News » Society » 50 dead, 42 missing as downpours pummel nation

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• 50 dead, 42 missing as downpours pummel nation
• Passengers and crew foil hijack attempt during flight to Urumqi
• Astronauts back on Earth, and they're feeling good
• 20 die in gas tanker explosion
• Nantong probes child lead poisoning cases
• Party expels pilot for causing deadly jet crash
• 175b yuan rural plan for safe drinking water
• Nantong probes child lead poisoning cases
• Party expels pilot for causing deadly jet crash
• 175b yuan rural plan for safe drinking water
• Tsingtao Chairman Jin Zhiguo Quits Two Weeks After Investor Share Sale
• China Vexes Smartphone Makers
• United Technologies Helped Build China’s First Military Attack Copter
• U.S. grants Iran sanctions exceptions to China
• Chinese Astronauts Return From Orbit
• Have You Heard…
• China blocks Bloomberg websites
• China blogger wins Bo Xilai case
• VIDEO: Hong Kong's gap between rich and poor
• VIDEO: China's first woman in space returns

50 dead, 42 missing as downpours pummel nation Posted: 29 Jun 2012 10:25 AM PDT FLOODS triggered by strong rainfall that has been battering many parts of China since June 20 have left 50 people dead and 42 missing, officials said. More than 10.4 million people have been affected by downpours in 399 counties in Inner Mongolia, Zhejiang, Fujian, Jiangxi, Hubei, Hunan, Guangdong, Guangxi, Chongqing, Sichuan and Guizhou, with 1.247 million in urgent need of aid, as of yesterday morning, according to the Ministry of Civil Affairs. Torrential rain also toppled 34,000 houses, damaged another 89,000 and destroyed 738,000 hectares of crops in these regions, resulting in direct economic losses of 10.3 billion yuan (US$1.62 billion). The ministry said some of the affected provinces have been battered by numerous rounds of heavy rain since April while other usually water-starved regions, including the Inner Mongolia Autonomous Region, have suffered record levels of rain that ruined many of their crops. The ministry said more than half of the affected counties and cities are in the country's impoverished regions and ethnic areas where local residents with already limited means of self-support largely rely on government aid. Local governments in disaster-hit regions have poured more than 90 million yuan into aid, including 20 million yuan allocated to Inner Mongolia - one of the hardest-hit areas - the ministry said. Persistent rain continues in south China. In the Guangxi Zhuang Autonomous Region, the death toll from week-long rainstorms has risen to 11, the regional civil affairs department said. Another round of storms is expected to arrive in Guangxi today and tomorrow as a result of the upcoming tropical depression Duksuri, which is due to land in Guangdong early today. In neighboring Guizhou Province, three people were killed and another injured in a landslide yesterday. And at least three people have been confirmed dead with 38 others still missing after a mudslide at a construction zone on Thursday morning in the southwestern province of Sichuan.

Passengers and crew foil hijack attempt during flight to Urumqi Posted: 29 Jun 2012 10:19 AM PDT PASSENGERS leapt into action to help aircrew foil an attempted hijacking by six men on a flight in northwest China's Xinjiang Uygur Autonomous Region yesterday. Two policemen on the flight were seriously injured while the head attendant and seven passengers received minor injuries, Xinhua news agency said. There were more than 92 passengers and nine crew members aboard Tianjin Airlines' Flight GS7554 when the men attempted the hijack about six minutes after take-off from the desert city of Hotan at 12:25pm. The plane was heading for the regional capital Urumqi, about 1,400 kilometers away, police said. The six suspects are in police custody, the Civil Aviation Administration of China said. "The hijackers claimed to have a bomb and tried to rush into the cockpit, but failed to open the door," a Beijing resident whose husband was on the flight, told Shanghai Daily yesterday. The woman, who declined to be named, said one of the hijackers took out a ball-shaped device and tried to ignite it. Two guards on the flight and several passengers, some of whom were police officers, jumped from their seats to tackle the hijackers, she said. They forced the hijacker to let go of the device before it could be ignited and finally subdued all of them as more passengers rushed to help, she said. "One of the hijackers pretended to be lame and hid the device in a walking stick to be able to dodge the security checks at the airport," she said. During the fight, he used the walking stick as a weapon to seriously injure the guards and passengers, she added. The jet returned to Hotan Airport at 12:41pm. Police checked all passengers after the plane landed and discovered another accomplice of the hijackers, the woman said. Police asked all the passengers to write down what they had seen during the hijacking attempt, she said. The airline arranged another flight at around 9:30pm to take the passengers to their destination. A photograph posted online showed passengers holding down the head of at least one of the suspects and some blood could be seen on one of the seats. In another picture, more than 10 armed police could be seen on the runway beside the plane. The civil aviation administration said a police investigation was ongoing and it could give no further details. A spokeswoman for Hainan Airlines, which owns Tianjin Airlines, said: "The airline is cooperating with the police to investigate the case and is not allowed to reveal any more details." In March 2008, two Uygur women attempted to blow up a China Southern Airlines flight from Urumqi to Beijing, but were stopped by crew members. A stewardess detected the smell of gasoline during the flight and traced it to one of the women who became agitated when questioned. Her accomplice was caught trying to ignite fuel in the plane's bathroom.

Astronauts back on Earth, and they're feeling good Posted: 29 Jun 2012 09:51 AM PDT "WE have returned, and we feel good," was the message relayed by China's three astronauts after they touched down on grassland in the north yesterday at the end of a 13-day mission to an orbiting module that is a prototype of a future space station. The Shenzhou-9 return module, carrying China's first woman in space and two colleagues, came down at around 10am in Siziwang Banner of the Inner Mongolia Autonomous Region. A parachute slowed their descent while a rocket was fired just before landing to position the module so that the hatch was in the right position to allow an easy exit. Helicopters which had been tracking the capsule since it entered the Earth's atmosphere hovered above the landing area as the capsule approached. It was just moments after touchdown that ground crew rushed to open the hatch. Medical staff who went inside said all three were in good health. Premier Wen Jiabao watched the landing from the command center in Beijing and congratulated the crew and welcomed them home. "This is another outstanding contribution by the Chinese people to human efforts to explore and use space," Wen said. Mission leader Jing Haipeng was first to leave the capsule, smiling and waving in his white space suit as he was helped out by two ground crew members. Fellow astronauts Liu Wang and Liu Yang followed to loud applause. "We are proud of the motherland," Liu Yang said to waiting reporters. Her red lips indicated she had put make-up on for her return. She had been allowed to take some specially made cosmetics into space, but appeared not to have used them during the mission judging by the daily television broadcasts. The mission marked the first time China had transferred astronauts between two orbiting craft, a milestone in its efforts to acquire the technological and logistical skills to run a space station that can house people for long periods. The mission also included manual docking maneuvers that marked another major step forward for China's ambition to become the third nation to build a permanent space station by 2020. The launch, landing and docking exercises with the Tiangong-1 space lab module were broadcast live on China Central Television. Chang Wanquan, chief commander of China's manned space program, announced in Beijing that the mission had been a "complete success." Before they were flown to the nation's capital for more physical examinations, the astronauts had lunch at the landing site. "Their first meal after landing included stewed mutton, porridge, steamed buns, pickles and vegetables and fruit," said Bai Yanqiang, deputy commander of the mission's astronaut system. They also had special drinks to boost heir energy, Bai said. Nutritionists had customized the menu for each astronaut after talking with them, he added. The astronauts successfully completed a manual docking between Shenzhou-9 and Tiangong-1 on Sunday, the first such attempt in the country's history of space exploration. The spacecraft and space lab had docked automatically on June 18, after the astronauts launched into space on June 16 from northwest China's Gobi desert. They also conducted a series of scientific and medical tests during their 13-day space flight. This posting includes an audio/video/photo media file: Download Now

20 die in gas tanker explosion Posted: 29 Jun 2012 09:50 AM PDT TWENTY people died when a tanker loaded with 40 tons of gasoline collided with a truck on an expressway in the southern Chinese city of Guangzhou yesterday morning. At least two of 14 people injured in the explosion and the massive fire that followed suffered severe burns. Some of the dead were workers at a timber processing plant near the scene, and others were local residents. The two drivers survived and are being treated in hospital where they are both said to be in a stable condition. The accident happened at about 4:30am on the Yanjiang Expressway in Guangzhou, capital city of Guangdong Province. Gasoline leaking into drainage ditches triggered a fire in the timber plant close to the expressway at 5:15am, Guangzhou government officials said. The blaze spread over some 2,000 square meters of the surrounding area. Dozens of vehicles parked at the plant and a fire engine were damaged in the fire. Many workers fell victim to the explosion and their bodies were badly burned, Guangzhou Daily reported. One worker who survived, surnamed Zhu, said he saw a fireball hit the plant. He suffered burns all over his back. A local resident identified as Chole-Lam online said he and his neighbors were woken by a huge explosion. "I thought the end of the world might have come." It took 185 firefighters and rescue workers about four hours to bring the blaze under control, officials said. The injured were taken to hospital while several hearses from a Guangzhou funeral house arrived to take the bodies away. The Guangzhou Blood Center issued an appeal for blood donors. The oil tanker driver surnamed Zhou, 38, and the truck driver surnamed Liu, 35, are said to have been detained by police. Both vehicles carried plates from central China's Hunan Province. The wreckage had been cleared by yesterday afternoon and the scene was cordoned off. The Guangzhou government said a team of professionals had been mobilized to check the expressway to ensure that it was safe to reopen to traffic.

Nantong probes child lead poisoning cases Posted: 29 Jun 2012 09:00 AM PDT NANTONG City authorities said yesterday that they are investigating allegations that hundreds of wire rope manufacturers are responsible for excessive lead levels in more than 200 children. Authorities have been accused of turning a blind eye to the case. A preliminary investigation found 184 of 655 children who were tested as of Thursday had high lead levels and 19 were diagnosed with lead poisoning, said a spokesman for the Nantong City Economic and Technological Development Area, Jiangsu Province. The affected children would be treated free of charge. Children under the age of 10 who live in the Zhuhang and Xiaohai communities, where most of the wire rope manufacturers are based, would be given free health checks, the spokesman said. Authorities said the cause of the lead poisoning has yet to be determined. The manufacturers in the area account for 33 percent of the domestic wire rope market and export products to 20 countries and regions. During production large amounts of lead dust is generated. Children living nearby were exposed to lead dust. Symptoms of lead poisoning include irritability, difficulty sleeping and general weakness. Parents said the plants were built 50 meters from residential complexes while state rules say the distance should be at least 100 meters. "Officials have long promised to move the plants," one resident said. "But years later, nothing has changed and the plants continue to operate."

Party expels pilot for causing deadly jet crash Posted: 29 Jun 2012 09:00 AM PDT A HENAN Airlines captain has been expelled from the Communist Party of China and fired for trying to land a plane despite poor visibility, resulting in an air crash that killed 44 people in Yichun, Heilongjiang Province, in 2010. Qi Quanjun, the captain, had his pilot's license revoked for violating aviation regulations and may face criminal responsibility, the State Administration of Work Safety said yesterday. Henan Airlines Co Ltd was fined 5 million yuan (US$786,780) for lax management of its crew and poor supervision of irregularities during a flight. Qi was deemed responsible for the accident as he piloted the plane toward the runway despite visibility deemed to be low for landing aircraft, the administration said. The visibility at the time was 2,800 meters due to fog, 800 meters below the lowest distance allowed for safe landings. Other flight crew members such as copilot Zhu Jianzhou were also held partly responsible for not reminding Qi that visibility was too poor to land the plane, the administration said. Zhu died in the accident. A number of Henan Airlines employees were fired after the accident. Forty-four people were killed after an E-190 plane traveling from Harbin, capital of Heilongjiang Province, overshot the runway and crashed in Yichun in August 2010. A total of 96 passengers were on board. The plane missed the runway by 1.5 kilometers and broke into two upon landing, throwing some passengers out of the cabin. The aircraft then caught fire before exploding.

175b yuan rural plan for safe drinking water Posted: 29 Jun 2012 09:00 AM PDT CHINA will invest 175 billion yuan (US$27.53 billion) before the end of 2015 to ensure safe drinking water in rural areas, a government official said yesterday. Vice Minister of Water Resources Li Guoying made the pledge at an ongoing bi-monthly session of the National People's Congress Standing Committee, citing a State Council report on a five-year plan for improving rural drinking water quality. The report was deliberated by legislators on Thursday. According to the report, the central government will subsidize 68 percent, or about 118.8 billion yuan, of the total investment, while another 22 percent of the funds will be provided by local governments and 10 percent will be assumed by rural residents, Li said. Residents will be charged an average of 54.6 yuan annually, according to the report. Li said subsidies in eastern and central China are typically less than those in the country's less-developed western areas. In the Tibet Autonomous Region, for example, the central government will bear all of the costs, Li said. The number of rural residents who lacked access to safe drinking water dropped by 221 million between 2004 and 2010, Du Ying, vice minister of the National Development and Reform Commission, said at the Wednesday session. However, legislators have admitted that improving the quality of drinking water in China has been challenging, particularly in rural areas. As many as 298 million rural residents still lack safe water, according to the report. In the next three years, the central government's allocation will be first used to guarantee the operation of drinking water projects for rural areas, Li said. Meanwhile, efforts should be made to protect water sources by reducing and optimizing the use of fertilizers and pesticides in agriculture, reducing pollution and improving the restoration of rural ecosystems, said Li. China amended its drinking water quality standards in 2006, increasing the number of water quality indices to 106. "By the end of 2015, the 106 quality indices will be implemented in all provincial capitals and municipalities," Minister of Health Chen Zhu said. Also by 2015, nearly 80 percent of the rural population will have access to safe drinking water through centralized water supply facilities, Du said. China should also deepen its reform of water prices nationwide and further promote progressive pricing schemes.

Nantong probes child lead poisoning cases Posted: 29 Jun 2012 09:00 AM PDT NANTONG City authorities said yesterday that they are investigating allegations that hundreds of wire rope manufacturers are responsible for excessive lead levels in more than 200 children. Authorities have been accused of turning a blind eye to the case. A preliminary investigation found 184 of 655 children who were tested as of Thursday had high lead levels and 19 were diagnosed with lead poisoning, said a spokesman for the Nantong City Economic and Technological Development Area, Jiangsu Province. The affected children would be treated free of charge. Children under the age of 10 who live in the Zhuhang and Xiaohai communities, where most of the wire rope manufacturers are based, would be given free health checks, the spokesman said. Authorities said the cause of the lead poisoning has yet to be determined. The manufacturers in the area account for 33 percent of the domestic wire rope market and export products to 20 countries and regions. During production large amounts of lead dust is generated. Children living nearby were exposed to lead dust. Symptoms of lead poisoning include irritability, difficulty sleeping and general weakness. Parents said the plants were built 50 meters from residential complexes while state rules say the distance should be at least 100 meters. "Officials have long promised to move the plants," one resident said. "But years later, nothing has changed and the plants continue to operate."

Party expels pilot for causing deadly jet crash Posted: 29 Jun 2012 09:00 AM PDT A HENAN Airlines captain has been expelled from the Communist Party of China and fired for trying to land a plane despite poor visibility, resulting in an air crash that killed 44 people in Yichun, Heilongjiang Province, in 2010. Qi Quanjun, the captain, had his pilot's license revoked for violating aviation regulations and may face criminal responsibility, the State Administration of Work Safety said yesterday. Henan Airlines Co Ltd was fined 5 million yuan (US$786,780) for lax management of its crew and poor supervision of irregularities during a flight. Qi was deemed responsible for the accident as he piloted the plane toward the runway despite visibility deemed to be low for landing aircraft, the administration said. The visibility at the time was 2,800 meters due to fog, 800 meters below the lowest distance allowed for safe landings. Other flight crew members such as copilot Zhu Jianzhou were also held partly responsible for not reminding Qi that visibility was too poor to land the plane, the administration said. Zhu died in the accident. A number of Henan Airlines employees were fired after the accident. Forty-four people were killed after an E-190 plane traveling from Harbin, capital of Heilongjiang Province, overshot the runway and crashed in Yichun in August 2010. A total of 96 passengers were on board. The plane missed the runway by 1.5 kilometers and broke into two upon landing, throwing some passengers out of the cabin. The aircraft then caught fire before exploding.

175b yuan rural plan for safe drinking water Posted: 29 Jun 2012 09:00 AM PDT CHINA will invest 175 billion yuan (US$27.53 billion) before the end of 2015 to ensure safe drinking water in rural areas, a government official said yesterday. Vice Minister of Water Resources Li Guoying made the pledge at an ongoing bi-monthly session of the National People's Congress Standing Committee, citing a State Council report on a five-year plan for improving rural drinking water quality. The report was deliberated by legislators on Thursday. According to the report, the central government will subsidize 68 percent, or about 118.8 billion yuan, of the total investment, while another 22 percent of the funds will be provided by local governments and 10 percent will be assumed by rural residents, Li said. Residents will be charged an average of 54.6 yuan annually, according to the report. Li said subsidies in eastern and central China are typically less than those in the country's less-developed western areas. In the Tibet Autonomous Region, for example, the central government will bear all of the costs, Li said. The number of rural residents who lacked access to safe drinking water dropped by 221 million between 2004 and 2010, Du Ying, vice minister of the National Development and Reform Commission, said at the Wednesday session. However, legislators have admitted that improving the quality of drinking water in China has been challenging, particularly in rural areas. As many as 298 million rural residents still lack safe water, according to the report. In the next three years, the central government's allocation will be first used to guarantee the operation of drinking water projects for rural areas, Li said. Meanwhile, efforts should be made to protect water sources by reducing and optimizing the use of fertilizers and pesticides in agriculture, reducing pollution and improving the restoration of rural ecosystems, said Li. China amended its drinking water quality standards in 2006, increasing the number of water quality indices to 106. "By the end of 2015, the 106 quality indices will be implemented in all provincial capitals and municipalities," Minister of Health Chen Zhu said. Also by 2015, nearly 80 percent of the rural population will have access to safe drinking water through centralized water supply facilities, Du said. China should also deepen its reform of water prices nationwide and further promote progressive pricing schemes.

Tsingtao Chairman Jin Zhiguo Quits Two Weeks After Investor Share Sale Posted: 29 Jun 2012 08:26 AM PDT Source: Bloomberg News Tsingtao Brewery Co. (600600), China's second-largest brewer by market share, reported the resignation of its chairman less than two weeks after an investor sold a block of shares 7 percent below market price. Chairman Jin Zhiguo resigned for health reasons and had no contact with the investor before the share sale, Tsingtao said in two separate stock exchange filings yesterday. Jin will be replaced by President Sun Mingbo, the company said. Tsingtao, based in the coastal city of Qingdao in Shandong province, in March pledged to boost growth by expanding capacity, developing new products and seeking acquisitions. The stock has dropped in Hong Kong this month as one of the company's investors, billionaire Chen Fashu, agreed to sell shares in the company at a discount. Tsingtao plunged 7.8 percent, the most in two years, on June 19 as Chen offered 32 million shares at HK$47 apiece, 7 percent less than the previous closing price of HK$50.55, according to a copy of a term sheet obtained by Bloomberg. Tsingtao yesterday said the company "did not have prior knowledge" of the sale and that Jin has confirmed he had no contact with Chen before the stake reduction. The stock dropped 1.3 percent to close at HK$44.05 in Hong Kong trading. The shares, suspended in Hong Kong since June 27, resumed trading today. The board has agreed to give Jin the title of "honorary chairman," the company said. "Given the long tenure Mr. Jin had with the company, and the crucial role he played in crafting out its strategy and development, his step down will likely weigh negatively on sentiment, at least in the short term," Bank of America Merrill Lynch analyst Tina Long wrote in a note to clients. Profit Increase Tsingtao, founded by German settlers more than a century ago in Qingdao, reported a 14 percent increase in 2011 profit on demand for alcoholic drinks in the world's most populous nation. Jin has held roles at Tsingtao including general manager and president, according to the company's annual report. He became president in 2001 and chairman in 2008. Jin is a member of China's National People's Congress, the report said. He quit because he needs "systematic treatment for personal health reasons," the company said. China's brewers are battling rising competition and higher expenses. Tsingtao in March said it faces challenges this year that include a "weak global economy, slowing domestic consumption growth, and rising human-resources costs." Profit margin at its core businesses narrowed to 33.4 percent from 35.2 percent a year earlier as raw material costs increased, the company said in March. China Resources Enterprise Ltd. (291), which makes Snow beer through its joint venture with SABMiller Plc (SAB), had a 22 percent share of the China beer market in 2011, according to data from Euromonitor International. Tsingtao was second with a 14 percent share.

China Vexes Smartphone Makers Posted: 29 Jun 2012 08:30 AM PDT Source: Wall Street Journal By Paul Mozur BEIJING—Regulations proposed by the Chinese government for the country's burgeoning smartphone market, already the largest in the world, are prompting concern from industry groups representing companies such as Apple Inc. and Google Inc. The draft law, for which the public-comment period ends this weekend, is the beginning of China's effort to regulate the fast-growing mobile-applications market and could force industry leaders to censor what applications they offer, build phones with China-mandated security requirements and include features that would help the government identify users. China's Ministry of Industry and Information Technology says the proposed rules are designed to protect the personal information of smartphone users. Chinese media have reported that the regulation would target malicious software—common on cheap, unbranded smartphones in China—that can steal users' personal information and incur charges by sending text messages. Industry groups say the effect on companies would likely be higher costs and slower growth in one of the most important markets for electronics suppliers. Apple sold two million smartphones in China in the first quarter, Samsung Electronics Co. Ltd. sold 7.8 million and Motorola Mobility Holdings Inc. sold 1.5 million, according to Analysys International. The size of China's total smartphone market has more than tripled in less than three years, with 31.2 million smartphone devices sold in the first quarter, compared with just 7.2 million in the fourth quarter of 2009, Analysys says. The rapid adoption of new mobile devices and applications by Chinese consumers has outpaced authorities' ability to regulate them. China's mobile-apps market currently is largely unregulated. The proposed measures mandate that handset makers ensure that preloaded apps and those made available through other means meet with Chinese laws in order to be licensed to sell the phones in China. That could mean companies would be forced to remove applications deemed offensive or antigovernment by China from devices and app stores offered on phones. The proposed law also says new phones must be made in accordance with Chinese standards. If new standards put forth by the government-guided China Communications Standards Association are approved, the law could force handset makers to cooperate with China's government to identify customers and track their app use. Foreign companies seeking to tap China's vast consumer base periodically have run up against government rules. In 2003 China pushed to require personal-computer companies and other gadget makers to use a wireless Internet technology known as WAPI, a Chinese version of the international Wi-Fi standard. The rule prompted a backlash from the industry, and China backed down but later it enforced the standard for handsets. Because the Chinese standard generally is unused, handsets sold officially in China support Wi-Fi as well as WAPI. Google, in particular, has had a rocky relationship with Chinese authorities since it decided in 2010 to stop complying with censorship requirements. The company doesn't yet have its own app store available for Chinese users, and many Android phones ship preinstalled with software from Google's competitors. Users also often download Android applications from alternative app stores in China, such as one run by China Mobile Ltd. or smartphone maker Xiaomi. Industry groups said the proposed smartphone law would fundamentally alter the industry in China and that they were pushing for the government to extend the consultation period on regulation. "Our big asks here is to hold off…we would like a significant delay so there can be a thorough discussion with the Chinese government about these measures," says John Neuffer, vice president for global policy at the U.S.-based Information Technology Industry Council, which represents a hardware manufacturers including Motorola, Nokia Corp. and Apple. Google and Motorola declined to comment, while Apple, Nokia and Samsung couldn't be reached. Regulations proposed in China often are ambiguous, and analysts have pointed out that industry opposition can lead the government to pare back proposed rules. Also, while new regulations tend to put the technology industry on edge, China often doesn't fully enforce standards, making it unclear just what impact the rules would have even if enacted. The new smartphone measures have coincided with a proposal to require users to give real identification in order to register for Twitter-like microblogs as well as Internet forums. "We've seen a lot more overstretch in the current climate of crackdown and control. [China regulators] are trying to get away with more right now," says Duncan Clark, chairman of consulting firm BDA China. "They just keep ratcheting up." In recent months, the government has cracked down on Internet chatter after online rumors of a coup spread following the March ouster of senior party leader Bo Xilai. With a once-a-decade leadership transition set to start this fall, analysts say the government has been seeking to reassert control over the spread of information online. For the smartphone industry, the new rules are likely to hurt innovation and push up costs, Mr. Neuffer says. "We are seeing the appearance of domestic Chinese standards when other standards are available, new licensing requirements, ambiguous testing requirements and direct government supervision that our industry is not used to anywhere else in the world," he says. Meanwhile, Nick Fetchko, director for international and government affairs at the Telecommunications Industry Association, says the fact that the draft law had come out for public consultation was a positive development, as it means the government may consider scaling back the proposal. But he also warns about the damaging impact unique Chinese standards would have on the global industry. "It really is detrimental to the global industry because China's such a large and important market, and when they start doing things differently from what the rest of the world is doing, it really creates barriers to entry," he says.

United Technologies Helped Build China’s First Military Attack Copter Posted: 29 Jun 2012 08:36 AM PDT Source: Wall Street Journal By Kate Linebaugh When two United Technologies Corp.engineers first laid eyes on the Chinese helicopter their company was helping outfit, they were shocked by what they saw. "Where are the other ten seats?" one asked the Chinese official in charge of the program, according to U.S. law enforcement authorities who interviewed the engineers. Instead of a helicopter for ferrying around groups of civilians, the engineers saw a two-seater in military configuration equipped with Pratt & Whitney engines and mock weapons. The Chinese official just laughed, according to the Justice Department. What the engineers didn't know, and what the Justice Department has spent the past six years investigating, was that Pratt & Whitney Canada had agreed to help China build its first military attack helicopter as the price for the chance to win millions of dollars in civilian business. On Thursday, the UTC unit pleaded guilty to illegally supplying China with military technology and agreed to pay more than $75 million in penalties, in a major violation of U.S. arms control laws. The attack helicopter was powered by Pratt & Whitney engines, the same engines used on a civilian version. But the company admitted it had outfitted them with engine-control software modified for military use. The conglomerate also admitted making false statements about the sale of software that aided the development of the attack helicopter and not making timely disclosures of the violations, which happened from 2002 to 2003. "Due in part to the efforts of these companies, China was able to develop its first modern military attack helicopter with restricted U.S. defense technology," Assistant Attorney General Lisa Monaco said in a statement. The Z-10 helicopter is in production, and initial batches were delivered to the People's Liberation Army of China in 2009 and 2010, the Justice Department said. "Export controls are an integral part of safeguarding U.S. national security and foreign policy interests," United Technologies Chief Executive Louis Chenevert said in a statement. "We accept responsibility for these past violations and we deeply regret they occurred." The U.S. imposed a prohibition on export of all defense material to China, including helicopters, in the wake of the 1989 Tiananmen Square crackdown. Despite the ban, Chinese authorities wanted to develop a military attack helicopter with assistance from Western suppliers, and that's where Pratt Canada got involved, according to the Justice Department. Lured by the promise of being the exclusive engine supplier to China's civilian helicopter program with the potential to generate $2 billion in sales and service, executives at Pratt Canada dodged concerns that the sale of the engine software violated U.S. export laws. Pratt initially thought it wouldn't need an export license from Canada, but was informed by the government that it would. When Pratt Canada told the Chinese about the potential difficulty with exporting the technology for military use, the Chinese came up with a briefing paper about a civilian helicopter program that was running in parallel with the military one, the Justice Department said. At that time, Pratt executives said by putting forward the civilian program whether "real or imagined" created an opening for Pratt to get exclusive access, according to an email excerpted in the company's deferred prosecution agreement. Soon afterward, Canada issued a permit for Pratt to export engines for the program. In an email that the Justice Department said was sent on Sept. 12, 2001, Pratt Canada's export manager cautioned that the company had to be careful that the helicopter program with China not be presented as military. "We need to be very careful with the Z10C program," the email said, according to the deferred prosecution agreement. "If the first flight will be with a gun ship then we could have problems with the US government." The first flight of the Z-10 was as a military attack helicopter, according to another email from a Pratt executive that was cited by the Justice Department. By 2004, executives in the U.S. offices of Pratt and United Technologies became aware of the possible breaches. "I would say the '2 seat version' is code for an attack helicopter," a United Technologies legal official wrote in an email. "This has the possibility to be very controversial…Any concerns?" The companies only disclosed the breach to the U.S. authorities in July 2006 after a Scandinavian group that offers advice on socially responsible investing raised the issue with United Technologies, saying they were "carrying out in-depth research," according to an email cited by the Justice Department. The Justice Department said the company's disclosures between July and September 2006 contained a number of false statements, including that officials at UTC and its two units companies were unaware the Z-10 program was military in nature. Under a deferred prosecution agreement, United Technologies will pay $20.7 million to the Department of Justice and another $55 million to the State Department for hundreds of other arms export law violations that turned up in the wake of the Chinese helicopter investigation. Up to $20 million of that can be suspended if applied to compliance measures. In the end, Pratt & Whitney lost out on the Chinese engine deal as well. The Chinese decided to open its civilian helicopter program up for bids, and it ultimately required larger engines than Pratt could supply. In an email to Canadian authorities in June 2006, Pratt Canada said: "Due to the decision of the customer to change its requirements and re-open sourcing, we are no longer interested in participating in the Z10 portion of the program." "This prosecution is one of the largest resolutions of export violations with a major defense contractor in the Justice Department's history," U.S. Attorney for Connecticut David Fein said at a press conference. Pratt Canada "exported controlled U.S. technology to China, knowing it would be used in the development of a military attack helicopter," he said in a statement, taking "what it described internally as a 'calculated risk.'" After the U.S. investigation began, United Technologies conducted a thorough review of all of its units including at Sikorsky, the maker of Blackhawk helicopters, for possible breaches of the U.S. arms export law. During that review, the company unearthed 576 different violations, many largely administrative in nature, and disclosed them to the State Department. In the process, United Technologies says it has spent $30 million improving its adherence to the law and now has a stable of 175 executives to maintain compliance.

U.S. grants Iran sanctions exceptions to China Posted: 29 Jun 2012 08:40 AM PDT Source: Reuters By Timothy Gardner and Arshad Mohammed (Reuters) – The United States gave China a six-month reprieve from Iran financial sanctions on Thursday, avoiding a diplomatic spat with a country whose support it needs to try to quell violence in Syria and rein in Tehran's nuclear ambitions. With Thursday's decision to grant exceptions to China, which buys up to a fifth of Iran's oil exports, and Singapore, which buys Iranian fuel oil, the Obama administration has now spared all 20 of Iran's major oil buyers from its unilateral sanctions. The sanctions themselves are designed to pressure Iran to curb its nuclear program, which the West believes aims to develop nuclear weapons but which Tehran says is for peaceful purposes such as generating electricity and medical isotopes. U.S. Secretary of State Hillary Clinton said both China and Singapore earned the reprieve by cutting imports of Iranian crude and argued the reductions by all 20 countries showed that Iran was paying a high price for its nuclear program. "Their cumulative actions are a clear demonstration to Iran's government that Iran's continued violation of its international nuclear obligations carries an enormous economic cost," Clinton said in a release. Earlier this month the administration granted exceptions to India and six other economies. Japan and 10 European Union countries got exceptions in March. The sanctions seek to pressure Iran by choking off its oil revenues, the life blood of the Iranian economy. Iran's exports have already fallen about 1 million barrels per day, worth about $630 million a week, on the threat of U.S. and EU sanctions. But the impact on oil markets has been muted by a surge in production from the world's largest exporter, Saudi Arabia, and signs of economic troubles in Europe and China. Geng Shuang, a spokesman at China's embassy in Washington, said his country "will continue working with parties concerned to find a peaceful solution of the issue through dialogue and negotiation." SIGNIFICANT REDUCTIONS Under the law President Barack Obama signed late last year, the administration can cut foreign banks from access to the U.S. financial system if they perform oil transactions with Iran's central bank. The law also allows Obama to grant 180-day exceptions to any country that has "significantly reduced" purchases of Iranian oil. The administration has not specified the levels each country must cut, but officials have said Japan had trimmed imports by about 15 to 22 percent. China's imports from Iran fell about 25 percent in the first months of the year on an unrelated pricing dispute with Tehran. The imports bounced back in May and are expected to do the same in June and July. With the rebound, the administration risks criticism from sanctions supporters on Capitol Hill. ACTIONS LOUDER THAN WORDS "The Administration likes to pat itself on the back for supposedly being strong on Iran sanctions," said Republican Ileana Ros-Lehtinen, the chairman of the House Foreign Affairs Committee. "But actions speak louder than words, and today the Administration has granted a free pass to Iran's biggest enabler, China," she said. The administration, however, is probably "prepared to take that risk because it would want to avoid a major diplomatic spat with Beijing" over the sanctions, said Mark Dubowitz, the head of the non-profit group Foundation for Defense of Democracies, which advocates tough sanctions on Iran. Tension over sanctions had driven oil prices higher early this year, but the impact has faded. "The oil market has already priced this in as the assumption was that China would be able to continue trading with Iran regardless," said Societe Generale's global head of oil research, Michael Wittner. Some Iranian ships have turned off tracking devices, according to oil market sources, leaving open the question of whether China and other countries are importing crude that has gone undetected. "I think we basically witnessed a game of chicken between the U.S. and China and the Obama administration flinched first," a Senate Republican aide said, speaking on background. To renew its exception six months from now China will have to prove without doubt it has cut purchases from Iran, said Democratic Senator Robert Menendez, who helped craft the sanctions law. "We will expect to see additional significant reductions by China and other nations."

Chinese Astronauts Return From Orbit Posted: 29 Jun 2012 08:43 AM PDT Source: Associated Press BEIJING—A Chinese space capsule with three astronauts aboard returned to Earth on Friday from a 13-day mission to an orbiting module that is a prototype for a future permanent station. The Shenzhou 9 parachuted to a landing on the grasslands of the country's sprawling Inner Mongolia region at about 10 a.m. local time. China declared the mission to the Tiangong 1 module—the country's longest and most challenging space mission yet—a major stride for its ambitious space program. About an hour later, mission commander and veteran astronaut Jing Haipeng, 45, emerged from the capsule, followed by crew mates Liu Wang, 43, and 33-year-old Liu Yang, China's first female astronaut. Lifted onto folding chairs, the three—all experienced air-force pilots—smiled, waved, chatted and saluted as state television ran live footage from the landing site. "Tiangong 1, our home in space, was comfortable and pleasant," Ms. Liu told national broadcaster CCTV. "We're very proud of our nation." Space program commander Gen. Chang Wanchuan said the astronauts were in good health and declared the mission "completely successful." He was followed by Premier Wen Jiabao, who said the mission marked "absolutely important progress" for the space program. The mission had included both remote-control and piloted dockings with the module and extensive medical monitoring of the astronauts as part of preparations for manning a permanent space station. China's next goals include another manned mission to the module—originally scheduled for later this year but perhaps to be delayed, depending on an evaluation of the Shenzhou 9 mission and the condition of the Tiangong 1. China has been extremely cautious and methodical in its manned missions, with more than three years passing since the previous one, and all four have been relatively problem-free. Chen Shanguang, director for the Chinese Astronaut Research and Training Center, told a news conference that preparations and selection of astronauts were already under way for the Shenzhou 10 mission. Tiangong 1 is due to be retired in a few years and replaced in about 2020 by a station weighing about 60 tons, slightly smaller than NASA's Skylab of the 1970s and about one-sixth the size of the 16-nation International Space Station. China was barred from participating in the international station, largely over U.S. objections. Possible future missions could include sending a rover to the moon, possibly followed by a manned lunar mission. Launched June 16 from the Jiuquan center on the edge of the Gobi desert in northern China, Shenzhou 9 is the latest success for China's manned space program that launched its first astronaut, Yang Liwei, into space in 2003. China was just the third nation to achieve that feat, following the Soviet Union and U.S. China would also be the third country after those two to send an independently maintained space station into orbit. Earlier in the week, a spokeswoman said China spent 20 billion yuan ($3.1 billion) on its space program between 1992 and 2005—a rare admission for a program with close links to the secretive military. By the time the next Shenzhou mission is completed, Beijing will have spent an additional 19 billion yuan ($3 billion), the spokeswoman said.

Have You Heard… Posted: 29 Jun 2012 08:44 AM PDT Have You Heard…

China blocks Bloomberg websites Posted: 29 Jun 2012 08:51 AM PDT Internet users in mainland China are unable to access Bloomberg's website, after access was blocked by the Chinese authorities.

China blogger wins Bo Xilai case Posted: 29 Jun 2012 06:03 AM PDT The detention of a Chinese blogger who mocked scandal-hit politician Bo Xilai was illegal, a court says.

VIDEO: Hong Kong's gap between rich and poor Posted: 29 Jun 2012 04:00 AM PDT Chinese President Hu Jintao has arrived in Hong Kong to celebrate the 15th anniversary of the city's return to China, but he faces a noisy, unhappy public and an increasingly tense political climate.

VIDEO: China's first woman in space returns Posted: 29 Jun 2012 03:53 AM PDT A Chinese space capsule carrying three crew members has returned to Earth following a 13-day mission.

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