China Sells Dollars-4

"Chinese nickel companies are quietly collecting stakes in junior nickel miners, in a move that guarantees future supplies for China and could help the small companies meet output targets. ... So, eager to ensure its future supply, China is buying stakes in resource-rich junior nickel miners, many of them based in Canada. And as a further guarantee of supply, it is parlaying some of its holdings into takovers. ... In short: The juniors have the material and China has the smelters and the financial firepower", my emphasis, Devon Maylie at the WSJ, 19 August 2009, link: http://online.wsj.com/article/SB125064757857942087.html.

"China's stimulus program has been a success so far--in driving up the price of copper. ... The country's steelmakers have imported 297 million tons of iron ore this year, for example, 29% more than in the same period in 2008, when China was feverishly building for the Beijing Olympics. ... China will probably not corner, say, the aluminum market, but analysts say the country's experiment in commodities stockpiling is likely to end badly in one of two ways. ... 'Any way you cut it, this isn't a policy that's going to work for them in the long run,' says Jennifer Richmond, China analyst with Stratfor, an Austin, Tex. consulting firm", Daniel Fisher at Forbes, 24 August 2009.

Quoted without comment.

Richmond is entitled to her opinion. Having looked at its alternatives, China apparently figures it's better off with iron ore, nickel and copper than US dollars. This makes sense to me.