China Signs Energy Deal with Brunei

                                              China signs energy deal with Brunei
 
China and Brunei Darussalam have signed four Memoranda of Understanding  and a Plan of Action at Istana Nurul Iman, as part of Chinese Premier Wen Jiabao's first official visit to Brunei.

The four Memoranda of Understanding are on cooperation in forestry, the energy sector, the establishment of Sister Cities program between Bandar Seri Begawan and Nanjing, and commercial cooperation in the oil and gas sector between PetroleumBRUNEI (PB) and China National Offshore Oil Corporation Ltd (CNOOC). Brunei is the third-largest oil exporter in Southeast Asia and the world's fourth-largest natural gas exporter.

The Plan of Action is on health care cooperation between Brunei's and China’s  Ministries of Health.

Turkmenistan to boost natural gas deliveries to China

Turkmenistan to boost natural gas deliveries to China

China has been diversifying and expanding access to energy needed to power its fast-growing economy and reduce its reliance on heavily polluting coal and oil.

 China, the world's second-largest economy, has been diversifying and expanding access to energy needed to power its fast-growing economy and reduce its reliance on heavily polluting coal.

In an agreement, signed by President Hu Jintao and Turkmen President Gurbanguly Berdymukhamedov, Turkmenistan agreed to increase annual gas deliveries by 25 billion cubic meters a year, bringing the total to 65 billion cubic meters annually. This is equivalent to more than half of China’s entire natural gas consumption last year.

The gas agreement was one of 14 signed between Turkmen President Gurbanguli Berdymukhamedov and Chinese President Hu Jintao. Both sides agreed to enhance security and law enforcement cooperation, promising joint efforts to fight terrorism, separatism and extremism, and cross-border crimes. The other agreements covered loans for the purchase of oil and gas drilling equipment, recognition of university degrees, police training, combating money laundering and counterterrorism.

 During their meeting, President Hu Jintao called Turkmenistan “a long-term and stable strategic energy partnership”. China became Turkmenistan's largest trade partner in 2011, with bilateral trade rising to $3.56 billion in the first three quarters.

China and Turkmenistan launched a natural gas pipeline in Central Asia in December 2009. The 1,833-km pipeline is the longest in the world and had delivered 10 billion cubic meters of natural gas to China by the end of May this year.

The agreement has greatly assisted China in diversifying its sources of energy and Turkmenistan has welcomed the cooperation with China, as they find alternatives to its dependence of selling to Russia.  In addition to natural gas sales to China, Turkmenistan has been expanding gas exports to nearby Iran and hopes to craft a deal with the EU in the near future.

Hong Kong office space rates predicted to keep falling

If you are planning to enter the Hong Kong market or thinking about upgrading your office space in Hong Kong, over the next 6 to 12 months you might find some deals.  

Weakening demand from the financial industry along with a rise in competition from other locations within the city like East Kowloon and Tsim Sha Tsui (TST) are giving pressure to prime office space in Central Hong Kong. 

Colliers International has predicted that rents in Central will fall by 8% over the next 12 months and prime office rents in Central already fell 3.8 percent in the third quarter to an average of HK$148 per square foot.  

In the bust to boom cycles Hong Kong often goes through, office rents can fall and rise drastically; from 2001 to 2003 Central office rents fell 40% and from 2008 to 2009 the market saw major consolidation of office space. 

HSBC’s has decided to reduce their local staff by 3000 over the next 3 years, Barclays, Bank of America, UBS and JP Morgan have all mentioned the intention to reduce over head in Hong Kong.

Even with the additional competition and weakening demand, don’t expect to see a glut of prime office space in Central, The lack of supply in Central is expected to continue due to economic slow down.

Hong Kong is one of Asia’s main banking centers, with weakening demand in the financial industry many companies are seeking lower rental costs and are consolidating locations, so if you have been thinking about entering the market here or you are eyeing an office upgrade , this might be the time to look for a deal.

A Short Trip to Macau

One of the many advantages of living in Hong Kong is the ability to escape from it, even if it’s just for the day. My normal escape route is due north, but this time I decided it was time to revisit Macao, after a short trip on a Jet Boat I was back in Macao and absorbing the energy of this dynamic island.

For most people living or have lived in Asia, when the word “Macao” is heard, the first thing that comes to mind is GAMBING! And for those of us that have been around for a while Stanley Ho might also come to mind, but Macao has many more things to offer than only gambling.

 The first time I visited Macao was in 1991 at the time it was a Portuguese colony.Today along with Hong Kong, Macao is one of the two special administrative regions of the People's Republic of China. It lies on the western side of the Pearl River Delta, bordering Guangdong province to the north and facing the South China Sea to the east and south.

The Gambling industry has sure changed in Macau since my first visit in 1991.

From 1962 until 2002 the gambling industry had been operated under a government-issued monopoly license by Stanley Ho's Sociedade de Turismo e Diversões de Macau. In 2002 several casinos from Las Vegas entered the Macau market. The Sands Macao, Wynn Macau, MGM Grand Macau and my favorite the Venetian Macau (which opened in 2007) all have been very successful. The gambling revenue has made Macau the world's top casino market, surpassing Las Vegas and a must visit spot for Asia’s high rollers.

What is also interesting about Macau is it is also an offshore tax haven with no foreign exchange control regimes; I had interesting conversation with some one I know who works at the Bank of China Macau, their stories would excite anyone, even those of us who have been in this market for a while.

In addition to gambling there are many things to enjoy in Macau.The mixing of the Chinese and Portuguese cultures and religious traditions for more than four centuries has left Macau with an amazing collection of holidays, festivals and events. The biggest event of the year is the Macau Grand Prix held in November.  

One of the methods I use for learning about a new place and culture is to go out and enjoy the local cuisine as the locals would and Macau never disappoints in this experience.

Macau’s cuisine consists of a blend of Cantonese and Portuguese cuisines, resulting from a mixing of people & culture that is call Macanese. Macanese food is seasoned with various spices and flavors including turmeric, coconut milk, cinnamon and lime.

Some famous dishes include Galinha à Portuguesa, Bacalhau (Cod Fish), Macanese Chili Shrimps, Pork Chop Bun and Stir-fry Curry Crab. No meal is complete with out trying the Macau Beer or Ginger Milk, and Almond Cookies or the very famous Portuguese-style egg tarts are both great ways to finish off a Macanese meal.

So after enjoying some time in the Venetian, dining on Macanese food, and watching an amazing show by the Circus Soli, I jumped back on a Jet Boat and was back home within a short matter of time, recharged and ready to face another work week.

China harvested its 7th largest corn crop in eight years, but it falls well below domestic demand.

China harvested its 7^th largest corn crop in eight years, but it falls well below domestic demand.

Despite China harvesting its seventh record corn crop in eight years, China has struggled to meet the insatiable demands of its middle class. Corn which forms the basis of sweeteners, starch, alcohol, ethanol  and feed for livestock, has become a vital commodity to the China market.

Chinese corn production reached 189.2 million tonnes in the harvest that began in September, 6.7 % more than last year, according to a survey of growers in the seven main producing regions carried out by SGS SA.

According the USDA, Chinese demand rose 50% since 2000 but output only gained 38%,which is insufficient to meet the demand and is driving prices to the highest ever annual average. The explosive economic growth in China in the past decade has spurred a change in diets, China’s  dairy herd has almost tripled since 2000, and per capita pork consumption rose 26 %.

China already buys about a quarter of all U.S. soybeans and  has become a net importer of corn for the first time in 14 years in 2010. In July, China ordered 21 million bushels of U.S. corn in one order, which is more than the U.S. government thought China would purchase annually . The purchase took the market by surprise and then China bought another 2.2 million bushels of U.S.

Prices in Jilin China rose 17 %  and touched a record 2,43 yuan a tonne on September 19, according to Shanghai JC Intelligence, the mainland's biggest independent agricultural researcher. Only US farmers grow more corn and the US consumers consume more corn than China.

Since China is secretive about the levels of commodities it holds in its strategic reserves, the rest of the market can only guess what its supply needs are, but the USDA forecasts that China will import 79 million bushels of corn for the 2011-2012 crop year. Some grain traders are even more optimistic, but they have been wrong before about China's appetite for U.S. corn, In the mid 1990’s US farmers thought the Chinese would become annual buyers, though  China's middle class is much larger than in the 1990s , maybe we are entering a golden age of Chinese consumption. 

The October flooding in Thailand could affect the rice market and may hold it in an uptrend into early 2012

The October flooding in Thailand could affect the rice market and may hold it in an uptrend into early 2012. 

Thailand is currently facing its worst flooding in 60 years; the Thai government estimates the nation may lose 25% of the main rice crop to flood waters. 

 The flooding has also affected the rice crops of their neighboring countries; this year flooding has damaged 6% in the Philippines, 12% in Cambodia and 7.5% in Laos, according to the UN Food & Agriculture Organization.

In addition dry weather in the U.S. has cut production there, U.S. rice production normally accounts for more than 10% of the global rice trade. 

Global rice prices may move up further in the next few months as flooding in Thailand continues to affect crop production and damage existing inventories.