News & Reports 2011-01-08

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In This Edition

South Korea, North Korea, and the US have reportedly lowered military alert status as tensions on the Korean peninsula showed signs of easing.

The United States says a total of $78 billion dollars will be cut from the Pentagon's budget in the next five years.

The United Nations Security Council welcomes the progress being made toward the upcoming referendum in Sudan, which will decide whether the south of the country will become independent.

And China will put more emphasis on the reform of its interest rate system in the country's new Five-year economic and social development plan.

Hot Issue Reports

Japan urge DPRK take "concrete actions" before six-party talks; Bosworth visits Japan

South Korean media is reporting that South Korea, North Korea, and US have lowered military alert status as tensions on the Korean peninsula showed signs of easing.

The move came after North Korea's call for unconditional 1 dialogue with South Korea.

Despite the lowering of its surveillance alert level, the South Korean military held its first firing exercise of the year, while South Korea's Navy chief also revealed plans to double the number of joint 2 anti-submarine drills with the United States this year.

Meanwhile, Japan urged the North to take "concrete actions" before the six-party talks resume, after Pyongyang's proposed unconditional talks.

After meeting with US Secretary of State Hillary Clinton in Washington, Japanese Foreign Minister Seiji Maehara stressed the importance of North and South Korea reopening dialogue, and of the resumption of six-party talks suggested by China.

"I believe what is important is for the DPRK (Democratic People's Republic of Korea) to take concrete actions with sincerity 4 and with good faith. We believe, in the first place that North-South dialogue should take place, and if North Korea takes concrete actions then I think six-party talks, as China is suggesting, then there should be no reason to reject that."

As Clinton and Maehara held their media conference, U.S. special envoy 5, Stephen Bosworth, was heading to Tokyo to discuss the outcome of a recent visit to Seoul and Beijing about easing tensions in the Korean Peninsula.

Bosworth met Kenichiro Sasae, the Japanese Vice 6 Foreign Minister, to discuss how the United States and Japan could work together.

"I would only say that we've just had a very useful and productive conversation with the (Japanese) vice foreign minister, and I think we are talking about and moving forward together in our attempts to address the questions of the Korean Peninsula."

Gates to announce major cuts in US defence spending

The United States says a total of $78 billion dollars will be cut from the Pentagon's budget in the next five years.

US Defence Secretary Robert Gates says the money will come from shrinking the military's ground force, increasing health care premiums 7 for troops and other politically unpopular cost-saving measures.

The plan also identifies a separate $100 billion US dollars in savings 8, including the cancellation 9 of a $14 billion US dollar amphibious Marine 3 vehicle.

However, the services will be allowed to reinvest that money in new weapon systems and programmes that benefit troops.

Gates said the move is to trim fat from the military's annual budget in light of the nation's ballooning deficit 10.

"This country's dire 11 fiscal 12 situation and the threat it poses to American influence and credibility around the world will only get worse unless the US government ... gets its finances in order. And as the biggest part of the discretionary federal budget, the Pentagon cannot presume to exempt 13 itself from the scrutiny 14 and pressure faced by the rest of our government."

But parts of the plan are likely to run into serious opposition 15 from the US Congress.

Lawmakers have fought past proposals to increase health care premiums and cut weapons programmes that produce jobs in their states.

The final plan calls for $553 billion US dollars spent in 2012, $13 billion US dollars less than the Pentagon wanted, but still representing a three percent in real growth.

China eyes stronger economic ties with Germany

Chinese Vice Premier 16 Li Keqiang continues his trip to Berlin with talks with Germany's political leadership and the signing of a series of multi-billion corporate 17 euros deals at the centre of his visit.

He says China is eying to join hands with Germany in expanding economic cooperation and setting up new mechanism 18 of collaboration 19.

Speaking at a dinner with German and Chinese business representatives, Li Keqiang says that China has the capability 20 to maintain steady and relatively 21 fast economic growth in the long run and will take a more open attitude toward the outside world.

"China will further enhance all-round reforms and adjust its economic structure to upgrade its industries. It will also promote green development on the principle of resources saving and environmental protection."

Li notes bilateral 22 trade is expected to exceed $140 billion U.S. dollars last year, 30 times more than that of 1990.

He also hopes the two countries not only deepen cooperation in traditional areas like machinery 23 and automobile 24 industry, but also explore new cooperation in green economy.

Sudan referendum: UN welcomes; ambassador confident; 140,000 moved to south

The United Nations Security Council is now welcoming the progress being made toward the upcoming referendum in Sudan, which will decide whether the south of the country will become independent.

Ivan Barbalic, Bosnia and Herzegovina's permanent representative to the UN, holds the rotating presidency 25.

"The members of the Security Council welcome the Sudanese parties reaffirmation of their commitment to full and timely implementation 26 of the comprehensive peace agreement, including their commitment to respect the outcome of the Southern Sudan Referendum, and appreciate in this regard the statements of President Omar al-Bashir during his visit to Juba on January 4, 2011."

The week-long referendum that begins on Sunday is part of the 2005 deal that ended a two-decades-long war.

UN co-coordinator for southern Sudan, David Gressly, says over 140-thousand Sudanese have arrived in the south since October, about 2-thousand per day, driven by fears about their citizenship 27 status in a potentially-divided Sudan.

Greesly is also dismissing reports that troops are now massing on the common border.

"The general security situation of Southern Sudan is currently stable and generally quite. Tensions along the North-South border have eased over the last 3 weeks."

Almost four million people have registered to vote, with more than 95 percent of them in semi-autonomous Southern Sudan.

Steep rise in Indian food costs sparks fears of global effects

Food prices in India have hit their highest level in more than a year, rising at an annual rate of 18 percent.

It's a development economists 28 now suggest is a sign that the impact of surging commodity prices is affecting the broader economy.

India's former apex 29 bank governor YV Reddy now says the inflationary pressure on the Indian economy are because of domestic and global cues.

"See, the problem is both domestic and global, on domestic side there is more demand but less of supply, both are domestic. It is also global as the prices of the commodities have gone up. So, it is both domestic and global, supply and demand."

Food inflation has risen above 14 percent in mid-December on the back of high onion and vegetable prices.

India's Finance Minister has suggested the year-end inflation might come in around 6.5 percent.

Food inflation in India is being driven by many of the same factors that have pushed up the price of global commodities, and is also adding to rising fears of a broader crisis in the developing world, with the UN now warning that global prices have surpassed levels last seen during the 2007-08 crisis.

Light News

China to encourage SOEs to go listed as whole, to restructure state assets

China is encouraging the centrally-administered state-owned enterprises to go listing as a whole, along with its subsidiaries, as it aims to restructure state assets.

Wang Yong, head of the State-owned Assets Supervision 30 and Administration Commission, says this is part of a strategy to restructure state assets.

"We should step up the effort to transform state-owned enterprises into stock companies, and to diversify 31 equities 32. Private capitals are encouraged to participate in the reform. And large state-owned enterprises should go public as a whole."

Profits of China's centrally-administered state-owned enterprises are estimated to be worth 1 trillion yuan or around $150 billion U.S. dollars last year. But Wang Yong says many enterprises are not competitive in global market.

"Many state-owned enterprises are in the industries of oil, chemistry, power and metallurgy. They are the largest energy consumer and pollutant 33 producer. Therefore, they face a tough burden now that China is targeting green development."

Meanwhile, China has set up a new asset management company, with an aim of restructuring uncompetitive state-owned enterprises.

China to Accelerate Pace of Liberalizing Interest Rate Reform

Reform of the interest rate system is once again being highlighted in China's new Five-year economic and social development plan. Although no substantial progress was made during the past five years, China's central bank vows 34 to push forward the reform in a steady manner in the coming years. Is China's capital market mature enough for a market-oriented interest rate regime? And what would be its impact?

Beijing starts to offer group ticket service

The Beijing Railway Administration has launched a service to offer group ticket sales to migrant workers. This is expected to make it easier for migrant workers to buy train tickets during Spring Festival travel rush that begins from January 19.

The service is available at both the Beijing Railway Station and Beijing West Railway Station.

Several companies have already taken advantage of the service.

"My company needs more than 800 tickets this year. Though the destinations spread all over the country, the group ticket service has made it much easier."

Officials at the two railway stations have opened additional ticket offices exclusively for group ticket purchases.

"We have opened two additional ticket offices for migrant workers and extended the service time. Now three ticket offices are open from 5:00 AM through 12:00 PM."

An estimated 6.2 million passengers will take the train everyday during the 40 day travel rush during Chinese traditional lunar new year.

2011 The top technology trends for 2011

Anchor: Tablet computers and connected internet TVs are being tipped as the top technology trends for 2011 as the annual Consumer Electronics Show opens in the US city of Las Vegas. The show is a treasure trove 35 of gadgets 36 and gizmos that manufacturers hope will rejuvenate 37 Main Street sales still suffering from the ill effects of the global financial crisis.

Media Digest

Out of Wired Magazine: A new genetic 38 test can reveal the hair color of unseen criminal suspects or unidentifiable victims.

The new analysis used a collection of recently discovered mutations linked to hair color, and it can predict the hue 39 of an unknown person's hair with about 80 to 90 percent accuracy.

Forensic 40 investigators 41 extract DNA 42 from blood, bones, spit, and other bodily stuff left at crime scenes, then check for matches in genetic databases. Until the past decade or so, unmatched samples weren't immediately helpful in crime solving.

Recent genetic research, however, has buoyed 43 DNA's forensic value by identifying markers linked to age, eye color, skin color and hair color.

Out of Fox News: The planet's northern magnetic pole is drifting slowly but steadily 44 towards Russia -- and it's throwing off planes in Florida.

Tampa International Airport was forced to readjust its runways to account for the movement of the Earth's magnetic fields, information that pilots rely upon to navigate 45 planes. Thanks to the fluctuations 46 in the force, the airport has closed its primary runway until next week to change taxiway signs to account for the shift.

The poles are generated by movements within the Earth's inner and outer cores, though the exact process isn't exactly understood. They're also constantly in flux 47, moving a few degrees every year.

Beyond just sliding around the planet, the magnetic north and south poles have been known to completely flip 48 as well.

Market update

US markets bounced off their lows but were still lower in Friday's final hour of trading after a weaker-than-expected December jobs report and an adverse 49 court ruling related to foreclosure liabilities that sank bank stocks.

The Dow Jones industrial average slipped 0.2 percent to 11,675. The Standard & Poor's 500 Index fell 0.2 percent, to 1,272. The Nasdaq Composite Index lost 0.3 percent, to 2,703.

Major markets in Europe also closed low. Britain's FTSE 100 lost 0.6 percent to 5984, Germany's DAX went down 0.5 percent to 6948, and France's CAC 40 dipped one percent to 3866.