Snap back to reality

After yesterday’s news of shopping sprees, things are coming back to earth today. That may have something to do with the bottom falling out of Wall Street and the Shanghai market following close behind. Beijing is hoping that it can at least help its auto sector, and is said to be encouraging Shanghai Automotive Industry Corp (SAIC) and China FAW Group Corp to buy up rivals. The idea is that consolidation – long a government priority across many sectors – will help to make Chinese automakers global players (think Vehicle Voltron). Less easily linked to 1980s Japanese cartoons, the corporate bond market is also getting renewed attention, with the China Insurance Regulatory Commission reportedly planning to allow insurers to buy unsecured corporate notes for the first time. Those insurers will no doubt be hoping to duplicate the success of China Investment Corp, which apparently managed to rake in US$10 billion in profits on its investments last year, in part by avoiding investments in Western banks. And finally on the investment front, China’s secret plan to own all of Australia by June took another step forward with the announcement that Hunan Valin Iron & Steel would buy a 16.5% stake in Australia’s Fortescue Metals. We hear that kangaroo is great for hotpot.