For full text of Chronicle see http://www.wednesday-night.com/Wed1197.aspurl]http://unfccc.int/essential_background/kyoto_protocol/items/2830.php[/url] enters into force (becomes a legally-binding agreement) on February 16 obligating the world to make rapid and significant global cuts in greenhouse gas emissions in order to prevent the onset of dangerous climate change. Even if every country in the world were to meet its commitment to the Kyoto accord, the beneficial effect would allow approximately ten years in which to develop alternate energy sources. This is especially so in the use of petroleum, as twenty percent of fossil fuels are currently consumed in transportation. Alternative energy companies see this as an opportunity. Companies with "clean" or low-emission technologies are poised to exploit the market as countries look to meet their commitments under the agreement. JACQUES CLÉMENT’S REPORT ON THE CHINESE ECONOMY With 9½% economic growth last year, China is Asia’s fastest growing economy and the second largest in the world; G.D.P. should grow by 7½% to 8½% this year, given the artificially weak currency that has been prevailing for the last ten years, with an exchange rate of 8.28 Yuan per U.S. dollar. Consumer spending has averaged over 8% in the past six years, but is not sufficient, given the 1.3 billion population in over 600 cities. The record trade surplus with the U.S. totalled over $130 billion last year. China is the second largest oil importer and the sixth top producer. The record current account surplus has attracted $153 billion last year, an increase of 33%. China has too much invested in their economy and encourages Chinese direct investments overseas, which rose by 27% last year to over $3.6 billion. Future investment spending plans have risen by $78%. General Motors sold over 490,000 new vehicles to China in 2004, a rise of 27%, after 46% in 2003. Despite renewed pressure from the G-7 countries, the Central Bank has no immediate plan to let the value of the Yuan rise, nor to ease the tight currency controls. There are huge problems of bad loans and worries that floating the Yuan too soon would cause a banking crisis. $45 billion U.S. of foreign reserves have been used to recapitalize two large Chinese banks. Sixteen major commercial banks have shed nearly $48 billion of bad loans, and non-performing loans of the banking system are equivalent to over 13% of total lending by the banks. China also needs to reform the social security system in order to give households more confidence to spend. Eventually, it is planned to let the Yuan trade freely, but the priority will be to broaden the exchange rate for the Chinese currency from the U.S. dollar to a more flexible basket of currencies (perhaps the Euro, the Yen and the U.S. dollar, etc. as “they have lost faith in the stability of the latter.”) QUOTES of the EVENING The fact is that trade does not lead to political realization You are talking about a country of contrasts where going up from to Beijing to ... (near) the Mongolian border, the one thing that has impressed me is that you sit around a round table, the head of the Communist party is served first. ... Who is benefiting from the privatization of (Chinese) assets? ... The members of the Communist Party If you take the long view, the potential of China has never been realized because of feedback loops and we have to be careful about extrapolating because of this; China may be really reaching its potential and will level off as has happened in Japan There are opportunities for Canada to come in (to China) but they don’t want to deal with the Americans unless they have to. Canada has a definite advantage China is here. It is here to stay. They are trying to maintain a balance between rural and urban [list:5038cf4a59][color=darkblue:5038cf4a59][/color][size=9:5038cf4a59][/size:5038cf4a59][/list:u:5038cf4a59]