Wen Jiabao’s comment
Premier of the People’s Republic of China, commented on what we have done wrong. “the Crisis”,
said Wen JiaBao,” it is attributable to a variety of factors and the major ones are: inappropriate macroeconomic policies of some economics and their unsustainable model of development characterized by prolonged low saving and high consumptions: excessive expansion of financial institutions in the bind pursuit of profit: lack of self discipline among financial institutions and rating agencies and the ensuring distortion of risk information and assert pricing; the failure of financial supervision and regulation to keep up with financial innovations, which allowed the risks financial derivatives to build and spread.
A long term remedies include introduction of national policy on those imbalances will have to be unwound, preferably by fundamental changes to domestic policy that encourage saving in the U.S. and spending in China.
Global economy crisis require global solutions world traders are going to gather to address problems tat can not be solved by one of them alone. The pressing date is April when leaders of the G20 leading economies will meet in London, Continuing a dialogues they began in Washington last fall. So the next timing is April when we can review more on the actions of these G20 leaders… However , China plays a very crucial role in stablilizing and balancing the World economy as we have a big market for consumption! So as Wen said, we will spend more and US people to save more...
China Internal consumption Stimulus
Automobile business in China
Beijing national regular meeting announced that China will subsidies RMB 5.0B tax reduction for the purchase of 1.3L capacity or below car to replaced tricycle, slow speed truck in the rural area. This will target total sales of 10 millions cars in China in 2009. This is the way to target to be the world largest car consumption country other than US. In U.S., there are average 800 cars in 1,000 people and there is only average 20 in 1,000 people in China., the Market is tremendous. As in January 2009, the China car sale market is larger than in US!
China in 2009
This is an important year for China, 2009 is
60th anniversary for New China Country establishment
50th Tibet Dalai Lama, a mystic reverence who ruled over Tibet until the Chinese Communists took over. In April the 23-year-old Dalai Lama fled to India.
30th anniversary of the economic reform was unleashed by Tang Siu Ping
20th Tiananmen Square Event June 4 1989
China will by all means making a lot of effort in performing good economy in the international show ground as to tell the rest of the western world a China is not just a world factory but a more or less a high way running towards middle class country in the standard of western world.
Maintenance of High GPD target 10% and worse case 8% for 2009
A change of world factory to be more in technology base manufacturing
Build it own system in the industrial standard such as the New HD DVD to deferential to the Japanese standard. This will boost the Electronics and MM player market without paying royalty to the Japanese!
EU is considering abort the sanction of military sales to China after 20 years of Tiananmen event.
Promote the sales plan for car and government tax support for buying small car
Wu Han has been granted RMB 1,000B for stimulating the economic and to support 2 millions of workers.
Well, yet to else but soon that China will announce the use of EV car 50% by 2020 that will drive a lot of industrial move in the electronics, LEDs, battery technology and car manufacturing in China.
US Bailout
The congress had approved by majority the Democratic parties that a bailout of 787B was approved by 60 to 38 votes of approval on 13 Feb. Obama will sign officially in Denver in on 17 Feb.
Amongst the bailout, 35% of them amount will be used as tax reduction program. And 65% will b used as Government investment.
National Policy for Stimulus
Europe will impose law in the banning of 100W incandescent Light bulbs.
European Union has planned to scrap all Automobile more than 10 years as to push for use of new car.
European and US government is doing a lot for green energy resources including solar and LED illumination
GM is imposing new practice in the launch of at least one model of Hybrid car in each model of their products.
Obama is emphasis the use of more efficient car including the use of battery driven or Hybrid car.
China would announce a national plan to encourage the auto maker and transportation system including gas station to have charging facilities of EV Car, By 2020, China will have at least 50% of car running by battery, that is also one reason Warren Buffet invested in car in China 2009
International Monetary Fund Managing Director Dominique Strauss-Kahn said the IMF still sees China's economy expanding 10 percent this year.
China will by all means try to target for this index.
Automobile Car Pileup
It is time for a good bargaining for car as General Motors, Ford, Chrysler, Toyota, Honda and Nissan were looking for buyers for 2,669,070 unsold vehicles in the U.S. at the end of 2008. According to Autodata Corp. in Woodcliff Lake, NJ., at the pace of cars and truck sold in Dec. it would take Honda 100 days, or Chrysler 115 days to clear always their pileups. That is almost double their inventory level a year earlier and far higher than the 60-days supply . Those analyses describe as normal.
Forecast for 2009
As on the U.S. bailout plan has been approved and it may take 1-2 quarters for result to be seen. By time Q3, new buys will come for Semicon equipment partly due to the bank will relax more for fund loans for IC investors. Semicon stock level will be at the lowest and factory is in need for more stock for shipment. We speculate that more internal drive for consumption in China will drive and boost up the market for electronic consumption and likely by End Q2, we should see order to come in a bigger scale. Of course nothing is 66.6% be easily foreseen, and this is purely my comment and opinion only.
Fever 15 Feb 2008
