China's Sovereign Wealth Fund Buys Financial Stocks As It Tries To Regain Investor Confidence

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Image: AP

Central Hujin Investment Ltd. a unit of China's sovereign wealth fund has bought shares of four Chinese state-owned banks according to government news agency Xinhua.

The four banks include Industrial and Commercial Bank of China (ICBC), Agricultural Bank of China (ABC), Bank of China (BOC) and China Construction Bank (CCB). All shares were bought on the secondary market.

Beijing has clamped down on lending as it struggles to bring inflation within its 4% target. Tighter lending has created a near liquidity crisis, local government debt has mounted, PMI looks weak, and the stock market has been down this year. With a slowdown in the global economy and fears of a Chinese hard landing, many investors have fled China, and other emerging markets, for safe havens. 

The government already owns a majority of shares in the China's biggest banks. While it remains unclear whether it will continue to intervene, the government, through Hujin aims to stop the 30% decline in bank stocks in recent months, according to the Financial Times.

The move was aimed solely at restoring investor confidence. While the Shanghai Composite closed at its lowest level in over 2 years, bank stocks in Hong Kong spiked immediately on the news.

Don't Miss: Why Everyone Is Suddenly Freaking Out About China >

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A Few Of China's Most Ridiculous 'Bridges To Nowhere'

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Reporting from Wangjiang, China, the LA Times describes some of the most ridiculous projects undertaken by Chinese local governments for the sake of boosting production.

Here's a few examples from the article:

A $10 million government headquaters the size of the Pentagon in the middle of rural WangjiangA $45 million giant clocktower in remote GanzhouA $44 million hotel shaped like a pingpong paddle in AnhuiA $7 million imitation of the Sydney Opera House, in a building which houses a hotel and restaurant but no operaA $1.3 million replica steam-powered train in Dancheng, which overturned on its first day and isn't used anymore

There's at least $1.7 trillion worth of local government debt built into projects like this.

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China's About To Outfit Its Subs With Controversial "First-Strike" Nuclear Warheads

MIRVs blanket a target for maximum effect

Image: wikipedia commons

While adding to its stockpile of almost 200 nuclear warheads, China is on the verge of arming itself with a new highly effective, multi-stage nuclear weapon.

The Washington Times devoted some attention to the new Pentagon report on China's military strategy and found the CCP is developing this third missile to compliment its medium and long-range nukes.

The Pentagon says China is developing its first mobile intercontinental ballistic missile equipped with a multiple independently targetable re-entry Image: wikipedia commons

vehicle (MIRV).

Put simply, this means the Chinese are creating a "first-strike" warhead that was hotly contested for its destabilizing effects during the Cold War and could increase their nuclear stockpile exponentially.

The Soviets wanted to ban MIRVs completely as early as the late 1960s.

MIRVs are mobile, can be put inside submarines and carry multiple warheads, capable of striking several targets, or just one target far more effectively than traditional missiles.

The Russians, who already admitted to helping China's fighter jet program, have highly advanced MIRV technology in their RSM-56 Bulava submarine missile which just went into serial production.

China's new warhead will compliment its new Jin-Class ballistic missile submarine the Pentagon says "appears ready" to enter the CCP fleet.

In addition to sending MIRVs out with its submarines China is also storing its warheads in underground facilities connected by 3,000 miles of "obscure tunnel network[s]".

Richard Fisher, of the International Assessment and Strategy Center told the Times, "Taken together, a well-protected, growing ICBM force that will soon have active defenses should be of great concern to the United States,”

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