-Andy Xie, former chief economist for Morgan Stanley, published an op-ed in Caijing magazine suggesting that foreign governments should dump their US Treasury Bills because they were only likely to loose value over time as the US Federal Reserve continues to cut interest rates as inflation rises in the US. It is hard to argue with his logic; however, Andy has a tendency to make perfect sense but be totally wrong in the end. Look at his prediction in 2005 that oil prices were likely to collapse; with oil prices at almost US$80 a barrel today he couldn’t have been more off the mark. Also he seems to ignore the fact that if central banks start dumping their US Treasury Bills, it will likely cause an even larger disruption in the global economy than the losses they may sustain on bills over the next few years.

-The mania for Chinese stocks continued as shares in China Digital TV shot up over 100% on Friday in the company's first day of trading on the NYSE. Investors Business Daily has a good piece about the astronomical returns of many Chinese IPOs during the last year including Wuxi Pharmaceuticals, Ehouse, Home Inns and Trina Solar, just to name a few that are up over 100% since their IPOs. It’s starting to look a whole lot like 1999 and the internet bubble all over again but something tells us it will probably take another few years before we start to hear that popping sound.

-With signs of a slowing US economy, the Economist asks how fit the Chinese economy is and will it be able to maintain its heady growth if the US economy slows. This is a question that we expect to be hearing a lot more about as concerns about the US economy’s health grow. The Economist's prognosis is that despite the Chinese economy's structural weaknesses, it should be able to keep chugging along; even in the worst case scenario, it believes that the Chinese government would use their huge reserves to prop the economy up. We hope they're right, otherwise things could get very ugly.

-An AFP article sites a Capgemini study that suggests India could overtake China in the manufacturing space in three to five years, based on their survey of 344 fortune 500 companies. We’re not sure of their methodology and how they came to this conclusion but the idea seems to be less than plausible if not laughable. According to the article China accounts for 8% of the worlds manufacturing and India accounts for less than 1%; even if China’s manufacturing output were to decrease by 50% over the next five years India would have to increase their output by 4 times. Doesn’t seem likely…..

Statistics

-The Ministry of Agriculture hopes that the sown area of potatoes across China will total 6.67 million hectares by 2010, 1.67 million hectares more than in 2006, and that per-unit yield will top 1,200 kg, an increase of 200 kg over the 2006 figure.

-China's railway passenger transport volume reached 1.033 billion person-times in the first nine months of this year, up 7.3% from the same period last year, according to the Ministry of Railways.

The ministry also said freight transport volumes went up 9.5% to 2.318 billion tons during the period, with a daily loading of 138,516 cars, up 8.1% year-on-year.

-Golden Week is a golden time to go shopping according to China UnionPay. On Oct. 1 and 2, CUP trans-bank transactions on the mainland surged 60% year-on-year to exceed US$2.5 billion (RMB19 billion), according to figures released on Wednesday by China Unionpay (CUP), a national electronic payment and interchange network.

CUP issued 10.21 million credit cards in the first half of 2007 in China, up nearly two fold over the same period of last year. They also issued 127 million debit cards in the same period, up 113.7% year on year.