Tag: China

Is Melamine in America’s Milk? Have you had bubble tea lately?

Stepped away from the computer this weekend and ventured out to Chinatown. Went to get bubble tea at our favorite restaurant to find they weren’t serving it, because their milk came from China. A trip to a second bubble tea store and asked where did they get their milk. “Mei Guo! Mei Guo!” they said, which means America in Mandarin, “HEB!” the Houston grocery store. They showed us the half and half and carefully made the bubble tea with it so we can see it. Nevertheless they had a can of Nestle Chinese milk there, actually quite inconspicuous. So if you don’t ask they will use the canned stuff. So, there are
View Larger Map“>208 bubble tea stores in Houston, and if 75% are using Chinese milk, well you could do the math.

By the way, have you noticed that 300,000 Chinese babies have fallen ill from melamine poisoning? Keep in mind this number is what the official number is, so it is likely to be higher than that. Quite amazing.

Fareed Zakaria, for one, welcomes our Chinese Overlords

Zakaria says America’s only hope is to kowtow to the Chinese.  As usual, I disagree.  Also as usual, the most interesting words are not his own:

“People often say that China and America are equally dependent on each other,” says Joseph Stiglitz, winner of the 2001 Nobel Prize in Economics. “But that’s no longer true. China has two ways to keep its economy growing. One way is to finance the American consumer. But another way is to finance its own citizens, who are increasingly able to consume in large enough quantities to stimulate economic growth in China. They have options, we don’t. There isn’t really any other country that could finance the American deficit.”

The Chinese are in this position because their labor is far cheaper than ours, and as such they can sell a lot of it. My response to this is essentially this. You won’t see any return to sensible trade and fiscal policy in our country until the Chinese can (or will) no longer purchase our bonds in such large quantities. I’m not saying I don’t want to see foreign investment, I’m just saying I want to see the kind of policies, like balanced budgets, that in a reasonable world would invite foreign investment. Zakaria and the NY Times, and apparently everyone in the media, is saying we desperately need to deleverage….later.

I guess I’d rather a sharp steep recession than an endless one. But no, it’s all spend, spend, spend, more easy money, bail out rotten banks, and go Christmas shopping, for the sake of the economy.

Need GHB for your next date? Buy toys made in China

Just in time for Christmas, boys and girls. Kids in Australia that consumed these aqua dots fell sick, it has since been pulled from the shelves in Australia, Spain, and from Toys R Us stores worldwide.

Chinese recall spurs demand for American-made toys

This kind of story is encouraging, though all these recalls of Chinese products have hardly made a dent in the market.

As consumers look for alternatives to Chinese-made toys following a series of recalls this year, dozens of small toy companies are struggling to meet surging demand. Some owners report online sales up as much as fivefold from last year. They’re hiring extra workers, expanding warehouses and adding extra assembly shifts.

Chinese recall spurs demand for American-made toys

Reagan Gahagan Report: China threatens to trigger US dollar crash#links

China threatens ‘nuclear option’ of dollar sales
By Ambrose Evans-PritchardLast Updated: 9:54am BST 08/08/2007The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.Fistful of dollars – China’s trade surplus reached $26.9bn in JuneTwo officials at leading Communist Party bodies have given interviews in recent days warning – for the first time – that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress.Shifts in Chinese policy are often announced through key think tanks and academies.Described as China’s “nuclear option” in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels.It would also cause a spike in US bond yields, hammering the US housing market and perhaps tipping the economy into recession. It is estimated that China holds over $900bn in a mix of US bonds.Xia Bin, finance chief at the Development Research Centre (which has cabinet rank), kicked off what now appears to be government policy with a comment last week that Beijing’s foreign reserves should be used as a “bargaining chip” in talks with the US.”Of course, China doesn’t want any undesirable phenomenon in the global financial order,” he added.He Fan, an official at the Chinese Academy of Social Sciences, went even further today, letting it be known that Beijing had the power to set off a dollar collapse if it choose to do so.”China has accumulated a large sum of US dollars. Such a big sum, of which a considerable portion is in US treasury bonds, contributes a great deal to maintaining the position of the dollar as a reserve currency. Russia, Switzerland, and several other countries have reduced the their dollar holdings.”China is unlikely to follow suit as long as the yuan’s exchange rate is stable against the dollar. The Chinese central bank will be forced to sell dollars once the yuan appreciated dramatically, which might lead to a mass depreciation of the dollar,” he told China Daily.The threats play into the presidential electoral campaign of Hillary Clinton, who has called for restrictive legislation to prevent America being “held hostage to economic decicions being made in Beijing, Shanghai, or Tokyo”.She said foreign control over 44pc of the US national debt had left America acutely vulnerable.Simon Derrick, a currency strategist at the Bank of New York Mellon, said the comments were a message to the US Senate as Capitol Hill prepares legislation for the Autumn session.”The words are alarming and unambiguous. This carries a clear political threat and could have very serious consequences at a time when the credit markets are already afraid of contagion from the subprime troubles,” he said.A bill drafted by a group of US senators, and backed by the Senate Finance Committee, calls for trade tariffs against Chinese goods as retaliation for alleged currency manipulation.The yuan has appreciated 9pc against the dollar over the last two years under a crawling peg but it has failed to halt the rise of China’s trade surplus, which reached $26.9bn in June.Henry Paulson, the US Tresury Secretary, said any such sanctions would undermine American authority and “could trigger a global cycle of protectionist legislation”.Mr Paulson is a China expert from his days as head of Goldman Sachs. He has opted for a softer form of diplomacy, but appeared to win few concession from Beijing on a unscheduled trip to China last week aimed at calming the waters.