Chinese Nationalism and Foreign Business Boycotting in China

By Lance Winslow

Well, it seems that China is expanding its territorial waters to include the oceanfront property which was either considered international waters, or the territorial waters of its neighbors. There have been disputes with Japan, Korea, Vietnam, Philippines, and Taiwan. There is also a rather significant problem brewing as citizens from these different nations become angered. When this happens they tend to boycott products from the other nation, and that causes trade flow imbalances.
Worse, when citizens of one nation get angered due to their government-sponsored media or a feeding frenzy of commercial media outlets which pander to propaganda then we have citizens uniting in nationalism against other nations. Just recently, a group of Chinese angered over a dispute between Japan and China over territorial waters took action into their own hands, and that group of citizens attacked and damaged the property of Japanese companies operating in China.
Will this happen if the United States tries to help Asian nations negotiate their own territorial waters? The United States supports Taiwan, Philippines, Korea, and Japan and we've worked to help Vietnam build up its nation and economy too. We also support China, as they are our largest trading partner. What happens if all the citizens in China start boycotting US products, and rioting and burning down US companies? That could be a rather big problem, and it would immediately knock China off our preferred trading partner list.
Would Chinese citizens working in factories purposely poison food products being shipped the United States? These are all questions that should be asked because that could easily happen right now today with China, it could easily happen between the US and China, and it appears China doesn't want to do anything about it in the case of Japan. In fact the Chinese communist government released a statement about the attacks of its citizens on Japanese businesses within China. They said that they understood why their citizens were angered, and took law into their own hands damaging Japanese properties.
What is that supposed to mean? It's obvious that that means China doesn't feel it necessary to police its own citizens for damaging property if it belongs to a foreign nation that is currently having a dispute with the Chinese. Wow, can you see how big of a problem this could be in the future? If this happens with US companies, quite a few of the largest corporations in America have factories in China, and it would hurt our stock market temporarily, but it would also perhaps cause the United States to turn around every single shipping container coming this way.
If that happened China's economy would crumble quickly, and then they might blame the United States and our own citizens for boycotting Chinese products, and then we would escalate a trade war into a larger scale dispute, until which time bullets were fired. That's not into do anyone any good, and that could be a real hard fall for China, and a devastating thing for humankind. Please consider all this and think on it.
Lance Winslow is the Founder of the Online Think Tank, a diverse group of achievers, experts, innovators, entrepreneurs, thinkers, futurists, academics, dreamers, leaders, and general all around brilliant minds. Lance Winslow hopes you've enjoyed today's discussion and topic. http://www.WorldThinkTank.net - Have an important subject to discuss, contact Lance Winslow.
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Look to India, China For Next Internet Innovation

By Kelly Short

The United States invented the internet and has driven the majority of its development and innovation over the past 20 years, but India and China are likely candidates to drive the next generation of innovation given their rising internet user base.

World's Most Popular Web Sites
The world's most popular internet sites have a decidedly American slant to them - sites like Google, Yahoo, YouTube, Facebook and Wikipedia all began in the States. These sites appeal to an American audience, with English text, and nuances that thrive on American culture. But as countries like China and India increase their online population the world's most popular sites will quickly become ones based in the Eastern hemisphere, appealing to Eastern audiences, that may or may not appeal to Western audiences.

As of 2008, China has the world's largest online population with 298 million internet users. India has the fourth largest online population with 52 million internet users and is predicted to have the third highest population by 2013 according to Forrester Research. When you combine both countries' online populations they currently have 60% more internet users than the United States.

Can Google Compete with Baidu?
Baidu.com, a China-based site, is the 9th most popular web site in the world and is China's most popular search engine. It competes with Google and Yahoo but more importantly it provides the best search results for Asian specific sites. Baidu is considered an internet portal similar to Yahoo and provides many different applications and solutions (57 different tools in all), but Baidu actually began as a music file search engine providing links to MP3 files of mainly Chinese music. As its popularity expanded, companies such as Google have copied its functionality (specifically the MP3 search feature) in order to compete in the China marketplace. Google has struggled though in China largely because it misses cultural nuances specific to the Chinese population that companies like Baidu are better positioned to understand. In 2009, Baidu has garnered more site visitors than Yahoo - impressive considering Baidu only caters to Chinese audiences versus Yahoo's worldwide audience.

The worldwide popularity of Chinese-based websites is due in large part to their enormous population. Capture the attention of China's internet users and you are almost guaranteed a spot in the top twenty of the world's most popular web sites. In fact, three of the world's top twenty sites are based in China (Baidu.com, QQ.com, Sina.com) according to Alexa.org, appealing specifically to Chinese internet users. By 2010, China will have an online population larger than the actual population of the United States.

India's Internet User Base
India, with a population of 1.1 billion, shares similarities with China with a large population base and fast growing online population. Though only one of the top twenty sites worldwide is Indian based (sort of... Google India) sites appealing specifically to India's population are certain to emerge.

American Innovation versus Chinese Innovation
Given the tremendous population base and online users in China and India "the next big thing" quite possibly may come from the Eastern hemisphere. American-based companies should carefully monitor fast growing web sites in China and India to assess their functionality and audience. The most popular sites in these countries have so far focused on search and Web 2.0 functionality (social-networking sites, video-sharing sites, wikis, blogs, mashups, etc), but evidence already exists that innovators from the East will develop solutions beyond what the world currently knows from the most popular sites. Perhaps Web 2.0 sites such as Facebook or Twitter can be further tweaked to appeal to cultural or technological differences in these countries. Or perhaps innovation from the East will be in the form of features and functionality not yet envisioned by the West. Only time will tell, but one thing for certain is that American internet innovators will be wise to keep an eye on our friends to the East for inspiration.

Kelly R. Short is a Fort Worth, Texas based expert in the technology, business process automation and marketing disciplines. He shares over 15 years worth of experience everyday at http://kellyrshort.com helping small and medium companies with actionable advice on increasing sales with powerful marketing, lowering operating costs using business process management, and leveraging unified technology to crush competition.

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Why China and India Will Soon Dominate the World - Will Our Political Class Do Anything About it?

By Bruno Korschek

If you look at some statistics from the U.S. Census organization, the CIA Fact Book, and several other credible sources and put them together in a "what-if" analysis regarding the future economic power of Russia, China, India, and the United States, you can develop the following statistical measures:

- The current population of the United States is about 310 million people, the 2050 estimated population is expected to grow about 42% to 439 million, the current GDP of the United States is about $14.43 trillion dollars which yields a current GDP to current population ratio of about $46,561 per person ($14.43 trillion divided by 310 million people).

- The current population of Russia is about 143 million people, the 2050 estimated population is expected to shrink 23% to 109 million people, the current GDP of Russia is about $1.24 trillion, yielding a GDP to population ratio of about $8681.

- The current population of China is about 1.34 billion people, the 2050 estimated population is expected to grow about 9% to 1.46 billion people, the current GDP of China is about $4.8 billion, yielding a GDP to population ratio of about $3,595.

- The current population of India is about 1.2 billion people, the 2050 estimated population is expected to grow about 53% to 1.81 billion people, the current GDP of India is about $1.1 trillion, yielding a GDP to population ratio of about $925.

Not unexpected, the United States is the richest country in the world as measured by gross GDP and GDP per citizen. However, the growth of the United States economy is pretty steady and conservative vs. countries like China and India. Let's play some games with these base numbers:

- Let's assume, and there is no reason to believe otherwise, that China continues to grow very quickly over the next forty years. If the Chinese are able to get their GDP to population ratio up to half of what the current U.S. ratio is, then the total size of the Chinese economy as measured by GDP (in today's dollars) would be over $34 trillion, almost two and half times the size of the U.S. economy.

- Let's do the same thing with India but assume that the ratio is so low that they can only get their ratio up to one quarter of what the current U.S. ratio is, then the total size of the Indian economy as measured by GDP (in today's dollars) would be over $21 trillion, 50% larger than the size of the U.S. economy.

- We will not do the same analysis for Russia since given how fast its population base is shrinking, its economic impact in the world economy will be less and less over time.

Thus, the upside for both the Chinese and Indian markets are very high based on the sheer number of citizens in each country and their governments' desire to aggressively grow their economies. Before we know it, both economies could be approaching and/or surpassing the size and power of the United States economy.

If you do not believe these calculations, consider a recent article from the Financial Times that was summarized in the July 30, 2010 issue of The Week magazine. According to the Financial Times, China is now the biggest consumer of energy, passing the United States last year as reported by the International Energy Agency. As late as the year 2000, the United States used twice the energy that China used. Now, China is using at least 4% more than us.

Another source. In a recent feature section in Fortune magazine, Goldman Sach's was quoted as estimating that by the year 2050, the size of the Chinese economy will be about $70 billion while the size of the U.S. economy will be only about $40 billion and just barely ahead of the Indian economy. By 2050, Brazil, Russia, India, and China will exceed the greenhouse emissions of the rest of the developed world.

All of these numbers point to the same conclusion: namely that China and India will become much, much stronger in the coming years and much more competitive, both for raw materials, finished products, and markets to sell their products. The United States needs to take some long term strategic actions in light of the coming tsunami of stronger economic rivals:

- We cannot hope to compete in the future economic landscape if we do not find a way to better educate our children for this new reality. The United States consistently ranks in the bottom half of worldwide student testing and education. This will not make for a strong economy if our workforce is outsmarted by other countries that also have the advantage of numbers on their side.

- We cannot hamstring our own economy with Obama's cap and trade policy while the rest of the world, including the bigger and bigger energy users of China and India do not agree to stringent and trackable carbon emissions programs. If the United States goes it alone in this area, our economy will suffer at the hands of these economies that do not, resulting in lost jobs, lost industries, and lost economic strength since any carbon savings we incur will be overwhelmed by these new economic powers.

- We cannot continue to police the world, draining our economy through our military budget. Better to focus on getting our own economic house in order rather than deploying troops around the world to protect against enemies that do not exist anymore, enemies that cannot do any direct harm to us, or enemies that are better handled by other countries or the United Nations. We need to bring home our 54,000 or so troops from Germany since the Iron Curtain no longer exists, we need to bring home the 90,000 or so troops from Iraq as Obama the campaigner promised to do, we need to bring home our 50,000 or so troops from Japan since Japan is not going to hit Pearl harbor again and 50,000 troops are useless in the face of 2,000,000 Chinese troops in the neighborhood, and we need to bring home our 28,000 or so troops from South Korea and let them handle their own security, their economy is strong enough to handle it. Our focus on defense needs to be much more narrow and much more focused on those that could actually harm us and we need to bank the savings and strengthen those areas that will enable is to better compete economically.

- We need to finally develop and deploy a sane national energy program that makes us as self sufficient as possible, given that the hungrier economies of India and China will start to compete with us for raw energy sources. The less we spend on energy, as with defense, the better and stronger our economy will be against the onslaught of the growing economic powers in the world.

- We need to start getting our national debt and government spending problem under control now. The more capital and investment dollars that can be funneled into American businesses, the better off we can compete with China and India and the rest of the world. If all of our available capital is going to the government, where it is used on wasteful, inefficient government programs or used to pay the interest our national debt, the less flexible and competitive American businesses will be and less economic health our citizens will enjoy.

Bottom line, what is needed is a long term strategic plan for dealing with the new world order in the areas of national defense and economic strength. Do we think that the American political class is ready for such a comprehensive analytical and strategic task? Consider what our politicians have been working on over the past year or so:

- A Congresswoman and her staff worked on legislation that would regulate the sound volume of television commercials.

- A Congressman and his staff worked on legislation that would ban the airing of ED commercials on television.

- A Congressman and his staff worked on legislation that would provide a tax break for pet owners who might have to give up their pets in these hard economic times.

- The entire U.S. Congress and the entire Federal financial regulatory network was completely blind sided by the biggest economic malaise since the Great Depression, not realizing what was coming until it hit them in the face.

- Politicians in both houses of Congress worked on a bill to regulate how Division One college football teams decide a national championship.

- The current New Mexico governor is working on whether or not to pardon Billy The Kid, who died over a hundred years ago.

- A Georgia Congressman, at a Congressional hearing, worried in public on whether the island of Guam could tip over in the ocean.

- At least two sitting Congress people are likely to shortly face ethics charges and potential trials in the House Of Representatives for numerous financial and ethics offenses.

- Nancy Pelosi, Speaker of the House, has publicly stated the insane concept that unemployment is the best way to create jobs.

As you can see, we have not elected the most forward thinking, strategic brains in the country. They are so entwined in the daily political infighting and just absolutely trivial matters that time is slipping away while other countries are quickly growing their economies to compete with us, our companies and our citizens.

If long term, strategic thinkers were running this country, they would not be working on the above trivial matters but instead would be focused on the following:

Step 1 - start reducing the size of the Federal government by 10% a year for five years to get our national debt and spending under control and to leave more capital in the private market for investment against other economies.

Step 2 - find a way to finally make us more energy self sufficient and to bring other nations into a world wide, trackable process that reduces carbon emissions equally, not allowing any economy to gain an economic edge at the expense of others and the environment.

Step 3 - develop a ground up approach to overhaul, improve, and revolutionize American public education processes to prepare our kids for competition in the new economic world order.

Step 4 - bring home most, if not all, of our foreign deployed forces to begin the downsizing of our military budget in order to get our national debt under control and to provide capital to grow our private sector of the U.S. economy.

Step 5 - end the Cuban embargo immediately. After fifty years, most sane people would conclude it has not worked and ending the embargo would open up a new market for American businesses just ninety miles from our shores.

Step 6 - the most important step, institute term limit for all politicians. Given that none of these needed strategic steps have happened to make us better able to compete in the new economic reality and that most of the sitting politicians have been sitting in the same seats for decades while nothing happened, we cannot assume that all of a sudden they will do the right thing. We need to continually refresh those serving in Congress and the government with new people that are more fully aware of what is going on in the world and are not tied to old ways of thinking and spending.

We can succeed, we just need some visionary thinker and leaders to make it happen. India has its own problems, a large part of its population is still dirt poor, possibly providing social unrest problems unless they somehow can bring more people into their economic growth. The Chinese population will age quickly, as a result of their one child per family policy, putting strain on their economy in the coming years. All is not lost. In fact, if executed right, a long term strategic plan, as proposed above, could make the United States even stronger since new markets would open up in these growth economies. I guess the political class will get to this strategic plan as soon as the fix that pesky college football playoff system.

Our new book, "Love my Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom and Destroying The American Political Class" is now available at http://www.loathemygovernment.com and online at Amazon and Barnes & Noble. Our daily dialog on freedom in America can be joined at http://www.loathemygovernment.blogspot.com.

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Top Ten China Travel Experiences

By Bryony Holland

China is a fantastic country to travel. There's quite simply a huge abundance of things to see and do during your China trip. With all its ancient history and Asian culture it's a travellers dream. Get you cameras at the ready as you won't take your finger of the trigger throughout your China travel experience.

Now this list could go on forever but if I had to choose, here would be my top ten travel experiences in China.

1. The Great Wall of China- This has to be number one really - an essential ingredient of any China trip. It's one of China's most iconic landmarks and it defiantly does not disappoint. One of my all-time best China travel moments was sitting on the edge of the Wall watching the sun set in to the mountains in the distance.
2. Star gazing at Labrang Monastery in Xiahe - The skies in Xiahe are truly spectacular as you can see millions of stars. Looking out for a shooting star as the monks chant with wafts of insence in the air is altogether a great China travel experience.
3. The Karst Mountains in Yangshuo- Scenery doesn't get much better than this. Towering limestone formations dominate the landscape and create one of China's most beautiful locations. This is something that you definitely don't want to miss out on during your China trip.
4. Hong Kong's Skyline- One of the best that I've seen from my travel in China. The city even puts New York to shame with the amount if skyscraper's on offer. The view point at Victoria Peak is defiantly a must to really appreciate the beauty of the metropolis. Head up just before it gets dark and watch the city light up as the sun goes down - a magical China travel highlight.
5. The Sera Monastery in Lhasa- Not necessarily the top attraction is Lhasa which is why it's one of the best. Nestled away from the normal tourist route the original structures of the Sera Monastery date back to 1419 with halls decorated by beautiful scriptures written in powdered gold. Be sure to arrive before 3pm to watch the afternoon debating session between the crowds of monks, a really quirky experience that you won't find anywhere else during your Tibet and China trip.
6. Camping in the Ganya Grasslands - Camping in the surrounding areas of Xiahe was a brilliant experience and one that I would not normally think of to do during a China trip. Rolling green hills and blooming flowers all topped off with a few grazing Yak. Nature at its best.
7. The "Impressions" Light Show in Yangshuo- "Impressions" was directed by Zhang Yimou who also created the Beijing opening ceremony. The show is set on the Li River itself with the Karst Mountains as the backdrop - a magical China travel experience. Expect spectacular music and a stunning light show.
8. Wangfujing Snack Street in Beijing -If you're feeling hungry and a little adventurous take a walk down Wangfujing snack street and see what the Chinese like to tuck in to instead of a bag of peanuts. Scorpions, star fish, seahorses and giant beetles are all on offer with a side of chilli sauce! This is a China travel experience that you won't forget in a hurry!
9. Hiking the Dragon's Bone rice terraces in Ping'an - Defiantly a place to get that postcard photograph. You'll climb and descend through marvellous scenic areas where the staggered terraces shatter off in to the distance. The best time to visit is from December to April as the terraces are filled with water which creates amazing reflections on a still morning.
10. Shanghai and the Bund- China's biggest and most prosperous city oozes atmosphere with stunning colonial architecture and dusty ancient temples tucked between futuristic sky scrapers. It's a great place to begin or end your China trip.

Bamboo sailing through karst mountains. Discover Tiger Leaping Gorge. Try an ice mountain horseback trek and stay at home with the Tibetans. We'll help you build your very own China adventure: http://www.chinatravelplan.co.uk

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Unique Vacation Ideas For Your China Travel Holidays

By Lola Adewoyin

China is one of the oldest countries which date back to ancient civilization. Because of this, it has retained a lot of its historical background and culture, many of which are still practiced today. To many people, China may still be regarded as a place that is located on the dark side of the moon, but it is not until you visit this unique and beautiful country, you can truly satisfy your curiosity about China.

Adventure travelers and globe trotters around the world have started discovering the natural hills and scenic spots in China, many of who return with interesting stories and beautiful pictures. If you have always wanted to visit this side of the world, then its time to pack up your bags and bask in the sun this summer as you discover many of China’s hidden beauties.

Let me start with beaches; not many are aware that China has a tropical side to it except the Special Administrative Region of Hong Kong which proudly boasts of the famous Repulse Bay. Located in the Southern province of China, Hainan is a beautiful exotic island with a rich culture for beach lovers to enjoy. It is the largest ocean province and smallest land province in China. Sanya, the most popular destination on Hainan province is known for the beautiful Yalong bay and Dadonghai’s white sand beaches. If you want to partake in this tropical Chinese beach tour, you can consult the services of a Chinese travel & tour operator in China to assist you with your vacation plans.

Golfing is another travel and leisure sport which is becoming very popular in China. Even with its old uncivilized environment, China still boasts of high class luxurious green paradise for you to enjoy your holidays golfing in the orient. Whenever, you speak about golfing, the first thing that comes to your mind is the lush green golf courses and perfect weather to enjoy this sport. There are four beautiful golf courses in China which are all located in different provinces with the perfect weather to enjoy the sport. Engaging in a golf travel tour particularly one in China can be the greatest adventure travel of your lifetime. Apart from golfing on China’s wonderful golf courses, you are afforded the opportunity to visit some of China’s main tourist attractions in Beijing, Kunming, Hangzhou and Shanghai. These cities highlight some of the must sees in China which you must not miss during your holidays. Once again, the tour operators can assist you to design your tour itinerary with affordable lodging and transportation.

Gastronomy Tours are specially designed for the cultural lover in you. If you delight in enjoying special Chinese delicacies, then, this is the right tour package for you. Discover more about Chinese culture and traditional cooking methods as you savor the exotic wonders of China.

Travel Agencies and tour operators have specially arranged tour packages for gastronomy tours which allow you to cruise and enjoy fine dining in exotic oriental restaurants as you are guided through many provinces and their long historical culture.

Shopping is a time consuming activity which must not be missed in China. Almost every province has a small market where you can get different varieties of shoes, bags, clothes at very reasonable prices. To be able to enjoy shopping in Shanghai, you should be an expert in price negotiation as this could pose to be a fun activity for a whole day. Many tour operators allow personal and free time during a tour, so you have the choice to visit any markets around.

There are a number of activities to do during your China tour experience. These includes Karting, Chinese tea discovery, Calligraphy and painting courses, hot air ballooning trip, Martial Arts and a whole lot more. Visit Passport to China’s suggested things to do on a China holiday.

For more information about China Travel, China Tour [http://www.passport-to-china.com] Vacations, visit Passport to China.

Lola writes about travel and adventure tours for China Tour & China Travels [http://www.passport-to-china.com] a foreign inbound tour operator in China.

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Enter In China And See Your China Business Prosper With Profits

By Yu Sun

Take a leap forward in China and head toward the market instead of its mighty walls – what today's offshore import and export China business enthusiasts do. Follow the footsteps of leaders to discover the enormous business opportunities lies in China's import and export industry. Already small and mid sized import and export companies from various parts of the world are keen on venturing China business and global sourcing. Numerous legendary companies of US like United Technologies, GE, Motorola, DuPont etc., have established deep penetration in China market. As per an estimation taken in 1992, 3,100 small and medium scale import and export companies have landed in China and later the number rose to more than 20,000. From manufacturing to exporting and servicing, China business opportunities are burgeoning and attracting all size of import and export businesses from the rest of the world. Over the last decade, number of US import and export companies taken up China business has raised at an astronomical rate – more than five times faster than other parts of the world.



- Scope of China Business – Broad Market Range and Manufacturing Potential



Attractive China business opportunities are growing and the growth is spanning through diverse industries. The growth is already evident in a series of industries, like medical, construction, energy exporting China business, telecommunications, agribusiness, machine tools, security and recreational products and service market, infrastructure etc. These are just to name a few of the vast import and export market where overseas China business owners are venturing in.



- China Business Partnership of Us Companies



China and Hong Kong together has become the third largest export partner of USA – Canada and Mexico have taken the first and second position. China continues encouraging US based import and export companies to venture and fortify greater business partnership. To generate further enthusiasm amongst more US business owners, Hu Jintao, the president of China, sent two hundred Chinese executives for a buying tour to US. US companies’ trade offices being located in China and fostered by China speak how US companies are deepening their penetration in China business and import and export industry.



- Haven for Import and Export Companies and Investors



Besides immense potential found in import and export China business, China has become the heaven for overseas investors. USA companies alone have invested over three billion dollars annually, making China the third largest investing area in the world. China is yielding sumptuous returns on investment, also profits at an expected ratio to the overseas investors. US companies are reaping myriad benefits by investing in manufacturing China business. The list of benefits includes competitive labour resources in China, incentives on investment and extensive local markets of China.



- Investment in Locally Manufactured and Imported Products in China



China now allows foreign firms to invest in China's locally manufactured products as well as to support in products brought through global sourcing. Small and medium sized companies can secure huge benefits for trading different types of China business ventures in locally manufactured products, imported goods and import and export of both locally manufactured and goods accessed through global sourcing in China.



About the Author: http://news.tootoo.com, which is the shortcut to China's industrical resource belonging to China's leading B2B Portal and Vertical Search Engine, http://tootoo.com.



Source: www.isnare.com

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China's Energy Plan to Reduce Its Dependence Upon Coal

By James Finch

According to a U.S. Congressional - Executive Commission on China, which held a series of Issues Roundtables in late 2004, it was estimated that 12 Chinese mine workers die for every million tons of coal produced. Most are killed by methane gas explosions while inside the coal mines. China Business Weekly reported in July 2000, "To prevent gas explosions, China emits 6 billion cubic meters of methane from mines annually, seriously polluting the environment..." Last year, instruments on the world's largest environment-monitoring satellite, the European Space Agency's Envisat, revealed the world's largest amount of nitrogen dioxide was hanging over Beijing and northeastern China. Because the country emits more methane from its coal mining than any other coal producing country, China pollutes the earth's atmosphere with about one-third of the total annual emissions of methane. According to the US Environmental Protection Agency, methane traps heat twenty times more than carbon dioxide, which impacts global warming.

On March 6th, People's Daily reported, "Shanxi, China's largest coal-producing province, plans to put the brakes on the further expansion of coal mining in the next five years." Shanxi Governor Yu Youjun at a recent press conference announced, "We can not continue the rough way of development any more and must limit coal production strictly with the guidance of scientific concept of development." While only slightly reducing the country's aggressive GDP growth, China has instituted reforms to maximize its energy efficiency and minimize the environmental damage and loss of human life. Not only is the country stamping down on the causes of these problems, it wants western technology to help become more efficient.

Since September 2005, Shanxi shut down nearly 5,000 illegal mines and fined or imprisoned more than 1,200 operators, including 60 local officials. Coal produced about 70 percent of China's energy supply in 2005. The Chinese government worries China's dependence upon coal could rise above 80 percent over the next five years. The country is second only to the U.S. as a net importer of petroleum. Nontraditional sources are being encouraged to clean up the environment and reduce China's dependence upon foreign oil. StockInterview.com has widely discussed China's scramble for uranium as the country has embarked upon the most aggressive nuclear power program since the United States in the 1970s. Along with nuclear energy, China hopes to exponentially expand its natural gas program as a means of lowering its astronomical levels of air pollution.

Chinese Premier Wen Jiabao told the National People's Congress earlier this month that the country's growth rate would be reduced to 7.5 percent over the country's next five year plan. Economic growth reached nearly 10 percent in 2005. The strain imposed on China's natural resources and labor has been taking its toll. According to the next five-year plan, China's government policy will concentrate on building a resource-efficient and environment-friendly society. Their idea is to sustain the high output while reducing waste.

That may not be so simple. On February 20th, China Daily reported, "The bulk of China's gas-fired power plants are on the verge of closure due to a shortage of natural gas." Wang Yonggan, secretary general of China Electricity Council, said nearly 40 percent of China's power plant capacity remained unused because of the lack of gas supplies. Wang warned a plan drafted the National Development and Reform Commission to increase China's gas power capacity to 30 gigawatts by 2010 (up from 10.7 now) would make "such targets impossible to reach," because of the gas shortfalls.

China's Ambitious Coal Bed Methane Gas Development

One of the more serious reforms being addressed is the energy crisis within the context of the environmental stigma now attached to China. Coal is a problem because, as toxic as it is known to be, it helps fuel China's growth, literally. But the dark rock has its bright side. Following the examples of the U.S. coal industry, predominantly in New Mexico's San Juan Basin, Wyoming's Powder River Basin, and Alabama's Black Warrior Basin, and the more recent rise of Alberta's Horseshoe Canyon, China has aggressively moved into the development of its coal bed methane gas industry. The degasification of coal can not only increase mining safety, but it can be an economic method of natural gas production.

According to the U.S. Geological Survey Fact Sheet,

"The coalification process, whereby plant material is progressively converted to coal, generates large quantities of methane-rich gas which are stored within the coal. The presence of this gas has been long-recognized due to explosions and outbursts associated with underground coal mining. Only recently has coal been recognized as a reservoir rock as well as a source rock, thus representing an enormous undeveloped 'unconventional' energy resource."

In a 2005 report issued by the Federal Reserve Bank of Dallas, coal bed methane is being taken very seriously as an alternative energy source with strong growth potential in the U.S. energy mix,

"Geologists call it continuous gas, but it is also called unconventional gas or even weird gas. Whatever you choose to call it, you must give it due respect for its growing importance. The Department of Energy reports the share of unconventional gas doubled from 17 percent of Lower 48 natural gas supplies in 1990 to 35 percent in 2003. By 2025 it is projected to be 44 percent-- matching the role of conventional gas--with the remaining 12 percent of domestic supplies imported."

By 2010, China hopes to increase its dependence upon cleaner burning fuels, such as nuclear and natural gas. However, the greatest immediate growth, for instance over the next five years, is likely to come from natural gas. Recent statistics show natural gas to be about 3 percent of China's energy mix. Numerous announcements over the past two years have been made that the country wants gas in its energy mix to reach 8 percent or more. For those who have traveled to China, it is no secret the country is in dire need of cleaner burning fuels.

Official statistics show that China uses 2.45 tons of water to produce a ton of coal. Coal bed methane, a byproduct, is often wasted. In 1996, China established China United Coalbed Methane (CUCBM) to harness that byproduct and to help reduce the toxic pollution and alarming fatalities, generated by coal mining. CUCBM is a sole professional company with the exclusive right to explore and develop coalbed methane resources in joint ventures with foreign companies. It is controlled jointly by PetroChina Energy Company and the China Coal Energy Group Corporation.

Methane gas is found in the conventional anticlinal (downward sloping) trap, but it is stored in the earth and produced differently than natural gas. It is stored uniformly in a formation that extends over a wide area, but it is trapped in a rock formation which requires additional resources to free it from that trap. Over the past twenty years, new technologies were developed to drill for methane gas and to complete production wells. The industry has grown by leaps and bounds in the United States. For example, in New Mexico, gas production rules the modern era of hydrocarbons. Once completely driven by oil exploration, New Mexico now produces nearly four times as much gas as oil. China would be happy to approach a fraction of that ratio.

CBM development would also decrease China's plague of mine safety issues. In a white paper published by World Markets Research in 2002, the values of coal bed methane (CBM) were summarized as follows, "With a relatively small investment - around US$10m per mine - the all-too frequent, horrific accidents related to CBM would come to an end. Over the years, CBM explosions have killed thousands of miners. In the future, we will see a lessening of these distressing fatalities with safety regulations, sensitive gas detectors and mine ventilation."

CUCBM has been actively developing China's coal bed methane industry by drawing upon the expertise, technology and capital of its foreign partners. "More high level technologies need to be deployed to ensure reliable power supplies," Ma Songde, China's vice minister of science and technology told Associated Press in late February. "By developing these technologies, we can resolve issues restricting growth and enhance growth." China is actively seeking foreign investment and cooperation in power generation, particularly in clean energy.

As a light hydrocarbon, coal bed methane is among the cleanest sources of energy. Published reports show that China's coal bed methane (CBM) resources, buried within a recoverable depth of 2000 meters, are estimated at approximately 36.81 trillion cubic meters. China has the world's third largest CBM resource. Following behind the United States, it is the second country to have conducted large-scale field exploration of coal bed methane.

According to a March 9th article in People's Daily, "China's coal bed methane industry made important headway in 2005." About 340 CBM wells were drilled across the country. That may not sound astonishing compared to the number of wells drilled in Canada, during the same year, which surpassed the 3,000 level for the first time. In that context, China remains nearly a virgin territory for CBM. CUCBM has been actively partnering with the world's giant oil companies and others to explore their vast CMB reserves. In 1998, Texaco (now Chevron-Texaco) was the first to partner with CUCBM and resulted in geological studies, exploratory wells and development contracts.

Since then, CUCBM has been extremely selective in choosing its joint venture partners to develop the ultra-valuable Production Sharing Contracts (PSCs). After attracting oil majors such as Texaco and Conoco-Phillips, only a total of 26 Production Sharing Contracts have been awarded to foreign-owned companies. Total coverage of those contracts now extends about 34,000 square kilometers of China's below surface coal basins. Foreign companies have investment more than $150 million in the contracted blocks. CUCBM hopes to ramp up coal bed methane output by 2010 to help meet the national gas growth target of 10 billion cubic meters.

Pacific Asia Energy Corporation's CBM Contracts in China

The first Canadian publicly traded company awarded a Production Sharing Contract was Pacific Asia China Energy Inc (PACE), which holds the PSC through its wholly owned subsidiary, Asia Canada Energy Corp. Pacific Asia China Energy, which trades on Toronto's Venture Exchange under the ticker symbol of PCE, also holds a second PSC through another wholly owned subsidiary China Canada Energy Corporation. It was the former which interested us, the company's Guizhou Project in southern China.

In talking with Dr. David Marchioni, one of Canada's leading CBM geologists, he said of CUCBM, "The Chinese government doesn't want to hand out resources to people who don't do anything with them. They want them developed. They want to have gas. They want to have energy." Dr. Marchioni helped co-author "An Assessment of Coalbed Methane Exploration Projects in Canada," published by the Geological Survey of Canada. He is also president of Petro-Logic Services in Calgary, whose clients have included the Canadian divisions of Apache, BP, BHP, Burlington, Devon, El Paso Energy, and Phillips Petroleum, among others. He is also a director of Pacific Asia China Energy and is overseeing the company's CBM exploration program in China.

It was obvious PACE was moving quickly to comply with CUCBM's objectives of getting natural gas into the country's energy mix. The company first started trading in its current entity on January 4th of this year. By March 16th, the company announced it would begin drilling and testing its massive Boatian-Qingshan property in the Guizhou Province of China. The 970 square kilometer CMB concession - more than half the land mass of Rhode Island - may hold up to 11.2 trillion cubic feet of gas, as reported in a recently published technical report by Calgary-based Sproule International Ltd.

In a brief telephone interview with Dev Randhawa, PACE's Chief Executive, he told StockInterview, "When I asked Dr. Marchioni about the size of the CBM resource, he shocked me when he said, 'It's about the equivalent of a billion barrels of oil." Randhawa was preparing for his tenth trip to China since June 2004, when he began the process to acquire these privileged concession awards from CUCBM. As an aside, Randhawa typically arrives early into the front end of what often becomes a trend. Serving also as Chief Executive for Strathmore Minerals, Randhawa's team were among the handful of early junior uranium development companies to participate in what has now become the Great Uranium Bull Market of the second millennium. Since mid 2004, Strathmore's market capitalization has soared from under C$20 million to a recent high of more than C$165 million.

But what is the strategy here? If Alberta is now turning the corner and putting itself on the map as a serious CBM contender, why would one of Canada's top CBM geologists get excited and pursue a property in southern China. "We got access to a huge resource for little money," said Dr. Marchioni. "Instead of paying hundreds of millions for a concession this size, we paid a small fraction of that. Comparably, the project at Guizhou would have cost up to $200 million to acquire in Alberta."

China needs to attract foreign capital, and may be generous up front, but did PACE buy a pig in the poke? We questioned him about the potential size of the resource. Marchioni responded, "The layman may think those are really big numbers, but you only have to look at the official reports. These are the numbers those guys think." He was referring to the Sproule assessment of the resource, which offered a three-case scenario, starting at nearly 1 billion cubic feet and reaching the upper limit of more than 11 trillion cubic feet. Still, their assessment for a "most likely scenario" was a hefty 5.2 trillion cubic feet. Marchioni added, "They were numbers we originally thought we had, and they've been confirmed."

How big is big in this case? "I think we could fully support some large plant of some sort," Marchioni explained. "This is more of a long-term thing where you would be looking at a major industrial development. You'd be looking to either have enough money yourself or you bring in partners to do things like liquefied natural gas or major gas-fired power station, liquefaction of coal."

Marchioni was quite excited about the CBM project in Guizhou, "These are all big projects, but the resource is there to support such a project. Because the resource is so huge, you could support a project like that. There also are a lot of potential industrial users for gas in the region." China Daily reported South China, where the Guizhou province is located, is facing gas shortage problems because of the high energy demands of Guangdong province.

And what does PACE bring to the Chinese? "Hopefully, they'll have an operating CBM project or two contributing clean burning fuel to their energy mix, which is really what they want," answered Marchioni. "We also bring access to outside technology from places that are producing CBM."

COPYRIGHT © 2007 by StockInterview, Inc. ALL RIGHTS RESERVED.

James Finch contributes to StockInterview.com and other publications. StockInterview’s “Investing in the Great Uranium Bull Market” has become the most popular book ever published for uranium mining stock investors. Visit [http://www.stockinterview.com]

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