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Showing posts with label China. Show all posts
Showing posts with label China. Show all posts

7/23/14

Britain: Corporate Bribery Probe: Glaxo link to probe

Drugs giant GlaxoSmithKline publishes second quarter results on Wednesday as a tangled web of allegations linked to a bribery probe by Chinese authorities continues to hang over the UK-based company.

It comes shortly after a British investigator and his American wife who were hired by the company learned they were to face trial in the country charged with illegally obtaining and selling private information.

The arrest of Peter Humphrey and Yingzeng Yu last year coincided with a Chinese probe into allegations that Glaxo staff had funnelled hundreds of millions of pounds through travel agencies to bribe doctors and health officials.

The couple's firm ChinaWhys had been asked to look into the origin of a sex tape involving Glaxo's China manager Mark Reilly, who has himself been accused by Chinese authorities in relation to the bribery case.

Glaxo has said it asked the investigators to look into a "serious breach of privacy and security" relating to Mr Reilly but that the firm was not hired "to investigate the substance of allegations of misconduct" made by a whistleblower.

In May, the pharmaceuticals firm disclosed that its commercial practices had come under "formal criminal investigation" by Britain's Serious Fraud Office.

Sheridan Adams, investment research manager at The Share Centre, said: "Although Chinese revenues only account for less than 5% of the global total, negative press coverage will not be welcomed and investors may want to hear from management on the matter."

Glaxo's second quarter update is the first since the takeover frenzy over US rival Pfizer's ultimately unsuccessful bid to swallow up Britain's AstraZeneca for £69 million amid a public outcry.

The merger spotlight in the sector has since fallen on Hampshire-based Shire and its American suitor AbbVie.
Glaxo has kept out of any speculation around such deals, after unveiling a complex three-part transaction with Novartis in May.

It will see the two firms create a £6.5 billion consumer healthcare powerhouse from its Aquafresh and Beechams together with antiseptic range Savlon and cough and cold brand Tixylix from Novartis.

The deal also saw Glaxo sell its oncology portfolio from Novartis and buy the Swiss firm's vaccines business.

Read more: Glaxo link to probe | Herald Scotland

Industrial Espionage: German businesses face rising threat of industrial espionage

Every year, industrial espionage costs German businesses around 11.8 billion euros ($16 billion), according to a survey released Monday by the German security firm Corporate Trust.

Every second company in Germany has faced attacks - whether successful or not - with more than three-quarters of those surveyed registering financial losses as a result.

Corporate Trust said the survey reflected answers from 6,767 companies, some 40 percent of which estimated the damage from espionage had cost them anywhere from 10,000 euros to 100,000 euros.

Twelve percent said they lost more than 100,000 euros, and 4.5 percent said they lost more than 1 million euros.

Read more: German businesses face rising threat of industrial espionage | Business | DW.DE | 21.07.2014

7/14/14

BRICS nations launch new development bank at summit in Brazil

A new international development bank and multi-billion emergency lending pool are set to be launched by Brazil, Russia, India, China and South Africa. The move comes at a summit meeting of BRICS leaders in Brazil.

The "New Development Bank" (NDB) is intended to compete with the World Bank and its private lending arm, the International Finance Corporation (IFC), by making it easier and quicker for developing countries to gain access to large-scale financing for infrastructure projects.

The BRICS will also set up a $100 billion (73.5 billion euros) joint US dollar currency reserve pool called the Contingent Reserve Arrangement (CRA), in order to provide emergency cash to BRICS countries faced with short-term currency crises or balance-of-payments problems, Russian Finance Minister Anton Siluanov has told reporters in Moscow.

Read more: BRICS nations launch new development bank | Business | DW.DE | 14.07.2014

7/7/14

Organic Foods: Food Labelled 'Organic' Is No Guarantee of Safety—Shocking Levels of Heavy Metals in Imported Food Highlight the Danger

Heavy metal pollution makes no distinction between how crops are grown. Irrespective of whether farming practices are organic or conventional practices are used, if the likes of cadmium, arsenic, lead, nickel and mercury are in the soil, water or air they can contaminate food and poison the people who consume it.

With enough exposure, heavy metals can build up in the body, causing chronic problems in the skin, intestine, nervous system, kidneys, liver, and brain. Some heavy metals occur naturally in soil, but rarely at toxic levels, while human activities like mining, manufacturing and the use of synthetic materials like paint, and even some agricultural chemicals, can release heavy metals into the air and water, and from there they find their way to the soil. And once in the soil, heavy metals are virtually impossible to remove.

China acknowledged last April that a staggering one-fifth of its arable land is seriously polluted with heavy metals, thanks to decades of aggressive industrial development. China’s Environmental Protection Ministry looked at data sampled between 2006 and 2013 and described the situation as “not optimistic.” The most commonly found heavy metals were cadmium, nickel and arsenic. The revelation came after months of speculation about the report, which at one point was not going to be released as the results were considered to be a “ State Secret.”

Read more: Food Labelled 'Organic' Is No Guarantee of Safety—Shocking Levels of Heavy Metals in Imported Food Highlight the Danger | Alternet

7/4/14

USA: This Fourth Of July, Stop To Thank Chinese Alchemists - by Alex Knap

When the Continental Congress in 1776 passed its motion for independence from Great Britain, John Adams wrote to his wife that the day should be “solemnized with Pomp and Parade, with Shews, Games, Sports, Guns, Bells, Bonfires and Illuminations from one End of this Continent to the other from this Time forward forever more.”

In the succeeding years, Adams’ prediction bore fruit (though he thought the date to be celebrated would be July 2, the day of the vote, not July 4, the date on the Declaration.) And one of the biggest parts of our Independence Day celebrations is the “Illuminations” – also known as fireworks.

But where do fireworks come from in the first place? The answer lies in Chinese alchemy.

Well, actually, I’m getting a little ahead of myself. The concept of fireworks predates what we think of as fireworks – burning chemicals, rockets, etc. The practice of making fireworks, based on the accounts we have, dates back to the second century B.C.E. in China, when people would burn bamboo to create explosions. (Try it yourself, if your local law allows it. The air pockets in the bamboo create satisfying booms as the bamboo burns.)

But of course, what really made fireworks what we know and love today is gunpowder. Gunpowder was discovered somewhat inadvertently by Chinese alchemists, who were trying to develop an elixir of immortality.

If you’re not aware, there are three primary components to gunpowder: saltpeter (potassium nitrate), sulfur, and charcoal.

Chinese alchemists have a long tradition of working with all three of these chemicals. Saltpeter is relatively uncommon in Europe, because it’s more likely to form at higher temperatures. But it’s abundant in China, and records indicate that alchemists were able to determine whether they’d found saltpeter by burning it back in the 3rd century C.E. (Saltpeter turns a bright purple when you burn it, thanks to the potassium.) Saltpeter had been used for centuries prior to that, with its first mentions coming in the second century B.C.E., but it was probably in use in the 4th century B.C.E. or earlier.

Read more: This Fourth Of July, Stop To Thank Chinese Alchemists - Forbes

7/1/14

Can Russia, India, and China unite to shift geopolitical gravity? - Surbhi Jain

China’s current daily gas demand is around 16 billion cubic feet (or bcf). Imports account for 31.6% of China’s total consumption.

China is the world’s largest energy consumer and Russia is the world’s largest energy supplier. In the past, both countries have entered into a number of deals that have proved advantageous to both sides—considering their relationship in terms of being the largest consumer and producer of energy, respectively, and the fact that they share a border.

With China’s rapid economic growth in recent years being largely fueled by oil from the middle-eastern nations, China has been eager to diversify its energy sources, both in terms of geography and commodity.

Getting its gas supplies from Russia, with which its shares its border, would definitely bode well for China.

The current Gazprom (OGZPY)-China National Petroleum Corporation (or CNPC) deal is as important for Russia as it is for China. Europe has been the primary gas consumer market for Russia.

Having strained its relations with Europe in the recent months over its tensions with Ukraine, Russia is now eyeing the east where it intends to send a third of its gas exports by 2035.

If the European Union (or EU) stops purchasing gas from Russia, China would prove to be a bigger consumer of gas than the whole of the EU.

Read more: Can Russia, India, and China unite to shift geopolitical gravity? » Market Realist

6/10/14

Can Russia, India, and China unite to shift geopolitical gravity?

China is the world’s largest energy consumer and Russia is the world’s largest energy supplier. In the past, both countries have entered into a number of deals that have proved advantageous to both sides—considering their relationship in terms of being the largest consumer and producer of energy, respectively, and the fact that they share a border.

With China’s rapid economic growth in recent years being largely fueled by oil from the middle-eastern nations, China has been eager to diversify its energy sources, both in terms of geography and commodity. 

Getting its gas supplies from Russia, with which its shares its border, would definitely bode well for China.

The current Gazprom (OGZPY)-China National Petroleum Corporation (or CNPC) deal is as important for Russia as it is for China. Europe has been the primary gas consumer market for Russia. Having strained its relations with Europe in the recent months over its tensions with Ukraine, Russia is now eyeing the east where it intends to send a third of its gas exports by 2035.

If the European Union (or EU) stops purchasing gas from Russia, China would prove to be a bigger consumer of gas than the whole of the EU.

The deal will help the Russian gas giant Gazprom diversify its revenue sources. In 2013, gas sales to Europe and Turkey accounted for 32% of Gazprom’s total revenue. Europe continues to look for alternative sources to meet its energy needs, while the shale boom in the U.S. is changing the dynamics of the global energy market. Consequently, it’s become important for Gazprom to cut its dependence on Europe. China, Japan, and India could be crucial markets for the company as it looks to diversify.

Exchange-traded funds (or ETFs) like the Market Vectors Russia ETF (RSX) which has 8.63% of its holdings in Gazprom, and the WisdomTree Emerging Markets Equity Income Fund (DEM) which is invested 5.65% in Gazprom, seek to take advantage of the company’s growth trajectory.

Read more: Can Russia, India, and China unite to shift geopolitical gravity? - Yahoo Finance

China - Online spying: 2nd China Army Unit Implicated in Online Spying - by Nicole Perlroth

The email attachment looked like a brochure for a yoga studio in Toulouse, France, the center of the European aerospace industry. But once it was opened, it allowed hackers to sidestep their victim’s network security and steal closely guarded satellite technology.

The fake yoga brochure was one of many clever come-ons used by a stealth Chinese military unit for hacking, said researchers at CrowdStrike, an Irvine, Calif., security company. Their targets were the networks of European, American and Japanese government entities, military contractors and research companies in the space and satellite industry, systematically broken into for seven years.

Just weeks after the Justice Department indicted five members of the Chinese army, accusing them of online attacks on United States corporations, a new report from CrowdStrike, released on Monday, offers more evidence of the breadth and ambition of China’s campaign to steal trade and military secrets from foreign victims.

Read more: 2nd China Army Unit Implicated in Online Spying - NYTimes.com

6/9/14

Global Finance: Russia-China to create its own Credit Agency

Russia and China have agreed to set up a joint rating agency as Moscow’s stand-off with the US over Ukraine has made it more eager to establish institutions that would reduce its dependence on the US and Europe.

“In the beginning, the agency will assess Russian-Chinese investment projects with a view to attracting of [investors from] a number of Asian countries,” Anton Siluanov, Russia’s finance minister, said in Beijing, according to his ministry. “Gradually, based on the progress and authority of such an agency, we believe it will rise to a level where its opinions will attract other countries.”

The finance ministry did not give details on the timeframe and detailed conditions for the establishment of the agency, but people familiar with the plans said it was likely to involve Chinese rating agency Dagong and a state-backed institution from Russia.

The Brics group of large developing countries – Brazil, Russia, India, China and South Africa – has long discussed plans to set up its own rating agency, along with a Brics bank. Member countries complain that globally dominant agencies such as S&P, Moody’s and Fitch focus on developed countries and fail to assess developing economies fairly.

While earlier attempts at challenging the dominant US players have been slow to get off the ground, observers in Russia said they were optimistic the planned Russian-Chinese rating agency could win backing and be broadened into a Brics project at the group’s summit in Brazil next month.

“The recent events around Russia and Ukraine have had an acceleration effect, as sanctions have encouraged plans in Russia to make itself less dependent on the US and the West in general,” said Chris Weafer, a partner at Moscow-based MacroAdvisory.

After the US slapped visa bans and asset freezes on Russian politicians and tycoons in March, Igor Shuvalov, Russia’s deputy prime minister, said the biggest damage did not come from the targeted sanctions directly, but from “hidden” measures such as pressure from the US on investment funds and rating agencies that would influence their views and actions on Russia.

When S&P lowered Russia’s sovereign rating to one notch above junk status in April, less than two months after Russia’s annexation of Crimea from Ukraine, Moscow dismissed the step as politically motivated.

The joint Moscow-Beijing move comes amid a flurry of initiatives to deepen bilateral trade and investment ties, which the government of President Vladimir Putin has complained have remained far behind their potential.

In a signal of the political will to strengthen ties with China, Mr Putin last month presided over the signing of a $400bn 30-year gas supply contract over which Russia’s state gas firm Gazprom and China’s CNPC had haggled for more than a decade. During his visit to China, the two sides also signed about 50 other accords.

Read more: MINA Breaking News - Russia-China to create its own Credit Agency

6/5/14

Democracy: China lodges protest with U.S. over Tiananmen remarks

China has lodged a diplomatic protest over U.S. remarks on the 25th anniversary of the brutal Tiananmen Square crackdown, issuing a sterner rejection of Washington’s call for it to account for those killed in pro-democracy protests.

Tens of thousands of people held a candlelight vigil in Hong Kong on Wednesday to mark the anniversary of the crackdown, while mainland China authorities sought to whitewash the 1989 event.

The White House had honoured those who gave their lives in the action to crush the protests and said in a statement it would always speak out in support of the fundamental rights that the protesters sought.

Foreign Ministry spokesman Hong Lei said China was “strongly dissatisfied” and “firmly opposed” to the U.S. statement, the official Xinhua news agency said in an English-language report late on Wednesday, adding that it had “lodged solemn representations” with Washington.

“The U.S. statement on that incident shows a total disregard of fact,” Hong said. “It blames the Chinese government for no reason, gravely interferes in China’s internal affairs and violates the basic norms guiding international relations.”

 Read more: China lodges protest with U.S. over Tiananmen remarks - The Globe and Mail

5/28/14

US Foreign Policy-A New Intelligent Approach ? : Obama: "Being The Best Hammer Doesn't Mean Every Problem Is A Nail" - by Mark Lander

'Not every problem is a nail'
President Obama on Wednesday May 28 tried to regain his statesman’s mantle, telling graduating cadets here that the nation they were being commissioned to serve would still lead the world and would not stumble into military misadventures overseas.

Speaking under leaden, chilly skies, Mr. Obama delivered the commencement address at the United States Military Academy.

“America must always lead on the world stage,” he said. “But U.S. military action cannot be the only – or even primary – component of our leadership in every instance. Just because we have the best hammer does not mean that every problem is a nail.”

Under pressure from critics who say the United States has been rudderless amid a cascade of crises, the president said that those who “suggest that America is in decline, or has seen its global leadership slip away – are either misreading history or engaged in partisan politics.”

A day after announcing that the last American soldier would leave Afghanistan at the end of 2016, the president told this latest class of Army officers that the United States faced a new, more diffuse threat in an arc of militancy stretching from the Middle East to the African Sahel.

Mr. Obama has been deeply frustrated by the criticism of his foreign policy, which during his first term was generally perceived as his strong suit. He has lashed out at critics, whom he accuses of reflexively calling for military action as the remedy for every crisis.

The overriding objective he said  is to avoid an error on the order of the Iraq war.

He brushed aside as reckless those who say the United States should consider enforcing a no-fly zone in Syria or supplying arms to Ukrainian troops.

In the speech, Mr. Obama described an array of priorities, ranging from the Iran nuclear negotiations to a new global climate change accord, which he said would occupy his final two-and-a-half years in office.

He also spoke of the need for the United States to look eastward to Asia, promoting his long efforts to negotiate a trans-Pacific trade agreement and pledging to defend American allies in the region in their territorial disputes with China in the South and East China Seas.

Note EU-Digest: Kudos to President Obama for at least showing the intention of his Administration to the world, in this major foreign policy speech at West Point, that the "gun-boat diplomacy" of the US is not acceptable anymore and has come to an end.   

Read more: ‘America Must Always Lead,’ Obama Tells West Point Graduates - NYTimes.com

5/27/14

Spying: US versus China :"the Pot is calling the Kettle Black" as China to ditch US consulting firms for espionage

State-owned Chinese companies will cease to work with US consulting companies like McKinsey and Boston Consulting Group over fears they are spying on behalf of the US government.

US consulting companies McKinsey, BCG, Bain & Company, and Strategy&, formerly Booz & Co., will all be snubbed by state-owned Chinese companies, the Financial Times reported, citing sources close to senior Chinese leaders.

“The top leadership has proposed setting up a team of Chinese domestic consultants who are particularly focused on information systems in order to seize back this power from the foreign companies,” a senior policy adviser to the Chinese leadership was quoted by the FT as saying.

“Right now the foreigners use their consulting companies to find out everything they want about our state companies,” the adviser said.

McKinsey is the largest global consulting group operating in China, and about one-third of clients are state-owned enterprises. McKinsey has 650 employees in China.

Last Thursday China announced that all foreign companies would have to undergo a new security test. Any company, product or service that fails will be banned from China. The inspection will be conducted across all sectors - communications, finance, and energy.

China has already banned Microsoft's Windows 8 operating system from government computers, according to Chinese state media agency Xinhua.

“Under President Xi Jinping, technology and implementation will look to be converging, so foreign tech firms should be very worried about their prospects,” Bill Bishop, an independent consultant based in Beijing, told the FT.

Chinese officials have said that government ministries, companies, universities, and telecoms networks are victims of US hacking, and will try to avoid using US technology in order to protect “public interest”.

Read more: China to ditch US consulting firms over suspected espionage — RT Business

5/21/14

Middle East Chaos: Egypt, Libya, Palestine, Syria, Israel - back to square one

Middle East Chaos
It has not been a pretty picture in the Middle East for some time now after the euphoria of the Arab Spring - better still it is a total mess and certainly not a feather on the cap of any EU, Russian or Chinese diplomat, especially not for the cap of the US's Mr.Kerry.

In Libya when one might have thought the mess there could not have gotten worse, it has. The latest round in the multidimensional chaos that has prevailed since the overthrow of Muammar Gaddafi was initiated by an ex-general named Khalifa Hiftar, who was trained in the Soviet Union, participated as a junior officer in the coup that brought Gaddafi to power in 1969, later broke with the Libyan dictator, and lived for years in the Northern Virginia suburbs of Washington, DC, where he apparently also became a U.S. citizen.

Hiftar returned to Libya after Gaddafi was ousted. Now he has put together a force he calls the “Libyan National Army” and aims at removing the interim parliament in Tripoli.

So probably also for Libya there is a new dictatorship in the making?

Israel and the Palestinians were back to square one in the peace process last Friday after the Jewish state torpedoed US-sponsored talks in response to a Fatah-Hamas reconciliation deal.

Israeli Prime Minister Benjamin Netanyahu set the tone, telling the BBC that Palestinian president Mahmud Abbas could "have peace with Israel or a pact with Hamas (but) he can't have both".

"As long as I'm prime minister of Israel, I will never negotiate with a Palestinian government that is backed by Hamas terrorists that are calling for our liquidation," he added.

In Syria tyrant Bashar Assad may have to stay temporarily as Syrian president despite the death toll in the country’s civil war heading higher than the number killed in Iraq, Tony Blair said recently.

The former Prime Minister branded the situation in Syria an “unmitigated disaster” and insisted the West should intervene in such conflicts.

“We are now in a position where both Assad staying and the Opposition taking over seem bad options,” he said in a speech at Bloomberg HQ in central London.

“Repugnant though it may seem, the only way forward is to conclude the best agreement possible even if it means in the interim President Assad stays for a period.” 

Egypt : In a statement dripping with cynicism, the White House said that Obama was “deeply troubled” by the recent  mass death sentences in Egypt.

“While judicial independence is a vital part of democracy, this verdict cannot be reconciled with Egypt’s obligations under international human rights law,” the White House statement read. It appealed to Sisi and his fellow military rulers to “take a stand against this illogical action.”

Whom do they think they’re kidding? The niceties of “judicial independence” are hardly an issue in Egypt.

The hanging judge Youssef—popularly known as “the butcher”—was installed in a special court created by the junta to do precisely what he is doing. Moreover, the draconian sentences have a very clear logic: they are an act of state terror designed to intimidate the Egyptian masses.

The statement continued: “Since the January 25 Revolution, the Egyptian people have aspired to be represented by a government that rules justly, respects their dignity, and provides economic opportunities. The United States supports these aspirations and wants Egypt’s transition to succeed.”

It seems hardly a coincidence that these mass death sentence came only days after Washington approved the provision of 10 Apache attack helicopters on top of some $650 million in military aid already approved for the Egyptian junta this fiscal year.

This is half of what the administration wanted to supply to the country’s repressive forces, the other half being held up by laws restricting aid to regimes brought to power through military coups.

Obviously the helicopter deal was correctly interpreted by the Egyptian junta as a green light to escalate its brutal crackdown.

All this disaster unfortunately is only the top of the Iceberg when one looks at the total Middle East picture. Maybe only one word to describe this is: total chaos .

EU-Digest

Energy Deal: Russia signs 30-year contract to supply natural gas to China

Gazprom said on Wednesday that the Russian gas company had inked a long-awaited 30-year contract to supply natural gas to China.

Gazprom spokesman Sergey Kupriyanov confirmed the deal had been signed, but he declined to give any further details.

China's state news agency, Xinhua, described the supply contract as a "multi-billion dollar deal."

The gas deal is a financial and diplomatic boost for Moscow, which has been targeted over the Ukraine crisis.

Moscow and Beijing had been in negotiations for more than a decade, but had been unable to agree on the price.

Chinese President Xi Jinping held talks with his Russian counterpart Vladimir Putin in Shanghai before the planned signing of the gas deal.

Both Chinese and Russian officials are reported to had said they expected a deal to be agreed in time for it to be signed during Putin's two-day visit to the city for an Asia security summit.

Read more: Russia signs 30-year contract to supply natural gas to China | News | DW.DE | 21.05.2014

5/16/14

China’s future: Enter the Chinese NGO

 The rulers of China have always seen its history as binary. Long divided, the empire will unite, goes a famous saying; long united, it will divide. Today, under the Communist Party, fear of division is strong. Determined to avoid the fate of the Soviet Union, party leaders strive to hold China together.

But the country is no longer a socialist paradise where the party dictates and the masses toil. A bourgeois class of perhaps 300m people has emerged—and they have their own views on the sort of place China should become. At the same time, the party has retreated from most people’s daily lives, no longer even pretending to provide cradle-to-grave benefits. Many weaker, poorer members of society are suffering.

Enter the Chinese NGO. A vast array of new non-governmental organisations are trying to meet both middle-class aspirations to participate and also society’s need for services (see article).

 Some 500,000 NGOs have registered over the past 25 years, a figure that some think will double over the next couple of years, as rules are relaxed. Many of these, admittedly, are quasi-state bodies, like an official youth foundation, or businesses in disguise, like private schools, but a growing number are the real deal.

And a further 1.5m-odd NGOs operate without being registered, including some that the party suspects of being too independent or confrontational. They include everything from self-help groups for the parents of autistic children to outfits defending the rights of migrant workers to house-church groups looking after the elderly.

Read more: China’s future: Enter the Chinese NGO | The Economist

5/7/14

On-Line Shopping: Alibaba Entering US Stock Market

Alibaba the Chinese internet monster filed a public share sale in the US stock market and expected as one of the biggest one so far in the history.

The web giant is seeking to raise $1bn (£589m) however this is will also add as an estimate to calculate a range of charges. And according to the business analysts Alibaba is expected to rise over $15bn and go past share sale of Facebook.

However the Chinese company did not Alibaba did not reveal the particulars of the number of shares it intends to sell or the range of price.

They also did not disclosed at which stock exchange they are looking to list their shares either its Nasdaq or New York Stock Exchange.

Being one of the leaders in the sector for long time the investors gets the glance of the company’s finance this time around.

Alibaba made a net profit of $2.9bn where it generated revenues of 40.5bn yuan ($6.5bn; £3.8bn) in the nine months to the end of December 2013.

With more than 11.3 billion orders placed last year by Alibaba the papers also exposed the value of all merchandise sold on various platforms of the company was $248bn.

It has gone past the combined sell of Amazon and eBay for the total value of merchandise sold on its platform last year.

Read more: Alibaba Entering To US Stock Market | MK Observer

4/6/14

China - Economy "Mini-Stimulus" Is Maxi Mistake - by Gordon G. Chang

On Wednesday, Premier Li Keqiang made what has been described as China’s first stimulus announcement of 2014.  The “mini-stimulus” plan will extend large tax breaks to small businesses, build social housing to replace shanty villages, and accelerate the building of rail lines.

The announcement followed a major policy address Li made on March 26.  “We have gathered experience from successfully battling the economic downturn last year and we have policies in store to counter economic volatility for this year,” he said then.  “We will launch relevant and forceful measures according to what we have planned in our government work report.”

Analysts, by and large, were not impressed with Li’s words in late March.  As Du Changchun of Northeast Securities in Shanghai said to Reuters at the time, “The market reaction really hasn’t been that great as these comments have been said many times before.”

What Li needed to do last week was to show that he had the right policies to stabilize an economy that is deteriorating quickly.  Observers expect this year’s first quarter to be the weakest in five years.

So how did the markets react to Wednesday’s mini-stimulus?  On Thursday, the Shanghai Composite fell, but it recovered most of its losses Friday.  Li, therefore, largely failed to bolster sentiment.  And that’s what his announcement last week was all about.  As Julian Evans-Pritchard of Capital Economics in Singapore noted, “They want to make it clear they have the ability to step in if necessary.”

At this point, Li and his technocrats look like they do not have that ability.  The principal problem is that they are still struggling with the ill effects of Wen Jiabao’s stimulus plan, announced in November 2008, to spend 4 trillion yuan.  The legacy of that effort, which when combined with bank lending was one of the biggest fiscal spending programs in the last 15 years, is a country choking on debt.  China’s total debt-to-GDP ratio is now somewhere north of 300% when GDP is properly adjusted—deflated—to account for price changes.

The symptoms of China’s debt accumulation are alarming.  There have been, within just the space of a month, the first domestic corporate bond default in the history of the People’s Republic, the first domestic junk bond default, and two bank runs.

 Read more: China "Mini-Stimulus" Is Maxi Mistake - Forbes

4/2/14

EU snuggles up to China, as relations with Russia freeze-up

Chinese President Xi Jinping is wrapping up his official European tour. His hosts have pampered the head of state and his 200-strong business entourage as the two huge economic blocs work towards a multi-billion dollar free trade agreement.

The world’s second-biggest economy is a strategic ally for the EU, especially as relations with Moscow have become frosty over action in Ukraine.

Europe is snuggling up to Chinese industry, concerned the ongoing dispute between the EU and Russia over Ukraine could affect trade relations. China is pushing a multi-billion dollar free-trade agreement with Europe’s $17 trillion economy, focusing on Germany, the most important partner within the EU. Net trade is only higher with the USA.

In return, the EU wants China to open up investment opportunities, which will attract more foreign money to China.

The tour began in the Netherlands, with legs in France, Germany, and Belgium, meeting with US President Barack Obama on the sidelines of the nuclear summit in The Hague.

Annual trade between China and the EU is $588.6 billion, according to the most recent European Commission data.

China’s annual GDP is $8.6 trillion, but grouped together the 28-state EU is the World's number one ranked in terms of GDP ( $ 16,67 trillion),  followed by the US GDP of  $16,24 trillion  giving both the EU and the US each a GDP which is twice that of China. Russia's GDP  presently stands at $ 2.02 trillion

EU-Digest

3/28/14

China - Freedom of Speech: Michelle's Message to China about Free Speech gets censored by China

The First Lady’s of the US on a trip through China also spoke of freedom of expression and the Internet during a speech at Peking University. It was a brave step because she knew it’s a hot topic for the Chinese regime.

China consumes a staggering amount of man-hours and money just to monitor, block and filter communications of half a billion users. China is third in the world for throwing journalists in jail, behind Turkey and Iran, with 32 journalists in prison.

She said: “It’s so important for information and ideas to flow freely over the Internet and through the media, because that’s how we discover the truth,” she said. “That’s how we learn what’s really happening in our communities and our country and our world.”

Mrs. Obama's specific remarks were censored by China’s news agency, but circulated in social media. America’s mainstream media praised the First Lady for speaking out on this issue.

Bravo Mrs Obama. 




3/27/14

‘Made in China': The World's Factory is Losing Its Shine

China, the 'world's factory', is losing its shine. And to a great extent this has been the result of the rise in workers' wages in most major cities. How has this happened?

Although the international financial crisis saw a minimal increase in the basic wage in 2009 in China, a wave of big wage increases nevertheless materialized in 2010. The 12th Five-Year Plan emphasized that residents' income should grow commensurately with economic development and that labor wages should grow commensurately with labor productivity. As a result, many provinces raised the minimum wage for workers.

According to basic salary statistics issued by China Labor Consult, 16 provinces raised their minimum wage in the first six months of this year alone, and most of the increases were of over 20%. According to the table on the right-hand side comparing the 16 cities, Sichuan saw the highest raise, of 38%, a heart-breaking figure for employers, while Shenzhen had the highest basic salary of RMB$1,500 per month, a frightening figure for factory owners.

Wage increases are now very much on the corporate agenda as a result of fierce competition for labor. The situation is particular severe in coastal regions where the cost of living is much higher than in inland cities. Workers are now less willing to travel a long way to earn what is only enough for their daily necessities.
The new industrial regions of the inland cities now also engage in inter-provincial competition for labor, while factories along the coastal strip have been lowering their admission standards for workers simply to recruit more labor. Higher wages of course are another important factor. For example, one Shenzhen company announced it would raise the basic wage by as much as 20%. Some industry experts forecast that wages will increase by 20% or even 30% annually over the next five years.

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