April 26, 2014

This is Sure to Calm Things Down

While everyone was looking at Ukraine, the Chinese siezed a Japanese merchant ship on Monday. MV Baosteel Emotion was imponded as per orders from a Chinese court that declared the bulk carrier a war reparation.   It was released yesterday only after the company paid about 28 million in fines. 


This one issue seems to be resolved, but the precedent has the potential to open a huge can of worms in the future. Given the ammount of Japanese investment in China, if they start calling in reparations from a war 70 years ago it's going to be a huge mess. 

It may not be entirely coincidental that the Chinese real estate bubble has shown signs of popping over the last few weeks, though the opacity of the the Chinese market makes it hard to be sure exactly what is going on. Thr large Japanese holdings in China are probably seen as a ready supply of cash, from a particularly hated creditor. 

Far less likely, but still within the realm of possibility is the potential for rthe US backing of Chiang Kai Shek to result in unwelcopme surprises for American companies. 

Posted by: The Brickmuppet at 12:55 AM | No Comments | Add Comment
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