China Launches Its Answer to America’s GPS Dominance

Officials at China’s independent satellite navigation system announced Tuesday their GPS alternative is available to the public, reports the BBC.

Named Beidou, Chinese for “compass,” the system has been in development for more than a decade. China began work on Beidou in 2000 in order to become less dependent on the U.S.-owned Global Positioning Satellite (GPS) infrastructure.

Before launching Beidou, the Chinese relied on American GPS for military and domestic use. Should China have gotten involved in a military conflict with a U.S. ally, the United States could have blocked access to GPS, causing a disadvantage for the Chinese military. With Beidou, China now has its own system for warship navigation and missile targeting.

China state media have stressed the commercial potential of the new system. Domestic GPS technology is a thriving market in the United States and Europe, and China expects to replicate that success.

Civilian users of the network will have geolocation accuracy of 10 meters and speed measurements accurate to .2 meters per second. The Chinese military will have access to more accurate data.

The development of Baidou parallels the creation of GPS, which was available exclusively to the American military for the first 20 years of its existence. Former U.S. President Bill Clinton declared GPS to be a “dual-use system” in 1996. This paved the way for car and naval navigation, geolocation, geocaching and a plethora of other GPS applications. However, in the U.S. and elsewhere, the military still enjoys more accurate GPS data than civilians.

Currently, Beidou uses 10 satellites. Coverage is limited to mainland China and nearby areas of Asia. The Chinese government plans to expand the system gradually, providing global coverage by 2020.

Trading the Globe: Saving China

Chinese stocks got their best rally in two weeks last night, but Shanghai is still down 29% from its peak. The macro numbers have been horrible. What will it take for Beijing to step in? Tune in tonight on CNBC for the answers.

Last week's industrial production numbers came in at their worst since August 2009 -- when the global economy was still digging out from the Lehman Brothers disaster.

Monetary supply is crawling along at its lowest level in over a decade, reflecting a dramatic downturn in demand for yuan as well as Beijing's efforts to clamp down on lending.

Exports are up 13.8%, which would be great for any country that does not have China's track record of 20% to 25% export growth.

But it looks like the government is actively buying stocks in Shanghai now and there might be another reserve requirements cut over the weekend.

Added stimulus could also be on the way.

Remember: the Chinese market began a rally in November 2008, months before the rest of the world realized the credit crisis was already easing.

Shanghai was a leading indicator then, and then led the world down in April.

Will it be a leading indicator again?

China pulls off “short squeeze” in manipulating copper market, again, as it also has with corn and cotton (JJC, CORN, BAL & GLD)

One of the nice things about having $3.2 trillion in foreign reserves -- more than any other nation -- and a state-controlled economy is that it allows China to continually manipulate markets for commodities such as copper ( JJC , quote ), corn ( CORN , quote ) and cotton ( BAL , quote ). As reported in an article in the Financial Times , "Copper soars to hit $8,000 level," it has been a good week for the red metal, a key component of a wide range of industrial and construction activities throughout the world.
The exchange traded fund for copper, the JJC, is up almost 9% even though every major user of copper (China, Europe, India, US, Brazil) is reporting or projecting lower economic growth.
In addition, Morgan Stanley and JP Morgan (JPM both downgraded commodities such as copper this week.  According to David Wilson, director of metals research for Citigroup, as quoted in the Financial Times piece by Emiko Tereazono and Javier Bias, this rally was due to "fund activity rather than any fundamental change in the overall outlook, including the macro economy."
In other words, it is not fundamental economic demand that is fueling the rise, rather speculation.
In this, Beijing pulled off a classic "short squeeze" to drive up the price of copper. In easing its monetary policy, China caught many "in bearish" positions according to the Financial Times .  Noted David Wilson, "The market has been very short, for sure."
As China is, by far, the world's biggest consumer of copper, the price was obviously going to rise after the announcement.  Also of note is that this is the first time in three years that Beijing has reduced the reserve requirement for banks, which can now lend more to copper consumers .
China also wreaked havoc with the corn market this year.  Early in the summer, articles in The Wall Street Journal and the Financial Times reported of record demand for corn from Chinese buyers.  As a result, the exchange-traded fund for corn (CORN) rose from about $38 in March to over $50 by late August.  Since then, it has fallen to under $40.
Further proof is the trajectory of the ETFs that track gold ( GLD , quote ) and copper (JJC).
There should be an inverse relationship between these funds, as copper rises in price due to greater demand from growing economies while gold rises in price due to a lack of confidence in fiat currencies due to floundering economies.
But both the GLD and the JJC have risen sharply since October.  For the year, however, the GLD is up double digits, while the JJC is down double digits.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.