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• NY Times launches site in Chinese
• Bird flu `epidemic' sparks chicken cull
• Cadre sacked after abortion stirs firestorm
• A family planning official has been fired and several others punished after a woman was forced to abort her seven-month pregnancy, sparking a firestorm domestically and around the world.
• Cambodia tells of architect-Gu money links
• EU seeks WTO help in China row
• Chinese myth lends name to discovery
• China to double its Latin trade
• 110m yuan less spent by central government
• HK to issue stamps to mark 15th anniversary
• Illegal cargo ignited bus fire
• Four waitresses dismembered, two men held
• Driver strips after crash
• Health services disliked
• China’s Banks Target Australia
• In China, Banks Pitch Yield
• Vietnam Calls on Cnooc Parent to Scrap Oil Exploration Bids
• China unveils new boost for Hong Kong ahead of anniversary
• Military to strengthen ties with US
• EU, U.S., Japan seek further WTO steps over China rare earths

NY Times launches site in Chinese Posted: 27 Jun 2012 08:12 PM PDT The New York Times launches a Chinese language version of its website in a bid to tap into the world's biggest internet market.

Bird flu `epidemic' sparks chicken cull Posted: 27 Jun 2012 07:05 PM PDT

Cadre sacked after abortion stirs firestorm Posted: 27 Jun 2012 07:05 PM PDT

A family planning official has been fired and several others punished after a woman was forced to abort her seven-month pregnancy, sparking a firestorm domestically and around the world. Posted: 27 Jun 2012 07:05 PM PDT

Cambodia tells of architect-Gu money links Posted: 27 Jun 2012 07:05 PM PDT

EU seeks WTO help in China row Posted: 27 Jun 2012 08:04 AM PDT The European Union asks the World Trade Organisation to arbitrate in a row about China's export restrictions on its "rare earth" minerals

Chinese myth lends name to discovery Posted: 27 Jun 2012 10:21 AM PDT US scientists have discovered a previously unknown substance in the Allende meteorite believed to be among the oldest minerals in the solar system. The titanium oxide is named panguite after Pan Gu, the giant in ancient Chinese mythology who created the world by separating heaven and Earth from chaos. The denomination is "in allusion to the mineral with an ultra-refractory origin, being among the first solid materials formed in the solar system," Chi Ma, a senior scientist at the California Institute of Technology, said. The mineral and its name have been approved by the International Mineralogical Association's Commission on New Minerals, Nomenclature and Classification. A paper outlining the discovery and the properties of the new mineral will be published in the July issue of the American Mineralogist journal and is available online now. "Panguite is an especially exciting discovery since it is not only a new mineral, but also a material previously unknown to science," said Ma, who also serves as director of Caltech's Geological and Planetary Sciences division. Studies of panguite and other newly discovered refractory minerals are continuing in an effort to learn more about the conditions under which they formed and subsequently evolved. "Such investigations are essential to understand the origins of our solar system," Ma said. In 1969, an exploding fireball over Mexico scattered thousands of pieces of meteorite across the state of Chihuahua. The Allende meteorite is the largest carbonaceous chondrite, a diverse class of primitive meteorites, ever found on Earth.

China to double its Latin trade Posted: 27 Jun 2012 10:05 AM PDT PREMIER Wen Jiabao wrapped up a tour of resource-rich Latin America on Tuesday by offering US$10 billion in credit for infrastructure projects and calling for a joint push to combat protectionism. Wen proposed a free-trade deal with the Mercosur bloc and signed a series of investment accords during the trip to the region, a key source of agricultural and mineral commodities and a growing market for Chinese exports. "The Chinese government ... will continue to offer economic assistance to countries in the region that are interested," Wen told the UN regional economic body ECLAC in Chile, the world's No. 1 copper exporter. He said China's Development Bank would implement a US$10 billion credit program for infrastructure projects. He also said China would create a US$5 billion fund for cooperation between China and Latin America and the Caribbean. "We have to combat trade protectionism, broaden the mutual openness of our markets, optimize the trade structure and diversify cooperation in terms of customs and quality control," Wen said. The premier added that China also aims to nearly double trade with Latin America in five years to over US$400 billion. Last year, 8.9 percent of all regional exports were destined for Chinese shores and 13.8 percent of imports were made in China, as trade between China and Latin America and the Caribbean surged nearly 30 percent in the 2005 to 2011 period, according to ECLAC data. "China wants to have more balanced trade with Latin America ... we hope that in the future we can import more types of products, including value-added products," Wen said. The head of ECLAC, Alicia Barcena, welcomed Wen's words to improve trade ties and diversify away from commodities-based exports. "It's very interesting that (Wen) came to the region to deliver a message that China isn't only interested in Latin America's and the Caribbean's raw materials, but that it wants a long-term strategic relationship," Barcena said. "That's very good news for the region." Fears of a hard landing in China, the world's No. 2 economy, have sent jitters through Latin America, as China's annual growth target for 2012 looks increasingly in jeopardy as demand at home falters and Europe's debt crisis worsens. "China is also considering the possibility of negotiating and signing agreements for local currency swap agreements ... and increasing the reciprocal creation of bank branches," Wen said. The Chinese leader also called for cooperation from regional leaders on food security and to that effect invited Latin American and Caribbean agriculture ministers to a meeting in China in 2013. "We also propose to establish between China and the region an emergency food reserve mechanism of 500,000 tons, which will be used for natural disasters and humanitarian aid," Wen said.

110m yuan less spent by central government Posted: 27 Jun 2012 10:04 AM PDT CHINA'S central government administrations and institutions spent 110 million yuan (US$17.3 million) less on overseas trips, vehicles, and receptions last year compared with 2010, the finance ministry said yesterday. Expenses in the three areas, known as "three public consumptions," totaled 9.36 billion yuan in 2011, including 1.98 billion yuan for overseas trips, 5.92 billion yuan for vehicle purchases and maintenance and 1.47 billion yuan for receptions, said Finance Minister Xie Xuren yesterday. The total figure for 2010 stood at 9.47 billion yuan, with overseas trips accounting for 1.77 billion yuan, vehicle purchases and maintenance 6.17 billion yuan and receptions 1.53 billion yuan. It is the second year for the Chinese central government to disclose bills of the "three public consumptions." Xie said more details and explanations on the expenses need to be provided and all the provincial governments need to follow suit in making their expenditures public within two years. Three public consumptions are often criticized as sources of corruption and waste of the public funds. Last year, 199,600 government vehicles were found to be purchased or used against regulations on the use of public funds, and 170 officials involved were punished, authorities disclosed earlier.

HK to issue stamps to mark 15th anniversary Posted: 27 Jun 2012 09:10 AM PDT A staff member shows the special stamps and first day covers which will be soon published to celebrate the 15th anniversary of the establishment of Hong Kong Special Administrative Region (HKSAR) in Hong Kong, south China, today. July 1, 2012 marks the 15th anniversary of the establishment of the HKSAR. This posting includes an audio/video/photo media file: Download Now

Illegal cargo ignited bus fire Posted: 27 Jun 2012 09:09 AM PDT THE fire that killed 41 on an overloaded double-decker sleeper coach in central Henan Province last July was ignited by flammable chemicals illegally taken onboard by the bus operator, authorities said. The State Administration of Work Safety said yesterday that the bus illegally carried 300 kilograms of chemicals, which were stored improperly and triggered a fire on the Beijing-Zhuhai Expressway in Xinyang City in Henan. Blame rests with the chaotic management of the Weihai Transportation Group in eastern Shandong Province, which subcontracted the bus operation to Wang Endian, as well as authorities in Shandong and Henan, officials said. Five people, including Wang and bus driver Zou Jianzhou, have been arrested for causing the incident while 32 Party officials, including work safety inspectors and transportation officials, have been punished, according to the statement. Wang paid 400,000 yuan (US$62,840) for the right to operate the bus and entrusted its day-to-day management to Li Gang, who died in the blast. Chemical manufacturers and dealers often asked Li to transport hazardous chemicals, and both Wang and the Weihai group turned a blind eye, officials said. On July 21 last year, Li took 10 boxes of the explosive chemical on the bus at the request of Huichang Chemicals Supporting Material Co in Zibo, Shandong. The State Administration of Work Safety punished Huichang and two other chemical companies. Five people in three companies, including Yang, have been apprehended.

Four waitresses dismembered, two men held Posted: 27 Jun 2012 09:09 AM PDT TWO men have been arrested in Shenzhen City, Guangdong Province, in the robbery and slaying of four nightclub waitresses, parts of whose bodies were cut up and flushed down the toilet at the men's apartment. Xie Bingyou, 32, and Lin Hu, 35, confessed to have lured the victims to their flat and robbed and dismembered them, police announced yesterday. Some body parts flushed down the toilet blocked sewage pipes. Police were alerted on June 16 after workers who came to unclog the pipes made the horrible discovery, Guangdong media reported. The suspects also are believed to have removed some of the body parts from the apartment and dumped them into suburban ditches. All the victims are thought to have been killed and dismembered inside the men's 15th floor apartment in the city's Luohu District. Police combed through surveillance footage and discovered the four women who entered the building since May never exited. Police caught the suspects in the wee hours of June 21. Two of the victims were reported missing, including a 29-year-old woman surnamed Tan. Her husband reported on June 12 that Tan had been missing since they last talked on the phone on June 7. Tan is thought to have been killed that evening - the third victim. The last victim is thought to have been murdered on June 17, local media reported. The victims were robbed of their cash and mobile phones and one was forced to divulge her bank card combination before being killed. The bank account was later emptied of cash from an ATM machine, according to police. Residents from the building told local media the corridors near the men's apartment started to smell rotten in recent weeks. As news of the slayings spread, some frightened tenants moved out. Both the suspects are Guangdong natives. Police had not said by late yesterday how the men had lured the women to their apartment.

Driver strips after crash Posted: 27 Jun 2012 09:09 AM PDT A woman driver who stripped naked in front of an ambulance to hinder rescuers after her car hit two people, killing one and severely injuring another, was given a psychological test yesterday. Zhang Yan, a university teacher in Linyi City, Shandong Province, sped in her residential complex and hit a woman on a moped who had her 4-year-old daughter sitting behind her, officials said. Instead of helping the victims, Zhang stripped and lay naked on the ground. Later she snatched the injured girl from the ambulance and dropped her on the ground. The girl died later. Her mother, surnamed Wang, remained in intensive care. Neighbors said Zhang was furious when she left her home on the morning of June 17. A relative of Wang, Wang Lewen, said Zhang drove into the crowd after finding out her husband had a mistress. Zhang was detained for involuntary manslaughter, but Wang Lewen said it was intentional homicide. "Zhang teaches medicine, including medical psychology and psychiatry. She disguises herself as a mad woman and hinders emergency treatment. She's so evil," Wang said.

Health services disliked Posted: 27 Jun 2012 09:09 AM PDT RESIDENTS are most dissatisfied with medical treatment and health services, the public service that earned the lowest marks in a report of the Chinese Academy of Social Sciences. Residents ranked compulsory education as the public service they were most satisfied with, followed by public utilities and transportation infrastructure. Chen Lanying, a 77-year-old resident in Shanghai, complained about the long queues at hospitals, high medical fees and repeated health checks. "I was asked to have the same health checks every time when I changed hospitals and the medical fee is also a burden," she said.

China’s Banks Target Australia Posted: 27 Jun 2012 08:51 AM PDT Source: Wall Street Journal By Caroline Henshaw and Rhiannon Hoyle SYDNEY—Chinese banks such as Industrial & Commercial Bank of China Ltd., or ICBC, are muscling into Australia's syndicated-loan market, seeking to replace debt-laden European lenders as they retrench in the Pacific nation. Asian banks—mainly Chinese and Japanese—accounted for about 21% of new syndicated-loan issuance in Australia so far this year, up 4% from a year earlier, according to data from Bank of America Merrill Lynch. At the same time, European lenders have halved their exposure, research from the bank shows. "Australia is definitely an important market for us," said Han Ruixiang, the head of Australian operations for ICBC, the world's largest lender by market value. "We are now growing more our bilateral relations, lending directly to corporate customers." Syndicated loans, which involve several banks providing capital, are the most common form of finance for large-scale mining and energy projects in Australia. The government expects that resources projects already envisaged will require 450 billion Australian dollars (US$451.4 billion) of capital to complete. China is already Australia's largest trading partner, but now Chinese banks see an opportunity to build their presence in a market historically dominated by local and European rivals. "We have a strong interest in resource deals but we're not focusing only on them; as a commercial bank we lend across the board," said Mr. Han. Up to the end of April, ICBC's gross Australian loans and advances totaled A$859 million (US$860 million), up almost a third from a year ago, according to data from the Australian Prudential Regulation Authority, or APRA. Mr. Han said that ICBC plans to stay in the market for corporate banking, rather than competing with Australia's dominant domestic retail banks. ICBC is 70% owned by the Chinese government. It is China's largest bank, with US$2.5 trillion in assets, compared with US$2.3 trillion in assets for the largest U.S. bank, J.P. Morgan Chase Co. Its drive in Australia comes as the bank seeks to more than double the share of profits coming from overseas operations in the next five years, to 10%, from the current 4%. The Beijing-based lender has provided capital for the A$5.7 billion development of a water-desalination plant in the state of Victoria, the renovation of the Royal Adelaide Hospital and major coal-loading projects in the port city of Newcastle and Queensland state as part of the roughly A$15 billion worth of business it has financed in Australia since 2008, said Mr. Han. ICBC isn't alone among Chinese lenders in targeting Australia. China Construction Bank Corp. has made its entry into the Australian loan market, with A$80 million of debt on its books as of April 30, compared to zero a year earlier, APRA data showed. Bank of China Ltd. increased its gross loans and advances by one quarter to A$5.12 billion up to the end of April. The bank's Australian arm says it is focused on providing syndicated loans to "market leaders" here, having already been involved in loans for major Australian companies like telecommunications operator Telstra Corp. Ltd., miner Rio Tinto Ltd. and energy provider Origin Energy Ltd. Infrastructure finance via syndicated debt was found to be a primary business target of Chinese banks in a study by KPMG and the University of Sydney China Studies Centre last year. "Chinese and Japanese banks, they are really following and supporting their clients into the Australian resources industry, and filling the gaps left by the withdrawal of the European banks," said Andrew Dickinson, a partner in KPMG's Australian Financial Services division. European banks have downsized their Australian operations as Europe's debt crisis has worsened. Royal Bank of Scotland Group PLC relocated its local fixed income, commodity and currency operations earlier this year, while many other European lenders have quietly cut back in more capital-intensive areas, such as lending. Syndicated debt is a prime example. Before the global financial crisis, banks such as the Royal Bank of Scotland, Barclays PLC, France's BNP Paribas SA, Crédit Agricole and Germany's WestLB AG accounted for about one-third of the local syndicated-loan market, according to Bank of America Merrill Lynch data. Now, RBS and London-based HSBC Holdings PLC are the only European lenders to feature in the top 10 table for syndicated debt for Australia. No Chinese banks feature in the ratings either.

In China, Banks Pitch Yield Posted: 27 Jun 2012 08:59 AM PDT Source: Wall Street Journal By Dinny McMahon BEIJING—Chinese savers increasingly are turning funds away from traditional deposits toward higher-return wealth-management products, a trend that is posing new risks for the country's banking system. Analysts and regulators worry that the proliferation of wealth-management products could put financial strains on China's lenders. These products are an eclectic mix of short-term investments that package bonds, money-market funds and other securities. Banks market them as low-risk alternative to deposits with the added advantage of offering a higher return. Fitch Ratings calculates that wealth-management products were valued at more than 10.4 trillion yuan ($1.595 trillion) at the end of March, equivalent to about 12% of China's total bank deposits. That is a sharp increase from 4.4 trillion yuan, or 6% of deposits at the end of 2010, and 2.3 trillion yuan, or 3.8% of deposits, at year-end 2009. The potential risk for banks, say analysts, is that they invest the proceeds from the sale of these products in securities with longer maturities than the products themselves. In normal times, when products mature, banks either persuade customers to roll over their investments, or pay out using funds raised from the sale of new products. But that strategy could backfire if demand for new products drops and banks don't have enough money to pay holders of maturing products. Banks "could start to have serious repayment problems," said Charlene Chu, head of ratings for Chinese banks at Fitch Ratings. "Anything that could reduce investor demand for products is a source of risk, including something as benign as a rebound in the stock market that would attract away depositors." Banks currently offer an annualized rate of about 4.5% on wealth-management products that typically mature after one to six months, well above the central bank's benchmark 2.85% for three-month deposits and 3.05% for six-month deposits. China's banks are restricted to offering traditional depositors rates no higher than 10% above the central bank's benchmark. The products primarily are invested in bonds, repurchase agreements and interbank loans. Some of the money is being lent to companies, and that portion could be rising, according to Zeng Yunjiao, an analyst at Cnbenefit, a data provider. Rather than manage each product separately, banks mingle all the funds raised into one pot, which they then invest as they see fit. Managing all the funds together means the pot has cash flow not just from the return on investments but also from the sale of new products, which the banks can then use to cover outgoing redemptions. That is important because the banks need to invest in long-term assets to get the returns they promise customers and can't afford to be cashing out of their investments each time a product matures. The proliferation of wealth-management products already is causing problems for some China banks. Deposit growth in the year that ended in April dropped to its slowest pace since data became available in the late 1990s. With banks only allowed to lend 75% of their deposits, that crimps the ability of smaller banks running close to that threshold to make new loans at a time when Beijing is looking to them to help juice a slowing economy. "Rising advertised returns [on wealth-management products] are leading to poisonous competition between banks," the Anhui branch of the China Banking Regulatory Commission said in a notice to banks last July. The notice, made public when it was posted on the national CBRC website in November, warned against "seeking rapid expansion of wealth-management business at the expense of the market's prudent and healthy development." Technically, the banks shouldn't be on the hook if a product's return is less than advertised, and product documents say there is the potential to lose money. It isn't clear to what extent banks actually let clients absorb any losses on the products. However, sales people can sometimes give the impression the products are risk-free, analysts and customers say. "I don't read the instructions line by line as before," said Jia Wenlong, a 25-year-old information technology worker who said he has about 80% of his savings in wealth-management products. "So far, the wealth-management products I hold have performed pretty well, although none of them are…guaranteed." Despite rules that took effect on Jan. 1 requiring banks to disclose more detail about the risks involved, banks continue to offer little clarity. A typical product prospectus provides a shopping list of areas where the funds might be invested—bonds, the money market, deposits, debt, trust loans, equity—but with little indication of how much goes where. In mid-June, central bank vice governor Liu Shiyu warned that banks don't disclose enough information about wealth-management products or provide sufficient warning of the risks. It is the pooling of the products that worries regulators. In August last year, the CBRC sent an internal notice to the country's banks, calling on them to manage each product separately. However, analysts say banks continue to keep the funds pooled. In an article published in late March in China Forex, the State Administration of Foreign Exchange's official magazine, Bank of Jiangsu vice general manager of risk and compliance Wang Kaining, and Cui Jianguo, a risk manager, said that banks don't have sufficiently sophisticated accounting or computer systems to manage the wealth-management products individually. They warned against using long-term assets to generate return on short-term investments. "This leads to liquidity risks with some banks using the issuance of new products or their own funds to relieve payment pressures" when products mature, the article said. "This significantly raises the risk for banks."

Vietnam Calls on Cnooc Parent to Scrap Oil Exploration Bids Posted: 27 Jun 2012 09:09 AM PDT Source: Bloomberg News Vietnam called on China National Offshore Oil Corp., the state-owned parent of Cnooc Ltd. (883), to cancel an invitation for foreign oil and gas companies to explore nine blocks in disputed waters of the South China Sea. Seeking bids for the exploration areas is an illegal act that "seriously violated" Vietnam's sovereign rights, Ministry of Foreign Affairs spokesman Luong Thanh Nghi said in comments posted on the ministry's website yesterday. The company should "immediately cancel" the invitation, he said. China's tender may lead to more tension in the waters after its surveillance ships last year moved to thwart efforts by Vietnam and the Philippines to explore for oil and gas in one of the world's busiest sea corridors. Exxon Mobil Corp. (XOM), Talisman Energy Inc. (TLM) and Forum Energy Plc (FEP) are among companies that have signed deals to explore the area. The location of the blocks indicates that China claims the maritime spaces within its so-called nine-dash map of the sea, a development that will further alarm claimant states, according to Clive Schofield, director of research at the Australian National Centre for Ocean Resources & Security. "There are highly likely to be future clashes should there be actions taken by any of the countries concerned to try and explore within those blocks," he said. "The designation of blocks is in a sense a proxy way of states trying to reinforce their jurisdictional rights." Drilling Rig Cnooc deployed China's first deep-water drilling rig last month near disputed islands to assert Beijing's territorial claims. The company said the blocks, covering an area of 160,124 square kilometers, are available for exploration and development cooperation with foreign companies this year, according to a June 23 statement on its website. The area "lies entirely within Vietnam's 200-nautical mile exclusive economic zone and continental shelf," Nghi said. "This is absolutely not a disputed area." China's oil exploration in the South China Sea is "normal corporate activity" and complies with international law, Foreign Ministry spokesman Hong Lei told a regular briefing in Beijing yesterday. The invitation for bids came as Vietnam's parliament passed a law reasserting its sovereignty over the area. China summoned Vietnam's ambassador June 21 to protest the move, with Vice Foreign Minister Zhang Zhijun saying Vietnam's statement wasn't "conducive to peace and stability." Defense Ties The disputed waters are estimated to have as much as 30 billion tons of oil and 16 trillion cubic meters of gas, which would account for about one-third of China's oil and gas resources, according to the Xinhua News Agency. China had 2 billion tons of proven oil reserves and 99 trillion cubic feet of natural gas reserves in 2010, according to BP Plc. (BP/) The Philippines and Vietnam have increased defense ties with the U.S. while rejecting China's map of the South China Sea as a basis for joint development. China yesterday repeated its call to shelve disputes in favor of working together to exploit the resources. The Philippines has set a July 31 deadline to develop two areas in the South China Sea claimed by China. Vietnam objected in March to Cnooc's plans to invite bids for Block 65/24, which sits 1 nautical mile from the disputed Paracel Islands. China ousted Vietnam from the 30 islets and reefs that comprise the Paracels in a 1974 battle in which 71 soldiers were killed. The countries also dispute the Spratly Islands further to the south, an area near where fellow claimant the Philippines is seeking to develop offshore exploration blocks.

China unveils new boost for Hong Kong ahead of anniversary Posted: 27 Jun 2012 09:03 AM PDT Source: Reuters By Kevin Yao and Pete Sweeney (Reuters) – Beijing will promote the further development of the offshore yuan market in Hong Kong as part of a new package of policies for the territory ahead the fifteenth anniversary of its return to China, the official Xinhua agency said on Wednesday. Since Britain handed back the colony on July 1, 1997, the city's economy has grown increasingly intertwined with that of mainland China, and Beijing has been eager to use the financial centre as a testbed for major reforms, such as its growing push to internationalize the yuan currency. "On financial cooperation, the government will support the third-party to use Hong Kong as anvenue to settle trade and investment in renmnibi (yuan) and further enrich the offshore renminbi products in Hong Kong," the Xinhua report said, without giving further details. The move to expand offshore use of yuan will further secure Hong Kong's place as a major international financial centre, said Andy Ji, currency strategist at Commonwealth Bank Of Australia in Singapore. It also "will help boost renminbi demand in general as more instruments (for yuan-related investments) are made available," he said. London and other financial centers like Singapore are also vying for a share of the rapidly growing offshore yuan market. Shen Minggao, China economist for Citigroup in Hong Kong, also said that the development would be good for offshore yuan liquidity in Hong Kong, which is showing signs of flagging after several years of explosive growth. Though the yuan is still tightly controlled by Beijing, offshore yuan deposits at banks in Hong Kong had boomed in recent years as China slowly relaxed its grip on the currency, encouraging it to be used more often in settling international trade and for certain investments. Such deposits have declined steadily this year, however, as China's economic growth has slowed and as the yuan's appreciation against the U.S. dollar ground to a halt, sharply reducing its investment appeal. Hong Kong's own economic growth is expected to slow to 1-3 percent this year from 5 percent in 2011, according to government estimates, as volatile global financial markets, bleak economic prospects in Europe and weaker growth in China and the United States all weigh on the highly open economy. CROSS-BORDER INVESTMENT China also will promote the mutual listings of exchange-traded funds (ETFs) on Hong Kong and mainland stock exchanges, the Xinhua report said. Chinese investors can already buy overseas stocks and bonds by investing in funds available under the Qualified Domestic Institutional Investor (QDII) scheme, but cross-border ETFs are expected to be easier to trade because they will be listed directly on Chinese bourses. In addition, Chinese investors hope the new ETFs will provide better returns than the current batch of QDII funds. CSRC vice-chairman Yao Gang was quoted in local media on Tuesday as saying that overall QDII fund performance to date had been "not ideal." However, no such funds have yet received formal approval, nor did the report mention whether the QDII quota will be increased. China will also make it easier for Hong Kong's long-term funds to invest in the mainland's capital markets, the Xinhua report said. Such liberalization is part of a concerted effort by Beijing to attract more foreign capital into mainland equity and bond markets through the Qualified Foreign Institutional Investor (QFII) program and its offshore-yuan denominated cousin, the Renminbi Qualified Institutional Investor (RQFII) program. Both programs have seen their quotas increased and their allowable scope of investment widened this year. Even so, analysts say their small size mutes their impact on stock indexes. QFII regulations currently limits net foreign investment through the program to $80 billion, but only $25.19 billion had been allotted as of April 16, according to the country's foreign exchange regulator. The total RQFII quota stands at 80 billion yuan ($12.57 billion). ($1 = 6.3629 Chinese yuan)

Military to strengthen ties with US Posted: 27 Jun 2012 09:13 AM PDT Source: By Zhao Shengnan and Cheng Guangjin (China Daily) Top Chinese military officials on Tuesday pledged to strengthen communication and cooperation with the United States, but also called for proper resolution of the issue of US surveillance flights near China. Defense Minister Liang Guanglie and Deputy Chief of the General Staff Ma Xiaotian of the Chinese People's Liberation Army made the remarks during meetings with visiting Commander of US Pacific Command Samuel Locklear. This visit comes one day before the largest-ever Rim of the Pacific naval exercises, scheduled from Wednesday to Aug 7 in Hawaii. It involves 22 nations, including the US, India and Australia, but not China, which was not invited to participate or observe. China-US military ties have great potential as overall bilateral relations have been developed in a stable manner, Liang said, adding that establishing new, equal and mutually beneficial military relations is the inevitable need of both militaries and the common expectation from the international community. China would like to boost military exchanges with the US and deepen cooperation in the fields of non-traditional security, said Ma. "This is in the best interest of both peoples, as well as the region and the whole world." The two Chinese officers expressed concerns over the US strategic shift to the Asia-Pacific region and its frequent military surveillance close to China's coast. They urged the US to resolve related issues as soon as possible. As a Pacific country, the US hopes to improve cooperation with all Asia-Pacific countries, including China, said Locklear, and he called for more dialogue and less misunderstanding. Despite differences over some issues, China and the US share common interests in many fields, and the two militaries should enhance exchanges and cooperation to safeguard such interests and build a safe international environment, he said. Closer ties between the US and its Asian allies are widely interpreted as a measure to contain China. Shortly after concluding the US joint drill with Japan and the Republic of Korea, Washington is scheduled to kick off the largest-ever Rim of the Pacific naval exercises with 21 other countries on Wednesday. Russia, India, Mexico, the Philippines, New Zealand, Norway and Tonga are participating in the exercises for the first time, according to the Stars and Stripes, a Washington-based newspaper. It is notable that China was not invited to participate or observe the exercises that involve most of the Asia-Pacific countries, analysts said. "We had 14 countries participate in 2010. We've got 22 this year, so I think that's an indication of the interest that countries have in participating in it and the value they see in this kind of unique training opportunity," Charlie Brown, a spokesman for the US Navy's 3rd Fleet, was quoted as saying. In 2006, the former head of US Pacific Command William Fallon invited the PLA to observe the exercise "Valiant Shield", said the newspaper. Professor Li Daguang with the University of National Defense said the exercise echoes the recent statement from US Defense Secretary Leon Panetta that US naval power in the Pacific will increase and the US will enhance ties with its allies in the region. The US carries on bilateral cooperation with China while at the same time continues building a strategic circle to contain China, Li told Beijing-based China News Service. "I think everyone recognizes that (the maritime security environment) is where either we learn to live and work together, because we do have considerable shared interests, or this is where we get in each other's way and potentially start to stare each other down," Brad Glosserman, executive director of the Pacific Forum Center for Strategic and International Studies in Honolulu, told the Stars and Stripes.

EU, U.S., Japan seek further WTO steps over China rare earths Posted: 27 Jun 2012 09:06 AM PDT Source: Reuters By Sebastian Moffett (Reuters) – The European Union, the United States and Japan on Wednesday requested a dispute settlement panel at the World Trade Organization (WTO) after failing to resolve a battle over China's export restrictions on rare earth minerals. The move followed a complaint the three trade powers took to the WTO in March, the first they have launched jointly, and comes amid a series of clashes with China over economic issues, including the value of the Chinese currency. "China's restrictions on rare earths and other products are violating its WTO commitments and continue to significantly distort global markets to the disadvantage of our companies," EU Trade Commissioner Karel De Gucht said in a statement. "We regret that we are left with no other choice but to solve this through litigation." After the March complaint, the parties talked in April to try to find a solution. But De Gucht said the Chinese response had not been adequate. "We had consultations with them, they didn't lead us anywhere," he said on the sidelines of a conference in Brussels. "The next step was to ask for a panel and we've just done that." The case concerns the 17 rare earth metals, as well as tungsten and molybdenum, which are used in advanced technologies for the defense, electronics and renewable-energy industries. They go into products such as the iPhone, disk drives and wind turbines. The damage done to European manufacturing runs into billions of euros because it is nearly impossible to diversify away from Chinese supply, according to EU officials. China accounts for about 97 percent of world output of the 17 rare earths, and the three powers accuse Beijing of trying to hold down prices for its domestic manufacturers and to pressure international firms to move operations to China. This, say the European Union and United States, hurts their producers and consumers, as foreign companies pay up to twice as much as Chinese firms for rare earth metals. "These materials are key inputs in a multitude of U.S. manufacturing sectors and American-made products, including hybrid car batteries, wind turbines, energy-efficient lighting, steel, advanced electronics, automobiles, petroleum and chemicals," U.S. Trade Representative Ron Kirk said in a statement. "It is vital that U.S. workers and manufacturers obtain the fair and equal access to raw materials like rare earths that China specifically agreed to when it joined the WTO," he said. In March, China described the trade complaint as unfair, arguing that it only controlled 90 percent of global production because other countries, notably the United States, had long ago closed their own rare earths refineries due to pollution concerns. Beijing also says its export curbs aim to both control environmental problems and preserve supplies of an exhaustible natural resource. Refining rare earths requires large amounts of acid, and also produces low-level radioactive waste. The EU directly imports 350 million euros worth of rare earths from China each year, and also brings in products of far greater value containing rare earths from Japan and elsewhere. Once appeals are lodged and heard, the WTO process could take as long as two years to complete. The European Union, the United States and Mexico won a similar case against China in January concerning other raw materials. "Despite the very clear WTO ruling earlier this year in the first raw materials case, Beijing has not taken steps to remove these export restrictions," said De Gucht in his statement.