CHINA & US: Climate Control Conflict

Compiled by Heather Hopkins Clement

* China and the US are key players in the climate control talks in Copenhagen. However, they have some differences.

* The United States believes the Chinese emissions target is too low. They want to see a stronger emissions commitment from China.

* The latest dispute in this second and final week of the summit is over how to monitor and verify any agreement. China is rejecting any kind of international monitoring of its emissions levels. The US will not agree to any deal that cannot be monitored and verified by a third party.

* International verification is essential to get the US Congress to sign off on any deal. Congress might even call for punitive tariffs on goods imported from China. They want to ensure a level playing field for American companies when competing with China.

* There are also cultural and political factors driving Chinese negotiators to engage in brinkmanship.

For More Details:

China and U.S. Hit Strident Impasse at Climate Talks, New York Times, December 14, 2009

RUSSIA: Nightclub Explosion in the City of Perm is deadliest fire since the fall of the Soviet Union

Compiled By Heather Hopkins Clement

• Fire broke out at a popular nightclub in the City of Perm on December 5, 2009 causing panic and death in the overcrowded café. A stampede resulted in many victims being trampled or suffocated to death. Witnesses claim security guards had to break down the club's sealed doors. Initial reports were 70 dead and 60 injured.

• Many of the injuries were critical with severe burns, and the death toll as doubled in the week after the incident. About 20 of the injured were taken to Moscow for further treatment. Those that do survive are to receive free plastic surgery.

• Russian ministers rushed to the scene, and the regional government resigned days later.

• Terrorism has been ruled out. Initially, it was believed some kind of short circuit may have caused the fire. Later, it was determined that onstage fireworks were the culprit. Fire safety breaches in the club were ignored for years.

• Arrests to date include the owner and other management.

• President Medvedev has demanded the culprits be brought to justice with harsh punishment.

• Prime Minister Putin says the tragedy reflects all the vices of Russian bureaucracy such as incompetence and corruption. Fire safety codes and their enforcement are notoriously lax in Russia due.

• Families of the victims were initially offered $3400 in compensation, but the amount was raised to $16,700 several days later.

• Victims memorialized with candles and flowers.

• Russia plans nationwide inspections, and Russia's emergencies chief demanded a fireworks ban in public places. A Moscow fire safety watchdog has asked courts to close 54 nightclubs.

• Russian records show up to 18,000 fire deaths a year which is several times the per-capita rate in the United States and other Western countries.

• Nightclub fires have killed thousands of people worldwide.

• The death toll as of December 12, 2009 stands at 146.


Related Articles:

Russian nightclub fire disaster: death toll rises to 146, RIA Novosti, December 13, 2009

Moscow fire safety watchdog asks courts to close 54 nightclubs, RIA Novosti, December 12, 2009

Inspectors could face charges over deadly nightclub fire, RIA Novosti, December 12, 2009

Death count in Russian nightclub blaze rises to 145, RIA Novosti, December 12, 2009

Death toll from Russian nightclub fire rises to 143, RIA Novosti, December 11, 2009

Nightclub blaze death count climbs to 142, RIA Novosti, December 11, 2009

Two more nightclub blaze victims die, toll climbs to 141, RIA Novosti, December 11, 2009

Fire safety breaches in Perm club were ignored for years – Shoigu, RIA Novosti, December 10, 2009

Perm tragedy reflects all vices of Russian bureaucracy – Putin, RIA Novosti, December 10, 2009

Death toll from Russian nightclub fire reaches 136, RIA Novosti, December 10, 2009

Death toll from Russian nightclub fire climbs to 135, RIA Novosti, December 10, 2009

Death toll from Russian nightclub fire reaches 134, RIA Novosti, December 10, 2009

Death toll in Perm nightclub fire rises to 128, RIA Novosti, December 9, 2009

Death toll in Perm nightclub fire rises to 125, RIA Novosti, December 9, 2009

Deadly accident in Russian nightclub, RIA Novosti, December 9, 2009

Regional government resigns over deadly fire, RIA Novosti, December 9, 2009

Russian nightclub hit by deadly fire was overcrowded – governor, RIA Novosti, December 8, 2009

Russian nightclub fire death toll reaches 120 - emergencies service, RIA Novosti, December 8, 2009

Russian nightclub fire death count 'rises to 119', RIA Novosti, December 8, 2009

Medvedev orders guilty parties of Perm fire be brought to justice, RIA Novosti, December 8, 2009

Russian nightclub fire death toll rises to 118, RIA Novosti, December 8, 2009

Russian nightclub fire death toll rises to 117, RIA Novosti, December 7, 2009

Russia mourns victims of Urals club fire as 113th victim dies, RIA Novosti, December 7, 2009

Vladimir Putin blasts fire safety measures in Russia, RIA Novosti,
December 7, 2009

Families of Perm nightclub blaze victims to get $16,700 each, RIA Novosti, December 7, 2009

One more Urals night club fire victim dies in hospital, RIA Novosti, December 6, 2009

All bodies in deadly Perm nightclub fire identified, RIA Novosti, December 6, 2009

Perm residents bring flowers to nightclub fire disaster scene, RIA Novosti, December 6, 2009

Russia's emergencies chief demands fireworks ban in public places, RIA Novosti, December 6, 2009

Flowers and candles: in memoriam for Perm fire victims, RIA Novosti, December 6, 2009

Deadly fire at Perm night club, RIA Novosti, December 6, 2009

SHORT CIRCUIT COULD BE THE CAUSE OF PERM NIGHTCLUB FIRE DISASTER – INVESTIGATORS, RIA Novosti, December 6, 2009

URGENT: All managers of Urals fire-stricken club detained –investigators, RIA Novosti, December 6, 2009

URGENT: Death toll in Urals cafe fire rises to 111, RIA Novosti, December 5, 2009

Perm emergencies officials raise death toll in nightclub fire to 110, RIA Novosti, December 5, 2009

Russia's health minister says 109 dead in Perm nightclub fire, RIA Novosti, December 5, 2009

Russian nightclub fire kills 109; many crushed, Associate Press, December 5, 2009

Explosion At Russian Nightclub Kills At Least 109, Associated Press, December 5, 2009

Lax codes cited in Russia blaze that killed 107, Associated Press, December 5, 2009

Security guards had to break Perm club's sealed doors down – witnesses, RIA Novosti, December 5, 2009

Five arrested in Perm club fire, death toll reaches 107, RIA Novosti, December 5, 2009

Death toll in Perm club fire reported lower at 106, RIA Novosti, December 5, 2009

Perm nightclub fire victims to receive free plastic surgery, RIA Novosti, December 5, 2009

Russian investigators arrest 3 more over deadly nightclub fire, RIA Novosti, December 5, 2009

Russia plans nationwide inspections over nightclub fire tragedy, RIA Novosti, December 5, 2009

Death toll from Russian nightclub fire reaches 109, RIA Novosti, December 5, 2009

Dozens in critical condition after Russian nightclub fire kills 103, RIA Novosti, December 5, 2009

Medvedev urges harsh punishment for culprits in nightclub fire, RIA Novosti, December 5, 2009

Nightclub fire in Russia's Urals kills 103, RIA Novosti, December 5, 2009

Four suspects wanted over Urals nightclub fire, RIA Novosti, December 5, 2009

Urals nightclub bosses arrested after fatal fire, RIA Novosti, December 4, 2009

Owner of Russian Urals nightclub arrested after fatal fire, RIA Novosti, December 4, 2009

Nightclub fire in Russia's Urals kills 102, RIA Novosti, December 4, 2009

Over 20 injured in Urals fire to be flown to Moscow, RIA Novosti, December 4, 2009

Families of cafe fire victims to get $3,400 in compensation, RIA Novosti, December 4, 2009

Fire rips through crowded Russian cafe, over 100 killed, RIA Novosti, December 4, 2009

Russian ministers in Urals city over cafe fire, RIA Novosti, December 4, 2009

Russian ministers arrive in Urals city after fatal nightclub fire, RIA Novosti, December 4, 2009

Russian cafe fire death toll rises to 112 – TV, RIA Novosti, December 4, 2009

Urals fire death toll reaches 100, 131 injured, RIA Novosti, December 4, 2009

HUNDRED KILLED, 131 INJURED IN URALS FIRE - RUSSIAN EMERGENCIES MINISTRY, RIA Novosti, December 4, 2009

Rescuers begin to compile lists of Russian cafe blaze victims, RIA Novosti, December 4, 2009

Urals cafe fire death toll rises to 98, RIA Novosti, December 4, 2009

PERM CAFE DEATH TOLL RISES TO 98 AS FOUR OF THE INJURED DIE IN HOSPITAL - REGIONAL EMERGENCIES MINISTRY, RIA Novosti, December 4, 2009

Local police look into several versions of cafe tragedy, RIA Novosti, December 4, 2009

Investigators rule out terrorist attack on Urals café, RIA Novosti, December 4, 2009

100 killed in Urals cafe blast, RIA Novosti, December 4, 2009

Some 76 killed, 114 injured in Urals cafe blast , RIA Novosti, December 4, 2009

Some 76 killed, 60 injured in Urals cafe blast, RIA Novosti, December 4, 2009

Over 70 killed in Urals cafe blast, RIA Novosti, December 4, 2009

Blast rocks cafe in Urals, RIA Novosti, December 4, 2009

Explosion At Russian Nightclub Kills At Least 109

December 5, 2009

by The Associated Press

Russia's top investigative body says the number of people who died in a nightclub fire in the Urals city of Perm has risen to 109.

The Investigative Committee says 98 died on the spot and 11 others later died in hospitals.

The victims crushed each other to death and suffocated after the fire tore through the popular Lame Horse nightclub in Perm late Friday, filling the crowded barracks-like building with thick black smoke.

The Investigative Committee said Saturday that some 130 people were injured and many remain in critical condition.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

PERM, Russia (AP) — Panicked clubgoers crushed each other to death in a popular Russian nightspot as they tried to flee a fast-moving fire that one eyewitness told The Associated Press was started by pyrotechnic fountains set up on the stage.

Officials said 103 people died when the fire tore through the popular Lame Horse nightclub in the city of Perm late Friday, filling the crowded barracks-like building with thick black smoke. Authorities said they arrested the registered owner of the club and the manager.

Officials said the club managers ignored repeated demands from authorities to change the club's interior to comply with fire safety standards. "They have neither brains, nor conscience," Russian President Dmitry Medvedev said, urging a tough punishment for the culprits.

Officials said most of the dead suffocated or were crushed at the exit.

"The fire spread very quickly," said Marina Zabbarova, chief investigator for the local prosecutor's office. "Panic arose which led to a mass death of people."

News footage shot later outside the Lame Horse showed charred bodies lying in rows on the ground amid a light snowfall. Rescue workers carried bodies on stretchers into waiting vans.

Svetlana Kuvshinova, who was in the nightclub when the blaze broke out, told the AP it started after three fireworks fountains spewed sparks, igniting the plastic ceiling.

"The fire took seconds to spread," she said. "It was like a dry haystack. There was only one way out. They nearly stampeded me."

Another clubgoer said panic spread quickly through the crowd.

"There was only one exit, and people starting breaking down the doors to get out," said a woman who identified herself only as Olga, smeared with soot and wearing a filthy fur coat. "They were breaking the door and panic set in. Everything was in smoke. I couldn't see anything."

A video recorded by one of the clubgoers and run by Russian television stations showed flames engulfing the ceiling decorated with willow twigs as a host shouted in a casual tone: "Ladies and Gentlemen, guests of the club, we are on fire. Please leave the hall!"

People reluctantly and slowly began heading toward the exit, some of them turning back to look at the burning ceiling, but then rushed away in panic as flames quickly spread around seconds later.

Authorities set about identifying bodies Saturday morning, as ambulances delivered some of the more than 130 injured to planes waiting at the airport, where they were being evacuated to Moscow hospitals.

Medical authortities said nearly 90 of the injured were in critical condition.

Firefighters were on the scene in downtown Perm one minute after the alarm was called in, the Emergency Situations Ministry said, and they took less than an hour to put the fire out.

Zabbarova, the top investigator, said that there was no suspicion of a terrorist attack.

Russia has been on edge since last week's bombing of the high-speed Nevsky Express passenger train midway between Moscow and St. Petersburg, which killed 27 in the first deadly terrorist attack outside Russia's restive Caucasus republics since 2004. Chechen rebels claimed responsibility for the blast.

Perm, a city of around 1 million people, is about 700 miles (1,200 kilometers) east of Moscow in the Ural Mountains.

Enforcement of fire safety standards is notoriously lax in Russia and there have been several catastrophic blazes at drug-treatment facilities, nursing homes, apartment buildings and night clubs in recent years.

Medvedev, who summoned top officials to report on the fire and rescue efforts, urged changes in the law to toughen punishment for violation of fire safety standards.

Russia records nearly 18,000 fire deaths a year, several times the per-capita rate in the United States and other Western countries. Nightclub fires have killed thousands of people worldwide.

Ten people died when an entertainer's clothing was ignited during a so-called "fire show" at a Moscow club in March 2007.

In February 2008, a fire in the Golden Rock nightclub in the Siberian city of Omsk killed four people. Officials said the blast might have been caused by natural gas.

A nightclub fire in the U.S. state of Rhode Island in 2003 killed 100 people after pyrotechnics used as a stage prop by the 1980s rock band Great White set ablaze cheap soundproofing foam on the walls and ceiling.

Associated Press Writers Douglas Birch, Jim Heintz and Vladimir Isachenkov in Moscow contributed to this report.

Time Runs Out On U.S.-Russia Arms Control Treaty

December 4, 2009

by Mike Shuster

TRANSCRIPT

The landmark 1991 arms control treaty negotiated by President George H.W. Bush and Soviet leader Mikhail Gorbachev that brought the Cold War nuclear arms race to an end expires Friday night.

U.S. and Russian negotiators have been working round-the-clock in Geneva to replace the Strategic Arms Reduction Treaty, or START, and maintain some of its key provisions, but that work is not yet completed. Both governments say they will abide by the terms of the treaty as the deadline passes.

For months, U.S. and Russian officials have been negotiating a replacement for the START, especially some way to extend key verification measures that have allowed each side to maintain a timely and accurate accounting of the strategic nuclear weapons the other side has deployed.

The START called for the reduction of each side's deployed strategic nuclear arsenal on long-range bombers, missiles and submarines to about 6,000. Those targets were reached years ago, and now the United States and Russia each deploy fewer than 2,000 strategic nuclear warheads.

Maintaining the verification measures of the START is important to the Obama administration. It was on the agenda Friday when Secretary of State Hillary Clinton met with her Russian counterpart, Sergei Lavrov, in Brussels.

"We always knew this would be very difficult. Remember, the prior administration didn't believe in arms control treaties, and so we were pretty much starting from scratch, and these are highly complex technical negotiations," Clinton said.

In 2002, the George W. Bush administration signed the Moscow Treaty that brought the nuclear arsenal of both sides down to current levels.

But President Obama has mapped out far more ambitious goals for the reduction of nuclear weapons. Clinton explained the rationale for this in a speech on arms control in October.

"Clinging to nuclear weapons in excess of our security needs does not make the United States safer. And the nuclear status quo is neither desirable nor sustainable. It gives other countries the motivation — or the excuse — to pursue their own nuclear option," she said.

Russia and the United States have already agreed to new levels for nuclear weapons — roughly 1,600. That turns out to have been the easy part.

Achieving reciprocal verification has been one of the hard parts. The U.S. stopped making long-range missiles years ago, and Russian personnel who monitored that production in the U.S. returned home. But Russia continues to produce long-range missiles, at a facility at Votkinsk on the Volga River, about 800 miles east of Moscow.

With the expiration of the START, American monitors at Votkinsk were set to leave. Arms control experts argue that even though the United States and Russia are no longer enemies or adversaries, verification measures such as this are still very important.

In fact, the fewer the nuclear weapons, the more verification matters, according to Joseph Cirincione, president of the Ploughshares Fund, a nonprofit group that seeks to reduce nuclear weapons worldwide.

"Once you start going down to, say, a thousand or a few hundred deployed weapons, then it really starts to matter. You want to be sure that you can account for those weapons, that there's no secret stock of weapons that the other side is using, that there's no breakout capability where one side could suddenly double or triple the number of weapons they have," Cirincione says.

The possibility of miscalculation is another good reason to maintain verification measures, says Jeffrey Lewis, who runs the Web site armscontrolwonk.com.

"We do constantly see on the Russian side and on the American side ridiculous over-estimates of each other. ... The Russians think the United States is 10 feet tall, and sometimes we think the same thing about them," Lewis says.

There are other issues that still divide the U.S. and Russia — for instance, disagreements over how deployed nuclear warheads and their delivery systems are counted. Russia wants to include missile defenses. The U.S. does not.

Despite the expiration of the START, it looks like the United States and Russia will continue working on these issues. Any new treaty will have to be ratified by the U.S. Senate and the Russian Duma.

Recession Elsewhere, but It’s Booming in China

December 10, 2009

By KEITH BRADSHER

GUANGZHOU, China — For the first time, Chinese will buy more cars this year than Americans. Demand is so high that drivers put their names on long waiting lists for the most popular models.

“I’m disappointed, but what can I do?” asked Zhang Ge Lu, a 28-year-old interior designer. He came recently with two friends to a row of dealerships here in southeastern China to buy a black Toyota RAV4, only to be told that he would have to wait two months for delivery.

And it is not just cars. For more and more consumer goods, China is surpassing the United States as the world’s biggest market — from cars to refrigerators to washing machines, even desktop computers.

The Chinese market is “on full tilt — booming is an understatement these days,” said John Bonnell, the director of Asia vehicle forecasting at J.D. Power & Associates.

China is pulling ahead at this particular moment partly because Americans, debt-laden and worried about their jobs, are pulling back. After decades of gorging on consumption, Americans are saving. And the Chinese, whom economists thought were addicted to saving, are spending more.

Among China’s 1.3 billion people, rising incomes are finally making large numbers of Chinese prosperous enough to make big-ticket purchases.

The question is: will they keep spending? The Beijing government is increasing consumption with rebates, subsidies and heavy bank lending. Whether China can turn the spending spree into the seeds of a true consumer society matters not just to China, but to the world.

For years, the West has pushed China to increase domestic consumption and reduce its dependence on exports — that’s because its overdependence on exports has distorted global trade.

To keep its export machine humming, China kept its currency undervalued to make its goods more competitive in foreign markets. The county beggared its own citizens, keeping salaries and bank deposit interest rates artificially low to support exporters.

China’s trade surpluses and extensive intervention in currency markets have led it to amass $2.27 trillion in reserves, mainly in United States Treasuries, mortgage-backed securities and other dollar-denominated investments, helping to keep interest rates low and finance Americans’ borrowing. Chinese parsimony enabled American profligacy.

If the Chinese buy more and Americans save more, a more stable global economic exchange can take shape. In the meantime, China’s rapid consumption growth is good news for the whole world. For the first time, China, not the United States, is a locomotive helping to pull the global economy out of a slump. But China’s tiny appetite for American exports means that the main benefit has gone to commodity exporters and to businesses in China.

Automakers are on track to sell 12.8 million cars and light trucks in China this year, virtually all of them made in China (although many are foreign brands), compared with 10.3 million in the United States. Appliance manufacturers expect to sell 185 million refrigerators, washing machines and other pieces of kitchen and laundry equipment in China this year, compared with 137 million in the American market.

In desktop computers, China moved solidly ahead of the United States in the third quarter, buying 7.2 million compared with 6.6 million in the United States.

Retail sales are growing 17 percent a year in China after adjusting for inflation, almost twice as fast as the overall economy.

Americans have been cutting back on purchases of everything from shoes to furniture to jewelry. But Chinese households are crossing a series of income thresholds at which cars and other big-ticket purchases become affordable.

At the same time, Chinese banks are stepping up consumer lending. The proportion of car sales financed with loans has doubled this year, to nearly 25 percent, although most Chinese still head for dealerships with bricks of 100-renminbi notes, each note worth about $14.62. Credit card spending rose 40 percent in the first nine months of the year compared with the same period last year, yet China still has just one credit card for every eight people, compared to two credit cards for each American man, woman and child.

While it is spreading creature comforts, China’s lending-based prosperity may also be sowing the seeds of future economic problems. China’s Banking Regulatory Commission recently told banks to show restraint in lending for the rest of the year, fearful that some of this year’s loans could become bad debts in the next several years, as happened with the mortgage lending spree in the United States.

The regulator threatened to block banks’ overseas investments and branch openings unless they can demonstrate adequate capital to cover risks.

The size of China’s consumer market, notwithstanding its growth, will make it hard for China to rescue the world economy by itself. Total consumer spending in China is still less than a sixth of American consumer spending at current prices and exchange rates. That is mainly because China has relatively few restaurants, hotels and other service businesses, even as sales of manufactured goods have risen.

The average price tags on most Chinese products are much lower than in Western markets. For many products, including some in which China leads in the sheer number of goods, the total dollar value of sales in China is still smaller than in the United States.

The average new car sells for $17,000 in China compared with almost $30,000 in the United States, according to J.D. Power. This is because Chinese consumers buy more subcompacts and fewer sport utility vehicles. While the Chinese market is one-quarter larger in the number of cars sold, the American market is still about two-thirds larger in dollar terms.

Similarly, the United States market for household appliances is a third larger in dollars, even though the Chinese market is a third larger in the number of appliances. Cooking ranges in China are sold for countertop installation without a lot of other equipment, for example.

“You don’t have the cook-a-turkey-in-the-oven type of product in China, because we don’t have that kind of cooking,” said Philip S. Carmichael, the president of Asian operations at Haier, China’s biggest appliance manufacturer.

But in some sectors, Chinese buyers are already proving more lavish than Americans. The average flat-panel television sold in China is bigger than in the United States, according to AU Optronics of Taiwan, the world’s third-largest manufacturer of flat-panel televisions.

When car sales began surging early this year, many auto executives attributed the boom to government incentives. To stimulate the economy, the government has offered rebates for rural families to buy cars and household appliances, and has cut sales taxes on cars with small engines.

But the boom has broadened to categories that barely qualify for incentives.

S.U.V. sales rose 72 percent in October from a year earlier. At Nissan, sales of cars with larger engines that do not qualify for the sales tax reduction are growing even faster than sales of small-engine cars.

Auto sales jumped 42 percent in the first 11 months of this year compared with sales in the same period last year. And sales are still accelerating, soaring 96 percent in November compared with the same month a year ago. Auto sales in the United States plunged 37 percent last month on the same basis.

China’s consumers have the potential to buy even more in the years ahead. The savings rate is close to 40 percent — and will remain high unless and until Beijing creates a social safety net for things like health care or retirement, which would encourage Chinese to spend more today.

And though annual incomes still average just $2,775 a person in cities and $840 in rural areas, Western economists predict the economy will grow almost 12 percent in each of the next two years and the renminbi is widely expected to appreciate someday, further increasing consumers’ buying power.

Hilda Wang contributed reporting.

Copyright 2009 The New York Times Company

Porsche, Daimler Snub Tokyo’s Car Show as China Eclipses Japan

Last Updated: October 20, 2009 04:48 EDT

By Makiko Kitamura and Kiyori Ueno

Oct. 20 (Bloomberg) -- Porsche SE, Daimler AG and Volkswagen AG all sent top executives to April’s Shanghai Motor Show as China is set to become the world’s largest car market. All three are skipping this week’s Tokyo Motor Show.

With the recession slashing global vehicle demand and Japan’s car sales headed for the lowest in three decades this year, no major foreign automakers will be represented for the first time in 45 years at the Tokyo event, formerly one of the world’s five biggest car shows.

“The Tokyo Motor Show is being snubbed by companies who made a beeline for Shanghai,” said Yuuki Sakurai, chief executive officer of Fukoku Capital Management Inc., which manages about 800 billion yen ($8.8 billion). “It’s just like investors being more interested in emerging-market stocks than in Japanese shares.”

The Tokyo show, open to the public from Oct. 23, will feature 108 automakers and suppliers. Compared with 26 foreign exhibiters at the last show in 2007, this year there will be only three; the U.K.’s Group Lotus PLC and Caterham Cars, and Germany’s Alpina Burkard Bovensiepen GmbH. In contrast with the Tokyo event, 1,500 exhibitors from 25 countries were present at the Shanghai show.

Foreign automakers and suppliers are passing on Tokyo to cut costs as vehicle demand drops in the world’s most rapidly aging country, whose population began declining in 2005. Imports accounted for just 176,723 out of Japan’s 5.08 million vehicle sales in the fiscal year ended March 31, representing a market share of 3 percent.

China Eclipses Japan

China overtook Japan as the world’s second-largest car market in 2006 and is set to surpass the U.S. for the top spot this year. U.S. vehicle sales are expected to drop by 23.5 percent to 10.1 million this year, according to an estimate by CSM Worldwide, an auto consulting company. In China, full-year vehicle sales may rise 28 percent to 12 million, according to a government forecast.

Japan’s market is expected to decline 8.5 percent to 4.3 million vehicles in the year ending in March. The show area in Tokyo has shrunk by about half to 21,000 square meters, or one- eighth of the 170,000 square meters allotted at Shanghai.

Even domestic truckmakers Isuzu Motors Ltd. and Hino Motors Ltd. are sitting out the Tokyo show, for the first time. Hino, Japan’s largest maker of heavy trucks, withdrew “due to the difficult business environment,” spokesman Yoshihiro Udagawa said.

Economic Contraction

Economists expect Japan’s economy will contract a record 5.7 percent this year and the unemployment rate will reach an unprecedented 6 percent in 2010, undermining consumer spending, according to a survey by Bloomberg.

In one parallel to Shanghai, the Tokyo Motor Show will feature electric cars alongside hybrid and gasoline-engine models. Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co., Japan’s three largest carmakers, are all displaying models designed to cut carbon emissions.

“In terms of scale and volume, China is the main attraction,” said Yasuaki Iwamoto, an auto analyst at Okasan Securities Co. in Tokyo. “But Japanese carmakers will remain the front-runner in environmental technologies. That won’t change.”

Honda, Mazda

Tokyo-based Honda will display a battery-powered concept car, the EV-N, and a concept electric motorcycle. Yokohama-based Nissan will show its Leaf electric car, to be sold starting next fiscal year. The carmaker’s shares have risen 46 percent this year.

Mazda Motor Corp., Japan’s second-largest car exporter, is developing a high-performance gasoline-engine car that achieves 32 kilometers (20 miles) per liter. The concept car, Kiyora, will be showcased at Tokyo Motor Show.

Toyota will unveil the four-seat FT-EV II electric concept car, which can run more than 90 kilometers on a full charge and can hit a top speed of more than 100 kilometers. The company’s stock has gained 23 percent this year.

The automaker will also show its FT-86 Concept sports car at the show. The model, which is set to be sold in 2011, is a compact rear-wheel drive sports car. Toyota will also display a plug-in version of its third-generation Prius gasoline-electric hybrid.

The three foreign exhibitors are all niche brands. Alpina configures Bayerische Motoren Werke AG cars, producing less than 2000 vehicles a year. Lotus makes hand-built cars with an aluminum chassis and Caterham builds two-seat racing vehicles in the U.K. It forecasts sales of 70 cars in Japan next year, according to Andy Bothwell, a spokesman for the company.

“There is great affection in Japan for anything quirky and British,” he said.

To contact the reporter on this story: Makiko Kitamura in Tokyo at mkitamura1@bloomberg.net

GM, Chinese Partner To Sell Vehicles In India

December 4, 2009

by The Associated Press

General Motors Co. and its main Chinese partner announced a venture Friday to sell vehicles in India, uniting the two fastest-growing car markets in a deal that reflects GM's reduced status as a global automaker.

As part of the deal, GM gave majority ownership of its main China joint venture to Shanghai Automotive Industries Corp., which is to invest up to $350 million in the India initiative. GM said they also would collaborate in future efforts to sell vehicles in other emerging markets such as Southeast Asia.

Analysts said the moves reflect the U.S. automaker's pressing need for money as it overhauls operations following a restructuring in U.S. bankruptcy court. The U.S. government owns 60 percent of GM after providing billions of dollars in loans.

"We have an outstanding relationship with SAIC," said Nick Reilly, president of GM's international operations, in a conference call with reporters. "It seemed to us very sensible and a big opportunity to deepen that relationship and broaden that relationship outside of China."

GM agreed to turn over 1 percent of Shanghai General Motors to SAIC, which will give the Chinese partner 51 percent of the company. Reilly said GM valued that 1 percent at $85 million. He said the transfer will give SAIC the right to approve the joint venture's budget and the appointment of senior managers, but he said the partners already operate that way and both are satisfied with management, so there should be no major changes.

Reilly said bringing in SAIC and its investment meant the Indian venture could develop more quickly. He said SAIC wanted majority ownership of the China venture so its financial results could be reported as part of SAIC's earnings. He said GM agreed to that "to get their full cooperation and the full cooperation of the Chinese government in other things," though gave no details.

"It also helps us, obviously, share the large investment that is behind this program and therefore get it done faster, and bring in other products than we envisaged in our GM-only plan," Reilly said.

Total investment in the India venture is expected to be more than $650 million, Reilly said. GM was contributing half in the form of factories and a distribution network in India and SAIC would provide the rest, he said, though declined to say whether that would be cash or other assets.

The venture also will sell Chinese-made GM cars and mini-commercial vehicles.

GM's decision to surrender control of its successful China operation and share access to India's promising market is a sign of its financial struggles, said John Bonnell, director of automotive forecasting at JD Power & Associates in Bangkok.

"The only motivation could be money - they need money," he said.

Bonnell said the move in China could reflect a shift in global strategy for GM after it canceled plans to sell its Opel unit in Europe. He noted that after it entered Chapter 11 reorganization in June, GM held onto its valuable stake in the China joint venture rather than sell it to raise cash.

"They were ready to give up on Opel, give up on Europe if you will, and maintain control in Asia," Bonnell said. "Now it looks like maybe they've decided to maintain their position in Europe at the expense of Asia.

Separately, the U.S. automaker and Suzuki Motor Corp. agreed Friday to end their manufacturing joint venture in Canada, leaving GM without a Japanese production partner after also severing manufacturing links with Toyota Motor Corp.

Like other global automakers, GM has said it wants to use India as a small car production base for export.

GM executives told The Associated Press in June that the company's regional units could no longer turn to their U.S. parent for funding. At the time, GM was in the midst of a $645 million expansion in India and Thailand.

GM has also run into trouble with its South Korean unit, GM Daewoo Auto & Technology Co., which saw its finances deteriorate due to a sharp drop in sales and large losses on currency hedging bets.

In October, GM pumped 491.2 billion won ($416 million) from its global operations into GM Daewoo, raising its stake to 70.1 from 50.9 percent through a rights issue that other shareholders, like the state-run Korea Development Bank, declined to participate in.

The GM deal makes SAIC the first Chinese automaker to come to India.

Analysts say the company will have to overcome Indian consumer prejudice against Chinese goods. Products made for China might not work in the Indian market, which is dominated by small, affordable cars, though analysts say GM's Chinese-made Wuling buses might succeed.

GM itself has done a poor job at cracking the Indian auto market.

Deepesh Rathore, chief auto analyst for IHS Global Insight in New Delhi, said GM India is overstaffed and needs to expand its dealer network and invest in new models to compete with market leaders Maruti Suzuki and Hyundai.

"SAIC is a good partner. They can bring in the financial muscle," he said.

GM's sales in India rose about 10 percent last year to 65,702 cars, but the company is still a distant fifth to Maruti Suzuki, which sold 711,818.

GM has invested more than $1 billion in India, where it sells six models under the Chevrolet brand. Its two factories there can turn out 225,000 cars a year, far more than it sells domestically.

"For them to take on a Chinese partner in India, which is a very nationally proud market, is very interesting. That tells me it's financially motivated," Bonnell said. "I don't think they're taking expertise from Shanghai over to India."

JD Power forecasts that car sales in India will grow from 1.7 million in 2008 to 3.2 million in 2015, while car sales in China will surge from 8.8 million to 16.0 million over the same period.

RUSSIA: In Shift, U.S. Talks to Russia on Internet Security

December 13, 2009

By JOHN MARKOFF and ANDREW E. KRAMER

The United States has begun talks with Russia and a United Nations arms control committee about strengthening Internet security and limiting military use of cyberspace.

American and Russian officials have different interpretations of the talks so far, but the mere fact that the United States is participating represents a significant policy shift after years of rejecting Russia’s overtures. Officials familiar with the talks said the Obama administration realized that more nations were developing cyberweapons and that a new approach was needed to blunt an international arms race.

In the last two years, Internet-based attacks on government and corporate computer systems have multiplied to thousands a day. Hackers, usually never identified, have compromised Pentagon computers, stolen industrial secrets and temporarily jammed government and corporate Web sites. President Obama ordered a review of the nation’s Internet security in February and is preparing to name an official to coordinate national policy.

Last month, a delegation led by Gen. Vladislav P. Sherstyuk, a deputy secretary of the Russian Security Council and the former leader of the Russian equivalent of the National Security Agency, met in Washington with representatives from the National Security Council and the Departments of State, Defense and Homeland Security. Officials familiar with these talks said the two sides made progress in bridging divisions that had long separated the countries.

Indeed, two weeks later in Geneva, the United States agreed to discuss cyberwarfare and cybersecurity with representatives of the United Nations committee on disarmament and international security. The United States had previously insisted on addressing those matters in the committee on economic issues.

The Russians have held that the increasing challenges posed by military activities to civilian computer networks can be best dealt with by an international treaty, similar to treaties that have limited the spread of nuclear, chemical and biological weapons. The United States had resisted, arguing that it was impossible to draw a line between the commercial and military uses of software and hardware.

Now there is a thaw, said people familiar with the discussions.

“In the last months there are more signs of building better cooperation between the U.S. and Russia,” said Veni Markovski, a Washington-based adviser to Bulgaria’s Internet security chief and representative to Russia for the organization that assigns Internet domain names. “These are signs that show the dangers of cybercrime are too big to be neglected.”

Viktor V. Sokolov, deputy director of the Institute of Information Security in Moscow, a policy research group run by General Sherstyuk, said the Russian view was that the American position on Internet security had shifted perceptibly in recent months.

“There is movement,” he said. Before, bilateral negotiations were limited to the relevant Russian police agency, the Bureau of Special Technical Operations, the Internet division of the Ministry of Interior, and the F.B.I.

Mr. Sokolov characterized this new round of discussions as the opening of negotiations between Russia and the United States on a possible disarmament treaty for cyberspace, something Russia has long sought but the United States has resisted.

“The talks took place in a good atmosphere,” he said. “And they agreed to continue this process. There are positive movements.”

A State Department official, who was not authorized to speak about the talks and requested anonymity, disputed the Russian characterization of the American position. While the Russians have continued to focus on treaties that may restrict weapons development, the United States is hoping to use the talks to increase international cooperation in opposing Internet crime. Strengthening defenses against Internet criminals would also strengthen defenses against any military-directed cyberattacks, the United States maintains. An administration official said the United States was seeking common ground with the Russians.

The United Nations discussions are scheduled to resume in New York in January, and the two countries also plan to talk at an annual Russia-sponsored Internet security conference in Garmisch, Germany.

The American interest in reopening discussions shows that the Obama administration, even in absence of a designated Internet security chief, is breaking with the Bush administration, which declined to talk with Russia about issues related to military attacks using the Internet.

Many countries, including the United States, are developing weapons for use on computer networks that are ever more integral to the operations of everything from banks to electrical power systems to government offices. They include “logic bombs” that can be hidden in computers to halt them at crucial times or damage circuitry; “botnets” that can disable or spy on Web sites and networks; or microwave radiation devices that can burn out computer circuits miles away.

The Russians have focused on three related issues, according to American officials involved in the talks that are part of a broader thaw in American-Russian relations known as the "reset" that also include negotiations on a new nuclear disarmament treaty. In addition to continuing efforts to ban offensive cyberweapons, they have insisted on what they describe as an issue of sovereignty calling for a ban on “cyberterrorism.” American officials view the issue differently and describe this as a Russian effort to restrict “politically destabilizing speech.” The Russians have also rejected a portion of the Council of Europe Convention on Cybercrime that they assert violates their Constitution by permitting foreign law enforcement agencies to conduct Internet searches inside Russian borders.

In late October at a luncheon during a meeting on Security and Counter Terrorism at Moscow State University, General Sherstyuk told a group of American executives that the Russians would never sign the European Cybercrime Treaty as long as it contained the language permitting cross-border searches.

Copyright 2009 The New York Times Company