Tuesday, June 3, 2014
Monday, June 2, 2014
Electio Invest - China thinks towards retaliation on the recent US and WTO Technology Metal sanctions.
By Electio Invest - www.electio-invest.com
Great Britain and France had the largest empires in the world, dominating the world economy in the 19th century thanks to their primary role in the inception of the Industrial Revolution. They were the superpowers of the recent past, whose rivalry has filled annals of history. The digital revolution has promoted the USA and China as the world’s true superpowers. Like France and Britain, the US and China have also been indulging in an all-out economic war and while diplomacy has masked rivalries, the events of the past few months have revealed many fractures in their bilateral relationship. Very different positions on the Syrian civil war, Russia, Ukraine, Iran, expansion in the South China Sea and the Pacific and the dispute over the now Japanese controlled Senkaku Islands have generated diplomatic tensions. Recent revelations of intense Chinese industrial espionage in the United States have lit the fuse to an already explosive scenario. China has become a crucial player in the world of high technology and electronics, despite its reputation as a country with a pronounced tradition of industrial counterfeiting. Electio Invest
Telecommunications equipment manufacturer Huawei is competing with Ericsson, Nokia and Motorola for first place in the sector. Foxconn is the leading manufacturer of high-tech devices including such iconic brands as Apple. Even in the software department, Chinese based search engine Baidu is putting up a valiant fight against Google. The Chengdu technology park will be the world’s largest with over a million square meters at its disposal. The United States has, so far, had few shots to fire to re-establish pre-eminence. The US considers Huawei as a threat to security because of its ties to the Chinese Communist Party according to China’s Minister Chinese Commerce. The House’s Intelligence Committee has claimed that Beijing could be using Huawei, the second largest manufacturer of routers and telecommunications equipment, for espionage purposes to the extent that Chinese investment activity in the United States is suspected as being a “potential Trojan horse”. Electio Invest
Technology Metals may be at the heart of the US-Chinese economic war; without them there would not be flat screen TV’s, hard drives, smart-phones, hybrid engines, wind turbines and solar panels – not to mention missile guidance systems and laser cannons. These minerals are strategic and China still controls 95% of their production and sale while owning less than a third of the world’s known reserves. Having managed to secure a virtual monopoly on Technology Metals – thanks in no small way to shortsighted policies in the West – China has exploited the opportunity to impose export quotas, undermining the needs of Western industries. China’s trading partners have accused China, through the World Trade Organization (WTO) of trying to raise prices and force foreign companies in the sector to relocate to China to secure access to Technology Metals. Meanwhile, amid suspicion of espionage, in 2012 China filed more patents than the United States. Surely, many of these were trivial and filed in response to Chinese government ‘quota fill’ requests; however, the UN’s World Intellectual Property Organization (WIPO) has conducted a study, demonstrating that the level of Chinese patents is improving and a fast growing number are up to world class.
A week ago, the US-Chinese ‘conflict’ achieved a new peak as the U.S. Justice Department accused several Chinese hackers suspected of industrial espionage. The five suspects belonged to the military and were spying in the metal and solar energy industry and a union. In turn, Germany’s investigative journal ‘Der Spiegel’ claimed that last March U.S. spies had managed to infiltrate China’s IT company Huawei. Doubtless, China will not take the accusations lightly, given the tense geopolitical timing of their revelation. China has a number of economic artillery options in its arsenal from establishing tougher standards for American made products to throwing bureaucratic spanners such as unscheduled inspections. China could also find cyber-espionage accusations of its own against the West and it can certainly make it put up a strong challenge against the WTO ruling demanding it drop unfair quotas and restrictions to exports of Technology Metals. Electio Invest
This being a period of ‘reflection’ in China, as the country is trying to confront the environmental damage caused by years of haphazard industrial growth, China’s retaliation will be guarded and delivered to strike maximum effect when it feels it is in a stronger position. For the time being, the US and the WTO are ‘winning’. On May 22, the WTO ruled that China may not enforce punitive tariffs on cars (having engine displacement of 2.5 liters or more). China had been charging 21.5% duty on these largely General Motors (GM), Ford and Chrysler cars namely such models as the Jeep Grand Cherokee, Cadillac Escalade and Buick Enclave. China had justified the punitive tariffs claiming that U.S. carmakers are backed by Washington and, as such, have been able to sell their cars at low prices in the People’s Republic. Overall, the United States exported in the year vehicles in the amount of $ 8.6 billion in the People’s Republic. The Obama administration continues, for some time now, has aggressively pursued efforts against trade barriers and industrial espionage, holding China responsible. China and the EU have their own fair share of trade issues and conflicts. In 2013, the EU had imposed punitive tariffs on Chinese solar panels while China then examined European wine imports and was considering its part to raise tariffs on large displacement European cars. Because the two sides agreed on a minimum price for solar cells, however, the conflict was resolved at that time. Electio Invest
Following the decision of the WTO, it is very likely that China will raise tariffs on exports. The current system of export quotas was “invisible” in recent years because the actual export volumes were below quota. At Baotou in the Inner Mongolia Autonomous Region, where 34 major producers are based, industry revenues reached 290 million U.S. dollars last year, however exports plunged 47.2% to Yuan 31 million. Chinese authorities may deal with the WTO by imposing higher taxes on producers of Technology Metals on the basis of the value of minerals, rather than the volume, as is the case now. This change will result in higher production and, of course, export prices. But China’s revenge will be brewing in a slow process, designed to hurt much deeper.
Electio Invest – Alternative Asset Managers – Electio Group
Great Britain and France had the largest empires in the world, dominating the world economy in the 19th century thanks to their primary role in the inception of the Industrial Revolution. They were the superpowers of the recent past, whose rivalry has filled annals of history. The digital revolution has promoted the USA and China as the world’s true superpowers. Like France and Britain, the US and China have also been indulging in an all-out economic war and while diplomacy has masked rivalries, the events of the past few months have revealed many fractures in their bilateral relationship. Very different positions on the Syrian civil war, Russia, Ukraine, Iran, expansion in the South China Sea and the Pacific and the dispute over the now Japanese controlled Senkaku Islands have generated diplomatic tensions. Recent revelations of intense Chinese industrial espionage in the United States have lit the fuse to an already explosive scenario. China has become a crucial player in the world of high technology and electronics, despite its reputation as a country with a pronounced tradition of industrial counterfeiting. Electio Invest
Telecommunications equipment manufacturer Huawei is competing with Ericsson, Nokia and Motorola for first place in the sector. Foxconn is the leading manufacturer of high-tech devices including such iconic brands as Apple. Even in the software department, Chinese based search engine Baidu is putting up a valiant fight against Google. The Chengdu technology park will be the world’s largest with over a million square meters at its disposal. The United States has, so far, had few shots to fire to re-establish pre-eminence. The US considers Huawei as a threat to security because of its ties to the Chinese Communist Party according to China’s Minister Chinese Commerce. The House’s Intelligence Committee has claimed that Beijing could be using Huawei, the second largest manufacturer of routers and telecommunications equipment, for espionage purposes to the extent that Chinese investment activity in the United States is suspected as being a “potential Trojan horse”. Electio Invest
Technology Metals may be at the heart of the US-Chinese economic war; without them there would not be flat screen TV’s, hard drives, smart-phones, hybrid engines, wind turbines and solar panels – not to mention missile guidance systems and laser cannons. These minerals are strategic and China still controls 95% of their production and sale while owning less than a third of the world’s known reserves. Having managed to secure a virtual monopoly on Technology Metals – thanks in no small way to shortsighted policies in the West – China has exploited the opportunity to impose export quotas, undermining the needs of Western industries. China’s trading partners have accused China, through the World Trade Organization (WTO) of trying to raise prices and force foreign companies in the sector to relocate to China to secure access to Technology Metals. Meanwhile, amid suspicion of espionage, in 2012 China filed more patents than the United States. Surely, many of these were trivial and filed in response to Chinese government ‘quota fill’ requests; however, the UN’s World Intellectual Property Organization (WIPO) has conducted a study, demonstrating that the level of Chinese patents is improving and a fast growing number are up to world class.
A week ago, the US-Chinese ‘conflict’ achieved a new peak as the U.S. Justice Department accused several Chinese hackers suspected of industrial espionage. The five suspects belonged to the military and were spying in the metal and solar energy industry and a union. In turn, Germany’s investigative journal ‘Der Spiegel’ claimed that last March U.S. spies had managed to infiltrate China’s IT company Huawei. Doubtless, China will not take the accusations lightly, given the tense geopolitical timing of their revelation. China has a number of economic artillery options in its arsenal from establishing tougher standards for American made products to throwing bureaucratic spanners such as unscheduled inspections. China could also find cyber-espionage accusations of its own against the West and it can certainly make it put up a strong challenge against the WTO ruling demanding it drop unfair quotas and restrictions to exports of Technology Metals. Electio Invest
This being a period of ‘reflection’ in China, as the country is trying to confront the environmental damage caused by years of haphazard industrial growth, China’s retaliation will be guarded and delivered to strike maximum effect when it feels it is in a stronger position. For the time being, the US and the WTO are ‘winning’. On May 22, the WTO ruled that China may not enforce punitive tariffs on cars (having engine displacement of 2.5 liters or more). China had been charging 21.5% duty on these largely General Motors (GM), Ford and Chrysler cars namely such models as the Jeep Grand Cherokee, Cadillac Escalade and Buick Enclave. China had justified the punitive tariffs claiming that U.S. carmakers are backed by Washington and, as such, have been able to sell their cars at low prices in the People’s Republic. Overall, the United States exported in the year vehicles in the amount of $ 8.6 billion in the People’s Republic. The Obama administration continues, for some time now, has aggressively pursued efforts against trade barriers and industrial espionage, holding China responsible. China and the EU have their own fair share of trade issues and conflicts. In 2013, the EU had imposed punitive tariffs on Chinese solar panels while China then examined European wine imports and was considering its part to raise tariffs on large displacement European cars. Because the two sides agreed on a minimum price for solar cells, however, the conflict was resolved at that time. Electio Invest
Following the decision of the WTO, it is very likely that China will raise tariffs on exports. The current system of export quotas was “invisible” in recent years because the actual export volumes were below quota. At Baotou in the Inner Mongolia Autonomous Region, where 34 major producers are based, industry revenues reached 290 million U.S. dollars last year, however exports plunged 47.2% to Yuan 31 million. Chinese authorities may deal with the WTO by imposing higher taxes on producers of Technology Metals on the basis of the value of minerals, rather than the volume, as is the case now. This change will result in higher production and, of course, export prices. But China’s revenge will be brewing in a slow process, designed to hurt much deeper.
Electio Invest – Alternative Asset Managers – Electio Group
Thursday, May 29, 2014
The Rise & Rise of Technology Metals
Maybe Avatar is fiction, maybe not, but the fact is that in the past twenty years or so we have seen in our own world a range of metals entering mainstream production. These metals have also been labelled 'unobtaniums': and it's not because they're rare; it's because it's such an expensive exercise extracting them from the ground.
The demands for these materials are growing exponentially, and in the years to come will surely outweigh the supply, which is hardly increasing at all.
These metals are known as 'Technology Metals', with the first one being discovered back in the late 18th century. It's interesting to note that a lot of the modern-day gadgets that we take for granted wouldn't even exist without these metals.
At this point there have been seventeen Technology Metal elements discovered (with four of them deriving their names from that small Swedish village), and today these elements are some of the most sought-after resources in the world. It could surprise you just how much your modern-day life depends on them.
You more-than-likely have a GPS system or a smart phone: if so, it's thanks to Technology Metals that your touch screen works. Have you used the vibrate mode on your mobile phone? Yes, Technology Metals at work again. In the evening when you enjoy your state-of-the-art HDTV, or you open your laptop, those screens you're looking at are only working because of Technology Metals.
Technology Metals are used in the majority of mobile phone and computer circuitry, and in fact they're used in wind turbines, your car's catalytic converter and alternator, and fibre optics - these are just a few uses, and there are many more.
Technology Metals have numerous applications in the military, and they're also used in the petroleum and chemical industries.
These elements exist in relative abundance around the world, but are extremely difficult to locate and hazardous to extract. They actually exist in abundance around the world, however they're difficult and expensive to locate and extremely hazardous to extract.
Because of these issues, and compared to other metals, global production of Technology Metals is quite small. The total production of all seventeen metals is estimated to be in the vicinity of approximately 130,000 tons per year - copper comes in at about seventeen million tons per year.
There are increasing concerns over future availability because of course the global demand increases each and every year. Developing countries are growing their middle classes, therefore billions more people will be yearning for smartphones, HDTVs, laptops and cars.
As Technology Metals become more unavailable it's going to become increasingly more difficult to meet the future demand.
As the demand has risen, so too have the attempts at exploration around the world, but unfortunately separation is a difficult and expensive process, not to mention the many environmental issues surrounding both extraction and separation.
In addition, exploration attempts in many countries have not been successful, with a meagre five percent of all mines ever producing.
Because of this ninety-five percent rate of failure, Japan and the United States have been stockpiling Technology Metals as a way of protecting themselves against the inevitable future increases in price. The United States and Australia are currently increasing their own production of Technology Metals, while Vietnam and Japan have united in a joint mining venture; all because they prefer to become less reliant on China.
China can only claim one-fifth of the proven reserves in the world, however it fulfils ninety percent of today's global demand.
In order to obtain a premium price for its Technology Metals, China is now cutting back on exports, right at the time when global demand is increasing. The Chinese Society of Technology Metals has stated publicly that there will be more restrictions in the future, while exports have indeed halved in the past decade.
Some believe this restriction in exports is designed to encourage the relocation of foreign tech companies into China, and others say that China just can't afford to continue exporting when it actually needs these Technology Metals for its own use.
The biggest importers of Technology Metals are the high-tech economies, so it's no surprise that the biggest importer in the world is Japan.
The rapid rise in prices is really affecting countries such as the United States, France, Germany, the Netherlands and Austria.
Even if China lowers its export restrictions, with so many countries depending on the constant flow of Technology Metals, the demand will still outweigh supply in the years to come.
So, what does this mean to us? What this means is that, in the years ahead, there could be some very financially rewarding investment opportunities in Technology Metals and the producers of same, and of course as we already know, new commercial uses will affect our lives in many ways.
And with the environment being a very topical issue these days and say the world really does go green, meaning an increase in the use of solar energy, wind energy and electric cars, we will be requiring many, many times the quantity of these metals in use today.
We are going to have to find that supply somewhere, and wherever it may be, we should all hope that the discovery and ultimate mining of these earth 'unobtaniums' is carried out with a lot more care and consideration for the environment than was previously shown to the inhabitants of Pandora.
Monday, March 3, 2014
Electio Invest Special Report on Sustainable Business: Gold as an Investment
Special report by Electio Invest featured in Sustainable Business.
Dubai: Investing in gold can be used in times of inflation and deflation. It also offers a useful place of refuge in times of turmoil in currencies, it provides stability when the euro and dollar waver. But, while gold does retain a value of wealth, it has no yield.
‘The majority of advisers generally agree that gold should not represent more than 5% of any investor's portfolio. More would be ‘foolish', says Adam Kenny, Head of Investments at Electio Invest Middle East; a commodity investment company head-quartered in Johannesburg. Mr Kenny argues that, for the private investor, gold is just insurance against a further financial meltdown.
However better protection could be obtained from simple asset diversification. Before people decide on which style of gold investment to use, it's very important to understand what forms are not appropriate. Jewellery is not a constructive investment as the price always includes the distribution, retail and manufacturing costs, ‘You just have to take a quick look at prices offered by the "money for gold" firms that flood the market to know that,' says Kenny.
Different ways to invest For people wish to hold the physical asset, the most simple way is to purchase gold coins such as Krugerrands or Britannia's. Investors can obtain these free of VAT and stamp duty, although they must be aware of additional costs for insurance and storage. However there is still an issue of security on gold coin investing as the price doesn't perfectly match the price that gold trades for on the markets.
Read the full report at Sustainable Business
Dubai: Investing in gold can be used in times of inflation and deflation. It also offers a useful place of refuge in times of turmoil in currencies, it provides stability when the euro and dollar waver. But, while gold does retain a value of wealth, it has no yield.
‘The majority of advisers generally agree that gold should not represent more than 5% of any investor's portfolio. More would be ‘foolish', says Adam Kenny, Head of Investments at Electio Invest Middle East; a commodity investment company head-quartered in Johannesburg. Mr Kenny argues that, for the private investor, gold is just insurance against a further financial meltdown.
However better protection could be obtained from simple asset diversification. Before people decide on which style of gold investment to use, it's very important to understand what forms are not appropriate. Jewellery is not a constructive investment as the price always includes the distribution, retail and manufacturing costs, ‘You just have to take a quick look at prices offered by the "money for gold" firms that flood the market to know that,' says Kenny.
Different ways to invest For people wish to hold the physical asset, the most simple way is to purchase gold coins such as Krugerrands or Britannia's. Investors can obtain these free of VAT and stamp duty, although they must be aware of additional costs for insurance and storage. However there is still an issue of security on gold coin investing as the price doesn't perfectly match the price that gold trades for on the markets.
Read the full report at Sustainable Business
Subscribe to:
Comments (Atom)