China holds the key to unlocking growth in Africa...

The recent Beijing Summit made it clear that the Chinese government is becoming more publicly emboldened in their African policy initiatives. Many mainstream pundits and analysts have recently written about this topic, and I thought I would interject with my thoughts while the debate is still young and minds are still impressionable. I have for some time felt that it was essential for the Chinese to take the lead in Africa, and my confidence in this opinion has only been strengthened as coalition forces face increased difficulty in Iraq, and the situation in the Palestinian territories continues to deteriorate.

Though I wish the Chinese would take more responsibility in the current Middle Eastern crisis, I can understand their unwillingness to get involved in a situation that they are neither responsible for nor capable of substantially pacifying. Instead, they should use their experience in managing the development of their own impoverished regions to shape a more prosperous future for the people of Africa, and they should do so without the fear of igniting a diplomatic firestorm among Western governments that view a more proactive China as a threat rather than an opportunity. Africa now faces rampant disease, famine, violence, economic malaise, and is plagued desertification; all the while Western diplomats sit on their thumbs on the upper-east side and squabble over the merits of peacekeeping missions to halt genocidal slaughter in Sudan.

For decades, U.N. policy has failed the people it was established to benefit, those in the developing world, and until recently, there was no end to the destitution is in sight. There is no government in the world more experienced with and successful in the implementation of development policy than the Chinese. Its immense population has required its leaders to climb down from their perches in Beijing and travel to the poor villages in its western provinces to better understand the nature of poverty and conceive of more realistic and effective policies to combat its debilitating consequences. However, China has heretofore been unwilling to assert itself on issues which it fears may derail its economic prosperity because of political opportunists in Western capitols eager to keep them in check as they grow and expand their influence beyond their borders.

Nobody questions the merits of exploring innovative solutions to problems that have vexed policymakers for decades. However, few Western politicians or bureaucrats have been willing to admit that when their initiatives to stimulate economic growth abroad are compared with the initiatives undertaken by the Chinese government to combat similar inequalities domestically the proof is in the pudding. The Chinese economy is booming, its peasantry is becoming increasingly self-sufficient and educated, and most people would agree that the future for the Chinese people (ALL Chinese people) is bright, and their international prestige and influence growing. This leaves western leaders in the precarious position of having to confront a communist government whose success challenges the legitimacy of their own democratic systems. As the U.S. and her allies battle for the hearts and minds of impoverished, war-torn peoples in the Middle East, for whose current situation they bear the lions-share of the responsibility, it is essential that other less-developed regions do not become lost in the chaos. Missions that have been relegated to the back-burner since 9/11 because of the shift in our foreign policy mustn't be permanently retarded, for social stability in a world growing in both population and inequality is not guaranteed and should not be taken for granted anywhere or on any issue.

It seems logical to me that governments in the developed world would feel threatened by the rapid ascendancy of such a formidable competitor in the less-developed world, but I doubt that they have the resources necessary to offer a viable alternative strategy while they become further bogged down in the "War on Terror". As the Chinese begin to spread their wings and establish friendships with countries on the African continent that have felt slighted by the West for years, they are undoubtedly going to earn the respect of the people and governments of these countries, and will finally enter the realm of nations which share collective responsibility to provide aid and assistance to the developing world (G8 members). Therefore, I think it would be in the West's self-interest to allow, in fact encourage, the Chinese to expand into Africa unabated to both relieve themselves of the distraction it poses to progress on current initiatives elsewhere. It is important to make sure the Chinese do not become too ambitious for their own good but rather stay focused on international projects that they are best suited to manage, of which African economic development is clearly one.

Some may argue that by ignoring the African continent and allowing the Chinese to build their prestige through cooperation in economic development projects and poverty alleviation, the West would be squandering their opportunity to build the partnerships necessary to capitalize on the rich natural resources the developing economies in that region will become increasingly adept at harnessing, packaging, and exporting.

I take a contrary view, as I feel that the best way to substantially benefit from the vast reserves of oil, uranium, iron ore, and other minerals and fuels that have only begun to be realized is by allowing the Chinese multi-national companies to take responsibility for financing, constructing, and operating the sorely needed infrastructure that will allow these goods to be extracted and brought to market in a manner that is both efficient and has a real effect on the currently inflated market prices that are currently under the sole discretion of the OPEC ministers.

I suspect that the Chinese are not going to make an investment in these countries unless they have reason to believe that their return on that investment will be substantial. Even if the Chinese and their partners are reluctant to open up their co-ops to full participation from foreign companies and governments, there is likely to be a tangible easing of the pressure the economy's unprecedented growth has placed on global markets, so by allowing them to have preferential access to these reserves it should result in a decline in the price of oil contracts traded in Chicago, New York, and other major commodity markets around the world. This is Economics 101, simple supply and demand.

In terms of realizing benefit on behalf of the American people and the citizens of our Western allies, this tweak in the fundamental market makeup could have a tangible downward effect on the price of gasoline for consumers, as well as ease the burden on airlines that are struggling to cut costs and climb out of bankruptcy. Thus, it would be positive for American industry generally to encourage the Chinese to explore possible partnerships in countries like Zimbabwe, Zaire, Nigeria, Kenya, and others that are ready to test the waters of globalization and improve their embattled economies.

Another comparative advantage China offers its potential African partners is its rich experience in building a domestic economy upon a manufacturing force that can both produce at unparalleled levels while simultaneously maintaining a cost of production well below that sought by countries in the America's and Eastern Europe, which are its only true competitors in terms of quality of labor. The last great untapped labor force in the world occupies most of the African continent and if provided the proper industrial management, the continent has enough raw material to become very competitive in numerous industries by following the Chinese economic development model.

I believe strongly that one of the most debilitating handicaps endured by G8 nations is their irreversible and misguided obsession with framing the debate on international development and poverty alleviation as a domestic political issue, instead of leaving the diplomats to contrive of innovative solutions to the complex problems of the 21st century which are devoid of political calculation. After spending several months considering the merits of the solution I have proposed it seems apparent to me that it will be successful based upon one precondition: the US and her allies acknowledge China's right to use the arena of international trade and developmental economics to enhance its prestige among its peers atop the international community. The ideas I have articulated in this post are an attempt to refocus the debate on development policy in the West away from the prevailing approach of "what should we be doing", towards one that asks the question, "what should we be encouraging others to do?" I hope to stimulate thought, and I welcome all feedback.

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Will China throw annoying neighbor under the bus before 2008 Games?

As I am sitting here watching the pundits tear each other to pieces on the FoxNews show Forbes on Fox, I am struck by what should have been a rather obvious point. The Beijing Olympics (a.k.a. China's great coming show) has the potential to make or break the emerging superpower in the eyes of the apprehensive western world. In Nicholas Kristof's brilliant book, and the inspiration for the name of my other blog, China Wakes he descibes a rather gruesome story that was recounted to him by a local party official in Beijing about the extent to which the government was willing to go to ensure the cities selection as the host of the '08 games. In touching detail and sincerity he tells the story of a young man who suffered from downs syndrome and suffered and sudden fits of seizure. This young man's parents' home was located along the route planned for the Olympic Committee's tour of Beijing and local police began to worry that he may unwittingly embarrass the city and cause the country their opportunity at securing the games. The government's solution was to kidnap him from his crying mother's arms and send him to a rural prison camp, where he was subsequently beaten to death without any recourse taken by the local government to compensate the family or bring to justice the guilty party. If the government is that paranoid about the impact a single mentally disabled Chinese may have on the image of their country in the eyes of the world, I find little reason to believe they are going find any benefit in allowing the North Korean leader to stay in power for very much longer. I have yet to see any indication that the US plans to change their policy, which is the obvious goal of the recent brazen tactics of Kim Jong-Il's regime, an thus it seems likely they will continue to flex their muscle and further pressure the Chinese to withdraw their support. Either way, a peaceful solution is quickly fading on the horizon.


EU takes proper stand against Chinese censorship

Too hot for ChinaImage by MrGluSniffer via Flickr
It has been mere hours since my last posting, in which I make clear my fealings about the newly issued rules for foreign media outlets operating in China, and already I am impressed by the reaction of the Europeans. Can't say that I often agree with the EU, but on this issue all citizens who live in societies free of government censorship should be deeply disturbed by such measures.

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China's Draconian Media Policies Get Worse

Taimiao in BeijingImage via WikipediaFOXNews.com - China Tightens Controls on Foreign Media - Asia

Related Google News Links

The state-owned media outlet Xinhua Press today issued strict restrictions on the content distributed by foreign media on the mainland. Bloomberg summed up the scope of the new rules as follows,

Foreign news agencies are subject to approval by Xinhua and may face warnings, demands for rectification, suspension or cancellation of their qualifications to release information for breaching the rules, the statement said. 
Under the rules, foreign agencies must not release information that undermines China's national unity, sovereignty or territorial integrity; endangers China's national security, reputation and interests; or violates China's religious policies or preaches ``evil cults or superstition.'' 
The regulations also ban incitement of hatred or discrimination among ethnic groups, spreading false information, disrupting China's economic and social order, or undermining China's ``social ethics'' or cultural traditions.

Bloomberg LP, Reuters Plc and Dow Jones & Co. are among overseas companies that sell news and information to subscribers in China. Xinhua, while acting as the industry regulator, also competes with foreign news agencies to sell information.

Effectively, Beijing is drawing a line in the sand and the west is simply expected to respect China's sovereignty and stay on the other side. Unfortunately, the Chinese people have decided to go along with its government's overt attempts to drastically limit their access to information. This fact simply astonishes me, especially considering the countries growing exposure to the west and dependence on foreign markets to feed their industrialization. One would think that businesses and individuals in less accessible Chinese villages would demand access to information as the internet becomes more widely available. This could be an attempt by the communist government to institute these rules early, before the entire Chinese internet market becomes too accustomed to certain media outlets, but how can they realistically expect foreign media conglomerates not to declare all out war on the government. I think such careless decisions by the current leadership could prove disastrous in the long term, but these rules aren't set in stone and a little pressure from the west now could avert a crisis situation.

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China Launches "Super Fruit" Satellite

The traditional (  中國                   ) and ...Image via WikipediaDNA - Evolutions - Shijian-8: China launches satellite for super fruit and vegetables - Daily News & Analysis

Related Google News Links

The Chinese have launched an ambitious agricultural program into orbit in the form of 2000 seeds on a recoverable platform, which will be exposed to cosmic radiation and micro gravity. China has been experimenting with similar research involving rice and wheat seeds with the result being a substantial increase in yields. This is China's 23rd 'recoverable' satellite launch and marks the first solely dedicated to seed enrichment. As the country continues to grow and more Chinese become accustomed to a higher standard of living, the demand for food in the PRC is also going to continue to rise indefinitely.

Rising populations in Africa and other less developed regions will undoubtedly put strain on global markets, and desertification of China's already scarce farmland has already put the country in a position of great dependence on global markets to feed its population. It will be important for Beijing to successfully reap the maximum yields from the arable land it still hasn't polluted if it is to confidently promise its citizens that they will have sufficient food stocks to prevent the onset of famine in the event of a natural disaster or other crisis. This research is absolutely a step in the right direction, and I hope the US and other governments have green-lighted similar programs to help China, India and every other developing nations deal with the strain of growing populations with limited resources.

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Guangdong workers get guaranteed wage levels

Guangdong workers get guaranteed wage levels

China's Southeastern province of Guangdong has announced that it has formally instituted minimum wage standards for its companies. The wage rate varies depending on the location of the company, but most workers below management level should receive some raise in the monthly wage.

"The minimum wage ranges from a high of 780 yuan (US$96.18) a month in Guangzhou to the lowest rate in rural regions of 450 yuan (US$55.49) a month." Though these levels probably seem repugnant to Americans who are used to making these monthly salaries in one hour of work, every extra dollar offers Chinese peasants hope for a brighter future.

Chinese Expand Internet Censorship- Set Sights on Google Earth

Image representing Google as depicted in Crunc...Image via CrunchBaseMapping China and the law

I found this posting from the Ogle Earth weblog, a Google Earth development community, particularly interesting. I am not surprised that the CCP has grown wary of companies such as Google, whose stated goal is to undermine suppression of individual freedom, and I used to believe that Google would never succumb to the pressures that be when pressed about their sensitive technologies. However, I have been very disappointed in the company since they decided to comply with Chinese censorship guidelines for their blogs and search results. 
For the companies executives and founders to seriously claim that they are "doing no evil" by removing any reference to the 1989 Tiananmen Square massacre from their search results, they must not have meant it when they made it their companies mission in the first place. I still hold out hope that they will soon do the right thing and refuse to self-censor their content. Who cares, the government censors still control the network, so they can just filter anything they want themselves, there is no reason to make it any easier for them. Some estimates place the number of government employed internet censors at roughly 30,000, giving them a more than adequate cyber-Gestapo to make sure the government doesn't look too bad. 
I have no doubt that any attempt to restrict satellite imagery of their territory would be quickly met with protest and even temporary shutdown from Google's Chinese operation, but it should not take such a drastic event for the greatest company in the history of the world (at least as far as I am concerned) to do the right thing.
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"Red Capitalism" Growing In Global Appeal

People's Liberation Army in dress uniform, currently the largest army in the world in number of peopleImage via WikipediaImage via Wikipedia- Google News-- Chinese Success Creates New Paradigm for Developing Nations

For years the prevailing model for growing the economies of developing countries was the Washington Consensus- brain-child of the Clinton Administration focused on creating dynamic regional and bi-lateral trade agreements to help bridge gaps in comparative advantage and lower protectionist trade barriers. In terms of maximizing the benefits of globalization for the United States and its most valued allies, both developed and developing nations, it was a very effective. However, many lesser developed nations have failed to find their niche in the global marketplace and have floundered for years, usually under political turmoil.
The unrelenting growth exhibited by the Chinese economy since opening its borders to the west has given the Chinese Communist Party immeasurable credibility in the eyes of developed and developing nations alike. The CCP's policy framework for building a 21st century economy under great demographic strain and a hostile political climate, otherwise known as "socialism with Chinese characteristics"-- but more aptly termed "Red Capitalism" by many China scholars-- has been embraced by many 3rd world states struggling to feed their people.

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China and Venezuela Get Cozy

Associated Press Business News: Venezuela Says China Backs U.N. Bid - MSN Money

China, Venezuela ink 8 agreements to boost bilateral ties

I have been totally caught off guard by the recent headlines coming out of Beijing, which is currently courting Hugo Chavez and his countries vast oil reserves using uncharacteristically audacious public diplomacy to emphatically embrace their lone legitimate Communist Ally. Several major agreements have been brokered recently which have clearly been launched with the intention of legitimizing the Venezuelan government as it aspires to bolster its regional and global profile. In addition to the recent announcement of support for Venezuela's bid for a seat on the UN Security Council, which is also supported by Moscow, the two Communist allies inked pacts on issues ranging from housing to oil. Chavez has declared that by 2009 China will receive 500,000 barrels of oil per day from his country, with that number reaching 1 million sometime next decade.

I don't see any reason why the US shouldn't support Venezuela's bid for a Security Council seat- for what better place is there to humble a spirited populist like Chavez. I would take John Bolton over Hugo Chavez in a cage fight (which is how I like to refer to Security Council sessions) any day.

Chavez has been emboldened by electoral victories and his government has made great efforts to brand itself recently as the most virulently anti-American in the western hemisphere, which has brought them the respect and financial incentives from the East, specifically Russia and China. Venezuelan oil ministers have recently threatened to cut-off shipment to the US if their is suspicion of subversive tactics by the CIA or any other US-backed anti-Communist activists in the country. Statistics for the first four months of 2006 put the total Venezuelan import figure at roughly 1.5 million barrels per day, which is far greater than Chavez has yet promised to Beijing, but that number is down from the 1.7 million barrels during the mid-1990's. If Caracas continues to divert exports typically bound for the US to Beijing, there will be a marked increase in the price of gasoline across the United States. I think the best policy would be for the US consumer to recognize the overtly hostile rhetoric of the Venezuelan President and make the conscious decision to not contribute to the coffers of a clearly irresponsible individual. CITGO is the Venezuelan state-owned oil company, and for this reason I never buy gasoline from a CITGO station. I call on all American's who care about the future of gas prices and the security of the US economy to join me in my boycott, and tell a friend.


Report: Legislation Could Stop Chinese Censorship - CIO News Alerts - Blog - CIO

Report: Legislation Could Stop Chinese Censorship - CIO News Alerts - Blog - CIO

I think the ideas put forth in this post on CIO magazine's blog, which entertain the possibility of legislation resticting US companies from self-censoring their content on their foreign based services, are very intriguing (as well as consistent with the principles of our foreign policy since the end of WWII- anti-Communist). However, I doubt Microsoft and Google are going to be thrilled about the possibility of being forced to shut down their entire Chinese operation. Can these companies, and the US market withstand the impact of a confrontation between Capitol Hill and Wall Street over the fate of the Chinese nation? Can the Chinese government justify its suppression of the freedom of information when the issue comes before the international media? There are hundreds, maybe thousands of possible outcomes of such a bold policy initiative in Washington- but I have to admit, there are a great many that could further the revolutionary objectives of true democrats around the world, all of whom see a bright future for a China freed of the crimson shroud cast by its draconian government. The Chinese are excused to govern their country as they wish, but the free world must stay united in the pursuit of a world united in adherence to the progression of democratic sovereignty in every country in the world. To fail to do so, would be a failure to safegaurd the legitimacy of our philosophy of government as it meets its most formidable foe since the annialation of the fascists in WWII.


The Heart of the Dragon

Chinese teens more conservative than their elders | Business | The Australian

Having befriended my fair-share of Chinese expats, I find this article to be unsettling. It is hard to understand the expectation of children to care for their parents, despite a cultural denial of such responsibility. This indicates to me that the emerging generations of Chinese leaders will be responsible in their social policy, but it also signals a possible tipping point for Communist leaders left over from the previous generations, who now must successfully provide the institutional transition toward a true welfare state. If the remaining years under China's Fifth Generation go smoothly, I think the current leadership in Beijing will have solidified the Party's legitimacy in the eyes of the Chinese people, who will take great pride in the achievements of their children and grand-children and China's burgeoning international prestige. If the Communist Government is allowed to frame the West, specifically the United States, as acting so as to counter the growing wealth and prosperity with policies aimed at suppressing China's success, it may be able to stave off the brain-drain suffered in Europe and other parts of Asia once the people were exposed to the possibilities of political and economic stability and security in the United States. US policy-makers have so far taken a 'wait-and-see' approach to Chinese affairs, but as the once impoverished nation becomes a truly legitimate competitor we must become more aggressive in our public diplomacy within the western mainland of China- where the heart of the dragon lays.


Chinese In Africa

BBC NEWS | Business | China defends its African relations

If there is one continent in the world that still elicits feelings of uncertainty in the minds of global political and economic leaders it is unquestionably Africa. The cradle of civilization now faces rampant disease, famine, violence and economic malaise, while Western diplomats sit on their thumbs on the upper-east side and squabble over the merits of peacekeeping missions to halt genocidal slaughter in Sudan. For decades UN policy has utterly failed the people it was established to benefit above any other, and no end to the destitution is in sight, at least until recently.

There is no government in the world more experienced with and successful in the implementation of development policy than the Chinese. Its population has demanded that its leaders climb down from their perch in Beijing and travel to the villages, so as to better understand the nature of poverty and conceive of realistic and effective policies to combat its debilitating consequences. Well, the proof is in the pudding.

The Chinese economy is booming, its peasantry is becoming increasingly self-sufficient and educated, and few people would argue that the future for the Chinese people is not bright and their international prestige and influence not growing. This leaves Western leaders in the precarious position of having to confront a Communist government, who's success challenges the legitimacy of their own democratic systems as they battle for the hearts and minds of impoverished, war torn countries in the Middle East, which are far more valuable to their self-interest than trying to tackle the complicated problems that plague the African continent.

It seems logical to me that governments in the developed world both feel threatened by the rapid ascendancy of such a formidable competitor, but I doubt that they have the resources necessary to combat the Chinese as they begin to spread their wings and establish friendships with countries that have felt slighted by the West for years. Therefore, I think it would be in the West's self-interest to allow the Chinese to expand into Africa unabated, so as to both relieve themselves of the distraction it poses to progress on initiatives currently under way elsewhere, as well as to make sure the Chinese do not become too ambitious for their own good but rather stay focused on international projects that they are best suited to manage.

The Chinese are well aware of where their comparative advantages lie, and I don't think they are eager to bite off more responsibility than they can chew.  We will have to wait and see how the US and other governments engage the Chinese, but with any hope they will be viewed as a partner who shares our goals of global prosperity and alleviation of destitution around the world. Until we are given a reason to feel otherwise, it would be both irresponsible and ignorant to act otherwise.

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BBC NEWS | Technology | Web users urged on China policy

BBC NEWS | Technology | Web users urged on China policy

There is nothing that I find more abhorrent in the prevailing ethical standards of corporate American than their compliance with internet and media censors around the world. They seem to have no understanding of how valuable their services are to the people of the world, who if denied access to these services would without question demand a change in government policy. Suppose Google, Microsoft, Yahoo, and others were to all say that is it, we are closing shop until we are allowed to do our job, which is proliferating the world's information to every human being on the planet. This is a force of globalization and technological modernization that no government should be permitted to resist. How would the Chinese government explain why the companies closed? How long would it take for the instinctively curious and ambitious Chinese populous to demand the government reinstate the companies free of censorship? I suspect the Communists are unwilling to risk their government over censorship of a world they can no longer deprive their citizens from exploring. It is the people's decision whether or not they choose to embrace western values and liberal political ideas, the party should fundamentally understand that they must concede this soon before they are subverted by a sudden embarrassment like the one I just articulated and lose their legitimacy. It has happened to every Chinese government in the last 1000 years, and if the historic success rate of Communism is any indication this long streak of total collapse is bound to continue.


Chinese Continue to Show Little Regard for Intellectual Property Rights

Chinese Reverse Enginere Skype

News broke recently on the blog of Charlie Paglee that a Chinese company had reversed engineered Skype's interface so as to manipulate the existing Skype programing, which relies on super nodes to transmit massive amounts of data into the individual users interface rapidly, by not giving the new service super node capability but still relying on the super node infrastructure to transmit its services. There are some upsides to the new technology, such as the interoperability it will offer for users of various IM services (such as MSN, Yahoo and AOL), co-operating through the Skype network. Paglee notes in his blog that he received a call via his skype service from a colleague who works for the Chinese engineering company responsible for the methodical reverse engineering process, who informed him that the end-goal of the firm was to create its own presence within the Skype network which is 100% inter-operable with the Skype offered communication services. He notes that there was a clear disparity in the quality of the two services as they currently work together, but he suspects the firm will be able to clear up these problems without significant problem. This is both a promising development for Chinese innovative capacity, but also poses a serious threat to the stability of the Skype network because of the intense drag it has on the current super node capacity. It is encouraging to hear about foreign firms, particularly Chinese firms, which have achieved great success in innovation of personal technology, but the Chinese need to understand the importance of working with its western corporate partners rather than actively pursuing every opportunity to undermine their competitive advantages and manipulate their already generous network infrastructure.


Industrial and Commercial Bank of China to Seek Dual Listing in Hong Kong and Shanghai

The Industrial and Commercial Bank of China has confirmed that it will seek a dual listing on the Hong Kong and Shanghai indices, which indicates bullish sentiment among Chinese policymakers for the mainland markets. This is in stark contrast to the consensus held for the last 18 months, during which ipso on the mainland capital markets were suspended because of extreme volatility following routine asset stripping and artificial deflation of IPO prices among corrupt brokerage houses and SOE executives. The mainland markets have shown signs of strength recently, hitting a two year high last week, but many institutional shortfalls will likely hamper any further maturity under a fresh IPO market. Lack of credible brokerages and institutional investors (such as pension funds) leave the markets off the buy sheets of most high profile investors, which leaves their fate in the hands of the individual Chinese investor, who is becoming more confident as of late, but still remains just as unpredictable as ever.

ICBC's Hong Kong listing will likely follow in the profitable footsteps of recent listings of two of the other five major Chinese banks, Bank of China and China Construction Bank. It is wishful thinking to assume the Shanghai listing will be as successful, but it seems evident to me that at the very least CCP policymakers see an opportunity to allow ordinary Chinese in on the success of its bullish financial sector, which has thus far been reserved for more globally focused investors who have the capital necessary to keep these investors out of the Hong Kong market. Whether or not the mainland investors can be counted on to buy early and hold onto their investment, rather than get caught up in an artificially motivated sell-off once the stock 'peaks,' which are typical of the mainland markets, remains to be seen. If this new strategy works, it will be a major political victory of the Communist Party, which has been struggling to find ways to let the general population share in the countries rapid economic growth.