News & Reports 2010-12-19

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In This Edition

China and Russia renew their calls for restraint from all parties concerned to avoid escalation 1 of tension on the Korean Peninsula.

China and Pakistan ink 10 billion U.S. dollars trade deal during Premier 2 Wen Jiabao's visit to the South Asian nation.

Iraqi parliament lifts a ban on Sunni Muslim politicians, bringing the country closer to a unity 3 government and an end to months of political turmoil 4.

China's Banking 5 Regulatory Commission Chairman, Liu Mingkang, says the country's can keep a grip on inflation next year, but will have a harder time coping with hot money inflows fanned by loose monetary 6 polices in some developed economies.

Hot Issue Reports

Chinese, Russian FMs Call for Restraint on Korean Peninsula

Chinese Foreign Minister Yang Jiechi and his Russian counterpart Sergei Lavrov have called for restraint from all parties concerned to avoid escalation of tension on the Korean Peninsula.

During a phone conversation with Lavrov on Saturday night, Yang, said the situation on the peninsula has become tense recently and may further deteriorate 7.

Yang Jiechi stressed that China firmly opposes any actions to cause tension and worsen the situation, and demands both sides on the peninsula show calmness and restraint, carry out dialogue and contact, and completely avoid any actions that would fuel the tension.

Lavrov, for his part, said Russia attaches high importance to the developments on the peninsula, adding his country has expressed great concern to relevant countries and demanded utmost calmness and restraint from all parties concerned.

Russia is willing to work with China to make active efforts to reduce the tension on the peninsula.

Earlier,China's Vice 8 Foreign Minister Zhang Zhijun warned that the situation on the Korean peninsula was "extremely precarious 9, highly complicated and sensitive."

"China is deeply concerned about the situation. China has pointed 10 out many times to the relevant parties that people on both sides of the peninsula would suffer directly if a bloody 11 conflict occurred and that it would create a national tragedy of compatriots from the south and the north fighting against each other. What's more, if a conflict happened, inevitably 12 regional stability and peace would be destroyed, and neighbouring countries would also suffer."

South Korea has declared plans for a live shell artillery 13 drill in the tense waters southwest of Yeonpyeong Island on a selected date in the next few days depending on weather conditions.

The North has urged Seoul to immediately stop its plans for the shelling exercise, warning it would deliver a second and third "unpredicted self-defense counterattack" that would be bigger and more powerful than the previous one.

North and South Korea exchanged artillery fires near the Yeonpyeong Island last month during which four South Koreans were killed.

Chinese Premier Offers Aid to Pakistan

China and Pakistan have signed trade deals worth some 10 billion U.S. dollars during Chinese Premier Wen Jiabao's current visit.

Addressing the China-Pakistan Business Cooperation Summit in Islamabad on Saturday, Wen Jiabao said the deals, covering projects in the sectors 14 of new energy, agriculture, and non-ferrous metal imports, reflect the huge potential for expanding bilateral 15 economic and trade cooperation.

Earlier, the premier announced a package for post-flood reconstruction 16 in Pakistan, including a 10 million U.S. dollar grant for flood victim compensation and a 400 million dollar concession 17 loan.

"We will help Pakistan repair infrastructure 18 facilities that have been destroyed in the severe floods, including roads and electricity-generation facilities. The Chinese government has decided 19 to set aside 10 million US dollars in cash to support affected 20 Pakistani citizens. And we have decided to provide 400 million US dollars in loans and credits for projects that will meet the urgent needs of Pakistan."

On the cultural sphere, Wen Jiabao proposed to designate 2011 as the Year of China-Pakistan Friendship, and further broaden people-to-people exchanges.

In order to further enhance relations, Wen Jiabao says Beijing is ready to establish an annual conference mechanism 21 between the two countries' leaders and a regular dialogue framework between their foreign ministers.

For his part, Pakistani Prime Minister Yousuf Raza Gilani said China is Pakistan's "best" and "most-trusted" friend, and that he was proud of the growth of their bilateral "all-weather" friendship.

He added that Pakistan is willing to join hands with China to beef up top-level contacts and strategic cooperation.

Chinese Premier Wen Jiabao is on a two-nation overseas trip, which has already taken him to India.

EU Leaders Agree to Permanent Rescue Plan

EU leaders have agreed to work for closer economic cooperation amid market turmoil over towering debts in countries across the continent.

The leaders made progress at a summit in Brussels on a new rescue system for future debt crises.

They have decided to set up a long-term European Stability Mechanism to bail 22 out member states that get buried in debt beyond 2013.

That's when the current 750 billion euro bailout fund expires.

The mechanism will provide rescue loans to countries that face a crisis of liquidity 23 - that is, if they can't access money quickly enough to pay off their debts.

Crucially, it will also be able to force private creditors 24 to assume some losses when a country is deemed insolvent 25.

Herman Van Rompuy, President of the European Council, stresses that the stability of the Eurozone is a priority of the EU.

"Euro area leaders underlined that we have a joint 26 economic strategy and a political will to do whatever is required to ensure the Eurozone's stability. Our joint economic strategy is part of the conclusions. Fiscal 27 consolidation 28, structural 29 growth and firm crisis management are the three pillars."

The EU is wrapping up a punishing year that has rocked the world's confidence in its ambitious experiment to share a currency.

The union has bailed 30 out two debt-saddled members - Greece and Ireland, and held countless 31 meetings to stabilize 32 the euro.

Iraqi Parliament Lifts Political Ban on 3 Sunnis

Iraq's parliament has lifted a ban on three Sunni Muslim politicians barred from running in national elections over allegations of having ties to Saddam Hussein's ousted 33 regime.

The former lawmaker Saleh al-Mutlaq and two other Sunnis are now allowed to return to political jobs.

The vote brings Iraq closer to a unity government and an end to months of political turmoil that began when the March 7th election failed to produce a clear winner.

It paves the way for broader Sunni participation 34 in the emerging government, headed by Shiite incumbent 35 Prime Minister Nouri al-Maliki.

Al Iraqiya bloc 36 spokesman Haidar al-Mullah said the decision marked a major step toward national reconciliation 37.

"As the matter is concerned with the issue of the Parliament session today voting to lift the political ban on Dr al-Mutlaq, Dr al Ani and Dr al Karbuli, we would like to clarify that al Iraqiya is moving forward to achieve national reconciliation and what happened today is a starting point for more reconciliation."

Al-Mutlaq is a critic of the incumbent Prime Minister and member of the Sunni-backed Iraqiya political coalition 38.

Al-Mutlaq was the most prominent of hundreds of candidates who were barred from the elections after a Shiite-led panel said they were loyalists to Saddam's outlawed 39 Baath Party.

Their blacklisting was seen as a thinly veiled attempt to prevent Sunnis from returning to power.

Iraq's Shiites and Sunnis have fought bitterly for power after the majority Shiites took control of the government that Sunnis ruled under Saddam.

South American Leaders Step up Regional Cooperation

South American leaders have agreed to step up efforts to integrate the region as they conclude a summit of Mercosur countries, a regional trading bloc.

Mercosur includes Brazil, Argentina, Uruguay and Paraguay.

Presidents of Bolivia and Chile have joined the bloc's leaders in southern Brazil's city of Foz do Iguacu.

The bloc has agreed on a plan to adopt common trade, investment and immigration policies to strengthen economic growth in the region.

Brazilian President Luiz Inacio Lula da Silva said Mercosur members have forged close ties in recent years, despite internal divergences 40.

"You can be certain that Mercosur is much more united and comprehensive, and we have many more needs."

Chilean President Sebastian Pinera said the continent has developed a lot in the past decades.

"We no longer speak of a lost time like the 80s, when the world advanced while Latin America only kept track. And when one analyzes 41 the way our continent faced this financial crisis, one realizes that Latin Americans know how to learn a lesson and realize that we have a huge mission ahead of us."

The economies of Mercosur are on track to grow between 7.5 percent and 9.5 percent this year.

Internal trade, including that with prospective 42 member Venezuela, has jumped to nearly 40 billion US dollars from a fraction of that a few years ago.

China Can Cap Inflation Next Year: Regulators

China can keep a grip on inflation next year, but will have a harder time coping with hot money inflows fanned by loose monetary polices in some developed economies. China's chief banking regulators also told a financial forum 43 in Beijing that the country will gradually make interest rates more market-oriented.

Property Tax Could be Complicated

If you thought buying property in China was expensive enough, there's a possibility prices could rise even higher if the government decides to go ahead a much talked about plan of introducing a residential 44 property tax. Long term, the hope is that the new tax will cool China's ever heating property market. But implementing 45 such a huge change is easier said than done, as CRI's Dominic Swire reports.

Indian Farm Minister Calls for Support of Nuclear Projects in Maharashtra

India's Farm Minister, Sharad Pawar, has slammed the media for spearheading opposition 46 over nuclear power projects in the western state of Maharashtra.

Pawar was speaking with media persons after attending an event in the state.

"Today, the media and street unions have decided not to allow the growth of Maharashtra. Every time a project comes up, they start opposing it. I have to take Maharashtra ahead and see the development of the new generation."

Hundreds of villagers, farmers and local fishing community have protested against a proposed nuclear plant to be built in Jaitapur port in the Ratangiri district of the state.

The 9, 900 Megawatt nuclear power plant is being constructed in collaboration 47 with a company based in France.

The project was cleared by India's Ministry 48 of Environment and Forests in late November.

The first unit of the plant is expected to become operational by 2018.

Media Digest

Fair Approach to Tackle Traffic Issues

Traffic congestion 49 has become too serious in Beijing to be left unattended. The city already has 4.7 million vehicles registered. The local road system, which includes all the planned expansion programs, can support only 6.7 million vehicles maximum. Based on the present growth, there will be seven million vehicles on the road by 2015. The result will be a nightmare.

There has been popular anticipation 50 of forceful administrative 51 intervention 52 to put checks on the accelerating car ownership. More specifically, there was the speculation 53 that Beijing would follow Shanghai's lead in auctioning 54 license 55 plates. To our pleasant surprise, that has not occurred.

An editorial from China Daily notes the municipal authorities in Beijing have refrained from adopting apparently 56 effective, yet morally problematic, measures to control traffic congestion. Instead, we have fairness.

The article goes on to explain raising the threshold of ownership might be the most efficient way to discourage potential automobile 57 owners from buying a car of their own. But the municipal decision-makers looked beyond efficiency and took fairness into consideration.

It is reassuring 58 to know that the local transport administration is determined 59 to "never" resort to auctioning license plates to control automobile ownership. It is unfair to those who do not have a car in their possession, whether or not they may choose to buy one someday. Nor is it fair when the potential buyers' financial resources are considered.

The paper says, in a culture like ours, public offices and their employees have all the means and resources necessary for imposing 60 arbitrary decisions. In fact, they are notorious for justifying 61 disregard of fairness with ideals. That the authorities in Beijing have to this point resisted that temptation and displayed respect for the legitimacy 62 of means is indeed something precious. The ideas, to further improve public transport and restrict the growth in automobile ownership by public offices, demonstrated more sophisticated thinking in composing a sensible local transport framework.

The editorial concludes given Beijing's role as the national capital, vehicles owned and used by public offices are a considerable source of pressure on the local transport network. Yet they have been absent from most local congestion-control programs, which is unfair. The latest move is a step forward in taking into account those vehicles owned by the authorities.

Property Tax Has Limited Role to Play in Containing Surging Houses Prices

Property taxes will be piloted early next year in some Chinese cities, such as Chongqing and Shanghai. This upcoming tax is designed to curb 63 the overheated real estate market.

Ordinary people are concerned the financial burden of another tax while they are still painfully paying back their mortgages.

Ji Jianmin, commentator 64 at Guangming Website, points out that property taxes will just rub salt into the wound, worsening the already high house prices. He says the fact that prices are staying high is fueled by profit-seeking real estate developers and local governments who treat real estate deals as a source of windfall. At this point, the central government now looks to property taxes, which give the government a share in this profitable market.

Ji Jianmin further explains real estate developers will not foot the property tax bill. The consumer will bear this burden. The precondition of lowering commodity prices is to reduce the production cost first, but property taxes will instead increase the cost of property development. Therefore, the launch of property taxes will be of little help in decreasing the prices.

Yin Pingping, commentator from Xinhua News Agency, also echoes this point by adding that many factors are responsible for disorder 65 in the real estate market. Excessive liquidity, ineffective policies, and insufficient 66 regulations are the most obvious issues. The introduction of property taxes will add to them. Therefore, the expectation that property taxes will fight escalating 67 property prices should be readjusted.