Business Times:

I believe it is a dream of every Singaporean to host a summer Olympic in Singapore one day. It is not only a game of great economic benefit to the host city, but also a moment of pride, unity and patriotism. Due to her limited size and population and thanks to her geographic location, Singapore will continue to rely heavily on free trade and tourism as a guiding strategy for growth in the foreseeable future. The Summer Olympic is arguably the best opportunity on this planet to promote Singapore’s image, boost domestic investment, and attract significant volumes of visitors globally that is consistent with the nation’s economic philosophy. The Olympic shall benefit all the sectors such as hotel, airline, retail, and infrastructure, just to name a few. In addition the Olympic would be a great boost to the domestic equity and property market almost without doubt.

Singapore is equipped with all the necessary infrastructures to host a summer Olympic. Singapore has a world class public transportation system that stretches to almost every corner of the island. The 2010 Youth Olympic shall be a good opportunity to test the stadiums and organizers’ efficiency. Singapore government, being one of the most efficient in the world, has sufficient resource and skill to organize a big event such as Olympic. The vast amount of hotels and resorts in Singapore shall be sufficient to meet the demand of growing visitors during the game. Continue (继续)

Chinatells – Wu Shu – Singapore

In the game of Texas, sometimes one need to play cool just to hold off on your bottom line, sometimes one need to bluff to scare the other players away.

China government’s reaction to President Obama’s decision to impose import tariff on Chinese Tires to USA is the key to determine how this trade battle will develop in the next phase, either an escalated war or a dust in the river of history.

There seems no doubt that US is on the proactive side in terms of aggression, and whether it is a rational decision remains to be seen. It is questionable whether the imposition of tariff on Chinese tires would make a difference in securing more jobs for American labors as there would be cheaper tires from Mexico, India and Brazil. In addition, most American companies have waned away from tire production anyway so the workers for the total sector is tiny compared to the mighty work force that is enduring the highest unemployment rate in the last 26 years in the States. For Obama Administration, the only tangible benefit in pleasing the unions by committing the promise to enforce trade laws seems to be a better negotiation stance in the health care reform, which is one of the biggest challenges for the current US government.

Continue (继续)

Seven o’clock in the evening around the street corner, Confucius stepped into the bar for an appointment made earlier.

Uncle Sam: Hi, buddy, how are you doing?

Confucius: Yo, Sam, long time no see

Uncle Sam: What’s going on? My trade deficit has broken another new record and my unions keep complaining to me every day that your workers are taking their jobs away. You are selling your toys and clothes too cheap.

Confucius: I can’t help, Sam. I have 50 million immigrant labors to feed. Without exporting them to you they will all be out of jobs.

Uncle Sam: I think the problem is your exchange rate. You are the country with the biggest trade surplus on this planet. But it is artificial all because of your too low currency value. Continue (继续)

What is the best social system in the history of human being? Feudalism, Serfdom, or Capitalism? What about Socialism or Communism? Such question has aroused heated debates among scholars from generation to generation. In the most recent two centuries, however, such debate seems to be becoming more and more smokeless. Capitalism, the dominant social system in almost all the wealthy and powerful nations, has so far proved to be the most dynamic, resilient and creative system in the history of humanity. The balance between individual freedom and social harmony, and the equilibrium between economic efficiency and mass fairness work out well to a point that any attempt for an alternative solution either failed (eg., USSR) or was aborted. Of course it is not to say that capitalism is flawless. In fact it is far from being perfect. On a relative basis, however, no alternative system is anywhere near to compete against the capitalism.

The rise of China, nevertheless, poises a challenge to the most superior system in the last two hundred years. To categorize China in a book defined system is not an easy task. To begin with, China hardly suits in the category of ‘capitalism’. To quote Merriam-Webster, Capitalism refers to an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market. In today’s China, the state capital accounts for about 53% of the nation’s total capital, and state owned enterprises contribute to about 40% of the country’s total GDP. Some industrial sectors, such as energy, railway, telecom and airline are almost totally controlled by limited numbers of mega big state owned companies, therefore there is hardly a ‘market’ in such sectors. In a lot of those state owned companies, the management has dual agendas from both economic and political aspects. For example, to maximize the profit of the company is important, but it is also politically risky to lay off employees even with a justifiable reason. Continue (继续)

(Chinatells) In June, 2009, Sinopec is reported to complete a US$7.2 billion takeover transaction for Addax Petroleum. Sinopec paid Canadian$52.80 a share, which is 16% more than the prevailing stock market price at the time of transaction to obtain the acceptance of the majority shareholders of Addax.

Whether such a deal is of commercial sense, however, is far from concluding. There are quite a few negative comments on Sinopec’s deal, particularly from Wallstreet. For example, it is calculated that based on the oil reserve that Addax occupies, Sinopec is literally paying an equivalent of $34 per barrel to Addax for all their potential future output. Such a price is quite high compared to an average acquiring cost of about $15 in the last two years. Due to this reason, Sinopec’s bid is valued to be 135% over the market estimate.

Is Sinopec so fooled as per those smart analysts’ ‘inside’ view? I doubt so. What those analysts have failed to see, are the macro background for such a deal and the timing of the deal. Continue (继续)

Our Editor published an article recently on Business Times (July 7, 2009) to discuss the situation of Chinese consumers and its potential impact on world market.

NAPOLEON Bonaparte is supposed to have once said: China is a sleeping lion; let her sleep; for when she wakes, she will shake the world. Certainly at the moment, China is rocking the world of commodities. As at late 2008, China contributed to 10 per cent of world’s oil consumption, 35 per cent of world’s coal consumption, 16 per cent of world’s aluminium consumption, 20 per cent of world’s copper consumption, 40 per cent of world’s cotton consumption and 18 per cent of world’s wheat consumption. Continue (继续)