BGI

I'm in a weird spot both recognizing Chinese stocks are cheap on fundamentals, but also a bear market or global recession isn't going to be good for them either. Much more interested in owning something like CGN with a 5 percent dividend yield, than Alibaba or Baidu that is responsible for the pop in FXI today.

The impetus for the move today is the government signaling it will inflate the currency and restart the housing bubble. Interest rates are already falling in China and the 10-year yield is below 3 percent.

Bloomberg: China’s Pledge to Lift Consumption Sparks Debate on Cash Handouts

iFeng: 利好来了！公积金贷款利率下调

China Ban on Australian Coal Stressing Nuclear Plant

CBC: Chinese nuclear plant 'performance issue' reported by its French joint operator

The French joint operator of a Chinese nuclear plant near Hong Kong says the plant is dealing with a "performance issue" but is currently operating within safety limits, following a report of a potential radioactive leak.

The Taishan Nuclear Power Plant is jointly owned by China Guangdong Nuclear Power Group and French multinational electric utility Électricité de France, the main owner of Framatome, which helps operate the plant.

China's ban on Australian coal hit its coal plants, plus summer weather has reduced hydropower in the region. Everyone should be paying close attention here. This is what the future will look like all over the globe if politicians continue making political decisions in place of economic decisions when it comes to energy. The news clobbered uranium stocks across the board.

China Winning 4G War in South China Sea, Plans 20 Floating Nuclear Power Plants

Whatever one thinks of the basis for China's claims in the South China Sea, they are behaving exactly as one should behave to defend property rights. While this is viewed almost strictly in military terms at the moment, China is developing the basis for long-term economic development of the region. Leaving aside the issue of sovereignty, is there any other nation that will develop the resources of the South China Sea?

In the United States, the Kelo decision expanded the concept of eminent domain to include takings for the purpose of private benefit, as long as the public would benefit from higher tax revenues. The decision was a horrendous ruling against private property rights, but under the logic of the Kelo decision, if you were the sovereign in charge of the region and hoping to maximize economic output, you would seize much of the South China Sea and give it to China.

From May, CNN: Fukushima at sea? China wants a fleet of floating nuclear power plants

The ambitious 2016 nuclear plan, formalized in China's 13th five-year plan in March, includes completing 58 power reactors by 2020 and building perhaps another 100 gigawatt-sized reactors by 2030, when China would become the largest nuclear power producer in the world.

As part of this plan China is going to build up to 20 floating nuclear plants.

...These small power plants will be built in Chinese shipyards, mounted on large sea-going barges, towed to a remote place where power is needed and connected to the local power grid, or perhaps oil rig.

Now some details of the plan are emerging, with the 20 nuclear power plants getting the green light.

Wind: 首艘海洋核动力平台即将总装 将建造20座核电站

Recently, China's first aircraft marine nuclear power platform built in the upcoming assembly CSIC's Bohai Shipbuilding Heavy Industries, China Shipbuilding Heavy Industries and the future will be the mass construction of ocean nearly 20 nuclear power platform.

The plants will provide power and fresh water to the islands:

Marine nuclear power mobile offshore platform is a small nuclear power plant , is the combination of small nuclear reactor and marine engineering, can provide security for the offshore oil exploration and remote islands, efficient energy supply, can also be used to power ships and desalination.

Marine Nuclear Power platform will provide energy security and protection of Chinese freshwater Nansha Islands. For a long time, due to power supply problems, officers and soldiers stationed in the island of Nansha Islands and fresh water supplies are not guaranteed, only to send bottled water on the island by boat, encountered extreme weather at sea, the soldiers may have to rely on rainwater life. Because of the lack of fresh water, the soldiers could not take a bath for a long time.

China expects to spend 2 billion yuan per platform, or 40 billion total:

Marine nuclear power platform to achieve volume after construction, nuclear power is expected to invest every seat ocean platform about 2 billion. 20 marine nuclear power platform total cost of about 40 billion yuan, much cheaper than the cost to build a fleet of aircraft carriers. China South China Sea reefs every seat platform with marine nuclear power, the equivalent of a nuclear-powered aircraft carrier, Yongxing Island, Xisha, Nansha YONGSHU reef is equipped with two missile systems, combat aircraft and naval aircraft carrier. Its military advantage is far greater than the United States from long-haul aircraft carrier fleet.

This concept is not new, nor experimental. Russia has also developed floating nuclear power and could bring it into use next year: Floating Nuclear Power Plants Becoming a Reality

Russian State Atomic Energy Corporation Rosatom reports that floating nuclear power plants will become a reality by October 2017.

Ahead of this deadline, Rosatom has just commenced construction of the coastal infrastructure and hydraulic structures for the start of such a power unit in Russia’s far eastern city of Pevek, Russia.

Rosatom plans to install the first power generating unit in September 2019 and expects to produce energy from these units in November 2019.

Floating nuclear power plants (FNPP), which are basically mobile power units, have been conceptualised to provide reliable power supply to remote settlements and large industrial facilities such as oil platforms. Development work on such plants began in the 1950s when Soviet scientists designed a mobile power plant on a four mobile tracked chassis.

Russia is now in the rest phase: 俄国海上漂浮核电站下海调试

According to several online media reports quoted the Russian-made the world's first offshore floating nuclear power plant has been tested sea. He reported that recently, the world's first floating nuclear power plant at sea to 俄罗斯罗蒙诺 Brasov Academy (Akademik Lomonosov) named offshore floating nuclear power plant into the sea testing phase, and will be after October 30, 2017 to complete the test officially put into use.

Back to China, nuclear power will make economic development much easier, and there's already talk of creating new economic zones in the South China Sea: China May Use Offshore Banking to Secure South China Seas

Leaving aside competing claims of sovereignty, the behavior of the Chinese makes it very clear they believe they own the entire South China Sea. There is a long tradition in common law of property ownership belonging to those who develop it. An owner who abandons property to squatters who repair it or develop it, can lose possession. China's behavior is a clear legal assertion of property rights and the failure of other nations to pursue similarly aggressive strategies is a major strike against their claims of ownership.

It can be argued 100 percent of this money is defense spending and the islands will never become anything more than legal claims to control the South China Sea. With natural resources and the potential at least for tourism and offshore banking, however, as more assets and development takes place, the odds of it turning into something more increase.

Sovereignty also does not fall under common law property rights and things will come to a head before China can fully assert ownership. Still, for the moment China is winning the 4G war in the South China Sea China's economic development is a strong moral counterclaim against the charge that China is violating sovereignty. It is an asymmetric response. Instead of focusing solely on claims of sovereignty, China is opening a new front in the battle and forcing its rivals to react. China is winning.