Commercialization of Sports in China is Unavoidable 

Twenty years ago, before the rise of China’s market economy, the Chinese hockey team didn’t stand to win prize money or sponsorships. Competitions were for the glory of the country, not the kind of fame lavished on athletes in the West. Today, with the Olympic Games in Beijing less than four months away, the team is sponsored by Nike. It has an expert coach from South Korea, expensive protective equipment made by a U.S. firm and access to a professional psychologist through the state sports administration.

Attitudes about sports in China have undergone a dramatic shift from the days when the government focused on collective gain rather than individual accomplishment. Those changes have helped foster the development of a new kind of athlete, one whose sacrifices result in fame and fortune — and, if the athlete has a distinct personality, national celebrity.

The shift spans the panorama of Chinese sport. Tennis players who once barely eked out a living can now earn as much as $100,000 a year. Even the lowliest college team is part of a tiered economic system of sponsorships, incentives and bonuses. In Beijing, the University of Aeronautics and Astronautics track team is sponsored by a tire company. One distance runner said he stands to receive a bonus of more than $14,000 if he wins at the national level.

“Before, our policy killed the personalities of athletes. The government didn’t promote fame or self-interest,” said Jin Shan, director of the Sports Culture Research Center at the Beijing Academy of Social Sciences. “China was so weak in its economy and politics that sports were used to enhance the people’s confidence. Now it’s not necessary to use sports to build a strong image of China overseas. Sports will be commercialized in the future, and more stars will be generated, just like in the U.S.”

If you didn’t have ethanol, you would not have the prices we have today

The globe’s worst food crisis in a generation emerged as a blip on the big boards and computer screens of America’s great grain exchanges. As prices rise, major grain producers including Argentina and Ukraine, battling inflation caused in part by soaring oil bills, were moving to bar exports on a range of crops to control costs at home. It meant less supply on world markets even as global demand entered a fundamentally new phase.

At the same time, food was becoming the new gold. Investors fleeing Wall Street’s mortgage-related strife plowed hundreds of millions of dollars into grain futures, driving prices up even more. By Christmas, a global panic was building. With fewer places to turn, and tempted by the weaker dollar, nations staged a run on the American wheat harvest.

Foreign buyers, who typically seek to purchase one or two months’ supply of wheat at a time, suddenly began to stockpile. They put in orders on U.S. grain exchanges two to three times larger than normal as food riots began to erupt worldwide.

The food price shock now roiling world markets is destabilizing governments, igniting street riots and threatening to send a new wave of hunger rippling through the world’s poorest nations. It is outpacing even the Soviet grain emergency of 1972-75, when world food prices rose 78%. By comparison, from the beginning of 2005 to early 2008, prices leapt 80%. Much of the increase is being absorbed by middle men — distributors, processors, even governments.

At least 14 countries have been racked by food-related violence.The crisis, it fears, will plunge more than 100 million of the world’s poorest people deeper into poverty, forced to spend more and more of their income on skyrocketing food bills.

People worldwide are coping in different ways. Although China has tried to calm its people by announcing reserve grain holdings of 30 to 40% of annual production, a number that had been a state secret, anxiety is still running high. In India, the government recently scrapped all import duties on cooking oils and banned exports of non-basmati rice. Even wealthy nations are being forced to adjust to a new normal. In Japan, a country with a distinct cultural aversion to cheaper, genetically modified grains, manufacturers are risking public backlash by importing them for use in processed foods for the first time.

In the United States, experts say consumers are scaling down on quality and scaling up on quantity if it means a better unit price. In the meat aisles of major grocery stores, steaks are giving way to chopped beef and people used to buying fresh blueberries are moving to frozen. Some are even trying to grow their own vegetables.

A big reason for higher wheat prices, for instance, is the multiyear drought in Australia, something that scientists say may become persistent because of global warming. But wheat prices are also rising because U.S. farmers have been planting less of it, or moving wheat to less fertile ground. That is partly because they are planting more corn to capitalize on the biofuel frenzy. If market forces had played a larger role in food trade, some now argue, the world would have had more time to adjust to more gradually rising prices.

Chinese intertwine business and personal affairs much more deeply. They do things for their partners even if they are personal affairs.

If you wander into any of China’s five floored bookstores, the first thing you notice right when you enter the store won’t be the newest hardcovered fictions. It’ll be management books written by successful American businessmen. On shelf after shelf, you could see copies of Jim Collins’s “Good to Great,” Jack Welch’s “Straight From the Gut,” Tom Peters’s “Re-Imagine!” and just about everything the late Peter Drucker ever wrote. One section you won’t find in Chinese bookstores is a section for management or human resources.

There’s a good reason for this. In the West (not to mention Japan and South Korea) management skills are a given. Graduate schools of management churn out M.B.A.’s, while instilling the basic processes and systems that virtually all multinational companies rely on. People who rise to the top of companies are the ones who have mastered the art of management. But there are also many first-rate managers who populate the middle ranks of companies. They are the lifeblood of most big companies.

That’s not the case in China. The shortage of managerial talent is huge. There just aren’t very many people here who have the range of skills you need in that position. Xiang Bing, dean of the Cheung Kong Graduate School of Business, said: “We Chinese are so willing to work hard for money. We are intelligent. We have the drive and the passion. But we put too much attention on technology and not enough on institution-building. And our soft skills are a real weakness.”

One issue with management is that most Chinese entrepreneurs hire friends and family because they don’t trust people they don’t know. And if they don’t get help fast, they are going to lose control of their rapidlygrowing businesses. Rapid growth, though, is only one of the issues these entrepreneurs are facing. Every bit as difficult are ingrained mind-sets and attitudes that can make it difficult for Chinese executives to adapt professional management techniques.

Many Chinese entrepreneurs (even those who have graduated from the executive M.B.A. program) don’t want to hire M.B.A.’s because they bridle at having to pay professional management salaries. Another problem is that many Chinese executives believe that because it is a Chinese business, professional managers won’t fit in the system.

When dealing with each other, the Chinese, quite simply, do business differently than Western companies do business. For one thing, there is a lot of petty corruption that is an ingrained part of business, especially among the state-run companies. Purchasing managers favor one vendor over another because they get a kickback. A sales rep buys customer loyalty with under-the-table payments. And so on. People also tend to put their own interests over the interests of their company — not a huge surprise, given that everyone worked for the state just a generation ago.

Finally, there is the gnarliest issue of all: the importance placed on the deep, intertwining set of relationships known as guanxi. Unlike the West, you don’t just have a business relationship in China; you have a relationship that interchangeably mixes the personal with the professional.

China Surpasses USA in Exports and Now Riding Germany’s Tail

China has overtaken the US as the world’s second-biggest exporter, the World Trade Organisation (WTO) said yesterday. WTO economists are also sceptical about how long emerging developing countries that have spearheaded global growth “can maintain a strong pace in the face of sluggish demand in major developed markets and rising inflationary pressures.”

1. Germany   2. China   3. USA

Germany!? How often do you see ‘Made in Germany’ on labels. Apart from some cars and Adidas, what else does it export?

Another stellar performance by China, which recorded a 26% rise in its merchandise exports to $1.2 trillion, enabled it to surge ahead of the US to be ranked the world’s second biggest exporter and is breathing down the neck of top-placed Germany.

Major Chinese banks are racing to open branches across the United States, but they are unlikely to make much money from them any time soon. The banks, once in deep financial trouble but now much stronger after a series of Chinese government bailouts, are increasingly interested in opening overseas shops, especially in major U.S. cities like New York. The idea is mainly to raise their image as international banks that are publicly traded rather than as state-owned agencies controlled by Beijing.

So far, only two Chinese banks — Bank of China and Bank of Communications – have branches in the United States. At least a half dozen Chinese banks, including Industrial and Commercial Bank of China and smaller rival Merchants Bank, plan to seek approval from the Fed to launch U.S. branches this year. Almost every time U.S. Treasury Secretary Henry Paulson traveled to Beijing to lobby officials for U.S. banks to have wider access to Chinese financial service sectors, Paulson would receive similar requests from his Chinese contacts.

 Wherever you turn, the rise of Asia is making its impact felt on our existence.

To many Victorians, British supremacy was a simple matter of racial supremacy - Europeans, and the English in particular, were fated to be the masters. The truth is that they are masters of the world no more.  The global power shift from the West to the East is no longer just a matter of debate confined to learned journals and newspaper columns - it is a reality that is beginning to have a huge impact on our daily lives.

Napoleon III compared China to a sleeping giant and warned: “When China awakes, she will shake the world.” After a long hibernation, China, and her 1.3 billion people (twice the population of the U.S. and EU combined) is awaking almost overnight. And not just China. The world’s second most populous country, India, is industrialising at a historically unprecedented pace.

Like anything, there are downsides that are becoming more apparent. Unskilled workers in the West have become unsettled by the threat to their jobs as production moves East. The most vulnerable Western workers have found their wages stagnate as they struggle to compete in an increasingly global market place. And competition for raw materials is pitting East against West.

Europeans have, for half a millennium, been unchallenged as the global colonisers, but last month the respected Economist magazine dubbed the Chinese “The New Colonists“.  The dire warnings from the International Monetary Fund this week that the West now faces the largest financial shock since the Great Depression, while the Asian economies are still powering ahead, simply underlines our vulnerability in this new world order.

There is an infectious confidence in Bollywood, and the price of Chinese antiques is rocketing as the newly rich Chinese decide they want a slice of their history.

Asian countries are not just buying up foreign raw materials, but as their companies try to become global leaders, they are buying up Western companies. From Kazakhstan to Indonesia to Latin America, Chinese firms are gobbling up oil, gas, coal and metals. Canadian authorities were recently alarmed to find the Chinese interested in exploring the Arctic Ocean, in a bid to get a share of the minerals beneath the thawing icecap.

 And Western governments are concerned that the rules of the game are changing. Most worryingly, as China’s brutal suppression of the once independent Tibet shows, this is not a superpower that respects Western standards on human rights. Western attitudes of superiority to China and the rest of the East will also subside, as Westerners realise they are no longer the masters of the world.

The Pressure Is On For Rice Farmers

Asian governments have long focused on developing high-growth sectors, such as manufacturing, and meeting the infrastructure requirements of increasingly urban populations. But that has been coupled with a neglect for farming that is now hurting as a larger and more affluent population demands more food, thereby also contributing to surging world prices for staples such as rice and soyabeans. Such neglect is particularly worrying because nearly two-thirds, or 641m, of the world’s poor live in the Asia-Pacific region, with rural poor accounting for some 70% of those.

Asian governments have shown chronic complacency towards agriculture since reaping the benefits of the green revolution three decades ago. Then, US research led by Norman Borlaug allowed India and other Asian nations to switch to higher-yielding farming techniques and rapidly gain self-sufficiency in crops such as wheat. A clear example is the demise of extension services in many Asian countries. While officials from agricultural ministries used to visit rural areas to train farmers and introduce new technologies, “this provision of public service has now almost collapsed”.

Thailand is ahead of Asian peers on productivity. But it is not immune to the distribution problems and even criminal activities undermining the region’s farming. A surge in crop prices is believed to have been accompanied by increasing theft. According to local reports, some Thai farmers have been waking up to find outsiders have harvested their entire crop overnight.

China and India, meanwhile, have both made substantial pledges to farmers in their latest budgets, with India waiving some $15bn in loans to small farmers. The challenge for China, where a wealthier population has more than doubled its meat consumption over two decades, is the limited availability of arable land rather than poor production. China is a leader in the use of fertilisers, at levels about three times the world average per hectare, and most of the easy productivity gains have already been achieved.  Hail to rice farmers!

Rice climbed to a record and corn traded near its highest ever on speculation a 3% annual increase in global demand for cereals will outstrip supply as governments curb exports to prevent protests. Rice, the staple food for about 3 billion people, rose 2.4% in Chicago trading today after doubling in the past year. Soybeans advanced for the third day and wheat gained as investors bought agricultural commodities on concern dry weather in the Great Plains and heavy rain in the eastern Midwest may curtail U.S. production and push down global inventories.

The World Bank estimates “that 33 countries around the world face potential social unrest because of the acute hike in food and energy prices,” Robert Zoellick, the bank’s president, said on the organization’s Web site. For these countries “there is no margin for survival,” he said.

Consumers still face at least 10 years of more expensive food

From subsistence farmers eating rice in Ecuador to gourmets feasting on escargot in France, consumers worldwide face rising food prices in what analysts call a perfect storm of conditions. Freak weather is a factor. But so are dramatic changes in the global economy, including higher oil prices, lower food reserves and growing consumer demand in China and India. While the price of spaghetti has doubled in Haiti, the cost of miso is packing a hit in Japan.

In the long term, prices are expected to stabilize, but consumers still face at least 10 years of more expensive food. The Chinese middle class is starting to change the traditional thought process of beef as a luxury. Attempts to control prices in one country often have dire effects elsewhere. China’s restrictions on wheat flour exports resulted in a price spike in Indonesia this year, according to the FAO. Ukraine and Russia imposed export restrictions on wheat, causing tight supplies and higher prices for importing countries.

Britain Bows To China 

Beijing Olympic organisers said Monday they backed a ban on political protests by athletes attending this year’s Games, amid uproar over an effort to silence British athletes. China is believed to be concerned that some of the 10,000 athletes expected here for the Games could be used by human rights activists and other groups to stage protests designed to draw attention to their causes.

The controversy erupted in Britain after a Sunday newspaper reported that the British Olympic Association (BOA) had threatened that any athlete who refused to sign the gag order would not be allowed to travel to China. Basically, any British participant who signed the order and then spoke out during the Games would be sent home, according to the initial plan.

Prince Charles has already let it be known that he will not be going to China, even if he is invited by Games organisers.  His views on the Communist dictatorship are well known, after this newspaper revealed how he described China’s leaders as “appalling old waxworks” in a journal written after he attended the handover of Hong Kong. The Prince is also a long-time supporter of the Dalai Lama, the Tibetan leader.

The controversial clause in the contract stated that athletes “are not to comment on any politically sensitive issues.” It then refers to Section 51 of the Olympic Charter, which says, “No kind of demonstration or political, religious or racial propaganda is permitted in any Olympic sites, venues or other areas.” Issues considered politically sensitive in communist-ruled China range from human rights, religious freedom, Tibet, Taiwan to Beijing’s role in Sudan.

The BOA took the decision even though other countries – including the United States, Canada, Finland, and Australia – have pledged that their athletes would be free to speak about any issue concerning China. To date, only New Zealand and Belgium have banned their athletes from giving political opinions while competing at the Games.

It’s the year of the Rat!

Chinese fortunes are based on a belief that events are dictated by the different balances in the elements that make up the earth — gold, wood, water, fire and earth. The lunar calendar is based on the cycles of the moon and associates each of the 12 years forming a partial cycle with an animal. Fortune-tellers base their predictions on the relationship between the zodiac animals and the characteristics of each.

The Rat is the first of the 12 animal signs, so marks new beginnings of changes with leadership in the United States, Russia and Taiwan. It is followed by ox, tiger, rabbit, dragon, snake, horse, goat, monkey, rooster, dog and pig.

 A Power Shift Is Underway

The US looks poised to lose its mantle as the world’s dominant financial market because of a rapid rise in the depth and maturity of markets in Europe, a study suggests. The change may have occurred already, not least because US markets are beset by credit woes, according to research by McKinsey Global Institute. “We think the differential growth rates are so significant that it is quite likely Europe has overtaken the US,” said Diana Farrell, author of the report. The credit crisis has dented confidence in the health of America’s financial institutions and its model of finance.

A power shift is also under way in Asia as the Chinese market continues to boom while markets such as Japan stagnate. McKinsey suggests China’s booming trade surplus has put it into the position of being the world’s largest net exporter of capital, topping Japan, Germany and the oil exporters for the first time. The findings are likely to attract attention from bankers and policymakers since they come amid an intensifying debate about the changing pattern of financial power.  

Meanwhile, since the launch of the single currency in 1999, European markets have been steadily growing in liquidity and size. And other parts of the world, such as Asia and the Gulf, are enjoying rapidly growing financial clout due to their large surpluses - a shift exemplified by the recent decision of Asian and Gulf Sovereign Wealth Funds to take large stakes in big US banks.

In 2006, McKinsey calculates that America’s markets had some $56,100bn ofassets. Europe, including the UK, had $53,200bn of assets, a sharp increase on recent years. On recent trajectories, this implies that Europe overtook the US in 2007.

Warning To The Bulls

Managers of Government-run Chinese mutual funds keep coming up with the same can’t-miss moneymaking opportunity for Lin Rongshi–and for themselves. The messenger might be a low-level functionary or a trusted middleman. Lin, a private fund manager, said the message sometimes would be delivered in his high-rise office overlooking Shanghai’s financial district or, more discreetly, by mobile phone. “They notify us first, and they would buy a few days later [for the fund], then they would come back to us to split the profit I make from buying at a lower price,” says Lin.

This front-running scheme would net an almost guaranteed haul for Lin and for the state-sector employees. Some others, –insiders all, would profit, too. The only outsiders in the transaction would be the mutual funds’ customers, average Chinese investors who have little idea how routinely their money is abused on the Shanghai and Shenzhen stock exchanges. They come to this man to cheat a fortune from the stock market because he was once an expert at it.

Lin says he made his first $100,000 from a trade made on inside information ten years ago, at age 23. He clocked close to a million dollars by the time he was 25, on insider trading, front-running and stock manipulation in the last Chinese bull market, before losing it all and more in 2001 on his last and biggest play.

Rich shareholders, fund managers, even the top management of listed companies–all have approached Lin in the last year, he says. Chinese investors often suspect manipulation behind the sudden, sharp rises in share prices, but their typical reaction is not outrage. Few stock cheaters get caught, and those who do are rarely jailed. The regulator, the CSRC, China Securities Regulatory Commision, is lacking in staff to hunt down cheats, lacking in legal power to punish them severely and sometimes lacking in political clout to take on some of the well-connected state-owned companies it is supposed to watch. Lawsuits are even less effective. The Communist Party, wary of any organized group of malcontents, essentially does not permit class actions.

So, how do you short Chinese stocks when shorting the Chinese mainland market is not allowed? There are several work-arounds, but none are perfect:

• Go through one of China’s Qualified Foreign Institutional Investors. QFII’s—including Citigroup, Goldman Sachs, JP Morgan, Merrill Lynch, HSBC, UBS and several dozen others—are allowed to buy A shares on the Shanghai and Shenzhen exchanges, the playground of domestic Chinese investors. A QFII can offer investors short positions through derivatives. The downside: More middlemen means more transaction costs.
• Short-sell exchange-traded funds that are comprised of Shanghai and Shenzhen A shares. The WISE CSI 300 China Tracker and the iShares FTSE/Xinhua A50 China Tracker are both listed in Hong Kong. The downside: You can’t bet against individual stocks.
• Short-sell a QFII’s closed-end A share fund, like Morgan Stanley’s China A Share Fund. The downside: Even if the value of the fund’s assets falls, that doesn’t mean the fund’s share price also has to fall.
• Bet against Chinese companies listed in Hong Kong. Direxion offers a China Bear 2X Fund and ProFunds Group offers ProShares UltraShort FTSE Xinhua China 25, both betting against the same 25 Hong Kong-traded stocks. If you’re betting on an all-China slump, these funds will rise 2% for every 1% that the 25-company index falls. The downside: Valuations on the Hong Kong “H share” market are not as sky high as on the A share market.
• Wait until China opens its own futures market, which has been expected for some time. The downside: You might miss your chance while you’re waiting. China might not want people betting against their stocks until at least after the Beijing Olympics.

Grudgingly, Japan is starting to respect its neighbors in terms of education methods.

Japan is suffering a crisis of confidence these days about its ability to compete with its emerging Asian rivals, China and India. But even in this fad-obsessed nation, one result was never expected: a growing craze for Indian education. Many Japanese are feeling a sense of insecurity about the nation’s schools, which once turned out students who consistently ranked at the top of international tests. That is no longer true, which is why many people here are looking for lessons from India, the country the Japanese see as the world’s ascendant education superpower.

Newspapers carry reports of Indian children memorizing multiplication tables far beyond nine times nine, the standard for young elementary students in Japan. Viewing another Asian country as a model in education, or almost anything else, would have been unheard-of just a few years ago, say education experts and historians. Much of Japan has long looked down on the rest of Asia, priding itself on being the region’s most advanced nation.

Last month, a national cry of alarm greeted the announcement by the Organization for Economic Cooperation and Development that in a survey of math skills, Japan had fallen from first place in 2000 to 10th place, behind Taiwan, Hong Kong and South Korea.  Most annoying for many Japanese is that the aspects of Indian education they now praise: learning more at an earlier age, an emphasis on memorization and cramming, and a focus on the basics, particularly in math and science.

Japanese parents have expressed very, very high interest in Indian schools. Eager parents try to send their children to Japan’s roughly half dozen Indian schools. The boom has had the side effect of making many Japanese a little more tolerant toward other Asians.

Everyone plays up the notion that we are in huge amounts of debt. This is simply not true.

With Treasury Secretary Henry Paulson in China this week to discuss a range of issues related to U.S.-Sino commerce, we thought it would be an opportune time to separate fact from fiction and highlight some key issues that presently define the economic ties between the United States and China:

1. U.S. Foreign Investment in China — Not As Much as You Think     Rarely does a day pass without the media reporting yet another American firm de-camping the United States for China. Reality is quite different. U.S. foreign direct investment (FDI) to China has climbed over the past decade, but a little perspective is in order. The $15.5 billion the U.S. has sunk in China this decade equates to only 1.6% of the global total. U.S. FDI in Ireland and Germany was roughly triple the level of investment in China over the same period.

2. The U.S. Enjoys a Huge Lead over China in FDI     It is no secret that Chinese investors are quite interested in increasing their direct investment position in corporate America. Equally, it’s no secret that any planned purchase of a U.S. company by Chinese investors is subject to a great deal of scrutiny in Washington. Next to America’s massive trade deficit with the mainland, China’s foreign investment in the U.S. has emerged as a key tension point between the two parties. That said, it’s interesting to note that when it comes to foreign direct investment — or the corporate presence of the U.S. in China versus China’s presence in the U.S. — the U.S. enjoys an overwhelming advantage over the mainland. In 2006, for instance, U.S. foreign investment in China on a historic cost basis totaled $22.2 billion, a figure well in excess of China’s investment stakes in the U.S. In other words, U.S. firms have far better access to the Chinese market than their Chinese counterparts in the United States. This investment gap represents a strategic competitive advantage to corporate America.

3. What really attracts U.S. firms to China? Consumers     Contrary to popular opinion, access to the Chinese consumer remains the key motivation of U.S. firms entering China. Keep in mind that China is not a unified market of 1.2 billion people but a collection of markets with different dialects, varying levels of development, and disparate per capita incomes. These variables, along with many others (the brand-sensitivity of Chinese consumers coupled with intense foreign and local competition) dictate that American firms adapt to local tastes and operate on the ground. Customer proximity, in other words, is key in China.

4. “Made in China” — What It Really Means     The mainland has emerged as an exporting powerhouse, with “Made in China” the most ubiquitous signature in the world. Yet lost on many folks is this: A great deal of what China exports to the United States and the world are goods from so-called foreign-invested enterprises, or foreign subsidiaries of various global multinationals. “Made in China” is not what most people think. Thousands of low-cost Chinese firms are not flooding the U.S. market with goods, displacing U.S. workers in the process. Rather, foreign firms are increasingly leveraging low-cost China to their competitive advantage.

5. The U.S. Trade Deficit with China: A Dangerous Scorecard     Much has been made of China’s merchandise trade surplus with the United States, which topped $230 billion in 2006. That’s a large figure, to be sure, although the figure does not accurately reflect the true nature of bilateral commerce between the United States and China. Missing from this equation are local sales of goods and services of U.S. foreign affiliates operating in China. The latter totaled some $86.5 billion in 2005 (the latest available data. Missing from the trade debate is the following: The primary means by which U.S. firms deliver goods and services to China is via foreign affiliate sales, not exports. At the end of the day, China does sell more to the United States, but not by the lopsided margin some might suppose.

6. Capital — China’s Top export to the U.S.     China’s most important export to the United States is capital — or U.S. dollars to be more exact. Lost on many legislators in Washington that want to punish China for running such a large U.S. trade surplus is this simple yet critical fact: China not only provides U.S. consumers with cheap, high-quality goods, it also provides the capital to purchase such goods by recycling greenbacks earned from trade back into U.S. treasuries and other dollar-denominated assets.

7. The Mainland — An unlikely Source of U.S. Profits     The lopsided nature of U.S.-China trade gives the impression that all the benefits go to the Chinese. That is simply not true. One of the best kept secrets on Wall Street is this: U.S. firms are making tidy sums of money in the Middle Kingdom.

Data on foreign affiliate income from the government’s Bureau of Economic Analysis corroborate these findings, with U.S. foreign affiliate income in China rising from $1.2 billion in 2000 to $4.7 billion last year. The bottom line: At a time when the U.S. is threatening to impose greater trade sanctions against China, U.S. firms with operations in China are posting record profits.

Here’s the rest of the list.