JAPAN: On menu in Japan: Beef bowl with side of deflation

A beef bowl at Yoshinoya.   Ko Sasaki for The New York Times

January 30, 2010

By HIROKO TABUCHI

Beef Bowl Economics

TOKYO — The broiled meat is tender and the rice is silky-smooth. But as Japan’s economic recovery falters, beef bowls have come to symbolize one of its most pressing woes: deflation.

Japan’s big three beef bowl restaurant chains, the country’s answer to hamburger giants like McDonald’s, are in a price war. It is a sign, many people say, of the dire state of Japan’s economy that even dirt-cheap beef bowl restaurants must slash their already low prices to keep customers.

The battle has also come to epitomize a destructive pattern repeated across Japan’s economy. By cutting prices hastily and aggressively to attract consumers, critics say, restaurants decimate profits, squeeze workers’ pay and drive the weak out of business — a deflationary cycle that threatens the nation’s economy.

“These cutthroat price wars could usher in another recessionary hell,” the influential economist Noriko Hama wrote in a magazine article that has won much attention. “If we all got used to spending just 250 yen for every meal, then meals priced respectably will soon become too expensive,” she said. “When you buy something cheap, you lower the value of your own life.”

Deflation — defined as a decline in the prices of goods and services — is back in Japan as it struggles to shake off the effects of its worst recession since World War II.

While prices have fallen elsewhere during the global economic crisis, deflation has been the most persistent here: consumer prices among industrialized economies rose by a robust 1.3 percent in the year to November, but fell 1.9 percent in Japan.

In the decline, companies that undercut rivals too aggressively are being chastised as reckless at best, or as traitors undermining the country’s recovery at worst. Every markdown of beef bowl prices by the big three restaurants — Sukiya, Yoshinoya and Matsuya — has been promptly broadcast by the national news media here.

Japan has reason to be worried. Deflation hampered Japan from the mid-1990s, after the collapse of its bubble economy, to at least 2005. Households held back spending on big-ticket goods, knowing they would only get cheaper. Companies were unsure of how much to invest. At the time, the three beef bowl chains were in a similar price war.

Still, government officials back then emphasized the supposed benefits of deflation; falling prices were good for households, they said. Others said deflation would help restructure the economy by weeding out weak companies.

But the drawn-out deflationary cycle weighed heavily on Japan’s recovery. Apart from putting a damper on consumption and investment, asset deflation ravaged the country’s banks and shut out new businesses from credit.

Now that deflation is back, Japan is wary. Unemployment remains near record highs, and wages are falling. Mounting public debt is also a problem, causing Standard & Poor’s on Tuesday to cut its outlook for Japan’s sovereign rating for the first time since 2002. Japan must do more to lift its economy out of deflation and bolster long-term growth, S.& P. said.

Moreover, the population is shrinking, making demand inherently weak. Economists say Japan’s economy is saddled with a 35 trillion yen, or $388 billion, “demand gap,” or almost 7 percent of the country’s economic output.

“With supply continuing to exceed demand by a massive margin, deflationary expectations are proving very difficult to shake,” said Ryutaro Kono, an economist at BNP Paribas in Tokyo. “Households have been tightening their purse strings as the income outlook looks increasingly bleak, and we believe firms will continue to respond by lowering prices.”

Matsuya, the smallest of the three chains, set off the price war by cutting the price of its standard beef bowl to 320 yen, or $3.55, from 380 yen in early December. The market leader, Sukiya, followed suit that month, lowering its price to 280 yen, from 330 yen.

Matsuya is one of large beef bowl chains in Tokyo.  Ko Sasaki for The New York Times

This month, the No. 2 beef bowl chain, Yoshinoya, lowered the price of its beef bowl to 300 yen, from 380 yen, though it says the cut is temporary. A smaller chain, Nakau, has also lowered prices.

The restaurant chains insist they have not downsized their portions, and will make up for cheaper prices by raising efficiency.

“We don’t consider this a price cut. We’ve simply set a new price,” said Naoki Fujita at Zensho, which runs the Sukiya chain. “With incomes falling, we needed to figure out what would be a reasonable price,” he said. “We hope customers who came every week will now come twice a week.”

In a sense, the beef bowl has always been about low prices. Yoshinoya, the beef bowl pioneer with about 1,560 stores in Japan and overseas, helped bring beef to the Japanese working class with its first restaurant in the Nihonbashi district of Tokyo in 1899.

Though beef was a delicacy at the time, Eikichi Matsuda, the Yoshinoya founder, kept prices cheap by buying in bulk, and serving as many customers as possible from his tiny stall. Speed and efficiency reigned, with workers trained to start preparing a bowl even before a customer sat down.

Banners at Yoshinoya advertise an anniversary sale on beef bowls.  Ko Sasaki for The New York Times 

The same principles still apply at Yoshinoya. At a branch in central Tokyo, servers rarely take more than a minute to fill an order. The average customer spends just 7.5 minutes on a meal, and a small restaurant can serve more than 3,000 customers a day.

But forced to sell at ever-lower prices — and hurt by lower-priced competitors — making a profit has been increasingly difficult. The company suffered a 2.3 billion yen net loss in the nine months to November, and the next month, before Yoshinoya slashed prices, its sales slumped 22.2 percent. In contrast, sales at Sukiya, which serves up the cheapest beef bowl, surged 15.9 percent that month from the previous year.

Yoshinoya is not considering further price cuts. Squeezing out more savings is “like wringing a dry towel,” said a spokesman, Haruhiko Kizu.

Meanwhile, labor disputes at Sukiya show how falling prices and revenue can quickly hurt workers. A string of former workers have sued the chain over withholding overtime pay. Sukiya denies the accusations.

Other companies have been harshly criticized for slashing prices. Fast Retailing, the company behind the fast-growing Uniqlo brand, has garnered as much disapproval as awe for selling jeans as low as 990 yen. McDonald’s, on the other hand, has won kudos for resisting bargain basement prices by introducing a series of big “American-style” burgers for more than 400 yen, considered expensive in today’s Japan.

“Some Japanese companies are waging such reckless price wars, they’re wringing their own necks,” said Masamitsu Sakurai, who heads the influential business lobby Keizai Doyukai. “Companies need to be more creative. They should come up with products that add value.”

Economists say it is absurd to blame individual companies for Japan’s deflation. “For prices to fall during an economic downturn is natural. That stimulates demand and facilitates an eventual recovery,” said Takuji Aida, chief economist for UBS in Tokyo. “But this mechanism doesn’t work when there is such a big demand shortfall.”

The government has vowed to lift household incomes through a series of subsidies, including new cash payments to families with small children. But the scale of government payments — 2.3 trillion yen in the case of the child subsidies — is hardly enough to fill the nation’s huge demand shortfall. With interest rates close to zero, Japan also has few options left in monetary policy.

In the meantime, cutthroat price battles are already driving laggards out of business. Wendy’s, the American burger chain, left Japan on Dec. 31.

It is not surprising, considering the competition. A mere stone’s throw from Tokyo’s celebrated Ginza district is Shokuan, the kind of restaurant that is undercutting everyone.

Shokuan, which has vending machines but no table service, is an inexpensive place to eat.   Ko Sasaki for The New York Times

Shokuan, which has no chairs nor table service, is a cluster of beer vending machines huddled under the train tracks. A man behind a tiny counter sells dirt-cheap morsels: fish sausages for 50 yen, prawn crackers for 60 yen, canned yakitori for 160 yen. Many days of the week, Shokuan is spilling over with customers.

“I don’t think there’s anything around here cheaper than this. That’s why I started to come,” said Yasunori Miura, a manufacturing company employee and a recent regular. “This here,” he said, pointing to his fish sausage, “is deflation.”

Makiko Inoue contributed reporting

View Article in The New York Times

S. KOREA & JAPAN: Korean girl groups set to perform in Japan

Friday, January 29, 2010

Popular Korean girl groups are making inroads in the Japanese pop music scene, following in the footsteps of boy bands that have drawn a sizable fan base after their debuts there last year, according to Yonhap News.

Five-member group Kara will present its first showcase in Japan on Feb. 7 in Akasaka Blitz, a live venue in central Tokyo, her agent DSP entertainment said. The show was initially planned as a one-off event, but fans' rush to buy tickets prompted organizers to add one more show to the Kara First Showcase in Japan 2010.

The seven-member sensation, After School, is set to attend the Billboard Japan Music Awards ceremony in Tokyo on Sunday, where the group will receive K-pop New Artist of the Year 2009 award.

The new 14-member Exile and BoA, an established star already active both in Korea and Japan, will also attend the award ceremony set to be broadcast in nationwide Japan.

View Article on The Korea Herald

CHINA: Foreign and Military Affairs China, US peacekeepers conduct joint patrol in Haiti

Updated: 2010-01-29 23:27

(Xinhua)

PORT-AU-PRINCE: Chinese peacekeeping riot police and US troops Thursday carried out their first joint patrol in the quake-battered Haitian capital, as designated by the UN Stabilization Mission in Haiti (MINUSTAH).

Hendre Ciprian, a Romanian police officer with MINUSTAH who coordinated the patrol, told Xinhua that the operation, the first one joined by US soldiers at MINUSTAH's invitation, was aimed at assisting Haitian police in keeping social stability and capturing criminal suspects.

A tactics team of 10 Chinese riot police and two squads from the US 82nd Airborne Division conducted the patrol.

The joint forces patrolled some densely populated areas in the city center including the Saint Joseph vegetable market, the Hypolite commercial area, and a neighborhood.

The forces kept guard when the Haitian special police were questioning and searching for suspects. The Haitian special police arrested one criminal suspect and brought the person to a police station for further interrogation.

Ciprian expressed his satisfaction over the one-and-a-half-hour joint patrol, saying MINUSTAH would carry out more similar operations to help restore order in Port-au-Prince.

Currently, nearly 130 Chinese riot police are deployed on a peacekeeping mission in Haiti as part of the 9,000-strong MINUSTAH.

View article in China Daily

CHINA: Beijing's representative-office scandals: The delights of home cooking

Jan 28th 2010 | BEIJING | From The Economist print edition

 

How to represent your hometown in style

 

(Illustration by S. Kambayashi)

FOR fans of Sichuan food in Beijing, there is no better place for authentic fare than the Chuan Ban restaurant, housed in, named after and operated by Sichuan province’s “capital representative office”. Your correspondent has never been seated there without a wait.

Every Chinese province and most large cities operate such Beijing offices. So too do thousands of city, district, county and town governments; others are run by big firms and even civic associations. But their days are numbered, at least for the estimated 5,000 offices run by smaller governments and entities. Outlook Weekly, an official news magazine, this week reported on a central-government plan to shut the lower-level representative offices down within six months.

The offices’ jobs include lobbying the central government on finance and policy issues, helping visitors from home, or reining in those in Beijing to protest, petition or otherwise make mischief.

They are also in the business of lavishly entertaining local officials when they visit Beijing. Many house restaurants and fancy guesthouses. Outlook reported that the offices spend a combined 10 billion yuan ($1.5 billion) a year. But since that is based on 2001 statistics the true figure is probably far higher.

The government’s main concern, however, appears to be corruption. Under China’s hierarchical bureaucracy, sub-provincial governments have little legitimate business in Beijing. Financing and policy matters are meant to flow through the provincial government. So any favour the lower-level offices might try to curry is likely to be illicit.

The offices have been involved in a series of corruption scandals in recent years. In 2002 the director of Hebei province’s office was sentenced to life in jail. Another scandal involved the spending of almost $100,000 on fewer than 800 bottles of liquor.

The fiction of Wang Xiaofang, once the private secretary to a deputy mayor of Shenyang, a large city in China’s north-east, has further besmirched the offices’ image. After the execution of his boss for corruption in 2001, Mr Wang went on to publish an influential series of novels called “Beijing Office Director”. His fictional accounts of the shenanigans in representative offices rang all too true. In 2006 the Communist Party’s corruption watchdogs launched a review of the representative-office system.

Closing the offices may not be so simple. Decision-making in China is very centralised. Many local officials will be tempted to maintain their lobbying operations, even if they have to reorganise them as companies. And many will hope to stay in business by using the connections and influence they have been cultivating over the years in Beijing. Friends in high places and gourmet local cooking can be a potent combination.

View Article on The Economist

JAPAN: Toyota recalls 'up to 1.8m' cars

The popular Corolla is one of the models affected

Page last updated at 21:31 GMT, Friday, 29 January 2010

Toyota says it is recalling up to 1.8 million cars across Europe, including about 220,000 in the UK, following an accelerator problem.

The carmaker says it will recall eight models including the Yaris, the Corolla and the RAV4 sports utility vehicle.

On Thursday, Toyota announced it was recalling 1.1 million more cars in the US, a day after suspending sales of eight popular US models.

Toyota then widened the recall to Europe and China.

Last week it recalled 2.3 million US cars with faulty pedals.

Deep regret

In a statement, the company said the precise number of European vehicles involved was still under investigation, "but may reach up to 1.8 million vehicles."

'My Toyota crashed into wall'

The eight models recalled are the AYGO, iQ, Yaris, Auris, Corolla, Verso, Avensis and RAV4 and cover manufacturing dates going back to February 2005.

The recall does not affect Lexus models, Toyota said.

"We understand that the current situation is creating concerns and we deeply regret it," said Tadashi Arashima, the chief executive of Toyota Motor Europe.

Toyota said it was not aware of any accidents resulting from the issue and that only a limited number of incidents involving accelerator pedals had been reported in Europe.

On Thursday, Toyota said it was recalling 75,552 RAV4 vehicles in China from 28 February.

The cars in question were manufactured between 19 March 2009 and 25 January 2010 in Tianjin, according to a notice on the website of the General Administration of Quality Supervision, Inspection and Quarantine of the People's Republic of China.

Separately, Ford said it would be suspending production of a van made and sold in China that has an accelerator pedal made by the same firm at the centre of Toyota's investigations.

However, Ford said it had only been using the pedal in the Transit Classic model since December, with only 1,663 vehicles produced.

View Article on BBC News

IN THE MOVIES: Scorsese and friends race to save film classics from destruction

Martin Scorsese's World Cinema Foundation is fighting against time to rescue forgotten film classics.

January 28, 2010 6:44 a.m. EST

By Grace Wong for CNN

STORY HIGHLIGHTS

• Martin Scorsese's World Cinema Foundation aims to preserve film classics from around the world
• Films from Turkey, South Korea, Morocco, Brazil among those restored by organization
• Directors Walter Salles, Guillermo del Toro, Wong Kar-Wai on board with effort
• Watch restored classics at online movie theater The Auteurs

London, England (CNN) -- They don't wear masks or capes, but the filmmakers behind the World Cinema Foundation are arguably the superheroes of film.

Led by Martin Scorsese, these celluloid crusaders are racing to save some of cinema's masterpieces from the ravages of time.

We are trying to fight "for the existence of a memory," Brazilian filmmaker and foundation member, Walter Salles told CNN.

"That is, at the end of the day, what we are preserving -- it's our collective memory," said the director who is known for his 2004 adaptation of Che Guevara's journals, "The Motorcycle Diaries."

Salles is one of a band of a dozen or so noted international directors compelled to join forces with the "Mean Streets" director in his push to preserve films. Others include Guillermo del Toro, Wong Kar-Wai, Stephen Frears, and Elia Suleiman.

Salles is currently restoring "Limite," a black and white film from 1931 that he said "shows a Brazil that doesn't exist anymore."

"Limite" is one of a handful of films the World Cinema Foundation has rescued since Scorsese launched the organization nearly three years ago.

It is Scorsese's passion for cinema that fuels the foundation, says Salles, who describes the filmmaker as a "renaissance man of cinema" and a "cinephile above all cinephiles."

Scorsese, a tireless champion of film preservation, introduced the foundation at the Cannes Film Festival in 2007 amid great fanfare.

Since then, the organization has been hard at work rescuing neglected films from various corners of the world.

South Korea’s “The Housemaid”

South Korea's "The Housemaid," Turkish film "Dry Summer" and "Transes" from Morocco are a few of the cinema classics from across the globe that have been restored by the foundation.

"Film preservation is always an uphill battle. There's never enough time," Scorsese said at Cannes last year.

"One has to think of history in the past 3,000 years, how much literature was lost. So, whatever we can do now, we're going to save something."

Unlike The Film Foundation, which Scorsese started two decades ago to preserve American film heritage, the World Cinema Foundation's focus is on international archives.

Its purpose is to provide help to countries where there are concerns that are larger and more pressing than the restoration and preservation of films, Kent Jones, executive director of the foundation, told CNN.

Or to put it more simply, he said, the aim is "to get help where help is really needed."

In the digital age, film preservation has come a long way.

"Even 10 years ago you couldn't do the kinds of things you can do now," Jones said. "You can take images and basically rebuild them from very compromised material.

"That just wasn't true before." But, he added, it's still a painstaking process.

The actual restoration process is just one of the challenges the organization faces; getting these films in front of audiences is another.

Given a movie-going public that, judging by the box office, is enamored with films like James Cameron's technologically advanced 3D "Avatar" -- films that look to the future of movie making rather than its past -- the latter may prove a harder task.

But Scorsese and company realize the importance of raising awareness around the films they save.

Beyond restoration and preservation, the World Cinema Foundation is committed to making sure their refurbished movies get seen, Jones said.

To that end, Scorsese revealed at Cannes last year two new distribution partnerships, including one that allows four of the films restored by the foundation to be viewed for free via online movie theater The Auteurs.

The foundation's role, Jones told CNN, is really "to create awareness and build up the presence of these films and filmmakers."

After all, it is these neglected films that remind us of how we lived in a specific period of time, according to Salles, and by saving them, history is being preserved.

That, he added, is "a very powerful tool, for the new generations or next generations, to understand where we come from, who we are and where we're going to."

For more on film preservation, watch The Screening Room on CNN at the following times: Wednesday 27 January: 0930, 1730, Saturday 30 January: 0930, 1800, 2130, Sunday 31 January: 0630, 1830, Monday 1 February: 0400 (all times GMT)

Lidz-Ama Appiah and Katie Walmsley contributed to this report.

Read synopsis of S. Korea’s “The Housemaid” and WATCH FOR FREE online here.

View Article on CNN

CHINA: Farmyard animal?

China's wild tiger population may be as small as 50

Page last updated at 15:37 GMT, Friday, 29 January 2010

By Patrick Jackson
BBC News

For every one wild tiger alive in the world today, there may be three "farmed" tigers in China.

They have been bred for their hides but also their bones, which are used to infuse some wines prized in South East Asia.

Some in the region believe that the consumption of certain parts of a tiger's carcass can give strength and virility.

China banned the trade in tiger bones and products in 1993 but that has not stopped the practice, which is currently on the agenda of an international tiger conservation conference in Thailand.

The part [of the farm] which people rarely see is basically a winery in which the skeletons of grown tigers are cleaned and put into vats of wine

Judy Mills
Conservation International

According to the World Bank, which leads the Global Tiger Initiative (GTI), the trade is being spurred by privately run tiger farms in Asian countries. It has called for these farms to be shut down.

Tigers on the farms are kept in cages and are also allowed to chase cows or chickens for the amusement of the paying public.

"Our position is that tiger farms as an animal practice are cruel," said the World Bank's Keshav Varma, GTI's programme director, as he attended the conference in Hua Hin.

"They fan the potential use of tiger parts," he told the Associated Press news agency.

In order to get an idea of what goes on in these farms, which are often presented as parks for tourists, BBC World Service spoke to Judy Mills of Conservation International, who has visited some of them.

'Speed-breeding'

The world's entire surviving wild tiger population is somewhere between 3,600 and 3,200, conservationists believe.

In China, there are now close to 10,000 tigers on farms, says Ms Mills, while other estimates suggest the number may be around 5,000.

"These are speed-breeding factory farms," Conservation International's tiger specialist says.

According to her research, farm tigresses produce cubs at about three times or more their natural rate, bearing up to three litters a year. Cubs are often taken away from their mothers before they are properly weaned.

These cubs, she says, are usually made to suckle from other animals, such as pigs or dogs - their "wet nurse surrogates" - so that the tigresses can produce more young.

"The part [of the farm] which people rarely see is basically a winery in which the skeletons of grown tigers are cleaned and put into vats of wine," says Ms Mills.

The bones are steeped for years, she explains, and the length of the infusion determines the value of the wine.

Conservation International says it is very difficult to clarify the legal status of these farms in China.

"When I first visited a tiger farm in 1990, it was part of a fur farm raising racoon, dogs, mink and other fur-bearing animals for commercial use," says Ms Mills. "The owner of the farm was showing me the log of orders for tiger bones and skins and other parts and products from tigers.

"Then in 1993, because of international pressure, China banned its commercial trade in tiger bone and tiger bone products but, at the same time, these tiger farms were allowed to expand.

"It's something the conservation community has been trying to address with the Chinese government ever since."

Late last year, the Chinese State Forestry Administration promised to monitor tiger breeders more closely, and crack down on the illegal trade in tiger parts and products.

The fear must be, however, that with the Chinese Year of the Tiger due to fall on 14 February, demand for such items will be as strong as ever.

View Article on BBC News

JAPAN: 'Fathering school' opens to give men lessons in raising children

Bringing up baby: A man practices on a life-size doll during a child care session at a "fathering school" in Chuo Ward, Tokyo, in November. KYODO

Friday, Jan. 29, 2010

By KYOTA SHIROYAMA

Kyodo News

More than a dozen men last autumn hoping to take on a greater role in child rearing gathered in Chuo Ward, Tokyo, after work for lectures on child care.

One of them, the father of an elementary school boy, said, "I want to consider child rearing anew."

A bachelor said was attending the eight-lecture course to prepare for the day he becomes a father.

Around 58 percent of male company employees say they want "to strike a balance between work, and housework and child rearing," according to a poll conducted by Mitsubishi UFJ Consulting Co.

However, the survey commissioned by the Health, Labor and Welfare Ministry found that 74 percent of male workers with preschool children put priority on work.

The nonprofit organization Fathering Japan set up the "fathering school" primarily for prospective fathers. The course covers ways to prevent illness, laws pertaining to child-rearing, and training sessions using life-size dolls of kids.

Tetsuya Ando, representative director of Fathering Japan, hopes the course helps participants find a sense of enjoyment in child care and assists them in developing networks.

Ando said he opened the school because there were no continuous learning opportunities for men to prepare for fatherhood.

He said "konkatsu" activities for men and women to find partners through marriage agencies and group meetings have become popular, but the "power of child care" will serve as a trump card for men.

Tokyo resident Shota Araki, 27, said attending the course gave him an opportunity to consider seriously what he can do before his wife gives birth next month.

Because he stays late at the office on weekdays, he has to juggle work to attend the weekly course. Planning to take parental leave, he said, "I'd like to raise awareness in the company so that employees spend more time with their children on weekdays."

Masami Ohinata, a professor of developmental psychology at Keisen University's graduate school in Tokyo, said the course provides a new avenue for men to approach child care, which is considered the preserve of women.

But Ohinata said there are many men who are unable to participate in child care even if they want to and the challenge is to enable them to play a more active role.

View Article in The Japan Times

TAIWAN: US Announces $6B Arms Sale To Taiwan

January 29, 2010, 04:12 pm ET

by The Associated Press

WASHINGTON - In a move sure to aggravate China, the Obama administration on Friday announced plans for more than $6 billion in arms sales to Taiwan, the self-governing island the Chinese claim as their own.

The sale would include Black Hawk helicopters, Patriot missiles, mine-hunting ships and information technology. Lawmakers have 30 days to comment before the plan proceeds; senior lawmakers have traditionally supported arms sales to Taiwan.

Taiwan is the most sensitive matter in already-tense relations between the U.S. and China, two powers increasingly linked by security and economic issues. The sale could spark a temporary break in U.S.-China military ties.

The United States, which only told China of the sale hours before the announcement, acknowledged Friday that Beijing may retaliate by cutting off military talks with Washington, which happened after a multibillion dollar U.S. sale to Taiwan in 2008.

Wang Baodong, a spokesman for the Chinese Embassy in Washington, said Beijing will lodge a formal protest against the U.S. decision. Asked if China would cut off military ties, he said, "Let's wait and see."

President Barack Obama's national security adviser, Jim Jones, said Friday that Washington and Beijing both do things "periodically that may not make everybody completely happy."

But Jones told an audience at the Center for Strategic and International Studies think tank the U.S. is "bent toward a new relationship with China as a rising power in the world."

China vehemently opposes U.S. arms sales to Taiwan. It has threatened to invade Taiwan should the island ever formalize its de facto independence.

The United States is Taiwan's most important ally and largest arms supplier.

The package, posted on a Pentagon Web site, dodges one thorny issue: The F-16 fighter jets that Taiwan covets are not included.

The sale satisfies parts of an $11 billion arms package originally pledged to Taiwan by former President George W. Bush in 2001, which has been provided in stages because of political and budgetary considerations in Taiwan and the United States.

The arms sale will test the Obama administration's China policy, which U.S. officials say is meant to improve trust between the countries, so that the inevitable disagreements over Taiwan or Tibet don't reverse efforts to cooperate on nuclear standoffs in Iran and North Korea and other issues.

China aims more than 1,000 ballistic missiles at Taiwan; the U.S. government is bound by law to ensure the island is able to respond to Chinese threats.

The package includes 114 Patriot missiles designed to shoot down other missiles, 60 Black Hawk helicopters, and two mine-hunting ships.

Associated Press writers Robert Burns, Desmond Butler and Lolita C. Baldor contributed to this report.

View Article on NPR

CHINA: Returned China Uighurs 'vanished'

Page last updated at 14:54 GMT, Friday, 29 January 2010

The Uighurs left Xinjiang after deadly fighting in July

China must account for the whereabouts of ethnic Uighurs forcibly repatriated from Cambodia, a US-based rights group has said.

Human Rights Watch (HRW) said such groups had "disappeared into a black hole" on their return to China.

The Uighurs fled to Cambodia after mass ethnic riots in China in July. Beijing has referred to them as criminals.

In December, a group of 20 Uighurs were put on a plane to China despite opposition from the UN and US.

They said the group were likely to face persecution in China.

"Uighur asylum seekers sent back to China by Cambodia have disappeared into a black hole," said Sophie Richardson of HRW.

"There is no information about their whereabouts, no notification of any legal charges against them, and there are no guarantees they are safe from torture and ill-treatment."

HRW said a number of the group had given detailed accounts of past torture and persecution in China and that threats had been made against their families.

The organisation said China has a history of executing or imposing harsh sentences of Uighurs sent back from abroad and that there were unconfirmed reports some members of a group previously returned had been sentenced to death in western Xinjiang province.

'Fair trials'

Ms Richardson said the Chinese government must say where the group are being held and under what status as well as allowing the UN and family members to see them.

"Family members have the right to know what has happened to their loved ones," she said

"The Chinese government must treat all returnees humanely, ensure fair trials, and not persecute individuals for activities and speech that are protected under international law."

There has been no immediate comment from the Chinese foreign ministry.

The Uighurs fled Xinjiang after July's violent ethnic clashes in the provincial capital Urumqi which left at least 97 people dead.

Most of those killed in the unrest were majority Han Chinese, according to officials, and Urumqi's Han population had demanded swift justice.

At least 25 people have been sentenced to death after the riots.

Tensions between the mainly-Muslim Uighurs of Xinjiang and Han have been growing in recent years. Millions of Han have moved to the region in recent decades.

Many Uighurs want more autonomy and rights for their culture and religion than is allowed by Beijing's strict rule.

View Article on BBC News

CHINA & US: Race Is on to Develop Green, Clean Technology

January 30, 2010

Davos 2010

By KATRIN BENNHOLD

DAVOS, SWITZERLAND — It is shaping up to be the Great Game of the 21st century. To top officials and business executives here at the World Economic Forum, Topic A this year was the race to develop greener, cleaner technology, which is emerging as one of the critical factors in reshaping the world economy as emerging powers snap at the heels of battered Western economies.

With the United States and China sizing each other up across the Pacific and Europe seeking to maintain its economic stature, it is a battle for potentially millions of jobs and trillions of dollars in export revenues. The outcome — which pits a venture capital-driven market approach relying on government subsides against a top-down system of state capitalism — has the potential to influence how economic and political systems evolve.

Concern that China may be edging ahead in potentially lucrative growth sectors like renewable energy was palpable here, where senior officials from the United States and Europe warned that the West could not afford to be complacent.

“Six months ago my biggest worry was that an emissions deal would make American business less competitive compared to China,” said Senator Lindsay Graham, a Republican from South Carolina who has been deeply involved in climate change issues in Congress. “Now my concern is that every day that we delay trying to find a price for carbon is a day that China uses to dominate the green economy.”

He added: “China has made a long-term strategic decision and they are going gang-busters.”

Christine Lagarde, the French finance minister, agreed. “It’s a race and whoever wins that race will dominate economic development,” she said. “The emerging markets are well-placed.”

The global economic downturn, which hit the aging developed world far harder than fast-growing emerging markets, has focused attention on the job-creating potential of green technology, seen by many here as the next industrial revolution. In the energy sector alone, the deployment of new technologies, like wind and solar power, has the potential to support 20 million jobs by 2030 and trillions of dollars in revenue, analysts estimate.

Ms. Lagarde estimated that as many as 240,000 jobs could be added in France over the next few years, helping offset the 400,000 lost last year in the slump.

While new energy sources will initially be more expensive than fossil fuels, politicians in the West, mindful of a stagnant or shrinking manufacturing base, are hopeful that clean technology offers a way of rebuilding older industrial areas by creating a comprehensive green supply chain.

The quest for a new comparative advantage, economists say, is all the more urgent as the crisis has left the financial-services sector reeling — a sector that was long considered one of the last bastions of Western sophistication.

From China’s perspective, experts here said, climate change offers the opportunity to leapfrog Western competitors.

“The low-carbon economy is the future,” said David Li Daokui, a professor at the Center for China in the World Economy in Beijing.

But others cautioned against framing the development of alternative energy as a pure competition. If the United States and China “work together we can deal with almost all the major global crises,” said Robert Hormats, the U.S. undersecretary of state for economic, energy and agricultural affairs. He stressed that success in clean technologies was not a “zero-sum game.”

But he agreed with those who see green technologies as important job generators. “Don’t leave the jobs on the table — the Chinese get it,” he said.

Moreover, the quest for sustainable energy and industrial processes is playing out against the backdrop of vastly different economic and political systems.

In China, the government poured an estimated $440 billion into clean energy last year. It is investing heavily in renewable energy and nuclear power. It also is pursuing efforts to make extraction of its vast coal reserves cleaner. Already home to one-third of the globe’s solar-energy manufacturing capacity and 400 solar-energy companies, China is expected to surpass Spain this year as the No. 3 country in terms of wind power installations, behind Germany and the United States.

William Rhodes, senior vice chairman of Citigroup and board vice chairman of the National Committee on U.S.-China relations, predicted that Beijing’s research into storing carbon emissions underground could soon lead to a major breakthrough.

In the United States, meanwhile, President Barack Obama faces an uphill battle in Congress to pass politically-sensitive legislation aimed at capping carbon emissions.

“China has the type of centralized industrial policy that we can’t match and don’t want in the United States or the European Union,” said Fred Krupp, president of Environmental Defense, a U.S. advocacy group. “What we have to compete with China is the power of our marketplace. A clear and declining cap on carbon emissions will send the essential market signal to industry, and that will engage our market directly in this competition.”

Mr. Krupp said it was Washington must make the next move since the Copenhagen climate talks last month failed to produce a binding global deal, because China may be in no rush to unleash America’s renowned capability for innovation. That could prove disastrous not only to the environment, analysts said, but also to the economic prospects of today’s advanced industrial nations.

Said John Chipman, director of the International Institute for Strategic Studies in London: “Climate change has become a theater of geopolitical competition.”

View Article on The New York Times

RUSSIA: Celebrating a master’s birthday – Chekhov turns 150

Edited 29 January, 2010, 23:17

January 29 marks the 150th anniversary of the birth of one of the world’s greatest playwrights and short-story tellers, the leading light of Russian drama, Anton Chekhov.

The jubilee of the celebrated author of “The Seagull”, “Three Sisters” and “The Cherry Orchard” is being celebrated throughout the world, with some of the largest-scale festivities taking place in Russia, namely in Taganrog, the writer’s city of birth.

President Dmitry Medvedev has laid flowers at the monument to Chekhov in southern Russia. He also met with some of the leading stage directors from Russia and overseas to discuss the playwright’s legacy, as well as theater in general.

“My parents had the whole collection of Chekhov’s works, back in the time when some books were hard to get hold of in the Soviet Union. It so happened that I’ve read everything by Chekhov. I was first interested by his short comic stories and then switched to more serious novels and plays. I was further amazed when I even started reading Chekhov’s letters, although this genre wasn’t aimed at young people. Frankly speaking, I’m happy I did it then, otherwise I don’t know when else I’d have a chance to do it,” Medvedev said.

Apart from exhibitions and festivals taking place in Chekhov’s motherland on the Sea of Azov, a number of events are currently in full swing in the Russian capital.

The “Days of Chekhov” festival in Moscow features performances based on the writer’s timeless works.

However, one of the most highly-anticipated events of the year is the 9th International Chekhov Festival, which will take place this summer.

View Article on Russia Times

CHINA: China to review laws on eviction

Page last updated at 12:26 GMT, Friday, 29 January 2010

Critics say evicted people often receive limited compensation

The Chinese government has outlined major changes to the way in which land can be seized for redevelopment.

Under the draft proposals, using violence and coercion to make people move would be banned and owners would be able to appeal against evictions.

Anyone losing land or property would have to be given at least its market value in compensation.

Forced evictions are a key social concern in China and have frequently lead to rioting.

The country has been plagued by the perception that local authorities acquiesce in, and sometimes actively aid, summary land grabs.

China's cabinet said all strong-arm tactics used to force people to leave their properties - including violence and cutting off water or power - would be banned, the Xinhua news agency reported.

Local governments would have to ensure public opinion was heard before going ahead with development.

In homes deemed to be old or dangerous - a reason often given for demolition - 90% of homeowners would have to give approval before they could be taken down.

The new proposals are open for public comment until mid-February.

Violence

All land in China is effectively controlled by the state and current laws allow local governments to claim land and confiscate homes for urban development projects.

But critics say the system is open to abuse and that evictees often receive a fraction of the value of their home in compensation.

Such cases have led to several violent clashes between residents and police or private security guards.

Several people have also set themselves on fire to protest against their home being seized.

Hundreds of thousands of people in China have been moved in recent years to make way for major projects including the Three Gorges Dam and the redevelopment of the capital for the 2008 Olympics.

View Article on BBC News

JAPAN: Akebono Won’t Stop Believing

Check out this promo for the Japanese version of “Glee” featuring Retired sumo grand champion Akebono.

RUSSIA: Russia is one of US’ key strategic partners – political scientist

Published 28 January, 2010, 14:25

Russia was one of the few mentions during President Obama’s State of the Union Address. Political analyst, Irina Kobrinskaya, thinks this is a sure sign that the US sees Russia as an important strategic partner.

Kobrinskaya thinks that the delay in the signing of the START treaty is merely a result of technical issues and not political. She also expressed belief that the US-Russia relations are heading for the better.

“Pragmatic interests on both sides give us hope. This will not be a short improvement but a long-lasting development which will be for the good of security in the world,” Kobrinskaya said.

View Article in Russia Times

CHINA: China's Next Leader Offers a Glimpse of the Future

January 29, 2010

By KATRIN BENNHOLD

DAVOS, SWITZERLAND — China gave the world a glimpse of the next generation of Chinese leaders on Thursday when Li Keqiang, widely expected to be the next prime minister, vowed that his country would act swiftly to shift from an over-reliance on exports toward greater domestic consumption.

But, in a half-hour speech at the World Economic Forum here, he carefully avoided any mention of the issue that was foremost on the mind of many in the audience: the undervalued Chinese currency. He offered no clues as to whether or when Beijing might allow the renminbi to appreciate against the dollar.

Mr. Li opened with a clear signal that China, which has weathered the global financial crisis better than most, did not consider it to be over. “The storm has not subsided,” he said.

Against the backdrop of growing calls for protectionism in the United States, Mr. Li appeared eager to emphasize a pledge to remake the Chinese economy in a way that would help address, at least over the longer run, China’s gaping trade surplus with the United States and its lesser trade gap with Europe.

“As we stand at a historic juncture,” Mr. Li said, “we must change the old way of inefficient growth and transform the current development model that is excessively reliant on investment and exports.”

“We will focus on boosting domestic demand,” he added, listing a number of initiatives from providing a stronger health care safety net, which would lessen the need for Chinese families to set aside large amounts of savings, to subsidizing farmers who buy household appliances. “The growth in domestic consumption in China will not only drive growth in China but also provide greater markets for the world.”

At the same time, Mr. Li repeatedly emphasized the importance of international cooperation, from continued coordination on fiscal stimulus to a global accord on climate change, something that economists in the audience welcomed as a sign of a China that would stay open and engaged.

Mr. Li, who is currently the executive deputy prime minister of China, is expected to take over from Prime Minister Wen Jiabao in the leadership change scheduled for 2012; the prime minister is the second-highest government official in China after the president. His speech to the world’s political and business elite in Davos was his first high-profile international appearance. A year ago, it was Mr. Wen who took the podium here.

There were traditional references to Confucius in his address, but also shades of novelty. He took the stage in confident strides, smiling and waving to the packed auditorium. He said he would to press ahead with pro-market changes, break monopolies and introduce more competition. China would “allow the market to play a primary role in allocation of resources,” he said.

In the middle of the speech he even made a veiled and seemingly conciliatory reference to the issue at the heart of the simmering spat with Google.

“Efforts need to be made to improve intellectual property rights,” Mr. Li said.

China’s rapid emergence and its diplomatic dance with the United States on everything from trade conflicts to climate change to geopolitics is shaping up as one of central issues on the global stage in the coming months and years.

The risk of a backlash in the United States over the Chinese currency was on stark display in Davos. Representative Barney Frank, chairman of the Financial Services Committee of the House of Representatives, called for actions to “level the playing field” at a time when America’s jobless rate has reached 10 percent.

“China has been very uncooperative and the currency is a major part of it,” Mr. Frank said in an informal interview here. “They want the world to be open to them but refuse to be open to the world.”

The threat that Western countries might retaliate by blocking China’s exports is one of the leadership’s biggest concerns. “Trade protectionism practices will only exacerbate the economic crisis,” Mr. Li said, urging a swift conclusion of the Doha trade round.

“The international financial crisis is not over,” he warned, “and the foundations of the economic recovery are still weak.”

He noted that more than half of Chinese exports were manufactured by foreign companies in China and that China had now become the second-biggest importer in the world.

Members of the U.S. administration here acknowledged the positive role China had played in bolstering growth and welcomed signs that the leadership was getting serious about restructuring the economy.

“I think China is moving in that direction,” said Robert Hormats, U.S. Under Secretary of State for Economic, Energy and Agricultural Affairs.

Mr. Li also hinted at why China had recently moved to curb its feverish growth with tighter monetary policy. The country needs to “strike a balance,” he said, between “steady and fast growth” and “properly managing inflationary risks.”

View Article in The New York Times

JAPAN: Japan's Prices, Wages Continue To Fall

01.28.10, 07:40 PM EST 

By TOMOKO A. HOSAKA, Associate Press

TOKYO -- Japanese prices and wages continued to fall in December as deflation deepened its grip on the world's second biggest economy. Core consumer prices fell 1.3 percent from a year earlier, the government said Friday.

The key consumer price index, which excludes volatile fresh food prices, has now fallen for 10 straight months. The reading matches Kyodo's market forecast. Core CPI for the Tokyo area, seen as a barometer of price trends nationwide, retreated 2 percent in January.

For the 2009 calendar year, core CPI retreated 1.3 percent, according to the Ministry of Internal Affairs and Communications.

Lower prices may seem like a good thing, but deflation plagued Japan during its "Lost Decade" in the 1990s. It can hamper economic growth by depressing company profits, sparking wage cuts and causing consumers to postpone purchases. It also can increase debt burdens.

Indeed, paychecks are dwindling. Average monthly household income fell 4.8 percent in December from a year earlier, the ministry said in a separate report.

Workers must also contend with a still-lackluster labor market. The country's unemployment rate eased to 5.1 percent in December, better than 5.2 percent in November but still high by Japanese standards.

The average ratio of job offers to job seekers stood at 0.46, a tad higher than 0.45 a month earlier. The figure means there were 46 offers for every 100 job seekers.

Still, the economy was not without signs of hope.

Household spending posted a solid rise in December, up 2.1 percent from a year earlier. The figure represents a key indicator of private consumption, which accounts for about 60 percent of Japan's economy.

Industrial output climbed 2.2 percent in December from the previous month, just missing Kyodo News agency's forecast for 2.3 percent growth in its survey of economists. The trade ministry expects factory production to rise 1.3 percent in January and 0.3 percent in February.

Earlier this week, the government said that Japan's exports expanded for the first time in 15 months in December, helped by robust Asian demand.

View Article on Forbes

TRAVEL: Why doesn't cash fly on many airlines?

American Airlines is joining several other carriers in rejecting cash during some or all flights. Passengers who want to buy food, drinks or other items must use credit or debit cards. (Tomohiro Ohsumi / Bloomberg / November 26, 2009)

January 24, 2010

By David Lazarus

Beginning Feb. 1, your money's no good on American Airlines.
The carrier is the latest to go completely cashless during flights, meaning that if you don't have plastic, you won't be buying food, drinks, duty-free items or whatever.

"The implementation of cashless cabins on select flights last summer has simplified the in-flight transaction process for both customers and flight attendants," Lauri Curtis, American's vice president of onboard service, said in a statement.

"For this reason, we look forward to going cashless on board all American Airlines flights."

Wait a minute.

Take a look at the paper money in your wallet or purse. Look at the words on the left-hand side, either above or below the very impressive seal of the United States Federal Reserve System: "This note is legal tender for all debts, public and private."

It doesn't say "all debts unless a business would rather take plastic." Or "all debts except for when you fly."

It says "all debts." Period.

Yet American now joins United Airlines, Continental Airlines, Southwest Airlines, JetBlue Airways, Alaska Airlines, Frontier Airlines and other carriers in rejecting cash during some or all flights.

So how can an airline discriminate against cash users? Isn't that, well, illegal?

A spokeswoman for the Treasury Department told me I should ask the Fed.

A spokesman for the Fed said this was a matter for the Treasury.
Talk about passing the buck.

As it happens, the Fed spokesman was right. On the Treasury Department’s website I found some information about the Coinage Act of 1965, which delves into the minutiae of what "legal tender" means. And it's pretty straightforward:

"United States coins and currency (including Federal Reserve notes and circulating notes of Federal Reserve banks and national banks) are legal tender for all debts, public charges, taxes and dues."

There it is, right? Cash is king.  Apparently not.

The Treasury Department goes on to say that there's no law "mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services."

"Private businesses are free to develop their own policies on whether or not to accept cash unless there is a state law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills."

Tim Smith, a spokesman for American Airlines, elaborated on this interpretation of the law. "Any business can do what it wants," he said. "If they say you have to pay in carrots, they can do it."

I asked the Treasury Department why my money says one thing but the law is apparently interpreted differently. A spokeswoman reiterated that "there is no mandate requiring private enterprises to accept currency as payment for goods and services."

In other words, American and other airlines -- and all other businesses, for that matter -- are free to reject cash if they please.
Santa Monica resident Mark Bartelt, 61, flew American recently from Los Angeles to Boston. He said he bought a small bottle of wine during the flight for $5. The flight attendant wouldn't take cash.

"I was surprised," Bartelt said. "It's not really an inconvenience to have to use a credit card, but what if a kid is flying unaccompanied? What's the airline going to do, tell him that he has to go hungry?"

Bartelt added that when he asked the flight attendant about the cashless policy, she joked that it's because the airline doesn't trust crew members with passengers' money.

Smith, the airline spokesman, told me at first that this was indeed "a small factor" in the company's decision to go cashless. But he corrected himself later to say that sticky-fingered fight attendants weren't a factor at all.

"The vast majority of our flight attendants are hardworking and honest," he said.

Flight attendants are of two minds about the cashless flights.  "The good part is that flight attendants don't have to carry around the cash," said Corey Caldwell, a spokeswoman for the Assn. of Flight Attendants. "The bad part is that we have to rely on machines, and machines go kaput every now and then."

She said most cashless airlines try to make sure they have backup card-processing devices on board in case one breaks down. Caldwell also said that the issue of unaccompanied kids who lack plastic comes up from time to time.

"Usually the flight attendant will take care of any costs herself," she said, "or other passengers will pay."

American's Smith said the airline will typically cover any such expenses. "We don't make a big deal about it," he said.

People talk about heading toward a totally cashless society. It would be better for the environment, they say, and more convenient in general. I don't really have a problem with that.

But I believe you should mean what you say. If our money says it's good for everything -- and it does -- then it should be good for everything. Otherwise, it shouldn't promise something it can't deliver.

Our cash also says "In God we trust." Maybe I should take this up with a higher authority.

David Lazarus' column runs Wednesdays and Sundays. Send your tips or feedback to david.lazarus@latimes.com.

View Article in The Los Angeles Times

CHINA: China joins Somalia piracy drive

 

China has a force of three ships patrolling the Gulf of Aden

Page last updated at 05:07 GMT, Friday, 29 January 2010

China's anti-piracy role off Somalia expands

China has agreed to join an international naval operation to fight piracy off the coast of Somalia.

China has been focusing on protecting its own shipping in the area, but it will now join the naval forces of the US, Nato and the European Union.

This grouping, the Shared Awareness and Deconfliction (Shade), protects a shipping corridor in the western Indian Ocean.

This is the area where pirate attacks are most frequent.

Members of the international naval task force say that although attacks there have increased, fewer have been successful.

Ransoms

The BBC's United Nations correspondent Barbara Plett says officials believe having China on board will allow more ships to be diverted to the Somali Basin, a vast expanse of water in the western part of the Indian Ocean, where attacks are at an all time high.

The agreement also allows China to take on the rotating chairmanship of the naval task force that coordinates patrols.

China is believed to be interested in raising its participation in the anti-piracy drive partly because one of its ships was hijacked last October.

The De Xin Hai bulk carrier was reportedly freed in late December amid reports of a possible ransom payment.

Analysts say China is also eager to extend its naval reach beyond its shores.

Chinese media have reported the stepping up of China's role in anti-piracy patrols as the moment when China takes on a "central" and "leadership" role in an important international operation.

Hong Kong's South China Morning Post newspaper reported that China had been lobbying for the expanded role for months.

The newspaper editorialised that China would "show its worth as a global player".

Noting the concern, even alarm, among some of China's neighbours at the country's growth as a maritime power, the newspaper said China's participation in the anti-piracy effort would help increase trust.

South East Asian countries and China are rival claimants to islands and atolls across the South China Sea, and China's growing might and extended naval reach are being watched closely.

View Article in the BBC News

JAPAN: Woman held over death of 1 of 3 men believed killed through foul play

Jan 28 08:40 AM US/Eastern

(AP) - TOTTORI, Japan, Jan. 28 (Kyodo)

Police served a fresh arrest warrant on a woman Thursday on suspicion of killing one of three men believed to have died from foul play last year in Tottori Prefecture, the police said.

The Tottori prefectural police set up an investigative task force Thursday on the cases involving Miyuki Ueta, 36, a former snack bar employee in the city of Tottori.

Ueta is charged with robbery-murder as she is suspected of killing Hideki Maruyama, 57, an electric appliance dealer, who was found drowned in a river on Oct. 7, 2009, while evading about 1.23 million yen in payment to the victim for electric appliances she had bought.

Ueta was quoted as telling the investigators, "I don't know anything (about the allegations). I didn't do it."

In addition to Maruyama's death, the police also plan to look into whether Ueta was involved in the death of one of the two other men, Kazumi Yabe, 47, a truck driver whose body was found in the Sea of Japan off central Tottori Prefecture in November.

The third man -- 58-year-old Kazumi Taguchi -- was a resident of the same apartment building as Ueta. Taguchi died in October after being taken to a hospital.

Investigations showed that all of them tested positive for components of sleep-inducing agents, such as Halcion, and cold medicine.

The investigators have ruled out possible conspiracy by Ueta's 46- year-old male roommate over the murder of Maruyama, suspecting Ueta gave drugs to Maruyama, forced his face into the river and killed him on her own.

Ueta and her roommate were first arrested Nov. 2 on suspicion of fraud, and were served with several more warrants over fraud.

The roommate has told investigators that he, Ueta and Maruyama went to the Mani River in two cars on Oct. 6 but he left the scene, his lawyer said.

When the man returned to the river, only Ueta was there and her clothes were wet, he was quoted as saying.

View Article on News on Breitbart

CHINA: China's Li Delivers A Polished Future

January 28, 2010 - 2:43 pm

Paul Maidment

Editor, Forbes Media

China's Vice-Premier Li Keqiang cuts the polished, poised figure of the world leader he is about to become. Tipped to succeed Wen Jiabao as prime minister when China's leadership changes generations in 2012, China's headliner in Davos delivered a flawless summary of China's five year plan to deliver sustainable long-term growth--maintain steady and fast GDP growth, encourage domestic demand, modernize strategic industries, particularly green tech ones, continue with economic reform, minimize the income gap, develop urbanism across China, create jobs and spread the social safety net. Down to the white shirt, red tie and well-cut suit, he could have been a western chief executive doing a roadshow.

To round it off, there was a five-point action plan for China's growing global citizenship: continue to cooperate over recovery from the global financial crisis; fight protectionism and conclude the Doha round of trade talks; pursue balanced development, both North/South and South/South; jointly tackle the global issues of climate change, energy and food security, public health, and natural disasters; and improve the structure of global governance to reform financial regulation, international financial institutions and increase the involvement of developing nations. And all done with only the gentlest jibes against the developed countries. "We came to see the future," said one (Western) participant.

What wasn't to like in such a perfect world?

View Article on Forbes

JAPAN: Toyota Extends Recall To Europe, China

01.28.10, 07:59 AM EST 

By SHINO YUASA

TOKYO -- Toyota's massive recalls over problem gas pedals in the U.S. are being extended to China and Europe, the latest blow to the world's top automaker as it struggles to salvage its safety reputation.

The announcements Thursday come after the company earlier this week said it was suspending U.S. sales and production of eight models - including the Camry, America's top-selling car - to fix faulty pedals that could stick and cause acceleration without warning.

Toyota Motor Corp. ( TM - news - people ) also announced an additional recall of 1.09 million vehicles in the United States covering five models - 2008-2010 Highlander, 2009-2010 Corolla, 2009-2010 Venza, 2009-2010 Matrix, and 2009-2010 Pontiac Vibe.

Toyota dealers across the U.S. have been swamped with calls from concerned drivers but had few answers as the recalls snowballed.

A week before the sales suspension, Toyota issued a U.S. recall for the same eight models, affecting 2.3 million vehicles. In late 2009 it recalled 4.2 million vehicles amid concerns that floor mats could bend across gas pedals, causing sudden acceleration.

Toyota has insisted the problem of sudden, uncontrolled acceleration was "rare and infrequent" and said dealers should deal with customers "on a case-by-case basis." But drivers of Toyotas and those who share the road with them were left with uncertainty.

The automaker has informed Chinese authorities it will start a recall in February for 75,500 RAV4 sport utility vehicles that were manufactured in China between March 2009 and January 2010, said Toyota spokeswoman Ririko Takeuchi.

They use the same problem parts in accelerators that caused the recent spate of massive recalls in the U.S., she said.

In Europe, Toyota is still unsure how many vehicles are affected by the problem with pedals that are manufactured by CTS Corp. ( CTS - news - people ), based in Elkhart, Indiana.

Colin Hensley, a manager at the car maker's European operations, said the company is checking how many European models use the parts involved in the latest U.S. recall.

"Toyota is making every effort to address this situation for our customers as quickly as possible," its European arm said in a statement.

The sales suspension in the U.S. - Toyota's biggest market - could endanger the company's fledgling earnings recovery. Toyota only returned to the black for the July-September quarter with net income of 21.8 billion yen ($241 million) after three straight losing quarters.

Investors continued to dump shares in the global auto giant Thursday. Toyota dropped 3.9 percent to 3,560 yen even as the benchmark Nikkei 225 stock average gained 1.6 percent to close at 10,414.29. Toyota tumbled 4.3 percent Wednesday.

"It is still uncertain how this recall problem will affect Toyota's profits. But investors are worried it could really pressure the company's overall earnings," said Masatoshi Sato, market analyst at Mizuho Investors Securities Co. Ltd.

Fitch Ratings warned Thursday the massive recalls and sales suspension could dent Toyota's recovery, especially in the vital U.S. market.

Fitch placed Toyota's credit rating of 'A+' on watch negative, meaning the rating could be downgraded. That could increase the interest rate Toyota pays on any debt.

"The recalls and sales and production suspension cast a negative light on Toyota's reputation for quality, just as the company emerges from an unprecedented downturn in the auto industry," Fitch said in a statement.

Toyota spokesman Hideaki Homma said Toyota decided to recall more vehicles in the U.S. due to the risk of accelerator pedals becoming stuck in floor mats.

Toyota said in a statement it will fix or replace the accelerator pedals for the recalled vehicles to avoid the risk of floor mat entrapment. The company said it will replace floor mats as well for the latest recalled vehicles.

In March of 2007, Toyota started getting reports of gas pedals being slow to rise after being depressed for acceleration. Engineers fixed the problem in the Tundra pickup early in 2008.

But troubles persisted in other models, eventually leading to last week's U.S. recall and the plans to suspend sales and shut down of six factories while Toyota tries to fix the problems.

Associated Press writers Yuri Kageyama in Tokyo and Aoife White in Brussels contributed to this report.

View Article on Forbes

S. KOREA: Hyundai Motor's Q4 Profit Jumps

Associated Press, 01.28.10, 02:12 AM EST 

SEOUL, South Korea -- Hyundai Motor's net profit nearly quadrupled in the fourth quarter on higher sales following a strong performance during 2009 in the fast-growing Chinese and Indian auto markets.

South Korea's largest automaker and a growing force in the global market, earned 945.5 billion won ($820 million) in the three months ended Dec. 31, it said in a statement Thursday. Hyundai Motor Co. reported net profit of 243.5 billion won the same period the year before.

The Ulsan, South Korea-based maker of the Elantra and Sonata sedans and the luxury Genesis said sales during the quarter rose 9.3 percent to 9.65 trillion won from 8.83 trillion won a year earlier.

For all of 2009, Hyundai recorded a net profit of 2.96 trillion won, more than doubling from 1.45 trillion won in 2008. Sales for the year, however, fell 1 percent to 31.9 trillion won from 32.2 trillion.

Hyundai reported big gains in sales volume in China and India in 2009 from the year before. It also said that profits in China soared while in India it made money after a loss the year before.

Hyundai, which along with affiliate Kia Motors Corp. forms one of the world's five biggest automotive groups, has seen its market share grow worldwide in recent years through an emphasis on quality and design.

Both companies have expanded aggressively overseas. Hyundai has factories in China, India, Turkey, the U.S. and the Czech Republic. Kia has plants in China and Slovakia and began production in the United States last year.

Shares in Hyundai Motor, which released results during afternoon trading, rose 4.1 percent to close at 113,500 won. The stock price tripled in 2009.

View Article on Forbes

CHINA & JAPAN: Banyan: Japan's love-bubbles for China

Jan 28th 2010

From The Economist print edition

Illustration by M. Morgenstern

Hatoyama's advances to China raise fundamental questions about regional security

WHAT our colleague, Charlemagne, calls “bubbles of optimism” over China have been popping in Western capitals, as China has taken a hard line against internal dissent, proven unhelpful in efforts to tackle both climate change and Iran’s growing nuclear threat, manipulated its currency and launched cyber- attacks on Western computer networks. China, muscling its way to global prominence, is not quite the partner the West had been cultivating. Striking, then, that in Japan the bubble of optimism, among the country’s new leaders, is only inflating.

Soon after the Democratic Party of Japan (DPJ) swept into office nearly five months ago, the prime minister, Yukio Hatoyama, unveiled a vision for an East Asian Community (EAC). For all that it was dreamy and disjointed, it had at its heart a rapprochement between Japan and China leading towards regional integration. Asia, Mr Hatoyama reaffirmed, was Japan’s “basic sphere of being”. As for integration, fraternity was to be the glue.

Then late last year the DPJ’s secretary-general, Ichiro Ozawa, travelled to Beijing at the head of a 639-strong mission, including 143 parliamentarians with whom a beaming President Hu Jintao took the trouble to be photographed, each in turn. Mr Hu doesn’t smile like that for Westerners. Back in Tokyo, Mr Hatoyama horrified sticklers for imperial protocol by insisting that Mr Hu’s heir-apparent, Xi Jinping, pay an impromptu call on Emperor Akihito. Now rumours suggest Mr Hatoyama may make a visit of remorse, the first by a Japanese prime minister, to Nanjing, site of a massacre by Japanese forces in 1937. In return (and at less political cost), Mr Hu may pay respects to the nuclear victims of Hiroshima. Japan under the DPJ seems to get on better with China than it does with its ally and security guarantor, the United States. Relations with the United States are strained over the relocation of a military base for American marines on Okinawa, leading to worries over the future of the two countries’ alliance, keystone to security in the western Pacific.

Economic logic argues for closer ties with China, which has already overtaken America as Japan’s biggest trading partner, and is about to overtake Japan’s economy to become the world’s second-biggest. After not one but arguably two “lost decades”, an ageing population cannot drive demand in Japan. It must hitch itself to the Chinese juggernaut. A strategic vision, too, lurks somewhere in the idea of an EAC. Mr Hatoyama has committed Japan to cutting greenhouse-gas emissions by a quarter by 2020. He thinks Japan can lead Asia towards a low-carbon future.

But contradictions lurk too. The idea makes a nod to China’s rise. Yet it assumes Japan’s rightful lead in proposing a new regional architecture, while impressing Japan’s technological prowess on China. The impulse is deeper-seated than Mr Hatoyama might admit.

The story of modern Japan is of the use of Western arms and technology to overturn China’s centuries-old regional dominance. China now intends to restore the natural order, and does not need directions from others, least of all Japan.

It has made only the minimum polite noises about an EAC. As for the green technology that Japan can share, both sides say it is a good thing but are infuriatingly sparing with the details. Besides, since the December summit in Copenhagen, China has hinted it might go its own way on climate change.

Popular Japanese attitudes towards China suffer from the same doublethink. In one recent poll, most of those questioned wanted a “warmer” political relationship with their big neighbour. But most also wanted the prime minister to visit Yasukuni, Tokyo’s militarist shrine, on remembrance day. That is one issue guaranteed to send China-Japan relations into the cooler. A sense of Japanese superiority over coarse, authoritarian China is also widespread. More than one Japanese professor has told Banyan that Japan is the true guardian of Chinese culture.

History wars, still far from resolved, point to the limits of rapprochement. So too do maritime disputes over territory. But a huge constraint is the fiscal one. Greying Japan is burdened with deflation, stagnant growth and a national debt close to 200% of GDP. Japan lacks the resources (and the will) for the kind of bold strategic moves, putting Japan at the heart of Asia, at which Mr Hatoyama and Mr Ozawa hint. Even a more autonomous security policy, out from under America’s wing, is almost a non-starter. Japan has cut its defence spending in recent years, to just 1% of GDP. It has grown more dependent on the United States, not less.

Behind China’s smile

This is where strains over the alliance really matter for the security of the whole region, not least because of Taiwan. On January 24th the Okinawan township picked, after painful years of talks, by the United States and Japan’s previous government as the destination for the relocated marine base elected a mayor resolutely opposed to the move. Popular concerns about the “occupation mentality” of American forces are valid. But Mr Hatoyama, according to colleagues, was sleepwalking when he reopened the issue. Now he cannot go back. Local politics and national security are on a collision course. Mr Hatoyama has said he will decide over the base by May. But moving it anywhere else in Japan will face local resistance too.

As Yoichi Funabashi, editor of Asahi Shimbun puts it, if the new administration bungles relations with Washington, it will look diplomatically inept at a time when power relations in Asia are shifting fast. That might spell the end of the hapless Mr Hatoyama. So it is hardly cynical to assume that one aim behind China’s outbreak of smiling is to drive a wedge between a slightly clueless Japan and its longstanding protector. After all, Japan would be its base were America to come to Taiwan’s rescue in the event of a mainland attack.

View Article on The Economist

JAPAN: Teachers lose suit for compensation over national flag, anthem issue

Jan 27 10:02 PM US/Eastern

(AP) - TOKYO, Jan. 28 (Kyodo)

The Tokyo High Court rejected on Thursday a demand for compensation by former teachers who argued that they were refused post-retirement reemployment because they had remained seated during the singing of "Kimigayo" national anthem at school ceremonies despite their school principals' orders.

The appellate court ruling overturned the February 2008 decision by the Tokyo District Court that awarded a total of around 27.5 million yen in compensation to 12 former teachers and a clerk at public high schools run by the Tokyo metropolitan government.

Presiding Judge Tatsuki Inada of the high court said the orders to stand up and sing the anthem in front of the Hinomaru national flag "were not intended to command them to engage in acts that may straightforwardly deny the plaintiffs' perception of history and do not necessarily violate Article 19 of the Constitution that establishes freedom of thought and conscience."

The ruling largely followed the lines of a Supreme Court precedent issued in February 2007 on a similar case.

On the decision by the metropolitan government to reject them post- retirement reemployment as part-time instructors, the judge said the local government acted within its discretion because "the plaintiffs had no option but to be rated lowly since they violated orders from superiors and were reprimanded."

The lower court ruled in February 2008 that the metropolitan education board overstepped and abused its discretion by attaching exaggerated importance to their disobedience of the orders while failing to factor in other aspects such as their service records.

The plaintiffs were seeking around 5.6 million yen in compensation per person from the local government.

Several lawsuits have been filed over the notice to principals, mainly by disciplined teachers, seeking nullification of the disciplinary measures and arguing the notice is unconstitutional.

The Tokyo District Court ruled in September 2006 that the education board cannot force teachers to sing the anthem in front of the Hinomaru flag or reprimand them for refusing to do so as such practices infringe on the Constitution. The ruling is being appealed at the Tokyo High Court.

But the Supreme Court rejected an argument by a music teacher in February 2007 that a principal's order to accompany the singing of "Kimigayo" on the piano is unconstitutional, saying the order "does not mean denial of the plaintiff's view of history and the world, and cannot be said to violate freedom of thought and conscience under the Constitution's Article 19."

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CHINA: China in Central Asia: Riches in the near abroad

Jan 28th 2010

From The Economist

The West’s recession spurs China’s hunt for energy supplies in its own backyard

DURING his first visit to Kazakhstan in 1996, Jiang Zemin was reportedly amused to learn that his Central Asian neighbour, the ninth-largest country in the world by land mass, had a population of only around 15m. “You probably all know each other,” China’s then president is said to have quipped to his hosts. With its population of 1.3 billion, China naturally thinks on a grand scale. This is what the five countries of Central Asia—Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan—both admire and fear. Like Russia, looking to its own far east, they worry about Chinese expansionism.

But for most of the 18 years since the Soviet Union’s break-up, China has taken a back seat in the fierce competition between Russia and America for influence in this resource-rich region. In 2009, with the energy needs of its burgeoning economy continually growing, it woke up to new opportunities in its western backyard.

Booming China had not exactly been neglecting Central Asia, but its priorities had lain elsewhere. Since the global financial crisis left Russia and America struggling with their budgets, China has loosened its purse strings to offer Central Asia a helping hand. Its money has been welcome. From a Central Asian point-of-view, Chinese credit offers an additional advantage over the Western kind: it comes with no annoying political strictures.

In June, for example, China agreed to lend Turkmenistan $4 billion to develop its largest gasfield, South Yolotan, close to the Afghan border. This was part of a 30-year deal that should eventually bring China 40 billion cubic metres of gas each year. The same month Hu Jintao, Jiang Zemin’s successor, announced a loan of $10 billion loan to the Shanghai Co-operation Organisation (SCO), a security forum grouping China, Russia and four Central Asian countries, to shore up members faltering in the global downturn. In November China’s largest oil-and-gas provider, jointly with Kazakhstan’s oil-and-gas firm, bought MangistauMunaiGas, a big oil producer in Kazakhstan. In exchange, China had lent the country $10 billion earlier last year.

In December Mr Hu and the leaders of three Central Asian countries gathered at the Saman-Depe gasfield in eastern Turkmenistan for a moment of crowning symbolism. The four men turned a tap to inaugurate a 1,833km (1,139-mile) gas pipeline, running through Uzbekistan and Kazakhstan into China’s far-western region of Xinjiang. For China, the new line forms part of a global effort to secure energy supplies for its rapidly growing economy. For Turkmenistan, it is a chance to reduce dependence on Russian demand.

A few days before the event, Vladimir Putin, Russia’s prime minister, said that Russia could be comfortable with Turkmenistan’s gas flowing eastward. But many Russian commentators bemoaned the loss of strategic ground to China.

Views about China are divided in Kazakhstan too. Late last year the president, Nursultan Nazarbayev, announced that China wanted to lease 1m hectares (2.5m acres) of farmland in Kazakhstan. In Almaty, Kazakh nationalists marched in protest at encroaching Chinese influence. Even the weak opposition briefly sprang to life. Similarly, last July China’s suppression of Xinjiang’s rioting Uighurs, whom Kazakhs consider brethren, raised tempers.

Dossym Satpayev, a political analyst, says that many protesters believe China’s vast population makes it inevitable immigrants will start moving to places such as Kazakhstan. Had dwindling Russia made the request for a land-lease, he says, the reaction would not have been so strong.

China may have taken its time before beginning to pursue its interests in Central Asia, but it seems determined to do so with vigour and for the long term. Mr Satpayev believes that within the next ten years it will come to dominate Central Asia’s political, economic and military spheres, mainly through the SCO. Its main rival will be less affluent Russia, whose historic dominance has left it with the habit of trying to boss former Soviet republics. America, Europe and other powers will become less important. China’s leaders have managed to advance far beyond the largely ceremonial co-operation of “friendship treaties”, without resorting to Russian tactics. As Mr Satpayev has it, “China doesn’t only buy loyalty with documents, but with money given at a low percentage.”

View Article on The Economist

JAPAN: JAL dumps alliance with American Airlines in favor of Delta, SkyTeam

January 28, 2010

(Mainichi Japan)

Japan Airlines (JAL) decided Wednesday to dump its partnership with American Airlines and its Oneworld alliance in favor of Delta and the SkyTeam group of carriers.

American together with a private equity firm had offered to invest $1.4 billion in JAL and strengthen cooperation between the two airlines, but JAL judged an alliance with Delta -- the world's largest airline -- would produce greater benefits.

The partnership with Delta will be officially announced by new JAL Chairman Kazuo Inamori on Monday.

To solidify the new alliance, JAL intends to apply to the Japanese and U.S. governments for antitrust immunity. The airline is also examining strengthening its international network with new routes from Narita International Airport to Detroit -- the hub for Northwest Airlines, acquired by Delta last year -- and from Haneda Airport to Amsterdam's Schiphol, SkyTeam partner KLM's home airport.

Delta and JAL cover many of the same routes, allowing the two airlines to better efficiency through schedule and fare collaboration. According to estimates by the state-backed Enterprise Turnaround Initiative Corp. of Japan (ETIC) -- overseeing JAL's restructuring process -- if JAL obtains antitrust immunity, the benefits of the Delta partnership could rise to some 17.2 billion yen. Even if the JAL-Delta deal does not receive immunity, the new partnership will result in benefits of around 9.2 billion yen -- still a significant jump from the 5.4 billion yen realized through the alliance with American.

Delta had previously offered a total $1.02 billion in financial support to JAL, including $500 million in new investment. As the leader in rebuilding the airline, however, ETIC apparently inclined to the belief that foreign financing was unnecessary for recovery, and elected to restrict any involvement with Delta to business collaboration.

Click here for the original Japanese story

View Article in The Mainichi Daily News