News » Society » How Saint Bob became (in his own words) a 'private equity whore' by launching £125m investment fund

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• How Saint Bob became (in his own words) a 'private equity whore' by launching £125m investment fund
• Doc dreams leave Kerala girl stranded in China
• SOAP WATCH: The ultimate insight into the week's soaps
• The Royal seal of success: From tea to perfume, holders of the Royal Warrant give a unique insight into the Queen's personal tastes
• Chinese-Thai military training
• Nations 'wasting time' on climate
• Ghana bails 38 Chinese miners
• China keeps quarantine on Philippine fruit
• HK takes back funds it donated in Sichuan
• High levels of chromium found in more capsules
• Submachine gun seized from gun-running gang
• Police rescue 13 victims of prostitution ring
• Tapping into safer water access
• Adidas ready to surf the China wave
• China’s top aluminium province idles plants as demand slows
• Obama officials press Senate to ratify sea treaty
• China, North Korea ties hit rough weather
• Iran’s Ahmadinejad to visit as China slams new sanctions
• China Pledges More ‘Fine-Tuning’ in Support for Growth
• Deposed Politician’s City Lists Names for Meeting on China’s Next Leaders

How Saint Bob became (in his own words) a 'private equity whore' by launching £125m investment fund Posted: 25 May 2012 05:06 PM PDT He made his name raising charity aid for Africa. So how can Bob Geldof justify spearheading a fund that could make him massive profits from the continent?

Doc dreams leave Kerala girl stranded in China Posted: 25 May 2012 03:48 PM PDT Reshma, who hails from the coastal village of Thottapally in Alappuzha district, had travelled all the way to China to study medicine. But now this student of Sichuan Medical University in Chengdu is stuck there and doesn't know whether she will be able to return home.

SOAP WATCH: The ultimate insight into the week's soaps Posted: 25 May 2012 02:30 PM PDT Coronation Street's Nick declared to Eva on Monday: 'I don't do mad, vindictive women'. This is not true. In fact, Weatherfield is packed with them, as Tyrone discovered following Kirsty's attack on him.

The Royal seal of success: From tea to perfume, holders of the Royal Warrant give a unique insight into the Queen's personal tastes Posted: 25 May 2012 02:30 PM PDT Her Majesty shops at Waitrose, various department stores, Prestat chocolates (pictured) and upmarket Piccadilly grocers Fortnum & Mason.

Chinese-Thai military training Posted: 25 May 2012 10:29 AM PDT Marines from China and Thailand undergo joint training yesterday in Shanwei, a city in southern China's Guangdong Province. The training was aimed at combatting regional terrorist organizations. The two countries trained together from May 11 until yesterday. This posting includes an audio/video/photo media file: Download Now

Nations 'wasting time' on climate Posted: 25 May 2012 11:53 AM PDT The latest round of UN climate talks makes little progress against a "coalition of the unwilling", observers say.

Ghana bails 38 Chinese miners Posted: 25 May 2012 09:36 AM PDT GHANA yesterday agreed to the bail of 38 Chinese citizens it detained earlier this week for alleged illegal mining after the Chinese Embassy stepped in. Ghanaian authorities will later take legal action over the Chinese miners, the China News Service said, citing embassy officials. The arrests on Tuesday morning came after a local gold mine owner reported to police that another mine owner had illegally employed Chinese miners at the village of Akutoase, about 400 kilometers from the capital of Accra. The Chinese miners and their Ghanaian counterparts were caught by police when they were mining near a river, causing serious environmental problems, it was reported. Meanwhile, Nigeria on Thursday released 80 of nearly 100 Chinese nationals it had arrested on suspicion of being in the country illegally, the Chinese consulate-general in the port city of Lagos said. Most of those held in a crackdown on Tuesday in Lagos and Kano were said to be textile traders working in city markets. Those still in custody face being sent back to China as they have overstayed their permits, Xu Chunman, an official with the consulate, told Xinhua news agency. The issue has been resolved, Xu said. The People's Daily reported that in a textile products market in the northern Nigerian city of Kano alone, the government arrested 45 Chinese dealers.

China keeps quarantine on Philippine fruit Posted: 25 May 2012 09:35 AM PDT CHINA'S quality watchdog said yesterday that it will maintain a quarantine on fruit imports from the Philippines. The move is aimed at preventing the introduction of harmful organisms into China and safeguarding the nation's ecological security as well as people's health, according to a statement posted on the General Administration of Quality Supervision, Inspection and Quarantine's website. It said that China's move is in line with rules and standards set by the World Trade Organization and the Food and Agriculture Organization of the United Nations. The agency said earlier that harmful insects or bacteria had been found in pineapples, bananas and other fruit imported from the Philippines in the last year. The statement added that AQSIQ officials and experts held talks with a visiting Philippine delegation about the problems, showing the delegation photos of harmful organisms found with the exported fruit. The AQSIQ said the Philippine side has invited Chinese delegates to the Philippines to conduct examinations, but the AQSIQ has no immediate plans to send delegates to the country. The AQSIQ also rejected a demand by the Philippines to send its own quarantine experts to jointly examine the exports, which the AQSIQ said violates international conventions and Chinese law. The Chinese administration urged the Philippines to take effective measures to improve and enhance preventive efforts against harmful organisms in orchards and packaging plants, as well as to strengthen quarantine checks before exports, the statement noted.

HK takes back funds it donated in Sichuan Posted: 25 May 2012 09:34 AM PDT THE Hong Kong government has decided to reclaim the HK$2 million (US$257,600) it donated to an earthquake-devastated city in Sichuan Province after local authorities pulled down a school built with its aid money. Stephen Lam, chief secretary of the administration of Hong Kong, said the city of Mianyang did not inform Hong Kong before it dismantled the school. He went to Sichuan Province on Thursday and said Hong Kong will allocate the returned money to other reconstruction projects in Sichuan. "Hong Kong has provided aid to Sichuan for 123 reconstruction projects and the remaining ones will be completed this year," Xinhua news agency cited Lam as saying. The Hong Kong government has donated HK$9 billion in total to aid Sichuan's reconstruction. The Sichuan provincial government said it respected Hong Kong's decision and will conduct an investigation into what it called the unauthorized demolition in Mianyang. Mianyang authorities blamed Wanda Commercial Prosperities Co Ltd for tearing down the Zijing Ethnic Minorities High School to make room for its massive real estate project. However, a statement issued by the Mianyang government on Monday said the school was torn down for safety concerns because the school building was leaning after recent heavy rains. Wang Jianlin, a Wanda executive, dismissed the unauthorized demolition, claiming the practice had nothing to do with Wanda. "We hadn't planned to bid for the land in Mianyang before the demolition was finished, but local authorities invited us to start a project. They promised 'everything was okay,' but problems occurred once we got the land-use right," he said.

High levels of chromium found in more capsules Posted: 25 May 2012 09:00 AM PDT IN the latest round of medical capsule inspections, 204 batches made by 56 pharmaceutical enterprises across the nation were found to contain excessive chromium. The involved companies were in Beijing and the provinces of Heilongjiang, Hebei, Liaoning, Hunan, Gansu, Zhejiang, Anhui and the Xinjiang Uygur Autonomous Region. Eighty-seven batches of toxic capsules were made by 15 factories in Liaoning and 60 batches were produced by seven plants in Heilongjiang, local food and drug authorities announced on their websites yesterday. In east China, 11 factories in Anhui were found to manufacture 25 bad batches while Zhejiang, the main production area for capsules, saw nine tainted batches from six factories, authorities said. Many of the toxic capsules were antibiotics, including Cefradine, Amoxicillin and Norfloxacin, online information showed. The Hong Kong Department of Health said on Thursday that it would recall nearly 3,000 boxes of cold medicine capsules that were found to contain levels of chromium 16 times higher than allowed. The Superior Gan Mao Qing Capsules were imported by a licensed proprietary Chinese medicines wholesaler, Kin Lik Trading Co Ltd. Another brand produced by Kin Lik, Quick Acting Gan Mao Qing Capsules, would also be recalled, the administration said on its official website. In a national crackdown by the State Food and Drug Administration in April, 74 batches made by 15 companies had high levels of chromium. Officials said producers' licenses would be suspended.

Submachine gun seized from gun-running gang Posted: 25 May 2012 09:00 AM PDT A TRANSNATIONAL firearms smuggling and trafficking gang has been busted, according to a statement yesterday by the Public Security Bureau in Nanning, capital of south China's Guangxi Zhuang Autonomous Region. Police have arrested 14 suspects and confiscated 37 guns, 1,686 bullets, a batch of gun powder and a fully loaded Thompson submachine gun. The ringleader, surnamed Li, accompanied by his two partners, surnamed Liu and Zhang, smuggled guns from neighboring countries, posted ads online and delivered the goods to buyers through express delivery, police said. Their crimes came to light in October when Nanning police discovered a parcel contained bullets. Police arrested the receiver of the package in Tianjing and followed leads to an Internet user called "carpenter," who claimed to be a former special forces soldier and own firearms for sale. Police soon identified the mysterious personality as Liu, who was later found to have engaged in more than 10 deals. Police arrested Zhang on December 30. Meanwhile, 11 other suspects were apprehended in provinces including Sichuan and Guangdong. Suspects said 14 seized guns came from the 33-year-old Li, native in Shantou, a city in Guangdong Province. He was alerted by the police crackdown and fled to Thailand. On April 18, Chinese police flew to Thailand and contacted local authorities. Five days later, Li was arrested, and on May 9, he was escorted back.

Police rescue 13 victims of prostitution ring Posted: 25 May 2012 09:00 AM PDT THIRTEEN girls and young women between the ages of 14 and 20 who were lured or forced into prostitution in several provinces have been rescued by police in Chongqing in southwest China. Police also apprehended 12 suspects, most of them related to each other or their fellow villagers, who were found to have made more than 500,000 yuan (US$78,950) from over 150 cases of forced prostitution. The underground ring was tightly organized with a clear distribution of work and a complete network stretching over the provinces including Sichuan, Guizhou, Henan and Anhui, Xinhua news agency reported yesterday. A 16-year-old girl surnamed Guo, a native of Chongqing, was able to escape and tell police her story in the Yubei District of Chongqing on March 27. That blew the lid off the underground prostitution ring. She said a man surnamed Jiang took her from Shenzhen, where she was seeking a job, to Chongqing after promising sightseeing and high-salary jobs. "An ad posted in a Shenzhen labor center read: 'Nannies are needed in Chongqing and Sichuan. Tens of thousands of yuan are paid every month. Flights are free.' I was in bad need of money and then contacted Jiang," Guo said., To win Guo's trust, Jiang led Guo to visit his company in a local high-end residential complex and showed her a complete set of licenses and certificates. Guo was convinced and flew to Chongqing, where her nightmare began, Xinhua said. A couple bought the girl, confiscated her identification card and money, and locked her in a rental house. They forced her to sign a contract to engage in prostitution and banned her from "making boyfriends and staying out overnight." A teenaged girl might be priced between 2,000 yuan and 10,000 yuan, and one ring member managed one to four girls, Xinhua cited police as saying. To gain more money from clients, girls were forced to disguise themselves as poor students, and a deal could even bring in tens of thousands of yuan. According to police, more and more people began trapping young women by impersonating rich young men or falsely offering good salaries. Some even lured teens to shoot nude photos or got them addicted to drugs to better control them, authorities said.

Tapping into safer water access Posted: 24 May 2012 12:38 PM PDT Source: China Daily via china.org.cn New standards for drinking water will come into force in China on July 1, with the number of quality indicators rising to 106 from 35. While that's almost on par with standards used in the European Union, some experts have raised concerns about the feasibility of the new system. "There are about 3,000 water companies in China," said Li Fuxing, director of the Beijing Institute of Public Health and Drinking Water. "Judging by their production technology and quality-testing facilities, most still have a long way to go before they can meet the new standards." Meanwhile, Fu Tao, director of Tsinghua University's Water Policy Research Center, said that the number of cities with facilities to test all 106 indicators covers a very small portion of the area served by the industry. Under the reforms, first released in 2006, all treatment plants are obliged to meet the new criteria by July 1 this year. Some cities, such as Beijing, quickly achieved that goal, but despite the five-year hiatus, many companies have yet to upgrade their equipment or production techniques. "By the end of 2009, 98 percent of China's water plants were still employing production processes that have been in use for decades," Lan Weiguang, adjunct associate professor from the chemistry department of the National University of Singapore, wrote in his micro blog. Meanwhile, the number of indicators to test for organic compounds in drinking water will rise to 53 from just five. "That means the government has realized the importance of controlling organic pollutants," said Lan. "But most water plants fail to meet the target because of outdated production processes." Some experts have asked why it's taken so long for the new regulations to come into force. "Other countries may use fewer indicators than us, but they are strictly implemented as soon as they're released. We have waited five years for these standards to be enforced," said Li. "Also, in many countries, the standards are revised annually, based on various data," he added, noting that, before 2006, the last revision in China was back in 1985. The 2006 reforms unified the water quality standards in the country's rural and urban areas for the first time. But even as plants in the city struggle to meet the new criteria, those in rural areas face an even tougher challenge because their quality standards have always lagged behind. Take quality monitoring in the rural areas of the southwestern province of Sichuan as an example. Work didn't begin until 2004, and official statistics show that only 20 indicators were being measured by 2011, nowhere near the 1985 standard of 35, to say nothing of the 106 stipulated by the 2006 reforms. Despite this, Sichuan is seen as something of a role model in the improvement of water quality, having undertaken a large number of projects to provide safe drinking water to its rural population, which is geographically dispersed over vast distances, with many people living in inaccessible mountainous regions. Meanwhile, the situation in provinces such as Yunnan and Guizhou is much worse. Traditional treatment Traditionally, the treatment process consists of four steps: flocculation, precipitation, filtration and chlorination. The first three remove particle pollutants and reduce the water's turbidity, making it clearer to the eye, while the addition of chlorine kills micro-organisms. Chlorination is seen as one of the major innovations of the 20th century, but in 1977 scientists in the United States discovered that organic compounds left in the water after the first three steps in the treatment process may react with chlorine to generate potentially carcinogenic byproducts. Meanwhile, the issue of water safety has been in the spotlight recently after a report in Century Weekly magazine this month quoted unnamed industry insiders who said only about 50 percent of the water in urban areas actually meets the required standards. A second body blow was delivered by Dong Liangjie, an expert in heavy metal pollution in water and a former researcher at the University of Hawaii. Quoting a paper recently published in a scientific journal, Dong claimed that researchers have found contaminants in all 23 water testing areas that, under certain conditions, can produce effects similar to contraceptives. Meanwhile, other experts said that, given the severely polluted state of the source water and the ineffectual treatment processes, less than 50 percent of the nation's tap water reaches the required standards. In response, officials from several areas went on record to say that tap water is safe to drink, in their provinces at least. The figures they released were all higher than 95 percent, much higher than the Century Weekly report. Four days after the report was published, Shao Yi-sheng, director of the monitoring center of the Ministry of Housing and Urban-Rural Development, released the latest official safety figures: 83 percent. Shao cited a survey conducted by the ministry in 2011, but didn't reveal the locations of the 17 percent that failed to meet national standards. "The water quality in cities such as Beijing and Shanghai is relatively stable, but for residents of small cities, 50 percent or 83 percent doesn't really mean anything." Netizens were dissatisfied with Shao's figures and asked for more information, including the locations where water quality failed to meet the standards. They also wanted to know what measures have been taken to rectify the situation, but the ministry has turned down requests for interviews on the topic. Source water quality The safety of tap water is dependent on many factors, the most important being the quality of source water, according to experts. The latest figure, released by the Ministry of Water Resources, said 80 percent is safe nationally. But Century Weekly quoted Song Lanhe, another official from the ministry's monitoring center, as saying that the rate is actually closer to 50 percent. "Much of China's source water is now surrounded by residential buildings, especially farms," said Tsinghua University's Fu. "The increase in annual agricultural output is supported by the use of huge amounts of chemicals and fertilizers, which will definitely enter the water table and contaminate our source water." Meanwhile, sewage dumped into rivers by chemical plants has also played a major role in changing the main pollutants from micro-organisms to organic compounds and heavy metals, many of which are toxic. "The facilities and equipment currently used in water plants were able to remove source-water pollutants efficiently before the 1980s, but they can't deal with those we face now," said Li. The nation's antiquated pipeline network is another thorn in the side of those seeking to improve the quality of the water supply. Statistics released by the China Institute of Water Resources and Hydropower Research suggest that approximately 6 percent of the pipes have been in use for more than 50 years. "The water quality decreases by about 10 percent during this (delivery) process," said Wang Hao, head of the water resources department at the institute, according to a recent report from the Xinhua News Agency. "The levels of bacteria in the pipes increase tenfold every decade. Some corrosive substances in the pipes may also be absorbed by the water," said Zhao Feihong, a researcher at the Beijing Institute of Public Health and Drinking Water. Projects to replace the older pipes are currently ongoing nationwide, but China's vast landmass means the situation will take a long time to rectify. Other dangers lurk unseen too: To guarantee adequate water pressure, buildings higher than six stories usually utilize a holding tank on the top floor. The system, known as 'gravity feeding" works well, but can become a health hazard if not carefully maintained. "These water tanks usually lack a regular sanitation management regime and are often loosely sealed," commented Lan Weiguang. "Green moss, bacteria and even the bodies of small animals are often found in them." Low levels of funding According to insiders from the Ministry of Housing and Urban-Rural Development, the fundamental problem in maintaining water quality is the low level of funding. "Investment is far from sufficient in this sector," they said. Those insiders received support from a number of experts. The problems inherent in the treatment process, the pipes and water tanks can be solved with the existing technology, they said, but there simply isn't enough money invested in the system to provide that technology. That problem is compounded by the fact that even raising the water quality indicator by one level results in spiraling treatment costs. Industry insiders told Xinhua that testing all 106 indicators in one sample costs 15,000 to 20,000 yuan ($2,370 to $3,160). However, as all of the indicators must be tested at least once a year, and others on a monthly or weekly basis, that sort of money is beyond most cities at present.

Adidas ready to surf the China wave Posted: 25 May 2012 08:36 AM PDT Source: By Yang Yang (China Daily) German sporting goods giant banks on continued buoyant demand for branded, luxury products German sportswear company adidas AG is banking on the strong demand in China for branded and trendy apparel to push revenues, even as it looks to expand retail presence in the second- and third-tier cities. The German company plans to open outlets in cities such as Juxian in Shandong province, Lanxi in Heilongjiang province and Pingtan in Fujian province. "Expansion in the lower-tier cities will be the key to our continued success in China. Our goal is to have stores in 1,400 cities by 2015, up from the 550 cities in 2010," says Colin Currie, managing director of adidas Group Greater China. "Much of China's economic growth is being driven by the rise in disposable incomes of consumers in these lower-tier cities. These consumers are also becoming more brand and quality conscious. Most of them are now eager to purchase premium international brands," he says. The company, China's No 2 sportswear brand after Nike in terms of market share, says it opened more than 1,000 new stores in China last year, with nearly half of them in lower-tier cities. Currie says the company currently has 6,800 retail stores in China and the target is to add at least 500 stores every year. At the same time, there has also been a change in customer preferences that has contributed to increased sales, he says. Sportswear is perceived not only as a practical product, but also as a fashion symbol. To cash in on this, adidas has changed its branding strategy globally to "adidas is all in" from "Nothing is impossible". "In English, 'all in' means that if you put 100 percent heart into it, you are all in. It really makes sense because it describes basically what we do as a company, from sports all the way into fashion," Currie says. He says the branding change was also necessary as adidas has its own fashion division alongside sporting goods. The brand's style division, which creates fashion brands for different age groups, currently accounts for 25 percent of the total sales, he says. Collections, such as Y-3 by Japanese fashion designer Yohji Yamamoto and Porsche Design Sport, a crossover collection between adidas and the accessory and apparel unit of luxury carmaker Porsche, are managed under the style division. Currie says there is immense potential for the company to further improve its position in China, as the market is still growing. Establishing the adidas brand as a fashion icon will be the main thrust of the overall China strategy. To make inroads into the lower-tier cities, adidas has launched the NEO collection in China for the younger generation of customers aged between 14 and 19. The company has also roped in famous Hong Kong model and actress Angelababy and Taiwanese actor Eddie Peng to promote the NEO range. "NEO is competitively priced. The price gap between NEO and Chinese local brands is within 100 yuan ($16, 12 euros). We think Chinese consumers in lower-tier cities with (relatively) higher disposable income will prefer to buy international brands with high quality," Currie says. The NEO products are priced between 120 yuan and 500 yuan. The German sportswear major has more than 1,000 NEO outlets in China, with as many as 900 of them opened in the past few years. "In lower-tier cities, we will open more Sports Performance stores. But NEO will still be the big ticket for us as it provides an excellent branding opportunity in smaller cities," Currie says. Though it is focusing on boosting its presence in smaller cities, it does not mean that it has given up on the first and second-tier cities. "The focus in these destinations will continue to be on our Originals collection, a streetwear collection featuring vintage dresses and retro shoes. Products in the Originals collection are priced nearly 20 percent more than those available in the NEO collection." Apparel products in the Originals collection fall under the Y-3 brand and are priced between 250 yuan and 1,200 yuan. In January, adidas opened its second brand center in Shanghai. It is the company's second such center in China and the fifth in the world that sells and displays all adidas' products and collections. "The increased presence in China clearly shows the importance attached to the nation in our overall global strategy. We chose to open these stores in Shanghai and Beijing because we wanted to strengthen our presence in China's top-tier cities," Currie says. To cater to Chinese styles, the sportswear brand has also opened a local design center to create customized products for Chinese consumers. Adidas Group had earlier said its Greater China sales rose by 26 percent to 385 million euros during the January-March period this year, the highest growth among all its major regions. It was also higher than the overall global sales growth of 14 percent. Adidas Group CEO Herbert Hainer had remarked while releasing the earnings numbers that China would continue to be a major growth engine for the group. "I am confident that we can grow our business at a double-digit rate in China," he said. Currie expects China to soon displace US as the top selling market for adidas. Much of that comes from the anticipation of more sportswear sales alongside major global sporting events. One of its big-ticket events is the forthcoming European Football Championship, where adidas is sponsoring six teams, including the defending champions Spain and tournament favorite Germany, and co-host Ukraine. "We believe that we will achieve record sales of 1.5 billion euros from the football category this year," Currie says. "We are also confident that China will be a major contributor in this segment." Like the 2008 Beijing Olympic Games, adidas has also invested considerably on the 2012 London Olympic Games. It is the Official Sportswear Partner of the British national team, with David Beckham as its spokesman. In 2008, although adidas was the Official Sportswear Partner of the Beijing Olympic Games, Li Ning, the chief executive officer of China's top sportswear brand, grabbed more attention while holding the torch that lit the Olympic flame. After the Olympic Games, adidas' high expectations for the Chinese market resulted in excess inventory. In 2009, the company was forced to take drastic action to rid itself of the excess inventory and had to shut down more than 100 shops nationwide. In the same year, Li Ning outperformed adidas in sales, and became the second largest sporting goods brand in the Chinese mainland. However, this excess inventory problem and temporary disadvantage did not deter adidas, Currie says. On the contrary, it helped the German sporting goods brand to explore new frontiers amid fierce competition in China.

China’s top aluminium province idles plants as demand slows Posted: 24 May 2012 12:42 PM PDT Source: Reuters By Polly Yam HONG KONG, May 24 (Reuters) – China's top aluminium-producing province has idled about 700,000 tonnes of capacity in recent months, a senior industry official said, further evidence that slower growth in the world's No. 2 economy is denting the country's appetite for commodities. The total reduction could rise to 1.2 million tonnes by the end of the year, Henan Nonferrous Metals Industry Association deputy chairman Liu Libin said, more than a quarter of the province's total capacity. Slowing growth, along with a recent slump in prices, has sparked a string of deferrals and defaults on coal and iron ore deliveries to China and seen stocks of the minerals pile up in the country's ports. Aluminium prices have joined a general slump for commodities, with London Metal Exchange metal down 15 percent from the year high hit in early March. "Smelters that are still producing in Henan are big ones," Liu told Reuters. "They are still able to maintain normal cash flows and are hoping the market will improve soon," he said, adding that local governments will support smelters as they want to maintain tax contributions and employment. China is the world's largest producer of aluminium – used in the building, transport and packaging sectors – with a production capacity of more than 23 million tonnes a year. Most of its smelting capacity sits at the high end of the global production cost curve, but many smelters have so far resisted closure, even though global producers Rio Tinto , Norsk Hydro and UC RUSAL have shaved output since the start of the year. Norsk Hydro became the latest to announce a closure, saying on Wednesday it would shut its 180,000 tonnes a year Australian smelter. Henan's move to shut plants illustrates how a combination of challenges, including sputtering demand at home and abroad, a production surplus and sliding prices are forcing smelters to bow to cost pressures. State-backed research firm Antaike has estimated that less than one million tonnes of aluminium capacity in the country is currently shut, with capacity set to exceed real consumption by more than 2 million tonnes by the end of the year. The supply glut has seen Shanghai exchange stocks of the metal AL-STX-SGH reach a near one-year high of 369,247 tonnes in April, before falling to 335,301 tonnes last week. OTHER PROVINCES MAY JOIN Henan, located in eastern central China, has 4.6 million tonnes of annual aluminium production capacity. Smelters there are among the most costly to run in China due to high electricity tariffs in the land-locked province. Liu said some 700,000 to 800,000 tonnes of capacity in Henan was most vulnerable to production cuts as these smelters do not have their own power plants. The price of front-month aluminium on the Shanghai Futures Exchange, which typically reflects spot prices in China, has fallen from a peak of over 24,000 yuan ($3,800) a tonne in 2008 to 15,950 yuan on Wednesday. Smelters in other provinces may also join the production cull if domestic prices fall to 15,000 yuan a tonne for a prolonged period, Liu said. For now, production cuts in Henan are being compensated by new smelters coming onstream, including some 600,000 tonnes of new capacity in the remote northwestern Xinjiang region. However, sustained low prices could help balance China's supply, as more smelters idle capacity or delay the start of new production lines. "The production cuts should peak at the end of the year. Imports may rise after that," said a source at large Henan smelter, which was also thinking of idling some capacity. ($1 = 6.3231 Chinese yuan)

Obama officials press Senate to ratify sea treaty Posted: 24 May 2012 12:45 PM PDT Source: Reuters By David Alexander (Reuters) – Washington's failure to ratify the Law of the Sea Convention puts the U.S. military at increasing risk of confrontation with rising powers like China, U.S. officials said on Wednesday as the Obama administration began a new push to join the 30-year-old treaty. Senior defense officials told the Senate Foreign Relations Committee that without the treaty, the U.S. military is forced to base rights of navigation around the globe on customary international law, or long-standing practice, which is subject to differing interpretations. "If we do not ratify over time, what would happen is that we put ourselves at risk of confrontation with others who are interpreting customary international law to their own benefit," said General Martin Dempsey, chairman of the Joint Chiefs of Staff. "If we are not a party to this treaty and can't deal with it at the (negotiating) table, then we have to deal with it at sea with our naval power," Defense Secretary Leon Panetta said. "And once that happens, you clearly increase the risk of confrontation." The 1982 treaty, which has been ratified by more than 160 countries, establishes 12-nautical-mile (22-km) territorial seas around coastal countries but ensures rights of navigation and overflight by other states. Twice in the past decade, the treaty was voted out of committee but never made it to a vote by the full U.S. Senate. Opponents of the treaty are concerned it would cede U.S. sovereignty to an international organization that would have the power to collect royalties on oil and mineral exploitation and use the funds to help poorer countries. Panetta and Secretary of State Hillary Clinton told the panel the convention would bring huge economic and military benefits to the country. But the issue quickly ran into the same objections that have stymied its passage since the mid-1990s. "My problem is with sovereignty," Republican Senator Jim Risch said, flipping through the pages of the treaty. "There's 288 pages here, and as you read it, there's some good stuff in here. But if we have to give up one scintilla of sovereignty that this country has fought, has bled for … I can't vote for it." Proponents say the benefits far outweigh any drawbacks, citing support by groups as diverse as the Chamber of Commerce, Greenpeace, members of the oil and gas industry, top U.S. military officials and recent Republican and Democratic administrations. 'IMMEDIATE BOOST TO U.S. CREDIBILITY' The accord creates 200-nautical-mile (370-km) exclusive economic zones that give coastal states rights of development and exploitation of natural resources but protect the ability of other countries to navigate, overfly and lay communications cables across the regions. The treaty also grants countries rights to continental shelf regions beyond the 200-mile economic zones. Because of its extensive coastal regions, the United States stands to benefit more than other countries by joining the treaty, proponents say. It would extend U.S. sovereignty to vast areas of the ocean, while putting the military's worldwide rights of navigation or firmer legal footing. Lawmakers and defense officials said the treaty would strengthen the military's hand in dealing with growing powers like China and Russia and others that have joined the convention and are seeking to establish claims in the Pacific and Arctic. "China and other countries are staking out illegal claims in the South China Sea and elsewhere," said Democratic Senator John Kerry, chairman of the Foreign Relations Committee. "Becoming a party to the treaty would give an immediate boost to U.S. credibility as we push back against excessive maritime claims and illegal restrictions on our warships or commercial vessels," he said. China claims rights over most of the South China Sea, which has led to confrontations with the Philippines, Vietnam and other countries bordering the waterway. The U.S. military has had repeated run-ins in the region with Chinese vessels and aircraft asserting their sovereignty, including a midair collision in 2001 that killed a Chinese jet pilot and forced a U.S. Navy reconnaissance plane to make an emergency landing on China's Hainan Island.

China, North Korea ties hit rough weather Posted: 24 May 2012 12:52 PM PDT Source: By Alexa Olesen, Associated Press | Photo: Reuters BEIJING (AP) — China's leadership is hitting a rough patch with ally North Korea under its new leader Kim Jong Un, as Beijing finds itself wrong-footed in episodes including Pyongyang's rocket launch and the murky detention of Chinese fishing boats. The testy state of China-North Korea affairs became public this week after Chinese media flashed images of the fishing crews, some of the 28 crew members stripped to their longjohns, returning home after 13 days in North Korean custody accused of illegal fishing. The reports quoted the fishermen as saying they were beaten and starved, and the coverage unleashed furious criticism in China's blogosphere. "The North Koreans are like bandits and robbers," China's Southern Metropolis Weekly newspaper quoted one fisherman as saying Tuesday. The story, shared thousands of times on China's Sina Weibo social media website, said the hijackers ripped down the Chinese flag on one boat and used it "like a rag." While much remains unclear about the event — including whether the fishing boats were poaching in North Korean waters — to some Chinese observers it seemed like a slap on the face from Kim Jong Un, who took power after his dictator father died five months ago. "The context of what is happening now between China and North Korea is this: Since Kim Jong Il died, the Kim Jong Un regime has been unfriendly to China," said Shi Yinhong, an international relations expert at Renmin University in Beijing. But even to the skeptics, the recent discord is unlikely to rupture an alliance that the countries' communist leaders like to say was "sealed in blood" in the Korean War. "They can weather it," said John Delury of Yonsei University's Graduate School of International Studies in South Korea. Pyongyang remains heavily reliant on Beijing for diplomatic protection in the United Nations and for much of the country's food, trade and oil. Chinese leaders worry that without the Kims in power, a North Korean meltdown would send a destabilizing wave of refugees into China and give U.S. troops stationed in South Korea an opportunity to move closer to the Chinese border. But in part because of its steadfast support, Beijing finds the lack of regard from Pyongyang all the more irritating. Relations between the two sides are "very strained at the moment," said Stephanie Kleine-Ahlbrandt, a Beijing-based analyst with the International Crisis Group think tank. The strains come as Beijing would like to coax the young Kim into launching bolder economic reforms to lessen North Korea's reliance on hand-outs and into easing regional tensions so as not to drive the U.S., South Korea and Japan into closer alliance. The fishing fleet episode comes amid other diplomatic frictions. Shi, the Chinese analyst, said Pyongyang failed to give Beijing a heads-up about a deal concluded with Washington in February for American food aid in return for concessions on North Korean missile and nuclear programs. Pyongyang compounded the affront by testing a rocket that stoked regional tensions and drew strenuous Chinese objections. China called in the North Korean ambassador to Beijing and urged Pyongyang publicly to desist, to no avail. Pyongyang did not give Beijing advance notification of the launch last month, said Shi and others. "They did not inform China in advance. The Chinese government is indignant," Shi said. The United States and other critics called the rocket launch a cover for a test of missile technology, and the U.N. Security Council — with China's backing — strongly condemned the launch. North Korea said the rocket, which broke into pieces over the Yellow Sea shortly after liftoff, was meant to send an observational satellite into orbit. Beijing rarely rebukes Pyongyang in public. Both governments prefer to keep their dealings out of public view, making it always difficult to assess the tenor of ties. Still, the perceived slights from Pyongyang contrast with Beijing's full-bodied embrace of Kim Jong Un. Within hours of Kim Jong Il's death, Chinese President Hu Jintao and other top leaders expressed support for the younger Kim's succession, and they have invited him to visit China. Analysts said that there has been a marked fall-off in high-level diplomatic visits to North Korea by Chinese officials, but that could be attributed to North Korea's mourning period for Kim and a preoccupation with internal transition politics. "Communication channels have never been broken between the two sides," said Shi Yuanhua, Director of Center for Korean Studies of Fudan University in Shanghai. Some among China's North Korea watchers have criticized Beijing's seemingly unconditional support for North Korea as part of the problem. With little at risk, their thinking goes, Pyongyang is encouraged to engage in high-stakes policies. South Korean intelligence reports and satellite imagery have shown new tunnel-digging at a North Korean nuclear test site in possible preparation for testing a nuclear device, its third in six years. If Pyongyang goes ahead, the test is likely to leave Beijing feeling further ignored, but without other repurcussions. "Although Beijing would probably prefer North Korea not to conduct another rocket or nuclear test, it would not really alter the fundamental strategic calculus from the Chinese government's perspective," said Delury.

Iran’s Ahmadinejad to visit as China slams new sanctions Posted: 24 May 2012 12:49 PM PDT Source: Reuters By Ben Blanchard (Reuters) – Iranian President Mahmoud Ahmadinejad will visit China in June for a security summit and discuss his country's disputed nuclear programme with Chinese President Hu Jintao, a senior diplomat said on Wednesday, criticizing new sanctions aimed at Iran. Ahmadinejad will be attending the Shanghai Cooperation Organisation (SCO) meeting hosted by Beijing in June, China's Vice Foreign Minister Cheng Guoping told reporters at a briefing. The SCO is a regional security forum that groups China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan and which Iran is attending as an observer. The summit will likely be overshadowed by the presence of Ahmadinejad, whose country is at the centre of a standoff with the West over its nuclear programme. "Certainly, during his meeting with President Hu, the Iran nuclear issue will be an important talking point," Cheng said. Ahmadinejad's visit to China takes on particular significance as China is a veto-wielding permanent member of the U.N. Security Council and has resisted U.S. demands for sanctions on Iran. Iran, OPEC's second-largest producer, exports most of its 2.2 million barrels of oil per day to Asia, home to its four main customers: China, Japan, India and South Korea. All four nations have cut back on their purchases, dissuaded by a previous package of U.S. financial sanctions due to take effect at the end of June as well as an EU oil embargo and a ban on shipping insurance, which take effect on July 1. The U.S. Senate unanimously approved on Monday a package of new economic sanctions on Iran's oil sector. Iran is under increasing pressure to curb its nuclear programme and its security council chief is due to hold talks in Iraq later on Wednesday with six world powers – the United States, Britain, France, Russia, China and Germany. The International Atomic Energy Agency (IAEA) earlier announced it was close to a deal to unblock monitoring of Iran's suspected work on a nuclear weapon, a positive sign before the six big powers meet Iran's security council chief. China has repeatedly urged a negotiated solution to the dispute over Tehran's atomic activities, which Western governments say appear aimed at mastering the means to make nuclear weapons. Tehran says those activities are peaceful. Asked about new U.S. and European Union sanctions targeting Iran's crucial oil exports, Cheng repeated China's opposition to what it views as unilateral moves made outside the framework of the United Nations. "We strictly follow the relevant U.N. resolutions on the Iran nuclear issue. But at the same time, China opposes using bilateral sanctions to force other countries or to harm other countries from normal trading with Iran," he said. While Chinese Premier Wen Jiabao warned Tehran in January against any effort to acquire nuclear weapons, Beijing has generally been reticent about publicly warning Iran or even firmly suggesting that Tehran might want to develop the means to develop nuclear weapons. Communist Party mouthpiece the People's Daily warned in a commentary on Wednesday that increased U.S. pressure on Iran risked worsening the crisis. "The United States still has a lot of room for maneuver on the Iran nuclear issue. But … stubbornly sticking to confrontation will most likely lead to new strategic misjudgments," it wrote. The People's Daily commentary was published under the pen name "Zhong Sheng", meaning "Voice of China", which is often used to give the paper's view on foreign policy issues.

China Pledges More ‘Fine-Tuning’ in Support for Growth Posted: 24 May 2012 12:59 PM PDT Source: Wall Street Journal By Aaron Back As evidence gathers that the Chinese economy continued to slow in May, Beijing is outlining a series of steps to prop up growth, including targeted tax cuts and support for favored sectors like new energy technologies. The latest sign of weak economic performance came on Thursday, with HSBC Holdings PLC's purchasing managers index, which fell to a preliminary reading of 48.7 in May from 49.3 in April, indicating that manufacturing activity declined for the seventh straight month. A reading below 50 indicates contraction; above 50, expansion. The May PMI follows a series of weak readings for April on everything from foreign trade to bank lending. Despite the worrying economic data, analysts say a massive stimulus program like that seen during the global financial crisis in 2008 and 2009—which relied on state-directed bank lending to prop up investment—remains unlikely. Instead, Beijing is turning to a patchwork of initiatives across various areas that it hopes will complement its long-term drive to shift to a more resilient, modern economy powered by consumption, innovation and private-sector activity. Nonetheless, there remains a serious risk that events abroad, in particular a potential Greek exit from the euro, could trigger a steeper downturn in China. In such a scenario, economists say, China would still be able to unleash a stronger stimulus, though possibly at the expense of its long-term economic overhaul. "If loan growth and investment fail to pick up soon, the state sector will come under heavy pressure to start spending," Mark Williams, an economist at research firm Capital Economics, said in a note. "Prospects that the economy will soon be put on a more sustainable, more consumer-led footing still look remote." China appears set to expand a tax overhaul launched at the start of the year in Shanghai, where certain service sectors moved from paying a business tax to a value-added tax, or VAT, getting a substantial tax cut in the process. That system is likely to be introduced to Beijing around the beginning of July and to the entire nation within about two years, Lachlan Wolfers, a tax partner at KPMG China, told The Wall Street Journal in an interview. KPMG has been working with the government on the overhaul. Separately, China's Ministry of Industry and Information Technology released a statement Thursday calling for an end to administrative fees on small enterprises, as well as to a number of fines and charges imposed by local government departments, a major complaint of smaller companies. Earlier, on Wednesday evening, China's State Council, the country's cabinet, pledged structural tax reforms to ease the financial burden on domestic companies, without giving specifics. Authorities will encourage private investment in sectors such as energy, railways and telecommunications, it said. The State Council also pledged to support the use of solar and other new energy technologies, and to accelerate deployment of fiber-optic cables for households. Last week, the State Council unveiled a modest package of subsidies on purchases of environmentally friendly, energy-saving household appliances. Beijing's relatively cautious approach to stimulus thus far may still be upended by events abroad. "Europe is China's biggest export market. If there is a big growth shock in Europe, it certainly will influence China's growth," Murtaza Syed, the International Monetary Fund's resident representative in China, said at a forum on Thursday. "The good thing is that China has enough fiscal room to deal with the bad downside scenario."

Deposed Politician’s City Lists Names for Meeting on China’s Next Leaders Posted: 25 May 2012 08:45 AM PDT Source: New York Times By Edward Wong BEIJING — The Communist Party branch in Chongqing, the teeming western municipality once governed by the deposed politician Bo Xilai, has named candidates for its delegation to a critical party conference in the fall at which China's next leadership lineup is expected to be announced. The list of 50 candidates includes some officials considered allies of Mr. Bo, but excludes Mr. Bo himself. Political experts in China are scrutinizing the lists of the candidates and those already named as delegates to the conference, the 18th Party Congress, for signs of fallout from the seismic scandal over Mr. Bo. For example, despite his initial support of Mr. Bo, Zhou Yongkang, a member of the elite Politburo Standing Committee and overseer of China's domestic security apparatus, was named last week to the delegate list from the Xinjiang region. Some analysts had raised doubts over whether Mr. Zhou would be invited to attend the party congress, which is to take place here in Beijing. Huang Qifan, the mayor of Chongqing, was on the list of Chongqing candidates, which was released on Monday and reported by the official news media on Wednesday. Mr. Huang is closely associated with economic policies promoted by Mr. Bo, though Mr. Huang had already helped formulate many of those policies in his role as vice mayor before Mr. Bo arrived in December 2007. Mr. Huang became the mayor in January 2010. The fate of Mr. Huang has been the subject of much speculation since Mr. Bo was removed in March from his position as the Chongqing party chief and suspended from the central party's Politburo in April. Mr. Bo is under investigation for the ways he used his power, and many people close to him have been questioned or detained. But with his appearance on the candidate list, Mr. Huang appeared to have sidestepped any serious trouble, and was seen as likely to be appointed to the party's Central Committee at the Beijing gathering in the fall. At the last party congress, in 2007, all party secretaries and mayors of province-level entities, which includes Chongqing, a fast-growing territory on the Yangtze River with a population of 31 million, were appointed to the Central Committee, which has about 300 members. Another official closely associated with Mr. Bo's policies, Yao Ning, was also named as a candidate. Ms. Yao was a prosecutor in the case of Li Zhuang, a lawyer from Beijing who defended a Chongqing businessman during a crime crackdown started by Mr. Bo. Mr. Li was convicted of suborning perjury and served 18 months in prison. Many Chinese intellectuals rallied to Mr. Li's cause and accused Mr. Bo and his allies in Chongqing of undermining the legal system. Ms. Yao was one target of that criticism. This week some liberal Chinese posted messages on microblogs denouncing her being named to the list of Chongqing candidates. Yuan Yulai, a lawyer in Zhejiang Province, wrote on his microblog that Ms. Yao "went beyond the scope of public prosecution in wantonly vilifying Li Zhuang" with "false accusations." Ms. Yao was not available for comment. The list of 50 candidates will be winnowed to 41 delegates at the Chongqing Party Congress, which is scheduled to take place next month after being pushed back from May because of the recent political upheavals. The party's central body in Beijing will appoint one delegate, making the total from Chongqing 42. A new party secretary for Chongqing is also expected to be named at the local congress. Several political observers in Chongqing say the two favorites are Jiang Yikang, the party chief of Shandong Province, and Zhou Qiang, the party chief of Hunan Province. The two men are on opposite sides in the two broad factions of Chinese elite politics: Mr. Zhou is associated with the Youth League faction, led by President Hu Jintao, while Mr. Jiang is said to be an ally of Jiang Zemin, Mr. Hu's predecessor and the leader of the so-called Shanghai Gang. The party secretary of Chongqing is expected to get a seat on the 25-member Politburo. After Mr. Bo was removed from that post, Zhang Dejiang, a vice premier and ally of Jiang Zemin, was sent to Chongqing as a caretaker party chief. He is considered a contender for the Politburo Standing Committee, which rules China by consensus. That committee has nine members, but there is talk that the number could be cut to seven. If that were the case, five seats would be up for grabs, since two current committee members, Xi Jinping and Li Keqiang, are expected to stay on and take over the top two posts in China. Both have been helped by the scandal, which removed Mr. Bo as a potential challenger to their hold on power.