Meanwhile, the U.S. and Europe are being harsh and rude toward China, constantly accusing it, inciting neighboring smaller countries to bully China, and scheming to carve up Chinese territory. At the same time, they keep demanding that China continue borrowing more money. Is there ever such a bizarre situation in the world?

　　I’ve heard that China is planning to buy 100 billion euros worth of toxic assets and hand over the money to Europe—this is nothing but a trap. The U.S. and Europe aren’t truly poor or in desperate straits. If they were really in dire financial trouble, why would they be hoarding so much gold? Why is China encircled on all sides, actively provoking neighboring smaller countries to provoke China? Why are they spending huge sums of money intervening in Libya? And why do they impose outright bans on selling military and high-tech products to China?

　　 According to publicly available information from the Hong Kong Stock Exchange, whether it’s the “Big Three” banks—ICBC, CCB, and BOC—or the “Big Three Oil Companies”—Sinopec, CNPC, and CNOOC; the “Big Three Telecoms”—China Mobile, China Unicom, and China Telecom; or resource-based enterprises such as Shenhua Group, Chinalco, and China National Coal Corporation—among the top ten shareholders of China’s various monopolistic state-owned enterprises and industry leaders, nearly half are U.S. companies and funds.

　　Goldman Sachs to ICBC, Alcoa to Chinalco—Americans use U.S. dollars to buy shares of Chinese companies, while China sells its shares and receives U.S. dollars to purchase U.S. Treasury bonds.

　　As of the end of 2010, U.S. corporations, funds, and individual investors held Chinese A-share stocks worth...   Over 100 billion US dollars The value of H-shares listed in Hong Kong is approximately   200 billion U.S. dollars The value of Chinese company stocks listed in the U.S. is approximately...   30 billion U.S. dollars , totaling 330 billion U.S. dollars.

　　According to the Ministry of Commerce’s “Report on Multinational Corporations in China,” in key industries such as light industry, chemicals, pharmaceuticals, machinery, and electronics, products manufactured by subsidiaries of multinational corporations already account for more than one-third of the domestic market share.   U.S. S&P 500 companies’ subsidiaries in China earn over 80 billion U.S. dollars annually from China in this manner. Based on its historical average price-to-earnings ratio of 14 times, the value of its assets in China is approximately US$1.1 trillion. Adding the assets held by U.S. companies in China through investments in other small and medium-sized enterprises, the total value of assets owned by U.S. companies in China amounts to as much as...   150 billion U.S. dollars 。

　　 Once again, over one trillion U.S. dollars of hot money from the U.S. and Europe is lurking in markets such as the housing market and high-interest lending.

　　All told, the money that Western powers have secretly stashed away in China has already exceeded China’s foreign exchange reserves. They don’t flaunt their wealth themselves; instead, they let China display its prosperity while pretending to be poor and begging for money from China. Their ultimate goal is to short-sell China at the right moment—when the time is ripe—leaving China suddenly destitute and utterly impoverished.

　　Please take a look at the Chinese market under foreign capital control.

　　According to the book "China Industry Map" (China M&A Research Center), the top five companies in each of China's open industries are controlled by foreign-invested enterprises. Among China's 28 major industries, foreign investors hold majority control over assets in 21 of them.

　　 Beer industry Among more than 60 large and medium-sized enterprises, only two national brands—Qingdao and Yanjing—remain; all the others have become joint ventures.

　　 Glass industry The five largest ones have all become joint ventures;

　　 Elevator industry The five largest companies are all foreign-owned, accounting for more than 80% of the nation's total output.

　　 Home appliance industry Of the 18 state-designated enterprises, 11 are joint ventures.

　　 Cosmetics : Controlled by 150 foreign-invested enterprises;

　　 Pharmaceutical industry 20% is controlled by foreign investors;

　　 Automotive industry Foreign brands account for 90% of sales! 　

　　 Photographic Materials Industry In 1998, Kodak of the United States carried out a full-industry acquisition in China with an investment of only 375 million U.S. dollars. In 2003, it further acquired a 20% stake in Lekai’s state-owned shares, thereby gaining at least a 50% share of the Chinese photographic materials market. Fujifilm’s market share in China exceeds 25%.

　　 According to an investigation by the State Administration for Industry and Commerce: Microsoft of the United States holds 95% of China's computer operating system market.

　　 Tetra Pak of Sweden holds 95% of the Chinese flexible packaging market.

　　 Michelin of France holds 70% of China's radial tire market.

　　In industries such as the mobile phone industry, the computer industry, IA servers, network equipment, and computer processors, multinational corporations all hold an absolute monopoly position in the Chinese market.

　　Please take a look at the Chinese industry sectors dominated by foreign investment.

　　 High-tech field Take the mobile phone industry as an example: Since domestic companies have been purchasing most of their upstream technologies, key components, and even production lines from multinational corporations, these multinationals have long since reaped substantial profits. Recently, multinational corporations have begun adopting a low-price strategy to squeeze the profit margins of domestic mobile phone manufacturers, aiming to eliminate them completely. Aside from their own branded products, domestic mobile phone companies lack core technologies and critical components. Since 2005, they have all been operating at a loss, their market share has severely shrunk, and many have been forced to withdraw from the market.

　　 Circulation sector In the large-scale supermarket sector, which holds a dominant market share, foreign capital already controls more than 80% of the market, leaving Chinese retail enterprises with no choice but to operate exclusively in the mid- and low-end markets. As foreign investment continues to expand, the low-end market itself will gradually face the danger of shrinking. The retail industry is one of the sectors that most effectively absorbs the labor force; yet we are allowing “capital-intensive” foreign enterprises to take control. Some industry insiders point out: distribution channels can effectively control the lifeline of the industrial sector. If we allow foreign companies to seize our country’s distribution channels, Chinese enterprises will eventually be reduced to mere processing workshops for products branded by foreign distributors.

　　Of strategic significance to our country.   Tire Industry Most have lost their autonomy and are now under foreign control. Among the remaining large and medium-sized state-owned enterprises, even those in relatively good condition have attracted the attention of foreign investors. China’s largest tire manufacturer—   Shanghai Tire Group Co., Ltd. A Memorandum of Understanding was signed with Michelin, France—the world’s largest multinational tire company—under which the two parties jointly established a joint venture for tire manufacturing, with the French side holding a 70% stake. As of 2000, foreign-owned and foreign-controlled tire enterprises already accounted for more than 70% of China’s total tire production capacity and output.

　　With the exception of a very few core sectors—such as power generation and defense industries—foreign capital holds significant equity stakes and market control in China’s cement industry (building materials sector), steel industry (ferrous metallurgy and rolling processing), automotive industry (transportation equipment manufacturing), rubber industry, machinery manufacturing sector (including general machinery, specialized equipment, electrical machinery and equipment, electronic and telecommunications equipment, instruments and meters, as well as machinery for cultural and office use), petrochemical industry (petroleum processing and coking, chemical raw materials and chemical products, chemical fiber manufacturing), glass industry, brewing industry (beverage manufacturing), pharmaceutical industry (pharmaceutical manufacturing), electronics and telecommunications equipment manufacturing, water and gas supply industry (electricity, gas, and water production and supply), coal industry (coal mining and beneficiation), daily cosmetics industry (chemical product manufacturing), food industry (food processing), papermaking industry (paper and printing products), textile industry, construction industry, furniture manufacturing, cultural, educational, and sports goods manufacturing, leather, fur, down, and plastic manufacturing, as well as arts and crafts and related industries. Thanks to economic stimulus programs and robust demand, foreign investors have reaped substantial rewards, fully enjoying the benefits and conveniences brought about by China’s rapid economic growth.

　　 (1) Cement Industry In 2009, the total cement production capacity in China reached 1.6 billion tons. Foreign-invested enterprises controlled more than 500–600 million tons of capacity, accounting for over 30–40% of both the total capacity and their own control share. After Lafarge acquired Sichuan Shuangma and Rui'an Construction, it captured a market share exceeding 18% in the four southwestern provinces. Huaxin Cement was acquired by Switzerland’s Holcim, giving it a 10–20% market share in central China. Following Morgan Stanley’s acquisition of a 30% stake in Sanshui Group, the company became the leader in the Bohai Rim region. After Ireland’s CRH acquired Jilin Yatai, it gained access to the northeastern Chinese market. Hailuo Cement, the nation’s top producer in terms of output and sales, is 25% controlled by foreign investors through its listing on the Hong Kong Stock Exchange. Additionally, Asia Cement, Sanshui Cement, and China Resources Cement are all listed on the Hong Kong stock exchange, with portions of their equity held by Hong Kong-based and foreign investors...

　　 (2) Machinery Industry In 2008, the total output value of the machinery industry accounted for approximately 12% of GDP. The share of foreign equity control was 35.2%, and the overall level of control exceeded 40%. Among the five major sub-sectors of mechanical manufacturing, the instrument and meter manufacturing sector had the highest foreign market share, exceeding 60%; the metal products industry had a share of over 37%; the electrical machinery and equipment manufacturing sector had a share of 32%; and the general equipment manufacturing and special equipment manufacturing sectors each had shares of around 30%.

　　Caterpillar has acquired 85% of XCMG’s equity. XCMG’s cranes and road rollers account for more than 50% of the domestic market, and the company holds a share of over half in 136 types of construction machinery products available domestically. Shan Gong Machinery, ranked seventh in China’s loader industry, has been fully acquired by Caterpillar. Singapore’s Far Eastern Group, U.S.-based Goldman Sachs, and U.S.-based Cathay Pacific hold a combined 51% stake in Yuchai Shares, China’s largest independent manufacturer of diesel engines. Wuxi Weifu is China’s leading manufacturer of diesel fuel injection systems; Germany’s Bosch holds a 67% stake in the company. South Korea’s wholly-owned Doosan Infracore has topped the Chinese excavator market for eight consecutive years, with sales now reaching one-third of XCMG’s total. Northwest Bearing holds a 25% share of the Chinese railway freight car bearing market. In the late 1990s, Germany’s Schaeffler took advantage of Northwest Bearing’s financial difficulties by forming a joint venture called Fu’an Jie Railway Bearings, gradually capturing its market share before eventually acquiring full ownership. Sweden’s SKF has fully acquired Piel Bearing. Wuxi Bearing and Yantai Bearing have both been fully acquired by U.S.-based TIMKEN, which also gained controlling interest in Xiangzhou Group. The nation’s premier production base for chemical equipment, Jinxi Chemical Machinery’s Turbine Plant, has been 70%-owned by Siemens. Germany’s ZF Group has acquired a 70% stake in Hangzhou Gear Factory, China’s second-largest gear manufacturer. The U.S.-based Ganer Fund holds a 30% stake in Shenyang Machine Tool. Britain’s Terex has acquired a 25% stake in Northern Shares, China’s largest developer and manufacturer of mining trucks. Yuchai Machinery holds a 9.3% market share in China’s small excavator segment, and U.S.-based HanDing has acquired a 43% stake in the company...

　　 (3) Automotive Industry Foreign brands account for more than 90% of sales. Although foreign-invested equity stakes do not exceed 50%, foreign investors maintain actual control—ranging from 60% to over 70%—in areas such as technology, branding, and R&D. Among China’s largest auto sales companies are FAW-Volkswagen, Shanghai Volkswagen, Dongfeng, Huachen, Shanghai General Motors, Changan Ford, BAIC Hyundai, Beijing Jeep, Guangzhou Honda, Guangzhou Toyota, Tianjin FAW Toyota, and Changan Citroën.   Foreign equity stakes are all 50%. Excluding foreign-invested small and medium-sized enterprises, the 53 large automobile companies in China that are controlled by foreign investors or joint ventures have sales exceeding one trillion yuan, accounting for more than 60% to 70% of the total automobile market sales. Moreover, these foreign-controlled companies already hold over 60% of the Chinese automotive parts market. In high-tech sectors such as automotive electronics, engine components, and motorcycle accessories, foreign-controlled enterprises account for more than 70%. In the automotive tire industry, foreign-owned and foreign-controlled tire companies—such as France’s Michelin and Singapore’s Giti Tire—have production capacities and output levels that now account for over 80% of China’s entire automotive tire market.

　　 (4) Steel Industry In 2008, the steel industry’s total output value accounted for approximately 6% of GDP. Due to the state’s control over mergers and acquisitions in the steel sector, many foreign investors—including ArcelorMittal, Russian companies, and BHP—whose ambitions to enter China’s steel industry had been thwarted. Even so,   Foreign investment still holds equity control exceeding 10% in China’s steel industry, and its market control exceeds 12%. For example, ArcelorMittal acquired a 33% stake in Hualing Steel; Deutsche Bank and ArcelorMittal acquired a 47% stake in China Eastern Steel (including a 29% stake in Hebei Jinxi Iron & Steel); France’s Saint-Gobain acquired 100% of the equity in Xugang; U.S. private equity firm Carlyle acquired a 49% stake in Jiangdu Steel Pipe; CITIC Pacific holds a 28% stake in Daye Special Steel. Additionally, on the Hong Kong main board, Ansteel, Ma Steel Shares, and Chongqing Iron & Steel—whose equity stakes stand at 14%, 22%, and 30% respectively—are controlled by foreign and Hong Kong-based investors including J.P. Morgan. Tangshan Guofeng Iron & Steel is 51%-owned by Hong Kong’s China-Hong Kong Holdings; Open Source Holdings, a mainland Chinese company listed in Hong Kong with 65% Hong Kong ownership, has acquired 30% stakes in Rizhao Iron & Steel and Rizhao Section Steel, as well as a 25% stake in Rizhao Rolling Mill, and subsequently reorganized with Shandong Iron & Steel...

　　With large-scale foreign acquisitions of China’s steel industry failing, a new strategy has emerged: international mining giants such as BHP Billiton and Brazil’s Vale are leveraging their control over iron ore resources to keep raising prices, effectively cornering the steel industry.

　　One can imagine just how popular foreign investment would be in the steel industry—where overcapacity stands at 200 million tons, industry fragmentation is high, and numerous small- and medium-sized as well as privately owned steel companies face elimination and a pressing need for capital. It’s foreseeable that in the near future, bypassing the numerous restrictions imposed by the Chinese government, many steel enterprises will once again fall under foreign control.

　　 (5) Petrochemical Industry In 2008, the petrochemical industry’s total output value accounted for approximately 10% of GDP. Although the state imposed certain restrictions on foreign investment access to the petrochemical sector, even so, aside from overseas listings, foreign investors managed to circumvent numerous obstacles by establishing factories in China and pursuing mergers and acquisitions. As a result, foreign ownership control in the petrochemical industry has reached 18%.   Market control is 20-30%. In the manufacturing of chemical raw materials and chemical products, foreign investment market control stands at 27%; in the petroleum processing, coking, and nuclear fuel processing industries, it is 13%.

　　For example, in 2000, PetroChina listed on the New York and Hong Kong stock exchanges. Foreign and Hong Kong investors held an 11% stake, and the company raised $2.9 billion through overseas financing. Over the following nine years, PetroChina distributed dividends totaling as much as $11.9 billion—four times the amount of its initial overseas financing. In 2000, Sinopec also listed simultaneously on the New York, London, and Hong Kong stock exchanges; currently, foreign and Hong Kong investors hold a 19% stake in the company. CNOOC listed in 2001 on both the New York and Hong Kong stock exchanges; today, foreign and Hong Kong investors hold as much as 34% of the equity in its subsidiary, CNOOC Services. Moreover, other overseas-listed companies on the NYSE—including CNOOC, Sinopec Shanghai, and Jilin Petrochemical—are partly controlled by foreign investors. Blackstone holds a 20% stake in China National BlueStar, a subsidiary of Sinochem Group.

　　 (6) Glass Industry The five largest ones have all become joint ventures.   The foreign investment control ratio is over 40%. Pilkington of the UK acquired a 19% stake in Yaohua Glass. China Glass was listed on the Hong Kong Stock Exchange, with foreign shareholders—including Pilkington—controlling 40% of the shares. Credit Suisse and other foreign investors hold a 33% stake in Zhejiang Glass, while Luoyang Glass is jointly owned by foreign and Hong Kong investors, who together hold 50% of its shares. Including Hong Kong investors, the combined shareholding of Hong Kong and foreign investors in China Glass and Zhejiang Glass exceeds 65%. Among A-share-listed companies, Fuyao Glass has been led by Hong Kong-based San Yi Development, which holds a 22.5% stake—the largest shareholder. For King Glass, Hong Kong-based Longbo Investment owns 17% of the shares. Hong Kong-based Xinyi Glass has been China’s largest exporter of automotive glass since 2004. Since 1985, Saint-Gobain has established representative offices in China and now operates more than 50 enterprises in the country, including over 40 manufacturing facilities located in cities such as Chengdu, Ma'anshan, Hangzhou, Changzhou, Zhanjiang, Mudanjiang, and Zhengzhou. Its business encompasses flat glass, glass packaging, high-performance materials, and other related products. Saint-Gobain employs over 15,000 people in China and achieved sales of 400 million euros in 2005. Over the past four years, Saint-Gobain’s sales in China have grown at an annual rate of 54%...

　　 In the primary industry The four major foreign-owned grain traders—ABCD—are threatening the livelihoods of 40 million soybean farmers. Countless soybean farmers, whose very survival depends on soybean cultivation, have been suffering losses year after year and are now forced to switch to other cash crops, leading to a mass “layoff” of 20 million soybean farmers. Among the 230 million migrant workers, one might well find many former soybean farmers among them.

　　Large quantities of soybean oil