PRC Economy and Industry: News and Discussions

[zlin]

Troubled GM says it is profitable in China, will continue to invest

BEIJING, CHINA - Troubled General Motors said Wednesday that it was making money in China and was continuing its investments in the large Asian market.

"We are continuing our investment in China and actually we are very profitable in China," said Henry Wong, a Shanghai-based spokesman for the biggest US auto maker.

He told AFP that various investment projects GM had committed itself to in the past were "all on target and on track."

These included expansion projects for existing plants in the cities of Qingdao and Yantai, both in east China's Shandong province, he said.

"We are not withdrawing or holding back any investment in China," he said. He declined to comment on reports in the local media that it planned to increase its 34% stake in SAIC-GM-Wuling, a joint venture that produces commercial vehicles.

"I will not speculate on where money will come from for future investment of speculative nature. Right now it's too early to talk about that," he said.

On Monday, GM chief executive Rick Wagoner said the US auto maker was in such dire financial straits that it needed to line up a federal aid package before president-elect Barack Obama took office in January.

"This is an issue that needs to be addressed urgently," Wagoner told Automotive News, adding that now is the time to "overshoot, not undershoot" the level of assistance.

GM has said it needs cash reserves of between 11 and 14 billion(S$16.5-21 billion) dollars to cover the cost of its operations.

[zlin]

Novo Nordisk to Invest $400 Million in China

Nov 13, 2008
By: Patricia Van Arnum
ePT--the Electronic Newsletter of Pharmaceutical Technology



Bagsværd, Denmark (Nov. 7)—Novo Nordisk will invest nearly $400 million to build a new insulin plant in Tianjin, China. The plant has been designated Novo Nordisk’s primary production base in Asia-Pacific and will supply China and export markets. The company announced the investment at a ground-breaking ceremony in Tianjin.

“The new plant in Tianjin will become the world’s most modern insulin formulation and filling plant and is yet another example of the increasingly important role China is playing in Novo Nordisk’s global operations,” said Lars Rebien Sørensen, president and chief executive officer of Novo Nordisk, in a company press release.

The new plant is one of the largest investments in Novo Nordisk’s history, and is the company’s largest single investment outside Denmark. The plant will be built on a new 88,000-m2 site next to its existing plant. Novo Nordisk’s first plant in Tianjin was built in 1996 and was expanded in 2002 and 2005.

The new plant is expected to be operational in 2012. Novo Nordisk’s insulin products such as “NovoMix” 20, “NovoRapid,” and “Levemir,” will be formulated and filled at the plant.

[zlin]

CSC and BaoSteel to partner to invest in overseas mining
It is reported that China Steel Corporation, Taiwan’s largest integrated producer of steel products, will partner with mainland China’s BaoSteel Corporation to invest in mines overseas.

CSC said that the partnership is aimed at reducing production cost and developing high grade steel products for sustainable operations by finding coal and iron mines overseas. The CSC has already begun cooperation with Japan based JFE, a steel mill, to invest in coal mining in Australia.

Battered by slumping steel prices internationally, both CSC and BaoSteel believe the iron and steel markets cannot continue as is for the selling prices for a variety of steel products have been quoted unreasonably lower than production costs.

Mr Chen Yuen cheng President of CSC said that over the past five years mainland China has raised rough steel production capacity to the present 500 million tonnes from 270 million tonnes, with the mainland supplying one third of the worlds overall steel products. In addition, the mainland has markedly stepped up its quality and quantity of steel products over the past five years.

Mr Chen said that CSC has substantially raised the production of high grade steel products, and anticipates that both Taiwan and mainland China would be able to elevate production of high grade steel products in five years.

BaoSteel looks to expand the cooperation and exchange with the CSC from technical levels to include energy and resources in the foreseeable future.

[KarthikSan]

Millions of migrant workers formerly employed in Guangdong - the manufacturing hub of China's south - are heading home in the wake of factory shutdowns caused by the global economic slowdown.

Out of Work in China

What struck me most from this video was the workers putting their finger impressions instead of signatures to get their wages. Don't know how much of the 90+ % literacy rate claim of the Chicom Pandas is true

[zlin]

China road, rail ministries to speed up investment
11.11.08, 1:06 AM ET


BEIJING, Nov 11 (Reuters) - China's railway and road ministries have promised to invest quickly and aggressively to help execute the government's 4 trillion yuan ($586 billion) economic stimulus package.

The Ministry of Railways plans to invest 600 billion yuan in 2009, up from 350 billion yuan this year, a figure that has been increased from the original target of 300 billion, according to Yang Zhongming, the head of the ministry's planning department.

'The scale of construction and size of investment will be unprecedented in China's railway history,' Yang told the official People's Daily newspaper.

He said next year's capital spending would eventually boost gross domestic product growth by 1.5 percentage points and create 6 million jobs. It would consume 20 million tonnes of steel and 120 million tons of cement, Yang said.

The ministry would ramp up investment over the rest of 2008, spending 150 billion yuan this quarter, he added.

He Jianzhong, a spokesman at the Ministry of Communications, said the pace of road building was also moving up a gear.

The ministry would complete investments totalling 300 billion yuan this quarter, bringing 2008 spending on highways to 800 billion yuan, He told state television on Tuesday.

In announcing its stimulus package on Sunday, the State Council, China's cabinet, identified a need to invest urgently to help cushion the world's fourth-largest economy from a downturn in global growth.

According to the plan, which runs through 2010, the central government will itself spend an extra 100 billion yuan by the end of 2008 and catalyse an additional 300 billion yuan from local governments, state banks and other sources.

Details of the pump-priming remain vague. It is unclear, for example, how much of the projected road and rail investments are included in the package. But the decision to turn on the spending taps is prompting ministries and local governments to aim high.

State television said 3.0 billion yuan would be spent on small airports.

The Economic Observer newspaper reported on Monday that the Ministry of Communication has plans to invest 5 trillion yuan in roads and ports by 2013.

Beijing will spend 240 billion yuan on subways and other transport infrastructure in the capital by 2012, more than the 170 billion spent in the five years before the Olympics, the China Daily reported on Tuesday.

By 2012, the city expects to have 420 km (260 miles) of subway lines, up from 110 km now, to help ease road congestion, the paper quoted a municipal transport official as saying.

And Guangdong has plans for 222 new investment projects worth a total of 2.37 trillion yuan, the Southern Daily newspaper on Monday quoted Li Miaojuan, head of the province's Development and Reform Commission, as saying.

[Avinash R]

Poisoned chinese food continues to be exported.

US alert over China-made produce
http://www.radioaustralia.net.au/news/s ... tab=latest

November 14, 2008 16:31:42

A nationwide import alert has been issued in the United States for Chinese-made food products.

The Food and Drug Administration says they might be contaminated with the toxic chemical melamine and warns against consuming several products from China including infant formula.

The agency will test a range of products containing protein in addition to dairy and dairy-containing products.

It says it will take appropriate regulatory action if necessary.

The import alert covers a range of products including beverages, candy, baby food and pet foods.

It allows inspectors to seize any products suspected of being contaminated.

[Avinash R]

U.S. bans melamine-tainted Chinese dairy products
http://uk.reuters.com/article/healthNew ... 13?sp=true

Thu Nov 13, 2008 10:48pm GMT

WASHINGTON (Reuters) - The United States issued an import alert for Chinese-made food products on Thursday, calling for foods to be stopped at the border unless importers can certify they are either free of dairy or free of melamine.

Two top U.S. health officials announced they will go to China next week to open food inspection offices and talk about food safety after a series of health scares from Chinese-made food products.

Health and Human Services Secretary Mike Leavitt and Food and Drug Administration Commissioner Dr. Andrew von Eschenbach will also open new FDA offices in Beijing, Guangzhou and Shanghai.

At least four Chinese children have died and tens of thousands were made ill this year from drinking milk powder adulterated with melamine, a chemical used to cheat nutrition tests. Many countries have begun checking Chinese exports of milk and egg products.

Last year, melamine-tainted pet food ingredients from China were blamed for the deaths of dogs and cats in the United States.

The FDA said the ban widens earlier health alerts about Chinese products. The burden will be on the importer to certify food does not contain dairy products, or is melamine-free.

"No adverse health effects have been reported in the United States from contamination with melamine of dairy products or dairy-containing products," the FDA said in a statement

Melamine, used in making plastic chairs among other things, has been added to food to simulate higher protein content and has since been found in dairy products, eggs and animal feed, prompting recalls of Chinese-made products around the world.

Two brands of Chinese toothpaste were banned in the Dominican Republic in May 2007 because of fears that they contain the lethal chemical diethylene glycol, held responsible for mass poisoning deaths in Panama in 2006.

In February, Chinese-made frozen dumplings contaminated with pesticide made 10 people in Japan sick.

Chinese-made heparin, a blood thinner, was blamed for the deaths of 81 U.S. patients.

And Chinese toys were recalled last year because of lead paint and tiny magnets that could be swallowed.

HHS said the Leavitt and von Eschenbach visit would help to address some of these issues. "In addition, during this trip, the Secretary and the Commissioner will open FDA's new offices in three cities in China," HHS said.

The FDA offices are meant to help start inspections of Chinese products before they are exported to the United States.

[Avinash R]

F.D.A. Detains Chinese Imports for Testing
http://www.nytimes.com/2008/11/14/busin ... ldbusiness

November 13, 2008

Candy, snacks, bakery products, pet food and other Chinese products that contain milk will be detained at the border until tests prove that they are not contaminated, the federal government announced Thursday.

The Food and Drug Administration said it issued the alert because of concern about such products being contaminated with the toxic chemical melamine. It was discovered in infant formula in September and has sickened more than 50,000 infants in China and killed at least four.

Since that time, melamine has been found in a wide range of other products, including milk, eggs and fish feed. As a result, companies in the United States have recalled several products generally sold in Asian specialty stores, including a nondairy creamer and Mr. Brown brands of instant coffee and tea. But to date, the contamination here was not thought to be widespread.

“We’re taking this action because it’s the right thing to do for the public health,” said Dr. Steven Solomon, a deputy associate F.D.A. commissioner.

But consumer advocates said the agency’s action was too little and too late.

“Although F.D.A.’s action today is a step in the right direction, it does not do enough to ensure consumer safety, especially since melamine contamination in Chinese products continues to broaden,” said Wenonah Hauter, executive director of Food & Water Watch.

As a result of the latest alert, Chinese products that contain milk or milk powder will automatically be detained at the border until the manufacturer or its customer has the product tested and it is found to be free of contamination, or they show documentation indicating that the product does not contain milk or milk-derived ingredients.

“The burden shifts to the importer,” Dr. Solomon said.

F.D.A. analyses have detected melamine and cyanuric acid, another contaminant, in “a number of products that contain milk or milk-derived ingredients, including candy and beverages,” according to an alert that the agency sent to field personnel. The alert also noted that inspectors in more than 13 other countries had discovered melamine in Chinese products including milk, yogurt, frozen desserts, biscuits, chocolates and cookies.

The agency routinely blocks imports of individual food products, but it is rare for it to block an entire category of one country’s foods. Last year, the F.D.A. blocked five types of farm-raised seafood as well as vegetable protein from China because of repeated instances of contamination.

Unscrupulous food and feed dealers in China add melamine to their products because it artificially inflates protein levels. Because it dissolves poorly, melamine can block the body’s filtering system, potentially leading to kidney failure and death.

Dr. Solomon said the alert was likely to apply mostly to specialty products sold in Asian markets. But Benjamin England, a former lawyer at the agency, described the latest alert as “massive” and said it could affect “a tremendous amount of goods.”

“It’s going to jam the ports up all the way up the supply chain,” said Mr. England, who represents food supply companies.

As a result of the earlier alerts on seafood and vegetable protein, many private laboratories that perform product tests for F.D.A. review already have long waiting lists, Mr. England said. In addition, the agency takes three to four weeks to review submitted tests, Mr. England said, so delays in shipping will be significant.

The import alert could extend to Chinese shrimp, Mr. England said, because much of it is breaded and the breading could contain dairy products. China is also one of the world’s biggest makers of supplements, and some protein powders and shakes are made largely with powdered milk.

The effect of the alert is likely to be long-lasting, Mr. England said, because importers must prove that each and every shipment is free of contamination.

“It’s impossible to get off the alert list,” Mr. England said.

China exports a relatively small but growing amount of dairy products to the United States, about $13 million in 2007, most of which was casein, a dairy ingredient. (By contrast, New Zealand exported $697 million to the United States). But the figures do not include food products and dietary supplements that include milk or milk-derived ingredients, a potentially much larger universe.

“Today’s F.D.A. Import Alert on dairy products from China should have little or no impact on the U.S. dairy industry,” said Peggy Armstrong, a spokeswoman for the International Dairy Foods Association, a trade group. “Dairy imports from China account for less than 1 percent of total dairy products imported to this country annually.”

Representative Rosa DeLauro, Democrat of Connecticut, criticized the agency’s response, saying it should have acted sooner. The import alert should include egg and fish products “given that animal feed has been found to be contaminated with melamine,” she said in a release.

“Clearly, the problems involving melamine in China are significantly deeper than F.D.A. would have us believe,” Ms. DeLauro said.

The import detention order comes at a delicate time. Secretary of Health and Human Services Michael O. Leavitt and Dr. Andrew C. von Eschenbach, commissioner of the F.D.A. will travel next week to China to open agency offices in Beijing, Guangzhou and Shanghai. Months of negotiations were needed for it to gain permission to open offices there.

Michael Herndon, an agency spokesman, said the new import order “shouldn’t affect the opening of F.D.A. offices.”

[anishns]

I guess the use of thumb impressions are not taken as a sign of illiteracy in some countries. In many latin american countries, the banks insist on your index finger impression along with signature when encashing a cheque. The ink is actually colorless/odourless and just leaves an impression on paper. Just an FYI

Millions of migrant workers formerly employed in Guangdong - the manufacturing hub of China's south - are heading home in the wake of factory shutdowns caused by the global economic slowdown.

Out of Work in China

What struck me most from this video was the workers putting their finger impressions instead of signatures to get their wages. Don't know how much of the 90+ % literacy rate claim of the Chicom Pandas is true

[Singha]

their idea of what is literate could be shall we say more 'cost effective and economical'

plus the usual fudging and psyops ofcourse.

[KarthikSan]

[quote="anishns"]I guess the use of thumb impressions are not taken as a sign of illiteracy in some countries. In many latin american countries, the banks insist on your index finger impression along with signature when encashing a cheque. The ink is actually colorless/odourless and just leaves an impression on paper. Just an FYI

Keyword: Along with signature. I rest my case!

[sklow]

Deleted

[Suraj]

Folks, we've been through this many times before, over many years. Some PLA drone comes in and picks fights. Members descend on him. Thread gets derailed. Members, inclunded long standing ones, end up with warnings against their name. We don't want that.

Just use the report post function, please.

Also, constantly posting every piece of bad news from China just acts as a flame for moths. Just how does using this thread as glorified troll bait help us understand their economy ?

[Avinash R]

Also, constantly posting every piece of bad news from China just acts as a flame for moths. Just how does using this thread as glorified troll bait help us understand their economy ?

Just did a google on china and news reports from different news agencies including chinese can be classified as "flame for moths". sorry for posting these but the melamine scandal is too big and may effect us too after toi reported an unusual rise in imports of milk from china and with milk inspectors getting beaten up in china for implementing "tough new safety checks" this melamine saga is not going to end soon.


Deaths uncounted in China's tainted milk scandal
http://www.washingtonpost.com/wp-dyn/co ... 01293.html

By CHARLES HUTZLER
The Associated Press
Saturday, November 15, 2008; 1:49 PM

LITI VILLAGE, China -- Li Xiaokai died of kidney failure on the old wooden bed in the family farmhouse, just before dawn on a drizzly Sept. 10.

Her grandmother wrapped the 9-month-old in a wool blanket. Her father handed the body to village men for burial by a muddy creek. The doctors and family never knew why she got sick. A day later, state media reported that the type of infant formula she drank had been adulterated with an industrial chemical.

Yet the deaths of Xiaokai and at least four other babies are not included in China's official death toll from its worst food safety scare in years. The Health Ministry's count stands at only three deaths.

The stories of these uncounted babies suggest that China's tainted milk scandal has exacted a higher human toll than the government has so far acknowledged. Without an official verdict on the deaths, families worry they will be unable to bring lawsuits and refused compensation.

So far, nobody is suggesting large numbers of deaths are being concealed. But so many months passed before the scandal was exposed that it's likely more babies fell sick or died than official figures reflect.

Beijing's apparent reluctance to admit a higher toll is reinforcing perceptions that the authoritarian government cares more about tamping down criticism than helping families. Lawyers, doctors and reporters have said privately that authorities pressured them to not play up the human cost or efforts to get compensation from the government or Sanlu, the formula maker.

"It's hard to say how the government will handle this matter," said Zhang Xinkui, a Beijing-based lawyer amassing evidence of the contamination for a possible lawsuit. "There may be many children who perhaps died from drinking Sanlu powdered milk or perhaps from a different cause. But there's no system in place to find out."

In the weeks since Xiaokai's death, her father and his older brother have talked to lawyers and beseeched health officials, with no result.

"My heart is in pain," said her father, Li Xiaoquan, a short, taciturn farmer with hooded eyes. From a corner of his farmhouse courtyard in central China's wheat and corn flatlands, he pulls a worn green box that once held apples and is now stuffed with empty pink wrappers of the Sanlu Infant Formula Milk Powder that Xiaokai nursed on. "We think someone, the company, should compensate us."

In coal-mining country 450 miles to the northwest, Tian Xiaowei waits for his wife to leave the newly built house before removing five small photos of a wide-eyed baby boy from a brown plastic document folder. "She breaks down when she sees them," Tian said. The photos are the only mementos left of year-old Tian Jin, who died in August.

"I want these people who poisoned the milk powder to receive the severest punishment under law. I want an explanation and I want consolation for my dead child," said Tian, a broad-shouldered apple farmer and part-time truck driver. "I feel like we could die from regret. If we knew that it was contaminated, we would never have fed him that."

Since September, when the scandal was first reported, Beijing has said that Shijiazhuang Sanlu Group Co., the dairy, knew as early as last year that its products were tainted with melamine and that company and local officials first tried to cover it up.

The government has promised free medical treatment to the 50,000 children sickened, and unspecified compensation to them and families of the dead. The Health Ministry, which is coordinating the government's response, declined to answer questions about the compensation plan and whether it was investigating deaths and illnesses not yet counted by the government.

Melamine, a chemical used as a flame retardant and binding agent to make cooking utensils and industrial coatings, is rich in nitrogen. As such, it makes an attractive low-cost additive to milk and other foods; nitrogen registers as protein on many routine tests.

Though melamine is not believed harmful in tiny amounts, higher concentrations produce kidney stones, which can block the ducts that carry urine from the body, and in serious cases can cause kidney failure.

All eight babies who died were diagnosed with kidney failure, according to the families, medical records or state media accounts. All also supposedly drank Sanlu infant formula or powdered milk.

The fathers of Li Xiaokai and Tian Jin both wave inch-thick sheaves of medical reports and tests from their children's stays in hospitals. Xiaokai, a twin older than her sister Xiaoyan by three minutes, was fed with Sanlu formula while the younger girl nursed on breast milk because their mother did not have enough for both, family members said.

An ultrasound examination of Xiaokai's kidneys at the Zhengzhou Children's Hospital on Aug. 21 found a stone in each kidney that was about the size of a small marble and 2 1/2 times larger than what doctors consider a critical threshold.

Tian Xiaowei, the apple farmer, sent bags of Sanlu infant formula to a government laboratory in September. The Xi'an Product Quality Supervision Institute's report, dated Oct. 8, found melamine levels of 1,748 milligrams per kilogram, more than 800 times the government-set limit.

Then there's Wang Siyu, the daughter of an accountant and proprietor of an Internet cafe in the central city of Shangqiu. Siyu was fed Sanlu products from birth and developed recurring kidney problems in May last year, at age 3, said her mother, Li Songmei.

Twice hospitalized, she was taken off Sanlu milk and started to recover, only to fall ill again when the family began to give her Sanlu products, Li said. Sick for a third time and swollen, she died of kidney failure at the Zhengzhou Children's Hospital on May 2, said Li.

"Ever since she was born, she had been using Sanlu milk. Only when she felt sick and couldn't eat did she stop taking Sanlu," said Li.

Others among the five include an infant in far western Xinjiang province, whose story was posted on the provincial government Web site, and a 6-month-old boy in southeastern Jiangxi province, reported by the New Legal Daily. A reporter who worked on the article and would give only his surname, Liu, said the newspaper was careful not to blame Cai Cong's death on Sanlu formula because "the local government has not yet reached a verdict."

Medical experts say kidney stones in infants are rare. Doctors in several parts of China first noticed a rise in cases in the past two years. Pediatric urologist Feng Dongchuan tried to sound an alarm, posting an item on his blog in July about a spike in cases at his hospital in the central city of Xuzhou and in nearby Nanjing city. Feng pinpointed infant formula as the likely cause.

Feng at first refused requests for interviews, then responded in a terse e-mail: "The chance for infants or small children to come down with kidney stones is very small, and having stones that obstruct both kidneys is even more rare."

Like the others, the Li family grew distressed when Xiaokai started to become fussy in July. With their two-acre farm in Liti Village, her parents never had much money and already had a child, a son. But they wanted a larger family, bucking the one-child family planning limits. Xiaokai was "the more active" of the twins, said her 70-year-old grandmother, Li Xuan.

By August, Xiaokai was running a high fever, unabated by ever higher doses of medicine. Alarmed after she stopped eating and urinating, the family took her to the nearby Runnan county hospital on Aug. 18. The doctors diagnosed kidney failure and rushed her overnight by ambulance to Zhengzhou Children's Hospital, three hours away and the best in Henan province.

"They knew right away," said the father, Li. Xiaokai was run through tests and put on intravenous solutions to try to shrink the kidney stones. Unable to stay with her or afford a hotel, Li and his mother slept on the pavement outside the hospital. After five days, the hospital said it could do no more.

"The doctors wouldn't operate because they said 'she's too small,'" said Li. They suggested taking Xiaokai to Beijing or Shanghai. Hospital officials declined comment and refused to make Xiaokai's doctor available.

The hospital stay in Zhengzhou cost 7,331 yuan, or $1,070 _ about a year's cash income for the family _ and they had already borrowed money to pay for Xiaokai's care.

So Li brought Xiaokai home to die. They took her to a traditional medicine doctor in the village, who gave her an herbal medicine and confirmed the grim prognosis. "The old doctor told us 'the child will die in 10 to 18 days,'" Li said.

Early on Sept. 10 while it was still dark, the grandmother called Li into the side room where she and Xiaokai slept. "Her stomach was puffy" _ a sign of kidney failure _ "and she wasn't breathing," he said.

In many parts of north China, the death of a child is considered a misfortune that can bring bad luck on a family and is best suppressed. Accordingly, Li Haiqin, a cousin, and three other men took Xiaokai to a creek on the far side of the village fields. They put a brick in the blanket with the body and placed it in a shallow hole under a path between rows of poplar trees. Then they walked back in silence beneath a gray dawn and a light rain. No close family members were there and none was told where the grave is.

Xiaokai's family says Beijing had waived regular inspections of Sanlu because its quality controls were said to be excellent. "The government should shoulder its responsibility. This was a national brand, inspection-exempt products," said Xiaokai's uncle, Li Shenyi.

Since the death, Li Shenyi approached the Runnan county Health Bureau to classify Xiaokai's death as caused by tainted formula. "They said the upper levels (of government) were working on it," he said.

The county health bureau referred calls to its supervisors in Zhumadian city, who said ultimately it was up to Beijing.

"Right now, the Health Ministry has no clear explanation on how the victim's families should be compensated," said a Ms. Shang at the Zhumadian Health Bureau's medical affairs office. "Nobody knows."



Timeline: China milk scandal
http://news.bbc.co.uk/2/hi/asia-pacific/7720404.stm
14 November 2008

Dangerously high levels of the industrial chemical melamine have been found in powdered baby milk and other dairy products in China, sparking worldwide safety concerns. The BBC looks at how the saga unfolded.

10 Sept: China reveals that 14 babies fell ill in Gansu province over the previous two months. All drank the same brand of milk powder. Cases start being reported around China.

12 Sept: Sanlu Group admits that its milk powder was contaminated with the toxic chemical melamine.

13 Sept: Production halts at Sanlu Group. Nineteen people are arrested.

15 Sept: Beijing confirms two babies have died. Vice-President of the Sanlu Group apologises to the public.

19 Sept: Melamine is found in ordinary milk from three well-known dairies. One of the firms involved - Mengniu dairy - recalls all its products.

22 Sept: Toll of ill babies rises to 53,000, and the death toll to at least four. The head of China's quality watchdog resigns, becoming the first national leader to step down because of the scandal.

23 Sept: Countries across Asia start to either test Chinese dairy products or pull them from shops.

26 Sept: The EU bans Chinese baby food with milk traces. Sales of the popular sweet White Rabbit are halted after tests detect melamine.

29 Sept: Cadbury recalls products in Asia after tests find traces of melamine. Reports say 22 people have been arrested in Hebei province, suspected of introducing melamine into the supply chain.

15 Oct: Nearly 6,000 infants remain in hospital across China for kidney diseases. Six are in a serious condition.

21 Oct: About 1,500 racoon dogs bred for their fur on a farm in China die of kidney failure after eating feed tainted with melamine.

23 Oct: Six more people are arrested in connection with the tainted milk scandal.

26 Oct: Hong Kong authorities discover eggs produced by Dalian Hanwei Group's eggs contain melamine. They are pulled off the shelves.

30 Oct: Two more egg brands from Shanxi and Hubei provinces are found to contain melamine.

31 Oct: State media admit that melamine is probably being routinely added to Chinese animal feed.

2 Nov: A Chinese official insists the egg scandal is an individual case and clamps down on illegal producers of feed.

14 Nov: The US issues a nationwide "import alert" for Chinese-made food products.



Post China food scare Food importers still unsure
Nov 16, 2008

They are unsure of public reaction to China-made products as ban is lifted in phases
By Debbie Yong and Tessa Wong
http://www.straitstimes.com/Breaking%2B ... 02939.html

ONE quick-to-act food importer did not waste time after a melamine scare led to a blanket ban here on the sale of all China-made milk products.

The Sept 19 ban is being lifted progressively over three weeks, starting last Tuesday, with tests being carried out in phases.

To cut its losses, the firm sent two tonnes of its recalled China- made but melamine-free crackers to South-east Asian countries without such a blanket ban.

'Why would you want to throw away goods that are perfectly okay?' said a spokesman, who did not want his firm to be identified.

Two other China-made products it imported had tested positive for melamine and all six tonnes were destroyed last Friday, he added.

The Agri-Food and Veterinary Authority (AVA) announced last Tuesday that China-made milk products that passed final tests will gradually be allowed back on shelves here. The ban will be lifted in three phases, according to a product's risk of being tainted with melamine based on its milk content level.

Fresh milk imports from China are still banned, while products made in China using milk from other countries will be released for sale only when importers submit proof of the sources of milk ingredients.

News of the lifting of the blanket ban had brought relief to importers who pulled stocks off shelves though theirs were not among the 13 products proven to be tainted.

Said the director of one firm which had 10 untainted biscuit products: 'We're an innocent party but we understand public concern and the need for AVA's actions.'

Her company spent about $3,000 conducting tests to prove its products were clean. Operating costs increased by 30 to 50 per cent for the month of September due to the recalls. The firm's products have a shelf-life of up to two years, so losses will be minimal once sales resume.

But for some, the lifting of the ban came too late.

Those faced with expiring product dates and uncertainty over when the ban would be lifted chose to destroy recalled milk products, even if they were not proven to be tainted. For instance, Meng Chong Foodstuffs, the importer for Monmilk, spent $420,000 incinerating 250 tonnes of the milk.

Some importers secured refunds from manufacturers.

Yamakawa Trading, the importer of contaminated Yili milk, received a full compensation of $300,000 from the China milk producer last Friday.Yamakawa's director Apple Ong is unsure if she will continue importing Yili products.

Other importers are similarly worried about the blow to consumer confidence in China-made milk products. 'What we will do depends on the reaction when banned items begin selling again,' said Mr Alfred Choo, marketing manager of Hup Seng, which used to bring in Mentos yogurt chewy dragees.

Yamakawa's Ms Ong added: 'It might take months or a year for manufacturers to get documentation for future imports to Singapore, and we'll have to then step up marketing and rebranding.'




China milk inspectors beaten over tough checks: state media
http://www.google.com/hostednews/afp/ar ... jS8QVjn-qg

1 day ago

BEIJING (AFP) — Two milk inspectors for a major China dairy firm were severely beaten in an attack blamed on suppliers angry at tough new safety checks following a tainted milk scandal, state media said Friday.

The two men were working in the northern city of Tangshan as inspectors for Mengniu, one of China's largest dairy companies, which has implemented strict new safety inspections, the China Youth Daily reported.

The attack occurred November 5 after inspector Li Zhongping had confronted an outside dairy supplier over a batch of milk he was selling that appeared not to confirm with new standards, it said.

"According to an initial analysis, this incident was triggered by (Li's) decision that this truck's milk was not in compliance," it quoted an unnamed Mengniu official as saying.

Li and another inspector, Zhang Liwei, were set on by a group of about five club-wielding men as they left work later that day.

Li was badly beaten, suffering numerous injuries over his body, including fractured vertebra, and was in a coma for "a long time", the paper said, without specifying Li's current condition.

Neither victim could identify the milk supplier nor the attackers as both inspectors had only recently been rotated to Tangshan.

Police were investigating, the paper said.

China has ordered tightened safety inspections in the dairy industry nationwide after it emerged in September that milk supplies had been tainted with the industrical chemical melamine.

The tainted products have been blamed for killing at least four infants in China and sickening more than 50,000 others in one of the worst of a string of safety scandals involving Chinese-made products in recent years.

Middlemen who collect milk from dairy farms and sell it to large firms have been blamed for adding the melamine to try to make the milk appear to contain more protein than it actually did.

The incident sparked a massive recall of dairy products in China as well as bans, recalls, or safety warnings in several export markets.


US seizes Chinese dairy food
http://www.chinadaily.com.cn/china/2008 ... 207889.htm

Updated: 2008-11-15 10:02

The US Food and Drug Administration (FDA) on Thursday said it will impound all food products with milk ingredients from China if they are found to contain melamine.

An alert notice on the agency's website said Chinese products that contain milk or milk powder will automatically be stopped at the border until the manufacturer or dealer has shown them to be free of contamination.

The announcement came two months after a raft of Chinese dairy products were found to contain melamine. The contamination caused the deaths of four infants and sickened 50,000 others.

Neither the General Administration of Quality Supervision, Inspection and Quarantine nor the Ministry of Commerce had any comment yesterday on the FDA announcement.

The administration, which will open three offices in China next week, had previously banned wheat gluten products from China after pet food was suspected to contain melamine and blamed for several animal deaths.

Also, in September, the European Union banned imports of Chinese dairy products for children and infants. Several other countries, including Singapore and Russia, followed suit.

Chinese exporters said the latest move by the FDA came as no surprise.

Tong Xun, a senior manager with the Zhangjiagang-based Liangfeng Food Co, said on Friday: "Compared to other countries that banned China's dairy products completely, US authorities seem to be more understanding of China's situation."

The firm has not exported any chocolates or cookies - its main products - since September, he said.

"I'm afraid it will take at least six months for us to recover from this difficult time," Tong said.

[Avinash R]

More child deaths linked to China's melamine scandal
Last Updated: Sunday, November 16, 2008 | 10:30 PM ET
The Associated Press
http://www.cbc.ca/world/story/2008/11/1 ... amine.html

The death toll in the melamine scandal may be higher than China's government suggests based on a recent revelation that at least five more children died after drinking infant formula tainted with the industrial chemical.

One of the deaths that may be linked to the scandal occurred in Liti village in Henan province in central China's wheat and corn flatlands.

Farmer Li Xiaoquan and his wife were the parents of baby twin girls, but tragedy struck just before dawn on Sept. 10 when one of the nine-month-old infants died of kidney failure.

The previous month, an ultrasound examination of baby Xiaokai's kidneys at the Zhengzhou Children's Hospital had found a stone in each kidney that was about the size of a small marble and two and a half times larger than what doctors consider a critical threshold.

Li's family and doctors have never been able to confirm how she got sick.

But just a day after Xiaokai died, state media reported that the type of formula milk the infant used to drink had been tainted with melamine.

Xiaokai, older than her twin, Xiaoyan, by three minutes, was fed formula milk while the younger girl nursed on breast milk because their mother did not have enough for both, family members said.

Li said he first learned of the contamination scandal from a relative who watched the news on television.

Although the cause of his daughter's death has not been confirmed, the grieving father puts the blame on the baby formula, which was produced by state-owned Sanlu, the diary at the centre of the contaminated milk scandal.

China's Health Ministry said three infants died from drinking melamine-tainted milk and up to 50,000 were made ill.

Yet the deaths of Xiaokai and at least four other babies reported by the Associated Press have not been included in China's official death toll, suggesting that the tainted milk scandal may have exacted a higher human toll than the government has acknowledged.

Nobody is suggesting large numbers of deaths are being concealed, but so many months passed before the scandal was exposed that it is likely that more babies fell sick or died than official figures reflect.
Families of uncounted victims unable to sue for compensation

The families of the uncounted victims of the scandal fear that the lack of an official verdict on their children's deaths means they will be unable to bring lawsuits and claim compensation.

Even though he is determined to sue for compensation from either the government or Sanlu, Li accepts that the chance of winning is "slim."

But that chance received a small boost last week when lawyers for dozens of families whose children were sickened by tainted milk decided to launch a class-action lawsuit against Sanlu, hoping to pressure Chinese authorities still dithering over compensation.

After weeks of discussions, the 15 lawyers decided to bundle cases involving nearly 100 families into a single lawsuit seeking medical and other expenses, payments for trauma and compensation for the families of those who died.

Since the melamine scandal was first reported in September, Beijing has confirmed that the Shijiazhuang Sanlu Group knew as early as last year that its products were tainted with the chemical and that company and local officials first tried to cover it up.

The government has promised free medical treatment to the children made ill and unspecified compensation to them and families of the dead.

But the Health Ministry, which is co-ordinating the government's response, so far declined to answer questions about the compensation plan and whether it was investigating deaths and illnesses not yet counted by the government.

Back in Liti Village, Li and his wife struggle to come to terms with the loss of their baby daughter — their grief compounded by the fact that they do not know where the infant is buried.

In some parts of China, the death of a child is considered a misfortune that can bring bad luck on a family and is best suppressed.

After her death, Li handed Xiaokai's body to his cousin and three other villagers.

They took her to the far side of the village fields and put her in a shallow grave under a path between rows of poplar trees.

No close family members were there and apart from the four men, no one knows where the baby girl is buried.

[Nayak]

Can we have chinki bositive thread please, mods.....

http://in.reuters.com/article/worldNews ... 3620081119
China seeks to curb unrest amid global finance crisis
Wed Nov
19, 2008 8:21am IST

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BEIJING (Reuters) - China has urged police to ensure social stability amid the global financial crisis after thousands rioted in a northwestern city against a resettlement scheme, beating up police and looting offices.

Communist China, used to decades of solid economic growth, is battling an unknown as falling demand for its products triggers the closure of factories, sparking protests by laid-off workers and raising fears of wider popular unrest.

Thousands of people mobbed a government office in Longnan city, Gansu province, on Monday, torching cars and looting office equipment in a riot sparked by a government scheme to resettle residents, state media reported.

Unrest flared again on Tuesday, Xinhua news agency reported. Officials contacted at the Longnan government offices refused to comment.

Public Security Minister Meng Jianzhu said police "should be fully aware of the challenge brought by the global financial crisis and try their best to maintain social stability", the China Daily quoted him as saying.

"You should let the people know the authority and dignity of the law and meanwhile make them feel the care and warmth from public security authorities," Meng said.

Gansu provincial authorities had despatched an emergency security force to maintain order in Longnan and ordered main streets to close and television stations to let "the masses understand the true situation".

Footage carried on Youtube showed riot police struggling to restore order on city streets while being pelted with stones, while pictures on Chinese web portals showed columns of armed riot police sheltering beneath a phalanx of shields.

The Longnan rioting follows a number of strikes by taxi drivers and labour protests in the country's major export regions, where thousands of factories have closed in recent months.

[Nayak]

http://www.nytimes.com/2008/11/19/world ... l?ref=asia

Thousands Battle Police in China’s Northwest

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By ANDREW JACOBS
Published: November 18, 2008

BEIJING — A local government’s decision to move its administrative headquarters from one city to another has provoked two days of unrest in northwestern China, according to state media and witnesses who said protesters had burned police cars and looted government offices.

A local newspaper and Xinhua, the official news agency, said the skirmishes, in Longnan, a prefectural capital in southern Gansu Province, began on Monday and involved 2,000 people. Witnesses reached by phone, however, said the crowds had swelled to more than 10,000 and many of the protesters were still battling the police on Tuesday night.

Officials said more than 60 people had been injured.

Although the state media did not fully explain the cause of the unrest, residents said many protesters were upset by the government’s decision to transfer its offices to another city. The move, residents said, would lower real estate values and deprive Longnan of desperately needed jobs.

Riots are not uncommon in China, but as the economy slows, the government is acutely sensitive to unrest. Many disturbances are prompted by grievances over illegal land seizures or official malfeasance, but in recent months, as thousands of manufacturers have abandoned the Pearl River Delta, jilted creditors and suppliers and unemployed workers have rampaged through empty warehouses and factories.

Last week, a confrontation involving thousands of people in the southern city of Shenzhen was ignited by the death of a motorcyclist who crashed after being hit by a walkie-talkie, which was tossed from a police checkpoint, witnesses said.

In recent weeks, there have been a number of high-profile taxi strikes across the country. The protests were prompted by low fares, rising costs and what drivers said was the collusion of corrupt officials and greedy fleet owners. The drivers, some of whom smashed cabs of those who refused to join the strike, relented after the government acceded to some of their demands.

In Longnan, residents said the disturbances were provoked by economic distress, rampant corruption and a lack of transparency in the local Communist Party.

Officials have said the decision to move the administrative headquarters from Longnan was based on the city’s location in a seismically unstable area. The earthquake that devastated parts of Sichuan in May, they point out, claimed more than 300 lives in Gansu, which borders Sichuan.

Some residents have said that if the area is so dangerous, Longnan’s 2.6 million people should be moved as well. According to a news release issued by the municipal government, the trouble began Monday morning when more than 30 people whose homes had been demolished gathered at the city’s Communist Party offices to petition for compensation. By the evening, thousands of others had joined them.

Dissatisfied with the pace of discussions, the petitioners began attacking officials and the police with rocks and metal batons, the government news release said. Then they charged the building, breaking windows and burning whatever they could, including motorcycles and bicycles, it said.

“Around 10 p.m., government officials spoke to the petitioners with loudspeakers trying to persuade them to stop but failed,” the release said. “The law enforcement department then decided to handle the problem immediately and controlled the situation.”

Witnesses said armed police officers from the provincial capital used tear gas to subdue the rioters, some of whom were tossing bricks and burning cars. As of Tuesday night, the witnesses said, smoke was still rising from the city center.

“People are furious, and now many farmers from surrounding villages and townships came to support them,” a man who described himself as a retired government worker said in a telephone interview. “Though I used to work in the government, I’m for those people now.”

Huang Yuanxi and Zhang Jing contributed research.

[amol.p]

China seeks to curb unrest amid global crisis

BEIJING (Reuters) - China has told police to ensure stability amid the global financial crisis after thousands of people attacked police and government offices in a northwestern city in unrest triggered by a plan to resettle residents.

After decades of solid economic growth, China is battling an unknown as falling demand for its products triggers factory closures, sparks protests and raises fears of popular unrest.

Rioting involving thousands of people exploded on Monday in Wudu, in Gansu province's poverty-stricken region of Longnan, where 1.8 million people were made homeless by the May 12 Sichuan earthquake.

The unrest, which flared up again on Tuesday, saw rioters invade local government offices, loot equipment and torch police cars.

Public Security Minister Meng Jianzhu said police "should be fully aware of the challenge brought by the global financial crisis and try their best to maintain social stability," according to the China Daily.

State media said the riots were triggered by a scheme to move the government headquarters to a neighboring county, which would force local residents to relocate, and had prompted fears from some residents about future housing and livelihoods.

Youtube footage showed police struggling to restore order while being pelted with stones. Pictures on Chinese web portals showed columns of armed riot police sheltering beneath shields.
An uneasy calm had fallen on Wudu on Wednesday, after authorities ordered an evening curfew and closed major streets and local businesses, according to local residents, who said heavy-handed police had inflamed the riots.

"No one's rioting today, the streets are all closed ... People will be snatched if they go out after 10 p.m. at night, so no-one dares to go out," a hotel worker who declined to leave his name told Reuters by telephone.

"Actually, there were only a few thousand petitioners, but police fired tear gas which made women and children sick. This made the others angry," he said.

"CRIMINAL ELEMENTS"

The Longnan local government on Tuesday said the riots were caused by "criminal elements" who used a complaint from a few dozen petitioners as a pretext to create wider havoc.

Officials contacted at the Longnan city government on Wednesday declined to comment.

Gansu provincial authorities had sent an emergency security force to maintain order and ordered main streets to close and television stations to let "the masses understand the true situation."

Gansu Communist Party chief Lu Hao ordered authorities to strike hard at a "small minority with ulterior motives," but said governments at all levels needed to draw lessons from the incident, Xinhua news agency quoted him as saying.

Lu said the government resettlement plan was not yet fixed, but suggested the unrest stemmed from frustration over post-quake reconstruction.

"The rebuilding task in Longnan and Wudu district which were damaged by the May 12 quake is extremely urgent. The central government has already approved the reconstruction plan ... Seize the opportunity to boost domestic demand and construction in quake-affected regions," Lu said.

China approved a 4 trillion yuan ($586.2 billion) government spending package earlier this month to pump up demand as annual growth in the third quarter slumped to 9 percent, putting the country on track for its first single-digit expansion since 2002.

Faltering economic conditions have raised the specter of growth falling below 8 percent, which the government regards as a benchmark to create enough jobs to sop up excess labor and guarantee social stability.

The Longnan rioting follows a number of strikes by taxi drivers and labor protests in the country's major export regions, where thousands of factories have closed in recent months, prompting fears the global financial crisis could stir wider popular unrest.

IMA Asia, a business intelligence provider, said it had raised its political risk rating for China from low to medium without any mention of the Gansu trouble.

"We are concerned about the potential for unrest within a massive pool of migrant workers who face lay-offs in the construction and export manufacturing sectors," it said.

But while incidents of unrest would increase, they would likely continue to remain localized, said Russell Leigh Moses, a Beijing-based analyst.

"Protesters understand what the rules of the game are," he said. "...You do not see these incidents of unrest reaching across provinces."

[Nayak]

Chinese team interested in hydropower, infrastructure projects in India
By IANS
Wednesday, November 19, 2008
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Kolkata: A business delegation from China's Yunnan province, which is here to promote bilateral trade between the two countries, Wednesday expressed interest in hydro power development and infrastructure projects in India.

"We are here to explore the markets and will be interested in various bilateral trade relations," Li Jiashou, leader of the China Council for the Promotion of International Trade (CCPIT) team, said.

Jiashou was speaking
to reporters here after signing an agreement for mutual cooperation for more economic and trade exchanges with Indian Chamber of Commerce and Industry President Sanjay Budhia.

The CCPIT delegation has shown interest in developing hydro power development in India in build-operate-transfer (BOT) format or in supplying equipments for such projects.

The council is also keen on importing black tea from India and will export green tea to the country.

Yunnan is known for its rich mineral resources, tobacco, tourism and hydro power. It is the top tobacco-producing province in China. It is also the largest export base for fresh cut flowers in Asia.

"Yunnan and India need to do more in building the Kunming-Kolkata Economic Corridor and laying a better foundation for all-round and multi-level cooperation," Budhia said.

India's trade with China is greater than that with Japan and the US. "Bilateral trade between India and China will be $75 billion in 2010 and $225 billion in 2015," an optimistic Budhia said.

http://www.siliconindia.com/shownews/49001

Not a good idea to allow low-grade/quality chicom activities in a core/important sector.

[abhischekcc]

There is another sinister motive that the Chinese have in wanting to build hydro power infra in India.

They will be able to study the geology of the riverine areas, something that will be invaluable if they want to create floods in India by releasing waters of Brahmaputra.

No way should be let these people enter this field in India.

[vsudhir]

China pledges new measures to safeguard dairy industry (IHT)

And since it is universally acknowledged that PRC pledges are the gold standard of probity and principle, sincerity and sinlessness, process and result....

/Drumroll on
let us rejoice keeping in mind the sound sleep 1000s of families who might have lost their babies to melamine, shall sleep tonite....
/Drumroll off

Hic.

[vsudhir]

Panda in China zoo bites student who wanted a hug

[Raj]

Interesting chinese picture
http://d.yimg.com/us.yimg.com/p/rids/20 ... 343454.jpg

[Nayak]

Labour unrest alarms China

http://timesofindia.indiatimes.com/Worl ... 748993.cms

24 Nov 2008, 0133 hrs IST, Saibal Dasgupta, TNN
Print Email Discuss Share Save Comment Text:
BEIJING: Chinese leaders have finally admitted that the country is facing a “grim” situation on the employment front owing to the global economic crisis. An official survey has shown that demand for labour has fallen 5.5% in the third quarter of this year across 84 different cities.

Yin Weimin, head of the ministry of human resources said that labour discontent was a “top concern” of the government as the employment situation has turned “grim”.

The government is clearly worried that unrest among jobless workers would result in protest demonstrations and unruly scenes. The past weeks have seen strikes by taxi drivers in four cities and a workers’ riot at the party headquarters in Gansu province.

China has nearly 150 million migrant workers, who have left their rural homes in central and west China to work in the factories of South China. The extent of unemployment caused in factories cutting back production following loss of export orders is still not known. But the number might prove to be big enough to cause social tension, sources said.

Things can get pretty ugly in mook-land.

[ArmenT]

China's second-richest person Huang Guangyu detained

CHINA'S second-richest person, who made his fortune building up the nation's largest home appliance chain, has reportedly been detained on suspicion of market manipulation.

Hong Kong-listed shares in Huang Guangyu's company, Gome Electrical Appliances Holdings, were also suspended today, according to a statement from the firm to the city's stock exchange.

[Vipul]

Chinese officials say employment situation 'grim'

Chinese officials have said that the global economic crisis has taken a toll on its economy and country is facing the grim prospect of growing unemployment with many company's resorting to massive layoffs which could lead to social unrest.

Yin Weimin, minister of human resources and social security, speaking at a press conference held by the State Council Information Office, said that the global slowdown has impacted the export industry as well as small and medium firms which has seen massive layoff due to shutdowns and now labor unrest of rural migrant workers is the ministry's "top concern".

He said that the employment scenario in the country is 'grim' and demand for workers is declining at a alarming pace with people looking for jobs in cities outnumbering new jobs by two-to-one.

According to Chinese officials, unemployment was worse in the month of October and is likely to go down further in the first quarter of 2009 with China experiencing a stable growth of 4 per cent during the first six months but became worse last month and jobless figures could hit 4.5 per cent by the year-end.

China's economy grew by 9 per cent in the third quarter after an explosive 11.9 percent growth last year but with the present global economic situation, it could further decline, warn economist.

As growth declines, the number of educated Chinese will grow from 5.59 million this year to 6.1 million next year and as 24 million from rural areas seek jobs in cities which can cater to only 12 million jobs.

Yin said that the country is facing unemployment problem due to massive decline in exports and small and medium firms which have labour intensive work like the manufacturing hubs, in Zhejiang and Guangdong provinces have seen massive layoffs due to production cuts and factory closures.

Evidence is mounting that an estimated 130 million rural migrant workers who have taken up jobs in Chinese cities as construction workers, factory workers and street cleaners in the boom time are facing bleak prospects. (See: China feels the pangs as the world slows down)

The impact is felt more in cities like the Dongguan, an exporting hub near Hong Kong, where thousands of workers are either unpaid or have lost jobs as the toy factories battle the downturn overseas. The local government had to intervene and give $3.5 million to the employees of Smart Union which sold toys to Mattel, Disney and Hasbro since 7,000 workers went on strike after losing their jobs due to the closure of the company.

Southern China, which had boomed due to the thriving manufacturing industry churning out electronics, clothing, toys and furniture and exported to the US, saw the worst decline as the global slowdown saw export orders plummeting and rising raw material and labor costs increasing.

According to government and industry estimates, more than 68, 000 small companies nationwide collapsed in the first half of 2008 and about 2.5 million people could lose their jobs in the Pearl River Delta region by the end of the year.

These workers have now gone home which is of grave concern to the Chinese authorities as the massive influx of idle people in the rural areas could create a social problem and many provinces have lost out on tax revenues due to closure of these factories.

Yin, said "The current employment situation is still grim and our judgment is that in the first quarter of next year there will be even greater difficulties."

The Chinese government is hoping to boost employment in the private sector or ask graduates to take up jobs in the rural and underdeveloped regions of China by offering them lucrative incentives.

China is also confident that the $586 billion it has undertaken to pump in the economy early this month in low cost housing industry all over the country as well as in the rural infrastructure area and in the road, railway and airports, will create more jobs both in the urban as well as rural areas.

[Nayak]

Great Engine of China Slows

http://www.nytimes.com/2008/11/26/busin ... steel.html

A giant, $3 billion steel mill opened by the Maanshan Iron and Steel Company to help meet China’s seemingly insatiable appetite for growth has ground to a halt.

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By DAVID BARBOZA
Published: November 25, 2008

MA’ANSHAN, China — The Ma’anshan Iron and Steel Company recently opened a giant $3 billion steel mill on the outskirts of this city. The mill, which covers one and a half square miles and has its own power plant and shipping port, was built to help meet China’s seemingly insatiable appetite for growth.
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But during what should have been a peak production period two weeks ago, it was silent. Rolls of coiled steel sat near the end of a long assembly line as a few helmeted workers lounged about, playing with their mobile phones.

Three blast furnaces and a line that produces H-beams for construction were also temporarily shuttered here at Ma’anshan, about an hour west of Nanjing.

“Demand is definitely shrinking,” Wang Wei, an investor relations manager, said as he toured one of the brand-new plants. “Everyone is cutting back capacity.”

It is happening faster than most anyone predicted: China’s economy, long the world’s fastest-growing major economy, is slowing down. Economists are forecasting that after growing nearly 12 percent last year, China’s economy could slow to 5.5 percent in the fourth quarter of this year — a stunning retreat for a country accustomed to boom times.

Last week, banking regulators began warning about the risk of bad loans accumulating, and labor officials publicly worried about the possibility that mass layoffs would lead to unrest.

“It’s the speed of the deceleration that scares people,” says Liang Hong, a Goldman Sachs economist who said she recently surveyed companies in China.

The American recession is one big reason China’s epic economic growth is imperiled: as Americans buy less, China sells less. And China’s own efforts to keep its economy growing, through a stimulus package worth nearly $600 billion, may not replace a falloff in American demand as the United States’ recession deepens.

The global downturn is already reaching deep into the heart of the country’s once-rapid industrial transformation — its steel, cement and construction companies — stalling dozens of multibillion-dollar investment projects. Plunging housing prices at home combined with a virtual global investment freeze have led to steel orders softening, steel prices plummeting, and inventories and losses piling up.

Coast to interior, China’s aggressive building boom is no longer so aggressive.

In Hebei Province, in north China, Capital Steel, one of China’s biggest steel makers, is building a $10 billion steel mill complex on an island, even as its profits evaporate.

In the eastern Chinese city of Hangzhou, Vanke — a huge real estate company — is spending more than $1 billion to build what amounts to a new city, with its own schools, a hospital and thousands of town houses at a time when the company is reporting a huge drop in sales.

And in Macao, new construction is grinding to a halt on one of the world’s biggest real estate developments — a massive casino and hotel complex whose cost has been estimated at $20 billion — because of huge debt obligations. About 10,000 people could lose their jobs.

Nationally, Chinese officials say their country faces a grim situation. New economic data released over the last weeks is beginning to reveal the extent of the slowdown in China.

This year, housing sales in big cities have plunged by as much as 40 percent from a year ago. Government revenue was down in October. And last month, industrial production registered its weakest growth in seven years.

“Growth is deteriorating fast,” says Andrew Driscoll, a China resource analyst at CLSA, the investment bank. “We’re not talking about China’s growth going backwards. But when supply is geared toward 10 percent growth, and it comes down to 5 percent, you have excess supply.”

To cope, Beijing recently approved the biggest economic stimulus effort in China’s history: a $586 billion package over two years, aimed at shoring up the very industries that seem to be faltering — steel, cement and companies engaged in building.

The government also approved emergency measures including tax relief, export rebates and housing policies. One Beijing official said the government could spend more than $586 billion.

The government is promising fast approvals for local governments to build subsidized housing, railways and airports, and even nuclear power plants. Fixed-asset investment — or spending on things like housing and manufacturing plants — accounts for about 45 percent of the nation’s economy, and that is the focus of the effort, analysts say.

Just months ago, Chinese leaders were warning that growth was too strong and risked stoking inflation. Now, Chinese officials say they want to do their part to keep the global economy from slipping into recession.

In America, consumers have closed their wallets. Parts of Europe are already in recession. And in Asia, Japan and Hong Kong now say that they too have slid into recession.

The ripple effects are being felt everywhere in China. Hard-hit airlines and automakers have appealed for government aid. Local governments that raised millions of dollars auctioning off land rights are confronting lower bids and depressed sales, which essentially means lower tax revenue.

Lead smelters, which produce material for the battery industry, and aluminum producers are shutting down production lines. And cement makers — one of the pillar industries in a nation perpetually under construction — are depressed.

“This is a bleak winter for the cement industry,” says Yang Dongsen, an analyst at Merchant Securities in Shenzhen. “There’s a nose dive in real estate construction. In south China and east China, two places where real estate boomed, many projects have suddenly stalled.”

Last month, electricity production in China dropped for the first time since early 2005, a sign that big industry, the largest consumer of power, is in retreat.

“Global commodity prices collapsed. People got scared, and many activities just stopped,” said Liang Hong, the Goldman Sachs economist. “Many turned off the lights.”

Steel producers are among the worst off. Slowing demand has forced many to idle plants. Australian and Brazilian iron ore suppliers — which reaped huge profits from China’s building boom — say demand from China has already slowed sharply.

Here at Ma’anshan Iron and Steel, executives are pondering what happened just after the middle of the year, after they began operating a huge new mill that they say is much more efficient than older mills. Ma’anshan’s average steel price peaked at $768 a ton around June, then began falling sharply. In November, prices dipped as low as $490 a ton.

Steel executives say weak consumer spending reduced demand for things like cars and refrigerators, which contain finished steel. But most say falling property prices had an even bigger impact.

Ma’anshan recently reduced its production by about 15 percent. But company executives say they are hopeful about the government rescue effort, one that will put China back to building.

“I’m quite optimistic about the stimulus package,” Hu Shunliang, board secretary at Ma’anshan Iron and Steel, said. “It’s not just theater. It will stimulate other industries and help bring us more investment.”

Chen Yang contributed research from Shanghai.

[Paul]

China, slowing to 19-year low, watches India closelyAds By Google



Reshma Patil, China Correspondent, Hindustan Times
Email Author
Beijing, November 25, 2008

Both India and China may grow at almost the same pace next year, when the global slowdown triggered in the US and Europe will hit home harder.

World Bank forecasts 7.5% growth in 2009; last year was 11.9%On Tuesday, the World Bank in Beijing forecast that China would grow at a 7.5 per cent rate next year --- China's lowest since 1990 --- and a drop from 9.4 per cent growth projected for this year. There is no Bank figure for India, but Prime Minister Manmohan Singh has predicted a 7 to 7.5 per cent growth.

China is the world's fastest-growing economy and had expanded in double digits for the last five years, touching 11.9 per cent last year.

"More than half of our GDP growth forecast of around 7.5 percent for 2009 is coming from government-influenced spending,'' said the report's main author Louis Kuijs in Beijing.

"We're encouraging China to look to a new growth model that depends more on domestic demand and domestic needs," said a statement from David Dollar, the Bank's country director for China.

A day earlier, Prime Minister Manmohan Singh's economic crisis-control got a thumbs-up from the mouthpiece of the ruling Communist Party of China, the People's Daily. On Monday, the paper carried an online opinion piece that said India is doing its best to cope with the crisis.

"With regard to global economic recovery, India will play a decisive role on whether emerging economies can effectively tackle the financial turmoil," said the piece titled India urged to play a new role.

"The endeavour India is making reflects the determination of emerging economies to cope with the crisis," it said. "India is doing its best to tackle the crisis and efficiently push forward the reform of the financial system, which will undoubtedly give the emerging economy an important role in global economic development".

The article described the downturn in India at length, emphasising that the IT industry 'India is always so proud of' made little profit because 60 per cent of the clients were in Europe and the US.

Singh's counterpart Premier Wen Jiabao, who recently toured China's slumping factories and trade zones, has described the impact of the economic crisis as 'worse than expected.'

[Paul]

AP
Chinese leader says China losing competitive edge
Sunday November 30, 5:58 am ET
Chinese president says China losing competitive edge as financial turmoil dampens demand


BEIJING (AP) -- Chinese President Hu Jintao warned that China has started to lose its competitive edge in trade amid the global financial crisis, as he told Communist Party leaders the challenge posed a test to the government's ability to rule, state media reported.
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China's economic growth is expected to fall to about 9 percent this year, down from last year's 11.9 percent. That would be the fastest of any major economy, but Chinese leaders worry about possible unrest as unemployment rises, especially in export industries where factories are shutting down as global demand plummets.

"External demand has obviously weakened and China's traditional competitive advantage is being gradually weakened," Hu said, according to the Communist Party's official People's Daily newspaper.

Hu told members of the Communist Party's powerful Political Bureau that the financial meltdown posed critical challenges to a government that has staked its legitimacy in part on competent management of a rapidly developing society.

"Whether the pressures can be turned into a driving force and the challenges turned to opportunities ... is a test of our ability to control a complex situation, and also a test of our party's governing ability," Hu said.

Hu urged party leaders to step up efforts to reform its economic growth model to achieve development that is sustainable.

He said greater effort should be made to raise living standards, use resources more efficiently and develop rural and urban areas, the report said.

The remarks come after China's top economic planner Zhang Ping, chairman of the Cabinet's National Development and Reform Commission, warned Thursday that the impact of the global financial crisis is worsening and that rising job losses could fuel instability.

But a government researcher said that despite the impact of the global slowdown, the country's economy is expected to grow by 10 percent next year as domestic consumption grows with rising personal incomes.

"Personal income continues to increase as millions of migrant workers flow into the city to get their lives improved. Enlarging demand for houses and autos will form huge and lasting consuming power," said Zhang Liqun, a researcher at a think tank attached to the Cabinet's planning agency.

On Wednesday, Beijing announced its biggest interest rate cut in 11 years to increase consumer and company spending. A multibillion-dollar stimulus package launched on Nov. 9 aims to boost growth through heavy new spending on construction, tax cuts and aid to the poor and farmers.

Beijing plans to spend 18 trillion yuan ($2.6 trillion) in 2009 alone to help blunt the impact of the global financial crisis, using the immense capital accumulated over years of double-digit economic growth and booming exports to build railways, roads, airports and electricity networks.

[Katare]

770,000 sit exams for 13K government jobs

[Katare]

This is very significant and sharp drop in leading indicator in worlds fastest growing economy.

China's PMI falls below 40% in November

A reading above 50 percent suggests expansion, while one below 50 percent rings alarm for economic slowdown

[Ameet]

China cancels EU summit over Dalai Lama visit

http://www.guardian.co.uk/world/2008/no ... as-sarkozy


China stunned European leaders yesterday by calling off a major summit because the Dalai Lama would be visiting Europe at the same time.

The office of President Nicolas Sarkozy of France, the EU president, announced yesterday that the talks in Lyon next Monday had been cancelled because the Beijing leadership was furious that Sarkozy planned to meet the Tibetan leader next week in Poland. The snub followed weeks of diplomatic jousting over the visit by the Dalai Lama, who plans to go to the European parliament and is to meet Sarkozy at a meeting of Nobel peace prizewinners in Gdansk next week.

"Nicolas Sarkozy is free to decide his agenda," said a French presidential spokesman, Luc Chatel. "He will meet the Nobel prizewinners, so he will meet the Dalai Lama in that framework."

An expert on Chinese policy described the cancellation of the talks as an "aggressive move that would play into the sorry spectacle of European disunity" over policy towards China. François Godement, from Sciences Po Paris at the European Council on Foreign Relations, said: "China's decision to cancel its scheduled summit meeting with the EU is a spectacular gesture and an unprecedented step."

Beijing warned Sarkozy a fortnight ago that the summit was in jeopardy. A senior Chinese official went to Paris last week to try to dissuade Sarkozy from the meeting. On Tuesday the Chinese foreign ministry issued a veiled warning to the French.

"The Tibet issue is an internal affair," a Chinese government spokesman said. "China and France should overcome all unnecessary disturbances and safeguard the interests of bilateral relations ... we oppose any foreign leaders having any contact with the Dalai."

The talks were expected to focus on disputes linked to China's huge trade surplus with the EU and on coordinating international action to counter the global economic crisis. Senior central bankers and finance officials on both sides were to discuss global finances.

It had been clear for several days that the summit was in trouble, but it was only yesterday morning that the Chinese told the French that the prime minister, Wen Jiabao, would not be travelling to Lyon.

The snub was a setback to Sarkozy, who is relishing his role in the EU presidency to parade as a world leader and crisis manager. The cancellation means that Europe and China will fail to hold an annual summit for the first time in 11 years.

The EU said it had "ambitious aims" for the summit and regretted the cancellation. "The ball's in China's court," said a spokeswoman, "but the door remains open."

Relations between China and Europe have been fraught since Sarkozy took over the EU presidency in July, his term coinciding with the Beijing Olympics and the aftermath of the Chinese crackdown on unrest in Tibet.

As EU president, Sarkozy said he was contemplating boycotting the Olympics, although he attended in the end. Last April pro-Tibetan demonstrators disrupted the Olympic torch's passage through Paris on route to Beijing, and in June the Chinese leadership spurned EU demands that it negotiate with the Dalai Lama.

Tibet's spiritual leader visited France in August and had a meeting with Carla Bruni, Sarkozy's wife, as well as Bernard Kouchner, the foreign minister.

Chinese anger at the perceived affronts from France and Europe was reinforced further last month when the European parliament awarded its main human rights prize to the Chinese dissident Hu Jia.

[satya]

China’s exports contracted in November

China’s exports shrank last month and industrial-production growth cooled, Fan Gang, an adviser to the People’s Bank of China, said today. “Things are not so good,” Fan said at a forum in Beijing. “November figures will come out soon, and industrial growth will be something around 5 percent and export growth will be negative.”

A collapse from October’s 19.2 percent export growth would add pressure on policy makers meeting in Beijing this week to do more to sustain the expansion of the world’s fourth-biggest economy. The government has already unveiled a 4 trillion yuan ($582 billion) stimulus package and cut interest rates by the most in 11 years as a global recession cuts demand for the nation’s toys, textiles and electronics.

A contraction in exports year on year will suggest that the impact of the global slowdown on China is happening far more quickly than anyone expected.

My simple global balance of payments model should suggest, however, that we should have expected a rapid slowdown. After all if Chinese overproduction is the flip side of US overconsumption, and each requires the other, then the astonishing rate at which consumption is contracting in the US should have, as its counterpart, an equally rapid contraction of production or, failing that, a rapid buildup of inventory. Either of these will come as a result of declining sales. There is no point trying to predict Chinese economic numbers independently from US economic numbers. The world imbalance has been built around US overconsumption and Chinese overproduction, and one cannot change with a corresponding change in the other.

Export has since long been a major driving force for the Chinese economy. Economists believed the stable development of smaller enterprises, particularly the exporters, which provided jobs for 75 percent of urban employees and rural migrant workers, was related to the stability of the enormous Chinese labor market.

On a separate note, one of the blogs I read regularly to impress people with my insider knowledge of Chinese policy-making (I just plagiarize him) is Victor Shih’s blog on Elite Chinese Politics and Political Economy. Here is a recent entry, which suggest to me that my long-running contention – that the government’s fiscal position is going to prove a lot less solid than everyone has always assumed – is not implausible:

More details have emerged about the 4 trillion stimulus package that China has rolled out. The main questions remain: who will get the money? How will it be spent? In a revealing article published the 21st Century Economic Herald (my favorite), reporter Wu Hongying gives a detailed account of how Chongqing (a provincial unit controlled by princeling Bo Xilai) plans to spend the money. I believe the situation faced by Chongqing is similar to that in many Chinese cities and provinces.

Basically, Chongqing SOEs, which focus on land holding, real estate, electricity, and financial services, are in deep trouble. Land prices in Chongqing have fallen by over 70%. The electricity group is in the red by about 250 million RMB. The debt asset ratio for the 8 major SOE groups in Chongqing has risen to 72%. No details are given about the financial holding companies, but considering that their main role is to inject capital in the other SOEs, they can’t be doing too well either. Things are not pretty, and the well off SOEs have to inject capital in the problematic ones.

So, the central government rolls out a 4 trillion stimulus package. As I pointed out in the last note, only a part of the money will be from the central government, but at this point, local governments are desperate to get this part. Thus, a massive fraud whose working and purpose are perfectly clear to all the players involved is perpetrated. Basically, local governments propose projects which may or may not be implemented with the sole purpose of receiving central funding and “supplementary” (peitao) bank loans from the state banks in order to stave off the bankruptcy of local SOE groups, which are heavily indebted at this point.

The local “self raised” part of the capital can be a piece of idle land or a redundant factory. The excuses are many, but both the local and the central governments know that the center and the banking system must give a large chunk of money in order to prevent (delay?) massive bankruptcies of local and a few central SOEs. As for Chongqing, it has applied for 20 billion in investment before the end of 2008 (out of the 100 billion announced by the NDRC for China as a whole). Almost all of the money will go toward large SOEs in Chongqing. Due to Bo’s political connections, Chongqing will probably get at least 5-10 billion, thus staying solvent for some time

[ramana]

Folks, Once in a while I would request the knowledgable China watchers to summarize what we see. Just posting links is the first step of gathering the data. What does it mean is more useful? Dont forget most of us are tehcies and a few MBAs with Tech background.


Thanks, ramana

[vina]

Ha Ha Ramana garu.. You unfortunately dont read what I write. I had predicted long ago , (just as the mortgage meltdown /implosion, first stage implosion lens going off compressing the plutionium core) that the end stage of the multi giga ton boom will happen when effect reaches Chi Panda and the mother of all booms is set off.

That is what is happening now. The x rays and high energy particiles from the earlier stages in US and Europe are compressing the duetrium and lithium tritide compressible material in Chipanda (the bank loans and the black holes of investments they have sunk into power, metals and other industires building massive overcapacity).. The exports getting wiped out and all those 75% workforce in jeopardy is just the tamper burning off. The high trigger that will set off the ChiPanda boom is the lack of internal demand that the 75% scared Chinese Abdul Lungis wil set off when they start saving even more than their mandatory 50%!.. Then Chipanda is really screwed. Falling demand internally and next to nothing outside. So what will Panda do. You cant borrow and spend to feed half the world's capacity in metals and other industries they built up, nor burn half the world's coal.. half of nearly everything..More energy added per year than UK!.. Sorry.. all that is now going to go silent /written off.. Even ChiPanda level command and control cant deal with that kind of fall out.

[Abhijeet]

Good article in the NY Times by an ex-Microsoft CTO. Has a great photo of the Shanghai World Financial Center building at night, showing the low occupancy rate.

Is Shanghai Turning Pro or Just Building High? A Guest Post

http://freakonomics.blogs.nytimes.com/2 ... uest-post/

The frenetic commercial exuberance of Shanghai is palpable to even a casual observer. In the case of Vegas, it is clear why the architects are driven to excess; they’re playing to the same types of human weaknesses that underlie its main industry. The dubious thrill of gambling with the odds against you is itself an act of irrationality, overcompensating for some deep-felt need or emptiness. The architecture of gambling naturally follows suit, shamelessly pandering to the same instincts: the swagger and bravado of a high roller translated into glass and steel.

It is less clear why Shanghai feels the need to be quite so architecturally assertive. I could spin a theory about the inevitable anxiousness of the nouveau riche, or the unease with the prosaic nature of cheap labor and low-cost manufacturing that is the source of its wealth. It could be the foreign influence or the feeling of modernity to escape the past. Maybe it’s some of all of these, but I am not convinced.

The comments are entertaining as well.

[vsudhir]

Global trade is shrinking fast led by China's trade numbers

[ramana]

Ha Ha Ramana garu.. You unfortunately dont read what I write. I had predicted long ago , (just as the mortgage meltdown /implosion, first stage implosion lens going off compressing the plutionium core) that the end stage of the multi giga ton boom will happen when effect reaches Chi Panda and the mother of all booms is set off.

That is what is happening now. The x rays and high energy particiles from the earlier stages in US and Europe are compressing the duetrium and lithium tritide compressible material in Chipanda (the bank loans and the black holes of investments they have sunk into power, metals and other industires building massive overcapacity).. The exports getting wiped out and all those 75% workforce in jeopardy is just the tamper burning off. The high trigger that will set off the ChiPanda boom is the lack of internal demand that the 75% scared Chinese Abdul Lungis wil set off when they start saving even more than their mandatory 50%!.. Then Chipanda is really screwed. Falling demand internally and next to nothing outside. So what will Panda do. You cant borrow and spend to feed half the world's capacity in metals and other industries they built up, nor burn half the world's coal.. half of nearly everything..More energy added per year than UK!.. Sorry.. all that is now going to go silent /written off.. Even ChiPanda level command and control cant deal with that kind of fall out.

vina, I read you and when I wanted some one to meet you, you decamp!

So PRC wont be guilty of all those green house emissions soon, Al Gore will be happy. So what does this mean politically as economics and politics are two faces of the pyramid, history being the other face. In the 90s they used to talk of 100M roving unemployed travelling between the cities. Right after WWI, there used to be travelling bandits with colorful names depicted in Good Earth by Pearl S Buck.

[wrdos]

Nice! It seems to me that there are so many great economists hiden here.
But, as I know, any prediction without a time scale is just, hmm......

So Ok, no matter Mr. vina or Mr. Ramana, besides your years long calling on a collapsing China, would you please give me a more scientific prediction of a simple but interesting issue.

When will India surpass China by, to say, nominal GDP in US$ term?

Hmmm, maybe it will turn out to be a too long journey for all of us to witness. OK, let's focus on a short term issue.

After this crisis, to say 1 or 2 years from now, the gap between the Chinese and Indian GDP data, no matter the nominal or ppp ones, will shrink or not? And your answer is definitely a "Yes"?

Then, let's wait and see.

[niran]

Mistah wrdos, it is not only Ramana, Vina, economist here at big mango are predicting
the same. The saying is that this time bubble could be "L" shaped instead of "V"
like the last time, hope you cached enough cash somewhere, you are goinh to need it.