Simon Johnson at Baseline Scenario, whose work I’ve immensely enjoyed reading over the years, posted a wonderful excerpt from his testimony before a Congressional panel about how best to put pressure on China to revalue the yuan (see Should We Fear China?).

China is the largest holder of official foreign currency reserves in the world, currently estimated to be worth around $2.4 trillion – an increase of nearly $500 billion in the course of 2009 (on the back of a current account surplus of just under $300 billion, i.e., 5.8 percent of China’s GDP, and a capital account surplus of around $100 billion). These reserves are accumulated through arguably the largest ever sustained intervention in a foreign exchange market – i.e., through The People’s Bank of China buying dollars and selling renminbi, and thus keeping the renminbi-dollar exchange rate more depreciated than it would be otherwise.

WuXi PharmaTech (NYSE: WX) plans to continue its growth by expanding into biotech, safety evaluation and manufacturing. In fact, to make the growth a reality, the company invests about $60 million each year in capital expenditures.

The overview of WuXi’s outlook and operations was published recently in the China Daily, including an interview with Edward Hu, COO of the company (see article).

China Cord Blood Corporation (NYSE: CO) has acquired a 19.92% equity interest in Shandong Cord Blood Bank (SCBB) for $20.5 million, which will be paid in cash. China Cord Blood already projects an investment yield in this year of 5% or about $1 million from the purchase. More importantly, China Cord Blood also has right of first refusal on future equity interests in SCBB.

SCBB holds the cord blood collection license for Shandong Province, an eastern province in China that is the third most populous province in China with 92 million people. China Cord Blood called it an “affluent” area.

Lithium and China

Telestone Technologies (TSTC), a small wireless equipment manufacturer in China, has attracted quite some attention since late last year when its stock price ran from below $5 to over $20 in several months. Riding the opportunity of the 3G buildup in China, Telestone Technologies supplies wireless coverage products to the three wireless operator giants: China Mobile (CHL), China Unicom (CHU) and China Telecom (CHA), and is expected to double its revenue and earnings in 2009.

However, TSTC's stock is notoriously volatile, often moving up or down 10% in a single day. After hitting an all-time high of $24 in January, it plunged to a low of $12 intraday on February 1st and is currently trading at around $20.

A yet to be verified story from Rough & Polished, a Moscow based website, reported that China had “confirmed its decision to acquire 191.3 tons of gold auctioned by the International Monetary Fund.” Of course, until official confirmation comes from China, no one will really know if this story is true or not. However, if true, here’s why this story would be hugely significant to the gold market.

One, such a purchase would give more validity to the theory that China, with a vested interest in the price of gold today, is willing to intercede and support gold prices whenever they are being attacked by the US Federal Reserve and Bank of England through their manipulation of fraudulent gold futures markets in London and New York.

Finmarket, a Russian news agency, reported that China has confirmed the intention to purchase 191.3 tons of gold from the International Monetary Fund at an open auction. The author came out an hour later to state that she did not have confirmed official sources, although the IMF declined to comment.

Many investors, myself included, considered the IMF gold sales to be much ado about nothing. I figured that if the IMF really did offer up physical gold, China or another country would step up eagerly to reduce their exposure to increasingly toxic fiat dollars. I still feel this to be the case, but certainly understand why Chinese authorities would not want the news leaked before the purchase. They could be forced to pay a much higher price for those 191 tonnes if the market moves first. However the dust settles on this story, I believe precious metals are certain to make new highs before the end of the year.

Three of big pharma’s biggest companies, Merck (NYSE: MRK), Lilly (NYSE: LLY) and Pfizer (NYSE: PFE), have banded together to create an Asian not-for-profit company that will construct a pharmacogenomic cancer database in Singapore. The database will compile its information using 2,000 tissue samples from patients with lung and gastric cancer. The information will be made available to researchers with the goal of developing new treatments for gastric and lung cancers, which are prevalent in Asia.

The company, called the Asian Cancer Research Group, is a kind of basic science collaboration among major drug companies that is not often seen. It will be housed at Lilly’s R&D center in Singapore. It will take about two years to create the database.

China Aoxing (CAXG.OB) will collaborate with QRxPharma Limited (QRXPY.PK), a clinical stage Australian pharma, to develop MoxDuo®IV for the China market. MoxDuoIV is an IV formulation of QRxPharma's patented morphine and oxycodone Dual-Opioid™ technology for the acute treatment of moderate to severe pain.

China Aoxing will fund development of MoxDuo®IV for the China market in exchange for exclusive marketing rights of the product in China. QRxPharma will retain ownership of MoxDuo®IV and may use the clinical work completed by China Aoxing in product registrations outside of China. Further financial details of the collaboration were not disclosed.