"Instead of being 'reactive' and waiting for inflation, the Chinese leaders are choosing to be 'proactive' to head off inflation before it takes hold," says China stock specialist Tony Sagami in UnCommon Wisdom.

"The People's Bank of China (PBOC), China's central bank, increased the reserve requirements by 0.5% effective on January 18 from 15.5% for large banks and 13.5% for small banks.

Based in Silicon Valley, Ustream has built a sophisticated platform that allows users to stream videos on their desktops or mobile phones. In January, the company had roughly 50 million unique users.

But of course, Ustream wants even more. So why not go into Asia?

To this end, Ustream has struck a major financing deal, led by Softbank (a major telecom operator in Japan). The round comes to $75 million, with the first tranche at $20 million. The remaining portion is an option to purchase shares in Ustream.

First, China has a $300 billion dollar sovereign wealth fund called the China Investment Corp. The fund has been investing natural resources which China needs to develop its economy. For example, China has had talks with Brazil, the world's second biggest iron ore exporter and Mexico, the second largest silver producer.

Two leading international financial newsletter editors remain bullish on the prospects for China Yuchai International Limited (CYD), a maker of diesel engines.

Here's recent commentary from Nicholas Vardy, editor of The Global Bull Market Alert and Paul Goodwin, editor of The Cabot China & Emerging Markets Report.

China's economy has been booming. The main driver has been exports. But as the developed world has been in a deep recession, China lost some of its export business.

Now, it seems the present model of the Chinese economy is about to change. Li Keqiang, speaking at the World Economic Forum in Davos, Switzerland, outlined the changes about to occur, the New York Times reported.

Is the world running on stimulus money or is there real demand for basic commodities?

What has been happening is that underdeveloped countries have been using stimulus money to stockpile raw commodities. Now there is a surplus. This, in turn, has led to a fall-off in commodity prices.

For the first time in eleven months, China's M1 money supply has fallen 6.6% from the previous month. But with China's aggressive stimulus program, China's money supply grew by 32% in December from the previous year.

China is worried that all of the excess money sloshing around in its economy will cause an asset bubble, mainly in stocks and real estate. China's property values rose 7.8% in December, the fastest rate in 18 months. The Shanghai Composite index rose almost 80% in 2009.

U.S. stocks hit a new 15-month high Tuesday as IBM led tech stocks higher ahead of its earnings report late Tuesday, and health-care shares rose as the health care and insurance reforms hung in the balance. The Dow Jones Industrial Average rose 115 points, or 1.1%, the S&P 500 rose 14 points, or 1.3%, and the Nasdaq Composite gained 32 points, or 1.4%.

Google (GOOG) has been kind of harsh with its Chinese web presence recently (with good reason), and now the world's largest information company (like that?) may not want to see two new smartphones that feature its Android operating system released in China. Why? Because the future of anything-Google in China is in jeopardy at the moment. In other words, Google's "do no evil" motto is finally catching up to it in the world's largest country by population -- but also one of the most repressed as its economy continues expanding.