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News » Society » VIDEO: Weak backdrop to EU-China talks


VIDEO: Weak backdrop to EU-China talks

Posted: 20 Sep 2012 05:35 PM PDT

With China's Wen Jiabao in Brussels for a summit with EU leaders, both sides could do without trade disputes at a time of weakening growth.

China calling for return to dialogue over islands issue

Posted: 20 Sep 2012 09:57 AM PDT

CHINA is urging Japan to return to the track of dialogue and negotiation to solve issues relating to the Diaoyu Islands.

Hong Lei, a spokesman for the Ministry of Foreign Affairs, was commenting on a report that Japanese Prime Minister Yoshihiko Noda was to send a special envoy to China.

At a regular press conference in Beijing yesterday, Hong said China had always insisted that issues concerning the islands should be solved through dialogue and negotiation.

China will maintain communication with the Japanese at all levels and expound China's stance on the Diaoyu Islands, Hong said.

"Japan's moves infringed upon China's territory and sovereignty and are illegal in terms of international law," Hong said, referring to Japan's recent announcement that it had "purchased" the islands.

Asked whether China would be offering compensation for Japanese enterprises' losses incurred during anti-Japan demonstrations and protests in China sparked by that announcement, Hong said relevant cases would be handled appropriately.

A Japanese government spokesman said yesterday that Japan would be seeking compensation for damage inflicted on its diplomatic missions during the recent protests, according to the Japanese media.

Angry crowds took to the streets in cities across China earlier this week and a small number of protesters vandalized a few Japanese stores and some Japanese-brand vehicles.

A senior marine administration official said safeguarding China's sovereignty over the islands would be a long-term and critical struggle.

Chen Lianzeng, deputy director of the State Oceanic Administration, told a symposium on protecting the Diaoyu Islands that all SOA subsidiaries should fully understand the severity of China's struggle to safeguard its rights.

Meanwhile, China has published a pamphlet in Chinese, English and Japanese stating that the islands in the East China Sea are China's "inherent territory."

The publication, compiled by the China Oceanic Information Center, uses historical documents and atlases to prove that China was the earliest country to discover, name, use and administer the Diaoyu Islands.


Suspect denies plot to murder 13 sailors

Posted: 20 Sep 2012 09:56 AM PDT

THE principal suspect in the killing of 13 Chinese sailors on the Mekong River last October denied plotting the attack when he and five other people went on trial in southwest China yesterday.

However, his fellow defendants all testified that he was the gang?s ringleader who masterminded the attack.

But Naw Kham told the Intermediate People?s Court in Kunming, capital of Yunnan Province, that he neither planned nor conducted the deadly attack on October 5.

The head of an armed drug gang from Myanmar had confessed to the murders in an interview with media before the trial, but he withdrew that in court, saying he had not been fully informed about the attack by gang members.

"I did not know about it at that time," he said.

"They did not tell me. I was only informed afterward."

Naw Kham admitted he was the gang's leader, saying every member called him "the boss." He was also known as the "Godfather" for running one of the most notorious armed drug rings on a section of the Mekong River near the borders of China, Myanmar and Laos borders.

The six defendants - five from Myanmar, Thailand and Laos and one stateless ? have been charged with murder, drug trafficking, kidnapping and ship hijacking.

The trial is expected to last three days.

Prosecutors allege that between the end of September and the beginning of October in 2011, Naw Kham and his subordinates, with the support of a small number of Thai soldiers, planned to hijack Chinese cargo ships and kill the sailors on board.

Naw Kham is said to have told police previously of anger over Chinese vessels' refusal to pay "protection fees" while navigating the river.

The Chinese vessels were also said to have been hired by Myanmar soldiers to help raid Naw Kham's gang, prompting a revenge attack.

Prosecutors said that under the gang leader's instructions, five of his men attacked, hijacked and took control of the crew on two cargo ships, the Hua Ping and Yu Xing 8, and planted drugs on the vessels on October 5, near a port in Thailand on the Mekong River.

The gang was busted earlier this year in a joint operation by police from China, Laos, Myanmar and Thailand.

Naw Kham was flown to China in May.

The Mekong, known in China as the Lancang River, is one of the most important waterways in Southeast Asia, linking China, Laos, Myanmar, Thailand, Cambodia and Vietnam.

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China, EU sign emissions deal

Posted: 20 Sep 2012 09:33 AM PDT

CHINA has struck a deal to work with the European Union to cut greenhouse gases through projects that include the development of Chinese emissions trading schemes, the European Commission said yesterday.

The European Union and China have had frequent clashes over climate policy and Beijing has flouted EU law requiring that airlines using European airports should pay for their emissions through the EU's Emissions Trading Scheme.

Andris Piebalgs, the EU's development commissioner, and Chen Deming, the Chinese commerce minister, signed a financing deal that will promote the transition "toward a low-carbon economy and a reduction of greenhouse gas emissions in China," the commission said in a statement.

Connie Hedegaard, the EU'S climate commissioner, said that the Chinese financing deal was "an important step for an ever closer cooperation toward a robust international carbon market."

In the statement, she said: "Needless to say that it makes a significant difference when now also China wants to use carbon markets to reduce emissions cost-effectively and boost low-carbon technologies."

The EU will contribute 25 million euros (US$33 million) and technical assistance over a four-year period to three carbon-reduction projects.

In addition to helping with the design and implementation of emissions trading schemes in China, the other projects are to assist Chinese cities in making efficient use of resources, to cut water and heavy-metal pollution, and to implement sustainable waste treatment policies.

China already has provincial emissions trading schemes and it is unclear whether further development of Chinese carbon trading would include aviation emissions.

The EU's decision to include aviation in its Emissions Trading Scheme has drawn international criticism and threats of a trade war.

All sides are now looking to the United Nations International Civil Aviation Organization to come up with an alternative global scheme to curb airline emissions.

This, the EU says, would enable it to drop its requirements.

The international Kyoto system for cutting greenhouse gas emissions does not include aviation and progress has been slow in trying to extend the lifetime and scope of the Kyoto Protocol.

At climate change talks in Durban last year, the EU led efforts to get a tentative deal, bringing in all greenhouse gas emitters, including China, which had previously been excluded as an emerging nation.

Ministry vows to improve transparency of charities

Posted: 20 Sep 2012 09:00 AM PDT

CHINA'S Civil Affairs Ministry yesterday pledged to improve the transparency of the country's charity organizations in a bid to rebuild their creditability.

The ministry would strictly carry out annual inspections of charity organizations, especially of financial records, Civil Affairs Minister Li Liguo said. He added that the ministry would try to engage third-party agencies to assess their performance in the future.

Li also promised to further promote the publishing of organizations' information.

"Not only the results of the inspections and assessments should be released ... but donations that attract attention should also be included in the publicity platform," Li said.

China's charity organizations suffered a blow last year, with its total public donations in 2011 dropping to 84.5 billion yuan (US$13.4 billion), down 18 percent annually. Donations to the Red Cross Society of China, in particular, fell 59.39 percent. That was mainly attributed to a scandal last June, when a young woman who claimed to work for an association affiliated with the RCSC, posted online photographs showed her lavish lifestyle. This led to speculation that charity money might have been embezzled.

While donations to official channels dropped, an emerging charity form called micro-charity, independently organized by users of social networking services, became increasingly popular in helping disadvantaged groups such as rural students.

Li said while such innovative acts deserve supports, public scrutiny is needed to ensure their "healthy growth."

Li pledged sound institutional mechanisms within the existing legal framework to promote the transparent operation of charity initiatives. New guidelines on charity activities had been drafted.


Bad dye in Wal-Mart clothing

Posted: 20 Sep 2012 09:00 AM PDT

US-BASED Wal-Mart, the world's largest retailer, has been accused of selling children's clothing containing a carcinogenic dye in its chain stores in Shenzhen City in southern China's Guangdong Province.

A former Wal-Mart clothing supplier surnamed Sun found in August a brand of children's wear on the shelf in the Xixiang store emitting a strong odor, and suspected the clothes were of poor quality. He then asked the Shenzhen Academy of Metrology and Quality Inspection to check, and the result confirmed his suspicion, showing decomposable aromatic amine dyes, a banned material in clothing, in the clothes, Shenzhen Economic Daily reported yesterday.

The product came from a children's clothing factory in the province's Dongguan City.

The paper found the same clothing on sale in another local store for 30 yuan (US$4.76), nearly 20 yuan off the original price.

Wal-Mart has not responded to the accusations.

The company's Shanghai subsidiary told Shanghai Daily that similar cases never happened in the city since stores followed strict procedures to test the products' quality before placing them on the shelf.

Children's clothing, including some under such popular labels as Zara and Disney, has been found to fail tests of color fastness, formaldehyde content and pH index.

"Some factories have poor techniques of production and shabby facilities, while some just want to make money without considering the harm to children," said Jiang Yanxiang, a textile engineer.

Government to aid elderly who lose only child

Posted: 20 Sep 2012 09:00 AM PDT

THE government is looking for a way to provide assistance to elderly citizens who have lost their only child, a senior civil affairs official said yesterday.

Dou Yupei, vice minister of civil affairs, made the remarks at the press conference on progress in improving people's livelihood and social security, held at the Information Office of the State Council.

Dou said the elder care problem is new for the country, surfacing only since the 1980s, when China implemented family planning policies to control its population.

According to current policies, the government supports elders who are not able to work, have no source of income and have no one to support them, Dou said. Accordingly, parents who have lost their only children should also be supported by the government, Dou said.

Dou said funds and services will be the key points in improving the country's elder care system, and greater attention needed to be paid to elder care services in the country's rural areas as part of a move to secure balanced development among different regions.

Dou said China's elder care system is facing "very grave problems," as the population is aging quickly and some elderly citizens are unable to cover their own care needs.

Besides, China's family units are getting smaller, complicating the situation, Dou said.

Dou said the ministry is working on several projects to build nursing homes at different levels and equip nursing homes and communities with necessary rehabilitation facilities.

Authorities are also considering encouraging private investment in this area through preferential policies in terms of taxation, land usage, and water and power supplies for privately run nursing institutions, according to the vice minister.

The government will improve nursing homes' admission and supervision systems to ensure quality services as well as these institutions' healthy operation.

Dou said the ministry and local civil affairs departments will put half of the lottery funds they have in the elderly care system.

China plans to provide 6.6 million beds in nursing homes for the country's elderly by the end of 2015, increasing the number of beds for every 1,000 senior citizens from the current 19 to 30.


Chinese restaurant chains face challenges

Posted: 20 Sep 2012 10:48 AM PDT

Source: By Li Woke (China Daily)

For a Chinese restaurant, expanding across the country or even outside the country can be much harder than starting from zero.
"I have five Chinese restaurants in Beijing but I am finding it very difficult to expand further because making sure every dish at every restaurant is exactly the same is problematic," said Liu Tao, general manager of a Yunnan cuisine restaurant in Beijing.

Take the famous General Tso's chicken or kung pao chicken as an example. Cooks have to mix the chicken, salt and egg white before heating the wok. Then dozens of seasonings are added to enrich the flavor, such as pepper, garlic, soy sauce, cooking wine, monosodium glutamate, vinegar, starch, sesame oil, Chinese onions and peanuts.

The dish will taste very different if the cooks add fewer or more seasonings or if it is cooked at a different temperature.

"In Chinese cuisine, one dish can taste totally different if it is made by different chefs," said Jia Guolong, board chairman of Xibei Restaurant.

Another Chinese fast food chain, Xinshang Fast Food in Qingdao, also struggled to satisfy customers while expanding locally. "Ensuring customers at each store have the same quality fast food is a major task," said Zhang Hongji, board chairman of the chain.

"Many problems lie in the way of the fast expansion of the Chinese catering industry," said Su Qiucheng, president of the China Cuisine Association. "These include the lack of specifications in the supply of raw materials, the lack of standards for kitchen jobs, the lack of logistics and distribution outlets, fragile franchisee management and vague brand development strategies, which Western fast food giants have already established."

Jia said one effective way to expand and develop Chinese restaurants is to learn from the experience of Western restaurant chains and to standardize the whole cooking process.

Zhang said Xinshang learnt a lot from the success of the United States fast food giant McDonald's Corp by strictly controlling the food's standardization, including the preparation of raw materials.

McDonald's, the world largest fast food chain, now has more than 33,000 outlets in 119 countries across the world. They have their secrets to make sure every burger in every restaurant is of the same quality, whether it's in a small Chinese city or a big United States metropolis.

"McDonald's burgers are made from 100 percent whole cuts of beef from British and Irish farms, with nothing added apart from a pinch of salt and pepper after cooking. The meat is then minced, shaped and frozen to make McDonald's beef patties. All beef is checked for bone and gristle to ensure that none finds its way into patties," said Joy Clachan, agricultural assurance manager at McDonald's UK.

After checking, the beef will be minced and frozen. Then the patties are hand-packed into boxes and a final quality check takes place before they are dispatched.

Inside a McDonald's restaurant, a burger will be fully cooked after being heated for more than 37 seconds. The buns are toasted and the meal is finished off by adding onion and pickle, said the company.

Chen Jie, kitchen assistant general manager of Jindingxuan, a famous Guangdong-style restaurant in Beijing, said: "standardizing our cooking procedure can improve the efficiency of professional chefs as well as cutting down costs. Our customers will be happy because they will spend less time waiting at their table."

McDonald's not only standardizes kitchen work but also its food resources. They can trace beef back to the farms where it was produced so the company knows exactly how the animal was reared.

Industry experts said traceability benefits the company's food management system. It is also essential because it ensures customer confidence in the company's food safety arrangements.

"Each Chinese restaurant operator should fully understand the importance of transforming and upgrading the industry," said vice-minister of Commerce Jiang Zengwei. "(They) should learn from the experience of foreign counterparts to improve their own conditions, including the processing and distribution of food."

Xibei Restaurant's Jia said he will push forward the standardization of Xibei before opening about 30 restaurants next year in first tier cities in China, such as Beijing, Shanghai and Guangzhou.

"The future of the Chinese food chain industry will be prosperous," said Su Qiucheng, president of the China Cuisine Association. "Look at Haidilao Hot Pot, XE Flavor and the Quanjude (Group) Co: They have all shown momentum in the rapid and sound development of their Chinese restaurant chains over the past years."

Last year, revenues of the Chinese catering industry topped 2 trillion yuan ($315 billion). The figure is expected to reach 3.7 trillion yuan by the end of 2015, according to the Ministry of Commerce.


Hershey CEO weighs next steps in China

Posted: 20 Sep 2012 10:51 AM PDT

Source: Reuters By Martinne Geller

(Reuters) – Hershey Co's (HSY.N) CEO is deciding on his next step in China, but expects the U.S. candy maker to remain with its partner there even after it took sole ownership of its joint venture in India.
Hershey owns a factory in China with South Korea's Lotte Shopping Co Ltd (023530.KS). The two companies sell enough products to run their plant at about 90 percent capacity, and Hershey Chief Executive Officer John Bilbrey sees it needing more space very soon.

"We're looking now at what do we do next," Bilbrey said in an interview at company headquarters in Hershey, Pennsylvania, ahead of a new factory opening. "Do we joint venture again on an additional factory or do we build our own factory? Do we do it in Southeast Asia? We haven't answered that question."

Hershey, whose shares rose more than 1 percent, just spent $300 million to modernize and double the size of a plant less than two miles from where its founder Milton Hershey opened his first chocolate factory in 1905.

The updated factory, which officially opened on Tuesday, can make 70 million Hershey's Kisses a day, up from roughly 40 million before.

As for China, Bilbrey said another option is to move into Lotte's other factories there, if space permits.

"I think we know enough to build (a factory) on our own, but that may not be the most financially viable way to do it," Bilbrey said. He expects to make a decision in the next 12 to 18 months.

Another option is to acquire Lotte's confectionary business, according to Bernstein Research analyst Alexia Howard.

In a research note last week, Howard wondered whether Lotte's recent deal with electronics retailer Hi-mart Co (071840.KS) signaled a shift of focus away from candy. If so, the candy business would be a good fit for Hershey, she said.

Bilbrey declined to comment on any upcoming acquisitions, but he did affirm the company's intention to do deals.

"That definitely could be in the cards," said Morningstar analyst Erin Lash. While she expects Hershey to pursue acquisitions, she said one consideration was Hershey's control by a trust whose main objective, in her opinion, is to preserve strong cash flow.

When asked about the trust, which has a 30 percent economic interest in the company but 80 percent of the voting rights, Bilbrey said it was "very supportive" of the company's strategy.

TO GO IT ALONE OR NOT?

Many international joint ventures are structured with eventual exit plans, so Bilbrey said it was no surprise when Hershey moved earlier this month to buy out its Indian partner, Godrej Consumer Products (GOCP.NS).

"We learned a lot from them," he said. "They were good partners, but food is not a core competency for them. We got ourselves to where it would be better for us to go on our way."

Just because Hershey bought out its Indian partner does not mean it will buy out all its partners, Bilbrey said.

"This is not about 'do you always walk away from them,'" he said, adding that he expects Hershey to continue to partner with Lotte, for example.

Referring to a Brazilian venture Hershey has with Bauducco Foods, he said he had no reason to believe that relationship will change.

"That may go on in perpetuity because it's good for them," Bilbrey said. Since business is seasonal for the Brazilian maker of panettone, an Italian holiday cake, it benefits from having a partner to share the factory's costs, he said.

Along the same lines, Hershey is building a distribution center in Canada with Italy's Ferrero.

Hershey has forecast 2012 sales of about $6.5 billion, with about 15 percent of that coming from international markets. By 2017, the company expects revenue of about $10 billion, with international sales accounting for about 20 percent.

Growth of the company's existing brands, such as Reese's, Kit Kat, Twizzlers and Jolly Rancher, should bring the company to about $9.3 billion, Bilbrey said. The remainder should come from acquisitions.

Acquisition targets could include brands in international markets or in the United States, in candy or in adjacent categories such as snack bars or other nutritional products, he said.

"We actively look all the time," said Bilbrey, whose favorite candy bars are Hershey's Milk Chocolate with Almonds and PayDay.

In December 2011, Hershey agreed to acquire Canada's Brookside Foods, which makes chocolate-covered jelly candies.

Those candies, made with fruits like acai and pomegranate, are sold only in Canada and in U.S. Costco Wholesale Corp (COST.O) stores. But Hershey plans to roll them out widely across the United States, starting in January.


China says U.S. auto trade complaint driven by election race

Posted: 20 Sep 2012 10:53 AM PDT

Source: Reuters

(Reuters) – China said it has been made a victim of U.S. electoral politics after Washington launched an international trade case alleging that Beijing has been unfairly subsidizing automobile and auto parts exports.
U.S. President Barack Obama announced the World Trade Organization (WTO) case against China over allegedly illegal subsidies for automobiles and auto parts during an election campaign stop in Ohio on Monday.

Beijing fired back hours after White House officials made the announcement with a complaint against U.S. duties on many Chinese exports, in the latest example of tit-for-tat trade disputes filed between the world's two largest economies.

In its first official comment on the complaint, issued on Tuesday evening, the Chinese Ministry of Commerce was unusually blunt in blaming the case on the race for the White House.

"In the midst of an election race, the United States chose to announce this news in Ohio, an automobile production area, showing that the U.S. took this step against China out of considerations of electoral politics," an unidentified Chinese commerce official said on the ministry's website.

"We express our opposition to this," said the official, adding that China will deal with the U.S. request for consultations in keeping with WTO rules.

Obama's latest trade enforcement steps come as he and Republican rival Mitt Romney vie for a few important states, including Ohio, that could determine the outcome of the November 6 presidential election.


Have You Heard…

Posted: 20 Sep 2012 10:46 AM PDT

Have You Heard…


EU, China leaders avoid protectionism after trade rows

Posted: 20 Sep 2012 10:56 AM PDT

Source: Reuters By Sebastian Moffett and Kevin Yao

(Reuters) – European Union and Chinese leaders agreed on Thursday to avoid trade protectionist measures following months of increasing tensions between the global partners with China undertaking to continue to invest in European debt.
At a summit in Brussels, the 15th between the world's largest trading bloc and China, the second largest economy, Premier Wen Jiabao sought to play down a dispute with Europe over Beijing's export policies and trade practices.

"We both (China and the European Union) follow free and open economic and trade policies, reject trade protectionism and work to advance economic globalization," Wen told a business conference on the sidelines of the summit.

Wen and EU leaders Herman Van Rompuy and Jose Manuel Barroso emphasized the size and interdependence of their relationship which has seen trade double in size over the past eight years.

Commerce between them has been marked recently by disputes, including the European Commission's accusation earlier this month that China had been selling solar panels below cost on the EU market.

The Chinese leader also said he believed Europe was able to overcome its debt crisis and that China would continue to play a role by investing in European debt.

"In recent months, China has been continuing to invest in the euro zone government bonds and bonds issued by the European Financial Stability Facility (EFSF)," he said, adding that China was also in talks on making other investments.

"Europe is one of the main markets for China to invest its foreign exchange reserves and China will continue to participate in efforts to tackle Europe's debt crisis through appropriate channels."

China's foreign exchange reserves are the world's largest at $3.24 trillion and economists say roughly a quarter of that consists of euro-denominated assets.

Wen also told the forum that China's economy would stabilize as policy measures gain traction and that it was on track to meet its annual economic growth target.

Beijing has set a 7.5 percent target for economic growth in 2012 but some economists think that could be missed as a global slowdown drags down activity.

TRADE FOCUS

Wen's delegation met Barroso, president of the executive European Commission, Van Rompuy, who heads the European Council representing national governments, and EU Trade Commissioner Karel De Gucht, among other EU officials.

Overseas trade is one of few bright spots in Europe and a critical source of growth for the region's economy which has slumped under the weight of the debt and banking crises, with EU gross domestic product falling and unemployment steadily rising.

Trade between China and the European Union, with a market of 500 million people, rose to 428 billion euros in 2011 and Chinese companies are increasingly investing in Europe.

At the same time trade disputes are intensifying and Europeans are concerned about what they call "state capitalism", where a government closely controls privately owned business as well as state-owned firms. It can use a range of policies – such as cheap finance and raw materials – to favor national companies.

FLARE-UPS

The theme has run through a series of flare-ups this year, including China's policy on exporting rare earth metals, trade in aluminum foil and the solar panels dispute.

De Gucht, the EU trade chief, said in May that the European Commission – the EU executive, which handles trade for the 27-member bloc – would consider new trade defenses for cases in which EU companies feared repercussions in China.

In March, the European Union joined the United States and Japan in challenging China at the WTO over its restrictions on rare earths which are used in advanced industries such as electronics and renewable energy.

The restrictions, say EU officials, give Chinese hi-tech companies access to cheaper raw materials.

The Commission is also investigating numerous accusations against China of dumping – where makers sell their products below cost in an effort to gain market share.

Until early September, the dumping accusations mainly concerned low-profile industries, such as aluminum foil, kitchenware and pipe fittings.

But two weeks ago the Commission launched a probe into suspected dumping of solar panels after a complaint by manufacturers in Germany, Italy and several other EU countries.

China exported more than $25 billion of solar panels to the European Union in 2011.


Bo in Spotlight as China Publishes Heywood Murder Account

Posted: 20 Sep 2012 10:59 AM PDT

Source: Bloomberg News

A chronology of the murder of British businessman Neil Heywood published by China's official Xinhua News Agency details the lengths taken to hide his killing and for the first time mentions the role of former Chongqing Communist Party Secretary Bo Xilai.
The account published yesterday contains a confession by Bo's former police chief, Wang Lijun, to charges he helped cover up Heywood's murder by Bo's wife Gu Kailai. It describes an episode on Jan. 29 when the "principal person" in charge of Chongqing — Bo — slapped Wang in a rage after Wang confronted him about suspicions Gu was involved in the murder. Xinhua's report doesn't mention Bo by name.

"The nuggets are the clues which could lead to a Bo Xilai indictment later on," June Teufel Dreyer, a professor of political science at the University of Miami who focuses on China, said in a telephone interview. "They have very cleverly left the door open with several phrases."

Wang's flight in February to the U.S. consulate in Chengdu — another crime he confessed to — set off a chain of events that would see Bo dismissed as Chongqing party boss and suspended from the ruling Politburo in the biggest political shakeup in China in a generation. The scandal surrounding Bo has clouded a once-a-decade leadership transition set to begin in weeks.

In the Xinhua chronology, Wang recounts a conversation he had with Gu in Chongqing on Nov. 14 last year — the day after Heywood's death, based on testimony from Gu and Wang.

Heywood Poisoned

"When I saw Wang, I told him what happened on the night of the 13th, when I saw Heywood and how I poisoned him," Xinhua cited Gu as saying. "He told me not to think about this incident, and from now on, this incident had nothing to do with me, and asked me to forget the entire memory. I said then I was worried, and he replied by saying things will be better in a week or two."

Xinhua said that on Nov. 15, Wang, then Chongqing's top police official, assigned an officer close to Gu to handle the case, relieving another investigator who was on the scene.

Three days later, Wang called Gu Kailai, reporting to her that Heywood's body was cremated that day, and telling her that it "turned into blue smoke flying to the west with cranes," Xinhua said, citing the testimony of Zhang Xiaojun, an orderly in Gu's home who was convicted last month as an accomplice in the killing.

'I Confess'

"I acknowledge the crime, I confess to the crime, I regret the crime," Xinhua reported Wang as saying at the end of his two-day trial, which ended Sept. 18 in Chengdu. Wang is awaiting a verdict in his case.

"We believe that all is equal before the law and expect a fair verdict from the people's court," the Xinhua account quoted a man identified as Wu Qunfang, a resident of Chengdu, as saying. The trial account was published in full in today's English-language China Daily newspaper.

In August, four Chongqing police officers were convicted of destroying evidence in the case and sentenced to between five and 11 years in prison. Family orderly Zhang was sentenced to nine years in prison and Gu, convicted of killing Heywood, was given a suspended death sentence.

Bo has to date only been accused of violating party discipline. He's not been seen in public since March.

Gu feared her son's life was threatened by Heywood after she and Heywood clashed over "issues of monetary gain," Xinhua reported. Heywood, like Bo and Gu's son Bo Guagua, was a graduate of the Harrow school in the U.K. and was a longtime acquaintance of the Bo family.

Police Chief

After his removal as police chief, announced on Feb. 2, Wang fled to the U.S. consulate in Chengdu, where he told diplomats that Gu murdered Heywood, according to U.S. officials briefed on the matter. After a night with American officials that saw the consulate compound ringed by police, Wang turned himself over to government authorities.

The Xinhua account also said Wang took a 2.85 million yuan ($452,000) bribe in 2009 in the form of two Beijing homes from Dalian Shide Group Chairman Xu Ming. Later that year, Wang released three people from custody in Chongqing at Xu's request, according to the report.

Xu bought a hot air balloon for the city of Dalian in 2000 at Gu's request and took a ride in one with Gu in the U.K. city of Bournemouth, the Wall Street Journal reported in June. Xu paid for and accompanied Bo Guagua and Gu on a school-hunting trip to the U.K. in the 1990s that cost more than $100,000, the Journal reported, citing a person with knowledge of the trip that it didn't identify.

Eighth-Richest

Xu was ranked China's eighth-richest man by Forbes magazine in 2005 with an estimated $1.05 billion of personal wealth. Dalian Shide, which Xu founded in 1992, produces chemicals, provides financial services and also manufactures home appliances. The company in 2000 bought the city's top tier professional soccer club for 120 million yuan, when Bo was the city's mayor.

Wang's relations with Gu began to deteriorate as she became increasingly worried that the murder would be exposed, Xinhua said. She hosted a dinner on Dec. 14 for three of the investigators handling the case who were helping cover up the murder, Xinhua said. Wang's co-workers came under investigation, furthering a rift with Gu, Xinhua said.

Wang, 52, headed Chongqing's police force from 2009 until early February. He oversaw a crackdown on gangs that raised the profile of Bo's "Chongqing model," with its focus on getting tough on crime and fighting social inequality. The campaign against organized crime, called "da hei," or "strike black," was accompanied by allegations of arbitrary arrests and beatings.


VIDEO: China-Japan dispute 'threatens economy'

Posted: 20 Sep 2012 09:12 AM PDT

The international economic organisation, the OECD, has warned that the dispute between China and Japan could harm global economic recovery.

VIDEO: China swipe over EU arms embargo

Posted: 20 Sep 2012 06:08 AM PDT

At his final summit with EU leaders, Chinese premier Wen Jiabao said he regretted that despite years of talk the arms and trade restrictions still apply.

VIDEO: China faces ageing population crisis

Posted: 20 Sep 2012 07:32 AM PDT

In the next 20 years the number of people over the age of 60 in China will double, leading to a nation where the retired outnumber the entire population of western Europe.

VIDEO: US ambassador's car attacked in China

Posted: 20 Sep 2012 01:40 AM PDT

The US ambassador's car was surrounded by protesters at the gates of the American embassy in Beijing. The demonstrators chanted anti-American slogans, and threw small objects at the vehicle.

VIDEO: Embassies hit by China islands row

Posted: 18 Sep 2012 06:04 PM PDT

Chinese communities in a number of cities around the world have held protests outside Japanese embassies, over the continued row over a group of disputed islands.

Principal suspect denies masterminding Mekong River attack

Posted: 20 Sep 2012 12:09 AM PDT

THE principal suspect for the murders of 13 Chinese sailors on the Mekong River last year denied plotting the attack today, when he and five other people went on trial in southwest China for the crime.

During the trial that opened today at the Intermediate People's Court of Kunming, capital of Yunnan Province, Naw Kham, the head of an armed drug gang from Myanmar, claimed he neither planned nor commanded the deadly attack in October 2011.

The six suspects, all foreigners or stateless people, have been charged with intentional homicide, drug trafficking, kidnapping and ship hijacking.

Naw Kham, who had confessed to the murders in an arranged interview with media before the trial, made a U-turn in court, saying he was not fully informed by his fellow ring members of the attack.

"I did not know about it at that time," he told the court. "They did not tell me. I was only informed afterward."

Naw Kham did admit that he was the gang's ringleader, saying every member called him "the boss."

One witness at the court said Naw Kham, dubbed "Godfather" for running one of the most notorious armed drug rings on the section of the Mekong River near the China-Myanmar-Laos borders, maintained an unperturbed smile during the morning's proceedings.

All of the six accused appeared before the court today. The trial is expected to last for three days.

According to the bill of indictment presented by prosecutors, a large amount of evidence, including DNA test results, autopsy reports and witness testimonies, will be produced before the court during the trial.

Present at the court were relatives of the 13 Chinese victims, embassy personnel of the related countries, Chinese legislators, political advisors, experts and representatives of local residents and media.

Simultaneous translations of comments and material into the national languages of the suspects were provided in court.

The crime ring was busted earlier this year in a joint operation by police from China, Laos, Myanmar and Thailand after the brutal murders of Chinese sailors triggered an outcry in China last year.

A previous police investigation found that Naw Kham, core members of the gang and a small number of Thai soldiers attacked, hijacked and finally murdered 13 Chinese sailors on two cargo ships, the Hua Ping and Yu Xing 8, on October 5, 2011, near a port in Thailand on the Mekong River.

Naw Kham was sent to China via a chartered plane in May.

"It is uncommon in China's judicial practice for foreigners who commit crimes against Chinese nationals outside China to be brought to justice before a Chinese court," Dong Lin, vice president of the Intermediate People's Court of Kunming City, told media before the trial.

Li Ruokun, deputy procurator of the Yunnan Provincial People's Procuratorate, said the trial showed China's resolution to severely punish cross-border crimes and to protect the legitimate rights of its citizens.

Li said the suspects' rights were fully respected.

Lin Li, Naw Kham's lawyer, said her rights to meet the defendant and access his criminal files were guaranteed.

With a length of almost 5,000 km, the Mekong River, known in China as the Lancang River, is one of the most important waterways in southeast Asia, linking the countries of China, Laos, Myanmar and Thailand. It plays a crucial economic role among the Greater Mekong Sub-region countries.

China media: Wang's testimony

Posted: 20 Sep 2012 01:01 AM PDT

Morning newspaper round-up: Newspapers publish details from the trial of Chongqing's former police chief.

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