the fourth largest in 2005.

Over the last five years, China has fulfilled its commitments to the WTO by adopting a series of measure to further open its auto industry. In the first 11 months of this year, China produced 6.65 million cars, putting it on track to reach 7 million for the year, making China the world's third largest auto manufacturer behind the United States and Japan. China is expected to sell 6.4 million vehicles this year.

If the Chinese are paying cash while the USA wants IOUs, all business will eventually gravitate to China. Money matters, you know. Heh.

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Comments

[China Law Blog]

Yes, but. . . . Many foreign companies (like Starbucks, for example) are buying out the shares of their Chinese joint venture partners, so it really is going both ways.

[Liberal AND Proud]

Yeah, we're really going to bring down the Chinese by denying them Starbucks franchises.

Our next strategic move...McDonalds!!

[Elaine Meinel Supkis]

Heh.

And they buy Lockheed-Martin. A fair trade.

[JSmith]

"They just took over 100% of Bank of America's Asian holdings, for example."

Took over? I didn't think anyone was nationalizing stuff any more - except for maybe nutjobs like Chavez.

Oh, wait - they actually bought it.

"The two sides inked an agreement worth 9.71 billion Hong Kong dollars in August..."

That's capitalism for you - you develop stuff, and then you sell it to someone else. If you sell it for more than your original investment, we call that "profit". (By the way, profit is good.)

[Elaine Meinel Supkis]

And when the Chinese have more dollars than you, Smith, they outbid you for everything in the end. Then the profit ends up being theirs.

[JSmith]

All this reminds me of the late 70s - mid 90s, back when the Yellow Peril was Japan. Remember that? Seems kinda quaint now, doesn't it?