Thursday, September 18, 2008

Chlorine leak sends 71 to hospital in SW China

Seventy-one people were hospitalized after a chlorine leak in a chemical plant in southwest China's Yunnan Province, local authorities said late Wednesday.

The leak occurred at around 3:35 p.m. Wednesday in liquified chlorine workshops of the Xundian Phosphorus and Power Company in Xundian Hui and Yi Autonomous County, the county's official sources said.

All the sick staff were sent to hospital within half an hour. They were receiving treatment or under medical observation. No deaths have been reported.

The company is under Yunnan Phosphorus Group.

The leak has been contained. Environmental authorities said air quality had returned to normal.

The cause of the leak is still being investigated.

Source: Xinhua

Quality watchdog cancels inspection exemptions for food producers

In the wake of the contaminated baby milk powder scandal, Chinese quality watchdog on Wednesday cancelled all kinds of national inspection exemptions previously given to food producers.

"Considering the particular characteristics of food products and the complexity in the cause of food safety problems, and with a view to further enhancing supervision over food producers, ensuring food safety and protecting consumers' interests," said the State Administration of Quality Supervision, Inspection and Quarantine in an explanation of the move.

It said relevant companies must stop activities of publicizing their national inspection exemption qualifications. The national inspection exemption labels printed on food products and their packages became invalid from Wednesday.

To help companies avoid repeated examinations and reduce their burden, the country began exempting those producing top-quality and globally-competitive products from quality inspections in 2000.

According to previous regulations, any company in China could apply for the inspection-exemption if they had a long standing quality record, large market share, and implemented standards up to or above national or international levels.

The products that passed state or province-level inspections on three consecutive occasions were awarded the qualification. While producers still must report the inspection-free products' quality status on a regular basis, AQSIQ organized spot checks on these products annually.

Before the move, AQSIQ had cancelled the exemption qualification of Shijiazhuang-based Sanlu Group and the "Famous Brand" titles of its baby milk powder, other kinds of milk powder and sterilized milk.

It was amending quality standards of dairy products targeting non-food additives. It would adjust its baby formula standards to allow tests of poisonous substances such as melamine.

No melamine tests were conducted on dairy products in the past. New standards would be published later this year, AQSIQ said.

The country's Certification and Accreditation Administration also said on Wednesday it revoked all certificates given to Sanlu and its products, including the sanitation registration qualification of food for export.

The government on Wednesday announced comprehensive nationwide tests for melamine on every dairy product by every producer after a third infant died after drinking contaminated milk powder.

The latest fatality occurred in the southeastern Zhejiang Province, Minister of Health Chen Zhu told a press conference in Beijing. He gave no further information about the latest fatality.

The first two deaths both occurred in northwest Gansu Province. A five-month-old boy died on May 1 and an eight-month-old girl succumbed on July 22.

Both were fed with Sanlu formula and had suffered kidney failure

Another 6,244 infants were ill after consuming the tainted formula as of 8 a.m. on Wednesday, including 158 with acute kidney failure, of which 94 were in stable condition, Chen said.

Inspectors had found the chemical in 69 batches of baby milk powder produced by 22 companies nationwide. The seized items included such well-known brands as Sanlu, Mengniu, Yili and Yashili, among others.

The State Administration for Industry and Commerce, which supervises product quality at the retail level, on Wednesday ordered all the tainted products to be immediately removed from shelves.

The contaminated products were to be sealed at the site and kept from re-entering the market.

New Zealand dairy giant Fonterra, which owns a 43-percent stake in Sanlu, said on Tuesday its own Chinese business had voluntarily recalled one batch of Anmum Materna milk.

The company said the particular batch had been manufactured and distributed under licence by Sanlu using what it believed to be contaminated local raw milk.

Melamine is a toxic chemical, banned in food. It is rich in nitrogen and was illegally added to raw milk for protein tests that raise nitrogen levels.

Source: Xinhua

Ties 'unaffected by Japan's political change'

Japanese politicians from different parties have assured China that the bilateral relationship will not be affected by changes in their domestic politics, a senior Chinese official said yesterday.

"This time I had contact with Japanese politicians including leaders of different parties such as the Liberal Democratic Party, the Democratic Party and the Citizen's Party," said Liu Hongcai, vice-minister of the International Department of the Central Committee of the Communist Party of China.

"One main concern we raised is whether the strategic relationship of mutual benefits between the two countries can withstand Japan's political situation and keep going. The answers I got were all affirmative."

"Whoever becomes Japan's prime minister, the strategic and mutually beneficial relations between China and Japan must persist, " Liu said.

With concerted efforts, China and Japan "will reap new fruits and add fresh chapter to the annals of bilateral relations," Liu said.

Liu made the remarks at the 4th Beijing-Tokyo Forum which ended yesterday. The forum was co-founded by China Daily and Tokyo-based Genron-NPO as a platform for dialogue between representatives from different walks of life in the two countries.

At a time Japan's political situation is clouded in uncertainty with prime minister Yasuo Fukuda's sudden resignation earlier this month, the forum was centered on keeping the momentum of China-Japan cooperation in various aspects such as trade, security, disaster relief and environmental protection.

"The world is facing some hard problems at present," Japanese Minister of Land, Infrastructure, Transport and Tourism Sadakazu Tanigaki said at the forum yesterday, referring to the US financial crisis and other global challenges.

"It is very necessary for our two countries to maintain heart-to-heart communication and play our due roles in the global trend," he said.

A joint statement released by China Daily and Genron NPO said organizers of the forum see it as a "long-term mission" to promote multi-layer dialogue between the two countries.

The statement also acknowledged that there remains room for improving understanding between the two peoples as a recent survey indicated different impressions in the two countries of each other.

Zhao Qizheng, chairman of the foreign affairs committee of China's top political advisory body, the National Committee of the Chinese People's Political Consultative Conference, said there is reason for optimism.

"Some people's impressions about Japan are associated with the Nanjing Massacre. This is natural view about the history," Zhao said.

"But there are also Chinese whose impression is about Japan's ODA and the earthquake rescue teams," he added.

"In the future, more Chinese will remember Japan's sakura and Mount Fuji with more and more tourism and people-to-people exchanges. This is something we can expect."

Source: China Daily

Special supplement: Book offers insight on China's economic approach

A book by Li Ruogu, chairman and president of the Export-Import Bank of China, has been published by the People's Publishing House.

Titled Institutional Appropriateness and Economic Development - Development Economics Based on Chinese Practices, it draws on Li's years of work in macro and micro economic management.

With particularly rich experience in the financial sector, the author looks into the drivers behind China's success over the past 30 years of reform and opening-up, and identifies "institutional appropriateness" as the key to China's unique development path.

The book notes that China has chosen an appropriate institutional system compatible with the country's characteristics, development level, historical and cultural background and international environment.

As well, such an institutional system is able to adapt itself to the changing environment and conditions through reforms, innovations and re-adjustments to balance institutional appropriateness and changing situations.

The author argues that taking into account varying situations and conditions of different countries, there is no such thing as a one-size-fits-all system that can be applied universally, but rather each has appropriate systems that meet its needs.

In the end, the author points out that there is not only one institutional system on the road of development - the only single truth is the theme of development.

China's 30-year experience in opening up and reform has revealed that the most valuable core concept is "institutional appropriateness", Li writes. The concept can also be used as a reference for other developing countries.

Focusing on the theme of "institutional appropriateness", the book presents a substantial framework of development economics based on Chinese practices.

Through in-depth research that combines China's development with that of the entire Third World, the author studies both the singularity and universality of China's experience in the context of the modernization of all developing countries.

Putting forward the new theory of "institutional appropriateness", the author expects to invite more research interest in the topic.

Zhang Yansheng is director of the International Economic Research Institute of National Development and Reform Commission

Source: China Daily

Mayor of Shijiazhuang sacked over tainted milk powder scandal

The mayor of Shijiazhuang, capital of north China's Hebei Province, was sacked on Thursday over a tainted milk powder scandal.

The dismissal of Ji Chuntang was made at the local legislature, one day after Ji was removed from his post as vice secretary of the Shijiazhuang Municipal Committee of the Communist Party of China .

The dairy giant Sanlu Group, based in Shijiazhuang, was the first company exposed in the scandal. More than 6,200 infants across the country had developed kidney stones after drinking Sanlu's tainted baby formula, including three who have died.


China arrests 12 more suspects in tainted milk scandal

Police arrested 12 more people in an early morning Hebei Province sweep on Thursday amid an intensifying crackdown involving tainted milk powder that has killed three infants and sickened 6,244 others.

Shi Guizhong, spokesman for the Hebei Provincial Security Department, said 18 suspects have been formally arrested so far. Ten others were detained.

All 18 suspects were said to be residents of greater Shijiazhuang, the capital of Hebei. Six allegedly sold the industrial chemical melamine, while the remaining 12 were dealers suspected of selling contaminated milk.

Police also seized some 300 kg of suspicious chemicals, of which 222.5 kg proved to be melamine.

One suspect surnamed Su, who was arrested on Tuesday, confessed during police interrogation that he bought 200 bags of melamine, each weighing 20 kg, between February 2007 and July 2008 at a cost of 200 yuan and resold the chemical to milk dealerships at 218 yuan.

The police is hunting for milk dealer Xue Jianzhong, who allegedly added melamine to his milk. Xue was put on the wanted list late on Wednesday.

Hebei also launched a province-wide, 10-day key task action to hunt down other violators involved in adulterating milk.

Sanlu Group Co., the dairy company based here, remains at the heart of the scandal. Its chairwoman and general manager, Tian Wenhua, who was fired, was detained by the police.


Laser TV to enter common families by 2010

A super-screen laser-TV in the Olympic coordination center was highly recognized by the BOCOG during the Olympics and Paralympics this summer.

Since April 2008, this 150-inch laser TV worked 18 hours per day and instantly broadcast video information of all the venues. Officials of the BOCOG delivered orders according to the information on the laser-TV.

It is said this laser-TV is only home-made display equipment used in Beijing Olympics and Paralympics. It is also the first time that laser display technology is used to serve Olympics and Paralympics.

Laser-TV is expected to enter common families around 2010.

By People's Daily Online

Most advanced research ship put into water

China's most advanced research ship Experiment I was put into water successfully in Bohai Sea, according to news from China Academy of Sciences on September 17.

60 meters long and 26 meters wide, the ship can be used for multiple ocean science researches and experiments, such as researches about ocean environment, near land and ocean acoustics reasearches.

By People's Daily Online

China's direct foreign investment exceeds 100 billion U.S. dollars

By the end of 2007, more than 7,000 Chinese investors had established more than 10,000 enterprises in 173 countries and regions in the world using direct investment, and the total amount of net direct investment reached 117.91 billion U.S. dollars, according to the "2007 China's direct foreign investment statistics Communiqué" issued by Ministry of Commerce, the State Statistics Bureau, State Administration of Foreign Exchange on September 17.

Last year, sales of China's non-financial overseas enterprises reached 337.6 billion U.S. dollars, generating the total offshore tax of 2.94 billion U.S. dollars. The domestic investors realized import and export of 118.9 billion U.S. dollars through overseas enterprises. At the end of last year, employees in overseas enterprises amounted to 658,000 people, among which 295,000 are foreign employees.

The proportion of state-owned enterprises in all domestic investors fell six percentage points last year over a year, limited liability companies' proportion rose by 10 percentage points, and private companies accounted for 11% of all investors.

Among non-financial investors, the state-level enterprises accounted for only 10.3 percent, enterprises at provincial and autonomous regional level accounted for 89.7 percent.

Judging by distribution of industry of domestic investors, manufacturing enterprises accounted for 45.5 percent, followed by wholesale and retail trade, accounting for 23 percent; the construction industry ranked third, accounting for 5.2 percent.

By People's Daily Online

Top brands favor Hanzhou and Shanghai

Yangtze River Delta has become a strategic area for international brands. International brands have covered every city in the Yangtze River Dalta region, entering 88.7 percent of sales outlets, a survey released by the Yangtze River Delta Business Information website said.

At present, international top brands have penetrated in many fields, such as clothing, cosmetics and watches. The average occupancy rate in the 16 cities of the Yangtze River Delta reached 40 percent, and Hangzhou and Shanghai has the highest rate.

Besides the fast economic growth, high income level and strong spending power, a higher degree of openness, and the potential consumer demands for the international brands in this region are also attractive to the top brands, some analysts said.

In addition, the Yangtze River Delta region has strong capacity of radiation. And Hangzhou, Ningbo and other cities have special status and special industries, so that the huge mobility consumption resources can be formed, such as tourism and business affair.

By People's Daily Online

300 million cubic meters of water sent from Hebei to Beijing to tackle shortage

A water shortage in Beijing is being tackled with the diversion of 300 million cubic meters of water from Hebei Province, as of 10 a.m. on Thursday.

It will arrive in Beijing in 10 days. The diversion will flow from three reservoirs, the first being Huangbizhuang, and last until March 10 next year, said the Hebei Provincial Water Resources Department.

Clear water gushed out for Beijing via a 18-km-long branch canal connected with another grand canal totalling 307.5 km after workers opened sluices in the Huangbizhuang Reservoir, Hebei Province, on Thursday.

The grand canal, which was finished in April, forms the northern end of the middle route of the South-to-North Water Diversion Project.

Apart from Huangbizhuang Reservoir, water will also be drawn from two other water facilities -- Gangnan and Wangkuai reservoirs, said Huo Guoli, chief of construction administrative section with Hebei Provincial Water Resources Department.

Beijing has been plagued by water shortages partly because of its geography, with nine years of consecutive drought starting in 1999. It has seen only 75 percent of its expected precipitation over that period.

This drought-ridden situation was alleviated somewhat this year as the national capital had a wet summer, coupled with fewer hot days.

The municipal weather observatory said it had 443.1 millimeter of rainfall so far this year, the most in a decade. There were only three days with the temperature above 35 degrees Celsius, compared with nine days last year or an average of 11.4 days in the past 10 years.

As a neighbor of Beijing and also Tianjin, Hebei, which also sits in the dry north of the country, has been sacrificing itself in order to safeguard water supplies in the two great cities, said Huo.

"Thursday's emergency water diversion is another example to showcase the sacrifice Hebei has made," said the official, who added the province had enjoyed ample rainfall since the beginning of the year.

The local weather observatory said so far this year it had had 509 mm of rainfall by September, and the three reservoirs -- Huangbizhuang, Gangnan and Wangkuai -- have amassed 1.33 billion cu m of water in total and can spare and supply Beijing with 300 million cu m of water.

In return, Beijing will compensate Hebei, the compensation to be paid in three phases. The first compensation had already been paid, said Huo, who declined to disclose the amount.

The South-to-North Water Diversion Project, consisting of eastern, middle and western routes, is designed to divert water from the water-rich south of the country, mainly the Yangtze River, the country's longest, to the dry north.

According to the South-to-North water diversion office, when part of the project is completed in 2010, about 1 billion cubic meters of water will be diverted to Beijing annually.

Source: Xinhua

FM: China supports UN observer mission in Georgia

China supports the UN observer mission in Georgia in the performance of its duties, Foreign Ministry spokeswoman Jiang Yu told a press conference in Beijing on Thursday.

She said the mission, since its establishment, had played an important role in maintaining peace and stability in Abkhazia.

The mission was sent to Georgia in August 1993 under UN Security Council resolution No. 858, which aimed to supervise the implementation of the cease-fire agreement between Georgia and Abkhazia reached in July that year.

As for proposals that the UN send peace-keeping forces to South Ossetia, Jiang said China has noted the situation and will consider it.

Source: Xinhua

China reports 69,227 deaths from May earthquake

The death toll from the May 12 earthquake in Sichuan Province and its neighboring region as of Thursday noon was 69,227, the State Council Information Office said in a statement.

The numbers of people listed as missing and injured were 17,923 and 374,643 respectively.

As of Thursday noon, a total of 1,486,407 quake-affected people had been relocated.

Among 96,544 persons who were hospitalized for injury, 93,459 had been discharged, the statement said.

The government spending on disaster relief and reconstruction had topped 67.556 billion yuan , including 60.087 billion yuan from the central budget and 7.469 billion yuan from the local budget.

According to the Ministry of Civil Affairs, domestic and foreign donations had reached 59.391 billion yuan in cash and goods by Thursday noon. Of this, 26.88 billion yuan had been forwarded to quake-hit areas.

About 1.58 million tents, 4.87 million quilts, 14.1 million garments, 3.93 million tonnes of fuel and 8.4 million tonnes of coal had been sent to the quake-hit areas, it said.

Relief workers have built 677,131 temporary houses for relocated people.

In the 72 hours ending Thursday noon, 500 aftershocks at or below magnitude 3.9 were monitored in the quake zone, according to the China Earthquake Administration.

A total of 30,235 aftershocks had been detected since May 12.

A total of 471,846 tonnes of grain and 12,013 tonnes of cooking oil have been allocated to the quake zones from central reserves as of Thursday, the statement said.

Of the 53,295 km of roads damaged in the quake, 52,994 km had been restored, according to the statement.

And 128,138 of the 138,960 business outlets damaged by the quake had been reopened, the statement read.

As of Thursday noon, 207,547 quake-affected people had been organized to work outside of the quake zone, while another 842,399people had found jobs in their hometowns.


Dairy producer yet to recall some tainted milk powder

A Chinese dairy producer at the center of a baby formula scandal has yet to recall 35 tonnes of tainted milk powder from retail outlets and consumers, an official said on Thursday, as it emerged that a fourth child had died.

Local authorities and the Shijiazhuang-based Sanlu Group had recalled 8,875 tonnes of a total of 8,910 tonnes of "problematic" milk powder the company had sold after the scandal was exposed, the city's vice mayor, Zhang Meizhi, told a press conference.

"The departments of quality supervision and industry and commerce in the city are now stepping up efforts to recall the remaining 35 tonnes, especially those sold to consumers in remote areas," she said.

"The milk powder produced before Aug. 6 had all been pulled off shelves," she said.

The company had also sealed off 2,176 tonnes of tainted milk powder it has yet to sell, she added.

The death toll in the scandal has risen to four, the latest being a baby in northwestern Xinjiang Uygur Autonomous Region.

The infant died at a hospital in the Bayingolin Autonomous Prefecture of Mongolian Nationality, the regional health department said on its website on Thursday, without giving further details.

The contamination earlier claimed the lives of three other babies, two in northwestern Gansu Province and one in eastern Zhejiang Province.

Nationwide, more than 6,200 infants have developed kidney stones after drinking Sanlu's baby formula, tainted with the chemical melamine, which was believed to have helped to increase protein content.

The dairy giant Sanlu, based in the Hebei provincial capital of Shijiazhuang in north China, was the first company exposed in the scandal. It is 43 percent-owned by New Zealand dairy company Fonterra and has been ordered to halt all production.

Tian Wenhua, the sacked board chairwoman and general manager of Sanlu, has been detained by police for questioning.

The State Administration of Quality Supervision, Inspection and Quarantine has carried out test samples involving 491 batches of products sold by all 109 companies that produced baby milk powder in the country. The inspectors found melamine in 69 batches of powder from 22 companies.

To date, 18 suspects in Shijiazhuang have been arrested. Six were charged with selling melamine, while the other 12 were dealers suspected of selling contaminated milk to Sanlu, Shi Guizhong, spokesman for the Hebei Provincial Public Security Department, told reporters on Thursday.

On Wednesday the mayor of Shijiazhuang Ji Chuntang resigned as a result of the scandal.

Earlier on Tuesday, four city officials were fired. They included Zhang Fawang, vice mayor in charge of agricultural production; Sun Renhu, the Animal Husbandry and Fishery Bureau director of Shijiazhuang; Zhang Yi, Food and Drug Administration director; and Li Zhiguo, director of the Bureau of Quality and Technical Supervision.


Beijing-Shanghai high-speed railway construction gets under way

China has started construction on1,059 km, or 80 percent, of the Beijing-Shanghai high-speed railway in the five months since the project kicked off.

Construction on the rest of the project was awaiting preliminary work, such as land confiscation.

Nearly 100,000 workers and engineers are involved in the 31.6-billion-U.S.-dollar project, and they will use 21,000 pieces of machinery, according to the leading group of the project.

The key part of the project, a bridge spanning the Yangtze River in Nanjing, has seen 10 of its piers installed, with one left.

The 1,318-km railway line, with a designed speed of 350 km per hour, is expected to welcome passengers in five years.

Upon completion, the line would cut the travel time between the capital of Beijing and the financial hub of Shanghai in half, to five hours.

It would also lift the one-way transport capacity to 80 million passengers and more than 100 million tonnes of cargo annually, so as to ease the burden on the existing line.

The line would traverse Beijing, Tianjin, Hebei, Shandong, Anhui and Jiangsu before reaching Shanghai.


Chlorine-sickened workers out of danger in SW China

A local government spokesman said on Thursday that 71 people were in stable condition following Wednesday's chlorine leak at a chemical plant in southwest China's Yunnan Province.

Among those sickened, 24 were being treated in hospitals and 47others were under medical observation. Doctors said one person had been seriously poisoned and six slightly poisoned, while 64 had skin irritation.

The leak occurred at about 3:35 p.m. Wednesday at a liquefied chlorine workshop of the Xundian Phosphorus and Electricity Co. Ltd. in Xundian Hui and Yi Autonomous County, the spokesman said.

The leak had been completely contained, causing no pollution, and air quality near the scene was within normal limits, the local environmental authority said.

The company, under the Yunnan Phosphorus Group, had resumed operation at its other facilities.

County work safety bureau officials as well as those from Kunming City, the provincial capital, were investigating the cause of the leak.


HK's jobless rate stable at 3.2 percent

Hong Kong's employment remained stable for the quarter ending August with unemployment at 3.2 percent and underemployment at 1.9 percent, the Census and Statistics Department of Hong Kong said here Thursday.

Total employment rose by 13,100 to 3,546,300 during the period of June to August while the labor force grew by 17,600 to an all-time high of 3,675,400.

The number of jobless people rose by 4,500 to 129,100 while the number of underemployed people fell by 900 to 69,000.

Unemployment fell in the decoration and maintenance, communications, and manufacturing sectors, while increases were seen in the sanitary services, education services, and welfare and community services sectors.

Underemployment falls were mainly seen in the foundation and superstructure construction, and retail trade sectors, offsetting the rises in the decoration and maintenance, and miscellaneous personal services sectors.

Hong Kong Secretary for Labor and Welfare Matthew Cheung said the unemployment rate has remained unchanged notwithstanding the expansion in labor supply. Nevertheless there is no ground for optimism in the face of the global financial turbulence.

"With the further downside risks to the already challenging external environment, the uncertainties clouding over the near term outlook for the local economy have increased," he said.

He added that the government will closely monitor the impact on job creation and employment while continuing to enhance training, retraining and employment services.


Vice president: China hopes for "fair, reasonable" settlement of boundary issue with India

Chinese Vice President Xi Jinping on Thursday said he hoped for a fair and reasonable framework to settle the boundary issue between China and India at an early date.

"Both should maintain peace and tranquility in the border area before the boundary issue is resolved," said Xi while meeting with Indian National Security Advisor M. K. Narayanan who was here attending the 12th Sino-Indian meeting on the boundary issue.

Xi hoped the framework would be worked out through equal consultation and friendly dialogue and accepted by both.

Chinese State Councilor Dai Bingguo and Narayanan, both special representatives of their respective countries, are co-chairing the meeting on the issue on Thursday and Friday.

China and India share about 2,000 km of border and the boundary has never been formally delimited.

The two began to discuss border issues in the 1980s. To maintain peace and stability in the border area, two agreements in1993 and 1996 were signed respectively.

In 2003, the heads of government of the two countries designated special representatives for demarcation work.

In 2005, China and India signed an agreement of political guideline on demarcation during Premier Wen Jiabao's visit to India. The two countries also announced a strategic cooperative partnership.

Xi said the achievement made during the boundary meeting would benefit both sides and increase the mutually strategic trust.

"The two sides should view the bilateral ties with strategic and long-term perspective, and expand the common ground and properly handle the disputes so as to push forward the long-term and stable relations," he added.

He pledged China was committed to developing the strategic and cooperative partnership of peace and prosperity with India, stressing Sino-Indian friendly relations would benefit both, Asia and the world as a whole.

Narayanan said the Indian government also hoped to realize the consensus by the leaders of the two countries to settle the boundary issue at an early date.

He said India attached importance to ties with China and would promote the relationship.

He also congratulated his host on its successful stage of the Beijing Olympics and Paralympics.

Source: Xinhua

Landslide kills 6 villagers in southwest China

Six villagers, including a one-year-old infant, died after a rain-triggered landslide damaged their homes in southwest China's Guizhou Province early on Thursday.

The landslide occurred at around 4 a.m. in Qinghe Village, Weining County, damaging five houses and burying the six villagers,the Guizhou provincial government said.

Rescuers retrieved all the bodies.

Source: Xinhua

Hebei turns on the tap as drought grips Beijing

A water shortage in Beijing is being tackled with an emergency diversion of 300 million cubic meters of water from Hebei Province that started at 10 a.m. on Thursday.

It will arrive in Beijing in 10 days.

The water will flow from three reservoirs, starting with Huangbizhuang, and last until March 10, said the Hebei Provincial Water Resources Department.

Clear water headed for Beijing via an 18-km branch canal connected with another open-cut grand canal totaling 307.5 km after workers opened sluices in the Huangbizhuang Reservoir, Hebei Province, on Thursday.

The canal, which was finished in April, forms the northern end of the middle route of the South-to-North Water Diversion Project. It starts with the well-known Beijing-Hangzhou Grand Canal, runs south to a local waterway in Hebei known as Huotuo in the south and ends at Tuancheng Lake in Beijing in the north.

Apart from Huangbizhuang, water will be drawn from two other facilities -- Gangnan and Wangkuai reservoirs -- said Huo Guoli, chief of the construction administrative section with Hebei Provincial Water Resources Department.

The quality of water from the three reservoirs, tested at level-III, conforms to the requirements set by the Beijing Water Authority, said Luo Yang, Water Environment Monitoring Center chief of Haihe River catchments.

"We will monitor the full process of some 30 aspects such as temperature and pH value to ensure the same quality of water being diverted to Beijing as at the sources," said Luo.

Beijing has had water shortages partly because of its geography, with nine years of consecutive drought starting in 1999. It has received only 75 percent of its expected precipitation over that period.

The shortage in Beijing is set to reach crisis point in 2010, when the population is expected to top 17 million, or 3 million more than its resources can support.

An optimistic estimate of Beijing's annual water supply is about 3.73 billion cubic meters in 2010, taking into account the Yangtze River water supplied by the ambitious South-to-North Water Diversion Project.

Yet the usable volume will be no more than 3.26 billion cubic meters, excluding at least 470 million cubic meters needed to maintain the city's ecology, according to a study.

Beijing had more than 15 million permanent residents and 4 million migrants at the end of 2006. The consequences of the rising population include the continuous decline of groundwater and a worsening environment.

To supply water to an additional 3 million people, experts say Beijing needs, by 2010, to slash water consumption per 10,000 yuan of GDP to 33 or even 31 cubic meters, down around 36 percent from the 2005 level.

As a first step, the municipal government is reconsidering a plan to impose a cap on consumption per household, which was first proposed four years ago but abandoned for "technical reasons", according to the Beijing Water Authority.

Beijing's water price is 3.7 yuan per ton. Under a quota system, residents will have to pay two to five times more for water if they exceed the limit, which will be about 12 tons a month for a family of four.

The drought was alleviated somewhat this year, as the capital had a wet summer and fewer hot days than usual. The municipal observatory said it has recorded 443.1 mm of rain so far this year, the most in a decade. There were only three days when the temperature exceeded 35 degrees Celsius, compared with nine last year or an average of 11.4 in the past 10 years.

Yu Yaping, the publicity section chief of the Beijing Water Authority, denied the recently concluded Olympics and Paralympics had any effect on the capital's water situation. Yu blamed another factor -- the lack of major rivers around Beijing -- for the water scarcity.

As a neighbor of Beijing and also Tianjin, Hebei Province, which also sits in the dry north of the country, has sacrificed to safeguard water supplies in the two mega-cities, said Huo.

"Thursday's emergency diversion is another example of the sacrifice Hebei has made," said the official, who added the province had enjoyed ample rain since the beginning of the year.

The local observatory said that so far this year, it recorded 509 mm of rain. The three reservoirs -- Huangbizhuang, Gangnan and Wangkuai -- have amassed 1.33 billion cu m of water in total and can supply Beijing with 300 million cu m of water.

In return, Beijing will compensate Hebei under a three-stage system, which Yu declined to quantify. The first stage has already been paid.

The South-to-North Water Diversion Project, consisting of eastern, middle and western routes, is designed to divert water from the water-rich south of the country, mainly the Yangtze River, the country's longest, to the dry north.

The eastern and middle routes are already under construction. The western route, meant to replenish the Yellow River with water diverted from the upper reaches of the Yangtze River by digging tunnels in the high mountains of western China, is still at the blueprint stage.

According to the South-to-North water diversion office, when part of the project is completed in 2010, about 1 billion cubic meters of water will be diverted to Beijing annually.

Source: Xinhua

Senior CPC official calls for deeper ties with Communist Party of India

Senior official of the Communist Party of China Li Yuanchao Thursday called for increased exchanges between the CPC and the Communist Party of India to deepen the relations between the two parties.

"The two parties should maintain frequent contacts and strengthen exchanges of experiences to contribute to deepening the reciprocal cooperation between the two nations and the cause of each other," said Li, member of the Secretariat of the CPC Central Committee, in a meeting with his Indian counterpart C. K. Chandrappan and his delegation.

Li, also member of the Political Bureau of the CPC Central Committee and head of the Organization Department of the CPC Central Committee, said the CPI had a traditional friendship with the CPC, and the CPC is grateful to the CPI's consistent and firm support to China on some major issues, such as the issues related to Tibet.

Hailing the good momentum of the comprehensive development of China-India relations in recent years, Li said China and India have no fundamental conflicts, but share broad common interests.

"The two sides should promote the development of China-India strategic partnership of cooperation to bring about benefits to the two peoples," Li added.

Chandrappan said the CPI admires the great achievements made in the socialist construction under the leadership of the CPC, and will continue to give firm support to the CPC.

He said the CPI is ready to further strengthen party-to-party exchanges to strive for the continuous development of India-China friendship.

Chandrappan and the CPI delegation arrived here Tuesday for a visit to China and to attend the 2008 Beijing Paralympic Games.

Source: Xinhua

Norway's top lawmaker meets senior Chinese military officer on bilateral ties

President of the Norwegian Parliament Thorbjoern Jagland met with Chen Bingde, chief of the General Staff of the People's Liberation Army of China in Oslo to discuss bilateral ties and issues of common concern on Thursday.

Jagland said that bilateral ties made great progress in recent years, with their cooperation in political, economic, cultural and other fields going on smoothly, and people-to-people contact increasingly closing.

Norway is following closely China's development and giving high priority to enhancing its ties with China and will continue to expand exchanges and cooperation in various fields with China, Jagland said.

On the Taiwan issue, the top Norwegian lawmaker said his country adheres to the one-China policy.

Jagland also congratulated China on the success of Beijing Olympic Games.

On his part, Chen conveyed to Jagland Chinese top legislator Wu Bangguo's cordial greetings and good wishes.

He said the two countries have no conflicts in their fundamental interests. The development of their bilateral ties has transcended differences in their social systems and ideologies and brought real benefits to the two peoples.

China attaches great importance to developing ties with Norway and is willing to work together with Norway to push forward the friendly cooperation between the two countries as well as their armed forces, he added.

Chen is also a member of the Central Military Commission ,the leading organ of China's armed forces. He arrived in Oslo on Monday night for an official visit to Norway.

Source: Xinhua

Timor-Leste donates 500,000 USD to quake-hit SW China

Timor-Leste gave 500,000 U.S. dollars to China's quake-hit Sichuan Province, its first donation to another country, the Chinese Foreign Ministry announced on Thursday.

At the donation ceremony in Dili, capital of Timor-Leste, also known as East Timor, Foreign Minister Zacarias Albano da Costa said the government and people of Timor-Leste had always been grateful to the assistance China offered.

He said his people were sympathetic with the victims in the 8.0-magnitude earthquake that devastated the southwestern province and the surrounding area on May 12.

He added he expected the Chinese to rebuild their homes at an early date as the quake had claimed nearly 70,000 lives and left 17,923 others missing.

The friendship between the two nations is sincere and the people of Timor-Leste will always stand by the side of the Chinese.

Su Jian, the Chinese ambassador to Timor-Leste, appreciated the support, adding his country would remember this benevolent act.

He said China would like to deepen its ties with Timor-Leste.

Source: Xinhua

One more body retrieved in N. China fatal landslide

Rescuers retrieved one more body on Thursday from a fatal landslide in north China's Shanxi Province, pushing the confirmed death toll in the Sept. 8 tragedy to 261.

A man's body was found at about 3 p.m. at a site 30 meters away from the collapsed iron ore retaining pond, rescuers said. According to the identity card and mobile phone found with the body, rescuers said he was a migrant worker from the central Hunan Province.

It was unclear whether he was included in the 10 people listed as missing on Wednesday when the death toll was 260.

An unlicensed iron ore dregs retaining pond in Xiangfen County burst on the morning of Sept. 8, discharging a huge volume of tailings, mud and rock that devastated a downstream village, an office building and a busy outdoor market.

An initial investigation found the collapse was due to negligence. The tailings dumping pond was built in violation of regulations and had few safety inspections.

Source: Xinhua

China issues regulation to clear labor contract law misunderstanding

China's State Council, the country's Cabinet, issued an implementation regulation for Labor Contract Law in Beijing on Thursday in an effort to clarify confusion surrounding the law.

The new law, which was put into effect on Jan. 1, was hailed as a landmark step in protecting employee's rights. But many complained the law increased a company's operational cost as it overemphasized protection of workers.

One of the most debated terms was one that entitled employees of at least 10 years' standing to sign contracts without specific time limits. Some employers believed the "no-fixed-term contract" would bring a heavy burden to them and lower company vitality.

"By issuing the regulation, we hope to make it clear that labor contracts with no fixed termination dates did not amount to lifetime contracts," a Legislative Affairs Office of the State Council official told Xinhua.

The regulation listed 14 conditions under which an employer can terminate a labor contract. These included an employee's incompetence to live up to the job requirements, serious violations of regulations and dereliction of duty.

Another 13 circumstances were also included in the regulation, under which an employee could terminate his or her contract with an employer, including delayed pay and forced labor.

Compensation should be given if employers terminate the contract lawfully. Employers should double the amount of compensation if they terminated a contract at their own will. No further financial compensation was required, according to the regulation.

China's top legislative body, the Standing Committee of the National People's Congress, adopted the Labor Contract Law in June2007, which was followed by a string of staff-sacking scandals.

The best known was the "voluntary resignation" scheme by Huawei Technologies Co. Ltd., the country's telecom network equipment giant.

The Guangdong Province-based company asked its staff who had worked for eight consecutive years to hand in "voluntary resignations." Staff would have to compete for their posts and sign new labor contracts with the firm once they were re-employed.

Huawei later agreed to suspend the controversial scheme after talks with the All China Federation of Trade Unions.

The NPC Standing Committee said on Thursday it would start a law enforcement inspection at the end of September in 15 provinces, municipalities and autonomous regions.

The Legislative Affairs Office of the State Council issued a draft of the implementation regulation on May 8 to solicit public opinion. By May 20, the office had received 82,236 responses. On Sept. 3, the State Council approved the regulation.

Source: Xinhua

BOC holds Lehman-related bonds, loans of $128.82 mln

Bank of China , the country's largest foreign exchange lender, said on Wednesday it had total exposure to failed U.S. investment bank Lehman Brothers of 128.82 million U.S. dollars.

The exposure, consisting of Lehman-related bonds of 75.62 million U.S. dollars and loans of 53.2 million U.S. dollars, accounted for 0.01 percent of the lender's total assets and 0.19 percent of its net assets, the bank said in a statement on its website.

It said the loss would not cause serious impact to its financial status. It was still assessing possible losses and would pay close attention to new developments. It would also set aside relevant allowances timely according to cautious principles.

After Lehman Brothers filed for bankruptcy on Monday, BOC shares dropped by the daily 10 percent limit on Tuesday and tumbled a further 6.31 percent on Wednesday in the yuan-denominated market.


Hong Kong stocks sink to 23-month new low

Hong Kong's benchmark Index further sank to a 23-month new low off the key support level of 18,000 Wednesday, failing to stage a rebound after the index plunged over 1,000 points Tuesday amid worries of a global financial turmoil after investment bank Lehman Brothers filed for bankruptcy protection.

The Hang Seng Index fell 663.42 points, or 3.63 percent, to 17,637.19, the index's day low and lowest close since Oct. 4, 2006,when it ended at 17,629 points.

Hong Kong stocks rose 2.13 percent to open Wednesday's morning session at 18,691.30, and once went up to the day high of 18699.18in early minutes, following the U.S. Federal Reserve announced an unprecedented deal to rescue insurance giant American International Group overnight.

But news of the U.S. government's rescue move failed to calm investors, who were waiting for more bad news from major financial institutions, analysts said.

The benchmark Hang Seng Index quickly reversed the early gains, fell off the key support line of 18,000 before midday.

Turnover fell to 76.23 billion HK dollars from Tuesday's 88.42 billion HK dollars .

Chinese banks led the day's blue-chip losses on concerns the People's Bank of China's latest rate cut will narrow interest margins of the major lenders.

ICBC, China's largest lender, lost 9.9 percent to 4.01 HK dollars.

China Construction Bank, the third largest bank in China, fell 8.2 percent to 4.73 HK dollars.

Bank of Communications dropped 7.7 percent to 6.58 HK dollars, and Bank of China declined 4.6 percent to 2.90 HK dollars.

China Merchants Bank said Wednesday it holds 70 million U.S. dollars worth of bonds issued by the collapsed investment bank. The Hong Kong-listed shares of China Merchants ended down 7.7 percent at 18.14 HK dollars.

All but six blue-chip stocks ended in the red Wednesday. Blue-chip heavyweight HSBC, which accounts for the largest weighting of the Hang Seng Index, went down 2.5 percent at 115.10 HK dollars.

Heavyweight China Mobile, the largest mobile phone operator in the country and the market's largest stock measured by capitalization, falling 2.0 percent to 70.20 HK dollars.

Analysts said they don't expect any major near-term rebound in the blue-chip index. But attractive valuations and solid fundamentals of Hong Kong companies could help the index stay around current levels instead of falling further.


Asian markets decline on AIG bailout

Asian financial stocks fell, countering gains by the region's chipmakers, as a US bailout of American International Group Inc failed to ease concerns that credit-related losses will cause more financial failures.

Macquarie Group Ltd slumped 7.8 percent in Sydney even after denying a newspaper report that the company may face difficulty in refinancing debt. Finance stocks gave up gains after CNBC reported that Morgan Stanley was considering seeking a merger partner.

Hynix Semiconductor Inc. jumped 9.9 percent after a bid from Samsung Electronics Co for US-based SanDisk Corp raised speculation that product prices will rise.

It's "difficult for market participants to predict whether regulators will bail out other financial institutions when they need help", said Hiroshi Morikawa, who helps manage about $14 billion as a strategist at MU Investments Co in Tokyo.

"Investors are still spooked. Considering the equity market is far from stable, I still recommend holding cash rather than stocks."

Most markets in Asia retreated, with China's CSI 300 Index declining 3.6 percent as of 3 pm in Shanghai, while Hong Kong's Hang Seng Index lost 2 percent. Japan's Nikkei 225 Stock Average climbed 1.2 percent to 11749.79.

Debt-rating downgrade

The MSCI Asia Pacific Index was little changed at 110.45. The measure plunged the most in eight months on Tuesday as credit turmoil pushed Lehman Brothers Holdings Inc to bankruptcy, and caused a debt-rating downgrade of AIG. The regional gauge is down 30 percent this year.

Inner Mongolia Yili Industrial Group Co slumped in Shanghai after China's food safety regulator said the company was among 22 linked to milk tainted with the industrial chemical melamine.

US stocks climbed, driving the Standard & Poor's 500 Index 1.8 percent higher, as speculation AIG would weather a funding shortage boosted financial shares in the last hour of trading. S&P futures gained 0.3 percent yesterday.

The Federal Reserve said it will lend as much as $85 billion to AIG, giving the government a 79.9 percent stake in the company. A "disorderly failure" could compound declines in financial markets, lead to higher borrowing costs and dent economic growth, the Fed said.

AIG's collapse would have threatened more financial companies and cost them $180 billion in losses, according to RBC Capital Markets.

Macquarie sank 7.8 percent to A$33.93, taking its loss in the past three days to 23 percent.

A report in the Australian newspaper that Macquarie may face difficulties refinancing A$5 billion of debt is misleading, spokeswoman Paula Hannaford said. The Sydney-based company is confident it can refinance debt even as the global credit squeeze worsens, she said.

China Merchants Bank Co dropped 7.4 percent in Hong Kong to HK$18.20 after saying it held $70 million of debt issued by Lehman. Aozora Bank Ltd, which had 60 billion yen in loans to Lehman, sank 5.3 percent to 162 yen, extending Tuesday's 16 percent fall.

Nick Footitt, a Morgan Stanley spokesman in Hong Kong, wasn't immediately available to comment on CNBC's merger report.

Morgan Stanley wasn't in any merger discussions as of late yesterday, CNBC said. Further movements in Morgan Stanley's stock could make senior management change track and seek a partner, the report said, citing people it didn't identify.

Potential losses

Japan's banks and insurers announced a combined 245 billion yen of potential losses tied to Lehman's collapse. The investment bank is likely to become the first US company to default on a samurai bond, threatening other borrowers' access.

Hynix Semiconductor jumped 9.9 percent to 19,900 won, after rival Samsung Electronics made a $5.85 billion hostile bid for SanDisk Corp in what would be its biggest acquisition. Samsung was unchanged at 525,000 won.

Samsung offered $26 in cash for each SanDisk share, or 73 percent more than the memory-card maker's latest closing price, the South Korean company said in a statement.

SanDisk, based in Milpitas, California, said its board rejected the offer.

Advantest Corp, the world's biggest maker of memory-chip testers, gained 4 percent to 2,335 yen. NEC Electronics Corp, Japan's No 3 chipmaker, added 3.9 percent to 2,280 yen. Inner Mongolia slumped 10 percent to 12.09 yuan, extending Tuesday's 6 percent decline.

Canon Inc, Japan's largest office-equipment maker, climbed 3.4 percent to 3,970 yen, snapping a five-day decline, after saying it will spend as much as 50 billion yen to buy back up to 14.5 million of its own shares.

Source:China Daily/Agencies

Futures prove a perfect fit for booming economy

With a widening product variety and deepening liquidity pools, the mainland's futures market is playing an increasingly important role in serving the national economy.

Zhengzhou Commodity Exchange , the first experimental futures market approved by the State Council, was established on Oct 12, 1990. The ZCE, which started with forward contract trading, launched its first futures contracts on five agricultural products - wheat, corn, soybean, green bean and sesame on May 28, 1993.

It still specializes in agricultural and chemical product futures, including hard white wheat, strong gluten wheat, sugar, cotton, rapeseed oil and PTA, a petroleum-based chemical product.

Three years after the establishment of ZCE, Dalian Commodity Exchange announced it would trade in futures contracts underlined by a variety of agricultural produce, mainly grown in Northeast China. So far, futures contracts on soybean, soybean oil, corn, palm oil, soymeal and LLDPE, a petroleum-based product, are traded on the Dalian bourse.

In 1999, Shanghai Futures Exchange was established and China's futures trading was expanded to metal and energy products. Now it deals in six futures products - copper, aluminum, zinc, gold, fuel oil and natural rubber.

The demand for commodity futures as hedging tools has been on the rise as the Chinese economy continues to advance at a brisk pace. The country is now one of the largest producers and consumers of a wide range of commodities, including oil, steel, copper, corn, wheat and soybean. To diversify their product ranges, the nation's three commodity futures exchanges are doing research to introduce new contracts.

For example, the Shanghai bourse plans to launch new contracts on nickel, silver and steel futures in the coming years. The Zhengzhou bourse is preparing to launch early long-grain non-glutinous rice futures, while the Dalian bourse is preparing to introduce hog futures to protect hog breeders from being exposed to sharp price swings.

China Financial Futures Exchange, the country's first financial futures exchange, was inaugurated in October 2006. The long-awaited CSI300, the first mainland stock index futures, will be traded on this bourse, which is putting the finishing touches to the launch.

The past year has seen these futures exchanges as well as China's futures market expand rapidly. The combined turnover of the nation's three commodity futures exchanges totaled 40.97 trillion yuan in 2007, up 95 percent from the year before.

The aggregate trading volume of these exchanges amounted to 728.46 million hands in 2007, up 62 percent over the previous year. More than half of the transactions took place on the Dalian bourse, while turnover on the Shanghai bourse amounted to 23 trillion yuan, accounting for half of the total.

Economists maintain that China, as a major producer and consumer of commodities, has great potential for developing its futures market. China's commodity futures markets are thus stepping up efforts to expand product ranges and deepen liquidity pools to cater to the increasingly diverse needs of the nation's rapidly growing economy.

Source:China Daily

Firm set up to manage CIRC fund

The China Insurance Regulatory Commission said it has set up a nonprofit State-owned corporation with registered capital of 100 million yuan to manage its insurance protection fund, amounting to at least 7 billion yuan.

China's insurers have been required to submit up to 1 percent of retained premiums to the insurance protection fund since 2005, which aims to protect policyholders in the event of defaults.

The entire assets of the insurance protection fund, including its 38.8 percent holding in New China Life Insurance, will be transferred to the newly established company.

Wei Yingning, CIRC's vice-chairman, was appointed as the company's chairman and Zeng Yujin, another CIRC official, was named president.

In a separate statement, CIRC, the Ministry of Finance and the People's Bank of China, jointly issued new measures for the administration of the insurance protection fund.

"The new rules are aimed at improving the risk prevention mechanism of the insurance industry, clarifying the management model of the fund and restructure the levy scheme," said the CIRC.

Based on the new rules, insurance companies are required to make payments to the fund at rates based on gross insurance policy sales rather than retained premiums, in order to provide better protection to policyholders rather than insurance companies.

Under the new policy, reinsurance companies are excluded from the fund. As a result, they will no longer be entitled to any form of compensation in the case of default by an insurance company.

Since the insurers' payment scope is enlarged based on gross insurance policy sales, the rules try to lower the payment proportion to alleviate the burden on the companies. Non-investment type property insurance products and non-investment type accident insurance policies are required to contribute 0.8 percent of their sales to the fund, down from the 1 percent required in 2004 under the old rules, according to the statement.

The new rules add investment-type non-life insurance policies to the contribution list for the insurance protection fund. Government-backed, policy-oriented insurance products and company pension fund products are exempt from contributions, according to the statement.

The regulator also broadened the range of products the protection fund can invest in, including central bank bills, central government-owned company bonds and financial bonds issued by the central government's financial institutions. Earlier, the protection fund could only invest in national debt.

Cash from the protection fund can be used, with the approval of the State Council, in cases where insurance companies go bankrupt or when there are material risks, it said, without elaborating.

CIRC said it would supervise the management company for the insurance protection fund, develop supporting measures for the new rules, and encourage the insurance companies to implement the requirements on corporate governance and internal control.

Source:China Daily

$297m in Lehman debt held

At least three large Chinese commercial banks have disclosed their exposure to the worsening US financial crisis through bonds issued by investment bank Lehman Brothers, which has filed for Chapter 11 protection.

China Merchants Bank yesterday said in a statement to the Shanghai Stock Exchange that it holds $70 million of Lehman Brothers bonds, of which $60 million is senior debt and the rest subordinated debt.

The bank also said it has not made special provisions for the book losses on those bonds and will evaluate their potential risks and disclose further details at a later date.

According to the Xinhua News website, Industrial and Commercial Bank of China , the country's largest State-controlled commercial bank by assets, holds $151 million in bonds issued by, or linked to, Lehman Brothers.

At press time, ICBC had not issued a statement to the Shanghai bourse to specify its exposure to Lehman Brothers.

Bank of China was also affected by the failure of Lehman Brothers. BOC holds $75.62 million in bonds issued by the ailing US investment bank. It also loaned $53.2 million to Lehman Brothers and its subsidiaries. BOC was reportedly listed as an unsecured creditor in documents filed by Lehman Brothers at the United States Bankruptcy Court of the Southern District of New York.

Lehman Brothers, the fourth largest investment bank in the United States, filed for Chapter 11 protection after efforts to find a buyer collapsed last Sunday.

Rising concern about the ripple effect of the deepening US financial crisis plus the gloomy outlook for China's banking sector has pushed down the prices of Chinese commercial banks' shares in the past two trading days.

Shares in China Merchants Bank yesterday dropped 9.96 percent to 14.47 yuan apiece. With its 11 percent plummet on Tuesday, China Merchants Bank has fallen a total 18.9 percent over the past two trading days.

Bank of China has dropped a total of 14.8 percent from last Friday to close at 2.97 yuan. Its Hong Kong-listed H shares also fell 4.6 percent yesterday to HK$2.9.

China Construction Bank yesterday plunged 10.09 percent to end at 3.83 yuan, while its H shares also tumbled 8.15 percent to HK$4.73.

The latest 27-basis-point cut to the benchmark lending rate plus the unchanged deposit rate is expected to squeeze bank earnings by narrowing the interest spread.

Jing Ulrich, chairwoman of China equities at JPMorgan Securities, yesterday told China Daily: "As China's financial market is not fully opened yet, the problem of Lehman Brothers is expected to have only an indirect impact on China's financial sector. An individual Chinese bank's exposure to the US financial crisis should be seen in the context of its total assets."

Source:China Daily

SanDisk rejects $5.9 bln Samsung offer

U.S. flash memory maker SanDisk Corp rejected a 5.9-billion-U.S. dollar-bid by top memory chip-maker, Samsung Electronics Co, but would not rule out a deal at a better price.

Buying SanDisk would help Samsung cut the 350 million dollars it pays each year to use SanDisk's patented flash technology, and widen the South Korean firm's lead in the flash memory market as the industry battles steep memory chip price falls due to a supply glut.

Offer undervalued

SanDisk said in a statement that Samsung's 26 dollars-a-share cash offer, an 80 percent premium to its Monday close, undervalued the company, but it remained open to a deal with Samsung at a price that recognizes its "intrinsic value".

Samsung had not yet made any decision on whether to raise its bid, said James Chung, a Samsung spokesman in Seoul.

A deal around that level would be the biggest takeover by Samsung, which has grown its business without resorting to big M&A deals.

Compact storage

Flash memory is a form of convenient and compact data storage that is used in a number of consumer gadgets, including digital cameras, cellphones and portable music players. The company uses Samsung's chips in its flash memory products.

SanDisk shares soared 53 percent to 23 dollars in extended trading on Tuesday after Samsung went public with its bid following months of private talks that failed to produce a deal.

On Tuesday, Japan's Toshiba Corp, which jointly operates a memory chip production plant with SanDisk in Japan, said it was open to a combination with SanDisk, but there were no concrete talks yet.

Toshiba, the world's No2 NAND flash maker, and third-ranked Hynix Semiconductor Inc both declined to comment yesterday on Samsung's offer.

Analysts said Samsung might buy SanDisk shares from institutional investors at the 26 dollars offer price, building up a minority stake to put more pressure on its target.

"Given SanDisk shares have lost so much value since late last year, and the NAND flash market is suffering a downturn that is likely to last for a while, there must be some institutional investors who want to sell to Samsung ," said Park Hyun, an analyst at Prudential Investment & Securities.

Arrangement made

"Samsung very likely has made some sort of arrangements with them before making the offer. Samsung could secure 20-30 percent of SanDisk initially, then work on raising its stake."

Writing to SanDisk CEO Eli Harari, Samsung CEO Yoon-Woo Lee said he was "deeply disappointed" that the Milpitas, California-based company "continues to cling to unrealistic expectations on both its stand-alone market value and an appropriate merger price".

Based on 225 million SanDisk shares outstanding, a deal at 26 dollars would be worth 5.85 billion dollars.

"This is a huge premium," said Yoshiharu Izumi, a JP Morgan analyst. "It's not clear at this stage what kind of market share Samsung would be able to grab, if this bid goes through."

Samsung ranked No 1 in the global NAND flash market in the second quarter with a 42.3 percent share, according to market research firm iSuppli, followed by Toshiba and Hynix, with 27.5 percent and 13.4 percent, respectively.

Harari said the offer was opportunistic, and Samsung was trying to take advantage of the industry-wide downturn and SanDisk's depressed stock price.

The company also said it was a possibility Samsung was trying to take advantage of ongoing licensing negotiations between the two groups, it said that Samsung did not address SanDisk's concerns about stockholder protection in the event of a deal. SanDisk failed to elaborate on this concern in its statement.

Source: China Daily/Agencies

China makes more overseas investment in 2007

Latest official figures show that China kept the strong momentum of its outbound investment on the overseas market in 2007.

A report of China's direct overseas investment is released jointly today on Sept. 17 by the Chinese Ministry of Commerce, the National Bureau of Statistics and the State Administration of Foreign Exchange.

According to the Commerce Ministry's news release on the report, China made 26.51 billion USD of direct investment on the overseas market in 2007, which represented a growth of 25.3 percent over 2006. Non-financial investment accounted for 93.7 percent of the total and rose 40.9 percent year on year. Financial investment contributed to the remaining 6.3 percent.

By the end of 2007, some 7,000 domestic entities in China had set up more than 10,000 enterprises in 173 countries and regions around the world. That leads to 117.91 billion USD of stock of China's outbound investment, of which 85.8 percent was under the non-financial category.

In 2007, non-financial overseas entities directly funded by Chinese investors registered sales revenue of 337.6 billion USD and paid 2.94 billion USD taxes. By the end of 2007, they had employed 658,000 people with 295,000 of them of non-Chinese nationalities.

Of the 10,000 plus enterprises funded by Chinese capital on the overseas markets, 31.8 percent are in the manufacturing while 19.4 percent were in retailing and wholesaling, and 15.1 percent in commercial services.

Half of those enterprises are located in Asia with Hong Kong apparently the favorite overseas destination of the capital outflow from the Chinese mainland.

Chinese investment spread through 90 percent of the Asian market and 81 percent of the African market by the end of 2007. The US, Russia, Viet Nam, Japan, Germany, United Arab Emirates, Australia and Singapore are also major homes to Chinese funded enterprises.

Only 10.3 percent of the non-financial Chinese investors were central state-owned enterprises and entities in 2007. But they contributed 78.5 percent of the stock of China's overseas non-financial investment. However, the ratio of SOEs in the investors' mix was down by 6 percentage points from 2006. Eleven percent of the investors were private companies.

The coastal Zhejiang province in east China is the top investor in terms of the number of overseas enterprises it has. It is followed by Guangdong, Shandong, Jiangsu, Beijing, Fujian, Shanghai and Heilongjiang.

By People's Daily Online

China stocks plunge nearly 6 pct after Wall Street losses

Declines on the China market worsened in the early session on Thursday after heavy losses on Wall Street and reports by more Chinese banks of holdings in failed U.S. investment bank Lehman Brothers.

The benchmark Shanghai Composite Index plummeted 5.84 percent to close the morning session at 1,816.44 points, led by bankers and insurers.

The losses tracked overnight losses on Wall Street, where the Dow Jones industrial average slid 449.36 points, or 4.06 percent, to 10,609.66.

The Industrial and Commercial Bank of China nosedived 7.89 percent to 3.15 yuan after the bank reported its holdings at 151.8 million U.S. dollars the previous day.

The Bank of China said its total exposure was 128.82 million U.S. dollars late on Wednesday. Its share prices went down 4.38 percent to 2.84 yuan in the morning.

China Merchants Bank, the first Chinese bank to report holdings of 70 million U.S. dollars worth of bonds issued by Lehman, lost 3.59 percent to 13.95 yuan after a two-day plunge of the 10 percent daily limit.

China Ping An plummeted by the daily limit of 10 percent finished the morning session at 30.2 yuan, while China Life Insurance was down 9.42 percent to 17.99 yuan.

The property sector also reported heavy losses, and helped drive the index lower. Chongqing Yukaifa fell 10.04 percent to 4.3yuan, and China Vanke fell 5.23 percent to 4.89 yuan.

The Shenzhen Component Index closed at 6,338.19 points, down 341.87 points, or 5.12 percent.

Losers sharply outnumbers gainers by 861 to 18 on the Shanghai market, and 722 to 11 on the Shenzhen market.


U.S. urged to crack down on export of e-waste

The Government Accountability Office urged the U.S. government on Wednesday to stop the export of used computers and other electronic products with toxic materials that endanger foreign workers.

U.S. regulators has done little to stop the growing flood of electronic waste fueled by the short lifespan of many products, and by manufacturers who rush to get the latest gizmo or upgrade on the market, the GAO said in a report.

The GAO criticized the U.S. Environmental Protection Agency for a lack of enforcement that allows recycling companies, some of them touting their "green" credentials, to dump computer and TV cathode ray tubes , which contain several pounds of lead, and other "e-waste" overseas.

U.S. consumers disposed of 300 million electronic devices in 2006, and "a substantial amount ends up in countries where disposal practices can harm workers and the environment," said the65-page report.

GAO investigators posing as foreign buyers of broken CRTs in India, Pakistan and Hong Kong found 43 U.S. companies willing to export such CRTs. "Some were willing to export CRTs in apparent violation of the EPA rule," which went into effect in 2007, the report said.

A new crop of recycling companies "includes some high-end players but also bottom feeders," said Ted Smith, founder of the Silicon Valley Toxics Coalition. These companies claim to responsibly recycle, but instead ship discarded electronics laden with toxic materials to Asia and Africa, where workers separate out copper, gold and other valuable elements.

The coalition was launched in the 1980s, when toxic chemicals from computer chip factories leaked into Silicon Valley groundwater. In recent years the coalition has focused on the disposal of electronic products as a growing problem.

The EPA estimates that 2.6 million tons of used or unwanted electronics was discarded in the United States in 2005. John Stephenson of the GAO told a House Foreign Affairs subcommittee Wednesday that U.S. export controls on used electronics are "among the weakest in the world." The only e-waste the EPA can regulate is CRTs, and "that enforcement is minimal," he said.

In response, the EPA said the GAO report "did not provide a complete or balanced picture of the agency's electronic waste program."

Cathode ray tubes contain up to four pounds of lead, and circuit boards also contain some of this metal. Lead is toxic and can delay neurological development in children and cause other adverse health effects in adults. Lead can leach out of CRT glass and circuit boards disposed of in landfills, or it can be released into the environment by incineration.


China stocks drop for third day despite banking sector rebound

Chinese stocks tumbled 1.72 percent on Thursday, the third fall in three days, though most shares of the heavy-weight banking sector rebounded from heavy losses in the previous two days.

The benchmark Shanghai Composite Index closed at 1,895.84 points, down 33.21 points, or 1.72 percent. The Shenzhen Component Index closed at 6,563.07 points, down 116.99 points, or 1.75 percent.


Hong Kong stocks finish off 16400 level at midday

Hong Kong's benchmark Hang SengIndex plunged 1301.05 points, or 7.38 percent, to finish Thursday's morning session at 16336.14, tracking losses of the U.S. market overnight amid a new wave of financial tsunami triggered by Lehman Brothers which filed for bankruptcy.

Hong Kong stocks opened down 516.96 points, or 2.93 percent lower, and quickly fell off 17,000 level in first several minutes during the morning session. The Hang Seng Index once nosedived to the new intraday low of 16283.72, down 1353.47 points, or 7.67 percent lower during Thursday's morning trading.

Regional stocks also tumbled in early trading following another sell-off on Wall Street, where the Dow Jones industrial average fell about 450 points, or 4.06 percent, to 10,609 overnight.