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This is an interesting column by Ho Pin, the Chinese-language editor and publisher of "The Biography of Xi Jinping." Here is the opening:

IT is a deeply ingrained belief in China that a young novice starting out in the real world must earn a degree, or at least spend some time in the West. "Gilding," or "du-jin" as it's called in Chinese, boosts the person's credentials and chances of success. Nowhere is this belief more apparent than in politics. For a new leader, strutting on the White House lawn and shaking hands with the president of the United States validates his status as a true statesman and confirms his country's rising power.

Ten years ago, China's current president, Hu Jintao, made the rounds in Washington before taking the top spot. His meeting with President George W. Bush was widely seen in China as his official debut on the world stage.

The tradition continues on Tuesday as Vice President Xi Jinping arrives in Washington. Mr. Xi is slated to become general secretary of the Chinese Communist Party later this year and China's president in early 2013.

The public sees Mr. Xi as a man of the people. When Mr. Xi was 9, his father, Xi Zhongxun, who had fought in the Communist revolution, was purged from the party by Mao. The father was detained and imprisoned and spent 16 years in a labor camp, plunging the family into poverty. During the Cultural Revolution, a 15-year-old Mr. Xi was banished to a poverty-stricken village in northern China where, for seven years, he labored with peasants, eating corn chaff bread and sleeping in a flea-infested
bed.

His past sufferings will most likely make him an advocate of ordinary people's interests. Indeed, the public expects that Mr. Xi will follow the example of his father, who later became instrumental in initiating China's economic reforms, backed many of his progressive contemporaries and reportedly disagreed with the violent suppression of student protesters in Tiananmen Square in 1989.

Mr. Xi will take the helm amid increasing disillusionment with Mr. Hu, a cautious technocrat who lacked the talent and political will to steer the country in a new direction. Even though China has used market reforms to transform itself into an economic powerhouse, the government lives in constant fear of unrest.

My view - My guess is that this Opinion column would not have appeared in the NYT and IHT during Mr Xi Jinping's official visit to the US without central government approval in China. If so, it is a public relations attempt to portray China's next leader as a progressive reformer and man of the people.

With scheduled changes at the top of China's ruling hierarchy and a presidential election in the USA this year, both countries have plenty to gain by reining in any inflammatory rhetoric and finding ways to work in their mutual interests. These are challenging times and the world could use some enlightened stability and economic growth from its leading countries and biggest economies.

Mike Lenhoff: A deal not quite done - but the bet is on - My thanks to the author for his latest topical note published by Brewin Dolphin. It is posted in the Subscriber's Area and while the headline refers to Greece here is a section on China and buying time:

From China, this morning's Financial Times reported that the banks have been instructed by the China Banking Regulatory Commission to roll over certain outstanding loans to local governments and extend repayment dates for several years, thus lessening the risk of a hard landing.

Yes, it may be all buying time. But who isn't buying time in an effort to help the economy? Having just extended its 'extended period' message on interest rates, the Fed is buying time by making sure that the recovery, the prospects for which are looking up, is sustainable. The ECB is buying time through its threeyear LTROs hoping to remove what has been a hugely destabilising influence on the economy. The Bank of England is buying time: the Monetary Policy Committee's recent decision to expand its quantitative easing programme by another £50 billion is about reflating aggregate demand and boosting broad money supply growth in recognition that, without the extra effort, '... it was more likely than not that inflation would undershoot the 2% target over the medium term.' It all needs time and money.

My view - Yes, everyone including China is buying time to deal with its debt problems and real estate bubbles. Austrian School advocates say we are impeding the natural clearing mechanism and advocate more creative destruction. That may sound OK on paper but I would not want to live through it.

Meanwhile, what can we say about investment opportunities in the current environment?

This item continues in the Subscriber's Area.

Navigating the 'Long Run' - A strategic Asset Allocation Framework for Pensions, Insurers, Endowments and Sovereign Wealth Funds - My thanks to a subscriber for this detailed but not overly academic paper by Brad Jones for Deutsche Bank AG/Hong Kong. It is posted in the Subscriber's Area but here is the introduction:

The concept of 'the long-run' as an investment horizon can elicit wildly different responses. To some it is the only relevant horizon over which carefully considered rational decisionmaking should be calibrated; for others, it is a nefarious concept consisting simply of a series of short-runs, and moreover, is typically only appealed to by investment managers as a shelter after a period of poor performance. The venerable late financial and economic historian Peter Bernstein declared, "the long-run as an investment destination is and always has been an impenetrable mystery" 1.

For our purposes, a treatment of 'the long-run' is further complicated by the material differences in investor types seeking to preserve and grow capital over this (perhaps somewhat abstract) time horizon. While pension funds, insurers, endowments and sovereign wealth funds (SWFs) are frequently grouped together under the banner 'strategic investors', a closer inspection reveals a striking degree of heterogeneity, both across and within these groups2. Take the global pension fund community as a case in point (Figure 1). Japan, with the world's second-largest stock of assets under management, stands at one end of the risk spectrum with 98% of assets in defined benefit schemes, mostly held on behalf of the public sector, with the highest (relative) exposure to bonds and lowest weighting to non-traditional asset holdings. At the other end, Australia and the US are characterized by largely defined contribution and private sector schemes, and the highest allocations to both equity and alternative assets. Meanwhile SWFs are typically classified under four broad categories: i.) macro-stabilization funds, ii.) national savings funds, iii.) pension reserve funds and iv.) reserve investment funds. Yet some SWFs have multiple objectives (typically savings and stabilization-based), while some countries have multiple SWFs each with a different objective. A stabilization-based SWF in a small open commodity-exporting economy with large short-term external liabilities will clearly have a different objective function (i.e. that of volatility-smoothing, in the spirit of Friedman's Permanent Income Hypothesis) vis-à-vis intergenerational savings-based sovereign wealth funds with no contingent cash calls, a high pain tolerance and distant starting liabilities.

My view - If you represent one of the investment institutions mentioned in the headline above, I think you will find this report informative.

And for the rest of us, here is a statistic to ponder: Brad Jones says that sovereigns now hold "more than US$10 trillion in foreign exchange reserves, well in excess of standard reserve adequacy requirements in many cases."

He publishes a graph showing these reserves since 1999, when they were less than US$2 trillion. They have increased every year except for 2008 when a tiny decline occurred. An accompanying pie chart shows that a staggering 63.4% of these reserves are now held by Asia Pacific countries, compared to 2.5% by North America.

Additional commentary by Eoin Treacy

Evolving tech DNA in mobile era - Thanks to a subscriber for this educational report from Woori Bank offering a Korean perspective on technological development and the leadership of Apple in the handheld devices sector. The full report is posted in the Subscriber's Area but here is a section on rechargeable batteries:

Key factors associated with developing next-generation rechargeable batteries: 1) developing rechargeable battery materials without using high-cost raw materials; and 2) ensuring capacity and power applicable for EVs

- Given that rechargeable batteries account for roughly 45% of EV manufacturing cost (56% including battery management systems (BMS)), use of high-cost raw materials needs to decline

- Voltage or current need to be increased in order to expand battery power (P=VI)

1) Method for increasing voltage (V): Escalate voltage difference between cathode and anode materials by increasing voltage level for cathode materials

2) Method for increasing current (I): Ensure mobility of ions and electrons between cathode and anode materials via technological improvements in electrolytes and separators.

My view If the long-term potential of mobile devices, electric vehicles and various renewable energy power stations are to be realised significant innovation will be required in battery technology. Korean companies have been among the leaders in this sector for a number of years

This section continues in the Subscriber's Area.

On Apple Following Apple's stellar performance to date, I asked a subscriber based in Silicon Valley what sentiment is like on the ground. Here is his generous response:

The View from Silicon Valley -- regarding Apple:

As you mentioned, the price chart looks pretty overextended, but the underlying fundamentals look great.  First, some of this super-fast run up was stimulated by the manure-poor job that the Wall Street "analysts" did in predicting Apple results -- any human with a brain who bothered to drop by a couple of Apple stores during the holidays and (especially) after the holidays would have noticed that the Apple stores were full of customers even when the other stores around them were empty.  These people were buying stuff. 

Second, the "analysts" continue to completely miss the ongoing market share growth of Apple computers.  The "analysts" are blinded by the bright lights of the cell phones and iPads, and totally miss that Apple is gradually eating away at Microsoft's monopoly, especially in laptops (which is where the profitable growth is in computers, <grin>).  Frankly, the MacBook Air laptop is rapidly becoming the must-have laptop for business travelers.  Apple continues to be at least a generation ahead of the Microsoft-based computers in both laptops and desktops.  Go check out their desktop with a pair of 27" monitors at your local Apple store.  Fullermoney looks really good on them :). 

These "analysts" (I use the term extremely loosely) must never fly -- take any flight and count how many people are using some Apple device, and you will usually find that Apple devices outnumber all other devices combined on the airplane. 

Finally, part of the run up is due to the rumor, spread globally by the WSJ, that Apple will be announcing the iPad 3 next month.  I've no clue if that is true, but that would certainly put a positive light on near-future revenues if it is true.  Here in Silicon Valley, our rumor mill positions the iPad 3 as another really kick-butt product.  On Wall Street, they talk of other tablets cutting into Apple's share -- out here, we think those guys are pretty funny since they are all holding iPad 2's as they talk about that, and between each of them and the TV camera is usually a MacBook Air laptop.

The Apple strategy of a growing an ecosystem for their customers is paying off big-time -- this is a huge strategic advantage, and one that has a high barrier to entry, and makes their products ultra sticky for customers (once you become part of the Apple world, you will not want to leave).

Additionally, Apple has focused on having the world's best customer service (both in their retail stores and in their support organization) -- not the cheapest support, but the best.  They train their people exceedingly well, and really focus on having thrilled customers. 

Net net, I am expecting Apple results to be truly spectacular.  They should also pass the $100 billion cash in the bank mark shortly (you have to look at both their cash/cash equivalents line and the "long term investments" line, which is actually US Treasuries, which are arguably quite liquid and probably could be sold at a significant profit versus when Apple bought them).  It remains a mystery what they will do with that much cash, but buying Microsoft is probably not one of the likely choices.  They are expanding their real estate holdings here in the valley, but that is all small transactions when viewed from the top of a pile of real money.

At the same time, the parabolic move in the price, as taught in the Chart Seminar (to quote you guys :) ), is looking pretty steep.  I intend to acquire more ownership on the next substantial pullback.  If this stock pulls back to the 200-day MA, it may well be the most undervalued company in the market as measured by real earnings potential.

I hope this helps the Collective :)

My comment - Apple is the clear global leader in handheld devices. It continues to fight a rear guard action against upstarts in the sector such as Google, Samsung and HTC. Patent infringement lawsuits have so far been partially successful in slowing the introduction of competing products but are unlikely to deter rivals from participating in such a high growth market beyond the short term.

This section continues in the Subscriber's Area.

Eoin's personal portfolio: equity short opened This section continues in the Subscriber's Area.

Major developers earnings solid, Hulic to launch J-REIT Thanks to a subscriber for this interesting report by Yoji Otani and Akiko Komine for Deutsche Bank. The full report is posted in the Subscriber's Area but here is a section:

The TSE REIT index keeps rising
The TSE REIT index rose 1.3% in the week spanning 1 to 8 February. However, it underperformed TOPIX and the TSE Real Estate stock index, by 1.9ppt and 0.3ppt, respectively. As of 8 February, the total market cap of all listed J-REITs was ¥3.1trn, the weighted average distribution yield 6.0% (based on company forecasts), the FFO multiple 11.3x, and the NAV multiple 0.81x (based on previous term results).

Office and diversified REITs strong; BoJ's first purchases of J-REITs in 2012
By asset class, office and diversified REITs performed well, posting a 1.6% increase. Residential rose 0.7%. As retail, logistics and hotel were also up, all the asset classes rose during the week. On 7 February, the Bank of Japan (BoJ) purchased ¥1.3bn of J-REITs for the first time in 2012. The BoJ's cumulative purchases since December 2010 are ¥67.8bn. It has ¥42.2bn left for J-REIT acquisitions.

Solid earnings at major real estate companies
Both Mitsui Fudosan (8801; ¥1,287; Buy) and Mitsubishi Estate (8802; ¥1,258; Buy) announced solid 3Q earnings on 3 February. Mitsubishi Estate raised its full-year guidance. We expect stable earnings for the real estate sector. We forecast OP at the five major companies we cover will rise 7.0% YoY in FY12 and 7.3% in FY13.

My view The TSE REIT Index has featured in the monthly tables of fundamental statistics for global indices on a number of occasions. This has mostly been because of its competitive yield which is currently 6.06%. The Index trended consistently lower for most of 2011 and lost momentum from early December. It appears to be in the process of forming a base and a sustained move below 820 would be required to question medium-term scope for some additional upside.

Email of the day (1) on creating a relative chart template:

On your charts, can I easily install a relative index, say with the FTSE-100 share index for UK shares please?

My comment Welcome to the Service and thank you for this question which others may also have an interest in. Yes, you can create a relative chart in three short steps using the Chart Library's charting functionality.

For example, choose any UK share from the International Equity Library menu.

1. Click on the Charting icon. This is situated to the left of the charcoal coloured bar located directly above the chart area.
2. This will open a popup window containing a range of options. Click on the Relative dropdown menu and select the third option FTSE 100 (UKX).
3. The system defaults to a ratio, so all you need do now is hit the Apply button at the bottom of the popup window.

To Save your settings as a template for future use follow these five steps:

1. Click on the Charting icon again to reopen the popup window.
2. Click on the Save button. This is located in the aquamarine bar at the top of the popup window.
3. Give the template a name and click OK.
4. Click on the Apply button at the bottom of the popup window.
5. Refresh the page.

Your new template will now be available in the Chart dropdown menu, located at the top of the page to the right of the Search. The next time you wish to see a share relative to the FTSE-100, all you need do is select the share you are interested in and choose your template from the chart dropdown menu.

Email of the day (2) on additions to the Chart Library:

Would you be so kind to add Transneft charts (TRNFP RU Equity) into the chart library? Many thanks and kind regards,"

And

Would you please amend a couple of charts which are not updating:

UKRPI, UKRPYOY, AUD interest rate - JPY interest rate

Thanks and regards.

And

Could you please add the following stocks to the H SHARE INDEX:

1. China Minsheng Bank [1988.HK]

2. Great Wall Motor [2333.HK]

3. Brilliance China [1114.HK]

"Many Thanks"

And

I need some additions 8960 JP: United urban
Also 3333 HK. (Back into the developers), 6823 HK, UAN (NY), CHKR (NY), YNDX (NY)

That's a start. Thanks

And

May I request you to kindly add BMC.V - Buchans Minerals (Canada) to our library?

My comment Thank you all for these suggestions which have either been updated or added to the Chart Library.

Speaking engagements in the USA - I have accepted invitations to speak to a number of associations and groups while in the USA for The Chart Seminar. My schedule is still filling but here are the details so far:

San Diego MTA chapter in the first week of April. Time and venue yet to be arranged.

Los Angeles MTA chapter on April 11th venue to be arranged but will be in the Long Beach area.

To Hoard or to Horde: risks and opportunities from participating with the crowd. Will be the topic of my talk to both these associations.

CFA Institute San Francisco April 12th 3pm. The venue has yet to be finalised but the topic will be Differing patterns of development, comparing the USA & UK with China & India.

The TSAA-San Francisco April 13th. Venue and time have yet to be confirmed by the topic will be Investment implication of competing inflationary and deflationary forces.

If you would like me to speak to your local chapter or organisation in California or New York please contact your respective chairperson and ask them to contact me.

The Chart Seminar 2012 - Following a sell-out tour to Singapore and Australia last year, The Chart Seminar will be held in San Francisco, New York and London this year. Please be aware that the early booking rate for non- subscribers at the US seminars expires on January 31st.

We are currently taking bookings for our San Francisco and New York dates in April as well as London seminars in May and November. Anyone interested in securing a place at any of our events should contact Sarah Barnes at sbarnes@fullermoney.com.

The date and venues for my seminars so far in 2012 are:

San Francisco - April 16th &17th 2012 Nikko Hotel

New York - April 23rd & 24th 2012 at The Manhattan Club (above Rosie O'Grady's) at 800 7th Avenue

London - May 25th & 25th 2012 at the Radisson Edwardian Hampshire

London - November 22nd & 23rd 2012 at the Radisson Edwardian Hampshire

The full rate is £950 + VAT. (Please note US delegates, as non EU residents are not liable for VAT). The early booking rate of £875 for non-subscribers expires on January 30th for the US seminars. Paid-up Fullermoney subscribers are offered a discounted rate of £850. Anyone booking more than one place can also avail of the £850 rate for the second and subsequent delegates.