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China’s Rigged Markets Could Fall Much Further, Much Faster

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Those fearing that China is the big risk in the year ahead for global markets hope that the first trading day of 2016 does not set the tone for the rest of the year.

Between a 7% fall in shares that triggered new circuit breakers on the Shanghai SHCOMP, -1.63% and Shenzhen stock exchanges 399100, -3.29% and accelerated weakness in the yuan, there is ample fodder for China bears.

The question being posed anew is whether 2016 will be the year Beijing finally throws in the towel on its attempts to coerce multiple asset markets upwards, while its economy continues to sink in a sea of debt.

While yet more weak industrial activity numbers from the Caixin China December PMI got the new year off to a flat start, the bigger concern is whether the leadership still has the will or the ability to continue holding up stock prices as its confronts ever more painful policy choices.

The black start to January trading had its roots in the controversial government intervention last summer to rescue stocks from a rout, which wiped over $4 trillion off share values and sent shock waves around global markets. (Read more from “China’s Rigged Markets Could Fall Much Further, Much Faster” HERE)

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China Blasts the U.S. About Anti-Terror Surveillance Law – They’re Brutally Honest

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China accused the U.S. and other Western critics of hypocrisy and “double-standards” Tuesday as it defended a new counter-terrorism law that gives authorities greater powers to monitor private communication.

The law, passed over the weekend, would also require telecom and Internet companies to provide encryption and other technical assistance to China’s anti-terror efforts.

Chinese authorities insist the new powers are necessary to combat growing terrorist threat at home and abroad.

However, State Department spokesman Mark Toner expressed concern over the law’s “overreach,” saying it “could lead to greater restrictions on the exercise of freedoms of expressions, association, and peaceful assembly.”

That criticism is “hypocritical,” state-run Xinhua News Agency said in a commentary published Tuesday, adding that the U.S. and other countries also have required technology firms to cooperate in terror-related surveillance. (Read more from “China Blasts the U.S. About Anti-Terror Surveillance Law – They’re Brutally Honest” HERE)

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Christians in China Feel Full Force of Authorities’ Repression

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Pastor Su Tianfu slides into the back seat and tells the driver to hit it . . .

It is days before Christmas, but instead of working on his sermon, Su is giving his tail the slip.

The slight and soft-spoken Protestant preacher is no stranger to surveillance. Su has worked for years in China’s unregistered “house churches,” and he said he has been interrogated more times than he can count.

But even Su is surprised by what has happened in Guiyang this month: a crackdown that has led to the shuttering of the thriving Living Stone Church, the detention of a pastor on charges of “possessing state secrets” and the shadowing of dozens of churchgoers by police.

A local government directive leaked to China Aid, a Texas-based Christian group, and reviewed by The Washington Post advises local Communist Party cadres that shutting down the church is necessary to “maintain social stability”— a catchall phrase often used to justify sweeping clampdowns. (Read more from “Christians in China Feel Full Force of Authorities’ Repression” HERE)

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Chinese Mother Testifies About 13 Million Forced Abortions a Year – It Amounts to ‘Torture’

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At a hearing of the Congressional Executive Commission on China on Thursday, a Chinese woman who is pregnant with her second child — and who fled to the United States with her husband and son — said the official government policy change from one-child to two will not stop forced abortions that number at least 13 million a year and amount to the “torture” of Chinese women.

“A majority, but not all, families will meet the criteria and be allowed to keep their second child,” Sarah Huang – not her real name – said in her prepared testimony, which she gave from an undisclosed location through an interpreter. “However, clearly China’s change to a two-child policy is not enough.”

“Chinese families who attempt to have two children could still be subject to coercive and intrusive forms of contraception and forced abortions, which amount to torture,” Huang said.

“The Chinese government data report that 13 million abortions are performed each year, for an average rate of 35,000 abortions per day,” Huang said. “I personally believe the number is much higher because these statistics only include hospitals that report their figures and most abortions occur in unauthorized ‘black’ clinics or at home.”

Huang said she believes the number of abortions annually in China is closer to 20 million a year. (Read more from “Chinese Mother Testifies About 13 Million Forced Abortions a Year – It Amounts to ‘Torture'” HERE)

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Watch for U.S. Recession, Zero Interest Rates in China next Year

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The outlook for the global economy next year is darkening, with a U.S. recession and China becoming the first major emerging market to slash interest rates to zero both potential scenarios, according to Citi.

As the U.S. economy enters its seventh year of expansion following the 2008-09 crisis, the probability of recession will reach 65 percent, Citi’s rates strategists wrote in their 2016 outlook published late on Tuesday. A rapid flattening of the bond yield curve towards inversion would be an key warning sign.

“The cumulative probability of U.S. recession reaches 65 percent next year,” Citi’s rates strategists wrote in their 2016 outlook published late on Tuesday. “Curve inversion will likely come more quickly than the consensus thinks.” (Read more from “Watch for U.S. Recession, Zero Interest Rates in China next Year” HERE)

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China ‘Clone Factory’ Scientist Eyes Human Replication

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The Chinese scientist behind the world’s biggest cloning factory has technology advanced enough to replicate humans, he told AFP, and is only holding off for fear of the public reaction.

Boyalife Group and its partners are building the giant plant in the northern Chinese port of Tianjin, where it is due to go into production within the next seven months and aims for an output of one million cloned cows a year by 2020 . . .

Boyalife is already working with its South Korean partner Sooam and the Chinese Academy of Sciences to improve primate cloning capacity to create better test animals for disease research . . .

The firm does not currently engage in human cloning activities, Xu said, adding that it has to be “self-restrained” because of possible adverse reaction.

But social values can change, he pointed out, citing changing views of homosexuality and suggesting that in time humans could have more choices about their own reproduction. (Read more from “China ‘Clone Factory’ Scientist Eyes Human Replication” HERE)

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China Plans to Launch Carbon-Tracking Satellites Into Space

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China plans to launch satellites to monitor its greenhouse gas emissions as the country, estimated to be the world’s top carbon emitter, steps up its efforts to cut such emissions, official news agency Xinhua said on Monday.

News of the plan comes as more than 150 world leaders arrived in Paris for climate change talks and Chinese President Xi Jinping and U.S. President Barack Obama said they would work together towards striking a deal that moves towards a low-carbon global economy.

According to the Xinhau report, the country’s first two carbon-monitoring satellites will be ready by next May after four years of development led by Changchun Institute of Optics and Fine Mechanics and Physics, part of China’s Academy of Sciences . . .

If successful, it would be the world’s third country to send satellites into orbit to monitor greenhouse gases, coming after Japan which was the first country to do so in 2009, followed by the United States last year.

The satellites will be key for expanding research into emissions – currently, China is only able to collect data from the ground, whereas the probes will also monitor oceans, which make up 71 percent of the world’s surface. (Read more from “China Plans to Launch Carbon-Tracking Satellites Into Space” HERE)

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China ‘Cloning Factory’ to Produce Cattle, Racehorses and Pets

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The world’s biggest animal “cloning factory” is due to open in China, producing one million calves a year, sniffer dogs and even genetic copies of the family pet.

The £21 million “commercial” facility will edge the controversial science “closer to mainstream acceptance”, Chinese media said, following the development of a technique which began when Dolly the sheep became the first cloned mammal when she was born in Scotland in 1996.

The centre may cause alarm in Europe, where the cloning of animals for farming was banned in September due to animal welfare considerations.

But Xu Xiaochun, chairman of Chinese biotechnology company BoyaLife that is backing the facility, dismissed such concerns . . .

“Legislation is always behind science. But in the area of cloning, I think we are going the wrong way and starting to kill the technology.” (Read more from “China ‘Cloning Factory’ to Produce Cattle, Racehorses and Pets” HERE)

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Beijing Vows Justice as ISIS Kills Chinese, Norwegian Hostages

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Beijing has vowed to bring ISIS to justice after the group said it had executed two hostages, a Chinese and a Norwegian.

ISIS said it had killed the two men, identified as Chinese national Fan Jinghui and Norwegian citizen Ole Johan Grimsgaard-Ofstad in its English-language online magazine Dabiq.

President Xi Jinping “strongly condemned” ISIS for the killing of Fan, the first known Chinese national to be killed by the group, and the country’s foreign ministry said the Chinese government would “definitely hold the perpetrators accountable.”

But how to respond to Fan’s “cold-blooded and violent” death presents a dilemma for China, which has stayed on the sidelines in the fight against ISIS and has a long-held principle of noninterference in other countries’ affairs. [Editor’s note: this is laughable; China economically leverages nations all over the globe. Ask any Ecuadorean, for instance, as to whether they believe China interferes in their domestic affairs]

To date, Beijing has been vague on the question of what it will contribute to the global fight against ISIS and has declined to explicitly offer its support for airstrikes being conducted against the group in Syria. (Read more from “Beijing Vows Justice as ISIS Kills Chinese, Norwegian Hostages” HERE)

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China Welcomes IMF Backing to Make Yuan World Reserve Currency

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China on Saturday welcomed backing from IMF experts that the yuan should be included in its reserve currencies, saying the move would strengthen the world’s financial system.

Now the world’s second-largest economy, China asked last year for the yuan to be added to the elite basket of SDR currencies, but until recently it was considered too tightly controlled to qualify.

It now looks likely the yuan will be formally admitted to the IMF’s “special drawing rights” currency basket at the end of the month, which would mark a milestone in China’s efforts to become a global economic power.

IMF chief Christine Lagarde said the fund now deemed the yuan “meets the requirements to be a ‘freely usable’ currency” — a key hurdle to joining the yen, dollar, pound and euro as a leading unit in international trade.

The yuan hit headlines in August when China’s central bank devalued the currency and said it would use a more market-oriented system to calculate the point around which the currency can trade each day. (Read more from “China Welcomes IMF Backing to Make Yuan World Reserve Currency” HERE)

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