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Look no further than Alcoa Inc. and General Motors Co. for evidence that the Chinese economy is poised to accelerate. Alcoa, the largest U.S. aluminum producer, is raising its forecast for global consumption of the metal on stronger demand from China. GM, the biggest overseas automaker in China, says the nation’s vehicle sales may reach 12M, surpassing the USA as the world’s No. 1 market. The benchmark Shanghai Composite Index entered a bear market, or a decline of at least 20%, August 31 on concern a slide in new loans in July might slow production and investment. Figures for August may allay the fears: Industrial output rose the most in a year and retail sales climbed at a 15 percent annual pace, median forecasts in Bloomberg News surveys show. The Shanghai index rose for a sixth day yesterday, helping pare the decline from this year’s record close on August 4 to 16%.

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PetroChina announced today that it has agreed to pay US$1.7Bfor a majority stake in two Oil sands projects in northern Alberta in the latest of several Chinese investments to help develop the world’s second-biggest Crude Oil reserves. The two projects, known as Mackay River and Dover, are being developed by Athabasca Oil Sands, a privately held Calgary-based group. “Oil sands projects are very capital-intensive, long-term investments and difficult to fully finance in the traditional equity market,” Bill Gallacher, Athabasca’s chairman said on Monday. “therefore we decided to look for joint venture partners.” PetroChina will acquire a 60% stake in the two projects, but Sveinung Svarte, Athabasca’s chief executive, told the Financial Times that “both of us have to reach decisions on the major issues”. The bitumen-like Oil Sands have drawn growing interest from Chinese energy groups.

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General Motors announced that it has formed a 50/50 Joint Venture with FAW Group to make light trucks in China for the 1st time, in a further sign that the US car maker has increased focus on the Chinese market in the face of weak US sales. Total investment in the JV with the Chinese vehicle maker will be US$293M GM said Sunday, under a deal that the two companies had been negotiating for several years. The partnership with FAW, called FAW-GM Light Duty Commercial Vehicle Co, will be GM’s 3rd JV with a local vehicle maker, but the first to produce trucks. GM’s other Chinese Joint Ventures produce passenger cars and mini commercial vehicles. GM passenger car sales in China rose 52% year-on-year in July, traditionally a weak month, according to figures from JD Power, the car consultancy. Total Chinese light vehicle sales in July were up a remarkable 60% year-on-year at 1.03M vehicles, the JD Power figures showed. Chinese light vehicle sales have continued to surprise vehicle market analysts since January 2009.

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In China the Government owns the Banks; the bankers do not own the Government. China’s stimulus plan is working better than in the US and the UK because the government is using the banks for public ends, rather than allowing the banks to use the government for private ends. In the USA, the banks are the most powerful lobby on Capitol Hill; they own the Government.

The USA is spending trillions of greenbacks to bail out its banking system, leaving its economy to languish, as China, now called a “miracle economy,” decoupled from the rest of the world, is maintaining a phenomenal 8% annual growth rate. That, by the way, is being questioned by lots of Pols, commentators, economists and other talking heads, as they ask how that growth is possible, when other countries relying heavily on exports have suffered major downturns and remain in the doldrums. Read more

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China’s carbon emissions will start falling by 2050, its top climate change policymaker said, and the 1st time the world’s largest emitter has given such a time-frame. Whether China will agree to some kind of cap on its emissions is a critical question ahead of global climate change talks in December in Copenhagen. Beijing argues, as do most developing countries, that developed nations should take responsibility for cutting emissions first, since global warming originated with their industrialization. China and India have been resisting pressure from developed nations to agree to a target of reducing emissions by an overall average of 50% by 2050. Beijing’s view is this; that as China still needs to grow its economy to help its people escape poverty, it is too early to discuss emissions caps. The Chinese Academy of Sciences has said that with major technological support from developed nations, China could see its emissions peak between 2030 and 2040. Other Chinese experts say carbon output will keep rising until 2050 unless radical controls are adopted. No radical programs are under way at this time.

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Chinese President Hu Jintao said here Saturday that the current international financial crisis, despite its severe impact on China’s economy, also means an opportunity for the country.

China should take the opportunity to change its development pattern and realize structural adjustment so as to maintain a steady and relatively fast economic growth, Hu said when joining a panel discussion with deputies of the National People’s Congress (NPC) from south China’s Guangdong Province.

“Challenge and opportunity always come together. Under certain conditions, one could be transformed into the other,” Hu said. Hu went on to say that China should make full use of its advantages to break the bottlenecks of development.

He also called for efforts to promptly and creatively implement the policies and plans of the central government to create conditions for solid and rapid development in the future. In face of impacts of global financial crisis, China should seek both a temporary solution and a permanent cure, and make efforts to upgrade its industry and improve competitiveness of Chinese enterprises, said Wu, chairman of the NPC Standing Committee.

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