There Are Two Chinas

 | Jul 30, 2013 | 3:26 PM EDT
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There are two Chinas. There is the China we hear is imploding by the hour and then there's the China we hear about on the conference calls.

Just today we heard from Cummins (CMI) and from Chart Industries (GTLS) and they joined the endless parade -- save Cat (CAT) -- that says there's a ton of business to be had in China and they are spending like crazy. Truck orders for Cummins were really strong. Orders for equipment to turn natural gas into a liquid fuel are booming. It's almost other-worldly.

How can you explain it? I think a lot of it has to do with pollution, and trying to stop it. I think the Chinese government may not know how to stimulate effectively, but I think it is trying to get a handle on noxious gases and to get away from diesel fuel by using natural gas and is adopting it much faster than we are. But, of course. We have no energy policy at all.

Now, let me make this clear. You order new Cummins engines, you cut pollution back tremendously and trucks emit a ton of pollution. But if you really wanted to cut back pollution you wouldn't be opening  new coal plants every other week, even if you claim that some of the technology allows for cleaner-burning coal. You wouldn't be polluting the air with an endless parade of smelters that wouldn't be allowed to be open anywhere else in the world. You wouldn't be producing too much of everything that's needed for commercial building and then flood the stuff to take our jobs away.

But when it comes to fuel, they are anxious to get away from OPEC and anxious to make the air cleaner in part because 1 million people will die from respiratory illnesses this year in China and that's enough to create a revolution if it keeps up.

Still, the orders keep coming through for companies and the business is still the best in the world for most of the industrial companies I deal with. Don't want to own China. Just pointing it out.

Random musings: So much R.R. Donnelley (RRD) stock shorted, for heaven's sake. Only 30% of its business is the old catalogue work. Cover and move on!

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