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China and Trump Make Copper a Red-Hot Bet

Copper’s 14-day winning streak is the longest on record for at least 28 years

Copper has become the favorite commodities trade, a sign that investors believe economic-growth prospects are improving from China to the U.S.

Prices for copper have closed higher 14 days in a row, the metal’s longest winning streak on record for at least 28 years. That run lifted copper’s price by 22% to a 52-week high, after the front-month contract rose 3.7% Thursday to $2.5495 a pound.

Other base metals also have soared recently. Top performer zinc has risen more than 50% this year, and aluminum, lead and nickel all hit new 52-week highs this week.

The prices for industrial metals, the building blocks for infrastructure and other major construction, tend to move along with signs of rising or falling economic growth. Copper in particular is considered a gauge of economic health, with its applications in everything from air conditioners and electric wiring to iPhones.

China has been responsible for much of the rally, analysts say. The government’s new plan calls for additional spending on building and construction projects, and an official gauge of factory activity in China rose last month to its highest level in two years. The U.S. also posted signs of increased manufacturing activity in October.

Metals got another boost this week by the victory of Donald Trump, who has indicated plans to spend hundreds of billions of dollars on infrastructure. In his victory speech, the U.S. president-elect re-emphasized his plan for widespread construction. “We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals,” he said on Wednesday.

Fiona Boal, director at Fulcrum Asset Management in London, said Mr. Trump’s election as president is adding one more bullish factor to copper, “the trade du jour.”

The metal’s rally has carried over to the shares of metal miners and producers. U.S. Steel jumped 17% on Wednesday following the election result. The steel producer and major U.S. copper producer Freeport-McMoRan are both up six sessions in a row, gaining more than 27% and 23% for the month, respectively.

Still, the recent surge in metal prices has some investors concerned that the rally has been overdone.

“We are cognizant that a good deal of market expectation is already baked into the price,” said Peter Kocubinski, manager of the commodity investment team at J.P. Morgan Asset Management.

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MARK SCHLARBAUM - Experienced in China - US business partnerships. Never giving up for those that never stop fighting! Help me join the fight against blood cancer and reach my fundraising goal! Visit My Fund Raising Page

China’s ‘monkey king’ picks next US president

SHANGHAI: A Chinese monkey has tipped Donald Trump for the US presidency, a tourism park said, after the creature successfully predicted the winner of football’s European Championship final earlier this year.

Known as Geda — which means knots or goose bumps — is the latest in a series of purportedly psychic animals that have popped up around the world since Paul the Octopus correctly predicted multiple 2010 World Cup matches.

The simian seer, wearing a yellow shirt emblazoned with his title, was given a chance to pick between life-sized cut-outs of Republican Trump and his Democratic challenger Hillary Clinton.

After “deliberate thought” the mystic monkey chose Trump, Shiyanhu Ecological Tourism Park said Thursday in a statement on its website. Without even waiting, he congratulated the cardboard candidate with a kiss on the lips.

The five-year-old simian correctly predicted Portugal would win the 2016 European football championship in July, two days before Cristiano Ronaldo’s side prevailed 1-0, online news portal ifeng.com reported at the time.

Then, the monkey was presented with the national flags of Portugal and France with bananas on both. It finally walked towards the national flag of Portugal and ate a banana there, the report said.

Geda’s antics seem to have been inspired by the oracular octopus Paul.

In 2010, Paul the Octopus became the world’s most famous mollusc when he foretold the results of every match played by Germany at the World Cup in South Africa, as well as Spain’s victory against the Netherlands in the final.

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China’s policing robot: Cattle prod meets supercomputer

China’s supercomputing development has a purpose, says U.S.

China’s fastest supercomputers have some clear goals, namely development of its artificial intelligence, robotics industries and military capability, says the U.S.

But some of the early iterations of this effort seem a little weird.

China recently deployed what it calls a “security robot” in a Shenzhen airport. It’s named AnBot and patrols around the clock. Here’s what AnBot looks like, according to a Chinese government newspaper, The People’s Daily online. And here is AnBot with its electric cattle prod-like device deployed and operational.

AnBot may seem like a Saturday Night Live prop, but it’s far from it. The back end of this “intelligent security robot” is linked to China’s Tianhe-2 supercomputer, where it has access to cloud services. AnBot conducts patrols, recognizes threats and has multiple cameras that use facial recognition.

These cloud services give the robots petascale processing power, well beyond onboard processing capabilities in the robot. The supercomputer connection is there “to enhance the intelligent learning capabilities and human-machine interface of these devices,” said the U.S.-China Economic and Security Review, in a report released Tuesday that examines China’s autonomous systems development efforts.

The ability of robotics to improve depends, this report said, on the linking of A.I., data science and computing technologies.

The report notes that simultaneous development of high-performance computing systems such as the Tianhe-2 and the Sunway TaihuLight supercomputers — along with robotic mechanical manipulation — “give A.I. the potential to unleash smarter robotic devices that are capable of learning as well as integrating inputs from large databases.”

Both the Tianhe-2 and Sunway TaihuLight have dominated the rankings of the Top 500 supercomputing list. TaihuLight is currently the world’s fastest supercomputer. China is intent on keeping its edge and has plans to deliver an exascale system in 2020, three years before the U.S. One exaflop equals one quintillion calculations per second; a quintillion is 1 followed by 18 zeros.

Chinese tech firms are working to learn as much as they can from their U.S. counterparts, particularly in A.I. development. The government report cited Baidu’s founding, in 2011, of its Baidu Silicon Valley AI Lab as one example.

The report recommends that the government increase its own efforts in developing manufacturing technology in critical areas, as well as monitor China’s “growing investments in robotics and artificial intelligence companies” in the U.S.

Mark Schlarbaum

Mark Zuckerberg’s Long March to China

The Chinese government likes to control social media and what people do with it—but Facebook looks willing to launch in China anyway.

For U.S. Internet businesses, China is the land of moral defeat. Many people hoped that Western technology companies would loosen China’s control over information. Instead, those companies have willingly participated in efforts to censor citizens’ speech. Yahoo gave Chinese authorities information about democracy activists, landing them in jail. Microsoft shut down the blog of prominent media-freedom activist Michael Anti. Google censored search results that were politically sensitive in China. In 2006, those three companies came before Congress and were accused by a subcommittee chairman of “sickening collaboration” with the Chinese government. Google shut down its mainland Chinese search engine in 2010, publicly complaining about censorship and cybersecurity.

Facebook has been blocked in China since 2009, and its Instagram photo-sharing service was blocked in 2014. I once thought that it would be disastrous or impossible for the social network to try a Chinese adventure of its own, and some China experts still believe that to be true. But a Facebook launch in China now looks probable.

Facebook’s founder and CEO, Mark Zuckerberg, has signaled to Beijing that he’s willing to do what it takes to get into the country. People who know the company well think it will happen. “It’s not an if, it’s a when,” says Tim Sparapani, who was Facebook’s first director of public policy and is now principal at SPQR Strategies, a consulting firm. Facebook declined to comment for this article, but Zuckerberg said last year: “You can’t have a mission to want to connect everyone in the world and leave out the biggest country.”

A decade after Google’s hopeful but ill-fated entry into China, U.S. Internet companies may see the Chinese market as even more tantalizing—yet impenetrable. The number of Chinese Internet users has surged to some 700 million, and they represent a valuable untapped resource for American companies with saturated, highly competitive home markets. But the Communist Party’s attempts to control information have also grown more intense. In addition to the “Great Firewall” that blocks access to foreign websites, legions of human censors, many employed at Internet companies, police domestic blogs and social networks. And a U.S. company would now have to compete with China’s own Internet giants. WeChat, a messaging app from the behemoth Tencent, has hundreds of millions of users.

Zuckerberg clearly thinks China is worth the trouble, even if that means leaving some “Western values” at the door. Earlier this year, he traveled to Beijing and had a high-profile meeting with China’s propaganda chief, Liu Yunshan. Chinese state media reported that Facebook’s founder praised China’s Internet progress and pledged to work with the government to create a better cyberspace. Liu highlighted the notion of Internet governance “with Chinese characteristics.” The translation was clear: a Chinese version of Facebook would definitely be censored. This year’s trip was something of a sequel. In 2014, he hosted Lu Wei, minister of the Cyberspace Administration of China, at Facebook’s offices. President Xi Jinping’s book The Governance of China just happened to be on Zuckerberg’s desk.

This courtship hasn’t been without some awkward moments. When Zuckerberg posted a photo of himself cheerfully jogging through the polluted haze of Tiananmen Square this year, he was mocked on Chinese social media. But overall he has made the right moves, says Cheng Li, director of the John L. Thornton China Center at the Brookings Institution. “Chinese leaders pay a lot of attention to personal relationships,” he says. “They think Mark Zuckerberg is a friend of China. He’s successful. He’s very China-friendly. He has a Chinese wife. He speaks Chinese. So what else do you want?”

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Facebook will still have to overcome Beijing’s suspicions that American Internet companies could destabilize the Communist Party’s rule. Media outlets that described the Arab Spring as the “Facebook Revolution” didn’t do the company any favors. And documents leaked by the former intelligence contractor Edward Snowden fueled Chinese suspicions that American technology companies had “back doors” for U.S. government surveillance.

But Facebook’s potential to help Chinese businesses go global could lead Beijing to see the company as a net positive. It already sells advertisements to Chinese companies for display outside the country, but launching a version of Facebook in China could strengthen the connections between Chinese companies and overseas customers.

The fact that China now has mature social-media companies of its own might also make the government less wary of Facebook. The company would be unlikely to displace incumbents such as the ubiquitous WeChat, which has taken hold in China in a way that few outside the country truly appreciate. People use WeChat not only to communicate but to make purchases, hail taxis, and book doctor’s appointments. In America you can say “I’m not on Facebook” and still be a functioning member of society. Avoiding WeChat in China is much harder.

Mark Schlarbaum

China’s 2,000-km Quantum Link Is Almost Complete

The Beijing-Shanghai project will form the backbone of the nation’s quantum communications network

Quantum Space Link: Staff work on China’s quantum research satellite, which launched in August. It is part of a larger effort in the country to push the limits of quantum key distribution.

By the end of this year, a team led by researchers from the University of Science and Technology of China, in Hefei, aims to put the finishing touches on a 2,000-kilometer-long fiber-optic link that will wind its way from Beijing in the north to the coastal city of Shanghai.

What will distinguish this particular stretch of fiber from myriad other long-distance links is its intended application: the exchange of quantum keys for secure communication—a sophisticated gambit to protect data from present and future hackers. If all goes according to plan, this Beijing–Shanghai line will connect quantum networks in four cities. And this large-scale terrestrial effort now has a partner in space: A quantum science satellite was launched in August with a research mission that includes testing the distribution of keys well beyond the country’s borders.

With these developments, China is poised to vastly extend the reach of quantum key distribution (QKD), an approach for creating shared cryptographic keys—sequences of random bits—that can be used to encrypt and decrypt data. Thanks to the fundamental nature of quantum mechanics, QKD has the distinction of being, in principle, unhackable. A malicious party that attempts to eavesdrop on a quantum transmission won’t be able to do so without creating detectable errors.

QKD has already made its way into the real world. In 2007, the scheme was used to secure the transmission of votes in a Swiss election. Several years ago, the U.S.-based firm Battelle began to use the approach to exchange information securely over kilometers of fiber between its corporate headquarters in Columbus, Ohio, and a production facility in Dublin, Ohio.

But despite great progress, there has been a stumbling block to wide distribution. “The problem we’ve got is distance,” says Tim Spiller, director of the United Kingdom’s Quantum Communications Hub, a nationally funded project that is building and connecting quantum networks in Bristol and Cambridge, in England.

The challenge is that QKD encodes information in the states of individual photons. And those photons can’t travel indefinitely in fiber or through the air; the longer the distance, the greater the chance they will be absorbed or scattered.

This characteristic has a direct impact on how quickly a quantum key can be generated, explains physicist Jian-Wei Pan, who leads the Chinese projects. If researchers attempted to send signals directly down 1,000 kilometers of fiber, Pan says, “even using all the best technology, we would only manage to send 1 bit of secure key over 300 years.”

Instead, QKD fiber links must have a way to refresh the signal every 100 km or so to maintain a reasonable bit rate. But this can’t be done with conventional telecommunications equipment. The same rules that protect quantum transmission against eavesdropping also prohibit a quantum key from being copied without corrupting it. The solution has been to concatenate, creating a daisy chain of individual quantum links connected by physically secured spots, or “trusted nodes.” Each intermediate node measures the key and then transmits it with fresh photons to the next node in the chain.

The Beijing–Shanghai line will use 32 trusted nodes to create the 2,000-km line. This approach isn’t ideal for security. Because each trusted node has to convert the quantum key back into classical (nonquantum) information before passing it on, an eavesdropper at the node could potentially hack the data stream there undetected. “That’s the drawback,” Pan says. But the approach is “still much better than traditional communications… [where] there is the possibility of performing eavesdropping” at every point along the route, he says. Here, the problem is limited to 32 spots under lock and key.

“A long-distance chain link like this, [it’s] really the first time it’s been done,” says Grégoire Ribordy of ID Quantique, based in Geneva, which makes hardware for QKD networks. “It’s inspiring other people to try to do similar things around the world.”

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Wal-Mart to invest $50 million in China online grocer New Dada

Wal-Mart Stores Inc will invest $50 million in Chinese online grocery and delivery firm New Dada, the U.S. retailer said on Friday, extending its tie-ups with local online players to help boost sales in the world’s second-largest economy.

Wal-Mart shifted its China strategy earlier this year when it sold its own online platform Yihaodian in exchange for a stake in local e-commerce giant JD.com Inc. New Dada is a joint venture part-owned by JD.com.

The investment in New Dada will help Wal-Mart target Chinese shoppers with faster delivery times in a popular but fiercely competitive online grocery market. New Dada has over 25 million registered customers and delivers in over 300 Chinese cities.

Mark Schlarbaum

China’s ZTO Express Set for Biggest U.S. IPO This Year

Delivery firm set to raise up to $1.3 billion in biggest IPO by Chinese company in the U.S. since Alibaba in 2014

Alec Macfarlane

Updated Oct. 15, 2016 10:08 a.m. ET

A logistics company tied to China’s booming online-shopping industry is set to raise up to $1.3 billion in what could be the biggest U.S. initial public offering this year.

ZTO Express, which delivers parcels for businesses including Chinese e-commerce giants Alibaba Group Holding Ltd. and JD.com Inc., said late Friday it will sell 72.1 million shares at $16.50 to $18.50 each.

At the top end of that range, the Shanghai-based company would raise $1.3 billion. The amount could rise to $1.5 billion if an overallotment option is fully exercised. This would exceed the $1.3 billion total raised by Japanese messaging-app operator Line Corp. in its New York and Tokyo IPO in July.

A listing on the New York Stock Exchange would also make ZTO’s IPO the biggest public market debut of a Chinese company in the U.S. since Alibaba raised $25 billion in the country in 2014.

ZTO is set to launch a global roadshow Monday to sell the deal to investors in the U.S. and Hong Kong.

Founded in 2009 by a 15-year veteran of China’s logistics industry, ZTO operates a fleet of more than 3,300 trucks that deliver across China. Its main business is delivering parcels for Alibaba, which accounted for 75% of its business during the first half of this year. ZTO’s backers include Hillhouse Capital Group and Warburg Pincus LLC.

Bankers working on ZTO’s IPO have been selling the company’s offering as a way for investors to cash in on China’s burgeoning e-commerce industry.

China had $609 billion of online retail sales last year, almost double the $342 billion in the U.S., according to data from iResearch Consulting Group cited in ZTO’s offering prospectus. That figure is expected to surge to $1.5 trillion by 2020, driven by China’s emerging middle class and growing internet and mobile use among consumers, according to iResearch.

ZTO made an operating profit of 1.5 billion yuan ($223 million) in 2015, a 150% increase from 2014. Its operating profit margin in 2015 was 25.1%, up from 15.4% in the previous year.

The company has a 14.3% share of China’s express-delivery market by parcel volume, compared with the 12.4%, 14.7% and 10.5% share held by rivals Shanghai STO Express Co., Shanghai YTO Express (Logistics) Co. and Yunda Ltd. respectively, according to iResearch.

ZTO’s decision to list in the U.S. is partly due to its reluctance to join the queue of more than 800 companies waiting for regulatory approval for IPOs in mainland China, according to a person familiar with the matter.

ZTO said it intends to use most of the proceeds from the offering to buy land, build facilities and purchase equipment to expand its sorting capacity. It plans to use the rest of the money to buy more trucks, invest in information technology and for potential strategic transactions.

Morgan Stanley and Goldman Sachs Group Inc. are lead managers for the IPO. China Renaissance, Citigroup Inc., Credit Suisse Group AG and J.P. Morgan Chase & Co. are also working on the offering.

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After investing $1 billion, Apple takes a board seat at ‘China’s Uber’

Apple took a seat on the board of Chinese ride-hailing company Didi Chuxing weeks after the iPhone-maker invested $1 billion in the firm. This is according to regulatory filings spotted by The Information, which notes that the board appointment in late June was not disclosed at the time of the investment.

The news shows how serious Apple is about its investment in Didi and its interest in the auto industry. Didi — which is valued at around $35 billion — famously beat Uber out of China, forcing the American company to sell its local business. The two companies had been in a war of attrition, using investors’ money to subsidize cheap rides for customers. Apple throwing its weight behind Didi will certainly have helped the Chinese firm’s cause.

A recent report from Bloomberg also noted that Didi is working on developing its own self-driving cars, just like Uber. This could be of particular interest for Apple given its own much-rumored car project. It’s entirely possible that some years down the line Apple’s $1 billion investment and new board seat could develop into a more involved partnership.

Apple’s mergers and acquisitions chief Adrian Perica will be taking the company’s seat on Didi’s board, alongside Martin Lau (president of Tencent), Lucy Peng (an executive at Alibaba), and Didi president Jean Liu and CEO Cheng Wei. Uber CEO Travis Kalanick is an “observer” of the board after the company sold its Chinese operations to Didi, but unlike the others, has no voting power.

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Alibaba, Spielberg to bring Hollywood to China

ET phoned China.

Steven Spielberg’s Amblin Partners and Alibaba Pictures Group, the film unit of Chinese billionaire Jack Ma’s Alibaba Group Holding said on Sunday they will co-produce and finance films for global and Chinese audiences.

They will also collaborate on the marketing, distribution and merchandising of Amblin Partner films in China, the companies said in a joint statement.

Amblin Partners creates film, television and digital content under the Amblin Entertainment, DreamWorks Pictures and Participant Media brands.

Big Chinese companies including Dalian Wanda are looking to bring more Western films and movie-making prowess into China even as they seek to expand their footprint in Hollywood.

China’s masses have the ability to keep Hollywood movies afloat, industry watchers say. They expect China to soon surpass the United States as the world’s biggest movie market.

This year’s ‘Warcraft’, which was a box office flop in the United States, raked in hundreds of millions of dollars in China, making it one of the country’s highest-grossing films of the year.

“Some of the stories I’m hoping Jack and I can tell in this new partnership between Amblin Partners and Alibaba Pictures will be able to bring Chinese-themed stories to the American audience, and we can do co-productions between our company and your company,” Spielberg said at a briefing in Beijing.

“And we can bring more of China to America, and bring some more of America to China.”

Alibaba Pictures has yet to release any films, although the company formerly known as ChinaVision Media Group has several projects in production.

Alibaba Pictures began investing in Hollywood films in 2015 with its stake in ‘Mission: Impossible – Rogue Nation’. It was an investor in this year’s blockbusters ‘Star Trek Beyond’ and ‘Teenage Mutant Ninja Turtles: Out of the Shadows’.

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American football is gaining traction in China

Stadium lights glared through heavy Beijing smog, top-40 bass lines shook the stands, the smell of cheap hot dogs filled the air and the Dalian Dragon Kings strutted onto the field, shouting and clapping in their crisp blue uniforms.

A few hundred had gathered to watch the Dragon Kings take on the Shenzhen Naja, marking the second game in the first season of the China Arena Football League — China’s first professional football league, a scrappy, six-team operation run by a company based in Conshohocken, Pa.

As the game unfolded — snaps fumbled, kicks blocked and touchdowns scored — the children in the stands roared with delight, while their parents whispered quizzically about running backs, field goals and other unfamiliar lingo.

“In the past, I just liked watching the commotion, but now I’m starting to understand the rules,” said Zhang Xinjia, a 46-year-old security guard, his eyes trained on the ball. “No doubt American football will be successful in China — it’s such a confrontational sport.”

Football, America’s most popular sport, does not enjoy a huge footprint in China, the world’s most populous country. For decades, many Chinese have found the rules too byzantine, broadcasts too infrequent, fields and equipment too scarce. Critics say that Chinese parents, repelled by the sport’s high injury rate and fears of concussions, would be reluctant to let their kids play.

Yet that all appears poised to change. American sports entrepreneurs, athletes, even Chinese officials are increasingly promoting the sport in China. The ingredients for widespread popularity may already be in place: China’s middle class is growing, its sports industry booming. In 2013, two former American college football players founded the amateur American Football League of China; now it boasts teams in 14 cities. The National Football League plans to host its first regular-season game in the country in 2018.

“I think in five years, [football] could be a relatively big thing in China,” said Xiao Shen, an NFL commentator on LeSports, an online sports magazine and broadcaster. “I’m very cautiously optimistic.”

Xiao said that Chinese audiences have not yet embraced the sport for several reasons: The NFL did not adopt a sustained China strategy until 2009, Chinese TV stations overlooked the sport and the country for decades lacked a league of its own. Even as soccer grew in popularity and the NBA gained millions of Chinese fans — many drawn to the sport by Houston Rockets star Yao Ming — meishi ganlanqiu, or “American-style football” remained in the shadows.

“I don’t think there’s any one element of football that Chinese audiences absolutely cannot accept,” he said. “But how much they can accept, that’s still unclear.”

Retired NFL quarterback Peyton Manning coached a junior clinic at an indoor field on Beijing’s urban outskirts in late September, while he was in China on a promotional tour. Chinese children in helmets and full pads sprinted, cut and passed, as their well-heeled parents snapped photos with their iPhones.

“I’ve met some rabid football fans [in China] — I mean I met a couple people in Shanghai who knew all of my statistics, including some that I didn’t even know,” Manning said. “And so, there’s potential to see more of these in China. But there’s still some work to be done.”

The players beamed. “There haven’t been any Chinese players in the NFL. I want to be the first one,” said Liu Sicheng, 10. “I super-like playing football. It’s great fun, it trains my mind and I can make a lot of friends.”

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