Understanding China

The thing to remember is China has a PLAN. They have a long range manufacturing strategic plan and a long range economic plan. The USA has neither nor does the EU. A former president of the USA was roundly criticized for “bailing out” the US auto industry but received little condemnation for bailing out the banks that nearly plunged the world into a depression in 2009. While the USA isolates itself from other countries, except militarily, China is happy to fill the void while the USA spends itself down the rabbit hole with military spending. The USA has a military presence in 150 different countries and is fighting wars all over the Middle East and Africa either openly or by proxy, creating massive migration problems other countries have to deal with. There is not even a strategic USA military plan as the war in Afghanistan has been going on for 17 years with no end in sight. While the USA repeats the mistakes of failed empires past China steps into the void building port facilities, airports, hydroelectric plants and roads in other countries all over the world. I am not a fan of the government in China but at least they have plan for economic expansion and international influence.

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The US instigated trade war with China is having effects way outside it’s intended target and purpose (Assuming that there are such a thing):

The owners of VLCCs are already feeling the pinch by low rates and restrictions on Iranian crude export due to another Trump action.

Yet somebody see opportunities in the VLCC market:

I couldn’t have said it better.

wait till all those lunatics around the world get jealous of China and then hence blaming them for their woes.
Once they get that status they will have become an equal of the USA

The USA just gave money to lots of countries, China has done deals that have locked them in debt traps forever, so maybe China will get to favorite hated nation status sooner than we think.

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Yes for China to keep a lid on internal issues now that the export business is slowing up and lots of factories and cities have either never been opened or are closing is to get the locals to spend.
They have to overcome the issue of huge factories using cheap manual labour to automation in a very short time in an attempt to continue to compete with rising manufacturing costs.
They closed the door on all those shifting billions out
now they are slowly removing cash internally. My guess is they will change the money to widgets for internal use at the flick of a switch to ensure 100% control on debt and reserves

The US views BRI as a threat to US dominance in the world, while others may have a different view.
China invest in infrastructure by direct investment by Chinese companies, loans by Chinese banks and grants by the Chinese Government.
Of course they expect something in return, both in the form of profit and political support. They don’t meddle in internal affairs in the countries involved though, nor do they demand allegiance to the Chinese system of government.

Here is an article in Splash 24/7 today with the opinion of a 20-year veteran in Asian business and policy:

Another Splash article today show how scared the US are of anything Chinese these days:
https://splash247.com/cosco-offers-us-authorities-long-beach-terminal-solution-solve-oocl-takeover/
At the same time they complain about China not being open enough to American investments.(??)

is that China where a foreigner can only own 49% of a company in China?

No the one where foreigners can own 51% controlling interest:
https://www.bloomberg.com/news/articles/2017-11-10/china-to-allow-foreign-firms-to-own-51-of-securities-ventures

While the US is going the other way:

Here you can compare China, US and 13 other countries laws on foreign ownership and investment:

Throw in Australia for good measure:
https://www.export.gov/article?id=Australia-openness-to-foreign-investment

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Looks like Trump is bringing China to its knees or just making a level playing field out of the global game

If that is the view from inside the wall then it will be a long hard learning curve. How will the USA repay the debt to China

BRI is moving forward and countries are climbing on board.

Meanwhile the Chinese Hongs are consolidating:

:http://www.seatrade-maritime.com/news/asia/chiwan-wharf-takes-39-stake-in-cmport-in-asset-shuffling-deal.html

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LEVEL PLAYING FIELD???
He has just plowed up a field that has been cultivated for 70 years!!
The farmer has been USA, who have also reaped the best harvest.

Here is the problem. Company A wants to do business in China so it has to sign up a Chinese partner who has 49% shares of a share of a new company in China with the company A holding the balance. The Chinese partner having acquired the intellectual property of A makes it available to a third party who goes into production destroying the value of the company formed by company A.
China is engaged in a hitherto unseen level of industrial espionage. A group of Chinese came to look at horticulture practice in NZ and were found at the border to have stolen cuttings from new varieties of apples.
You had it right in Norway when you built the bare hull in China and fitted it out with all the advanced equipment in Norway.
If you have arbitration in China you can kiss goodbye to your money .

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If you are afraid that whoever you partner with or sell to will steal your trade secrets and copy your products you wouldn’t be able to do much business anywhere. Industrial espionage is wide spread and not only conducted by China.

Norway see China as a major future market for its export, incl. marine equipment and technology:


Ships of Norwegian design and with Norwegian equipment are being built in China all the time and for owners of many different nationalities. Some marine equipment are being produced under license, or by subsidiaries in China.

I presume that the hull you where referring to being built in China and outfitted in Norway was this one. Seen here arriving in Norway and being carried on the COSCO HLV Xiang Rui Kou:


To my knowledge that is the only one, otherwise they build hulls or sections in Eastern Europe.

BTW;This was the maiden voyage for the XRK. I was COSCO’s Superint./Loadmaster during loading of the next cargo. (A Grab Dredger from Nagasaki to S.Africa)

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There will always be unscrupulous traders in every country in the world and those countries that have the ability to engage in industrial espionage continue to do so.
What I am on about is Chinese involvement is on an unprecedented scale and the carefully crafted rules on trade and arbitration are ignored. There is no redress through the Chinese legal system when a contract is not completed. This seems to be a government directive.

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This is silly. China bought long term US Treasury bonds because they thought the bonds were good investments and safe. They actually own less than years past. If China decided to unload their US bonds they have to find a buyer. The USA is under NO obligation to pay China or any other country for long term bonds they buy. They have to sell them on the open market. The only US treasury bond actually guaranteed by the US government are series I savings bonds. If China unloaded or tried to unload their long term bonds it would cause the bond price to plummet and they would lose money causing an inverted yield curve which I would love as I hold mostly shorter term I treasuries.

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If China didnt buy T bills they wouldnt sell anything in the USA, same for Japan years ago.
China owes the USA for where it is today as does Japan

actually its Japan they got cheap resources for 70 years…

Wah Kwong looking to be a middleman to Chinese equity, whilst Trump builds walls China builds bridges - from Tradewinds

Wah Kwong scouts China for equity partners

Industry veteran David Palmer says his new company is shying away from shipyards for the time being but looking to invest with strategically interesting management clients

June 21st, 2018 17:00 GMT

by Bob Rust

Published in Dry cargo

Wah Kwong Maritime Transport is looking to use its shipmanagement business strategically as a springboard to making equity ­investments, says chief executive David Palmer.

“We are not expanding in third-party management to compete with the likes of V.Ships,” says Palmer, who joined the conservative, family-owned shipowner a month ago.

Rather, the Hong Kong time charter-oriented owner is looking for clients that need both shipmanagement expertise and commercial connections from a company that moves easily between the Chinese and international business and shipping cultures.

Palmer, who had been Singapore chief executive of Pareto Securities, is settling into his new role.

Wah Kwong had gone without a top executive from outside the Chao family since the 2016 departure of Tim Huxley. In the interim, it has been led by chairman Sabrina Chao, recently with the increasing support of one of her younger brothers, executive director Hing Chao.

Palmer took on his new job after 12 years running the Singapore offshore and shipping finance base that he set up for Pareto in 2006.

Penfield taps Hong Kong for aframax pool partners
Read more  .
The veteran of Stolt-­Nielsen’s US operations is well travelled in both the shipowning and ship finance world. He moved from the US to Singapore in 2002, where he headed the IMC Pan Asia Alliance for Tsao family-­owned International Maritime Carriers (IMC) ­before his switch to investment banking.

At Pareto, his biggest deals included raising money and acquiring ships for the United Arab Chemical Carriers start-up in partnership with Credit Suisse. More recently, he was involved in the sale of Jaya Holdings’ offshore fleet to Mermaid Marine Australia in 2014 and last year’s sell-off of the 32-ship Swissco ­offshore fleet, now going through the courts.

Wah Kwong headhunted him back from investment banking into shipowning, rather than connecting with him through any transaction business with Pareto, Palmer says.

“I think I ticked a lot of boxes for them,” he says. “I had managed family companies and knew how to work with families.”

Separ­ately, in an interview for Wah Kwong’s in-house magazine, he says: “Wah Kwong was innately appreciative of my grey hairs… and provides a well-rounded final leg to my 40-plus-year ­career in shipping.”

As a traditional tonnage supplier, Wah Kwong has long worked through strategic partnerships with co-investors, and using shipmanagement to explore investment opportunities is a strategy that precedes Palmer’s recruitment. But it will be stepped up on his watch.

Palmer mentions existing client Shandong Landbridge as an example of the kind of client that holds promise for future equity investments. “Landbridge is someone we want to grow with,” he says.

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Wah Kwong chairman Sabrina Chao Photo: TradeWinds Events

So far Wah Kwong does only technical management and newbuilding super­vision for the privately owned company, which has three VLCCs on the water and three more on ­order.

Palmer also points to the growing directly owned fleets of some Chinese ­financial ­institutions, many of which have gone beyond bareboat charter finance leases to doing time charter business ­directly for cargo owners — something that aligns well with the business model of traditional Hong Kong tonnage suppliers.

He sees Wah Kwong as better qualified to develop such business than its Hong Kong peers, because it is the one that has remained most Chinese both in its crewing and its shoreside personnel.

Hats off to the new Commodore
Read more  .
Wah Kwong is “a Chinese owner based in Hong Kong with an international outlook”, as Palmer sees it, and he believes a competitive ­advantage lies in this distinction.

“Around 91% of our crew are ­Chinese,” he tells TradeWinds. “Some of the other Chinese owners of Hong Kong have ­become less Chinese over the years. We have good communications ­between the office and the ships because everyone is speaking the same language.”

He tells the company’s in-house magazine: “[It] is Wah Kwong’s ability to think like Chinese owners and operators which allows us to serve as a bridge between China and the world.”

Wah Kwong lists a fleet of 15 bulkers from handysize to capesize, plus four aframax tankers and two VLCCs, but Palmer says the dry-wet split is about 50-50 in terms of vessel values. The com­pany is “relatively asset-agnostic”, but new equity investments, whether through partners or at shipyards, are likely to follow that pattern.

“That’s been our company policy to date. We see diversity as a hedge,” he explains.

“I think we are going to be ­targeting commodity bulk trades where there is liquidity in the ­secondhand market, so I don’t think you will see us going into any ­specialised tonnage segments.”

Seamless return

As for gas shipping, where Wah Kwong was active as an owner ­until recently, he says its position as manager of two VLGCs for Fortune Gas and five smaller ships for long-term partner Exmar provides a platform for a seamless return to equity investments there if a suitable opportunity arises.

But it is putting off direct renewals through newbuilding contracts until clarity emerges about how the industry will tackle the emissions question.

“Everybody is consumed with the S-word right now — scrubbers,” Palmer says. “It’s hard even to get a quote. It’s lost to me why we are supposed to be putting ­refineries on ships.”"

Meanwhile, the Great and Ancient is still expanding in China…

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Hows the Dollar versus the Renmimbi?