News & Reports 2010-06-27

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In This Edition

Leaders of the world's eight major industrial nations vow 1 to take collective action to prevent financial risks like the sovereign debt crisis from getting out of control.

The disputes between the United States and Europe over the proper timing 2 for withdrawing fiscal 3 stimulus 4 policies threaten to overshadow the ongoing 5 G-20 Summit in Canada.

U.S. lawmakers hammer out a historic overhaul 6 of financial regulations that would restrict derivatives 7 dealing 8 by banks and curb 9 their proprietary 10 trading.

And China has seized 38,000 suspects in drug-related crimes and confiscated 11 tons of drugs during a national campaign.

Hot Issue Reports

G8 Summit Concludes in Canada

The leaders of the world's eight top industrial countries have ended their meetings in Huntsville, Canada.

Speaking to reporters at the conclusion of the talks, Canadian Prime Minister Stephen Harper said leaders were unanimous on the need to take collective action to prevent financial risks like the sovereign debt crisis from resulting in another event like the collapse 12 of the Lehman Brothers investment bank.　

"We all realize that the world economy, the world economic recovery is fragile. We all realize that there are many risks going forward to that recovery. That said, I think that we recognize all the following: that what we must avoid at just about all cost some cataclysmic event."

But the countries were divided over whether to continue government stimulus spending, as the United States wants, or to cut mushrooming deficits 13, as Europe and Japan want.

On Afghanistan, Harper reaffirmed the leaders including himself commitment to a secure and stable Afghanistan.

"We realize challenges remain pretty severe. That said, I think there is a general recognition around the G8 table that we have to continue to put our shoulder to the wheel to ultimately ensure that what we leave behind is a stable Afghanistan that would be a positive contributor to the world, world security and not a potential source of terrorism or a failed state."

The G8 leaders said it was important to accelerate efforts to make sure the country's own security forces can "assume increasing responsibility within five years."

After the summit, the leaders took helicopters back to Toronto for the G20 meetings which expand the group to include major emerging economic powers such as China, India and South Korea. It is the first time for these two important international forums 14 to be held back-to-back in the same country.

Major Protest during G20 Summit Staged in Toronto

As the Group of Eight summit in Ontario, Canada concluded Saturday, leaders from G20 nations began their summit in Toronto.

Dozens of police in riot gear guarded a sprawling 15 metal fence encircling the site where leaders from the Group of 20 nations have gathered.　　

Officials expect the summit to be the subject of a range of protests.

The fence encloses a five-block by seven-block stretch of downtown Toronto, diverting traffic for all but workers and residents from the area.

Earlier, at least 2,000 people had marched in the downtown streets in the Canadian city of Toronto in a major protest during the Group of 20 summit.

One protester dressed in camouflage 16 with a battery hanging out of his ear said the focus should be on keeping the global financial crisis from spreading.

"Middle class has to realize this crisis is their destruction. There's going to be hyper-inflationary depression. It's happened many times around the world."

Riot police holding shields blocked the marchers. The crowd remained largely calm and peaceful when they were halted, only chanting slogans and singing loudly.

US-Europe Fiscal Policy Spat 17 Overshadows G20 Summit

The dispute between the United States and Europe over the proper timing for withdrawing fiscal stimulus policies has threatened to overshadow the G-20 Summit.

Experts believe that leaders of the largest economies will give priority to issues concerning global economic recovery during the two-day meeting.

Zhang Ru has more.

Reporter: The global economy is showing positive signs of recovery. But Huang Ying, a researcher at the China Institutes of Contemporary International Relations in Beijing, warns that potential threats could drag the economy into a downward trend.

"The sovereign debt crisis in Europe may spread to broader areas if it is not properly handled. And we are still not assured whether the world economy can stay on the recovery track on its own if an exit strategy is implemented 18. So for the Toronto summit, I am afraid that the G-20 leaders will be more preoccupied 19 with how to strengthen the fragile recovery than other issues."

As the summit approaches, there seems to be no consensus 20 on what should be done to assure strong and sustainable global growth.

Just a week ahead of the G-20 Summit, U.S. President Barack Obama warned his fellow G-20 leaders in a letter not to withdraw fiscal stimulus too soon.

But the European Union has called on the G-20 group of nations to coordinate 21 with each other in planning exit strategies from stimulus measures.

Sun Jie, a researcher at the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, explains the reasons behind the disagreements.

"The key gauge 22 used by the Untied 23 States to set its economic policy is the unemployment rate. In recent months, the unemployment rate in the U.S. has remained close to 10 percent, which is still very high. So it's not a proper time for the U.S. to move towards exit strategies."

Sun Jie says figures from the U.S. Federal Reserve show that despite its easy monetary 24 policy, American consumers and private enterprises are still not willing to borrow money from banks amid economic uncertainties 25.

He says to confine the spread of the sovereign debt crisis that has engulfed 26 Greece, European nations must arrange exit strategies by cutting their budgets.

This is why G-20 leaders may not forge a consensus on the issue during the summit.

"The G-20 Summit can only serve as a platform for countries to be fully 27 engaged in discussions. More importantly, the U.S. and Europe have a large share of the world's GDP. They also have a great impact on the trend of the global economy. So their economic polices and views on the economic situation can be used by other countries as a reference."

The G-20, which groups 19 countries plus the European Union, accounts for 85 percent of the world's gross national product. Experts predict that countries will also debate issues such as a global tax on banks and financial reforms.

For CRI, I'm Zhang Ru.

US Lawmakers Agree on Landmark 28 Financial Regulation on the Eve of G8, G20 Meetings

U.S. lawmakers have hammered out a historic overhaul of financial regulations.

Democrats 29 raced to complete their work before US President Barack Obama left for the G8 and G20 meetings in Canada, where he can tout 30 the changes as a blueprint 31 for other countries.

Obama praised their efforts and said the G8 nations needed to work together.

"The reforms making their way through congress will hold Wall Street accountable so we can help prevent another financial crisis like the one we are still recovering from. We'll put in place the toughest consumer financial protections in our history, while creating an independent agency to enforce them."

Legislators agreed to a rewrite of Wall Street rules that may crimp the industry's profits and subject it to tougher oversight 32 and tighter restrictions 33.

The bill will restrict derivatives dealing by banks and curb their proprietary trading to shield taxpayer-backed deposits from more risky 34 activities.

Banks will be allowed to keep most swap 35 dealing activity in-house, although the riskiest 36 trading would be pushed out. They will also be permitted small investments in hedge funds and private equity 37 funds.

The reforms must still win final approval from both chambers 38 of Congress before Obama can sign them into law.

Quick approval is expected and the reform could go to Obama for his signature by July 4.

Hamas Lawmaker Refuses to Leave Jerusalem

Israel's decision to expel four Hamas politicians from Jerusalem threatened to set off a new crisis over the disputed city and could hinder U.S. efforts to restart peace talks.

Israel has not said where the three Palestinian lawmakers and a former Cabinet minister would be sent, but somewhere in the West Bank is likely.

Hamas lawmaker Mohammed Abu Teir, one of those set for expulsion, said they won't leave voluntarily.

"I reject the actions of the police and of the occupation to begin with, I did nothing to have the police arrest me and if they will try, I am in my home and I will not leave willingly. I am rooted in my land and in my village and these actions are unacceptable and unjust."

Israel revoked 39 their Jerusalem residency rights in 2006 and arrested them because they belong to Hamas. The expulsion orders were delayed because the men have been in prison until recently.

Israel has stripped thousands of Palestinians of their residency rights in east Jerusalem since capturing and annexing 40 the area in the 1967 Mideast War.

Palestinians say revoking 41 Jerusalem IDs is part of an overall Israeli policy to reduce the number of Jerusalem's Palestinians, who make up one-third the city's population.

Expert: Prevent Young People from Drug Abuse

A local court in southeast China's Fujian Province Saturday announced the executions of two drug dealers 42 who were convicted of selling and trafficking more than 12 thousand grams of heroin 43.

The Ministry 44 of Public Security says police across the country have seized 38,000 suspects in drug-related crimes from January to May during a national campaign.

A total of 2.3 tons of heroine, 2.4 tons of crystal methamphetamine and 2.1 tons of ketamine were confiscated, along with 243 tons of chemicals for drug making.

People under the age of 30 account for a large percentage of the total drug users in China. The vulnerability young people have to succumb 45 to drug abuse has become a major concern in recent years.

Xyee takes a closer look.

Reporter: Qiu Zeqi, professor with the Institute of Sociology and Anthropology 46 at Peking University says young people account for nearly 80 percent of China's total drug users, of which 60 percent are male.

He says most drug users are exposed to drugs through their friends.

"Our study shows that 97 percent of drug users were in the crowd the first time they took drugs. That is to say, if they have friends who take drugs and encourage others to take, it will be easily for them to follow suit."

Qiu Zeqi says drugs such as ecstasy 47 and Ketamine are popular among young people.

"Drugs in the family of Methamphetamine and Ketamine have an influence on people's nerves, making them excited. They are widely used at parties or night clubs. So these drugs are often called "Party Drugs". Young people usually take them for excitement."

Many young people take it for granted that ecstasy and Ketamine are not as addictive 48 as heroin and cocaine 49.

But Professor Qiu says their view has been proven false.

"Drugs such as ecstasy are also addictive. But compared with heroin and cocaine, it may take a longer time for people to be hooked. That's why in the United States, many people think that smoking marijuana is not a big deal."

He warns that those who abuse ecstasy may easily get senile dementia when they get old. But he says at present young people are not well informed on the risks for taking such drugs.

"It's important to let young people know the consequences of taking drugs. Since they are too young to make a correct judgment 50, their parents should talk to their children about the hazards of drug abuse."

For CRI, I am Xyee.

World Cup Brings Business To Driving Service Market

The World Cup not only has brought Chinese football fans a frenzied 51 summer, but also an increase in business for companies that provide drivers to take people home after parties. Their logos say, "Don't worry about binge drinking, someone will send you home."

Let's follow our reporter Liu Min to take a closer look.

Reporter: At a warm midnight, Fan Debin from the driving service company Changyinwuyou goes to a bar in eastern Beijing's Sanlitun neighborhood to drive a customer home. He says as a football fan he's never watched a single match since the World Cup started earlier this month, because he has been busy driving home inebriated 52 fans.

"This is the third customer tonight. There is another one later for me to get. Ever since the World Cup started, orders asking our company for driving services have been jumping a lot every day."

Providing such services is strictly 53 regulated. Drivers usually show the customers their driver's licenses 54 first, and then sign a driving service contract with the customers.

One customer says the service is very convenient for him.

"It's not a good option to take a taxi since I need to pick up some friends on the way to the banquet. That's why I have to drive my own car. This kind of service can guarantee that someone will drive me home after the party."

Drivers like Fan Debin say they now must work overtime 55 every day since demand for drivers has recently risen, thanks to the World Cup.

"In the past, we usually could go home after the last service before 10 p.m. or 11 p.m. Now we have extended our working hours to 2 to 3 a.m. or even 5 o'clock in the morning."

Earlier, Beijing's traffic control department pledged it would crack down on drunk-driving with strict measures, especially during the World Cup. Those who violate traffic regulations will have their licenses revoked. Extreme behaviors while driving could even result in arrest by police.

The World Cup has been a catalyst 56 for booming business at driving service companies.

Zhang Jing, manager of one such company, says orders for driving services have increased by 50 percent or more.

"Before the World Cup, orders were only 40 to 50 every day. But now the obvious change is the number has jumped to 70 to 80 orders per day."

The price for driving services during the day starts at 60 yuan per hour. But the average price during the night is a bit higher. Between 10 p.m. and 11 p.m. customers must pay 80 yuan. The price jumps to 100 yuan when service is provided between 11 p.m. and 12 p.m. During this period, driving service companies can make about 100 thousand yuan more than before.

Zhang Jin is very happy about the extra profit his firm is making during the World Cup.

"The World Cup has brought us much more businesses these days. We are also busy recruiting more drivers. We are cooperating with other companies in the city. Their drivers can also take our orders so that such services can cover most parts of the city."

The World Cup is not only making driver's service companies more popular these days, but also luring 57 many individual drivers who are trying to get a slice of the booming market, with hundreds of driving service advertising 58 threads emerging online.

Industry insiders remind customers to always check licenses and certificates while they are sober before signing a service contract to avoid a possible dispute later.

For CRI, I'm Liu Min.

China Daily: Fearful Feasts

A report has surfaced exposing officials with the Grain Bureau in Shandong who splurged some 15,000 yuan, or more than 2,000 US dollars, at a recent banquet.

Only 12 people attended the private affair which was held for high ranking authorities.

An article in China's leading English newspaper, China Daily, points out that this is the latest example of how precious public money is wasted.

Officials reportedly squander 59 about 300 billion yuan in public money on business-related entertainment expenses every year.

Though the State Council, the country's Cabinet, says the figure is exaggerated, it admits the amount of public money wasted on entertaining guests is exorbitant 60.

Yet public outcry over this misuse 61 of money has not been very strong. Many don't take it seriously since they think it is fine and natural for officials to spend money on guests, rather than taking it for themselves.

However, the article argues that throwing away astronomical 62 amounts of cash on food and drinks every year is simply a gross misuse of taxpayers 63' money.

It says it is in urgent need for governments at all levels to set a limit for an official banquet bill. Government departments should also be asked to limit their spending on hospitality to a certain percentage of their budgets.

Time Weekly: Tax Reductions Needed for Wage Increase

Wage increases and tax hikes have been hot topics in recent days.

In the wake of recent disputes between capital and labor 64, the All-China Federation 65 of Trade Unions has been calling for an increase in workers' wages. The central government has also vowed 66 to further income reform.

Meanwhile, reform on taxes is being studied to adjust wealth distribution.

While some people cheered at the news, an opinion piece in the Guangdong-based Time Weekly holds a different view.

The article cites the example of Foxconn, whose shares nose dived after announcing wage increases for its employees. It says that shows investors 67' concerns over the rising costs of Foxconn, which may have a negative effect on workers' income in the long run.

The article holds the view that in order to increase the income of workers, the government should first trim taxes.

According to Forbes annual "Tax Misery 68 Index", the Chinese mainland is the world's second most miserable 69 tax-wise.

The commentary indicates that low- and medium-income people are levied 70 heavy taxes in China, while the rich are the main pillars for tax revenue in other countries. And the tax burden on small- and medium-sized enterprises as well as ordinary labors 71 remains 72 one of the root causes to the low income of workers.

The opinion piece says it doesn't oppose the introduction of property tax, consumption duty and inheritance duty, which target high-income earners; but stresses that large-scale tax reductions are needed while introducing new taxes.