China ecnomoic news....

1) Shanghainese gov't along with local banks and investment brokerage firms are doing a tour this month to New York and London. The goal, to attract the brightest in the financial sectors to Shanghai to work. Huh? Come again? These people were the brightest that have caused the world financial systems to collapse. And we are hiring them to be here? How many times do we really want to get screwed? I hope this is only an excuse for the Shanghainese gang to do some pre-Christmas touring.

2) As expected Hong Kong residential pricing is dropping. So far, 20% or so. Will drop more as credit from banks is hard to get. HSBC has raised mortgage rate over 75 basis points. Expect the home price continues to fall to 30% by next year. The number of home prices less than the mortgage has surged over 175% in the 3rd quarter. Yikes. This sounded like the US real estate market from before.

3) The Citic Group Hong Kong that purchased the Australian dollar accumulator continues to look money. There is no bottom yet as the contract does not expire until later next year. Good think it is being backed by the Chinese gov't now. But the lost is mounting and won't know what the total tally is. As of yesterday, word was over HK$187billions.

4) An open letter has been sent to the Chinese Central Committee by 10 university economic professors. They want the Chinese gov't to start buying the A shares and the H shares to save the market. Have not heard what is the response.

5) A history professor in a Shanghai university was being investigated as "counter revolution". He was done in by two female students who attended his class. Apparently, he was critical of the Chinese policies during the pre-cultural revolution time. Go figures.

6) The world largest container producer, a Chinese company has stopped production line for over 2 months now. 38% of the employees are on "holiday".

7) The might boost Taiwanese stock market. The Taiwanese gov't has agreed to allow Chinese QDII funds to invest into Taiwan. That's huge for Taiwan as it will not depend on US. At this rate, Taiwan "will return to" China virtually but not physically. QDII is Qualified Domestic funds registered and approved by Chinese gov't. These funds collectively lost a HUGE sum of money last year in then stock markets abroad. But the management fee doubled. Wonder what these funds will invest in Taiwan.

8) The Chinese gov't is setting up a new performance review system for civil servants. If one employee has two years of "incompetent" status, he will be fired. Gee.... I thank SlackTel should discuss w/ the Chinese gov't on this. Along with this new system, bonuses will be paid out to civic servants who have "Excellent" status.

9) This is interesting... Commerical property sale, the gone years used of the slogan "guarantee rent after sale" (售后包租) is banned by the Shanghainese gov't. As early as 2005, the Chinese gov't had announced ban of this type of sale tactic. No one really cared until now. By banning this tactic, sale of commercial space will be very difficult and expect to drop dramatically. This guarantee was used to attracted large amount of investors to buy, in particular in the area of service apartment and shop usage. Now I understand why there have been so many shops opening up at places that should not have been.

10) With the economic downturn continues to affect Chinese market, commercial space demand is expected to drop. Next year's average rent cost will decrease. By how much, not known yet. Some newly developed space or still being built are giving out "up to 1 year of free rent". Or RMB1.5 per square meter favorable rent. The current rate is about RMB2.5 per square meter. Further, expect franchises are holding back in space demand pending on the economic recovery. Shops along Nanjing Road West (南京西路）and Huai Hai Lu (淮海路), even though have no sale, but still want to maintain a store front on these streets. These two streets are well known for shoppers. Polling of major cities: Beijing, Shanghai, Hangzhou, Xian all expected rental cost decreases.

11) Chinese real estate analysts all said residential price has not dropped bottom yet. Maybe by 2nd half of next year. And 2010 1st half will rise and will enter another phase of elevated pricing. Really?