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Archive for the ‘CHINA’ Category

COMPANY AT CORE OF CHINA’S MILK SCANDAL IS DECLARED BANKRUPT

Posted by Gilmour Poincaree on December 25, 2008

December 24, 2008

by Edward Wong – The International Herald Tribune

PUBLISHED BY ‘THE INTERNATIONAL HERALD TRIBUNE’ (USA)

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PUBLISHED BY ‘THE INTERNATIONAL HERALD TRIBUNE’ (USA)

Posted in CHINA, COMMERCE, COMMODITIES MARKET, CRIMINAL ACTIVITIES, DAIRY PRODUCTS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FOOD INDUSTRIES, FOOD PRODUCTION (human), FRAUD, HEALTH SAFETY, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, JUDICIARY SYSTEMS, MILK, POWDERED MILK, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY | Leave a Comment »

CHINA URGES US TO PREVENT PROTECTIONISM AFTER BUSH ADMINISTRATION FILES TRADE CASE

Posted by Gilmour Poincaree on December 24, 2008

December 23, 2008 – 6:28 AM

Associated Press

PUBLISHED BY ‘THE STAR TRIBUNE’ (USA)

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PUBLISHED BY ‘THE STAR TRIBUNE’ (USA)

Posted in CHINA, COMMERCE, COMMERCIAL PROTECTIONISM, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FOREIGN POLICIES, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, RECESSION, WORLD TRADE ORGANIZATION | Leave a Comment »

CHINA DROPS HINTS ABOUT DEPLOYING AN AIRCRAFT CARRIER

Posted by Gilmour Poincaree on December 24, 2008

24/12/2008 1:00:01 AM

by John Garnaut in Beijing

PUBLISHED BY ‘THE CANBERRA TIMES’ (Australia)

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PUBLISHED BY ‘THE CANBERRA TIMES’ (Australia)

Posted in AIR TRANSPORT INDUSTRY, CHINA, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, RECESSION, THE FLOW OF INVESTMENTS | Leave a Comment »

RP MAY RESUME MARINE EXPLORATION IN SOUTH CHINA SEA, SAYS DFA (Philippines)

Posted by Gilmour Poincaree on December 24, 2008

12/24/2008

by Michaela P. del Callar

PUBLISHED BY ‘THE DAILY TRIBUNE’ (Philippines)

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PUBLISHED BY ‘THE DAILY TRIBUNE’ (Philippines)

Posted in CHINA, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY INDUSTRIES, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, PETROL, PHILIPPINES, RECESSION, THE FLOW OF INVESTMENTS | Leave a Comment »

CHINA WON’T DEVALUE YUAN TO BOOST EXPORTS- MINISTER

Posted by Gilmour Poincaree on December 24, 2008

Wednesday December 24 2008

Reuters

PUBLISHED BY ‘THE GUARDIAN’ (UK)

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PUBLISHED BY ‘THE GUARDIAN’ (UK)

Posted in CENTRAL BANKS, CHINA, CURRENCIES, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, INTERNATIONAL, MACROECONOMY, RECESSION, YUAM RENMIMBI (China) | Leave a Comment »

THE GREAT DEPRESSION OF 2009

Posted by Gilmour Poincaree on December 23, 2008

Monday, December 16, 2008 – 7:40 AM

by David Bradley

PUBLISHED BY ‘SAMURAI TRADER’

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PUBLISHED BY ‘SAMURAI TRADER’

Posted in BANKING SYSTEM - USA, BANKING SYSTEMS, BANKRUPTCIES - USA, CENTRAL BANKS, CHINA, DEPRESSION, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SCAMS, FOREIGN WORK FORCE - LEGAL, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, INTERNATIONAL, JAPAN, MACROECONOMY, NATIONAL WORK FORCES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE WORK MARKET, THE WORKERS, USA | Leave a Comment »

SOCIAL SECURITY FUND – CHINA FIRMS DEFER PAYMENT

Posted by Gilmour Poincaree on December 22, 2008

Dec 22, 2008

The Strait Times

PUBLISHED BY ‘THE STRAIT TIMES’ (Singapore)

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PUBLISHED BY ‘THE STRAIT TIMES’ (Singapore)

Posted in BANKING SYSTEMS, CHINA, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, NATIONAL WORK FORCES, RECESSION, THE WORKERS | Leave a Comment »

US$19B MAINLAND AID FOR TAIWAN BUSINESSES (China)

Posted by Gilmour Poincaree on December 22, 2008

2008-12-22

by Zhang Fengming

PUBLISHED BY ‘THE SHANGHAI DAILY’ (China)

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PUBLISHED BY ‘THE SHANGHAI DAILY’ (China)

Posted in CHINA, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, FORMOSA - TAIWAN, INTERNATIONAL, INTERNATIONAL RELATIONS, RECESSION, THE FLOW OF INVESTMENTS | Leave a Comment »

BEIJING PROMISES TO HELP HK THROUGH CRISIS (China)

Posted by Gilmour Poincaree on December 20, 2008

Fri, Dec. 19, 2008

Joe McDonald – The Associated Press

PUBLISHED BY ‘PHILLY.COM’

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PUBLISHED BY ‘PHILLY.COM’

Posted in CHINA, ECONOMY, HONG KONG, INDUSTRIAL PRODUCTION, REGULATIONS AND BUSINESS TRANSPARENCY, STOCK MARKETS, THE WORK MARKET | Leave a Comment »

ORE PRICES SET FOR BIG FALL SAYS CHINA EXPERT

Posted by Gilmour Poincaree on December 20, 2008

December 20, 2008

by Glenda Korporaal

PUBLISHED BY ‘THE AUSTRALIAN’

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PUBLISHED BY ‘THE AUSTRALIAN’

Posted in CHINA, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, INTERNATIONAL, IRON ORE, RECESSION | Leave a Comment »

TARIM OIL FIELD ACHIEVES 20-MILLION-TON PRODUCTION MILESTONE (China)

Posted by Gilmour Poincaree on December 20, 2008

Wednesday, 17 December 2008

CNPC

PUBLISHED BY ‘RIGZONE’

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PUBLISHED BY ‘RIGZONE’

Posted in CHINA, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY INDUSTRIES, FINANCIAL CRISIS 2008/2009, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, PETROL, RECESSION, THE FLOW OF INVESTMENTS | Leave a Comment »

Posted by Gilmour Poincaree on December 20, 2008

Friday, December 19, 2008

CNPC

PUBLISHED BY ‘RIGZONE’

CONSTRUCTION COMMENCES ON CHINA’S WEST-EAST GAS PIPELINE

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PUBLISHED BY ‘RIGZONE’

Posted in CHINA, COMMODITIES MARKET, CONSTRUCTION INDUSTRIES, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY INDUSTRIES, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, MACROECONOMY, NATURAL GAS, RECESSION, THE FLOW OF INVESTMENTS | Leave a Comment »

US$2.6 BILLION INVESTMENT FOR BONG MINES (Liberia)

Posted by Gilmour Poincaree on December 19, 2008

Thursday, 18th December

2008

by Morrison O.G. Sayon

PUBLISHED BY ‘THE INQUIRER’ (Liberia)

CLICK HERE FOR THE ORIGINAL

ARTICLE

PUBLISHED BY ‘THE INQUIRER’ (Liberia)

Posted in BANKING SYSTEMS, CHINA, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FOREIGN POLICIES, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, LIBERIA, MINING INDUSTRIES, NATIONAL WORK FORCES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE FLOW OF INVESTMENTS, THE WORK MARKET | Leave a Comment »

ANGOLA: PRESIDENT DOS SANTOS THANKS CHINA FOR SUPPORT

Posted by Gilmour Poincaree on December 19, 2008

17 December

2008

ANGOLA PRESS

PUBLISHED BY ‘ALL AFRICA’ (Mauritius)

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PUBLISHED BY ‘ALL AFRICA’ (Mauritius)

Posted in AIR TRANSPORT INDUSTRY, ANGOLA, CHINA, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INTERNATIONAL, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE FLOW OF INVESTMENTS | Leave a Comment »

WARREN BUFFETT’S ELECTRIC CAR HITS THE CHINESE MARKET, BUT ROLLOUT DELAYED FOR U.S. & EUROPE

Posted by Gilmour Poincaree on December 17, 2008

Monday, 15 Dec 2008

by Alex CrippenPUBLISHED BY ‘CNBC’

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PUBLISHED BY ‘CNBC’

Posted in AUTOMOTIVE INDUSTRY, CHINA, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION, INDUSTRIES, INDUSTRIES - USA, INTERNATIONAL, RECESSION, THE FLOW OF INVESTMENTS, USA | Leave a Comment »

SULIGE GAS FIELD’S DAILY OUTPUT EXCEEDS 20MMCM (China)

Posted by Gilmour Poincaree on December 17, 2008

Monday, December 15, 2008

CNPC

PUBLISHED BY ‘THE RIGZONE’

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PUBLISHED BY ‘THE RIGZONE’

Posted in CHINA, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY INDUSTRIES, FINANCIAL CRISIS 2008/2009, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, PETROL, RECESSION, THE FLOW OF INVESTMENTS | Leave a Comment »

CHINA CONFIRMS PETROCHINA 100 BCM GAS FIND IN XINJIANG

Posted by Gilmour Poincaree on December 17, 2008

Monday, December 15, 2008

by Renya Peng – Dow Jones Newswires

PUBLISHED BY ‘THE RIGZONE’

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE RIGZONE’

Posted in CHINA, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY INDUSTRIES, FINANCIAL CRISIS 2008/2009, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, PETROL, RECESSION, THE FLOW OF INVESTMENTS | Leave a Comment »

REMEMBERING WASHINGTON’S OPENING TO CHINA DECADES LATER

Posted by Gilmour Poincaree on December 17, 2008

Wednesday, December 17, 2008

by Richard C. Holbrooke

PUBLISHED BY ‘THE DAILY STAR’ (Lebanon)

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PUBLISHED BY ‘THE DAILY STAR’ (Lebanon)

Posted in CHINA, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FOREIGN POLICIES - USA, HISTORY, INTERNATIONAL RELATIONS, RECESSION, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, USA | Leave a Comment »

DIRECT FLIGHTS AND SHIPPING FORGE CHINA-TAIWAN LINKS

Posted by Gilmour Poincaree on December 17, 2008

4:00AM Tuesday Dec 16, 2008

PUBLISHED BY ‘THE NEW ZEALAND HERALD’

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PUBLISHED BY ‘THE NEW ZEALAND HERALD’

Posted in AIR TRANSPORT INDUSTRY, CHINA, COMMERCE, ECONOMY, FORMOSA - TAIWAN, INTERNATIONAL, THE FLOW OF INVESTMENTS, TRANSPORT INDUSTRIES | Leave a Comment »

CHINA TO ISSUE HALF OF 09 COAL EXPORT QUOTAS-TRADE

Posted by Gilmour Poincaree on December 17, 2008

16 Dec 2008, 09:56 hrs IST

Reuters

PUBLISHED BY ‘THE ECONOMIC TIMES’ (India)

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PUBLISHED BY ‘THE ECONOMIC TIMES’ (India)

Posted in CHINA, COAL, COMMERCE, COMMODITIES MARKET, ECONOMY, INDUSTRIES, INTERNATIONAL, MINING INDUSTRIES | Leave a Comment »

CHINA COPPER SMELTERS SEEK HIGHER SPOT, TERM FEES

Posted by Gilmour Poincaree on December 16, 2008

16 Dec 2008, 12:24 hrs IST

REUTERS

PUBLISHED BY ‘THE ECONOMIC TIMES’ (India)

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE ECONOMIC TIMES’ (India)

Posted in CHINA, COPPER, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, HONG KONG, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, METALS INDUSTRY, RECESSION | Leave a Comment »

CHINA TO INCREASE SUPPLY OF MONEY TO BOOST ECONOMY

Posted by Gilmour Poincaree on December 15, 2008

December 14, 2008

PUBLISHED BY ‘THE BOSTON GLOBE’ (USA)

BEIJING—China said it plans to increase the amount of money circulating in its economy next year in a new effort to spur consumer spending and shield the country from a global downturn.

Saturday’s announcement by the country’s State Council, or Cabinet, comes on the heels of a multibillion-dollar economic stimulus package announced last month that calls for injecting more government money into the economy through spending on construction and other projects.

There are mounting signs that China’s economic slowdown is sharper and deeper than expected. Exports fell in November for the first time in seven years and the industry minister warned Friday that worse was to come.

China will increase its money supply by 17 percent next year, the Cabinet said in a statement on its Web site. It said that would be 3 to 4 percentage points above the total growth of economic output and consumer prices.

Increasing the supply of money is aimed at stimulating domestic economic activity and spending by making more credit available to encourage consumers and companies to borrow.

“We must strengthen the role of the financial sector in supporting economic growth by better implementing an active fiscal policy and moderately easing monetary policy,” the Cabinet statement said.

The growth rate of China’s money supply slipped this year as business activity and bank lending slowed.

The growth in China’s broadest measure of money supply shrank from 16 percent in August to 15 percent in November, according to the central bank. That measure, known as M2, includes cash and bank deposits.

The Cabinet also decided to increase by 100 billion yuan ($14.6 billion) the amount of loans for the country’s policy banks this year and suspend and reduce the sale of some central bank securities, the statement said.

The central bank has been draining billions of dollars from the economy every month to reduce pressure for prices to rise as revenues from China’s booming export industries flood through the economy.

The government said it would stop sales of three-year central bank notes and reduce sales of one-year and three-month bank notes, but gave no other details.

With economic growth forecast at 9 percent and inflation at about 6 percent this year, China’s money supply growth has just kept pace with growth in commercial activity. With both growth and inflation forecast to be lower in 2009, the planned expansion in money supply should be much larger than is needed to maintain commercial activity.

China’s industry minister Li Yizhong said Friday that the government will spend 15 billion yuan ($2.2 billion) to subsidize loans to companies to improve technology and cut energy use. Li said Beijing might buy surplus steel to help producers as demand plummets, as well as cut taxes to spur auto and real estate sales.

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PUBLISHED BY ‘THE BOSTON GLOBE’ (USA)

Posted in BANKING SYSTEMS, CENTRAL BANKS, CHINA, ECONOMIC CONJUNCTURE, ECONOMY, INTERNATIONAL, RECESSION, YUAM RENMIMBI (China) | Leave a Comment »

SKOREA, CHINA, JAPAN SHOW UNITY AT FIRST SUMMIT

Posted by Gilmour Poincaree on December 14, 2008

Published: Dec 13, 2008 06:00 AM – Modified: Dec 13, 2008 07:06 AM

by Eric Talmadge – Associated Press Writer

PUBLISHED BY ‘THE NEWS&OBSERVER’ (USA)

FUKUOKA, Japan – The leaders of Japan, China and South Korea said Saturday that Asia must be the engine of growth to counter Japan's Prime Minister Taro Aso, center, delivers a speech as Lee Myung-bak, South Korea's president, sitting right, Wen Jiabao, China's premier, sitting left, isten at the start of dinner after their meeting at the Kyushu National Museum in Dazaifu, southern Japan, on Saturday, December 13, 2008. (AP Photo/Tomohiro Ohsumi, POOL)global financial turmoil and vowed to rev up their economies with infrastructure projects and bolster domestic demand.

Tokyo and Seoul also criticized North Korea for stalling denuclearization talks.

The Asian nations – which together make up 75 percent of the east Asian economy – were holding their first-ever three-way summit, with Japanese Prime Minister Taro Aso, South Korean President Lee Myung-bak and Chinese Premier Wen Jiabao attending.

The global financial slowdown was atop their agenda.

“The current financial crisis continues to spread,” Wen said at a joint news conference. “We are important economic players in Asia and the world, and we must strive to respond to this once-in-a-century crisis.”

In a joint statement, the leaders said they believed Asia must be a center of growth to counter the sliding world economy. They said they would push domestic demand and infrastructure projects while refraining from raising new barriers to investment or trade over the next 12 months.

“The three leaders shared the view that efforts need to be strengthened to minimize the negative impacts that the current financial turmoil could have on the world economy,” the statement said. “Asian countries are expected to play a role as the center of world economic growth.”

Meeting ahead of the summit, Aso and Lee welcomed a deal reached the night before to increase a bilateral currency swap arrangement to the equivalent of $20 billion. The Bank of Korea also announced a deal with the People’s Bank of China worth about $26 billion.

“This is very meaningful,” Lee said of the currency swap arrangement. “We translated cooperation into action.”

Swaps generally entail one central bank borrowing a currency from another and offering an equivalent amount of its own as collateral.

Seoul has seen its own currency reserves dwindle and feared that without the swap arrangements it could suffer a foreign exchange crisis because of the global financial turmoil. The South Korean won has declined 32 percent this year amid record selling of South Korean stocks by foreign investors.

Aso and Lee also criticized North Korea for its lack of cooperation at nuclear disarmament talks and stressed the importance of continuing to push together for progress.

Four days of negotiations in Beijing ended in stalemate Thursday with North Korea refusing to put into writing any commitments on inspection, making it impossible to move forward on a disarmament-for-aid agreement reached last year.

“We have made progress but it has been slow,” Lee said. “We must have patience and hope.”

The three leaders said they planned to make the trilateral summit an annual event and strengthen ties through increased political and cultural exchanges.

“Politically and economically, we have a very significant presence in the region,” Aso said. “We should have had this kind of a summit sooner.”

Though their countries are often at odds over the legacy of Japan’s militarist past, solidarity was the word of the day.

Officials said the summit was intended to be a show of unity in the face of the global economic downturn and was an important step toward better relations overall between the three neighbors.

Left off the table was lingering animosity over Japan’s pre-1945 colonization of Korea and its often brutal aggression on the Asian mainland in the first half of the last century. Such issues have frequently flared up in the past and continue to be a thorn in relations.

Japanese officials said it was “significant” that the three countries were putting such issues behind them and trying to approach the summit with a more forward-looking stance.

Other sensitive issues remain, however.

In a meeting with Wen, Aso expressed concern over the entry of Chinese vessels earlier this week into waters Tokyo claims near disputed southern islands known as the Senkaku in Japanese and the Diaoyu in Chinese.

Japan lodged a protest with Beijing on Monday after the ships spent nine hours near the islands, which are claimed by Japan, China and Taiwan.

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PUBLISHED BY ‘THE NEWS&OBSERVER’ (USA)

Posted in ASIA, BANKING SYSTEMS, CENTRAL BANKS, CHINA, COMMERCE, CURRENCIES, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, INTERNATIONAL RELATIONS, JAPAN, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, SOUTH KOREA, THE FLOW OF INVESTMENTS | Leave a Comment »

FOOD SAFETY ISSUES HINDER RICE EXPORTS – There are several problems facing the export of rice, one of the cash crops that local peasants prefer cultivating compared to cotton and wheat. Recently China has imposed a ban on imports of Egyptian rice

Posted by Gilmour Poincaree on December 13, 2008

December 10, 2008

by Amina Abdul Salam

PUBLISHED BY ‘THE EGYPTIAN GAZETTE’

The reasons behind the ban are related to the use of herbicides, in addition to safety procedures that should be taken in the last stage of the harvest, but which were not made, according to Chinese authorities.

This has prompted Egyptian Minister of Agriculture Amin Abaza to ask the Central Administration of the Agriculture Quarantine to invite a formal Chinese delegation to discuss this issue with Chinese agencies.

A study, conducted by Egyptian agronomists Ali Abdul Rahman and Inas Saleh, has found that although international trade began to expand rapidly in the 1970s in the developed countries, developing countries have recently come to dominate a large part of the agricultural trade. Although fast growing, the international exchange trade has started to slow owing to fierce competition over agricultural production, according to the study. The slowdown is also related to an increase in restrictions representing in health conditions imposed by some countries, which aim at protecting their agricultural produce. Therefore, the health conditions have become legal obstacles, similar to the customs obstacles, many of which were unjustifiably imposed on global trade, the study noted. The study also showed that the previous restrictions were drawn up by some countries, not for the purpose of protecting their produce but in response to political activities practised by those who benefit from these curbs.

Therefore, recognition of the previous conditions led to a resistance of applying health specifications, which were one of the main topics of agenda of the trade negotiations, according to the same study. Otherwise, the exporting country has a right to object to health procedures drawn up by the importer in case the first part asserted the previous procedures had no scientific justification. The complainant should settle the issue with the other country. Rice accounts for around 40 per cent of Egypt’s farm exports.In a report on development and agricultural exports, leading Egyptian expert Abdul Salam Gomaa stressed the importance of paying more attention to organic agricultural products that depend on biological fertilizers so as to cope with market demands.

The report called for a gradual expansion of using organic fertilizers and the necessity of developing programmes of agrarian guidance and linking it with research as well as beginning transforming technology to old and new agricultural lands.Concerning new trends in using undated organic technology in the agricultural field, professor Magda Sabour at the Agricultural Research Centre believes that organic cultivation aims at preserving the environmental and biological safety of living creatures.

She notes that organic agriculture depending on biological methods can combat pests that destroy plants, in addition to producing healthy and safe food. On cereal storage, such as rice, a professor of entomology at the same centre in Giza, Shadia Abdul Aziz says that the peasant should protect his crop, following the harvest, not only to reduce waste, and it is his legal responsibility as well. As for destroying insects in cereals, she explains that the insects make the crop unfit for human consumption. “Therefore strict safety and protection measures should be followed at storehouses, taking into consideration the necessity of preventive steps against the occurrence of infection.”

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PUBLISHED BY ‘THE EGYPTIAN GAZETTE’

Posted in AGRICULTURE, CHINA, COMMERCIAL PROTECTIONISM, COMMODITIES MARKET, ECOLOGICAL AGRICULTURE, ECONOMIC CONJUNCTURE, ECONOMY, EGYPT, ENVIRONMENT, FINANCIAL CRISIS 2008/2009, FOOD PRODUCTION (human), FOREIGN POLICIES, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RICE, THE FLOW OF INVESTMENTS | Leave a Comment »

BRAZIL GOV’T IN TALKS ON SUBSALT OIL INVESTMENTS

Posted by Gilmour Poincaree on December 11, 2008

Monday, December 08, 2008

by Jeff Fick – Dow Jones Newswires

PUBLISHED BY ‘THE RIGZONE’

RIO DE JANEIRO – Brazil’s government is in talks with a variety of potential investors – besides China – to finance investments in the Mines and Energy Minister Edison Lobaocountry’s promising subsalt oil deposits, the country’s mines and energy minister said Monday.

Mines and Energy Minister Edison Lobao told the local Estado news agency that “it’s not only China. There are a range of opportunities that Petrobras has.”

Lobao confirmed press reports Monday that the Chinese government had offered Brazilian state-run energy giant Petroleo Brasileiro $10 billion to fund subsalt oil development – and that was just to start.

According to Lobao, other possible funding could come from the United Arab Emirates, Japanese groups and Canadian banks. In addition, financing could be arranged with oil-exploration equipment suppliers that have their own sources of financing, Lobao said.

“Petrobras is a solid company. It has a prestigious history abroad. There is no safer investment than in Petrobras,” Lobao said.

“Petrobras will not have any problems. The financing sources will be generous, whether they are domestic or foreign,” the minister added.

The Brazilian government would also consider using its $200 billion in foreign reserves to help finance Petrobras’ investments, Lobao BRAZIL'S SUBSALT BASINSsaid.

“It’s a possibility. It’s a decision that will be made by the government. If Petrobras one day needs it, we could help with these reserves. They’re just sitting there,” Lobao said.

Such financing could help Petrobras overcome a tight credit market and falling international oil prices, which experts and analysts have speculated could slow down development of the subsalt reserves. Full development of the region has been estimated to cost as much as $600 billion.

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PUBLISHED BY ‘THE RIGZONE’

Posted in A QUESTÃO ENERGÉTICA, BRASIL, CANADA, CHINA, CIDADES, COMBATE À DESIGUALDADE E À EXCLUSÃO - BRASIL, COMMERCE, COMMODITIES MARKET, ECONOMIA - BRASIL, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY INDUSTRIES, EXPANSÃO ECONÔMICA, EXPANSÃO INDUSTRIAL, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FLUXO DE CAPITAIS, FOREIGN POLICIES, GÁS NATURAL, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL RELATIONS, MINISTÉRIO DAS MINAS E ENERGIA, NATURAL GAS, O PODER EXECUTIVO FEDERAL, PETRÓLEO, PETROL, POLÍTICA EXTERNA - BRASIL, PROGRAMA DE ACELERAÇÃO DO CRESCIMENTO (PAC), RECESSION, RELAÇÕES COMERCIAIS INTERNACIONAIS - BRASIL, RELAÇÕES DIPLOMÁTICAS - BRASIL, RELAÇÕES INTERNACIONAIS - BRASIL, THE FLOW OF INVESTMENTS | Leave a Comment »

FRENCH ECONOMY SURPASSING U.K., REPORT FINDS

Posted by Gilmour Poincaree on December 11, 2008

December 8, 2008

Bloomberg News

PUBLISHED BY ‘THE INTERNATIONAL HERALD TRIBUNE’ (USA)

PARIS: The financial crisis is recasting the league table of economies, with Britain sliding behind its European neighbors and China gaining on its richer rivals, the Center for Economics and Business Research said in a study released Monday.

A recession and a decline in the pound’s value pushed Britain’s gross domestic product below France’s this year and it will be passed by Italy in 2009, the CEBR said in the report. China has overtaken Germany and will top Japan in 2010 to become the world’s second-largest economy behind the United States, it said.

“The recession associated with the credit crunch will change the position of many countries in the world’s GDP league table,” the London-based CEBR said in the report.

The study shows how countries that ran up debts during expansion, like Britain, will now suffer, while emerging-market economies will wield increasingly more power in the global economy as they develop. Governments from the Group of 7 nations are under pressure to broaden their membership to reflect the changing shape of the world economy.

Brazil will rise to eighth-biggest economy from 10th by 2010 and India to 10th from 12th, the CEBR said. Canada will drop to 13th from ninth in the same period as its currency falls, it said.

The CEBR also said the British and Italian economies would suffer the deepest downturns with 18 quarters of GDP below its previous peaks. Spain’s slump will last 16 quarters and Japan’s 11 quarters. The United States will rebound after nine quarters. China will not suffer a single quarter of contracting growth, the report said.

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PUBLISHED BY ‘THE INTERNATIONAL HERALD TRIBUNE’ (USA)

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MARKETS CAN’T RULE THEMSELVES – A ‘made in the U.S.A.’financial crisis highlights the need for more global—and more robust—oversight

Posted by Gilmour Poincaree on December 11, 2008

December 2008 – february 2009

by Joseph Stiglitz – (*)

PUBLISHED BY ‘NEWSWEEK – Special Edition – ISSUES 2009’ (USA)

For years, there has been an ongoing discussion among world leaders and thinkers about deficiencies in the international financial architecture and about economic imbalances, GROUND ZERO - Wall Street exported troubles to the world; it needs world help to fix themincluding the widening U.S. trade deficit. Many worried about a disorderly unwinding of these imbalances. Nothing was done. We are now paying the price for our failure to act. Ten years ago, the fear was that financial turmoil in the developing world might spill over to the advanced industrialized countries. Today, we are in the middle of a “made in the U.S.A.” crisis that is threatening the entire world.

If we are going to address this worldwide crisis and prevent a recurrence, we must reform and reconfigure the global financial system. There are simply too many inter-dependencies to allow each country to go its own way. For example, the United States benefited from its export of toxic mortgages; had it not sent some of them to Europe via complex securitization, its downturn would have been far worse. But the resulting weaknesses in Europe’s banks are now ricocheting back to the United States.

Better regulation would have helped prevent such a situation. But the reform of the global financial system must go much further. For example, there must be better monetary-policy coordination around the world. Europe’s current slowdown is due in part to the fact that while the European Central Bank spent the past year focusing on inflation, the United States was (rightly) focusing on the impending recession. The resulting difference in interest rates led to a strong euro and weak exports. That hurt Europe. But a weak Europe eventually hurts the United States, as Europe is forced to reduce its imports of American goods. With better coordination, perhaps America would have been able to convince Europe of the risks of recession, and that would have led to moderation of Europe’s interest rates.

There is also a need for internationally coordinated stimulus programs to help jump-start growth. It is good news that China, the United States and Japan have now all instigated major programs of fiscal expansion. But they are of vastly different sizes, and so far, Europe’s is lagging behind. Its growth and stability pact imposes constraints that may have global consequences. Beyond this, confidence in financial markets will not be fully restored unless governments take a stronger role in regulating financial institutions, financial products and movements of capital. Banks have shown that they can’t manage their own risk, and the consequences for others have been disastrous. Even former Fed chairman Alan Greenspan, the high priest of deregulation, admits he went too far.

What we need now is a global financial regulatory body to help monitor and gauge systemic risk. If financial rules are allowed to vary too widely from nation to nation, there is a risk of a race to the bottom — some nations will move toward more lax regulation to capture financial business at the expense of their competitors. The financial system will be weakened, with consequences that are now all too apparent.

What should this” new set of global financial rules encompass? For starters, it should ensure that managerial incentive schemes are transparent and do not provide perverse encouragement for bad accounting, myopic behavior and excessive risk taking. Compensation should be based on returns not from a single year but over a longer time period. At the very least, we should require greater transparency in stock options, including making sure that they receive appropriate accounting treatment. And we need to restrict the scope for conflicts of interest — whether among rating agencies being paid by those they are rating, or mortgage companies owning the companies that appraise the properties on which they issue mortgages. We need to restrict excessive leverage, and other very risky behavior. Standardization of financial products would enhance transparency. And financial-product safety and stability commissions could help decide which products were safe for institutions to use, and for what purposes. We have seen what happens if we rely on bankers to regulate banking.

Beyond better global coordination of macroeconomic policy and regulation, there are at least two other actions governments should take. First, we need a reform of the global reserve system. More than 75 years ago, John Maynard Keynes, the greatest economist of his generation, wrote that a global reserve system was necessary for financial stability and prosperity; since then the need has become much more dire. Keynes’s hope was that the International Monetary Fund would create a new global reserve currency that countries would hold instead of sterling (the reserve of the time). Today, such a currency could be used to replace the dollar as the de facto reserve currency. Because it would not depend on the fortunes of any one country, it would be more stable. Supply could be increased on a regular basis, ensuring that reserves kept up with countries’ needs. Issuance could be done on the basis of simple rules—including punishment for countries that caused global weaknesses by having persistent surpluses. This is an idea whose time may have finally come.

The other major reform should be a new system of handling cross-border bankruptcies (including debt defaults by sovereign states). Today, when a bank or firm in one country defaults, it can have global ramifications. With various national legal systems involved, the tangle may take years to unwind. For example, the problems arising from Argentina’s 2001 default are still not resolved, and bankruptcy complications plagued South Korea and Indonesia during their crises a decade ago, slowing down the process of recovery. The world may soon be littered with defaults, and we need a better way of handling them than we have had in the past.

This crisis has highlighted not only the extent of our inter-dependencies but the deficiencies in existing institutions. The IMF, for instance, has done little but talk about global imbalances. And as the world has focused on problems of governance as an impediment to development, deficiencies in the IMF’s own governance meant its lectures had little credibility. Its advice, especially that encouraging deregulation, seems particularly hollow today. Many critics in Asia and the Middle East, where pools of liquid capital dwarf die IMF’s own, are wondering why they should turn over their money to an institution in which the United States, the source of the problem, still has veto power, and in which diey have so little voting power.

This is a Bretton Woods moment — a time for dramatic reforms of existing institutions” or, as was done at the end of World War II, the creation of new ones. Until now, Washington has consistently blocked efforts to create a multilateral global financial system that is stable and fair. It exported the deregulatory philosophy that has proved so costly, both to itself and to the world. President Obama has an opportunity to change all this. Much depends — now and for decades to come — on his response.

(*) – Joseph Stiglitz is a Nobel laureate in economics and a professor at Columbia University.

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CHINA REAFFIRMS YUAN POLICY, WILL CUT TAXES

Posted by Gilmour Poincaree on December 10, 2008

December 10, 2008 at 6:42 AM EST

Reuters

PUBLISHED BY ‘THE GLOBE & MAIL’ (Canada)

BEIJING — China’s top leadership wrapped up a three-day strategy meeting on Wednesday with a pledge to ramp up public spending and cut taxes to promote domestic demand in the world’s fourth-largest economy.

The Central Economic Work Conference, judging that the economy was heading into rougher waters as the global financial crisis spread, set the pursuit of steady growth as the top priority for 2009, state radio reported.

“The general requirements for next year’s economic work are maintaining stable but rapid economic growth by boosting domestic demand,” the radio summarized the meeting as concluding.

It said the leadership reaffirmed China’s long-standing policy of maintaining the yuan’s exchange rate basically steady at a reasonable, balanced level.

However, the meeting agreed on the need to take measures, which were not spelled out, to stabilize external demand.

China earlier on Wednesday reported unexpected declines in both exports and imports in November from year-earlier levels as the economy suddenly slumped.

“At present, China’s economic operation is facing greater difficulties,” the radio said. “Downward pressure on the economy is increasing.”

The report made no mention of a numerical target for growth in 2009, but state media have said the authorities would do all they could to “protect eight” – a reference to the 8 per cent growth rate widely thought to be necessary to create enough jobs for the millions of people entering the work force every year.

The economy expanded 11.9 per cent in 2007, its fifth straight year of double-digit growth. But the pace has slowed sharply in recent months and the World Bank is forecasting just 7.5 per cent growth in 2009.

To prop up growth, the government launched a 4-trillion yuan ($586-billion U.S.) stimulus plan on Nov. 9 and the central bank followed up on Nov. 26 by slashing interest rates by 1.08 percentage points – four times its usual margin.

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Posted in BANKING SYSTEMS, CENTRAL BANKS, CHINA, COMMERCE, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, NATIONAL WORK FORCES, RECESSION, THE FLOW OF INVESTMENTS, THE WORK MARKET, WORLD BANK, YUAM RENMIMBI (China) | Leave a Comment »

SAUDI ARABIA’S OIL EQUATION – OPEC has a math problem

Posted by Gilmour Poincaree on December 10, 2008

Monday, December 08, 2008

by Liam Denning – THE WALL STREET JOURNAL via Dow Jones Newswires

PUBLISHED BY ‘THE RIGZONE’

When demand for oil is rising, members of the Organization of Petroleum Exporting Countries take extra portions from the expanding output quota pie. But when it falls, as now, they are supposed to share the pain of lower production even as oil prices are declining, a double blow to cash flows.

As the organization’s biggest member, much of the burden of managing all this rests on Saudi Arabia.

Yet it also must consider its customers and long-term demand.

This largely explains OPEC’s recent decision to put off further output cuts, even as crude prices continued sliding. It also is why oil bulls can expect little relief from Riyadh next year.

Saudi Arabia’s current output quota is 8.5 million barrels a day. After domestic use, that leaves seven million barrels for daily export. Ahmad Abdallah, commodity analyst at financial-services firm GaveKal, points out that Saudi Arabia’s 2008 budget was set at $109 billion. With oil exports accounting for just under 90% of public revenues, that equates to an oil price of $38 a barrel to balance the budget. The OPEC basket price has averaged $98.50 a barrel this year.

Nymex crude-oil futures, having dropped 17% in the past week alone, now command just $42. The OPEC basket price typically trades at a discount of $5 to $10. Were Nymex crude to average $40 next year, and OPEC crude $35, Saudi Arabia’s 2009 oil-export earnings could drop to $89 billion.

The problem is, that price forecast may require OPEC to cut perhaps another 2 million barrels a day. If Saudi Arabia contributed half of this, its implied export earnings drop to $77 billion, opening up a big deficit.

Fortunately for Saudi Arabia, it has stashed a cushion of petrodollars to manage this. It also has other factors to consider.

Beijing’s decision announced Friday to link domestic fuel prices more closely to international markets is particularly alarming. Subsidies have boosted Chinese demand. Reforming them suggests China, the fastest-growing oil consumer, is getting serious on energy efficiency just as America, the biggest oil consumer, has elected a president pushing the same agenda.

Saudi Arabia needs to keep the world addicted to oil as long as possible, so giving it a breather with lower oil prices isn’t a bad thing. As a bonus, this also will challenge Iran and Russia, both of which need much higher oil prices to balance swollen budgets.

So Saudi Arabia has a near term chance to squeeze its biggest regional rival and its main non-OPEC competitor.

Other OPEC members won’t take this lying down. Many will likely prefer to bust quotas, pressuring prices further.

For oil bulls, 2009 promises to be as easy as Chinese algebra.

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PUBLISHED BY ‘THE RIGZONE’

Posted in CHINA, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, ENERGY INDUSTRIES, FINANCIAL CRISIS 2008/2009, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, MACROECONOMY, PETROL, RECESSION, SAUDI ARABIA, THE FLOW OF INVESTMENTS | Leave a Comment »

AFRICOM CHINA AND CONGO RESOURCE WARS

Posted by Gilmour Poincaree on December 10, 2008

Tuesday, Dec 09, 2008

by F. William Engdahl – Online Journal

PUBLISHED BY ‘INFOWARS’

Just weeks after President George W. Bush signed the order creating a new US military command dedicated to Africa, AFRICOM, events on the mineral-rich continent have erupted which suggest a major agenda of the incoming Obama Presidency will be for the son of a black Kenyan to focus US resources, military and other, on dealing with the Republic of Congo, the oil-rich Gulf of Guinea, the oil-rich Darfur region of southern Sudan and increasingly the Somali ‘pirate threat’ to sea lanes in the Red Sea and Indian Ocean. The legitimate question is whether it is mere coincidence that Africa appears just at this time to become a new geopolitical ‘hot spot’ or whether it has a direct link to the formal creation of AFRICOM.

What is striking is the timing. No sooner had AFRICOM become operational than major new crises broke out in both the Indian Ocean-Gulf of Aden regarding spectacular incidents of alleged Somali piracy, as well as eruption of bloody new wars in Kivu Province in the Republic of Congo. The common thread connecting both is their importance, as with Darfur in southern Sudan, for China’s future strategic raw materials flow.

The latest fighting in the eastern part of the Congo (DRC) broke out in late August when Tutsi militiamen belonging to the Congrès National pour la Défense du Peuple (CNDP, National Congress for the Defense of the People) of General Laurent Nkunda forced loyalist troops of the Forces armées de la République démocratique du Congo (FARDC, Armed Forces of the Democratic Republic of Congo) to retreat from their positions near Lake Kivu, sending hundreds of thousands of displaced civilians fleeing in the process and prompting the French foreign minister, Dr. Bernard Kouchner, to warn of the imminent risk of ‘huge massacres.’

Nkunda, like his mentor, Rwanda’s Washington-backed dictator, Paul Kagame, is an ethnic Tutsi who alleges that he is protecting the minority Tutsi ethnic group against remnants of the Rwandan Hutu army that fled to Congo after the Rwandan genocide in 1994. MONUC UN peacekeepers reported no such atrocities against the minority Tutsi in the northeast, mineral rich Kivu region. Congolese sources report that attacks against Congolese of all ethnic groups are a daily occurrence in the region. Laurent Nkunda’s troops are responsible for most of these attacks, they claim.

Strange resignations

The stage for political chaos in Congo was further set in September when the Democratic Republic of Congo’s 83-year-old prime minister, Antoine Gizenga, resigned after two years. Then at end of October, with suspicious timing, the commander of the United Nations peacekeeping operation, the Mission de l’Organisation des Nations-Unies au Congo (MONUC, Mission of the United Nations Organization in the Congo), Spanish Lieutenant General Vicente Diaz de Villegas, resigned after fewer than two months on the job, citing, ‘lack of confidence’ in the leadership of DRC President Joseph Kabila. Kabila, the Congo’s first democratically elected president, has also been involved in negotiating a major $9 billion trade agreement between the DRC and China, something which Washington is clearly not happy about.

Nkunda is a long-standing henchman of Rwandan President, US-trained, Kagame. All signs point to a heavy, if covert, USA role in the latest Congo killings by Nkunda’s men. Nkunda himself is a former Congolese Army officer, teacher and Seventh Day Adventist pastor. But killing seems to be what he is best at.

Much of Nkunda’s well-equipped and relatively disciplined forces are from the bordering country of Rwanda and the rest have been recruited from the minority Tutsi population of the Congolese province of North Kivu. Supplies, finance and political support for this Congolese rebel army come from Rwanda. According to the American Spectator magazine, ‘President Paul Kagame of Rwanda has long been a supporter of Nkunda, who originally was an intelligence officer in the Rwanda leader’s overthrow of the Hutu despotic rule in his country.’

As the Congo News Agency reported on October 30, ‘Some have bought into the pretext of an endangered Tutsi minority in Congo. They never fail to mention that Laurent Nkunda is supposedly fighting to protect “his people.” They have failed to question his true motives which are to occupy the mineral-rich North-Kivu province, pillage its resources, and act as a proxy army in eastern Congo for the Tutsi-led Rwandan government in Kigali. Kagame wants a foothold in eastern Congo so his country can continue to benefit from the pillaging and exporting of minerals such as columbite-tantalite (coltan). Many experts on the region agree today that resources are the true reason why Laurent Nkunda continues to create chaos in the region with the help of Paul Kagame.’

The USA role and AFRICOM

Evidence which was presented in a French court in a ruling made public in 2006 claimed that Kagame was responsible for organizing the shooting down of the plane carrying Hutu President of Rwanda Juvénal Habyarimana, in April 1994, the event that set off the indiscriminate killing of hundreds of thousands of people, both Hutu and Tutsi.

The end result of the killings in which perhaps as many as a million Africans perished was that US and UK backed Paul Kagame — a ruthless military dictator trained at the US Army Command-General Staff College at Fort Leavenworth Kansas — was firmly in control as dictator of Rwanda. Since then he has covertly backed repeated military incursions by General Nkunda into the mineral-rich Kivu region on the pretext it was to defend a small Tutsi minority there. Kagame had repeatedly rejected attempts to repatriate those Tutsi refugees back to Rwanda, evidently fearing he might lose his pretext to occupy the mineral riches of Kivu.

Since at least 2001, according to reports from Congo sources, the US military has also had a base at Cyangugu in Rwanda, built of course by Dick Cheney’s old firm, Halliburton, conveniently enough near the border to Congo’s mineral-rich Kivu region.

The 1994 massacre of civilians between Tutsi and Hutu was, as Canadian researcher Michel Chossudovsky described it, ‘an undeclared war between France and America. By supporting the build up of Ugandan and Rwandan forces and by directly intervening in the Congolese civil war, Washington also bears a direct responsibility for the ethnic massacres committed in the Eastern Congo, including several hundred thousand people who died in refugee camps.’ He adds, ‘Major General Paul Kagame was an instrument of Washington. The loss of African lives did not matter. The civil war in Rwanda and the ethnic massacres were an integral part of US foreign policy, carefully staged in accordance with precise strategic and economic objectives.’

Now Kagame’s former intelligence officer, Nkunda, leads his well-equipped forces to take Goma in the eastern Congo as part of an apparent scheme to break the richest minerals region away from Kinshasha. With the US military beefing up its presence across Africa under AFRICOM since 2007, the stage was apparently set for the current resources grab by the US-backed Kagame and his former officer, Nkunda.

Today the target is China

If France was the covert target of US ‘surrogate warfare’ in 1994, today it is clearly China, which is the real threat to US control of Central Africa’s vast mineral riches. The Democratic Republic of Congo was renamed from the Republic of Zaire in 1997 when the forces of Laurent Désiré Kabila brought Mobutu’s 32-year reign to an end. Locals call the country Congo-Kinshasa.

The Kivu region of the Congo is the geological repository of some of the world’s greatest strategic minerals. The eastern border straddling Rwanda and Uganda, runs on the eastern edge of the Great African Rift Valley, believed by geologists to be one of the richest repositories of minerals on the face of the earth.

The Democratic Republic of the Congo contains more than half the world’s cobalt. It holds one-third of its diamonds, and, extremely significantly, fully three-quarters of the world resources of columbite-tantalite or “coltan” — a primary component of computer microchips and printed circuit boards, essential for mobile telephones, laptops and other modern electronic devices.

America Mineral Fields, Inc., a company heavily involved in promoting the 1996 accession to power of Laurent Kabila, was, at the time of its involvement in the Congo’s civil war, headquartered in Hope, Arkansas. Major stockholders included long-time associates of former President Clinton going back to his days as governor of Arkansas. Several months before the downfall of Zaire’s French-backed dictator, Mobutu, Laurent Desire Kabila based in Goma, Eastern Zaire, had renegotiated the mining contracts with several US and British mining companies including American Mineral Fields. Mobutu’s corrupt rule was brought to a bloody end with the help of the US-directed International Monetary Fund.

Washington was not entirely comfortable with Laurent Kabila, who was finally assassinated in 2001. In a study released in April 1997 barely a month before President Mobutu Sese Seko fled the country, the IMF had recommended “halting currency issue completely and abruptly” as part of an economic recovery programme. A few months later upon assuming power in Kinshasa, the new government of Laurent Kabila Desire was ordered by the IMF to freeze civil service wages with a view to “restoring macro-economic stability.” Eroded by hyperinflation, the average public sector wage had fallen to 30,000 new Zaires (NZ) a month, the equivalent of one US dollar.

According to Chossudovsky, the IMF’s demands were tantamount to maintaining the entire population in abysmal poverty. They precluded from the outset a meaningful post-war economic reconstruction, thereby contributing to fuelling the continuation of the Congolese civil war in which close to 2 million people have died.

Laurent Kabila was succeeded by his son, Joseph Kabila who went on to become the Congo’s first democratically elected President, and appears to have held a closer eye to the welfare of his countrymen than did his father.

Now, in comes the new US AFRICOM. Speaking to the International Peace Operations Association in Washington, D.C., on Oct. 27, General Kip Ward, commander of AFRICOM defined the command’s mission as ‘in concert with other US government agencies and international partners, [to conduct] sustained security engagements through military-to-military programs, military-sponsored activities, and other military operations as directed to promote a stable and secure African environment in support of US foreign policy.’

The ‘military operations as directed to promote a stable and secure African environment in support of US foreign policy,’ today, are clearly aimed squarely at blocking China’s growing economic presence in the region.

In fact, as various Washington sources state openly, AFRICOM was created to counter the growing presence of China in Africa, including the Democratic Republic of Congo, to secure long-term economic agreements for raw materials from Africa in exchange for Chinese aid and production sharing agreements and royalties. By informed accounts, the Chinese have been far shrewder. Instead of offering only savage IMF-dictated austerity and economic chaos, China is offering large credits, soft loans to build roads and schools in order to create good will.

Dr. J. Peter Pham, a leading Washington insider who is an advisor of the US State and Defense Departments, states openly that among the aims of the new AFRICOM is the objective of ‘protecting access to hydrocarbons and other strategic resources which Africa has in abundance . . . a task which includes ensuring against the vulnerability of those natural riches and ensuring that no other interested third parties, such as China, India, Japan, or Russia, obtain monopolies or preferential treatment.’

In testimony before the US Congress supporting creation of AFRICOM in 2007, Pham, who is closely associated with the neoconservative Foundation for Defense of Democracies, stated, ‘This natural wealth makes Africa an inviting target for the attentions of the People’s Republic of China, whose dynamic economy, averaging 9 percent growth per annum over the last two decades, has an almost insatiable thirst for oil as well as a need for other natural resources to sustain it. China is currently importing approximately 2.6 million barrels of crude per day, about half of its consumption; more than 765,000 of those barrels — roughly a third of its imports — come from African sources, especially Sudan, Angola, and Congo (Brazzaville). Is it any wonder, then, that . . . perhaps no other foreign region rivals Africa as the object of Beijing’s sustained strategic interest in recent years. Last year the Chinese regime published the first ever official white paper elaborating the basis of its policy toward Africa.

‘This year, ahead of his 12-day, eight-nation tour of Africa — the third such journey since he took office in 2003 — Chinese President Hu Jintao announced a three-year, $3 billion program in preferential loans and expanded aid for Africa. These funds come on top of the $3 billion in loans and $2 billion in export credits that Hu announced in October 2006 at the opening of the historic Beijing summit of the Forum on China-Africa Cooperation (FOCAC), which brought nearly 50 African heads of state and ministers to the Chinese capital.

‘Intentionally or not, many analysts expect that Africa — especially the states along its oil-rich western coastline — will increasingly becoming a theatre for strategic competition between the United States and its only real near-peer competitor on the global stage, China, as both countries seek to expand their influence and secure access to resources.’

Notably, in late October Nkunda’s well-armed troops surrounded Goma in North Kivu and demanded that Congo President Joseph Kabila negotiate with him. Among Nkunda’s demands was that Kabila cancel a $9 billion joint Congo-China venture in which China gets rights to the vast copper and cobalt resources of the region in exchange for providing $6 billion worth of road construction, two hydroelectric dams, hospitals, schools and railway links to southern Africa, to Katanga and to the Congo Atlantic port at Matadi. The other $3 billion is to be invested by China in development of new mining areas.

Curiously, US and most European media neglect to report that small detail. It seems AFRICOM is off to a strong start as the opposition to China in Africa. The litmus will be who President Obama selects as his Africa person and whether he tries to weaken Congo President Joseph Kabila in favor of backing Nkunda’s death squads, naturally in the name of ‘restoring democracy.’

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PUBLISHED BY ‘INFOWARS’

Posted in BANKING SYSTEM - USA, BANKING SYSTEMS, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), CHINA, CIVIL WAR - CONGO, COMMODITIES MARKET, CONGO, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES - USA, IMF, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, INTERNATIONAL RELATIONS, MACROECONOMY, METALS, METALS INDUSTRY, MINING INDUSTRIES, PETROL, RECESSION, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE MEDIA (US AND FOREIGN), THE UNITED NATIONS, USA | 1 Comment »

EURO-ZONE’S TOP CENTRAL BANKER SAYS ECONOMY WOULD HAVE SLOWED WITHOUT FINANCIAL CRISIS

Posted by Gilmour Poincaree on December 9, 2008

Last update: December 8, 2008 – 10:58 AM

by Aoife White – Associated Press

PUBLISHED BY ‘THE STAR TRIBUNE’ (USA)

BRUSSELS, Belgium – Don’t blame the financial crisis for the current economic downturn, says the euro-zone’s top central banker.

European Central Bank President Jean-Claude Trichet said Monday the slowdown was inevitable after high growth in recent years and a spike in oil prices that sent inflation soaring and braked business activity and household spending.

“Even without the financial crisis we would have had a slowing down in the economy after long years of very active growth at the global level and after the oil shocks that we had to cope with,” Trichet told the European Parliament’s economy committee in Brussels.

“That had a very powerful depressive effect on every economy in the world,” he said.

Oil prices hit a new record of $147 a barrel in July as demand for energy grew rapidly in emerging economies such as China and Brazil while suppliers remained tight. Prices have since sunk by two-thirds to hit a four-year low of $40.50 on Friday on worries of a world downturn.

The United States entered a recession last December, joined by the 15 nations that use the euro in the second quarter. Job losses are mounting and will likely rise further in coming months.

Trichet acknowledged that “exceptional tensions in the financial sphere” that froze bank lending had worsened the downturn.

He said the euro-zone central bank expects the global economy and “very sluggish” household demand to remain weak in the next few quarters — warning that a fragile recovery could be damaged by worse financial turmoil, protectionism and sudden changes to global account deficits.

He called on European governments to move fast to restore confidence in the banking sector by pushing forward with banking rescue plans that should ease lending. France said Monday it would start a recapitalization program within days after it won EU approval to give out large subsidies to banks.

Trichet did not give any hint of a future interest rate cut that would bring euro borrowing costs below the current 2.5 percent. The ECB reduced rates from 3.25 percent last week as falling inflation gave it more room to stoke growth in a slowing economy.

Economists speculate that the ECB may cut rates again in January to 2 percent. That would match current rates charged by the Bank of England and Sweden’s Riksbank.

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Posted in BANKING SYSTEM - USA, BANKING SYSTEMS, BRASIL, CENTRAL BANKS, CHINA, COMMERCIAL PROTECTIONISM, DEPRESSION, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, EUROPE, FARMING SUBSIDIES, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INTERNATIONAL, MACROECONOMY, RECESSION, STOCK MARKETS, THE EUROPEAN UNION, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, USA | Leave a Comment »

THE BIG THREE NEED A SHAKEOUT, NOT A BAILOUT

Posted by Gilmour Poincaree on December 9, 2008

Tuesday, December 9th, 2008

by Keith Fitz-Gerald – Investment Director

PUBLISHED BY ‘MONEY MORNING’

Money Morning/The Money Map Report

I don’t know about you, but my jaw literally hit the floor when the chief executives of Detroit’s “Big Three” begged for a taxpayer-funded bailout. Never mind that General Motors Corp (GM), Ford Motor Co. (F) and Chrysler LLC are now seeking an aggregate $34 billion – which is up 36% from the $25 billion the Big Three was seeking just two weeks ago – or that they “drove” to Capitol Hill in a caravan of new hybrids so shiny they could’ve made the Keystone Cops green with envy.

And now that negotiations are under way to “advance” the three U.S. automakers $15 billion from an existing loan program, I don’t know whether to laugh … or to cry, since the total amount actually needed may be north of $150 billion.

The bottom line: Detroit doesn’t need a bailout.

It needs a shakeout.

How to Really Assess the Big Three’s Health

Nothing drove that point home more than when Ford CEO Alan R. Mulally who, after admitting “big mistakes,” attempted to sway Congressional members by saying that “we’re really focused now.”

I may not be the brightest bulb in the bunch here, but it seems to me I’ve heard this same mea culpa before – several times. Indeed, wasn’t that what the Big Three said:

– Back in the 70s, after Japanese-made cars that were better made and more economical started grabbing huge swaths of U.S. market share.

– Back in the 80s when U.S. quality began to suffer badly.

– And again back in the 90s when they tossed their lot in with SUVs and trucks.

But I really have to question whether GM, Ford and Chrysler were “really focused” after supposedly beating back each of these challenges, since the Big Three has seen its market share drop from more than 70% then to less than 50% today.

They’re so “focused” I can’t stand it. And I can only wonder what they’ll say when Chinese automakers hit our shores in the next few years, rolling out cars that sell for 30% less than it costs Detroit to make cars for.

Even at their new salaries of $1 a year, the Big Three’s top leaders are overpaid in my book – but I digress.

The so-called Big Three are nowhere near the anchor of American industry that Detroit would have us believe. And the arguments they’re using are superficial – at best. Maybe that’s good enough to bamboozle some people, but I believe that the American public is smarter than that. I can’t speak for our elected leaders who seem hell bent for leather on sticking band-aids on all our serious problems, but that, too, is another story for another time.

Essentially, the carmakers’ case boils down to this: Each of the Big Three – GM, Ford and Chrysler – contribute billions of dollars to the U.S. economy, and directly or indirectly employ three million Americans. Thus, by allowing any or all of the automakers to fail, lawmakers would be making a major economic misstep.

That might be true, but not for the reasons the automakers have stated.

The Big Three are manufacturers. You don’t measure their success or failure by how much they purchase. You measure it by how much they sell, whether their market share is rising or falling, and what customers are saying about the quality and functionality of the finished product.

Economics 101

That brings us to the basics of supply and demand. If you recall your freshman-level Economics 101 course, “supply” is the total amount of goods and services (in this case cars and related support services) available for purchase. Demand is the amount of a particular good or services that a consumer or consumers will want to purchase at a given price.

Demand curves are normally downward sloping because consumers typically buy less of an item as its price increases. Similarly, supply curves are upward sloping because producers are willing to supply increasing amounts of their wares at increasingly higher prices. A bit of an oversimplification, perhaps, but it makes the general point.

In their rush to portray their industry as an economic linchpin and supplier of key future technologies – not to mention as a “victim” of the worst financial crisis since The Great Depression – the U.S. automakers are forgetting that their failure will not bring about a total destruction of demand. History is literally littered with failed companies. Demand for cars won’t fall off because the Big Three go under anymore than folks would stop buying beer if Annheuser-Busch Cos. Inc. (the maker of Budweiser that’s now Annheuser-Busch InBev NV) were to collapse and disappear.

What’s far more likely to happen is that Japan’s Honda Motor Co. (ADR: HMC) and Toyota Motor Co. (ADR: TM), India’s Tata Motors Ltd. (ADR: TTM), Germany’s Daimler AG (DAI) and Bayerische Motoren Werke AG (BMW), China’s Chery Automobile Co. Ltd. and Geely Automobile Holdings Ltd., and other companies from around the world will happily fill the void.

In fact, I’m certain that these companies will not only absorb key elements of the purchasing chain, but the workers, too. History shows that industry consolidation is actually a positive influence for the remaining companies and their workers. History also demonstrates that during periods of industry consolidation, there really isn’t anything other than short-term loss in business activity.

In short, if the demand is there, other firms will move in.

What Detroit is actually seeking is a bailout that preserves the status quo, and that implicitly rewards 40 years of inept management, bad decisions and poor quality. But to my way thinking, it makes no sense whatsoever to throw $34 billion at businesses that are losing $6 billion a month.

Like the other federal bailouts that I’ve opposed (as a proponent of free markets and the Austrian school of economics, I believe that bailouts are fundamentally wrong), a taxpayer-funded bailout of the U.S. auto sector would do nothing to improve Detroit’s competitive position. Instead, the capital would serve as little more than a punitive tax on such successful companies as Toyota and Honda, just to name two of the most obvious that would suffer. It would also allow Detroit to come back for more money after they blow through whatever we give them now. In the end, that will hurt both the consumer and the taxpayer – in most cases, one and the same.

Congressional sources are saying that that before the Big Three gets a cent, they would each have to make concessions similar to those extracted from the U.S. financial-services sector. Not only would the automakers have to eradicate their dividends and guarantee repayment, they’d also have to willingly submit to government control, just in case things didn’t play out as planned.

Maybe I’m the only one who sees a problem with this but such a change would mean that the same people who have been running the U.S. Postal Service would not be in charge of both Wall Street and one of our major manufacturing industries.

No thank you.

There are still plenty of strong automobile companies operating in the U.S. market that are able to offer of successful products that range from ultra-plain utilitarian models to all sorts of luxury vehicles, with to large-scale trucks in between.

And if the Big Three were to fail, still more auto firms will come to the United States, as their many foreign predecessors did in the years before.

So here’s to the natural order of things and, hopefully, a levelheaded Congress that will let the markets take their natural course and force a shakeout – and not a bailout.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘MONEY MORNING’

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NO ROOM FOR WISHFUL THINKING – THE SLUMP IS HERE WITH A VENGEANCE (USA)

Posted by Gilmour Poincaree on December 9, 2008

Saturday December 6 2008

by Larry Elliott, Economics Editor – The Guardian

PUBLISHED BY ‘THE GUARDIAN’ (UK)

The shocking jobs data from the US yesterday should remove the last doubt about the potential of the current crisis to turn into the most serious economic shock to the global economy since the 1930s.

The fact that the world’s biggest economy shed 533,000 jobs last month smacks of a slump. While it is unlikely to prove as long and as deep as the Great Depression, more jobs were lost last month than at any time since 1974, when the decision by Opec to turn off the oil taps brought the postwar boom to a shuddering halt.

To make matters worse, the jobless figures for September and October were revised sharply higher so that payrolls were down by 1.25 million over the latest quarter.

Some analysts saw hope in the fact that the unemployment rate rose only modestly from 6.5% to 6.7%. But that was because more than 400,000 people left the labour force altogether last month, presumably on the grounds that there was no prospect of finding work.

Nor was this a temporary shakeout precipitated by the collapse of Lehman Brothers. Revisions to the back data show payrolls were down by more than 400,000 in September, before the escalation in the financial crisis had any effect.

Apart from any impact on shares, bonds and the dollar, yesterday’s woeful jobs data will have three consequences. If 1.25 million people suddenly stop earning a wage, there will be an impact on consumer spending. And if consumers are not spending, companies are not going to invest – even assuming that they can get the finance. We are likely to see output contract at an annual rate of about 4% in the fourth quarter – and it could be even worse. And what happens to America matters to everybody else, especially the big exporting nations: China, Germany, South Korea, Japan.

The second effect will be social. America does not have the generous welfare nets enjoyed in Europe, so unless those made jobless can quickly find work, there will be hardship, poverty and the threat of disorder.

The need to put people back to work leads to the third consequence. There will be further interest rate cuts by the Federal Reserve and other “unconventional” measures to drive down long-term rates. There will be suggestions that America can’t wait for the $500bn fiscal stimulus the president-elect is planning. And there will be help for the motor industry. One of the few Americans likely to have found hope in yesterday’s report will be Rick Wagoner, the boss of General Motors.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE GUARDIAN’ (UK)

Posted in AUTOMOTIVE INDUSTRY, BANKING SYSTEM - USA, BANKRUPTCIES - USA, CENTRAL BANKS, CHINA, COMMERCE, CONSUMERS AND PSYCHOLOGICAL FACTORS, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, EUROPE, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, GERMANY, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, INTERNATIONAL RELATIONS, JAPAN, MACROECONOMY, NATIONAL WORK FORCES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, SOUTH KOREA, STOCK MARKETS, THE EUROPEAN UNION, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE WORK MARKET, THE WORKERS, USA | Leave a Comment »

NEWS ANALYSIS: TAKING RISKS WITH BAILOUT FOR AUTOMAKERS (USA)

Posted by Gilmour Poincaree on December 9, 2008

Published: December 9, 2008

by David E. Sanger

PUBLISHED BY ‘THE INTERNATIONAL HERALD TRIBUNE’ (USA)

WASHINGTON: When President-elect Barack Obama talked on Sunday about realigning the American automobile industry he was quick to offer a caution, lest he sound more like the incoming leader of France, or perhaps Japan.

“We don’t want government to run companies,” Obama told Tom Brokaw on “Meet the Press.” “Generally, government historically hasn’t done that very well.”

But what Obama went on to describe was a long-term government bailout that would be conditioned on government oversight. It could mean that the government would mandate, or at least heavily influence, what kind of cars companies make, what mileage and environmental standards they must meet and what large investments they are permitted to make — to recreate an industry that Obama said “actually works, that actually functions.”

It all sounds perilously close to a word that no one in Obama’s camp wants to be caught uttering: nationalization.

Not since Harry Truman seized America’s steel mills in 1952 rather than allow a strike to imperil the conduct of the Korean War has Washington toyed with nationalization, or its functional equivalent, on this kind of scale. Obama may be thinking what Truman told his staff: “The president has the power to keep the country from going to hell.” (The Supreme Court thought differently and forced Truman to relinquish control.)

The fact that there is so little protest in the air now — certainly less than Truman heard — reflects the desperation of the moment. But it is a strategy fraught with risks.

The first, of course, is the one the president-elect himself highlighted. Government’s record as a corporate manager is miserable, which is why the world has been on a three-decade-long privatization kick, turning national railroads, national airlines and national defense industries into private companies.

The second risk is that if the effort fails, and the American car companies collapse or are auctioned off in pieces to foreign competitors, taxpayers may lose the billions about to be spent.

And the third risk — one barely discussed so far — is that in trying to save the nation’s carmakers, the United States is violating at least the spirit of what it has preached around the world for two decades. The United States has demanded that nations treat American companies on their soil the same way they treat their home-grown industries, a concept called “national treatment.”

Yet so far, there is no talk of offering aid to Toyota, Honda, BMW or the other foreign automakers that have built factories on American soil, employed American workers and managed to make a profit doing so.

“If Japan was doing this, we’d be threatening billions of dollars in retaliation,” said Jeffrey Garten, a professor at the Yale School of Management, who as under secretary of commerce in the 1990s was one of many government officials who tried in vain to get Detroit prepared for a world of international competition. “In fact, when they did something a lot more subtle, we threatened exactly that,” referring to calls for import restrictions.

Garten said he was stunned by the scope of the intervention that Washington was now considering. “I don’t know that we’ve seen anything like this since the government told the automakers what kind of tanks to make during World War II,” he said. “And that was just for the duration of the war — this could be for much, much longer.”

It is hard to measure just what kind of chances Obama may be taking with this plan, in part because so many parts of it are still in motion.

In the short term, Democrats are floating the idea of linking $15 billion in immediate loans to the designation of a “car czar” who, in doling out the money, could require or veto big transactions or investments — essentially a one-man board of directors. The White House indicates that President George W. Bush, who has spent his entire presidency proclaiming that the government’s role is to create an environment that spurs free enterprise and minimizes government regulation, would very likely sign the rescue plan.

The first $15 billion and the car czar who oversees it, however, are only the beginning. “After that, we’re in uncharted water,” said Malcolm Salter, a professor emeritus at Harvard Business School who has studied the auto industry for two decades and, until a few years ago, was an adviser to General Motors and Ford. “Think about this: Who in the federal government would have the tremendous insight needed to fix this industry?”

Depending on how the longer-term revamping of the industry proceeds, Washington could become a major shareholder in the Big Three, it could provide loans, or, in one course that Obama seemed to hint at on Sunday, it could organize what amounts to a “structured bankruptcy.” In that case, the government would convene the creditors, the unions, the shareholders and the company’s management, and apportion a share of the hit to each of them. If that “consensus building” sounds a lot like the role of the Japanese Ministry of International Trade and Industry in the 1970s and the 1980s, well, it is.

To promote the Japanese car industry on the way up, the trade ministry nudged companies toward consolidation, and even tried to mandate which parts of the market each could go into. (Soichiro Honda, the founder of the company, rebelled when bureaucrats told him he was supposed to limit himself to making motorcycles.) By the 1980s, Congress was denouncing this as “industrial policy,” and arguing that it put American makers at a competitive disadvantage — and polluted free enterprise.

Now, it is Congress doing exactly that, but this time as emergency surgery. Other nations will doubtless complain, or begin doing the same for their own companies. “We’re at this moment in history, in which the Chinese are touting that their system is better than ours” with their mix of capitalism and state control, said Garten, who has long experience in Asia. “And our response, it looks like, is to begin replicating what they’ve been doing.”

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PUBLISHED BY ‘THE INTERNATIONAL HERALD TRIBUNE’ (USA)

Posted in AUTOMOTIVE INDUSTRY, BANKING SYSTEM - USA, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), CHINA, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, JAPAN, MACROECONOMY, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE WORK MARKET, THE WORKERS, USA | 1 Comment »

WHY US HOLDS KEY TO GLOBAL RECOVERY

Posted by Gilmour Poincaree on December 8, 2008

8 Dec 2008, 0000 hrs IST, ET Bureau

Editorial

PUBLISHED BY ‘THE ECONOMIC TIMES’ (India)

The conventional wisdom holds that economic ups and downs are transmitted across THE TRACKS OF A TROPICAL CYCLONEcountries by financial and trade flows. This does not seem sufficient to explain why, when the US economy fell of a cliff after October, other emerging market economies are falling off a cliff too. The bankruptcy of Lehman brothers was a watershed in the US. It suddenly created fear of counter-party risk, and financial markets of all sorts froze out of fear.

This freeze hit the real economy: producers could not get credit, and consumer credit plunged too. Fear of recession led consumers to cut spending, producing a sharp slump in GDP that still has some distance to go. Now, we in India were blase‚ when the US subprime mortgage problem arose in mid-2007. Our banks had virtually no subprime exposure, and the high leverage of the US financial sector had not been repeated here.

GDP growth continued strong, averaging almost 7.7% in the first half of the financial year. This was seen as evidence that our economy had decoupled from the west’s in substantial measure, though not wholly. That now looks a complete illusion. Since October, emerging markets have collapsed almost simultaneously with the US economy.

How do we explain the instant transmission of the US collapse globally? Had the transmission mechanism been trade or financial flows, we would have seen a time lag. In fact there was no time lag because of a new channel of transmission — fear. When Indian bankers heard that markets in the US had frozen, they feared the worst in India, and so virtually froze lending here too.

Consumer fear swept across the world, and Indian consumers slashed spending as in the US. INDONESIAN FARMERS PROTESTING IN JAKARTA - 2007The internet, TV and other electronic channels transmitted fear from the US to the rest of the world instantly. The lesson: recovery from the recession is likely to be transmitted by global mood change too. Optimists think the recovery will begin first in a string of emerging markets like China and India. Maybe so, but the last two months suggest that the epicentre of economic transmission remains the US. Bernanke may determine our recovery more than Subbarao.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE ECONOMIC TIMES’ (India)

Posted in BANKING SYSTEM - USA, CENTRAL BANKS, CHINA, COMMERCE, COMMERCIAL PROTECTIONISM, CONSUMERS AND PSYCHOLOGICAL FACTORS, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, HOUSING CRISIS - USA, INDIA, INTERNATIONAL, MACROECONOMY, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE MEDIA (US AND FOREIGN), USA | Leave a Comment »

ARMS SALES AND THE FUTURE OF U.S.-TAIWAN-CHINA RELATIONS

Posted by Gilmour Poincaree on December 7, 2008

November 24, 2008 05:01 PM – Age: 13 days

by Jau-shieh Joseph Wu

PUBLISHED BY ‘THE JAMESTOWN FOUNDATION’ (USA)

Publication: China Brief Volume: 8 Issue: 22

Category: China Brief, Featured, Military/Security, China and the Asia-Pacific

The outgoing Bush Administration made an 11th hour decision to notify the U.S. Congress on GEORGE WALKER BUSHOctober 3—a day before Congress went into recess ahead of the groundbreaking November presidential election in the United States—that a raft of arms and weapons systems, which have been effectively frozen since December 2007, will be released for Taiwan. The passage of the arms package provided a temporary reprieve for Taiwanese President Ma Ying-jeou, whose approval rating since assuming office in May has plummeted to 23.6 percent in October (Global View, November 2008). The items released by the U.S. Defense Security Cooperation Agency, at the value of $6.4 billion, includes: 182 Javelin anti-tank missile; 30 Apache helicopters; four PAC-3 anti-missile batteries; 32 submarine-launched Harpoon missiles; and four E-2T radar plane upgrades. But more noticeable than the items released is the absence of the first phase of 8 diesel-powered submarines, Black Hawk helicopters, and two additional PAC-3 batteries that had been originally sought (United Daily News [Taiwan], October 5, 2008; Defense News, October 6). Taipei also requested 66 F-16 C/D jet fighters to add to its current inventory, but the Bush Administration has not received the letter of request for the reason that it would only process the above-mentioned package at the current stage.

The passage of the arms package was received with a sigh of relief in Taipei, which is concerned about the island’s strained relations with the United States,and, had a decision lapsed to the next U.S. president, weary that the package would be approved at all. As expected, Beijing complained bitterly and suspended unspecified military exchange programs with the United States (United Daily News, October 8, 2008), but overall the sale did not upset Sino-U.S. relations, nor did it interrupt the momentum of reconciliatory gestures between the Kuomintang (KMT), the ruling party on Taiwan, and the Chinese Communist Party (CCP). However, the scaling-down of the arms package signifies subtle changes in the geopolitical landscape in East Asia, where the shifting center of gravity may affect the long-term interests of the United States and its relations with the nations in the region.

Arms Sale and Taiwan’s Defense

Although the items approved only represent a fraction of Taiwan’s request and the value is half of what was originally sought, the package nonetheless improves Taiwan’s defense capability and reduces Taiwan’s widening military disparity vis-à-vis China. However, China’s military is rapidly modernizing, with its military defense budget has increased by double digit for more than 15 years while Taiwan’s defense budget has remained low. Therefore, the arms package will be unable to offset the strategic changes in the depth projection of China’s military in the region and encirclement of Taiwan’s sovereignty. Among Taiwan’s most cited threats is the People’s Liberation Army’s (PLA) deployment of more than 1,000-1,400 short-ranged ballistic missiles (SRBM), which have increased at the rate of 100 per year since 2001. These missiles have been aimed at Taiwan from six missile bases in Lepin, Santow, Fuzhou, Longtien, Huian, and Zhangzhou, spanning three southeastern coastal provinces of Jiangxi, Zhejiang, and Fujian [1] (Liberty Times [Taiwan], March 30, 2008). In addition, China has also acquired an estimated 50 advanced submarines, which is more than what military analysts state the PLA needs to blockade the Taiwan Strait. The PLA has also engaged in military exercises and deployments designed to sharpen its defensive capabilities so that even with limited offensive capabilities, China would be able to subdue Taiwan’s defenses in a limited amount of time by denying the access of other maritime powers that may come to Taiwan’s defense [2]. Furthermore, China has—in recent years—ratcheted up its computer-hacking activities against the Taiwanese government’s national security-related agencies and has stolen countless sensitive materials (United Daily News, April 8, 2007), so much so that some Taiwanese security officials describe that a “silent war” has already begun.

Friction between the Democratic Progressive Party (DPP) and the CCP in the Taiwan Strait was to be expected for two parties whose visions for Taiwan and its relationship with China are diametrically opposed. That the result of Taiwan’s presidential election on March 22 was embraced by the embattled U.S. leadership came as no surprise. The KMT’s Ma Ying-jeou appears more conciliatory toward China than his predecessor, Chen Shui-bian of the DPP. Chen stoked tensions in cross-Strait relations prior to the election by advocating that Taiwan join the United Nations as a new member, promoted a national referendum on the issue during the recent presidential election. These tensions have since eased following President Ma’s inauguration. Bush Administration officials—in pubic and in private—conveyed satisfaction to see Taiwan’s KMT government and the CCP re-engaged in cross-Strait dialogue, particularly the resumption of the Strait Exchange Foundation (SEF) – Association for the Relations Across the Taiwan Strait (ARATS) channel, severed by the CCP after former President Lee Teng-hui stated in a major policy speech in 1999 that Taiwan-China relations are “special state-to-state relations.”

Cross-Strait Politics and China’s Legal Warfare against Taiwan

From November 3 to 7, the head of ARATS, Chen Yunlin, serving as China’s special envoy to Taiwan, participated in an unprecedented visit to Taiwan to negotiate cross-Strait aviation, shipping, and food safety agreements. Chen Yunlin’s visit has attracted international attention on the warming relations between a democratic Taiwan and an authoritarian China, and also on a deepening divide in Taiwanese society.

A closer examination of ongoing cross-Strait shuttle diplomacy between the KMT and CCP, and public announcements made by President Ma raises legitimate questions about whether the current trend is in Taiwan’s national interest or for that matter U.S. long-term security interest.

The issue of Taiwan’s sovereignty has always been the focal point of cross-Strait tension, since the PRC claims that Taiwan is a part of China under its interpretation of the “one-China principle.” The Chinese government has engaged in what some analysts call a diplomatic “full-court press,” using a carrot and stick strategy in the form of financial and monetary incentives, to legalize the “one-China principle” in major international organizations and thereby legitimize its claim of sovereignty over Taiwan (Javno, November 16, 2007).

The first such step came in May 2005, when the Chinese government signed a memorandum of understanding (MoU) with the World Health Organization (WHO) Secretariat requiring the WHO to seek Chinese approval before Taiwan, under the name “Taiwan, China,” could participate in any WHO-related activities. The second came in the United Nations, which in March 28, 2007, issued a letter from the Secretariat to Nauru stating that, in compliance with the 1972 UN General Assembly Resolution 2758, “the United Nations considers Taiwan for all purposes to be an integral part of the People’s Republic of China.” The third incident was with the OIE (World Organization of Animal Health). In May 2007, Beijing attempted to pass a resolution “recognizing that there is only one China in the world and the government of the People’s Republic of China is the sole legal government representing the whole of China which includes Taiwan,” changing Taiwan’s membership into “non-sovereign regional member,” and using “Taiwan, China” or “Taipei, China” as Taiwan’s official title in this organization.

As these three examples demonstrate, the “one-China principle” has been used by the PRC as a means of waging its “legal warfare” to incorporate Taiwan and to accomplish its bottom-line goal of de jure unification, as explicitly stated by its CARCEL PARA POSADAdeclared intent to use military force if necessary under the “anti-secession law” of 2005 to “reunify” Taiwan. The examples also illustrate how, if Taipei agrees to the “one-China principle,” it may be interpreted as accepting China’s claim of sovereignty over Taiwan. Under such pretexts, the government under the DPP had to avoid and even repel the “one-China principle” as the precondition for the resumption of cross-Strait talks. The DPP did this by seeking international support for its counter-position, which led to the standoff in cross-Strait negotiations and showed the world that the “one-China principle” effectively became a non-starter.

These efforts notwithstanding, Ma Ying-jeou in his inaugural address reversed the previous administration’s position and accepted the so-called “1992 consensus” as the foundation for cross-Strait reconciliation in spite of the fact that the PRC officially stated that the “1992 consensus” was a consensus realizing (ti-xien) the “one-China principle.” In several private meetings with foreign visitors, Ma even went on to say that he accepted the one-China principle with or without any elaboration on what he meant by it. In addition, Ma stated in September during an interview with a Mexican journal that the relations between Taiwan and China are “non-state to state special relations,” and his spokesperson Wang Yuchi further qualified that statement of policy by saying that relations should be characterized as “region to region” (diqu dui diqu) relations (September 3, 2008, news release, http://www.president.gov.tw). In the effort to participate in international organizations, Ma announced that there is no better title for Taiwan other than “Chinese Taipei” (United Daily News, April 5, 2008). During the August/September effort to participate in the United Nations, the KMT government gave up on the membership drive and pursued only “meaningful participation” in UN-affiliated organizations. Even so, the Chinese Ambassador to the UN, Wang Guang-yia, stated that Taiwan was not qualified to participate in major international organizations, and Taiwan’s participation in the WHO had to follow the MOU signed between the Chinese government and the WHO Secretariat (Liberty Times, August 28, 2008). The Ma administration made no attempt to repudiate the Chinese claim, and Ma’s spokesperson stated that it was not a “non-goodwill” (Liberty Times, August 29, 2008). In addition, when in the negotiations for cross-Strait chartered flights the Ma administration decided to open up six domestic airports in addition to two international airports, the decision apparently fell into the Chinese claim that the cross-Strait flights are domestic flights. In short, the official statements and policy actions by the KMT government on relations between the two sides of the Strait thus put Taiwan within the description of the “one-China principle,” with Taiwan being part of China.

Inner Politics and Arms Sales

In another interview by India and Global Affairs, Ma stated that HOMELESS - USAhe wanted to pursue full economic normalization with China, and that he also wanted to reach a peace agreement within his term (Liberty Times, October 18, 2008). If Ma’s concept on the relations between Taiwan and China falls within the description of the “one-China principle,” a full economic normalization will mean an arrangement similar to the Closer Economic Partnership Agreement (CEPA) between Hong Kong and China. A peace agreement between Taiwan and China within the timetable of his four-year term may necessitate that the United States prepare for an eventual termination of arms sales to and security cooperation with Taiwan. Ma’s statements may be welcomed by the international community as gestures toward peace, but it is actually putting Taiwan’s security in jeopardy. If Taiwan were to sign a peace agreement under the KMT where the conditions are defined by the KMT and CCP, the resulting equation, influenced by a much more powerful China at the other end of the negotiating table, may forfeit Taiwan’s freedom to repudiate China’s claim over Taiwan. Taiwan may be moving dangerously too close to the PRC and may not be able to maintain its current de facto independent status any longer.

The United States has for decades held a policy of refuting the PRC’s claim of sovereignty over Taiwan, as stated in the “six assurances” provided by President Ronald Reagan in 1982 and other private communications with Taiwan (Fredrick Chien Memoir, vol. 2, 2005, 215-6). When China manipulated the UN Secretariat to issue a letter in March 2007, which stated that Taiwan is considered by the UN an integral part of the PRC, the United States protested to the UN Secretariat, arguing that such a declaration is against U.S. policy (Liberty Times, September 6, 2007). But if Taiwan itself accepts one-China principle, the foundation for this U.S. policy may be jeopardized. In other words, Ma’s effort of reconciliation is a short-term relief for the United States at a time when it is not capable of addressing simultaneous international conflicts. However, such efforts may prove to be against U.S. long-term interests, especially if the United States continues to view China’s rapid military modernization with suspicion.

Taiwan’s domestic politics are severely divided over the course of the government’s ongoing rapprochement with China. President Ma has not made any efforts to seek domestic reconciliation or attempt to communicate with the opposition over his intentions on cross-Strait policy. In fact, Ma’s statements and actions angered many people who believe that Taiwan should keep China at arm’s length. Taiwan appears to be more divided than before in the months since Ma’s inauguration, as evidenced by several large-scale, anti-government/anti-China demonstrations. Consequently, Taiwan’s status has been relatively weakened in facing the subtle and not so subtle threats from authoritarian China. A divided and weakened Taiwan severely threatens Taiwan’s national security, and is, by extension, not in the interests of the United States or Japan, its key ally in East Asia. All interested parties should therefore encourage the KMT to engage the opposition DPP in formulating its policy across the Taiwan Strait.

Conclusion

The changes occurring within the strategic landscape of East Asia are quite subtle indeed. U.S. arms sales to Taiwan are one of the most important means LOADING BOMBSfor the United States to demonstrate its security commitment to its key allies and ensure peace and stability in the Taiwan Strait. In order for the United States to continue to maintain peace and stability in the region, the United States has long held the position, as prescribed by the Taiwan Relations Act, that arms sales to Taiwan are evaluated on the merit of Taiwan’s defense needs, not political judgments or as a result of consultations with the PRC. However, the U.S. decision to scale down the volume of weapons that had already been promised may make Taiwan feel uncomfortable about the U.S. commitment at a time when Taiwan needs a strong defense in order to ward off China’s possible aggression. A continued U.S. commitment is also integral in permitting Taiwan to resist China’s political pressure, however remote it may seem, and most importantly enable Taiwan to negotiate with China from a position of strength. The unfinished issue of arms sales to Taiwan thus becomes another pressing matter for the new U.S. administration to address in order to safeguard American interests in reinforcing peace and stability in East Asia.

Notes

1. Tseng Shiang-yin, “The Enhancement of Taiwan’s missile defense,” Taiwan Defense Affairs (Vol 5, No. 3, Spring 2005) pp. 88-117, www.itdss.org.tw/pub/05_3/05_3_p088_177.pdf.

2. Ling Chang-sheng, “Research, Development and Deployment of China’s Cruise Missiles,” Defence International Issue 213 (Taiwan: April 12, 2003), www.diic.com.tw/comment/06/06930412.htm.

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PUBLISHED BY ‘THE JAMESTOWN FOUNDATION’ (USA)

Posted in BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), CHINA, COMMERCE, COMMODITIES MARKET, DEFENCE TREATIES, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FOREIGN POLICIES, FOREIGN POLICIES - USA, FORMOSA - TAIWAN, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, INTERNATIONAL, INTERNATIONAL RELATIONS, MILITARY CONTRACTS, NATIONAL WORK FORCES, RECESSION, STOCK MARKETS, THE ARMS INDUSTRY, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE OCCUPATION WAR IN IRAQ, THE PRESIDENCY - USA, THE WORK MARKET, THE WORKERS, USA, WAR IN AFGHANISTAN, WARS AND ARMED CONFLICTS | 1 Comment »

SHARING THE RESPONSABILITY

Posted by Gilmour Poincaree on December 7, 2008

DECEMBER 3-8, 2008

by Michael Levitin

PUBLISHED BY ‘NEWSWEEK’ – Print Edition – (USA)

He was Chief of Staff to Chancellor Gerhard Schröder, the leading voice behind 'A BIGGER BREAK' - Frank-Walter Steinmeier says the crisis forced the U.S. to leave behind its traditions - Photo by Hans-Christian Plambeck (Laif-Redux)Germany’s refusal to fight in Iraq. Now German Foreign Minister Frank-Walter Steinmeier is the Social Democratic Party candidate for chancellor in next year’s elections, running against the popular Christian Democrat incumbent, Angela Merkel. In his first major interview with the U.S. press, Steinmeier sat down with NEWSWEEK’s Michael Levitin to discuss German troop engagements in Afghanistan, Russia’s recent aggression, the global financial crisis and how Germany might work alongside the United States. Excerpts:

LEVITIN: The day after Barack Obama won the U.S. presidency, Russian President Dmitry Medvedev threatened to install missiles in Kaliningrad if Washington did not “rethink” its deployment of a NATO missile shield in Eastern Europe. Did Moscow’s latest show of aggression shift the dynamic between Russia and Europe? How should you respond- and what should Europe’s response be?

STEINMEIER: Medvedevs announcement the day after the elections was clearly the wrong signal at the wrong time. We have no illusions about Russia. In the last few years it has often proved itself a difficult partner. The question remains how to deal with this huge country in Europe’s immediate neighborhood; having to choose between containment versus engagement, I advocate the latter. We must try to develop relations with Russia that go beyond economic interests and contribute to increased stability and security. After all, it is in our own interest to make sure that a Russia that is looking for its own identity is politically and culturally anchored in die West.

LEVITIN: Do you see Germany as a middleman, acting as a buffer between Russia and the rest of Europe-perhaps at the moment even Russia’s closest EU ally?

STEINMEIER: Russia is aware of our uniquely close relationship with the United States. We are firmly embedded in NATO and the EU and thus we don’t aspire to play the role of a middleman. Together with our European partners we showed a strong and outspoken response to Russia’s role in the conflict in Georgia. I think Europe’s united voice no doubt contributed to the military conflict ending. Now the stabilization of the region as a whole has to continue, and for genuine stability we need Russian cooperation. As for energy links between the EU and Russia, the answer depends on which European country you talk to. But in general, Russia depends as much on Europe and America buying its goods as we rely on Russia supplying us with natural gas and oil. As far as Germany is concerned, it is little known in the United States that we have worked successfully for decades to diversify our suppliers of various forms of energy and fuels, with Russia but also Norway and Africa being important suppliers.

LEVITIN: You mentioned the conflict In Georgia. Should that country and Ukraine be Invited to Join NATO?

STEINMEIER: This is not a simple yes-or-no decision. With national elections looming, the domestic situation in Ukraine has changed, as has the situation in the Caucasus since the conflict broke out this summer. Yes, we remain committed to supporting and assisting these countries on the road ahead. But concerning the Membership Action Plan, Germany and other European governments continue to stand by their position.

LEVITIN: The most urgent U.S. foreign-policy question involving Germany, which Obama raised many times during his campaign, is Afghanistan and whether Germany will contribute more troops there to stabilize the south. How much is your country willing to sacrifice for this partnership, putting its soldiers into harm’s way?

STEINMEIER: I have spoken to Barack Obama twice, and from these exchanges I know that he sees Afghanistan in a very nuanced way. I feel we see eye to eye in our assessment that we’re facing a very difficult security situation, but that military means alone cannot bring about the necessary changes. Our approach has to be a comprehensive one, and contrary to what some people may say, Germany has played its part.

LEVITIN: In the north, certainly. But It’s in the south where the greatest violence has taken place, and where Obama’s asking for greater German participation.

STEINMEIER: We have shouldered our share of the military responsibility and we have also enlarged our engagement. We are about to increase our troops by 30 percent, to 4,500. We are participating in aerial surveillance across the whole of Afghanistan, including the south, and German radio engineers are also stationed in Kandahar. The German Air Force runs flights for all NATO countries throughout Afghanistan, again including the south. We took over the lead of the Quick Reaction Force in the north. And let us not forget that circumstances there have also changed; the north, too, has seen its share of armed opposition activities increasing in the last month. But our engagement in Afghanistan is about much more than military action. We have always said that we will only be successful if we succeed in helping rebuild the country and its economy. Civil reconstruction is the second important pillar of our engagement on the ground, and we’ll continue to increase our contribution in this area next year.

LEVITIN: Given the turmoil in Pakistan, what do you think the next steps forward ought to be?

STEINMEIER: The security of the whole region strongly depends on Pakistan. If we want to combat terrorism in Afghanistan, we have to succeed in stabilizing Pakistan politically and economically. This calls for a strengthened Pakistani commitment to combat terrorism, but it also calls for international assistance for this country. It needs a substantial loan from the IMF. We also need to be ready to help stabilize the country in a lasting way.

LEVITIN: On Iran, what realistic hopes do you see of bringing Mahmoud Ahmadinejad to the table and persuading him to give up Tehran’s nuclear ambitions? And how far will you be willing to push?

STEINMEIER: No doubt there is hope in the international community that after 29 years of standstill, a new approach may be possible. We all remember the reasons for the break-off of relations between the U.S. and Iran. Since then, U.S.-Iranian relations have also been a story of missed opportunities: when Washington signaled openness, Tehran wasn’t willing or able to respond in kind, and vice versa. I think it would be worthwhile trying to have direct talks, but the Iranians have to know it is up to them to prove they do not aspire to nuclear weapons-and that they’re willing to play a constructive role in the region. I have to admit I am skeptical, and can only express my hope that the leaders in Iran seize this opportunity.

LEVITIN: Turning to the financial crisis, the banks got a bailout. Now the automobile manufacturers are seeking the same thing. How do you see EU countries regaining their competition policy-and their legitimacy-after this?

STEINMEIER: I believe the politicians would have lost their legitimacy if they hadn’t acted. What we’re facing here is the very visible failure of the market. We had to make sure that the crisis in the financial markets does not lead to a total breakdown of the financial system as a whole. On both sides of the Atlantic, unconventional means were applied to manage the crisis. Honestly speaking, many of the measures taken in the U.S. seemed a bigger break with American tradition than can be said about European measures.

LEVITIN: How important is it that developing countries play a greater decision-making role In the future? For example, we saw hints of the G8 expanding into a G20 several weeks ago in Washington.

STEINMEIER: What is the most fundamental challenge the world is facing today? To my mind, it consists of integrating the emerging powers of the 21st century into a system of shared global responsibility. I am talk ing about countries like China and India, but also Muslim states such as Saudi Arabia. Can any of the global challenges we face be tackled without them? I don’t think so. That is why we have to make them stakeholders, and in that respect the recent financial summit in Washington was historic. To me it is obvious we cannot stop there.

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ALCOA SCRAMBLES TO STAY VIABLE

Posted by Gilmour Poincaree on December 6, 2008

Thursday, December 4, 2008

By The Wall Street Journal

PUBLISHED BY ‘THE PITTSBURG-TRIBUNE REVIEW’ (USA)

Alcoa Inc., which had been Alcoa Warrick Operations employee of 36 years Fred Westbrook, 59, of Evansville, Ind. inspects the finished rolls of aluminum as they comes off the last stage of the production line in this April 7, 2006, at the Alcoa Warrick Operations in Newburgh, Ind. (AP Photo/ Daniel R. Patmore, File)counting on obtaining discarded aluminum assets from a merged BHP Billiton and Rio Tinto PLC, has fewer strong options to improve its prospects amid one of the worst aluminum markets in decades now that the deal has collapsed.

With aluminum inventories just shy of record levels, prices at their lowest level in 2008 and nearly half of the world’s aluminum production unprofitable, Alcoa is scrambling to cut capacity and find buyers for some of its downstream businesses, which is proving more difficult given the tight capital markets and reluctance of many companies to take on debt.

Neither of those efforts, however, addresses the company’s fundamental challenge: Alcoa remains the high-cost producer of the world’s major aluminum makers when compared with Rio Tinto’s Alcan and Russia’s United Co. Rusal. Knowing that BHP wasn’t keen on the aluminum market, Alcoa had been hoping to buy all or part of Alcan, which has lower energy costs, after BHP bought Rio Tinto.

With that prospect off, speculation is mounting that Alcoa will look at other avenues.

“Everybody understands the current economic situation in the world” requires certain steps, said Alcoa spokesman Kevin Lowery. “In the interim, we are taking steps to reduce costs and taking steps to position ourselves so we will be stronger than competitors. That is what we are focusing on.”

John Tumazos, an analyst with Very Independent Research, said the company has few good options as its influence in the commodities world is nowhere as solid as it once was. “They need to idle more smelters than they have cut,” he said.

So far, Alcoa is keeping a lid on its options, but industry observers say it could deepen its existing relationship with its partner Aluminum Corp. of China, also known as Chinalco. The two companies own a 9 percent stake in Rio Tinto that they jointly purchased for $14 billion in January. The stake is valued at about 80 percent less since BHP’s planned takeover of Rio collapsed last month.

Alcoa could increase its existing stake, betting on a rise in commodity prices. It could sell its stake, which would bring about $200 million in cash to its coffers and represent a huge loss from its initial $1 billion investment.

The two companies could combine into a single entity. Such a deal, while in no way an easy task because it would result in Chinese ownership of a key U.S. company, could work for both sides. A combined Alcoa and Chinalco would make it one of the biggest producers of aluminum and both alumina and bauxite, necessary ingredients for aluminum production.

In addition, a combined company would be able to better rationalize expensive smelters and other production facilities in Europe, the United States and China, leaving just the lowest-cost facilities to compete with Rio Tinto and UC Rusal.

Tumazos said Alcoa’s sagging stock price, which is hovering around $10, makes the company a fairly inexpensive purchase. “Chinalco could buy Alcoa for about $8 billion plus a premium,” he said. “That is less than it paid for a stake in Rio.”

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Posted in ALUMINUM, CHINA, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, EUROPE, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION, INDUSTRIAL PRODUCTION - USA, INDUSTRIES, INDUSTRIES - USA, INTERNATIONAL, METALS INDUSTRY, MINING INDUSTRIES, RECESSION, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE WORK MARKET, THE WORKERS, USA | 1 Comment »

PROTECTIONISM REARS ITS HEAD AS WTO TRIES TO WRAP UP DOHA – CONGRESSMEN TELL BUSH TO REJECT TABLED TRADE DEAL – SUMMIT TO END SEVEN YEARS OF TALKS PUT IN DOUBT

Posted by Gilmour Poincaree on December 5, 2008

Thursday December 4 2008

by Larry Elliott, Economics Editor – The Guardian

PUBLISHED BY ‘THE GUARDIAN’ (UK)

A sign that the current crisis is fanning a desire for protectionism emerged yesterday when members of Congress warned George Bush against trying to fast-track a trade deal for the end of the year.

Pascal Lamy, director general of the World Trade Organisation, is considering calling trade ministers to Geneva to conclude the Doha liberalisation talks.

“Unfortunately, the negotiating texts currently on the table would provide little if any new market access for US goods, and important advanced developing countries are demanding even further concessions from the US,” said a bipartisan letter from Charles Rangel, Max Baucus, Jim McCrery and Charles Grassley. Democrats Rangel and Baucus chair the Ways and Means and the Finance committees respectively, while McCrery and Grassley are the ranking Republican members.

“We see no tangible progress, and in fact believe that some of our trading partners have become even further entrenched in their unacceptable positions.”

Lamy wants to bring more than seven years of acrimonious talks to an end with a meeting next weekend, after last month’s summit of G20 leaders in Washington instructed trade ministers to settle differences over agriculture and manufactured goods. Some officials believe it would become more difficult to conclude any deal once Barack Obama is sworn in next month.

WTO sources last night talked of a meeting on December 13, although Lamy was more cautious. In a fax to the WTO’s 153 members, he said he had yet to decide whether there had been enough progress since talks broke down in July: “As we all know, we still have a number of outstanding issues. But the reality is the relevance of what we are doing to the financial crisis,” he said. “If we fail we have a problem; but although there remains the risk of failure, the risks involved in not trying are higher.”

He is concerned that economic distress in the US, Europe and Asia is already prompting countries to use protectionist weapons yet to be outlawed by the WTO – raising tariffs to the maximum permitted, and introducing anti-dumping regulations.

US agriculture secretary Ed Schafer said he was confident a deal could be done, and confirmed that Washington was ready to make a big cut in its agreed ceiling for agriculture subsidies if other countries opened their markets further to US farm produce. “We in the US remain confident we can see a successful completion to the Doha round this year,” he told reporters in Beijing.

However, the Congressmen warned Bush against being rushed into a deal that would be rejected on Capitol Hill. “We strongly urge you not to allow the calendar to drive the negotiations through efforts to hastily schedule a ministerial meeting, without adequate groundwork having been laid.

“Developed and advanced developing countries must commit to provide meaningful new market access opportunities if Congress is to support a deal.’

“Achieving the necessary flexibility from our trading partners could require new thinking … and our negotiators should be given time to explore such options. Otherwise, the likely result will be a deal that Congress cannot support – an outcome that would be detrimental to US farmers, workers and firms, the global economy, and the WTO itself.”

Amy Barry, trade spokeswoman for Oxfam, said: “This round of talks was meant to be primarily about development, not about market access for US farmers and companies. Yet Oxfam is hearing that the US, with tacit support from the European Union, Australia and others, has now put extra demands on the table, mostly about further prising open the markets of major emerging economies.

“These come as China has seen a major fall in its exports, leading to many enterprises closing and huge numbers laid off to go back onto the land … India has lost 20% of its exports in a year, with 1.2m job losses in textiles and clothing alone … It is difficult to understand why anyone would seriously expect China and India to agree to yet more trade concessions.”

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PUBLISHED BY ‘THE GUARDIAN’ (UK)

Posted in 'DOHA TALKS', AGRICULTURE, CHINA, COMMERCE, COMMERCIAL PROTECTIONISM, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, EUROPE, FARMING SUBSIDIES, FINANCIAL CRISIS 2008/2009, FOREIGN POLICIES, G20, G8, INDIA, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE EUROPEAN UNION, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, USA, WORLD TRADE ORGANIZATION | 1 Comment »

FIRST SIGNATURES ON TREATY TO BAN CLUSTER BOMBS

Posted by Gilmour Poincaree on December 4, 2008

December 04, 2008 Edition 1

PUBLISHED BY ‘THE MERCURY’ (South Africa)

OSLO: About 100 nations began putting their names to a landmark treaty banning cluster bombs yesterday, amid calls for major arms producers such as China, Russia and the United States to join them.

Norway, which played a key role in hammering out the worldwide ban on using, producing, transferring and stockpiling cluster munitions, was the first country to sign the convention.

“The world is a safer place today,” said Richard Moyes of the Cluster Munitions Coalition, an umbrella group that comprises some 300 non-governmental organisations.

“This is the biggest humanitarian treaty of the last decade,” he said.

Dropped from warplanes or fired from artillery guns, cluster bombs explode in mid-air and scatter hundreds of bomblets, which can be just 8cm long.

Many bomblets fail to explode, littering war zones with de facto landmines that can kill and maim long after a conflict ends.

Worldwide, about 100 000 people have been killed or maimed by cluster bombs since 1965, 98% of them civilians.

More than a quarter of the victims were children, who mistook the bomblets for toys or tin cans. – Sapa-AFP

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NEW GAS EXPORT STRATEGIES (Iran)

Posted by Gilmour Poincaree on December 3, 2008

Thu, Dec 04, 2008

by Majid Karimi

PUBLISHED BY ‘THE IRAN DAILY’

The trilateral meeting between the leaders of Turkmenistan, Turkey and the Republic of Azerbaijan was held at It is difficult to predict the final stance of Turkmenistan toward the Nabucco pipeline, as nothing official has yet been made public.Turkmanbashi, Turkmenistan, on Friday.

Gurbanguly Berdymuhammedov, Abdullah Gul and Elham Aliev respectively discussed cooperation in the field of energy.

The meeting followed Berdymuhammedov’s visit to Germany and Austria, and negotiations for exporting gas to Europe. Of course, he has not made explicit comments regarding exports of gas to Europe via Nabucco or the trans-Caspian project.

The trans-Caspian project has not yet materialized due to ambiguities surrounding the Caspian legal regime, rift between Turkmenistan and Azerbaijan over a gas field and environmental problems.

Diversification

After the Turkmanbashi meeting, Financial Times reported Azerbaijan and Turkmenistan have reached an agreement about new strategies for exporting the Caspian Sea energy to consumer markets to curb the dependency of European states on Russian gas.

Based on this report, the European Union (EU) and the US have urged Turkmenistan to join the Nabucco pipeline project for transporting gas via Azerbaijan, Georgia and Turkey.

After meeting his Azeri counterpart, Berdymuhammedov said, “Turkmenistan and Azerbaijan, which are rich in hydrocarbon resources, have reached an agreement on diversifying the export routes for energy to the global markets.“

He emphasized that his country is keen on participating in the Nabucco pipeline project, but is under pressure for exporting its gas via Russia, which is the main market for Turkmen gas.

“Turkmenistan has signed a contract for supplying gas to China via the pipeline which is presently under construction,“ he said.

On the threshold of this trilateral meeting, Berdymuhammedov visited Germany and Austria during Nov. 13-19. In these visits, issues pertaining to the transport of Caspian Sea gas bypassing Russia were examined.

Manager of Azerbaijan’s Oil Projects Research Center Ilham Shaban noted that negotiations between the presidents of Azerbaijan, Turkey and Turkmenistan hints at more extensive cooperation among them in the energy sector than the Nabucco project alone.

Future meetings are not expected to focus on the gas project for building a pipeline through the Caspian seabed because at the presidential level, projects in their preliminary stages are not examined.

“So far, a few meetings have been held between representatives of Turkey and Turkmenistan in which the import of electricity and transport of gas via Iran were discussed. But, the last case did not materialize,“ he said.

The Azeri official noted that till now, no trilateral meeting was held between the leaders of Azerbaijan, Turkmenistan and Turkey.

“I should mention a similar case regarding how things proceeded regarding energy cooperation between Azerbaijan and Kazakhstan. Since November 2002, negotiations took place between Baku and Astaneh at different levels. This eventually led to an intergovernmental agreement between Azerbaijan and Kazakhstan regarding oil transport via the Baku-Tbilisi-Ceyhan pipeline. Hence, the meeting in Turkmenistan is another step to this end,“ he said.

Since the Commonwealth of Independent States gained their independence in 1991, Azerbaijan has had good economic ties with Turkmenistan and Turkey.

“I personally believe that in future negotiations between the presidents of these countries, more issues will be examined,“ he said.

Shaban further said it is difficult to predict the final stance of Turkmenistan toward the Nabucco pipeline, as nothing official has yet been made public, except a communiquŽ expressing Turkmenistan’s desire to diversify its gas supply.

“Interestingly enough, it has been mentioned that gas will be transported to China from fields located above Amudarya, from northern Dolatabad to Russia via the pipeline alongside the Caspian Sea and whatever is found in the western part of Turkmenistan will be transported to the West,“ he said.

It seems that Turkmenistan has determined, after 17 years of independence, where and how gas should be transported in a viable manner.

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PUBLISHED BY ‘THE IRAN DAILY’

Posted in CENTRAL BANKS, CHINA, COMMERCE, COMMODITIES MARKET, COMMONWEALTH OF INDEPENDENT STATES, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, ENERGY INDUSTRIES, EUROPE, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, GERMANY, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, IRAN, KAZAKHSTAN, NATURAL GAS, REGULATIONS AND BUSINESS TRANSPARENCY, RUSSIA, THE FLOW OF INVESTMENTS, TURKEY, TURKMENISTAN, UZBEKISTAN | Leave a Comment »

ECONOMIC STIMULUS PLANS SPRING UP AROUND WORLD

Posted by Gilmour Poincaree on December 3, 2008

Published Tuesday, December 2, 2008

THE WASHINGTON POST

PUBLISHED BY ‘THE OMAHA WORLD-HERALD’ (USA)

WASHINGTON — In a bid to jump-start the beleaguered global economy, countries around the world are introducing massive public spending programs aimed at creating millions of jobs, boosting the use of green energy and modernizing infrastructure in a way that could transform urban and rural landscapes.

The viability of some of the plans remains unclear. But observers say the number of countries moving in tandem underscores the perceived severity of the coming global recession and the view that governments must at least temporarily pick up the slack as the hard-hit private sector sheds jobs and cuts spending.

It is time “to invest massively in infrastructure, in research, in innovation, in education, in training people, because it is now or never,” French President Nicolas Sarkozy said in a recent public address.

World leaders are pursuing various strategies to tame the economic crisis, including moves to unclog credit markets, strengthen financial institutions and ease monetary policy. But fiscal stimulus packages, in particular, have emerged as a favorite tool of policymakers.

Worldwide, economists say, the increase in public spending, if executed wisely, could add as much as 1 percent or 2 percent to global growth next year, perhaps easing recessions in the United States, Europe and Japan while cushioning the slowdown in the developing world, which until recently had seen red-hot growth.

Yet if the promise of combating a global recession with public funds is big, so too, experts say, is the danger that billions worth of taxpayers dollars could be spent in vain.

Analysts point out that the pitfalls of growth-by-spending were exposed by Japan, which launched a huge infrastructure program in the 1990s. To spur expansion after stock market and real estate crashes, the Tokyo government spent billions on new public works projects.

Those projects not only failed to prevent a decadelong economic slump but also produced a herd of white elephants that included new, but little-used, airports and ports, as well as a $250 million bridge to Kourijima Island. Population: 361.

“There is a huge danger of bridges to nowhere, and as Japan showed us, that is no way to get out of a recession,” said Grant Aldonas, a former high-level Bush administration trade official and a senior fellow at the Center for Strategic and International Studies.

While China and Japan enjoy a surplus of reserves, spending increases will drive the United States, Britain and many other European countries deeper into debt. The cost of raising cash on world markets by some rich nations, such as Ireland, has surged as investors grow increasingly skeptical of their fiscal health, limiting their options to spend more now.

“In normal times, we would be telling countries, ‘Please reduce your debt,'” said Olivier Blanchard, chief economist at the International Monetary Fund, which has taken the unusual step of calling on nations to raise public spending by 2 percent of gross domestic product to combat a global recession. “But these are not normal times.”

A snapshot of how governments plan to increase spending is emerging. Those plans include not only the building of more bridges and roads but also the introduction of measures to put more cash into the hands of strapped consumers.

In the United States, the Federal Reserve and Treasury Department have moved to boost consumer spending and lower home mortgage rates, committing as much as $800 billion to make it easier for Americans to borrow money for cars, tuition and homes.

The British said they would slash the national sales tax from to 15 percent from 17.5 percent. The Germans are set to offer temporary tax incentives to consumers buying cars or renovating homes. The Japanese are giving out cash rebates to taxpayers.

Some of the projects being proposed are pre-existing infrastructure plans that are being accelerated. Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics, estimates that only about half the “new projects” in Beijing’s $586 billion package amount to previously unplanned spending. “But that is still a great deal of money,” Lardy said.

A number of countries are gearing up for projects that offer long-term benefits, both economic and environmental.

In a move that may offer a guide to helping the ailing Big Three automakers in Detroit, the French are in the early stages of plans to assist their hard-hit auto industry by awarding government grants to boost research into hybrid and battery-power technology.

In comments last week, president-elect Barack Obama suggested that an expansion of wind and solar power generation would be part of his stimulus plans. Obama also cited a plan being circulated by environmental groups that would offer government loans to help schools update their heating and cooling systems, creating quick construction jobs and stimulating demand for building materials.

“I think the fervor in which (the Obama team) is seeking suggestions right now tells me that this kind of spending is something they are very serious about,” said Carl Pope, executive director the Sierra Club.

Some countries in Europe, such as Germany, appear more concerned about overspending. That is at odds with the leadership in France, where Sarkozy has seen the crisis as an opportunity to boost the role of government.

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CIC DOES NOT DARE INVEST IN FINANCIAL COMPANIES

Posted by Gilmour Poincaree on December 3, 2008

Wednesday, December 3, 2008 – (1 hr 2 mins ago)

PUBLISHED BY ‘THE STANDARD’ (Hong Kong – China)

China Investment Corp.

Chairman Lou Jiwei said he would not dare invest the sovereign wealth funds money in foreign financial firms after losing US$6 billion on stakes in Morgan Stanley and Blackstone Group.

“I dont dare to invest in financial institutions now,” Lou said at a conference in Hong Kong. “The policies of the developed nations on these institutions are not clear. Until they are clear, I don’t dare to invest in them. What if they go bust? I will lose everything.”

CIC, with US$200 billion, last year invested US$5 billion for 9.9 percent of New York-based Morgan Stanley and US$3 billion in Blackstone, the world’s largest private-equity firm. Morgan Stanley has lost 77 percent of its market value since then while Blackstone, also based in New York, has shed 85 percent.

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HSBC DRIVES UP COST OF GETTING MORTGAGE (China)

Posted by Gilmour Poincaree on December 3, 2008

Tuesday, December 02, 2008

by Alfred Liu

PUBLISHED BY ‘THE STANDARD’ (Hong Kong – China)

Hongkong and Shanghai Banking Corp has announced it will raise mortgage rates drastically for new home buyers by 50 to 75 basis points.

New customers who take out a HK$1 million home loan will pay HK$5,000 to HK$7,500 more per year in interest as a result.

HSBC raised its mortgage rate, regardless of loan size, to between prime minus 1 percent and prime minus 1.5 percent – equivalent to 3.5 percent and 4 percent, on a new mortgage – with effect from yesterday.

The plan includes a cash rebate of 0.5 percent.

It has now cleared its original dividing range of HK$1.5 million loans and unified mortgage rates for loans of all sizes. The rate increase follows the same move by its peers, the bank said.

“Hongkong Bank may want to maintain its profitability at a reasonable level,” said Industrial and Commercial Bank of China (Asia) (0349) executive director Stanley Wong Yuen-fai.

“The net interest margin for the whole banking mortgage market is 2 percent now. Banks even had to pay interest rate differences when interbank lending rates were very high previously.”

The rate hike is expected to hit improved property market sentiment.

“I predict the transaction volume of secondary residential units will decrease 10 to 20 percent in December compared with November,” said Ricacorp Properties head of research Patrick Chow Moon-kit.

Hong Kong Property chief executive Fredy Wu Yat-fat said the impact would be limited as flat prices have been falling and he expects the move to accelerate home purchases before other banks raise their mortgage rates.

Property market sentiment improved after Sun Hung Kai Properties (0016) sold about 580 apartments at its two new projects, Peak One and La Grove, which were launched on Friday.

Major mortgage players, including Bank of China (Hong Kong) (2388), Hang Seng Bank (0011) and Standard Chartered Bank (Hong Kong), said they have no plans to increase mortgage rates.

Top player HSBC increased its share of the local mortgage market to 26.1 percent as of the end of October, up from 22.4 percent at the end of September, according to mortgage brokerage mReferral.

The brokerage’s chief economic analyst, Sharmaine Lau Yuen-yuen, said she sees the mortgage rate hike as a strategy and predicts more lenders may follow.

“I expect mortgage rates to fall to a level of prime minus 0 early next year,” she said.

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ARAB ECONOMIES TO GROW DESPITE SETBACKS

Posted by Gilmour Poincaree on December 2, 2008

December 1, 2008 at 9:10 AM EST

OXFORD ANALYTICA – Exclusive – PUBLISHED BY ‘THE GLOBE AND MAIL’ (Canada)

SUBJECT: The impact of the world economic downturn on Arab economies.

SIGNIFICANCE: In contrast to the severity of the downturn in other parts of the world, the Arab world appears likely to experience relatively moderate losses. However, certain countries may be particularly vulnerable.

ANALYSIS: The IMF’s latest downward revisions of growth rate projections for 2009 place Arab countries in third place at 5.3 per cent after China and India at 8.5 per cent and 6.5 per cent respectively, although World Bank figures are somewhat less optimistic. Positive growth prospects reflect two key factors:

Macroeconomic fundamentals are positive, in particular the prospects for sustained investment growth, which will be driven by accumulated oil revenues and continuing oil incomes.

Regional capital markets, which have been hit by the crisis, are among the smallest and least significant in emerging markets.

Investment. Buoyant investment activity is now and will continue to be supported by oil income and wealth: The current account surplus of oil economies is expected to double to some $132-billion (U.S.) in 2008 against $77-billion in 2007.

Arab sovereign wealth funds possess at least $1.53-trillion in assets, with considerably more in reserves and accumulated private wealth.

Despite the slashing of oil revenues due to the present fall in oil prices, accumulated assets are likely to make up the difference from a regional standpoint – although particular countries may suffer.

Intra-Arab foreign direct investment has been rising steadily, from $8.8-billion between 1985-1995, to nearly $17-billion between 1995-2002, to $77-billion between 2002-07, with $14-billion in 2007 alone: FDI accounts for 12 per cent of regional capital formation compared to 7.8 per cent in developing countries as a whole.

GCC investors are now investing around 25 per cent of their oil wealth in the region compared to 15 per cent in 2003.

In oil, gas and energy, $520-billion worth of projects are planned for 2009-2013, down from a projected $650-billion before the crisis; even if only $400-billion worth are financed, $8-billion to $10-billion a month of investment will take place.

The crisis in Europe and the United States will strengthen the need for geographic diversification, and will confirm intra-Arab investments as a key category in Arab portfolios.

Investors will likely diversify away from real estate and tourism into other sectors such as food, transport, and medical diagnostics.

There have been official promises to maintain intra-Arab capital and investment flows, although the use of resources in domestic bailouts may limit the fulfilment of such commitments.

Market losses. The four largest markets – Dubai, Egypt, Kuwait, and Saudi Arabia – have lost up to half of their value, mirroring heavy losses elsewhere. Another four markets – Abu Dhabi, Bahrain, Qatar, and Oman – registered relatively moderate losses of 20-40 per cent. All had fallen from historical highs in summer, 2008.

There are a number of channels of contagion from global financial markets:

Exits by non-Arab investors have most seriously affected the more open Arab stock markets, namely those of Egypt and the United Arab Emirates.

Exposure to the US prime and sub-prime markets has affected players in Kuwait, Qatar and the UAE.

A more significant channel is heightened fear and uncertainty about the unfolding global recession; the region’s markets, whose trends have been dominated by excitement and herd behaviour, joined the global panic.

Negative sentiment overwhelmed the effects of positive fundamentals, including the strong results of many listed corporations for the first half of 2008.

Mitigated impact. Yet there are good reasons to believe that the falls in Arab markets will be less enduring, and have less negative broader impact, than in markets elsewhere:

The fall in OECD financial markets is the most severe in decades; in contrast, wild swings in the region are common.

Arab stock markets are highly volatile, narrow and illiquid; only a small proportion of total capitalization is traded.

The dominance of financial institutions in market indices made their fall in the present crisis inevitable; financials constitute 56 per cent of the S&P’s Pan Arab index, compared to 16 per cent in the Latin America index and 36 per cent for Africa.

Remarkably, the four smallest markets – Beirut, Jordan, Morocco, and Tunis – retained gains, indicating that intra-Arab investments have constituted a successful portfolio diversification strategy.

Arab markets are still constructing operational and regulatory structures. Gaping holes remain in corporate governance rules and practices, and the culture of retail investors is still underdeveloped. In 2007-2008 a series of investigations targeted insider dealings and share manipulation. Fines were handed to listed firms, brokers, and investment companies in Jordan, Egypt, UAE, Saudi Arabia, and Oman. However, the relative unsophistication of markets and their lesser significance in the broader economies has shielded Arab countries from the worst effects of the financial crisis.

Slowdown. The downside risks are not to be underestimated in a deep and complex world crisis: Oil revenues will be dented by declining world demand, forcing oil-rich countries to engage in belt-tightening and possibly threatening FDI flows to other Arab countries.

The cost of finance, in terms of spreads, has already risen to all-time highs, and all types of capital raised are below 2007 levels.

Falls in exports will cause losses across the region; many once-booming industries such as petrochemicals and fertilizers are now faced with sliding markets.

Falls in tourism will hit players such as Morocco, Egypt, and Dubai; falls in remittances will hit North African countries.

Dubai’s fall is likely to be the sharpest, linked as it is to the bursting of an enormous real estate bubble; mortgage lending had quintupled in the last five years, and government debt is high at around $70-billion.

Egypt, which is poor and heavily indebted, is likely to be hit hard by declines in the stock market, oil and gas income, and Suez revenues; even a moderate downturn is likely to feed growing public discontent.

CONCLUSION: Losses on Arab stock markets have wiped out abnormally high returns, but not the prospects of solid positive returns. The region is finally drawing on what has long underpinned East Asian and European growth: domestic and intra-regional investment. Supported by ample reserves and SWF resources, this strength should help the region to weather a world recession. Growth prospects are therefore dented, but remain positive.

From the Oxford Analytica Daily Brief

Copyright 2008 – Oxford Analytica Ltd. All rights reserved.

Founded in 1975, Oxford Analytica’s 1,000+ analysts provide international organizations with monitoring, research and consultancy services that explore the strategic implications of policy, economic, financial, industry, trade and security developments around the world.

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ASIAN MARKETS MIXED ON OUTLOOK FOR CHINA, US

Posted by Gilmour Poincaree on December 1, 2008

1 Dec 2008, 1220 hrs IST, AGENCIES

PUBLISHED BY ‘THE ECONOMIC TIMES’ (India)

SEOUL, South Korea: Asian stock markets were mixed on Monday as investors digested signs that the U.S. holiday shopping season got off to a tepid start over the key Thanksgiving weekend.

While Japan’s market fell, stocks in Hong Kong and mainland China rose on expectations of further measures by the Chinese government to boost the economy after last month’s big interest rate cut and multibillion dollar stimulus package.

“These are the appetizers of a full meal, “said Winson Fong, managing director at SG Asset Management in Hong Kong, which overseas about $3 billion in equities in Asia, referring to those earlier measures. “It’s not the end.”

Hong Kong’s Hang Seng index was up 297 points, or 2.1 per cent, to 14,185.8, continuing its rally from last week, when it rose nearly 10 per cent. China’s Shanghai Composite index was up 0.4 per cent to 1,879.66.

India’s benchmark Sensex index also rose, climbing 2.4 per cent to 9,305.94, reflecting at least some investor confidence in the wake of the terrorist attacks in Mumbai, where the stock exchange is located, that left at least 174 people dead.

Stocks in Australia, Singapore and South Korea also fell. Early reports from the U.S. showed modest gains in retail sales on Black Friday, the traditional start of the American holiday shopping season, but business appeared to fall off during the remainder of the weekend, considered one of the most important of the year for U.S. retailers. Also, sales gains seemed to come at the expense of profits as companies slashed prices to lure shoppers.

‘We don’t know if it’s driven by sales or if U.S. consumers are getting their confidence back,’ said Fong.

Investors around the world are paying close attention to the weekend sales figures for clues on the strength of the American economy, a vital export market.

According to preliminary figures released Saturday by ShopperTrak RCT, a research firm that tracks total retail sales at more than 50,000 outlets, sales rose 3 per cent to $10.6 billion on Friday from the same day a year ago. A more complete sales picture of how the Thanksgiving shopping weekend fared won’t be known until Thursday when the nation’s retailers report November same-store sales, or sales at stores opened at least a year.

Stocks in Thailand rose, led by energy stocks, amid hopes that the country’s political crisis will be resolved soon. Anti-government protesters have occupied Bangkok’s two main airports for nearly a week, cutting off air freight, stranding tourists and causing millions of dollars in lost sales. The benchmark SET index was up 0.8 per cent at 405.09.

In Tokyo, the benchmark Nikkei 225 stock average lost 123.34 points, or 1.5 per cent, to 8,388.93, retreating after advancing 7.6 per cent last week. Investors sold exporters as the yen strengthened, which erodes exporters’ overseas earnings.

‘Despite a rise on Wall Street last Friday, sentiment was downbeat as investors were bracing for weak U.S. manufacturing data due out later in the day,’ said Kazuhiro Takahashi, an equity strategist at Daiwa Securities SMBC Co. Ltd., referring to the Institute for Supply Management’s report for November.

Wall Street advanced for a fifth straight session Friday, the first time the Dow Jone industrial average to accomplish that feat since July 2007. For the week, the Dow climbed 9.7 per cent for the week and the broader Standard & Poor’s 500 index jumped 12 per cent.

U.S. stock futures were down, suggesting Wall Street would open lower Monday. Dow futures were up 59 points, or 0.7 per cent, to 8,763, and S&P futures were up 6.8 points, or 0.8 per cent, to 888.5.

Oil prices fell to near $53 a barrel after OPEC declined to cut production at an informal meeting in Cairo on Saturday. Light, sweet crude for January delivery was down $1.13 to $53.30 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore.

In currencies, the dollar declined to 95.22 yen from 95.48 yen in New York late Friday. The euro was little changed at $1.2685.

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INÍCIO DAS OBRAS DO EDIFÍCIO MAIS ALTO DA CHINA – O projeto completa o bairro “super alto” e exibe espaço público sustentável

Posted by Gilmour Poincaree on November 30, 2008

28 de novembro de 2008 09:38

PUBLISHED BY ‘PR NEWSWIRE BRASIL’

XANGAI, China, 28 de novembro /PRNewswire-Asia/ – O Shanghai Tower, um edifício de 632 metros (2.074 pés) de altura projetado pela Gensler, empresa líder global em projetos de arquitetura, avança estratégias sustentáveis de projeto e oferece proeminência aos espaços públicos.

A Shanghai Tower Construction & Development Co., Ltd. é a empresa que está desenvolvendo o projeto. Os engenheiros estruturais da Thornton Tomasetti, os engenheiros mecânicos, elétricos e de encanamentos da Cosentini Associates, bem como o Architectural Design and Research Institute (Instituto de Design e Pesquisa em Arquitetura) da Tongji University como o Local Design Institute (Instituto Local de Design) prestarão apoio à Gensler. A construção está prevista para ser concluída em 2014.

O Shanghai Tower está localizado na zona comercial e financeira de Luijiazui, uma área de Xangai que há 18 anos era uma área de terra cultivada. O bairro está posicionado para se tornar o primeiro bairro “super alto” da China, quando o Shanghai Tower foi construído para concluir um trio de torres que inclui o Jin Mao Tower e o Shanghai World Financial Center. Juntos, estes três edifícios criarão um novo ícone na vista de Xangai. Enquanto o projeto do Jin Mao Tower presta uma homenagem ao passado da China e o projeto do SWFC significa o recente crescimento econômico da China, o projeto do Shanghai Tower é o sinal do futuro da China. “Esta torre é símbolo de uma nação cujo futuro está repleto de oportunidades ilimitadas”, declarou Qingwei Kong, presidente da Shanghai Tower Construction & Development Co., Ltd. “Com o Shanghai Tower comemoramos não apenas o sucesso econômico e a conexão cada vez maior da China à comunidade global, como também o compromisso da nossa empresa em desenvolver propriedades que demonstrem as realizações de projetos mais altos, nobres e distintos possíveis”.

O Shanghai Tower terá um espaço para escritórios de alta categoria, varejo, um hotel luxuoso e locais culturais. Os andares mais elevados terão o deck de observação ao ar livre mais alto do mundo. O edifício do pódio da torre contará com um local para varejo de alta categoria com um enorme espaço para eventos. As instalações subterrâneas incluem varejo, conexões ao metrô de Xangai e três andares de estacionamento. “Esperamos que o Shanghai Tower inspire novas idéias com relação ao quanto um edifício alto pode ser sustentável”, disse Art Gensler, FAIA, presidente do conselho da Gensler. “Unimos o perímetro da torre, de cima para baixo, aos espaços públicos e integramos um raciocínio estratégico ambiental em cada etapa. A torre é uma etapa que ganha vida através da presença das pessoas”.

Para mais informação, por favor, contatar:

Jasmine Chien Associada Sênior Ogilvy Public Relations Worldwide, Shanghai Tel.: +86-21-2405-1604 Email: jasmine.chien@ogilvy.com

FONTE Ogilvy Public Relations Worldwide, Xangai

BNED: NG

FONTE: PR NEWSWIRE LATIN AMERICA

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UNCERTAINTIES BEDEVIL PLANS TO KEEP WORLD TRADE FLOWING

Posted by Gilmour Poincaree on November 29, 2008

28/11/2008 1:00:00 AM

PUBLISHED BY ‘THE CANBERRA TIMES’ (Australia)

Trading nations around the world are saying the right things about preventing a surge of protectionism that would choke Pakistani investors monitor the index at Karachi Stock Exchangeglobal trade when it needs to be boosted to help pull economies out of their slump. But amid fears of a deepening recession stretching beyond 2009, will governments act in conformity with their promises?

Leaders of the 21 economies in APEC, the Asia Pacific Economic Cooperation forum, hit the right notes when they issued a statement during their summit in Lima, Peru, last weekend. To counter calls to shield countries and industries from competition by restricting imports, the APEC leaders, who oversee half the world’s economic activity, said that in the next 12 months they would not raise new barriers to investment or to trade in goods and services, impose new export restrictions, or implement measures inconsistent with the World Trade Organisation, including those that stimulate exports.

This was an endorsement of the free trade section of a declaration issued by the summit of the Group of 20 advanced and emerging economies in Washington on November 15. The G20 accounts for about 90 per cent of global economic activity and 80 per cent of trade. Australia, Canada, China, Indonesia, Japan, Mexico, Russia, South Korea and the US are members of both APEC and the G20. So the combined words of leaders of these two groups should carry weight.

Yet two days after Russia’s President, Dmitry Medvedev, put his name to the G20 declaration, his Deputy Finance Minister, Dmitry Pankin, announced that Moscow would raise tariffs on imported cars to protect Russian producers.

Russia has also announced a general review of trade agreements that may lead to a further increase in import duties and a cut in quotas for allowable imports. Russia says these measures were planned in advance of the G20 meeting. ”No one said that anyone should scrap existing barriers or go back on existing decisions,” Mr Pankin explained.

China, which is anxious to help exporters hit by falling demand in the US and Europe, took a somewhat different tack. Three days before the G20 summit it raised export tax rebates paid on more than 3700 types of goods almost 28 per cent of the total sold overseas. Yet China has a huge trade surplus and has been criticised by economists who argue that the export sector receives too much favorable treatment from the government, which should instead stimulate domestic demand.

So far there has been no reneging on APEC and G20 free trade pledges. But these are early days. It will take resolute national leadership and continuing international consultation to resist protectionism as economic woes get worse and cries for help by affected industries become louder.

Fredrik Erixon, director of the European Centre for International Political Economy, a free-trade think-tank in Brussels, is concerned that the APEC and G20 pledges still leave scope for countries to impose anti-dumping duties on imports deemed to be below the cost of production, and to provide emergency state aid to politically sensitive industries. Indeed, he says that such measures are supplanting permanent import tariffs as the main method of protectionism and were not covered by either the APEC or G20 statements.

Still, APEC went somewhat further than the G20 in supporting an early resumption of WTO negotiations to liberalise international trade. These negotiations collapsed last July after seven years because of disagreements between the US and India, backed by China, over the extent to which agriculture in developing countries should be shielded from foreign competition.

China’s President Hu Jintao said in Lima that Beijing believed reviving the WTO talks and bringing them to a successful conclusion should be a top priority. APEC leaders directed their trade ministers to meet in Geneva next month to try to advance the WTO negotiations. Prime Minister Kevin Rudd said a successful outcome would be a ”huge shot in the arm for the global economy” and to confidence.

If the world trade deal stalls again, there is another option for Pacific Rim nations. They could forge a trans-Pacific free trade agreement. The Bush Administration in the US, Australia and Peru announced recently that they would join Brunei, China, New Zealand and Singapore in talks to try to build the core of a free trade area of the Asia-Pacific. The first round of negotiations will be held in March in Singapore.

However, the Obama factor is looming over all these issues. Barack Obama, the US President-elect who takes office in January, outlined a potentially protectionist agenda during the election campaign. He said he would renegotiate the North American Free Trade Agreement with Canada and Mexico and a pending bilateral deal with South Korea, rebalance economic ties with China to reduce the huge US trade deficit, challenge unfair trade in the WTO and elsewhere, and discourage US companies from outsourcing work to countries such as India and the Philippines.

If Obama, backed by a Democratic majority in Congress, takes up these cudgels, the prospects of success in both the WTO and trans-Pacific trade liberalisation negotiations will recede while the likelihood of a slide into wider tit-for-tat protectionism will increase.

The International Chamber of Commerce pointed out recently that parallels are being drawn between the financial and economic crisis of today and the Great Depression of the 1930s. ”Almost 80 years ago, many nations reacted to the Great Depression by raising border tariffs and ended up making matters worse for themselves included. Beggar-my-neighbour protectionism ended up beggaring everyone. That is one of the most unambiguous lessons of the 1930s,” the chamber said.

Obama and the leaders of other major economies and trading nations should bear this in mind as they consider policies for 2009 and beyond.

The writer, a former Asia editor of the International Herald Tribune, is a visiting senior research fellow at the Institute of South-East Asian Studies in Singapore.

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CHINA SIGNS GREEK PORT DEAL

Posted by Gilmour Poincaree on November 27, 2008

Nov 26, 2008 6:38 AM

Chinese President Hu Jintao vowed to increase maritime investment in GREEK PROTESTERS - ReutersGreece after the signing of a 3.4 billion euro deal to run the country’s largest port, despite protests from dockers.

Hu and Greek Prime Minister Costas Karamanlis witnessed the signing of the contract by state-controlled China Ocean Shipping Company (Cosco) to operate the container port of Piraeus (OLP) for 35 years, part of Greece’s privatisation agenda.

“Our priorities are to widen our economic cooperation … to strengthen maritime cooperation and investments,” the Chinese leader told journalists, during a three-day state visit.

Greece controls one fifth of the world’s merchant fleet. Its ship owners have profited from a huge boom in demand for iron ore, oil and grain from China in recent years, and they are the largest clients for Chinese shipbuilding yards.

Until a collapse in freight rates earlier this year, the boom helped Greece’s economy grow by 4% a year for a decade.

“The agreement between OLP and Cosco signals a new important chapter,” said Greek Prime Minister Costas Karamanlis. “Greek ports can become transit points for Chinese goods to the EU and southeast Europe, as well as the Mediterranean.”

Several hundred dockworkers, carrying a banner reading “Cosco Go Home” and waving black flags, marched past the Greek parliament before the signing, saying the deal would mean job losses and tougher labour conditions.

“They must not sell the ports. OLP is a profitable business … it doesn’t make sense,” said Manolis Gemeliaris, 54, an engineer at the port. “When Cosco comes, we will lose our jobs.”

The Chinese company has insisted that it will create 1,000 new jobs at the port for Greek workers and more than double its capacity by 2015.

Hu, who toured the ancient temples of the Acropolis in central Athens with his wife, has insisted during his visit that China’s economy is still experiencing “significant growth” and he would cooperate with international efforts to tackle the global economic downturn.

However, the World Bank said in a report published Tuesday that China’s economic growth would slow to 7.5% next year, its lowest rate since 1990, despite a 4 trillion yuan ($US586 billion) stimulus package.

Despite the opposition of Greece’s restive unions, the conservative government is pressing ahead with privatisations and has put loss-making Olympic Airlines on the block.

The ruling New Democracy party, whose parliamentary majority was cut to one seat this month by the expulsion of a rebel deputy, has fallen behind in opinion polls for the first time since winning power in 2004 amid discontent at its economic policies. Many analysts expect an early election next year, ahead of a 2011 deadline.

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AFRICA’S CHINESE CONNECTION AND THE DOWNTURN (South Africa)

Posted by Gilmour Poincaree on November 27, 2008

Posted to the web on: 27 November 2008

by Greg Mills – (*)

YOU know that it’s a globalised world when the man in front of you on the flight from Hong Kong THE GREAT WALLto Beijing starts a conversation, across several rows of seats, about the fast-bowling merits of Dale Steyn versus those of Morne Morkel — in Afrikaans.

Yet this very phenomenon — of an increasingly integrated world of trade, technology, skills and capital — is not only seen to be under threat due to the global economic crisis, but in the eyes of some is the cause of the crisis.

But that’s not how China sees things, in spite of some loss of export markets because of the credit crunch.

The formula for global economic growth has, over the past two decades , in simple terms, comprised western consumption of cheap Asian goods fuelled by access to cheap credit produced in turn by high Asian savings.

The cheapness of Asian goods relates to their productivity, which is related once again to the number of workers that are joining the global economy — 20-million annually from China’s rural to urban areas, at the last estimate.

Once in the cities they produce (up to three times) more and save more.

The downturn in demand for manufactured goods is likely to hit China hard — just as it has depressed commodity prices, the third leg of the western consumption-Asian thrift formula.

The supply of African oil and minerals has driven up continental growth rates, of course, and radically changed the level of external interest in African affairs.

China has been in part responsible for “globalising” Africa.

In doing so, it has certainly shown African prospects in a different light to the one shone by western firms and governments.

This relationship is represented in a plethora of statistics: In 1980, China’s share of world trade was less than 1%. By 2003 it had risen to 6%, where exports make up one-third of China’s gross domestic product. In 1980 China’s exports were worth less than $20bn. Last year, they exceeded $1-trillion. Such trade largely involves China’s processing of raw materials and the assembly of parts.

China’s trade with Africa has dramatically increased from $11bn in 2000 to $56bn in 2006 and $73bn last year, much of the increase due to oil.

Beijing has an African trade target of $100bn by 2010.

The second-largest global energy importer behind the US, China imported more than 6-million barrels of oil per day in 2006. This figure is expected to double in the next 15 years.

With only half of its energy needs now supplied by domestic sources, Angola has become China’s largest suppler of oil, while Sudan and Nigeria are important investment partners.

China today receives about one-third of its oil imports from Africa, comprising just less than 10% of the continent’s total oil exports. By comparison, the US purchased one-third of a percent of Africa’s total oil exports in 2006.

By 2006, more than 800 Chinese state-owned enterprises were active in Africa, with Chinese firms investing more than $6bn in 900 projects. The following year, China invested $4,5bn in African infrastructure projects alone.

Yet current figures put the downturn in manufacturing order books by more than 50% worldwide. China’s third-quarter growth has dipped to 9% from 12% last year. A loss of markets and growth, potentially compounded by rising labour costs depressing productivity, is a spectre that no Chinese politician fancies.

Beijing believes it will cope with the credit crisis by focusing on substituting its internal market for those lost overseas. Hence the announcement of a $586bn infrastructure stimulus package.

For example, the Chinese government has committed, in the short-term, an extra R1-trillion to railway infrastructure. That will buy a lot of steel, and much else, at current prices.

For this reason, for the moment, China aims to continue with its strategy to secure raw materials from Africa at source, in so doing managing the prospect of input price inflation.

This offers further prospects to African businesses with an appetite for partnership in exploiting the long-term trend of increasing global flows of capital to emerging markets.

But despite its strategy to beef up internal demand, China retains a big stake in globalisation.

Without sizeable external markets it cannot provide for its citizens, with all the economic fallout and political instability that would denote.

For experience teaches that large numbers of job seekers cannot be absorbed by government, or to satisfy local demand. For China, as in Africa, if they cannot find a place for themselves in the global economy, many will not be able to find a place at all.

(*) – Dr Mills heads the Brenthurst Foundation and has been researching in China.

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CHINA SHARES UP AS ROAD-BUILDING PLANS REVEALED

Posted by Gilmour Poincaree on November 27, 2008

Published: Nov 26, 2008 03:44 AM

The Associated Press

SHANGHAI, China – China’s shares edged up Wednesday for the first time in five sessions, led by In July 7, 2008 photo, an investor looks at a stock price board at a private securities' company in Shanghai, China. Chinese shares fell sharply Friday, Aug. 8, 2008, on heavy selling of airlines and other market heavyweights, as investors and analysts puzzled over why expectations of a rally linked to the Beijing Olympic games never materialized. The benchmark Shanghai Composite Index sank 4.5 percent, or 122.81 points, to 2,605.16. The Shenzhen Composite Index of China's smaller, second market dropped 5.6 percent to 74transportation and steel stocks after the government announced road-building plans under a stimulus package.

The benchmark Shanghai Composite Index ended up 0.5 percent, or 9.17 points, to close at 1897.88. The Shenzhen Composite Index for China’s smaller second exchange rose 0.6 percent to 535 points.

Trading was thin, reflecting the market’s search for direction after a rally – prompted by Beijing’s Nov. 9 announcement of its stimulus package – faded, analysts said.

“If the policies become clearer, the euphoria could continue,” said Huang Xiangbin, an analyst for Cinda Securities.

Stocks in toll road operators and steel makers rose after the Ministry of Transport said it would spend 1 trillion yuan ($146 billion) on building highways and rural roads as part of the stimulus.

The package is meant to help shield China from the global downturn by pumping money into the economy through higher spending on construction, tax cuts and aid to the poor.

Guangxi Wuzhou Communications Ltd. advanced by the daily limit of 10 percent to 4.62 yuan, while Jiangxi Ganyue Expressway Co. jumped 2.9 percent to 8.15 yuan.

Steel stocks rose after iron ore supplier BHP Billiton Ltd. dropped its bid for rival Rio Tinto Group, which eased concerns that a tie-up would give the mining group too much leverage to raise prices.

Baoshan Iron & Steel Ltd., China’s biggest steel maker, gained 3.9 percent to 5.02 yuan. Anshan Iron and Steel Group rose 6 percent to 7.1 yuan.

Real estate stocks rose on expectations of a possible interest rate cut, despite comments by a central bank deputy governor who said the current level is appropriate.

China Vanke Ltd., the country’s biggest developer, climbed 3.7 percent to 6.8 yuan, and rival Poly Real Estate Group rose 2.6 percent to 17.38 yuan.

In currency markets, China’s yuan weakened to 6.8282 to the U.S. dollar in over-the-counter trading around 0800 GMT, down from Tuesday’s close of 6.8220.

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FOR A BETTER FINANCIAL ORDER – Chinese leaders and scholars suggest reforms to strengthen the international financial system

Posted by Gilmour Poincaree on November 26, 2008

November-26-2008 NO. 48 NOV. 27, 2008

by Ding Ying

As the international financial crisis plunges many countries into economic turmoil, China’s relatively stable economic growth is reassuring to the international community.

As a result, the world is paying more and more attention to China’s opinions about the ongoing crisis and possible solutions. Chinese leaders and economists recently made a series of suggestions for reforming the current international financial system.

China’s efforts

Chinese President Hu Jintao participated in the Group of 20 (G-20) Summit on Financial Markets and the World Economy held on November 15 in Washington, D.C., where he delivered a speech calling for international cooperation to get through this “difficult moment.”

In his speech, Hu clearly stated the Chinese stance on international financial reform. “Reform of the international financial system should aim at establishing a new international financial order that is fair, just, inclusive and orderly and fostering an institutional environment conducive to sound global economic development,” he said.

The Chinese Government has taken many measures to safeguard economic development and financial stability. After the crisis began, China made timely adjustments to its policies and strengthened macroeconomic regulation, Hu said. These adjustments included lowering the bank required reserve ratio, lowering interest rates and easing corporate tax burdens. Hu also promised to play a “constructive role” in restoring the international financial system and suggested four key reforms: increased international cooperation in financial supervision, reform of international financial organizations, increased regional financial cooperation and diversification of the international monetary system.

As the world’s most populous developing country, China would make an important contribution to international financial stability and world economic growth simply by maintaining steady economic growth, the president said. Several days before the summit, China announced a 4-trillion-yuan ($586 billion) economic stimulus plan. Observers believe that the plan, which concentrates on stimulating domestic consumption in China, may restore confidence in world economic development.

In a November 16 Xinhua report, Chinese Foreign Minister Yang Jiechi outlined five achievements that came from Hu’s participation in the financial summit. First, he met with other G-20 leaders to discuss the root causes of the financial crisis and possible solutions and reforms, which they described in a joint statement. Second, Hu introduced measures the Chinese Government has taken to safeguard economic growth and financial stability. Third, he helped guide the direction of international financial reform. Fourth, Hu called for international efforts to help developing countries. Finally, Hu promoted China’s bilateral relationships with several countries by meeting with their leaders during the summit.

Cooperation, not competition

Chinese economists also had opinions on the current world economic situation. They provided suggestions for reforming the international financial system and maintaining economic and financial stability in China.

Zhang Ming, a researcher from the Institute of World Economics and Politics, Chinese Academy of Social Sciences, said in World Affairs on November 16 that there were resemblances between the current international economic and financial situation and the Great Depression. The U.S. dollar has been greatly weakened by the subprime mortgage crisis, but the euro is struggling as well. “The supreme financial structure is on the edge of collapse,” he said.

The countries affected by the crisis have two options, Zhang said. One is to unite and cope with the crisis together by building new international financial and monetary systems, which could cushion the U.S. dollar’s fall. The other is for each country to look out for itself, which might cause discord and competition among the largest economies and lead the dollar system to collapse completely.

“The latter way further undermines the global economic and financial order. Then a new crisis, or even wars, will break out,” said Zhang, arguing the world must join hands to deal with the current financial crisis.

Regarding international monetary reform, independent economist Xiang Songzuo said in Elite Reference on November 16 that there is little possibility the International Monetary Fund will be recast as the world’s central bank. Instead, the crisis might cause new regional currencies to emerge. “Influential currencies, like the euro, yen and the renminbi, can play an important role in stabilizing regional economies,” he said.

Su Jingxiang from the Center for Globalization Studies, China Institutes of Contemporary International Relations, said in People’s Daily that since the financial sector is the weak point of the Asian economy, Asian countries must enhance both regional and global cooperation. He said that based on the foreign reserves held by China, Japan, South Korea and ASEAN members, Asia could become a leader in international financial fields. “Only through strengthened cooperation can China protect its interests well and perform its function better in the international cooperative system,” Su said.

“China’s top priority is to deal with the crisis with caution and run its own business well,” said Xiang Lanxin, an observer of world affairs, in Global Times. Xiang urged China to promote domestic demand over exports in its response to the crisis. Massive exports could push other countries into trade protectionism and make China a target of international criticism.

Highlights of the G-20 Financial Summit

Leaders attending the G-20 financial summit agreed on an action plan to combat the current financial crisis on November 15 in Washington, D.C. After discussing the reasons behind the current crisis, the leaders issued a statement pledging to “enhance our cooperation and work together to restore global growth and achieve needed reforms in the world’s financial systems.”

The leaders agreed that the current financial system has vulnerabilities such as weak underwriting standards, unsound risk management practices, increasingly complex and opaque financial products, and consequent excessive leverage.

Further, inconsistent and insufficiently coordinated macroeconomic policies, inadequate structural reforms and unsustainable global macroeconomic outcomes are the combined elements that resulted in the current financial crisis.

The leaders stressed that free market principles, including the rule of law, respect for private property, open trade and investment, competitive markets, and efficient, well-regulated financial systems, are essential to economic growth.

They vowed to take “strong and significant actions” to reform current financial systems, stimulate their economies, provide liquidity, strengthen the capital of financial institutions, protect savings and deposits, address regulatory deficiencies, unfreeze credit markets and ensure that international financial institutions can provide critical support to the global economy.

The plan is based on five principles: strengthening transparency and accountability, enhancing sound regulation, promoting integrity in financial markets, reinforcing international cooperation and reforming international financial institutions. The principles have been broken down into immediate and medium-term actions to be taken by March 31, 2009.

The leaders also agreed to meet again by April 30, 2009, to review the plan’s implementation.

(Source: Xinhua News Agency)

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CHINA TO INVEST $18 BLN IN 2ND RAILWAY FOR XINJIANG

Posted by Gilmour Poincaree on November 26, 2008

UPDATED: November-26-2008

Construction is expected to begin next year, with investment from the central and local governments and other sources

China will spend 120 billion yuan (17.6 billion U.S. dollars) to build a second railway linking the northwestern Xinjiang Uygur Autonomous Region with inland cities, according to information from a meeting of the Xinjiang committee of the Communist Party of China on Tuesday.

Construction is expected to begin next year, with investment from the central and local governments and other sources.

The new line will be parallel to the existing Lanxin Railway linking Gansu, Qinghai and Xinjiang. Only passenger trains will run on it.

When the new line is completed, the old Lanxin railway, running1,892 kilometers, will be used by cargo trains only.

Xinjiang, a vast region in China’s far west, boasts rich oil, coal and other resources and is the country’s major cotton producer. Lanxin is currently the only railway linking Xinjiang and other parts of China.

Railway officials said the new rail line will break the bottleneck of transport for Xinjiang in its economic development, ease the pressure on the Euro-Asian continental bridge and facilitate exchanges between China and its west neighbors.

Another 100 billion yuan would be injected to improve Xinjiang’s highway network between 2009 and 2013, according to information from the meeting.

(Xinhua News Agency)

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