According to the Wall Street Journal, China is expected to formally establish its sovereign wealth fund (SWF) on Saturday. The size of the fund is expected to reach US$200 billion, about 1/7th of China’s total foreign reserve assets of US$1.4 trillion. According to the Wall Street Journal, US$93 billion has already been prepared for the SWF, likely to be named the China Investment Corp.

Brokerage company CLSA (Credit Lyonnais) has put out a report saying that using A (domestic Chinese share) share prices to value China’s listed corporates does not reflect their true value.

The Times of London says that mainland China’s new sovereign wealth fund (SWF), set up to manage around US$200 billion of its foreign exchange reserves, could already be buying shares and could be fueling the rapid rise of Hong Kong Exchange (0388.HK). HKEX has risen by 140% from around HK$100 in mid-2007 to around HK$240 today.

Deng Xiao-Ping, China’s late leader and successor to Mao Tse-Tung, deserves a decisive place in history for setting off a chain of events that has led to China’s current economic success. His aggressive policy of economic reform in China was perhaps one of the most courageous acts of any political leader in the 20th century. In 1985, not quite a decade after Deng first launched his reforms, Richard Holbrooke was quoted in Time magazine as saying: “There is no other leader in the world who is doing anything even remotely in Deng’s league.”

Bloomberg, in a recent article, writes "Former Federal Reserve Chairman Alan Greenspan said China will be the U.S.'s major competitor by 2030 and the world's economic fate depends on how much more Chinese leaders embrace markets."

Taishan (Mount Tai), Shandong Province. 1 and ½ hours from Jinan, Shandong Province. Height at 1,545 meters.

China’s securities regulator will allow Citic International Capital Corp. and Citic Securities Co. to make direct investments, like foreign private equity companies have been doing, in domestic Chinese companies. This lifts a previous ban imposed on domestic brokerage companies.

China’s Securities Regulatory Commission has approved trading of gold futures on the Shanghai Futures exchange. This move deepens China’s commodities markets as one more commodity has been added to the five which already trade (copper, zinc, rubber, fuel oil and aluminum).

The lens through which mainstream media interprets China’s actions is sometimes too narrow, in the view of the Red Cat Journal. Let’s look at the reactions to two recent actions related to the Hong Kong stock market: 1) the announcement that domestic Chinese investors will be allowed to invest in Hong Kong listed shares through Tianjin (Aug.