PRC Economy and Industry: News and Discussions

[wrdos]

China Plans First-Ever Space Walk
Its Third Manned Space Mission, Later This Month, Will Feature Live Broadcast

http://www.cbsnews.com/stories/2008/09/ ... 3724.shtml

(AP) China will launch its third manned space mission in late September, featuring its first-ever space walk, a state news agency said.

The Shenzhou 7 launch is to take place between Sept. 25 and 30, the official Xinhua News Agency reported late Saturday.

The spacecraft will be launched from the Jiuquan Satellite Launch Center in northwestern Gansu province, the agency said, citing a spokesman from the center.

It will carry three astronauts into space, one of whom will conduct a space walk, the report said, citing Zhao Changxi, a senior scientist with the project.

The space walk will be broadcast live using cameras mounted on the inside and outside of the spacecraft, Xinhua said.

In 2003, China became the third country in the world - along with the United States and Russia - to send a human into orbit. It followed with a two-man mission in 2005.

China launched a moon probe last year about one month after rival Japan blasted its own lunar orbiter into space.

© MMVIII The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

[wrdos]

China's inflation eases as trade gap grows

http://news.yahoo.com/s/ap/20080910/ap_ ... _economy_6

By JOE McDONALD, AP Business Writer Wed Sep 10, 6:02 AM ET

BEJING - China's politically sensitive inflation eased to a 14-month low in August while export growth dipped, the government reported Wednesday, and analysts said Beijing might shift from fighting price rises to revving up the slowing economy.
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Chinese leaders have made a priority of fighting an inflation surge that began in mid-2007 and have imposed price controls and credit curbs. But they face an unexpectedly sharp downturn in economic growth, which could cost jobs and fuel social tensions.

Consumer prices rose 4.9 percent in August over the same month last year, the National Bureau of Statistics said. That was down from July's 6.3 percent and well below February's 8.7 percent rate — the peak of the inflation surge.

China's trade surplus hit a record $28.7 billion in August, but export growth slowed to 21.1 percent, down from July's 26.9 percent, the government reported.

Wednesday's data "suggest that policymakers will continue to take a prudent and gradual approach in shifting its policy focus from inflation to growth," said Lehman Brothers economist Minchun Sun.

Chinese stocks edged up on the news. The benchmark Shanghai Composite Index finished the day up 0.2 percent.

Analysts have cut growth forecasts this year to as low as 9 percent, down from 2007's explosive 11.9 percent. That still would be the fastest rate for any major country, but Beijing wants to keep growth high to reduce poverty and create new jobs.

"There are increasing noises that this tightening policy has lasted too long, and more and more worries about growth skidding seriously," said Standard Chartered economist Stephen Green in a report to clients.

Green cautioned that despite the impressive trade figures, Chinese exporters face tougher times ahead.

"As Europe now slows, though — the biggest destination for exports — this will change in the last few months of the year," he said. "This may well be the lull before the storm."

Adding to pressure to improve business conditions, Chinese companies were squeezed in August as wholesale inflation accelerated to a new 12-year high of 10.1 percent, according to the government data.

Beijing reacted to a similar decline in export growth in June by increasing tax rebates to textile producers. Economic planners are expected to roll out measures targeting other struggling industries.

China's trade surplus grew by 14.2 percent in August from a year ago, topping the previous monthly high of $27 billion in October 2007. Exports reached $134.9 billion, while imports rose 23.1 percent to $106.18 billion.

China's inflation surge was blamed on shortages of pork and grain. Beijing responded with price controls and subsidies to raise farm production. But its efforts were hampered by winter storms, a jump in oil prices and China's devastating May 12 earthquake.

Food prices rose sharply in August, climbing by 10.3 percent, but that was down from July's 14.4 percent and well below February's peak of 23.3 percent.

"The continuous decline of the CPI is a positive sign as it shows that the government's measures to ease inflationary pressures were effective," said the bureau's chief economist, Yao Jingyuan, quoted by the official Xinhua News Agency.

Communist leaders worry about the political impact of high inflation in a society where families spend up to one-third of their incomes on food. Bouts of high inflation in the 1980s and '90s sparked protests.

The recent rise in wholesale costs adds to pressure on Chinese companies to raise retail prices. But many are in industries with intense competition that prevents them from passing on higher costs to consumers.

That is squeezing corporate profits and could lead to job losses.

"The focus in terms of inflation has shifted toward non-food prices," said Jing Ulrich, chairwoman of China equities for JP Morgan Securities, in a report. "With power shortages occurring in many parts of the country, anticipated further hikes in energy prices would feed into higher costs for various items."

China's trade surplus with the United States grew 16.6 percent to $17.5 billion in August, the government reported. The gap with the 27-nation European Union, China's biggest trading partner, swelled 25 percent to $16 billion.

Also in August, monthly growth in spending on factories and other assets, a key economic stiumulus, accelerated to 27.4 percent, the government said.

[ramana]

Technology review reports

China's challenge to Intel

Tuesday, September 02, 2008
A Chinese Challenge to Intel
Researchers have revealed details of China's latest homegrown microprocessor.
By Kate Greene

In California last week, Chinese researchers unveiled details of a microprocessor that they hope will bring personal computing to most ordinary people in China by 2010. The chip, code-named Godson-3, was developed with government funding by more than 200 researchers at the Chinese Academy of Sciences' Institute of Computing Technology (ICT).

China is making a late entry into chip making, admits Zhiwei Xu, deputy director of ICT. "Twenty years ago in China, we didn't support R&D for microprocessors," he said during a presentation last week at the Hot Chips conference, in Palo Alto. "The decision makers and [Chinese] IT community have come to realize that CPUs [central processing units] are important."

Tom Halfhill, an analyst at research firm In-Stat, says that the objective for China is to take control of the design and manufacture of vital technology. "Like America wants to be energy independent, China wants to be technology independent," Halfhill says. "They don't want to be dependent on outside countries for critical technologies like microprocessors, which are, nowadays, a fundamental commodity." Federal laws also prohibit the export of state-of-the-art microprocessors from the United States to China, meaning that microchips shipped to China are usually a few generations behind the newest ones in the West.

Despite its late start, China is making rapid progress. The ICT group began designing a single-core CPU in 2001, and by the following year had developed Godson-1, China's first general-purpose CPU. In 2003, 2004, and 2006, the team introduced ever faster versions of a second chip--Godson-2--based on the original design. According to Xu, each new chip tripled the performance of the previous one.

Godson chips are manufactured in China by a French-Italian company called ST Microelectronics and are available commercially under the brand name Loongson, meaning "dragon chip." Loongson chips already power some personal computers and servers on the Chinese market, which come with the Linux operating system and other open-source software. "They use a lot of open-source software because it's free," says Halfhill. "The Chinese government wants to get as many PCs into schools and as many workplaces as they can."

The latest Godson chips will also have a number of advanced features. Godson-3, a chip with four cores--processing units that work in parallel--will appear in 2009, according to Xu, and an eight-core version is also under development. Both versions will be built using 65-nanometer lithography processes, which are a generation older than Intel's current 45-nanometer processes. Importantly, Godson-3 is scalable, meaning that more cores can be added to future generations without significant redesign. Additionally, the architecture allows engineers to precisely control the amount of power that it uses. For instance, parts of the chip can be shut down when they aren't in use, and cores can operate at various frequencies, depending on the tasks that they need to perform. The four-core Godson-3 will consume 10 watts of power, and the eight-core chip will consume 20 watts, says Xu.

This latest chip will also be fundamentally different from those made before. Neither Godson-1 nor -2 is compatible with Intel's so-called x86 architecture, meaning that most commercial software will not run on them. But engineers have added 200 additional instructions to Godson-3 to simulate an x86 chip, which allows Godson-3 to run more software, including the Windows operating system. And because the chip architecture is only simulated, there is no need to obtain a license from Intel.

Erik Metzger, a patent attorney at Intel, says that the chip will only perform at about 80 percent of the speed of an actual x86 chip. "That implies that [the Chinese government] is going after a low-end market," he says. This is the same market that Intel is targeting with its classmate PC and low-power atom microprocessor. Metzger adds that the inner workings of the chip, known as its instruction set, have not yet been disclosed, making it difficult to know if or how any x86 patents may have been breeched.

The Chinese team hopes to further boost its chip program through collaboration with other companies and researchers. "We still lag behind the international partners a lot," says Xu. "But we are doing our best to join the international community."

Copyright Technology Review 2008.

Understatement of the year!

[vina]

The New York Times
Printer Friendly Format Sponsored By

September 11, 2008
Real Estate Woes Spread to China
By KEITH BRADSHER

GUANGZHOU, China — China has joined the United States, Britain, Spain and others on the list of nations suffering a real estate decline.

Although the last national statistics showed single-digit growth from July 2007 to July 2008 in the average price of commercial and residential real estate, real estate brokers say prices are down from peaks reached earlier this year, while the number of transactions has plunged.

This downturn comes as the growth rate of Chinese exports has slowed — sharply in yuan terms — and stock markets have plummeted. The confluence of events has resulted in what economists describe as a deceleration in China’s economic growth — although at nearly 10 percent it remains the envy of many nations.

Brokers say that sales volumes first dropped precipitously here in southeastern China, and then the decline spread across the country. Faced with few buyers, sellers started cutting their prices for residential and commercial real estate.

In some neighborhoods in the southeast, prices have dropped by 10 to 40 percent.

In other parts of the country, transactions have fallen, but prices have only started to follow. For instance, the number of home sales has plunged by two-thirds in Harbin in the northeast, though prices are down as little as 4 percent from the same period last year.

“People are thinking more carefully and taking much longer before they decide to buy or not to buy property,” said Hwang Sha, a real estate broker in Xiamen in east-central China.

Cities deep in China’s interior are least affected. Dan Yian, a real estate agent in Chongqing, the largest city in southwestern China, said that the volume of housing transactions there had slowed by 20 to 30 percent so far this year. But prices have not yet fallen from a stable level of $730 a square meter, or 10.76 square feet, which works out to nearly $66,000 for a typical apartment of about 970 square feet.

Export-dependent coastal cities in mainland China have had the steepest downturns in their real estate markets. Some of those problems are starting to make ripples elsewhere in Asia.

Freddy Wu, the chief executive of Hong Kong Property Services, said his real estate agency had seen mainland investors default in recent months on a tenth of their purchases of Hong Kong apartments, forfeiting the down payments that they made.

“A lot of investors from China have their cash tied up in the mainland stock market and in mainland real estate, so they would rather take a loss now,” instead of being forced to sell mainland investments at a loss to come up with the cash to complete purchases in Hong Kong, Mr. Wu said.

The skylines of Chinese cities remain dotted with cranes. But Ralph J. Gerson, the executive vice president of Guardian Industries, the largest American glass-making company and the world’s third-largest, said that demand was rising less rapidly in China for the company’s high-tech insulated glass for modern office buildings.

“It used to be booming, and now it’s growing at a slower pace,” he said. Fresh evidence of broader economic problems in China came on Wednesday as the government released monthly statistics. Growth in imports and in fixed-asset investments slowed. Inflation dropped sharply at the consumer level, to 4.9 percent in August from 6.3 percent in July.

But unlike the subprime meltdown in the United States, and the resulting credit crisis, weaknesses in China’s real estate market do not at this point appear to pose a threat to the vitality or stability of the financial system.

One reason is that Chinese banks require down payments of at least 30 percent, giving banks an ample cushion of cash against losses. American banks frequently did not require down payments. Foreclosures are also rare here, and many Chinese still pay cash for their homes, particularly in rural areas.

Leo Wah, a Chinese banking analyst for Moody’s, said that Chinese banks could weather the decline in real estate prices, but cautioned that they could face more challenges if economic troubles spread.

“We do not believe that it would cause a serious problem, but if property prices fall some more, it won’t be the only sector that has problems,” he said.

Real estate difficulties pose a dilemma for China’s leaders because they coincide with a two-thirds drop in share prices on the Shanghai stock market since the market’s high last October. The two together could produce a negative effect, causing Chinese consumers to feel poorer and to reduce spending.

The most recent national data from the government shows that the average price for all residential and commercial real estate was 7 percent higher in July than a year earlier. But brokers across China say that within that period, prices peaked in many markets — either at the end of last year or at various times this year — and have slid since. The stocks of real estate developers have plunged, too. China Vanke, the country’s biggest publicly traded developer, reported on Tuesday that its sales had plummeted in August by 35 percent from a year earlier.

The real estate decline is affecting ordinary Chinese, too. Perhaps most consequential is the emerging view, apparent on blogs and in interviews, that apartments and houses, like shares on the declining Shanghai stock market, are no longer a certain path to prosperity.

Lin Bin, a 48-year-old insurance saleswoman who lives in Guangzhou, said the 1,000-square-foot, three-bedroom apartment she bought here in 2002 was still worth more than she paid in 2002. But she said she had lost two-thirds of the $4,400 she put into the stock market a year ago and worried that the housing market might be next.

“I’m not contemplating buying a second home as an investment because I hear that stock market and housing prices will continue to fall through next year,” she said while shopping recently.

Part of the problem is a severe credit squeeze. Through last winter, China’s central bank repeatedly raised the amount of capital it required Chinese commercial banks to deposit with it. The goal was to slow bank lending and control inflation. The commercial banks responded by continuing to lend to big corporate customers, most of them state-owned or at least state-controlled, while reining in other lending.

Central bank data shows that total loans to households plummeted by a third from March to July of this year. The bulk of these loans are mortgages because Chinese shoppers, even car buyers, use mostly cash.

“It’s collapsing; it’s unbelievable, and most of it is from mortgages — I don’t see how the housing sector is going at all,” said Nicholas R. Lardy, a specialist in Chinese finance at the Peterson Institute for International Economics in Washington.

He added that the decline was so precipitous that it had to reflect weaker demand for housing, and not just regulatory restrictions on credit.

To increase lending may be difficult now. The central bank needs ever greater reserves from commercial banks to buy dollars and prevent China’s currency from rising against the dollar, which could cause China’s exports to slow further.

China’s trade surplus set a record of $28.7 billion in August, the government announced on Wednesday, mainly because of an unexpected slowdown in the growth of imports. Slower growth of imports is a common sign of a weakening economy.

Assessing national trends in Chinese real estate is often difficult because of long lags in the data. Real estate brokers say prices are holding up better for homes in prime locations than in outlying areas. Top-quality commercial buildings are faring better than older buildings.

Keith Bradsher added additional reporting from Hong Kong. Hilda Wang contributed reporting.

[Raghavendra]

1,253 babies hit by contaminated milk powder scam in China

Beijing, Sept 15 (PTI) At least two infants were dead and 1,253 others sickened, 53 of them seriously by contaminated milk powder, the Chinese government today said, vastly increasing previous estimates.

The tainted milk formula, laced with melamine, an industrial chemical used in plastics, caused kidney stones among infants, the Ministry of Health said here.

Chinese police have arrested two persons, both brothers, for adding melamine into raw milk to make the milk's protein level appear higher.

Vice Health Minister Mao Shaowei told reporters that as many as 10,000 infants may have drunk the contaminated milk by the Sanlu group, which is China's biggest milk powder producer.

The figure for babies sick with kidney stones was up from 432 published by the ministry on Saturday.

According to officials, most of the infections occurred in Hebei, Jiangsu and Gansu provinces. The two deaths were reported in northwest China's Gansu Province. The first death from the scam was reported on May 1.

Among the 1,253 infected, 53 babies were in a critical condition while a total of 340 were receiving treatment in hospitals, they said.

The remaining 913 with light symptoms are either receiving treatments outside hospital or already cured.

Health Minister Gao Qiang said on Saturday that a series of lawsuits had been filed against Sanlu for distributing tainted milk powder since March and the company had begun recalling and holding back the product.

Chinese officials earlier said that private milk collecting stations were likely the culprits.

[Avinash R]

Chinese parents seek answers on tainted baby milk
Fri, Sep 19 05:36 AM

SHIJIAZHUANG, China (AP) _ Hundreds of Chinese parents, some cradling infants, converged on the company at the heart of a tainted baby formula scandal, demanding refunds and asking what they can safely feed their children.

Thousands of others filled hospitals, many hovering over sons and daughters hooked to IV drips after drinking milk powder tainted with melamine, a toxic industrial chemical that can cause kidney stones and lead to kidney failure.

The scandal highlights the changing family dynamics and economic growth in China. A generation ago, women had little choice besides breast-feeding.

Now, supermarkets are filled with dozens of brands of baby formula, marketed to women who work outside the home after they give birth. Yao Haoge, an 11-month-old baby with two large kidney stones, had been drinking formula produced by Sanlu group Co. since she was born because both of her parents work. They had been puzzled by their little girl's fevers and dark urine, but it never occurred to them that she had kidney stones brought on by her formula.

Now, like many of the babies at the Peace Hospital in Shijiazhuang, Haoge has an IV drip hooked into a vein in her head. "We don't make much money, but we wanted to buy good milk powder," said her father, Yao Weiguan, a day-laborer from a small town an hour's train ride from Shijiazhuang.

"We thought it was good and now it's given us problems. And we spent quite a bit of money too.

" Baby milk powder laced with melamine, used in plastics and fertilizers, has been blamed in the deaths of four babies. More than 6,000 others have been sickened.

Some 1,300 babies, mostly newborns, remain hospitalized, with 158 suffering from acute kidney failure. Questions continued to swirl Thursday about the handling of the scandal by milk producer Sanlu and government officials.

The company reportedly received complaints about its formula as early as March and tests revealed the contamination by early August, just before the Olympics. Sanlu went public with a recall on Sept.11 after its New Zealand stakeholder told the New Zealand government, which then informed the Chinese government. Melamine has no nutritional value but is high in nitrogen, making products with it appear higher in protein.

Suppliers trying to cut costs are believed to have added the toxic chemical to watered-down milk to cover up the resulting protein deficiency. The scandal has not been confined to Sanlu, one of China's best-known and most respected brands, based in this dusty northern Chinese city.

The country's quality control watchdog has found that one-fifth of companies producing milk powder in China had melamine in their products. "Who do you trust? I don't know.

If such a big company is having problems, then I really don't know who to trust," said a 31-year-old man surnamed Yang, waiting in line outside a Sanlu office to get reimbursed for his 7-month-old daughter's medical exam and kidney ultrasound. Yang, who refused to give his full name, held a bag with a can of Sanlu milk powder he planned to return for a refund.

The formula cost US$21.60, a significant amount of money for working families in China. "What happens if something else goes wrong in the future? Is it just kidney stones? What if there are other problems?" said Yang, whose daughter checked out fine.

Parents traded tips on which brands were still considered safe after news that products from China's top dairy producers Mengnu and Yili were also found to be tainted. "Now we have no idea what kind of milk to give the baby.

They all have problems," said a woman surnamed Wang, the mother of a 1-year-old who had been drinking Sanlu formula for two months. "There are brands that are OK, but I can't remember the names." At a nearby Sanlu processing facility, hundreds of people waited for refunds.

Some held a half-empty pouch, while others hauled in cases of the formula. A red banner at the plant declared: "Pay attention to food safety, ensure the public's health.

" Police in northern China's Hebei province, where Sanlu is based, arrested 12 more people Thursday, bringing the total to 18. Provincial police spokesman Shi Guizhong said six suspects allegedly sold melamine, while the others were accused of adding the chemical to milk.

The widening crisis has raised questions about the effectiveness of tighter controls China promised after a series of food safety scares in recent years over contaminated seafood, toothpaste and pet food tainted with melamine. In 2004, more than 200 Chinese infants suffered malnutrition and at least 12 died after being fed phony formula that contained no nutrients.

[Ameet]

Total now jumps to 54k babies affected in various forms by the tainted milk. Seems like one of the milk companies knew of the problem, but did not disclose it for a month due to the People's Glorious Ever Happiness Olympics!!!

http://news.yahoo.com/s/nm/20080922/ts_nm/china_milk_dc

Nearly 13,000 in hospital as China milk scandal grows

By Chris BuckleyMon Sep 22, 9:44 AM ET

The number of Chinese infants sick in hospital after drinking tainted milk formula doubled to nearly 13,000 and the country's top quality regulator resigned on Monday in the latest blight on the "made-in-China" brand.

Four deaths have been blamed on the toxic milk powder, which causes kidney stones and agonizing complications, and a string of Asian countries have banned or recalled Chinese milk products.

The official Xinhua news agency said in a brief statement that the country's quality chief, Li Changjiang, had quit in light of the case. "Li was the highest ranking official brought down so far by the dairy product contamination scandal," it said.

The Communist Party chief of Shijiazhuang, home to the Sanlu Group which is at the centre of the scandal, has also been fired, Xinhua said, the latest official to lose their job for mishandling the incident.

The government has blamed local officials for delays in reporting problems with the milk powder, and an investigation has found that Sanlu began receiving customer complaints about its milk powder as long ago as last December, Xinhua said.

"Sanlu did not report (the problem) either to the Shijiazhuang government or related authorities and did not take remedial action, causing the incident to expand even further," it said, citing the results of an official probe.

The Health Ministry said the number of children hospitalized due to the milk powder contaminated with the industrial chemical melamine rose from a previously announced total of 6,244 -- which included many who had left hospital -- to 12,892, including 104 who were in a serious condition.

More than 1,500 had already left hospital and nearly 40,000 with milder symptoms "received clinical treatment and advice" before going home. The ministry did not explain the sharp rise.

The jump to more than 54,000 affected children was announced late on Sunday, escalating a scandal that has again shaken trust in Chinese products after last year's scares over toxic and shoddy goods from toothpaste and drugs to pet food and toys.

Melamine, used in making plastics, has also been found in cartons of milk and some dairy exports, but no illnesses from those sources have been reported.

Medical experts said on Monday that, as well as causing kidney stones, melamine could potentially cause far more serious complications by crystallizing and then blocking tiny tubes in the kidneys.

DEEPER FAILINGS

Chinese Premier Wen Jiabao visited hospitals in the national capital in a bid to reassure an anxious public. But he also said the outbreak of poisonings exposed deeper failings.

"Although the ordinary people are very understanding, as the government we feel very guilty," he said, according to Xinhua. "This event is a warning for all food safety."

He also vowed stiff penalties if the problem re-emerges.

China's food quality watchdog has said it found melamine in nearly 10 percent of milk and drinking yoghurt samples from three major dairy companies: Mengniu Dairy Co, the Inner Mongolia Yili Industrial Group and the Bright group.

Nitrogen-rich melamine can be added to watered-down milk to fool quality checks, which often use nitrogen levels to measure the amount of protein in milk.

Past product safety scandals have exposed corruption, influence-peddling and lumbering, feuding bureaucracies overwhelmed by fragmented, cost-cutting producers. The milk scandal has shown a government campaign did not end those woes.

China's dairy producers faced a "crisis of confidence" that would need strong official steps to cure, said Lao Bing, manager of a Shanghai-based dairy investment company.

"Consumers will start rebuying in a month or two if they feel sure the government is undertaking a vigorous clean-up," he said. "Exports will take longer. This will have a major impact."

JUMPY EXPORT MARKETS, PANICKED PARENTS

Japan's Marudai Food Co. Ltd withdrew buns made with milk supplied by Yili. A spokesman for Japan's Nissin said that group had also recalled products with Chinese dairy ingredients.

The Japanese government has asked 90,000 companies to check if imports have been contaminated with melamine.

Other markets that have banned or recalled Chinese milk products include Brunei, Singapore, Malaysia, Hong Kong and Taiwan. Taiwan banned all mainland dairy products from Sunday.

Even White Rabbit Creamy Candy, a popular Chinese brand of milk sweet, was contaminated with melamine, Singapore and Malaysia have warned.

At the weekend, a three-year-old Hong Kong girl was found to have a kidney stone after drinking a milk product tainted by melamine, making her the territory's first suspected victim.

But the biggest worry remains in China.

Sanlu, the nation's biggest maker of infant milk powder, knew about the problem but did not disclose it publicly for at least a month throughout August, when Beijing hosted the Olympics, officials have said.

The revelation brought a surge of panicky parents and children to hospitals, and the government has promised free treatment for stricken children. But some parents said they worried about costs and long-term complications.

Zhou Zhijun, from south China's Hunan province, said she took her wailing, increasingly thin daughter to hospitals at least three times from June to late August before doctors diagnosed a kidney stone.

"All those visits and checks cost 20,000 yuan ($2,900), and I still don't know who will pay for that," she said, adding that her 15-month-old baby had drunk Sanlu milk powder. "Also what if there are complications and problems later? Who'll pay for that?"

The Chinese Ministry of Agriculture said despairing farmers were dumping milk and killing cattle after companies stopped buying their supplies. It promised subsidies to help farmers.

[sanjaykumar]

heheheheh Three months ago I asked a colleague if he thought the food would be safe on his China trip, he bristled at the suggestion that 'some of the greatest restaraunts in the world' would be unsafe.


Well chow down good sir.

[Singha]

east asians are generally averse to milk products and no significant diary industry there. its news to
me that chinese also use infant formula...was thinking some alternative soya based powder was in use.

not sure if true or not but a page on cannibalism in the web claims some shenzhen hospitals were
selling aborted foetuses as health food - doctors themself keeping the juicier 'morsels'

[Nayak]

The wimmen-folk are very figure-conscious, they belive feeding the baby will make them fat. Hence the move towards baby-formula early on.

--self edit: skating on thin ice--

I could go on, but some pc-g/p andoo will complain to the adminullahs and I will feel the sting of the lathi on my musharraf by the roving adminullahs-e-besharam.

[Zin]

Fears grow around world over tainted Chinese milk

BEIJING (Reuters) - Fears are growing around the world about the safety of Chinese dairy products after thousands of babies in China fell ill from drinking tainted milk formula, with bans and recalls in place in several countries.

Brunei, Singapore, Malaysia, Hong Kong, Taiwan, Japan, Bangladesh, Gabon, Burundi and the Philippines are some of the countries testing Chinese dairy products or pulling them from the shelves altogether.

China announced earlier this month that some locally made milk powder had been contaminated with the industrial chemical melamine, which can cause kidney stones, and the scandal has since widened to include even a popular milk sweet.

In Hong Kong, two girls were suspected of having kidney stones after drinking tainted milk, while Taiwan banned all China dairy products from Sunday due to contamination fears.

Hong Kong health officials urged parents to take children to hospital if they see traces of blood in their children's urine or if they cry excessively for no apparent reason.

"In serious cases, the stones can lead to kidney failure, in that case, parents must take children to hospital immediately," Chow Chun-bong, consultant paediatrician at Princess Margaret hospital, told a news conference.

On Monday, Taiwan's government set up a milk-testing station in Taipei for concerned consumers.

"Of course I'm worried. I bought 20 vats, at a discount," said Lu Chi-e, 60, of Taipei, one of a half dozen people who lined up at the milk-testing station.

Singapore and Malaysia have also banned Chinese dairy imports, while the poor central African countries of Gabon and Burundi, to which China has said contaminated milk powder was exported, have put curbs on Chinese milk product sales.

Japan's top government spokesman, Nobutaka Machimura, told reporters that the Health Ministry had asked 90,000 companies to check if their imported products, including processed foods, had been contaminated with melamine.

He said that if melamine was found, the ministry would ban the product and provide information to relevant industries and provincial governments.

Japan's Marudai Food Co. Ltd withdrew buns made with milk supplied by China's Yili, a Marudai official said on Monday, adding there had been no reports of illness from the buns.

Marudai shares fell about 14 percent on Monday after the recall.

A spokesman for Japan's Nissin said the group had also recalled products with Chinese dairy ingredients, again without reports of any related sickness.

A visiting U.S. consumer safety official told Reuters in an interview in the southern Chinese city of Guangzhou that the incident, which comes after a series of safety scandals last year, underscored the need to eliminate shortcuts in production.

"It illustrates that constant vigilance is needed. It illustrates that you have to make sure that you understand what is coming into your plant, what the raw materials are," said Nancy Nord, acting chairman of the U.S. Consumer Product Safety Commission.

But some South Korean dairy companies have seen sales of their powdered milk surge in China.

"The number of our milk powder cans exported to China on a weekly basis has increased from 3,000 to 4,000. The sudden surge was caused by recent woes over tainted milk powder in China," said an executive at Maeil Dairies Co Ltd. "We see this as a temporary thing and expect the market to stabilise eventually."

[Zin]

Sale, import of China milk products banned in Philippines

MANILA, Philippines – President Gloria Macapagal-Arroyo has ordered an investigation into the controversy surrounding China’s milk products that had been reported to contain a dangerous chemical that has sickened thousands of children in the communist state, Executive Secretary Eduardo Ermita said.

“The instruction of the President is to see to it that this is looked into and investigated and take the necessary steps to prevent the proliferation in our market that might cause injuries to our babies,” Ermita said in an interview Tuesday at the Traders’ Hotel in Manila where he was guest speaker at a forum hosted by the Commission on Human Rights.

Arroyo’s directive came as the Bureau of Food and Drugs (BFAD) ordered on the same day an immediate ban on the sale and import of all milk products from China.

Asked about the BFAD directive, Ermita said this did not surprise him as the agency was “within its authority.”

Arroyo is in New York where she is scheduled to address the United Nations General Assembly.

In its advisory Tuesday, the BFAD said all licensed importers and distributors have been ordered to immediately stop selling until all products have been tested safe for human consumption.

“The Bureau of Food and Drugs has decided and hereby issues this advisory, in the interest of protecting public health and welfare, directing all licensed importers and/or distributors of registered milk products sourced from China to immediately stop from further importing, distributing, selling and offering for sale these products,” according to the advisory signed by Director Leticia Barbara Gutierrez.

The BFAD said that although records did not show registered infant formula having been imported from China, “consumers are advised not to purchase” items that “might have been brought into the country through unauthorized means.”

The Bureau also said a nationwide investigation would be conducted to ensure that the toxic milk was no longer being sold in Philippine markets.

The public is also asked to report any establishment still selling imported milk from China during the ban, the BFAD said.

"What we are telling parents now, especially the mothers, is to avoid buying milk with 'made in China' markings," Gutierrez said.

"There are other brands in the market which they can buy instead," she said.

Last week, the bureau said the Philippines did not import milk from Sanlu Group, the company originally at the heart of a scandal over melamine-tainted milk which has sickened tens of thousands of children in China.

Two liquid Chinese milk products with the Yili and Mengniu brand have been found on sale in the local market.

Samples have been collected and were now being tested to determine whether they are contaminated with melamine, a chemical normally used in plastics but which, added to milk, could make it appear richer in protein.

The Philippines trade department has said unlabelled milk products being sold openly in many Manila markets might have been smuggled in from China.

[Yayavar]

east asians are generally averse to milk products and no significant diary industry there. its news to
me that chinese also use infant formula...was thinking some alternative soya based powder was in use.

not sure if true or not but a page on cannibalism in the web claims some shenzhen hospitals were
selling aborted foetuses as health food - doctors themself keeping the juicier 'morsels'

I concur on the latter...I've posted earlier about the book 'Red Dust'..the author, among bizzarre things he gets to eat, relates how his doctor friend takes home fresh placenta from the abortion clinic for the dumplings for the party for later that day. It is mentioned in passing, casually and I remember having to re-read the sentence.

However, possibly dairy use was picking up with outside influence but then some thought of taking a 'faster' path to riches.

[Singha]

here is what I saw: the pics look PSed, but could be grain of truth in report.
afterall one restaurant was selling chicken cooked in human milk - gettyimages
had a photo of it.
http://www.chinasucks.org/fetal.htm
http://www.heretical.com/cannibal/china.html

placenta eating is probably far more common than foetus as its available
more easily and no legal issues...being medical waste and not a 'person'

snopes claims its all a hoax
http://www.snopes.com/horrors/cannibal/fetus.asp

[Yayavar]

here is what I saw: the pics look PSed, but could be grain of truth in report.
afterall one restaurant was selling chicken cooked in human milk - gettyimages
had a photo of it.
http://www.chinasucks.org/fetal.htm
http://www.heretical.com/cannibal/china.html

placenta eating is probably far more common than foetus as its available
more easily and no legal issues...being medical waste and not a 'person'

snopes claims its all a hoax
http://www.snopes.com/horrors/cannibal/fetus.asp

Yes, I've no difficulty in accepting that foetus eating was a hoax.

It still was unnerving reading the book where he casually mentions stuffing dumplings with abortion clinic placenta...

[Singha]

dunno about the placenta since I have seen it at close qtr but not touched it, but the
umbilical cord is one tough rubbery thing. I cut it myself for my kid (nurse offered it as a
option) ... I would imagine people could make a meal of such stuff...esp if rumours
spread about healing properties, stem cells and what not.

[Nayak]

http://www.thestar.com/printArticle/503168

A crisis rooted in two Chinas TheStar.com - World - A crisis rooted in two Chinas
NG HAN GUAN/AP
A Chinese farmer sells fresh cow milk to residents near Zhengting in China's northern Hebei province.
Milk scare stems from problematic 'normal' China, while the 'abnormal' China is a show-time success
September 21, 2008
Bill Schiller
Asia Bureau

BEIJING–They can win 51 gold medals.

They can stage the best opening ceremonies in the history of the Olympic Games. And this week they'll even catapult astronauts into space to conduct the country's first-ever spacewalk.

So why can't the Chinese government safeguard baby formula for the nation's infants?

"Because there are actually two Chinas," explains Li Datong, a leading commentator and one of China's most incisive social critics.

The first is a kind of show-time China, a totalitarian state that can mobilize the nation's might and money to execute time-limited events for national prestige: the Olympics for example – or this week's spacewalk.

Li calls it, "the abnormal China."

"Then there is the other China," he says, "the one the majority of us live in.

"Call it 'the normal China.' This one is full of problems and is a more complicated matter ..."

"Normal" China was on sad display last week, as the government grappled with an ever-exploding milk crisis. It started with one company's baby formula contaminated with melamine – a chemical used to make plastics and glue – and by week's end had spread to the nation's overall milk supply.

When the government's quality inspection chief Li Changjiang went out of his way to assure the world the milk served to athletes at the Olympics and Paralympics was safe, and even passed through "special scanning procedures," Chinese netizens exploded with rage.

"Give melamine to ourselves, but give safety to our guests," cried one.

"Send the good milk abroad, leave ourselves tragedy," wrote another.

Beijing lawyer Zhou Ze even publicly called for Li Changjiang's resignation.

If Li were to be removed, he wouldn't be the first high-profile official to fall. Last year, former Food and Drug Administration chief Zheng Xiaoyu was executed after taking bribes from pharmaceutical companies to allow them to market untested, deadly medicines.

Christopher Hughes, a professor of international relations at the London School of Economics, says he believes Chinese officials "spared no cost" in ensuring foreigners' food and milk were safe during the Olympics.

"And the conclusion being drawn by many (Chinese) on the Internet, is that their government cares more about protecting foreigners and their own international image than it does about saving the lives of Chinese babies."

Why can't China guarantee safe milk for its babies?

There is a complex of reasons, says Hughes: "systemic corruption, bureaucratic inefficiencies and the lack of a strong civil society of non-governmental organizations and a free press."

The government that we have assumed to be in total control – controlling the media, organized worship, even grey-haired grannies wanting to demonstrate – might not be in as much control as we thought.

From the outset, in what seemed like some bizarre parallel universe, rather than alert Chinese parents as soon as possible to potentially life-saving information about the melamine contamination, baby formula producer Sanlu and various levels of government tried to shut down information.

The initial information blackout was a scandal of its own.

One Chinese journalist, however, dared to challenge it, and that made a difference.

Jiang Guangzhou, writing a blog on the Chinese website Tianya.cn, was frustrated by reports citing babies with kidney stones thought to be caused by a baby formula from "a certain company."

On Sept. 11, after investigating the matter, Jiang named Sanlu – a company with 50 years in the business and 18 per cent of China's baby formula market. Sanlu started the day with outraged denials. By midnight it issued a recall.

And the news started to circulate.

Chinese journalists say the government's Central Propaganda Department, however, issued orders that Chinese media not send their own reporters to further investigate the story; early reports of the scandal – including Jiang Guangzhou's – were deleted from websites; and editors were told to only use reports from the state's tightly controlled Xinhua News Agency.

The government wanted what it always has on what it deems to be a "sensitive" story, one that might trigger upheaval: total control.

Shockingly, on a day last week when the number of babies suffering kidney stones after drinking the tainted formula rocketed from 1,250 to nearly 6,250, state broadcaster CCTV reported on it – but only as the fourth item on the main evening newscast.

Since then the government has stopped releasing figures.

Exactly how many children are now ill as a result of bad baby formula is unknown.

And the embarrassing fact that New Zealand Prime Minister Helen Clark also emerged as a key whistle-blower in the Chinese tragedy has been kept out of China's mainstream media.

Clark had ordered her ambassador in Beijing around Sept. 9 to contact China's central government with news she had learned from Sanlu's minority New Zealand partner that the baby formula was contaminated.

Most Chinese still know nothing of her role.

In the past 48 hours, however, the central government has shifted into action. The Ministry of Health ordered all provinces and major cities to set up 24-hour hot lines for anxious consumers.

And government agencies have been told to monitor markets for supply disruptions and price-gouging in the sales of powdered milk – a staple in rural China.

State-run newspapers and state-controlled TV also ran lists of milk products that have been cleared of violations and deemed to be safe.

Those measures should help the government gain back some of the credibility it lost in its early bungling of the crisis.

But the lack of a broadly vigorous, independent media remains a key part of China's current problems, says Hughes. So is the lack of pressure groups.

An independent media has a key watchdog role to play in revealing shortcomings in any system.

"No matter how many regulations are put in place and organizations created to monitor food safety," says Hughes, "it's impossible to effectively monitor a large and complex modern society without the scrutiny of pressure groups and the media.

"A centralized, authoritarian system is simply not able to do all the work," he says.

[Nayak]

http://communities.canada.com/vancouver ... -word.aspx

China Dailyisms - The Last Word
Alas, this is the last China Dailyisms to come from my computer while in Beijing. I'm heading back to Vancouver after seven weeks, and will miss the daily roundup of funny news the China Daily provided me.
No one should think for a moment that this really represents all that is happening in China, and in fact the tainted milk scandal and the meltdown of the markets both here and abroad have been top news.
The milk scandal is actually so dangerous to China's internal economy that it probably presents one of the most serious threats to the country since the pro-democracy movement in the late 1980s as inflation rose out of control.
That's simply because when people lose confidence in government, they seek change. And so far, with China's economic growth ripping along at 10 per cent or better annually, nobody seems to want to upset the apple cart.
But the milk scare, and the fact that more than 6,200 babies have officially been reported as having kidney stones or urinary tract problems, has set people on edge.
Yesterday, I ran into someone who explained how serious this is: "You don't mess with babies," the woman said. "Everyone is worried about this."
It's not just babies who have been affected. Today we learned that melamine-contaminated milk has been sold by three of the major milk producers, including Yili, the official milk products sponsor for the Olympic and Paralympic Games.
Even Starbucks and KFC have been hit by this; they have withdrawn all the milk they purchased from another tainted milk producer, Mengniu.
When I went to the airport today, I discovered the Starbucks outlet here couldn't make hot drinks made with milk. Instead, they offered to top off my Americano with pressurized whip cream. (Which, I am sure, has more preservatives and other junk in it than any melamine-tainted milk I might have tipped in.)
Now, on to lighter stuff:

• Guizhou Metropolis Daily tells the story of a woman who fainted from choking after cooking with too much pepper.
Now, pepper in China means chilies. I've had the Sichuan Chicken here, and it's more chilies than chicken. You take your taste buds in your hands when you get even the watered-down tourist version. So here's how the newspaper explains this tale.
"The resident surnamed Zhang from Guiyang, Guizhou province, earlier brought some dried pepper powder home. Before adding to her frying pan, she had shut her windows tightly so the smell would not bother neighbors.
"After hearing some loud noise, a family member found Zhang lying on the kitchen floor, where the pungent smell of smoke had filled the room."
Well, the APEC protesters and media who were felled by Sergeant Pepper's blast of capsicum could have told her what happens when you get a snoot full of chile powder.

• This is more tragic than anything else. A farmer set his entire $8,800 savings on fire during a traditional ceremony on the night of the Mid-Autumn Festival, according to www.chinanews.com.cn
"In his village nearby Baoding, Hebei province, Li Xing, who had just withdrawn his money from the bank, was burning joss sticks, candles and offerings in his living room amid a memorial ceremony for his ancestors, a traditional custom he and his fellow villagers have followed for many years.
"But a gust of wind later blew down the candles and set fire to the wooden table holding all his cash inside the drawer, burning his life savings.
"It is probably time for us to change the custom to avoid such damage," his fellow villagers said after they helped him put out the fire.

• And lastly, another example of a hen-pecking woman not understanding the real meaning of true love. And of a dumb cluck not knowing it either.
The Wuhan Evening News reports that "a would-be bride has decided to postpone her wedding after her fiance failed to pass a premarital psychological test.
"Twenty-four year old Lu Ling has dated her boyfriend surnamed Li for over two years and the couple planned to tie the knot over the upcoming National Day holidays in Wuhan, Hubei province.
"But the primary school teacher changed her mind after bringing Li to a local psychiatric consulting company, which tested his emotional and mental condition, attitude towards marriage and family, and loyalty to spouse.
"Lu was told by one of the company's consultants that Li was not the right match for her, which led her to delay the wedding. Lu then took her fiance to see a psychotherapist at Liyuan Hospital, where Dr. Yi Jun introduced scientific guidance designed to enhance marriage communication and conflict resolution, but is by no means a prophecy for marriage."
A prophecy for marriage? A psychiatric consulting company? Li, my friend, RUN, don't walk, for the door. Disconnect the trip wires and save yourself.
On the other hand, your bride-to-be doesn't sound like the brightest bulb in the socket either if it took her two years of dating to discover you might have a few crossed wires.

[ArmenT]

China space mission article hits Web before launch

BEIJING (AP) - A news story describing a successful launch of China's long-awaited space mission and including detailed dialogue between astronauts launched on the Internet Thursday, hours before the rocket had even left the ground.

[Bade]

That is to be expected from a choreographed performance as a show-off, rather than an exploratory take that most cultures would do. If you had a chance to see CCTV excerpts you would have also seen singing patriotic hymns as a prelude to the launch.

[Purush]

http://edition.cnn.com/2008/WORLD/asiap ... bury.milk/
Cadbury recalls Chinese-made candy in chemical scare

LONDON, England (CNN) -- British confectioner Cadbury has recalled all of its Chinese-made candy products over fears that they may be contaminated with the chemical melamine, a company statement said Monday.

"The products that are affected by this withdrawal include a range of Cadbury chocolate products and Choclairs, all produced in our Beijing plant," Cadbury said in a statement.

Some or all of the products were exported to Taiwan, Hong Kong, Australia, the Pacific island of Nauru and Christmas Island in the Indian Ocean, according to the company.

Cadbury said that it is implementing new food safety and quality checks at its Beijing plant and that fresh candies will be manufactured.

The candy maker is the latest company to get caught up in China's tainted-milk scandal. Melamine was first found in powdered infant formula but has since been traced to dozens of other products.

Nearly 53,000 children in China have been sickened by the formula or other products containing melamine. Four babies have died, and five Hong Kong children have suffered melamine-related illnesses. Dozens of countries have banned or recalled Chinese milk products.

Chinese police have arrested 40 people in the tainted-milk scandal, including 22 announced Monday in northern China's Hebei province. Nineteen of those were managers of pastures, breeding farms and milk-purchasing stations, the Xinhua news agency reported, citing a panel investigating the case.

Authorities say they raided 41 locations in Hebei and seized 490 pounds (222 kilograms) of melamine.

Eighteen arrests were announced earlier. They include two brothers who face charges of selling contaminated milk. The brothers could face death if convicted, according to China Daily, a state-run newspaper.

The raw milk used to produce powdered baby formula had been watered down, and the chemical melamine was added to fool quality checks, the newspaper said.

Melamine is commonly used in coatings and laminates, wood adhesives, fabric coatings, ceiling tiles and flame retardants. Some Chinese dairy plants have added it to milk products to make it seem to have a higher protein level.

Melamine is the same industrial contaminant from China that poisoned and killed thousands of U.S. dogs and cats last year.

Health experts say that ingesting melamine can lead to kidney stones, urinary tract ulcers, and eye and skin irritation. It also robs infants of much-needed nutrition.

The following 11 products are included in the recall, according to Hong Kong's Centre for Food Safety:
• Cadbury Dark Chocette, 45 grams.
• Cadbury Dark Chocette, 80 grams.
• Cadbury Eclairs, 180 grams.
• Cadbury Dairy Milk Chocolate Pumpkin, 150 grams.
• Cadbury Dark Chocolate, 40 grams.
• Cadbury Dairy Milk Chocolate Bulk Pack, 5 kilograms.
• Cadbury Dark Chocolate Bulk Pack, 5 kilograms.
• Cadbury Dairy Milk Hazelnut Chocolate Bulk Pack, 5 kilograms.
• Cadbury Dairy Milk Cookies Chocolate Bulk Pack, 5 kilograms.
• Cadbury Hazelnut Praline Chocolate (2008 Chinese New Year), 312 grams.
• Cadbury Dairy Milk Chocolate (2008 Chinese New Year), 300 grams.

[derkonig]

China continues to sell poisoned milk

[Ameet]

Candy with melamine found in 2nd US State. The American / Western media seem to be relentless on this story. Me thinks it is revenge for having to take it up the musharraf during the Olympics coverage by the Chinese government. Chinese officials must be pining for the days when they could have these journalists put in "classrooms" for "retraining".
Hell hath no fury like a journalist scorned.

http://news.yahoo.com/s/ap/20081001/ap_ ... y_melamine

An industrial chemical blamed for sickening thousands of infants in China was found in candy in four Connecticut stores this week, a state official said Wednesday.

Days after contaminated White Rabbit Creamy Candy was found in California, Connecticut Consumer Protection Commissioner Jerry Farrell Jr. said tests found melamine in bags of the candy sold at two New Haven stores, a West Hartford market and an East Haven store.

"We're concerned, obviously, there may have been bags sold of these before we got to them," Farrell said.

Anyone who has the candy should destroy it, Farrell said.

The contamination has been blamed for the deaths of four children and kidney ailments among 54,000 others. More than 13,000 children have been hospitalized and 27 people arrested in connection with the tainting.

Melamine, which is high in nitrogen, is used to make plastics and fertilizers and experts say some amount of the chemical may be transferred from the environment during food processing. But in China's case, suppliers trying to boost output are believed to have diluted their milk, adding melamine because its nitrogen content can fool tests aimed at verifying protein content.

Melamine can cause kidney stones, leading to kidney failure. Infants are particularly vulnerable.

Melamine has been associated with contaminated infant formula and other Chinese products containing milk protein.

On Wednesday, the Chinese government identified 15 more Chinese dairy companies as producing milk products contaminated with melamine, bringing the total to 20 companies. At least 100 batches of milk powder have been found to contain the chemical, according to data on the food safety administration's Web site.

Last week, California health officials announced it discovered traces of melamine in White Rabbit candy it tested. Queensway Foods Company Inc. of California distributed the candy and says it is recalling it.

The U.S. Food and Drug Administration is working with state and local governments to check for and test products that could possibly be contaminated with melamine. Last Friday, the FDA warned consumers not to consume White Rabbit Candy and Mr. Brown coffee products because of possible melamine contamination.

The vanilla-flavored candy has also been pulled from shelves in Hawaii, Asia and Britain, and tests in Singapore and New Zealand last week found White Rabbit sweets tainted with melamine. The Shanghai-based maker of the candy, Guan Sheng Yuan Co., said last week it was halting production of the sticky, taffy-like confection, an iconic brand beloved by generations of Chinese.

The candy is sold in more than 50 countries throughout Asia and the world, including most of the Chinatowns in the United States. Overseas sales have reached $160 million over the past five years.

[Zin]

Candy with melamine found in 2nd US State.
http://news.yahoo.com/s/ap/20081001/ap_ ... y_melamine

An industrial chemical blamed for sickening thousands of infants in China was found in candy in four Connecticut stores this week, a state official said Wednesday.

Days after contaminated White Rabbit Creamy Candy was found in California, Connecticut Consumer Protection Commissioner Jerry Farrell Jr. said tests found melamine in bags of the candy sold at two New Haven stores, a West Hartford market and an East Haven store.

"We're concerned, obviously, there may have been bags sold of these before we got to them," Farrell said.

Anyone who has the candy should destroy it, Farrell said.

The contamination has been blamed for the deaths of four children and kidney ailments among 54,000 others. More than 13,000 children have been hospitalized and 27 people arrested in connection with the tainting.

Melamine, which is high in nitrogen, is used to make plastics and fertilizers and experts say some amount of the chemical may be transferred from the environment during food processing. But in China's case, suppliers trying to boost output are believed to have diluted their milk, adding melamine because its nitrogen content can fool tests aimed at verifying protein content.

Melamine can cause kidney stones, leading to kidney failure. Infants are particularly vulnerable.

Melamine has been associated with contaminated infant formula and other Chinese products containing milk protein.

On Wednesday, the Chinese government identified 15 more Chinese dairy companies as producing milk products contaminated with melamine, bringing the total to 20 companies. At least 100 batches of milk powder have been found to contain the chemical, according to data on the food safety administration's Web site.

Last week, California health officials announced it discovered traces of melamine in White Rabbit candy it tested. Queensway Foods Company Inc. of California distributed the candy and says it is recalling it.

The U.S. Food and Drug Administration is working with state and local governments to check for and test products that could possibly be contaminated with melamine. Last Friday, the FDA warned consumers not to consume White Rabbit Candy and Mr. Brown coffee products because of possible melamine contamination.

The vanilla-flavored candy has also been pulled from shelves in Hawaii, Asia and Britain, and tests in Singapore and New Zealand last week found White Rabbit sweets tainted with melamine. The Shanghai-based maker of the candy, Guan Sheng Yuan Co., said last week it was halting production of the sticky, taffy-like confection, an iconic brand beloved by generations of Chinese.

The candy is sold in more than 50 countries throughout Asia and the world, including most of the Chinatowns in the United States. Overseas sales have reached $160 million over the past five years.

Why not sell it to fartier friend pakistan?
It is better than grass.

[ramana]

Any insights on how the US banking crisis has affected PRC? All this tainted milk stuff is human interest story, but the more important one is the effect of the banking crisis on PRC.

[Paul]

There is an article in USAToday's friday edition on this subject.

Per this article PRC does not want to step in and pick up the tab. It is early days yet. They may change their mind for the right price.

[KarthikSan]

Any insights on how the US banking crisis has affected PRC? All this tainted milk stuff is human interest story, but the more important one is the effect of the banking crisis on PRC.

Not an exact answer to your question but this BW article tells there is some effect.

China's Economy Sputters

I'll be eagerly awaiting the day when all the commie statistics are proved "wong" and a revolution takes place in that country to overthrow the pigs at the helm.

[Avinash R]

South Korea finds melamine in 10 China-made products
Mon, Oct 6 12:15 PM
SEOUL (Reuters) - South Korea's food watchdog said on Monday it had found melamine in 10 Chinese dairy products and ordered them to be taken off shelves.

[Avinash R]

Powerful quake rocks northwest China

[wrdos]

China Exports to U.S. `Small Beer' for Economy: Chart of Day

http://www.bloomberg.com/apps/news?pid= ... lbnqPtjPqI

By Lee J. Miller
Enlarge Image/Details

Oct. 7 (Bloomberg) -- A U.S. recession won't ``drag China down with it,'' because only 7 percent of China's economic output is generated by exports to America, with half of those being consumer goods, according to TD Securities Ltd.

``History shows very little in the way of a correlation between U.S. consumer spending and Chinese gross domestic product,'' said Stephen Koukoulas, head of global foreign exchange and fixed-income strategy at TD Securities in London.

``The start of the U.S. consumer boom in about 1995 coincided with a major slowing in Chinese gross domestic product,'' he said by telephone. During the U.S.'s recession in 2001, GDP in China ``took off'' even while America's personal consumption growth slowed to 2 percent from about 5 percent.

The CHART OF THE DAY shows China's annualized GDP growth and U.S. personal consumption in constant dollars. Though there has been a decline in both U.S. spending and China's economic growth the past year, there is little or no correlation in most periods.

In the extreme, ``catastrophic'' case of a 10 percent drop in demand from the U.S. for consumer goods, China's GDP would be trimmed by about 0.3 percentage points, Koukoulas said, calling the amount ``small beer.''

China's economy is slowing, ``but this is in direct response to the series of policy tightenings through 2007 and early 2008,'' he said. ``Massive urban infrastructure development and gradual easing of interest rates or regulations should enable China to skate through the current episode with GDP bottoming at about 8 percent.''

To contact the reporter on this story: Lee J. Miller in Bangkok at lmiller@bloomberg.net

[satya]

How the US Slowdown Is Slowing Down China

Well, the bill was passed Friday, but markets continued to fall. Hong Kong’s Hang Seng Index lost 2.9% Friday capping the fifth consecutive losing week with a loss of 5.4%. Unless the government announces some extraordinary measure over the weekend to boost stock prices I expect that next week is going to start out badly.

It would be only reasonable if it did. On Friday the US government reported that the US economy had lost 159,000 jobs in September, making it the ninth consecutive month that the US job market has contracted, and suggesting that it is going to be harder and harder for the US to avoid a slowdown in consumption. China has bet its economic future very heavily on sustained US consumption driving its economy forward, and faltering US demand – coupled, as it is almost sure to be, with faltering European demand – cannot help but slow China’s export growth.

This is, in my opinion, one of the two most likely channels by which global financial difficulties will become Chinese financial difficulties (the other is if perceptions of rising risk cause liquidity outflows from the banks). If exports slow, and domestic consumption is unable to accelerate sufficiently to replace it – and in fact I expect domestic private demand to slow – there is a good chance that domestic investment will also slow, after a lag that sees rising inventories. In that case three of the four pistons in China’s economic engine will falter.

This is dangerous for the financial system, of course, because any economic slowdown will finally put the Chinese financial system to its first real test since the massive expansion of the past four years, and I am not sure it will pass the test very easily. The current issue of Caijing actually has an interesting article on the subject, indicating that quite a lot of people are becoming increasingly worried about that particular risk. The article says:

It’s the most pain China’s commercial banks have felt since a reform of the shareholding system began under fairly good economic conditions. Now, as economic growth slows, factors such as changing liquidity positions, fluctuating equity prices, loan quality downgrades and policy adjustments may bring adverse effects. All this change has given commercial banks a full-scale test, especially in terms of incentive mechanisms, risk control maintenance and income growth styles. This testing process has five key aspects.

First, the NPL ratio is likely to bounce. The overall ratio in the banking industry may rise if most economic adjustments occur in the nation’s eastern coastal area. Data show NPL ratios for loans to small- and medium-sized enterprises have been rising in this region.

Second, the loan growth rate is falling. Commercial bank income from intermediary business has expanded steadily in recent years, but interest income is still the main income source. With a guaranteed loan-deposit interest rate differential, banks rely heavily on loan growth to generate profit. In the second half of 2008, the People’s Bank of China loosened its credit control by five percent. But July and August statistics did not show a rebound for loan growth. Even if the quota were further relaxed, loan growth this year would hardly match 2007’s.

Third, the loan-deposit interest rate gap may further shrink. On inflation concerns, a loosening of monetary policy will likely be handled in an asymmetric style. That is, loan rates will be cut while deposit rates remain unchanged, which is what the central bank did September 15.

Fourth, loans to the real estate sector and local governments will become more risky. Personal mortgages and property developer loans currently account for more than 20 percent of the lending at major banks. If house prices continue falling, however, NPLs in real estate may soar.

Fifth, administrative measures may bring side-effects. Loosening credit controls and the “double cut” decision to trim loan interest rates while lowering the required reserve ratio for banks are steps aimed at encouraging banks to lend. If the government sets loan targets for commercial banks through administrative measures, banks will lower their standards for qualified borrowers, which could lead to even more NPLs.

I have often argued that the financial system (including off-balance sheet transactions, unrecorded municipal and provincial activity, and the informal banking system) has been growing much more quickly and in a much more chaotic way than most analysts realize, and its vulnerability to a slowdown may be significantly greater than we think. If three of the four pistons in China’s economic engine are faltering, fiscal expansion is left as the main driver of the economy, and although I have little doubt that we will see fiscal expansion, its impact is likely to be slow, the adjustment forced into the banks difficult, and it will only lead to greater imbalances in the economy.

On that note Standard Chartered’s Stephen Green, who regularly puts out some of the best and most interesting economic analyses of China, has a new piece out today called “The world just changed, China hasn’t.” In it he says:

We hate to be killjoys, but we have some bad news for anyone claiming that China’s transition to a new growth model – one with more consumption, less investment, more domestic demand, and less exports – is already underway. We would love to believe it too, but it just ain’t so. Worse, the US financial crisis and the coming global economic slowdown will show China’s present model to be even less sustainable than was thought before. But they also present Beijing with an opportunity to unleash new growth drivers. The world just changed, and now is the time for Beijing to change too.

Green argues that while the debate over China’s growth model suggests that policy-makers are in principle acknowledging the need for China to shift from an export-led growth model to a domestic-consumption-led one, in practice this hasn’t happened. What is worse, one consequence of the global slowdown is actually likely to be a concerted effort to reinforce the “old” model in a desperate attempt to protect the economy from the impact of a slowdown in exports.

The problem also has to do with the gulf between aspirations and actual policy choices, which are often driven by short-term concerns. To reduce the economy’s dependence upon exports, one needs to reduce exports. It sounds simple, but even with 10% real export growth at present, Beijing has apparently decided to throw incentives back to exporters by topping CNY appreciation and increasing tax rebates to textile producers, and even seems poised to increase them for electronics and machine tool exporters too. To reduce the amount of heavy industry, one needs to raise manufacturers’ cost of electricity, but there is still no effective system to prevent local governments from protecting their local steel, aluminium, and copper plants from higher power tariffs.

To slow down the investment boom, one needs real positive interest rates (banks currently have negative ones), rigorous dividend payments by state firms into the budget (a reform which is still a small-scale experiment), and local officials whose performance is not measured on investment and tax revenues alone. To discourage people from investing in the domestic market, one needs a fairly priced exchange rate, but since 2005 it has been fixed and under-valued, as it still is despite the 7% gain in the effective exchange rate over the past year.

To really encourage innovation, one does not need quotas for patent applications, but a reliable civil law system which allows companies to protect their own valuable IPR. To allow people to get decent healthcare, one must allow private hospitals to participate in the state’s insurance system and regulate them. To increase the scale of the service sector, one needs to tackle the state-protected oligopolies that currently dominate – think telecommunications, parts of financial services, health and education, as well as the entertainment business. As PBoC governor Zhou Xiaochuan liked to say a couple of years ago, and everyone else asked themselves more recently with the success of Kung Fu Panda, where on earth is China’s creative film industry?

Green is fairly pessimistic, it seems to me, about the likelihood that China will take the necessary policy steps to shift its economy towards a more sustainable model. That shouldn’t come as a surprise. It is always difficult to make major necessary adjustments when external conditions are bad, and yet it seems unnecessary to do so when external conditions are good. I have mentioned before in this blog the difficult experience of the US in the early 19th Century when the US economy shifted from being driven primarily by exports to the UK, Europe and the Caribbean to being driven primarily by the development of its own internal market.

This shift did not occur in a gradual way and according to the best thought-out plans of businessmen and government leaders. The change was forced onto the US and happened mainly because beginning in 1797 the Napoleonic wars and an especially vicious spread of smallpox along the coastal cities decimated the US export business, ushering in a very long depression. It took the ensuing financial crisis and depression to reorient the economy towards its domestic market, and not without a great deal of difficulty

The “silver lining” in the current global slowdown for China may very well be that China is also forced kicking and screaming into doing what it should have done much earlier, although I suspect Green is right that in the early stages it will actually try to strengthen the export and investment orientation of its economy as a way of slowing job loss. This would be a mistake in the long run, but may be a natural reaction for a government that greatly fears the short-term political consequences of rising unemployment.

[satya]

Fiscal expansion? Not so fast

As expected, yesterday saw pretty awful performances on the local stock exchanges, with the SSE Composite down 5.2%, followed by a 0.7% loss today. Given what is happening around the world this is pretty standard stuff, but it does put an effective end to the latest attempt by the government to rally markets. Unless we get some more interference from the government, or a big rally abroad, we are going to drift back down to test last month’s lows.

Yesterday in fact there was an attempt to “signal” the market into positive territory. The PBoC announced that they would once again permit companies to issue medium term bonds, and that the proceeds could be used to repurchase shares, but the market wasn’t impressed. Good. I wonder if decapitalizing companies and increasing leverage in the system is the best way to deal with upcoming volatility. I hope companies are fairly sparing in their use of this new privilege.

Tom Holland has an interesting new piece in the South China Morning Post arguing that Beijing has much less room for fiscal expansion than is widely assumed.
His argument has two parts. First, he says, the balance sheet isn’t as clean as we might think. Problems in the banking system can have a very large impact on the government budget.

As the economy slows, the proportion of non-performing loans in the state-controlled banking sector is certain to rise, bumping up the government's contingent liabilities. That's important, because although the official ratio of bad loans at the end of June was just 5.6 per cent of banks' total loan books, the absolute amount was more than 17 times the government's budget surplus for the whole of last year. Clearly it wouldn't take much of an increase to knock a big hole in banks' capital and, ultimately, in the government's own finances.

I think he is right and would actually go a little further. There is already more debt out there than we think. Today’s Bloomberg quotes a more optimistic Morgan Stanley analyst on the subject:

China can “afford to run multiyear fiscal deficits without running into debt sustainability problems,” because it has public debt of only 30 percent of gross domestic product, Wang said.

30% perhaps, if you ignore various contingent but very real liabilities including the obligations of the bankrupt AMCs, which are guaranteed by the MoF, or the possibility of uncollectible debt at the provincial and municipal level, which is guaranteed by the central government. About three years ago a Chinese think tank director estimated it to be about 10% of GDP, and I would guess by now that it has grown. Add all the pieces up and I suspect total debt is probably over 50% of GDP before we include the possibility that an economic slowdown might cause NPLs to rise.



As the first of the two charts below shows, both government revenues and spending have increased sharply in recent years. Beijing did indeed run a surplus in 2007, but only because revenue growth fractionally outstripped the rise in expenditure at the very peak of the cycle. Unfortunately for finance ministry officials, history tells us that when the economic cycle turns down, revenues tend to fall rapidly, while spending proves a lot more "sticky". As a result, fiscal positions quickly deteriorate and budget surpluses soon turn into deficits.

There are ominous signs that this is happening in China. As the second chart shows, government revenue in August was just 10 per cent higher than in the same month in 2007. That compares with a rise of 32 per cent for 2007 as a whole. And there are signals China's fiscal position will get a great deal worse before it gets better. Tax reform earlier this year has already damped corporate tax revenue from domestic companies. Now with profit growth slowing abruptly - the country's biggest listed aluminium producer warned yesterday that third-quarter profits would be down 50 per cent from last year - revenue from corporate taxes is set to fall steeply.

That's not all. The property market is cooling. Home sales in Beijing and Shanghai were down around 80 per cent in September compared with the previous year. As a result, government revenues from property taxes and land sales are also likely to head south.

[Avinash R]

Vietnam finds tainted milk from China
The Associated Press
Published: October 7, 2008
http://www.iht.com/articles/ap/2008/10/ ... d-Milk.php

HANOI, Vietnam: Melamine contamination has been found in 23 milk products imported into Vietnam from China, officials said Tuesday, intensifying consumer worries about tainted milk products.

Five more products tested positive for the industrial chemical, which is usually used in making plastics and fertilizers. So far authorities have found 23 contaminated products after testing 400 samples of milk and milk products, Vietnam's vice minister of health Cao Minh Quang said.

About 300 tons of products, mostly imported from China, have been recalled, said the ministry's chief inspector, Tran Quang Trung.

"Milk and milk products contaminated with melamine have been brought under control," Quang said. "Our top priority is to protect the health of people, especially children."

Many Vietnamese customers have already stopped buying milk and milk products after reports of contaminated milk emerged.

"I have stopped buying milk for my 3-year-old son. Now we have to find other kinds of food to feed him," said Nguyen Mai Huong, 33, a state employee. "There are too many kinds of milk, and we don't know which one is safe."

Vietnamese dairy farmers are suffering as a result of the milk boycott because factories are refusing to buy milk from them.

Nguyen Thi Mai, a dairy farmer in Phu Dong village just outside Hanoi, said she has had to give away or throw away milk since factories stopped buying it six days ago.

"I don't know what is melamine, but it's killing us," she said.

China pledged to improve food safety Monday and authorities detained six more people in the country's contaminated milk scandal. The head of China's quality watchdog said the country was also stepping up checks on its exports.

The Chinese government has been scrambling to show it is tackling the problem of melamine contamination in milk powder and other products, which has been blamed for killing four babies and sickening more than 54,000 children with kidney stones and other illnesses in China.

[wrdos]

Yuan Falls After China Lowers Interest Rates to Support Growth

http://www.bloomberg.com/apps/news?pid= ... kGxfnAX1sM

By Belinda Cao and Kim Kyoungwha

Oct. 9 (Bloomberg) -- The yuan fell against the dollar after China cut interest rates for the second time in three weeks to shield the world's fourth-largest economy from global financial turmoil.

The drop in the yuan, Asia's best performer this year, also reflects dollar gains against other major currencies after the Federal Reserve, European Central Bank and Bank of England lowered borrowing costs yesterday to counter the worst financial crisis since the Great Depression. China has managed the yuan's exchange rate against a basket of currencies, including the euro, yen and pound, since a dollar peg ended in 2005.

``The yuan is under pressure as China has more room to cut rates than the U.S. and Europe,'' said Shi Lei, a Beijing-based analyst at Bank of China Ltd., the country's largest foreign- currency trader. ``I hear foreign companies in China are buying dollars and remitting them out of China.''

The currency traded at 6.8303 a dollar in Shanghai as of 10:05 a.m., from 6.8171 yesterday, according to the China Foreign Exchange Trade System. The yuan is allowed to trade by up to 0.5 percent against the dollar either side of the so- called central parity rate, which was set at 6.8310 today.

The People's Bank of China said it would lower the key one- year lending rate by 27 basis points to 6.93 percent, and the one-year deposit rate by the same amount to 3.87 percent, according to a statement on its Web site. Premier Wen Jiabao said this week that China's financial system is safe and the economy, the world's fourth largest, may be able to maintain rapid growth.

Gross domestic product grew 10.1 percent from a year earlier in the second quarter, more than four times the pace of expansion in the U.S., Japan and Germany, the three largest economies.

To contact the reporters on this story: Kim Kyoungwha in Beijing at kkim19@bloomberg.netBelinda Cao in Beijing at lcao4@bloomberg.net.

[svinayak]

China Cuts Rate to Protect Economy That's Now `Big Enchilada'

Japan is still a very big economic power, but China is the big enchilada on the field,'' said James Lilley, a former U.S. ambassador to Beijing. ``They really, in their own way, are joining the world financial community in dealing with a very severe crisis.''

China's move reflects how deeply the world's fourth-biggest economy has become integrated in the global financial system. While its gross domestic product expanded at 10.1 percent in the second quarter from a year earlier, its exports have been hit by a collapse in demand from the U.S. and Europe.

China's reduction shows increased anxiety about the impact of the credit crisis on its own economy. The CSI 300 Index of stocks fell 3.8 percent yesterday for a 62 percent slump this year.

Premier Wen Jiabao said on Sept. 27 that his nation wants to participate in a global solution.

``All countries should take proactive measures'' to deal with the financial crisis, and prevent it from spreading, he said in a televised speech to a conference.

``We share the same interest and goal in facing this crisis,'' the People's Bank of China said a week later, after the U.S. approved a $700 billion rescue plan for its financial system. ``All countries should take the responsibility to cooperate.''

China's huge holdings of U.S. debt means it must bear a large proportion of the ``burden of sorting things out'' in the U.S., Yu said. ``China is very worried about the safety of its assets.''

[wrdos]

Aussies joke - and hope - that China can save capitalism

http://news.yahoo.com/s/afp/20081009/od ... 1009161249

Thu Oct 9, 12:12 PM ET

SYDNEY (AFP) - A cartoon on the front page of Australia's national newspaper Thursday neatly illustrates an irony admitted by the government: communist China could save capitalism.
ADVERTISEMENT

The illustration shows a Chinese man in a Superman outfit telling exactly this to a bankrupt, cigar-smoking Wall Street tycoon covering his nakedness in a barrel.

"Oh, you're just loving this, aren't you," the fallen high-flyer replies in the cartoon in The Australian.

Amid turmoil in the world financial sector, the International Monetary Fund predicted Wednesday that China's economy would grow at more than 9.0 percent next year while much of the West faces recession.

That's good news for Australia, whose own economic boom has been driven for years by China's insatiable demand for mineral resources such as iron ore for steelmaking and coal to fire up its industries.

"China is now a major influence in the world economy and it's significant that the IMF doesn't downgrade its growth prospects," Finance Minister Lindsay Tanner told national radio Thursday.

"So we are well positioned to continue to sell an awful lot of exports to China and we believe that that's one of the important factors that's protecting Australia, to some extent, from the influences of the US financial crisis," he said.

Tanner's remarks followed those of Prime Minister Kevin Rudd, a Chinese-speaking former diplomat who has made building closer ties with Beijing a central plank of his foreign policy since taking office last year.

"China has a huge impact on the economies of the east Asia region, as well as the global economy," Rudd said Wednesday.

"My understanding is that China will continue to drive strong economic growth for its own national purposes, but that's also good for countries like Australia because China is such a major trading partner of ours."

[wrdos]

Beijing to pave way for land reform

http://www.ft.com/cms/s/5f396358-9550-1 ... t=yes.html

By Jamil Anderlini in Beijing

Published: October 8 2008 16:59 | Last updated: October 8 2008 16:59

The leadership of China’s Communist party will meet on Thursday to discuss whether to allow peasant farmers to trade their land titles in what could be one of the most significant reforms since the country left Maoism behind three decades ago.

Over the next four days the plenary session of the Communist party’s central committee will meet behind closed doors and is expected to take a step that many analysts and policymakers say will lead to the eventual privatisation of rural land.

Details of the reform remain a closely guarded secret but the country’s top leaders are expected to enshrine the rights of rural citizens to transfer or rent their 30-year land leases to other individuals or companies and possibly allow that land to be used for collateral to access loans.

All land in China has been, in effect, owned by the state since the 1949 communist victory and direct private ownership is very unlikely to be introduced soon under the party’s gradualist approach to reform.

“The current land contractual relations will be kept stable and unchanged for a long time, and we will allow farmers to transfer the right of land contract and management by various means, in accordance with their will,” Hu Jintao, China’s president, said in a statement last week.

Government insistence on collective ownership of land in the countryside “hinders growth of agricultural productivity and achievement of scale efficiency”, according to Yiping Huang, a Citigroup economist. “Many economists have urged the government to privatise land ownership and that is likely the direction we are now heading in.”

Proponents of reform argue the parcelling out of small plots of land to households and the rigid laws that forbid private sale or purchase of contracted land mean agriculture remains small-scale and inefficient and ties down the country’s more than 730m rural residents at a time when the government is encouraging rapid urbanisation.

In practice, many of the more than 150m rural residents who have migrated to the cities in search of work have already leased their contracted land on an informal basis to neighbours or even some of China’s pioneering agribusinesses.

But legal protection for these arrangements is lacking, and corruption and abuse by local government officials who oversee the transactions are rife.

Some policymakers in Beijing said they expected the party to renew and extend the current system from 30-year contracts to 70-year contracts but others said this was unlikely to happen immediately.

The government’s expected decision to press ahead with rural land reform is not universally popular, even among the party leadership.

Many government advisers argue the current system has allowed China to avoid the problems of other large developing nations – such as India, Brazil and Indonesia – which struggle with huge populations of landless farmers.

In China, migrant workers who lose their jobs in the cities are usually able to return to a plot of land in their village and the country’s largest cities are noticeably free of slums.

Some officials concede that allowing farmers to transfer contract titles for a fee amounts to de facto privatisation.

“This reform will allow real capitalists into the agricultural sector but we cannot use the words ‘privatisation’ or ‘capitalism’ because they will just provide ammunition to hardliners to fight this reform,” according to one Chinese analyst who asked not to be named.

The leaders are also expected to discuss the global credit crisis.

Copyright The Financial Times Limited 2008

[Avinash R]

Melamine contamination in China still a mystery
10 Oct 2008, 0848 hrs IST,AP
http://timesofindia.indiatimes.com/Worl ... 579060.cms

SHANGHAI: Chen Changhua was enraged when he read melamine, the chemical he sells for a living, was found in baby formula. When he realised his infant son might be drinking it, he nearly fainted.

Chen, 33, a sales manager in Chengdu for China's largest melamine producer, said his initial thought was that it was absurd anyone would want to add to food the white powder used to make plastic, fertiliser and fire retardant foam.

"Could this have been done by a human being?" he remembered thinking. "It didn't actually come into my mind immediately. But when I came to my senses I realised my baby was probably drinking this. I suddenly felt faint."

As the scandal stretches into a second month, melamine contaminated milk has poisoned more than 53,000 children, killing four of them.

The chemical has been found in fresh milk, powders and yogurt from more than 20 dairy producers, including leading national brands -- pushing concerns over the safety of made-in-China products to an all-time high.

Before China's tainted milk crisis emerged a month ago, hardly anyone had heard of melamine. Now after a series of international recalls of products ranging from White Rabbit candies to saltine crackers, the word strikes fear into the hearts of shoppers everywhere.

So great is the concern over melamine that Malaysia, Australia, South Korea and New Zealand were reportedly testing fruit and vegetables this week to see if they were contaminated the white powder. No cases were reported found.

However, the chemical, which has existed for nearly 175 years, is in hundreds of everyday items. It is on the surface of our floors, it holds together the particle board in our furniture, is in the paint coating our household appliances and is even used to make tableware.

Products made with melamine resins do not release the chemical and do not pose health risks, according to producers.

"Melamine itself is not toxic or dangerous. It can be used in almost anything but not in food," said Chen, a sales manager with M&A Chemicals Corp, the international trading arm of Sichuan Chemical Works. Neither company has been linked in any way to the milk scandal.

As the world's factory floor, China is not only the world's largest melamine consumer but also its largest exporter.

And this is not China's first melamine scandal, last year the chemical was found in pet food containing Chinese ingredients that killed cats and dogs in the United States.

It is not legal to add melamine to food anywhere in the world, according to producers.

"Melamine is not for use in food and feed and there is no approval worldwide of any authority to do so," Lena Aschauer, a spokeswoman for Linz, Austria-based Borealis Group, Europe's largest melamine producer, said in an e-mail.

The white powder is cheap and rich in nitrogen. When added to watered down milk it can fool quality tests that gauge milk protein levels.

Chinese state press have reported that more than 40 people in central and northern China have been arrested for producing, selling or adding the chemical to milk to falsify tests.

China's industry ministry last month ordered investigations into the nation's dozens of melamine producers, checking their production capacity and sales records.

But Zhou Jun, a domestic sales manager with Sichuan Chemical Works, said tracing the source of the melamine could be impossible.

He said middle men could have obtained the chemical from small companies and sold it on to dairy farmers.

"We know our clients and what they use the chemical for quite well. None of them is in the food industry," Zhou said.

Chen, the melamine salesman with the one-year-old, said whoever added the chemical to milk deserved to be executed.

He said the powdered milk he fed his baby turned out not to be on the black list, but remained disgusted at the entire scenario.

"Think about it," he said, sighing. "What China is doing is destroying its own national brands."

[Avinash R]

China recalls herbal injections after 3 deaths
9 Oct 2008, 1833 hrs IST,REUTERS
http://timesofindia.indiatimes.com/Worl ... 577471.cms

BEIJING: China has recalled two batches of herbal injections after three people who used them died, the official Xinhua agency said on Thursday, as the country still struggles to clean up a tainted milk scandal.

The drugs, made from Siberian ginseng, caused strong adverse reactions in six people from south-western Yunnan province, Xinhua said. Three of them died in hospital on Monday.

The recall started the next day and an official from Heilongjiang province, where the faulty drug was made, said all the problematic batches had been located.

"We started on Tuesday morning to recall the products that had been sold by the company but not used by hospitals. All the medicine is on the way back," Guo Laibin, an official in charge of economic development, was quoted as saying.

The herbal medicine is used to treat conditions caused by a weak liver and kidneys, and is also thought to be helpful for people suffering from heart disease, nervous exhaustion and menopause-related problems, Xinhua said.

All sales and use of the drug are suspended in Heilongjiang and Yunnan, the only place that has reported problems.

National and local food and drug officials are investigating Wandashan Pharmaceutical, which has been making the drug for more than 30 years, the Xinhua report added.

Nearly 10,700 Chinese infants and children were still in hospital on Wednesday after drinking toxic milk and milk formula that has killed four, the Health Ministry said.

The scandal has dented the "made in China" brand, and led to recalls around the world of goods feared tainted by Chinese dairy products, ranging from candies to biscuits and milk tea.

[Avinash R]

Second lawsuit filed in tainted milk scandal
10 Oct 2008, 1116 hrs IST,AP
http://timesofindia.indiatimes.com/Worl ... 579473.cms

BEIJING: A second lawsuit was filed against a Chinese dairy company at the heart of the tainted milk crisis, an attorney said Friday, as more than 10,000 children remained hospitalized after drinking milk powder laced with an industrial chemical.

Zhang Xiuwen, a migrant worker from southern Guangdong province, filed a legal claim after his 11-month-old son was diagnosed with kidney stones, his lawyer Chen Beiyuan said. The baby had been fed formula produced by Sanlu Group Co. since his birth.

The Guangzhou Intermediate People's Court has yet to accept the lawsuit, which is seeking $132,000 in compensation, Chen said in a telephone interview.

He said he was also planning to file a suit against the Dairy Association in China for failing to supervise its members.

The milk powder, laced with the chemical melamine, has been blamed for causing the deaths of four infants and sickening more than 54,000 others.

Chinese dairy suppliers have been accused of adding melamine, used in plastics, paint and adhesives, to watered-down milk to make the product appear rich in protein and fool quality control tests.

The practice was apparently widespread in the industry, with government investigations showing that 37 Chinese dairy companies, including its most reputable brands, had tainted dairy products.

Eight of the 10,666 children hospitalized are in serious condition after drinking the contaminated powder, which can lead to kidney stones and life-threatening kidney failure, the Health Ministry said this week.

Earlier this month, parents from central Henan province filed the first known lawsuit against Sanlu, seeking $22,000 in compensation for medical, travel and other expenses incurred after their 14-month-old baby developed kidney stones. The infant remains hospitalized.

The court in Zhenping county has also not yet decided whether to accept that case.