|To: Sam Citron who wrote (227)||3/4/2009 11:52:12 AM|
|From: Sam Citron|
|Economy to Dominate Annual Chinese Gathering [NYT]|
By MICHAEL WINES
BEIJING — China’s national Legislature begins its tightly scripted annual meeting on Thursday with an agenda dominated by the ruling Communist Party’s two overriding concerns: riding out the global economic crisis and keeping citizens’ unhappiness with their lot from boiling over into public unrest.
In the nine-day session of the National People’s Congress, about the only suspense involves whether the government will propose to add still more stimulus spending to the $584 billion that China’s leaders already have pledged to help the slumping economy. On Wednesday, Asian and European stocks rose in part on hopes that it would.
Prime Minister Wen Jiabao is to speak early on Thursday to the 3,000-odd delegates, and is expected by many analysts to set a target for 8 percent growth of China’s gross domestic product in 2009, the same as in previous years. The government has long said that that rate is needed to hold down unemployment and the potential for social unrest. The economy logged a 9 percent rate last year, even after a sharp slowdown in the last quarter.
But a number of experts believe that a 2009 growth rate of 6.5 percent or 7 percent, meager by recent Chinese standards, is increasingly likely. Some financial analysts predicted this week that the government will propose spending vast new amounts to head off a sharper decline, although the consensus view is that new spending, if any, will be more modest.
“The government could enlarge the plan a bit,” Shen Minggao, the chief economist for Caijing, a Chinese business magazine, said in an interview. But he said that fiscal conservatives would be wary of increasing a 2009 budget deficit that already appeared to be headed for a record.
The projected deficit is widely expected to reach 950 billion yuan, or nearly $140 billion, about 3 percent of China’s GDP. The previous record deficit, about 2.6 percent of a far smaller economy, was recorded in 2002.
One certainty is that whatever is proposed will be adopted. The delegates, the handpicked cream of the Communist Party establishment, have little taste for revolt. On Thursday, they will gather in the wedding-cake Great Hall of the People, on Tiananmen Square, for Mr. Wen’s two-and-a-half hour overview of China’s domestic and foreign-policy goals. Much of the rest of the session will be spent giving those goals ritual approval.
The lockstep is likely to be especially tight this year, because the government wants to present a united and confident front to a public battered by rising unemployment and falling incomes. The government estimated a month ago that 20 million of the nation’s 130 million migrant workers — the cheap-labor force that powered much of China’s construction and export booms — had lost their jobs.
A signal goal of China’s stimulus program is to ensure that the idle jobless do not become an engine of social unrest. Protests by laid-off or cheated workers are a not-infrequent occurrence, and the government has suggested that demonstrations will increase this year.
Already, the Beijing authorities have rounded up hundreds of would-be petitioners who traveled from other cities to the capital, many hoping to present grievances personally to the National People’s Congress delegates.
But if the National People’s Congress suffers a rubber-stamp image, its deliberations remain likely to illuminate the government’s still-murky plans toward economic and social stability — and, perhaps, a bit of its political calculation as well.
Experts will be watching Wen’s proposals closely to see not only how the proposed 4 trillion yuan stimulus will be spent, but how much is actually genuinely new spending. China’s central government is allotting only about 1.2 trillion yuan , or $175 billion, of the total; the rest is supposed to come from banks, investors and local governments, whose finances are especially opaque.
Most of the money is set to go to infrastructure projects, like roads and dams, that pump money quickly into the economy. But many outside experts and some party figures are calling for more money to be spent directly on people’s basic needs, from medical care to education to poverty, and the need for more social spending is likely to be vigorously debated at the meeting.
The delegates will consider one bill that would pour 850 billion yuan, or about $124 billion, into health care reform, setting up a national health insurance program and overhauling the medical care system. But even that amount would only boost annual health care spending to about 120 yuan, or $20, per person, a sum some analysts say is too little to provide meaningful relief.
“There’s an overinvestment in infrastructure,” Mao Yushi, the respected 80-year-old head of a Beijing research organization, said in an interview this week. “Money should be directed to help small businesses, for employment and social security, for medical insurance.”
In the past, such decisions have been the exclusive purview of party leaders. As this People’s Congress convenes, there are small signs that that is slowly changing.
On Sunday, Wen went on the Internet for nearly two hours to answer questions from Web-surfing citizens, issuing his own call for the government to be more transparent in its dealings. This week, the National Development and Reform Commission — the government body that is directing much of the stimulus spending — announced that it will post details of its spending plans on the Internet.
The delegates themselves also plan to engage in Internet chats with citizens, a Congress spokesman said this week.
Chinese stocks rose the most in four months on Wednesday as investors bet that further economic stimulus measures would be announced and that a wide range of Chinese companies would benefit. The Shanghai stock market gained 6.1 percent on Wednesday.
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|From: Sam Citron||3/5/2009 7:36:31 AM|
|China's 'Missing' Stimulus [WSJ]|
By ANDREW PEAPLE
While the U.S. government is being accused of socialism, China's Communist Party isn't being as socialist as some expected.
Absent from Chinese Premier Wen Jiabao's keynote speech to China's National People's Congress on Thursday was the announcement of any major new fiscal stimulus plan. Confident that one was coming, investors bid up share prices around the world in anticipation.
In retrospect, those hopes were always overdone.
Beijing's existing $585 billion stimulus plan, unveiled last November, is barely out of its wrapping: while China's capacity to absorb it fully is already in doubt.
Less than a third of the $15 billion slated for disbursement in 2008's fourth quarter was actually spent by the end of December, a government official said Wednesday. Worries that corruption in the localities will cause stimulus funds to be wasted are also leading Beijing to keep a grip on the fiscal tap.
And spending isn't all that China's offered up in defense of its economy. Banks, encouraged to lend by Beijing, have begun to do so in earnest, while specific measures to support ten different industries are in the pipeline.
The government is now waiting to see if all this is enough for Chinese economy to grow by its perennial 8% target in 2009. Meanwhile, it doesn't want to give the impression of panic by adding another major initiative before the impact of the first is clear.
One worry: Isolated green shoots of recovery could be leading to unwarranted complacency in Beijing's hierarchy. China's purchasing managers' index has risen for three months in a row, for example, but it's still in contractionary territory. Bank lending is up, but anecdotal evidence suggests some of that is flowing into stocks, or simply being hoarded.
So ruling out the eventual addition of another stimulus plan would be a mistake -- if only because China still has room to do more. Even with the current plan, government debt is projected to remain under 3% of GDP this year -- a level that's surely envied by some of the world's biggest economies.
Still, China does few things hastily. Including, as investors learned Thursday, pouring money onto a plan that's hardly had time to work.
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|From: Sam Citron||3/7/2009 2:24:49 AM|
|Japan’s Crisis of the Mind [NYT Op-Ed]|
By MASARU TAMAMOTO
RECENT events mark Japan’s return to the world’s stage, or at least so it seems. Tokyo was Secretary of State Hillary Clinton’s inaugural overseas destination. Last week, Prime Minister Taro Aso was the first foreign leader to visit the Obama White House. All this suggests that Washington sees Japan, the world’s second-largest economy, as a powerful nation. If only we saw ourselves the same way.
The truth is, Japan is a mess. Mr. Aso’s approval rate recently hit 11 percent, and his ruling Liberal Democratic Party is in open disarray. His predecessor barely lasted a year. The opposition Democratic Party of Japan just offers more of the same. This is largely because we have become a nation of bureaucrats. What passes for national policy is the sum of various ministerial interests, often conflicting or redundant, with jealously guarded turfs and budgets.
There can be no justification for all those mostly unused airports. Or for roads that lead nowhere. Or for the finance minister who appeared to be drunk at the Group of 7 meeting this month in Rome. Our problem is so deep that it sometimes seems that no political party can tame the bureaucracy and put in place a coherent national agenda.
But what most people don’t recognize is that our crisis is not political, but psychological. After our aggression — and subsequent defeat — in World War II, safety and predictability became society’s goals. Bureaucrats rose to control the details of everyday life. We became a nation with lifetime employment, a corporate system based on stable cross-holdings of shares, and a large middle-class population in which people are equal and alike.
Conservative pundits here like to speak of this equality and sameness as being cornerstones of “Japanese” tradition. Nonsense. Throughout much of its history, Japan has had social stratification and great inequality of wealth and privilege. The “egalitarian” Japan was a creature of the 1970s, with its progressive taxation, redistribution of wealth, subsidies and the dampening of competition through regulation. This all seemed to work just fine until our asset-price bubble popped in the 1990s. Today, the hemmed-in Japanese seem satisfied with the knowledge that everyone around them is equally unhappy.
Since the middle of the 19th century, our economic success has relied on the availability of outside models from which to choose. Our model for social security took inspiration from Bismarck’s Germany, state planning from the Soviet Union, public works from the Tennessee Valley Authority, automobile assembly and manufacturing from Ford. Much of Japanese innovation has involved perfecting what others have created. Sony is famous for its Walkman, but it didn’t invent the tape recorder. Japan’s rise to economic greatness was basically a game of catch-up with the advanced West.
So what happened once we caught up? Over the past two decades, the answer has largely been paralysis. Japan’s ability to imitate outside models was mistaken for progress. But if progress is defined by pursuing a vision of a desirable future, then the Japanese never progressed. What we had was a concept of order and placement, which is essentially stasis.
In the West, on the other hand, the idea of progress rests on establishing individual autonomy and liberty. In Japan, bureaucratic rule offered security and predictability — in exchange for personal freedom. The problem is that our current political leaders can’t keep their side of the bargain. Employment security can no longer be guaranteed. The national pension and health plans seem to be insolvent in the long run. People feel both insecure and unfree.
Signs of despair are everywhere. Japan has one of the highest suicide rates among rich countries. There may be as many as one million “hikikomori,” from teenagers to those in their 40s, who shut themselves in their rooms for years on end. Then there are all those “parasite singles” — or unmarried adults living with their parents. But by far our most serious problem is a declining and aging population. Given present trends, total population will likely decline from around 130 million to under 90 million in 50 years or so. By that same time, 40 percent of Japanese could be over 65.
If we want to survive as a nation, we must shed our deeply rooted resistance to immigration. Contrary to widespread prejudices in favor of keeping Japan “pure,” we desperately need to dilute our blood. Our aging nation will need millions of university-educated middle-class immigrants with high productivity, people who will put down roots and raise families, whose pride and success will be the affirmation of new Japanese values.
Japan desperately needs change, and this will require risk. Risk-taking is not common among the bureaucratically controlled. You won’t find many signs on Japanese beaches saying, “Swim at your own risk. No lifeguard on duty.” If that sign were to appear, many Japanese would likely ask the authorities to tell them if it is safe to swim. This same risk aversion translates into protectionism and insularity. The ministry of agriculture, for example, wants to increase self-sufficiency in food. There is not nearly enough critical thinking and dissent in the Japanese news media.
Still, the idea that the Japanese are afraid of risk has no basis in history, for better or for worse. Remember Pearl Harbor? In fact, Japan’s passiveness today is in large measure a calculated and reasonable reaction to its behavior during the Second World War. But today, this emphasis on safety and security is long past its sell-by date.
We have run out of outside models to imitate. We must start from scratch, embracing an idea of progress that is based on innovation, ambition and dynamism. Doing so will take risk — and extraordinary leadership. But the alternative is to continue stumbling down a path of decline.
Masaru Tamamoto is a senior fellow at the World Policy Institute.
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|From: Sam Citron||3/10/2009 8:01:29 AM|
|No help in sight for sinking [Swedish] krona [FT]|
By Peter Garnham
Published: March 9 2009 20:00 | Last updated: March 9 2009 20:00
The Swedish krona has suffered its steepest fall since it was allowed to float in 1992 and has been the worst performing major currency during the financial crisis.
Since the collapse of Lehman Brothers last September, the krona has dropped almost 20 per cent against the euro, last week falling to a record low of SKr11.7860, and has declined 27 per cent against the dollar.
Typically, the krona performs badly when global stocks markets come under pressure. “We are talking about a relatively small, illiquid market, which investors leave quickly in case of rising risk or deteriorating sentiment,” says Antje Praefcke at Commerzbank.
But support for the currency has also been undermined by deteriorating conditions in Sweden’s export-driven economy, especially in the automobile sector.
Saab, the carmaker, has sought protection from its creditors and is hoping to restructure with the help of a $647m loan from the European Investment Bank. Ford wants to sell Volvo Cars and cut jobs at the company.
Swedish industrial production and new orders slumped far beyond expectations in December, while fourth quarter gross domestic product figures revealed a 4.9 per cent annualised fall.
This has heightened expectations that the Swedish central bank, which slashed interest rates by 100 basis points to 1 per cent this month, will have to cut rates again by at least a further 25bp at its next policy meeting, scheduled for April 21.
“Quantitative easing will also have to be contemplated in the course of 2009,” says Audrey Childe-Freeman at Brown Brothers Harriman.
It is not just sentiment on equity markets or worries over the economy that is driving the krona lower. The high exposure of Swedish banks to a potential collapse in the Baltic states is also adding pressure.
Ms Praefcke says the issue represents a “sword of Damocles” for the krona. “While uncertainty on the markets regarding eastern Europe as a whole remains high, the krona remains vulnerable to further losses.”
Many observers believe the Riksbank, Sweden’s central bank, has been complicit in the krona’s fall.
Dan Katzive at Credit Suisse says the current crisis is perfectly designed to derail the Swedish currency. “Perhaps most damaging to the krona, the central bank has not objected to its weakness and, indeed, has appeared to encourage it at times,” he says.
Robert Stenram, a former senior Swedish banker, says Sweden is carrying out a competitive devaluation, something that is not appreciated in the outside world. “Sweden is experiencing a currency crisis, with the Riksbank the only global central bank talking down its own currency,” he says.
While a moderate devaluation could help exporters, the recent fall in the krona risks sucking in imported inflation, which would only exacerbate Sweden’s problems, Mr Stenram says.
“There is a limit to how far a devaluation can go without damaging the country,” he says. “This is a very dangerous situation.”
So far, the Riksbank has shown little willingness to intervene to stem the krona’s fall, even verbally.
Lars Svensson, deputy governor of the Riksbank, even floated the possibility of intervening to weaken the currency in a bid to stimulate the country’s economy.
Mr Svensson has also noted that it would be possible to view an appreciation of the exchange rate as evidence that anti-deflation efforts were failing.
“The clear message from the Riksbank is one of minimal concern ... an apparent preference not to see this depreciation reversed,” says Mr Katzive.
The authorities expect the krona’s weakness to be temporary and for it to appreciate once the worst of the crisis is over, partly because Sweden has a stable surplus in foreign trade.
But last week, Svante Öberg, first deputy governor of the Riksbank, admitted there was a risk that the krona’s weakness could be more prolonged. “This would lead to exports strengthening and imports slowing down, but at the same time provide an inflationary impulse... This may be an advantage in the short term, as economic activity is now weak and inflation is low,” he said.
“But in the longer term, a currency that fluctuates substantially can be a problem. It increases uncertainty.”
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|From: Sam Citron||3/10/2009 8:13:26 AM|
|Subprime Europe [NYT Op-Ed]|
By LIAQUAT AHAMED
Published: March 7, 2009
THE 1931 collapse of the Austrian bank Creditanstalt provoked financial panic across Europe and almost single-handedly turned a bad downturn into the Great Depression. Last week, when I read about the brewing European banking crisis, I suddenly began to dread that history might be repeating itself.
You might think that my worries are a bit late. After all, losses on subprime mortgages in the United States have already caused a Depression-like banking collapse. Well, believe it or not, Europe’s current crisis is scarier. For while losses on Eastern European debts may be only a small fraction of those on subprime mortgages, the continent’s problems are politically harder to solve, and their consequences may prove to be much worse.
Much as in our subprime mess, Eastern Europe’s problems began with easy credit. From 2004 to 2008 Eastern Europe had its own bubble, fueled by the ready availability of international credit. In recent years countries like Bulgaria and Latvia borrowed annually the equivalent of more than 20 percent of their gross domestic product from abroad. By 2008, 13 countries that were once part of the Soviet empire had accumulated a collective debt to foreign banks or in foreign currencies of more than $1 trillion. Some of the money went into investment, much of it into consumption or real estate.
When the music stopped last year and banks retrenched, the flow of new capital to Eastern Europe came to an abrupt halt, and then reversed direction. This credit crunch hit the region just as its main export markets in Western Europe were going into free fall. Moreover, with so much of the debt denominated in foreign currencies, everyone in Eastern Europe has been scrambling to get their hands on foreign exchange and local currencies have collapsed.
Most of the Eastern European debt is held by Western European banks. It also turned out that some of the biggest lenders to Eastern Europe were Austrian and Italian banks — for example, loans by Austrian banks to Eastern European countries are almost equivalent to 70 percent of Austria’s G.D.P. Now, Italy and Austria can’t afford to bail out even their own banks.
The debt crisis in Eastern Europe is much more than an economic problem. The wrenching decline in the standard of living caused by this crisis is provoking social unrest. American subprime borrowers who have had their houses foreclosed on are not — at least not yet — rioting in the streets. Workers in Eastern Europe are. The roots of democracy in the region are not deep and the specter of right-wing nationalism remains a threat.
So what is to be done? The potential approaches essentially mirror those that have been attempted in response to America’s subprime problem.
The first approach is to deal with the short-run liquidity problem. In the same way that the Federal Reserve expanded its own lending last year to compensate for the collapse in private lending, the International Monetary Fund is providing funds to Eastern Europe, and Hungary has proposed that the European Central Bank lend to borrowers who use non-euro assets as collateral. But given the state of the rest of the world, Eastern Europe will not be able to export its way out of its troubles in the immediate future.
The debts of many Eastern European countries and some banks will have to be written off. Ultimately, as in the case of the American subprime debts, taxpayers will have to foot the bill. But which taxpayers? The taxpayers of Austria and Italy certainly can’t. So the burden will have to fall on the rich countries of Europe, especially Germany and France.
There are two approaches to taxpayer-financed bailouts. The first is to go case by case. This is being proposed by the Germans. The problem here, as we discovered after the Bear Stearns rescue last March, is that the case-by-case approach does nothing to establish confidence in the system and prevent contagion.
The best choice would be a fund that provides bailout money and a protective umbrella to banks and countries, even those that don’t seem to need it now. Hungary has proposed the creation of such a fund with roughly $240 billion at its disposal. Though the proposal has already been rejected by stronger European economies, the American experience of last year in which the Treasury finally had to ask Congress for $700 billion for a similar fund suggests that this is where Europe will end up.
The response of the American government to the financial crisis has been criticized for being too slow and inadequate. But at least we have a federal budget, the national cohesion and the political machinery to get New Yorkers and Midwesterners to pay for the mistakes of homeowners in California and Florida, or to bail out a bank based in North Carolina. There is no such mechanism in Europe. It is going to require leadership of the highest order from officials in Germany and France to persuade their thrifty and prudent taxpayers to bail out foolhardy Austrian banks or Hungarian homeowners.
The Great Depression was largely caused by a failure of intellectual will. In other words, the men in charge simply did not understand how the economy worked. Now, it is the failure of political will that could lead to economic cataclysm. Nowhere is this danger more real than in Europe.
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|From: Sam Citron||3/10/2009 8:26:30 AM|
|China prices fall for first time in six years [FT]|
By Jamil Anderlini in Beijing
Published: March 10 2009 04:05 | Last updated: March 10 2009 06:17
Chinese consumer prices in February fell for the first time in more than six years with the benchmark consumer price index falling 1.6 per cent from a year earlier, down from a 1 per cent rise in January.
The drop marked the tenth consecutive month of moderating price rises and compares with an 11-year record rise in the CPI of 8.7 per cent last February, when food and energy prices were soaring.
Beijing has targeted headline inflation of 4 per cent this year but many analysts say the government will struggle to meet that target and will have to act quickly if it is to avoid a period of prolonged deflation.
“The government must find new growth drivers to replace exports and housing or face the risk of a ‘W-shaped’ recovery and a more durable deflation problem,” said Ben Simpfendorfer, an economist with RBS in Hong Kong.
The fall in consumer prices was matched by a 4.5 per cent decline in the producer price index, its third consecutive month in deflationary territory and a faster decline than the 3.3 per cent fall in January.
China’s National Bureau of Statistics took the unusual step on Tuesday of issuing a statement explaining that it is too early to say deflation has taken hold in China and the drops in CPI and PPI were largely down to falling raw material prices and holiday-related distortions.
“Recent downward pressure on prices in China are very obvious but there is a big difference between our current situation and typical deflation,” Yi Gang, vice-governor of the central bank, said in state media reports.
China is likely to lower the amount of money it requires banks to hold on deposit with the central bank and can also reduce benchmark interest rates, analysts said. China’s benchmark one-year lending rate is currently set at 5.31 per cent and the required reserve ratio for banks is 13.5-14.5 per cent.
The government also plans to raise its minimum purchase prices for grains and accelerate pricing reform for power and refined oil products, which could provide a counterweight to deflationary pressures.
Falling food prices were a large contributor to the dip in CPI last month, with a drop of 1.9 per cent.
Chinese urban property prices fell by 1.2 per cent in February from a year earlier, the government said on Tuesday, the steepest decline since official records began in 2005.
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|From: Sam Citron||3/20/2009 1:58:16 PM|
|Kuwait Cancels Refinery Contracts [WSJ]|
By MIKE BARRIS and OLIVER KLAUS
Kuwait National Petroleum Co. has canceled more than $10 billion in contracts for a refinery project, including $2.1 billion in remaining value to Fluor Corp., amid the slump in fuel prices and the project's burgeoning cost.
Share of Fluor, which reported the cancellation of its contract Friday, fell 3.6% to $37.42 in premarket trading as the move will cut the company's backlog as of Dec. 31 by some 6%.
Four South Korean companies earlier said the state-run Kuwaiti oil firm canceled $8.36 billion in refinery orders awarded them in May.
The $15 billion refinery project appeared in limbo earlier this week days after it was reported that Kuwait's former prime minister had ordered its cancellation in a further sign that political chaos in the state was taking its toll. Both the project's sponsor, KNPC, and the international contractors building the refinery said earlier this week they were unaware the project had been scrapped.
Kuwait's ruler dissolved Parliament Wednesday and called for fresh elections, a move that could end weeks of a political deadlock that has stalled an economic bailout program for the Gulf nation's banks.
The project came under increased scrutiny last year after opposition members of Parliament alleged that KNPC's contract awards didn't comply with the tender procedures set out by Kuwait's Central Tenders Committee, which handles all public sector contracts. The project was subsequently referred to the State Audit Bureau, the country's accounting watchdog.
The project's scrapping comes three months after Kuwait's Parliament forced state-owned Petrochemical Industries Co. to pull out of a planned $18 billion joint-venture deal with U.S. chemicals giant Dow Chemical Co.
Fluor had approximately 300 employees performing engineering work on the al-Zour project. The refinery was to have been Kuwait's fourth, handling 615,000 barrels a day of crude, with the intent of producing low-sulfur fuel oil for the country's power plants from 2012.
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|From: Sam Citron||3/28/2009 10:57:23 AM|
|Grieving Parents Gain Clout In China|
Party Steps Lightly In Wake of Disasters
By Ariana Eunjung Cha
Washington Post Foreign Service
Saturday, March 28, 2009; A01
BEIJING -- When Zhao Lianhai created a Web site for parents of children hurt or killed by contaminated milk, he did not set out to challenge the Communist Party. He did it because his son was sick. The 3-year-old had been diagnosed with kidney stones and Zhao was scared. He needed advice.
Within days, more than 4,000 families signed up, and soon the discussion evolved from technical questions and answers about medical care to demands for punishment and compensation. It wasn't long before the 37-year-old former advertising salesman became the de facto spokesman, organizer and lobbyist for thousands of parents across the country whose children had suffered after drinking infant formula or milk that had been illegally doctored with the industrial chemical melamine.
In a country where every leader must be appointed, approved or otherwise sanctioned by the party, the fact that Zhao has been allowed to operate relatively freely is a testament to the government's careful approach to those he represents. It is perhaps out of respect for their concerns -- or fear of them.
Parents groups such as Zhao's -- whose members' children were hurt or killed in various tragedies such as the milk scandal, the Sichuan earthquake and the Tiananmen Square massacre -- have become an emerging political force. They pose a special challenge to the Chinese government, which has not been able to deal with the grieving parents in the same manner it has dealt with others who challenge its authority.
The parents, hugging pictures of their sick or deceased children, have captured the public's empathy. Attempts to bully, bribe, harass or detain them have been met with harsh reprimands from ordinary citizens on Internet bulletin boards.
So the government has chosen, for the most part, to let the parents be -- a significant concession for a government that has always been deeply suspicious of any group that it does not directly control.
While several parents said local officials regularly stop them from mounting public protests, holding large meetings and traveling to the capital to voice concerns, authorities have not jailed the parents on unrelated charges, a common tactic with other protesters. Parents also say government officials have been careful to show more deference and respect, both in public and in private, than they might with others.
Even so, there have been some pressures on them. Since he began coordinating with other parents in late September, Zhao said, he has been "interviewed" by police more than 20 times. His cellphone has been tapped, he said, and he is followed whenever he tries to meet with other parents.
After government officials told at least three corporations that were hosting the group's Web site to shut it down, the parents found a company that would give it a home overseas for free and out of the reach of censors. Parents disseminate the address, which they change regularly, via e-mail or word of mouth. Zhao and other organizers coordinate through disposable phone cards that can't be traced. When holding meetings or news conferences, they gather at safe houses rather than their homes.
Liu Xiaoying, 34, lost her 12-year-old daughter, Bi Yuexing, when a school she was in collapsed during last May's earthquake. A local official fell to his knees, apologized and promised a full investigation into shoddy construction when a group of angry parents confronted him several weeks after the earthquake. Liu now wants the central government to do the same.
In January, she joined nine other sets of parents in traveling for two days and two nights on trains, buses and taxis to evade local police from Sichuan province as the group made its way to Beijing to meet with officials from the Ministries of Education and Construction. The government representatives in Beijing made a show of listening to their concerns, she said. "We have lost our child, and there's nothing left we'd be afraid of now," she said.
That is the same sort of pain that Xu Jue, one of the organizers of Tiananmen Mothers, said motivates her. Xu's group seeks to make Chinese authorities recognize "6/4" -- or June 4, as the Tiananmen Square massacre in 1989 is known in China -- as a day of tragedy. Thousands of pro-democracy demonstrators clashed with security forces in the square that summer day, and the standoff ended only when the government rolled in tanks and began shooting at the protesters.
"The bloodstains of that time have long been washed away and the bullet marks rubbed out and the site of the massacre is now decorated with exotic plants and flowers and has become a scene of peace and prosperity. But can all this conceal the sins of that time?" Xu and other mothers wrote in a letter in February to the country's legislature.
In the initial days of the milk powder scandal, the government seemed to be in denial about the scope of the tragedy. Subsequent investigations revealed that the contamination had spread well beyond one brand of infant formula to nearly every brand of milk produced in China.
When Zhao set up his Web site six months ago, the government moved quickly, shutting down the site repeatedly. The more authorities began to crack down on his group, however, the more the group fought back. It called itself the Melamine Victims' Parents Alliance.
Zhao, the son of a government prison official, said he had become disillusioned with how the problem was being handled.
He blames China's culture rather than a specific government entity, company or individual for the scandal. "In today's Chinese society, too much attention has shifted to material pursuits while social fairness and justice are scarce," he said. "If this situation continues, tragedies like the [milk powder scandal] will happen over and over again."
At every key turn in the investigation into the scandal -- the sentencing of corporate executives, the Ministry of Health's discussions about compensation, the bankruptcy auction of the assets of one of the companies responsible -- Zhao and other parents have been present. They have held posters with slogans such as "Killers should pay with their own lives" and "We want to participate in the prosecution."
Zhao has pushed for a better count of victims. Official figures show that six babies died and 300,000 became ill, but Zhao's group has been in contact with others who say their children died but were not counted.
He and his group are credited with helping push the central government, which had minimized the problem and had been reluctant to do much in the initial days of the scandal, to roll out a national compensation plan that allocated cash to victims based on age and severity of illness. Many have received less than $300, which does not even cover their basic doctors' bills, much less the surgery and long-term care many of the children will need.
Zhou Jin, a 26-year-old migrant worker from Hunan province, met Zhao online after his daughter became seriously ill -- urinating blood and having a high fever -- after months of drinking formula from a company called Sanlu. A subsequent check found a 0.6-by-0.4-inch stone in her kidney.
He said Zhao sheltered him at his home for four nights when he came to see doctors in Beijing and gave him advice about how to seek better medical care. Zhao said people often ask him why he has given up so much of his personal time, given that his son recovered from the kidney stones relatively quickly. He said what motivates him is a hope that he can help promote individual rights in China. "We reached and encouraged some families to act more actively rather than give up easily," Zhao said. "In the long run, these will be beneficial to perfecting China's justice system."
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|From: Sam Citron||3/29/2009 11:12:27 AM|
|EU: Czech PM Mirek Topolanek's "Way to Hell" Speech|
Transcript of the speech by Mirek Topolánek in the European Parliament
Good morning, let me welcome you to the regular report of the European Council President after the European Spring Council.
Mirek TopolánekFirst of all, I would like to apologise for not being able to stay throughout the entire plenary meeting as is the custom – in the second part after the speeches of the representatives of the political groups, Deputy Prime Minister Vondra will stay here on my behalf. The reason why I have to return to Prague is, as Hans-Gert Pöttering already mentioned, an unprecedented obstructive attitude of the Socialist party, which, after all, we have been faced with since the very beginning of the Czech Presidency and I have never made a secret of it. The fact that our Government will have to resign will certainly not jeopardise the Presidency; the fact that the Socialists do not take into consideration the Czech Presidency of the European Council and refuse to cooperate, be it only on the basic level, is most detrimental to the Social Democratic Party itself. There should be no harm done to the Presidency, because I am fully confident that we have undoubtedly managed to deliver on what I said in my opening speech in the European Parliament – I said that we will make an effort to be good moderators of the discussion and to reach compromises - and the Spring European Council is a clear example of this. In my country, it is customary not to interrupt the speaker but here the customs may be a bit different. So much for the introduction, then.
Let me now move on to the reason why I am here today – and I will now be following the conclusions of the European Council very closely – let me explain some of the steps taken at the European Council, but before that, let me first comment on the events that took place before. Now I am speaking about the “tripartite summit” – the summit with the social partners. The meeting brought together a number of high-level leaders – in addition to me and European Commission President José Manuel Barroso, it was attended also by the Prime Ministers of the next two Presidencies, both Prime Minister Reinfeldt from the Kingdom of Sweden and Prime Minister Zapatero from the Kingdom of Spain. The meeting impressed me in a very positive way and I was much surprised by the consensus reached by the social partners, not only as far as the agenda of the Presidency is concerned, but in general as regards responses to the situation which is or may be faced by employees or possibly the unemployed due to the global financial crisis and economic recession. If some of you are interested, I will speak about the tripartite summit at greater length, but – to sum up – we have agreed on three fundamental principles. i.e. to ensure a much greater flexibility of the labour market and mobility of the labour force and to work much harder in order to increase the level of education and skills of workers so that they can assert themselves on the labour market.
Although the Spring European Council was already the second meeting of Heads of State led by the Czech Presidency, it was the first formal, regular summit.
The first key issue, which perhaps attracted most attention, was the current economic crisis and ways of tackling it.
First and foremost, I must strongly reject all the allegations saying that we are not doing enough and that we are staying on the surface of things. I will give only one figure - 400 billion euros. The 400 billion accounts for 3.3 % of the EU’s GDP. It is an unprecedented step and the sum will complement the automatic stabilisers which the EU has, unlike for instance the USA. I think that the example given by José Manuel Barroso is a very instructive one – when jobs are cut at Saab in Sweden and at General Motors in Chicago, the workers’ social standards are completely different; the approaches of their respective governments are completely different, too, and it is the automatic stabilisers that multiply the sum of 400 billion euro and increase it significantly, giving us in this way an undeniable advantage over the USA. The mainstay of the agreement of the EU-27 is the reiterated validity of the Lisbon Strategy, which is one of the four pillars on which the entire consensus is built. I am sure that yesterday, Gordon Brown had the opportunity to speak to you about the approach of the EU-27 and the mandate for the G20 summit. We have agreed that all the short-term measures must be of temporary nature and have also been conceived as such. The medium-term and long-term priorities and tendencies of the Lisbon Strategy have been confirmed and the short-term ones must be in keeping with them.
In all frankness, I must say that when Timothy Geithner, the US Secretary of the Treasury, spoke about “permanent action”, it was much to the European Council’s dismay.
Not only is America repeating its mistakes from the 1930s – the large-scale stimuli, the protectionist tendencies and appeals, the “Buy American” campaign… - all these steps, their combination and, worse, the initiative to establish them as permanent, are a road to hell. We have to return to our history books, which so far have only been gathering dust. I consider the resounding “no” to this policy and to this short-sighted approach as the greatest success of the Spring Council meeting.
I have to strongly oppose the words of the Chairman of the European Socialists, Poul Nyrup Rasmussen, who said that the European Council had done little to combat the crisis and that we were waiting for the USA to save us. Not only because the path chosen by the United States has been disproved by history, but also, as I have already said, the quality of social security and the functioning of the social networks in general are very different, and on a much lower level in the USA than in the EU. This is why the US approach is dangerous - in order to finance its social stimuli, the US will need liquidity – and will have no problems in obtaining it since there will always be a buyer for US bonds. However, this will jeopardise the liquidity of the markets; it will withdraw liquidity from the global financial market and other treasuries, perhaps European bonds, and certainly Polish and Czech ones, will face difficulties finding a buyer and then there will be no ready money in the system. This approach gives reason for some unease and in my opinion will also be discussed at the G20 summit. The G20 summit will be one of the opportunities to talk about this issue and the debate may continue at the subsequent informal summit of the EU-27 with the US Administration and Barack Obama in Prague. I am confident that together with the USA we will find a common solution because in no way do I want to set the USA and Europe against each other. Today – as the crisis has shown yet again – there is no such thing as an isolated economy; the rate of inter-relatedness is very high, which, at a time of crisis, means that we are all facing a problem, but also that we can only solve it together.
The preparation for the G20 summit is the second pillar of our agreement as regards the ways to tackle the current crisis. The material prepared by Gordon Brown and his Cabinet is excellent and you had an opportunity to learn more about this text yesterday. The three-pillar approach, i.e. the responses concerning the financial sector and the fiscal stimuli, regulation and rectifying mistakes within the system and the restoration and liberalisation of world trade, which means pressing for the resumption of talks under the Doha Round in the context of the WTO, as contained in the third pillar – all this is precisely what, in my opinion, constitutes a set of solutions proposed and unanimously agreed upon by the European Council. I also want to highlight the fact that we have agreed finally on a specific sum for the increase of the available financial capacity of the International Monetary Fund - we have decided to pledge 75 billion euros. Ahead of the G20, the EU-27 has a single position, one voice and a common goal. I consider this to be the greatest success because the entire European Council meeting was a test of European unity, European solidarity, European values and the internal European market. If any of these fundamental qualities were undermined, we would in fact be weakened by the crisis, but if we stick to them, as I think we will, we will be strengthened.
There is therefore no reason to be pessimistic ahead of the G20, as Poul Nyrup Rasmussen fears. I think that we all understand that we need to express our solidarity and work together, as Graham Watson from the Liberal Democrats Group put it.
As we all have said, the current crisis is a crisis of trust. The third precondition that is essential if we are to overcome the crisis is to restore trust. It is not enough just to pour money into the system – we have tried this and the banks still refuse to lend money. It is necessary that they start lending money and they won’t unless they trust their customers. The liquidity they have at their disposal has not solved the problem. Trust cannot be ordered nor bought. In order to restore trust we have taken another step to reinforce it – we have doubled the guarantee framework to cover the needs of the countries outside the eurozone to 50 billion euros. We have agreed that it is necessary to treat each bank and each country individually. At the moment, we consider the one-size-fits-all approach dangerous, since the markets are nervous and react immediately, negatively and with undue intensity to every gesture. That’s why we need better regulation, and I stress the word “better”. And we need to introduce regulation in those countries which have lacked it so far. This is where you, the MEPs, come into play. We would like to reach agreement, and there are signals that we might be successful, on legislative acts corresponding to our vision of better regulation which concern rating agencies, the solvency of insurance companies, capital requirements for banks, cross-border payments, e-money etc. I would very much welcome it, if you adopt these acts during your parliamentary term, so that they may be implemented immediately. I and the others also welcome the de Larosière report, which is brilliant in its analytical part and contains clear instructions concerning the implementation of measures; in this respect the European Council has drawn clear conclusions.
Perhaps the most important task of the Spring European Council was to assess the implementation of the Recovery Plan so far, as set by the December Council. The Recovery Plan has aroused much criticism and many comments, which I consider unjust. It has been labelled as insufficient, slow, lacking ambition... I would like to use this occasion to set things right. EU fiscal measures have reached 400 billion euros, which is approximately 3.3% of GDP. This amount doesn’t include the funds for recapitalisation of banks and guarantees, representing more than 10% of GDP. This is something the European Union can afford at the moment, nevertheless it will have a substantial impact on the Growth and Stability Pact, on public debt, on the rectification of the situation during the period of the so-called day after, i.e. after the crisis has ended, if I may put it this way. I believe that even the 5 billion euros is just a small amount out of the huge sum of 400 billion euros. It was finally approved after difficult negotiations, having to face criticism by many countries. They claimed that these funds cannot be considered a crisis measure if they are not drawn in 2009 and 2010 (it is true that the project evaluation system is not transparent), that the list of the projects is not well drawn up with some projects missing or being excessive. In the end we have managed to reach agreement on the 5 billion euros, after complicated negotiations and thanks to the dominant role of the Czech Presidency, sending the proposal to the European Parliament to deal with it.
I need to mention that the Recovery Plan has its Community level, with approx. 30 billion euros available at the moment, and a national level, with each Member State implementing its own fiscal incentives. I consider as essential that the European Council has agreed upon the validity of the Stability and Growth Pact. If the Union is to get through the crisis unhurt and even stronger, we have to respect our own rules. Introducing new packages without having implemented all national and Community actions, understanding their impact and knowing whether or not further fiscal incentives are necessary would be the biggest mistake. The European Council has also agreed upon that. If necessary, the European Council may adopt other measures, but at the moment we are not sure whether to proceed this way. No one knows the bottom of this crisis, its end. So without knowing the impact of the 400 billions worth of fiscal incentives it makes absolutely no sense to adopt further measures. The Plan is ambitious, diversified and complex and deals with both growth and employment in individual countries, as well as problems related to the economic situation.
The climate discussion. The negotiations and preparations of the Copenhagen conference have already begun. Denmark, which will host the conference, but also Sweden, during whose Presidency it will take place, and the Czech Presidency are already working intensely. We are not only trying to reach a common European position, but are also beginning to negotiate with the biggest players whose participation is required if the Copenhagen conference is to be a success. They are the USA and, of course, Japan, China, India and other big countries and major polluters. The most important discussion, which I would like to say at least a few words about, was whether we should already now establish not only mechanisms but also the contributions of the individual EU Member States to the funds that we intend to give the developing countries and other third countries to help them fulfil their obligations in the fight to protect the climate. The decision we have made is the right one. In a situation where we negotiate with all the big players, who so far have talked more than they have acted, it would be a tactical blunder and a very bad idea if we established our own barriers and limits which the others wouldn’t respect. Our negotiating position is much better if we have free hands. That is what was decided by the countries that tabled the latest proposal, i.e. Sweden, Denmark, the Netherlands, UK and Poland. Referring to the attitude adopted by Poland, both the interests of the countries that are a little reluctant about the mechanisms and the interests of the leaders in terms of climate protection are respected. What is left for us to do, is to find a concrete mechanism, the key and the right wording. This should be done sufficiently in advance of the Copenhagen conference by an agreement between all the countries, also those that have made it their absolute priority.
Thirdly, there is the issue of external relations. The European Council formally adopted the Eastern Partnership initiative as a supplement to our foreign policy or the neighbourhood policy. If there are icebergs to the North and we have the Atlantic to the West, our neighbours live to the South and East. They are countries which could potentially threaten not only our economy but also our social situation and our security. The Eastern Partnership has been one of the goals of the Czech Presidency and I am very glad that it has been adopted and that a clearly defined sum - 600 million euros - has been made available. I anticipate your question about whether Belarus should take part. We are considering this - Belarus is part of the project. Belarus has made certain progress and the suspension of the ban on issuing visas to representatives of the regime has been prolonged. The doors are opening for Belarus, but no decision has been made. If the Member States do not reach agreement, and the decision should be made by all 27 countries, then we will not invite Mr Lukashenko, even though both the opposition and the neighbouring countries recommend us to do so. I think it is a question that I cannot answer if you ask it right now, and therefore I anticipate it.
I have also informed the European Council that on 5 April there will be an informal summit meeting with President Obama in order to fulfil another priority - our transatlantic ties. The organisational arrangements are still not in place. You will all be kept informed in detail. The issues to be addressed at the summit will be concentrated around three main themes – an initial discussion of the results of the G20 summit, cooperation on energy and climate change, an area where both the EU and the US want to be key actors. And the third item of debate will be external relations, i.e. the geostrategic area from the Mediterranean to the Caspian Sea, Afghanistan, Pakistan, the situation in Iran and the Middle East. The summit with the US is important, nevertheless it seems that we shouldn’t have too high expectations. No Messiah has come. The USA has a number of domestic problems to solve and that is why it is a good thing that Barack Obama will make one of his decidedly fundamental speeches of the year in Prague in which he will naturally want to send a message to the citizens of Europe about the general attitudes and objectives of the new American Administration. I think that there were a number of other details at the European Council that I am willing to answer questions about. If I left something out, we will cover it during the discussion after the contributions of the chairmen of the political groups. We will probably not meet again in this composition because you will soon go and start your election campaigns. I would be glad if you did not start campaigning right here today. I hope that the struggle for the seats in the European Parliament will be fair and that you will meet again after the elections to continue your work. Thank you for your attention.
Last update: 26.3.2009 17:28
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