News & Reports 2011-04-17

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In This Edition

Delegates at the Bo'ao Forum 1 for Asia praise China's contributions to the growth of global economy.

Business leaders believe hot money into Chinese real estate market leads to housing price bubbles.

Nigerian voters across the country turn out in large numbers to participate in the presidential election, which many hope will be the country's first credible 2 presidential election in decades.

Chancellor 3 Angela Merkel said Germany wants to shift away from nuclear energy as soon as possible.

Hot Issue Reports

BFA Delegates Laud 4 China's Progress

Delegates at the Bo'ao Forum for Asia have lauded 5 China's contributions to the growth of global economy, especially that of Asia, after joining the World Trade Organization 10 years ago.

Carlos Gutierrez, former US Secretary of Commerce, echoes the sentiment at the forum's 2011 annual conference which ended on Saturday in the scenic 6 town of Boao in south China's Hainan Province.

"I think it's being phenomena 7. I think it's hard to find a parallel in human history of China's economic rise and China's impact in the world."

Leif Johansson, CEO of Volvo Group, says China's accession into World Trade Organization has brought many opportunities to the car maker 8.

"China is a very important market for a couple of reasons. It's a vast market, a huge market, but also qualifying to be a sophisticated market."

Johansson adds the Chinese market is becoming more and more important, as seen from its investment on research and development.

But China's Commerce Minister Chen Deming warns that the world's second largest economy still lacks its own internationally-recognized brands.

"I think the most important thing is to build China's own brand. I feel embarrassed that China has no brand on the list of top 100 export brands, even though China is the biggest export country and the second largest import country in the world."

The minister points out that China now stands at a critical juncture 9 for export transition, though it has made great progress in trade in the last decade.

Hot Money into Chinese Real Estate Market Leads to Housing Price Bubbles

A senior manager of a major Chinese bank says hot money entering the country's real estate market has led to bubbles in housing prices in the country.

Jiang Jianqing, Chairman of the Industrial and Commercial Bank of China, one of China's top five banks, made the remark during the Bo'ao Forum for Asia Annual Conference in Hainan Province.

Jiang said when emerging economies like China grow rapidly and their exchange rates appreciate, hot money floods into them as is happening now in China's real estate market.

"A great deal of foreign hot money is flooding into China's real estate market, which has added new capital to the Chinese market and features comparatively easy liquidity 10. Under such an influence, bubbles have appeared in housing prices in some areas and cities in China."

Liu Erfei, Managing Director and Country Executive for China at the Bank of America Merrill Lynch, agrees that emerging economies are attractive destinations for hot money.

"India, Brazil and China have attracted a great amount of capital inflow. China as a market with a fast rate of wealth growth is, of course, the most attractive among others for hot money. There has been no indication that the capital inflow is slowing down."

Data from China's State Administration of Foreign Exchange indicate a net inflow of 35.5 billion U.S. dollars into China last year, accounting 11 for 7.6 percent of the country's foreign exchange reserve. The figure surpassed the internationally accepted warning line of 6 percent.

At present, with the continuation of quantitative 12 easing in the United States and an increased interest rate by European Central Bank, emerging economies like China are in a general interest rate hike cycle.

China Supports Necessary UN Security Council Reform

China's Foreign Ministry 13 spokesman Hong Lei says China supports reasonable and necessary reforms for the United Nations Security Council.

Hong added that China advocated UN member states to seek "a package of" solutions and reach the broadest consensus 15 with patient and democratic consultation 16.

China strongly opposes any "step-by-step" or "piecemeal 17" approach in the reform, and objects to forcing an immature 18 draft resolution into action.

Meanwhile, in New Delhi, spokesperson of India's ruling Congress Party, Abhishek Manu Singhvi, also commented on the proposed UN reforms and India's opposition 19 to unilateralism.

"India has steadfastly 20 cautioned against unilateralism, especially where the use of force involving the crossing of boundaries arises. We are therefore happy to note that the joint 21 declaration at the BRICS gathering 22 in China largely endorses 23 that old established principled Indian stand that use of force unilaterally across sovereignty, across sovereign boundaries, is not acceptable."

Leaders of the BRICS countries--Brazil, Russia, India, China and South Africa-issued the Sanya Declaration on Thursday at the BRICS Leaders Meeting in the southern Chinese resort city of Sanya in Hainan Province.

In it, they repeated their call for a comprehensive reform of the UN, including its Security Council, to make the international organization more efficient and representative.

Nigerians Turn out to Elect New President

Nigerian voters across the country turned out in large numbers to participate in the presidential election, which many hope will be the country's first credible presidential election in decades.

Lines formed early across the country, including the dusty alleyway in the northern village of Daura where former military ruler Muhammadu Buhari will cast his ballot 24.

Musa Abubakar, a voter living nearby the polling station, expressed his joyous 25 mood after casting his vote.

"I came here at exactly 6 a.m., and coming here I met almost more than 20 people before me. You can see everybody is happy. Everybody is almost jubilant, because we want to believe that the time has come for us to elect with, you know, a feeling that at least we have the leaders who we can call our leaders."

There are more than 73 million eligible 26 voters in the most populous 27 African nation.

At least 20 candidates are running in the election. But the four candidates considered the frontrunners include incumbent 28 President Goodluck Jonathan, former military head of state Muhammadu Buhari, Nuhu Ribadu of the main opposition party, and Ibrahim Shekarau of the All Nigeria Peoples Party.

Clinton in S.Korea for Talks on Nuclear and Free Trade

U.S. Secretary of State Hillary Clinton has held a meeting with her South Korean counterpart in Seoul on nonproliferation and free trade.

Clinton said the two countries will continue to work together closely on bilateral 29 and global issues.

"We have worked closely together and we will continue to do so on non-proliferation. We're looking forward to the nuclear security summit next year you'll be hosting. We're very grateful for that."

Clinton arrived in South Korea earlier on Saturday for her two-day visit to the country.

South Korea's Foreign Minister Kim Sung-hwan reinforced his country's wiliness to work with the U.S. in the nuclear issue.

"Your support for inter-Korean dialogue first was the underlying 30 force for the progress of South-North dialogue. I also look forward to working closely with you in resolving North Korean nuclear issues."

Clinton also mentioned the free trade deal between the two countries, which is still awaiting approval by the South Korean congress.

"I am very encouraged and determined 31 about the passages of the free trade agreement. We will be consulting and making the case together to our respected legislators. And I'm very confident that there will be a positive outcome that will benefit both of our countries. "

Merkel says German wants to shift away from nuclear energy as soon as possible

Chancellor Angela Merkel said Germany wants to shift away from nuclear energy as soon as possible.

After meeting Germany's state premiers 32 to discuss the topic, Merkel said the government would concentrate on developing Germany's power grid 33, renewable energy sector 34, and energy efficiency.

"We are making a very ambitious attempt and there is a lot of political will to at least create a framework in which not only the exit is made clear but also how an independent German energy supply can be achieved without nuclear power."

Merkel also said that Germany's move away from nuclear energy will require the construction of new gas and coal plants.

While the meeting took place, dozens of protesters took part in an anti-nuclear demonstration 35 outside the chancellor's office, calling on the government to leave nuclear energy as quickly as possible and send an example to the rest of the world.

Thousands Protest against Hungary's New Constitution

Thousands protested against the ruling Fidesz party's overhaul 36 of Hungary's constitution, which critics say will weaken democratic checks and balances.

The constitution will allow the government to curb 37 the powers of the top court on budget matters and will allow the president to dissolve parliament if a budget is not approved by April.

Protestors, organized via social network websites, claimed that civil society groups were not consulted over the changes.

"At the moment, apart from the hunger for power, nothing necessitates 38 a new constitution, especially not such a constitution, in such a way that the checks and balances are torn down."

"This constitution is a joke. This is about strengthening the governing party and its leader on the top."

Rewriting Hungary's constitution has been a long-held ambition of Fidesz, which says the new text will complete the democratization process that started in 1989.

The text to be approved will come into force next year, but a raft of subsidiary legislation must also be passed by a two-thirds majority of parliament.

The opposition Socialists 39 and green liberal LMP parties boycotted 40 the drafting process, saying it was pointless taking part as Fidesz refused to listen to their arguments.

In response, Fidesz said the opposition had failed in its duty by not offering an alternative text.

Japanese Official Optimistic about Economic Recovery

A senior official from the Japanese Ministry of Foreign Affairs says the country's economy will see a recovery this year following the country's devastating 41 earthquake.

In the meantime, the Japanese government is discussing a supplementary 42 budget of several trillion yen 43 for reconstruction 44 work.

Our reporter Zhang Cheng has more.

At the Boao Forum, Hideaki Domichi, a senior official with the Japanese Foreign Ministry, discussed the earthquake's impact on Japan's economy.

"Japan's economic losses are about 16 to 25 trillion yen. The earthquake heavily damaged the vehicle industry in northeast Japan. The supply chain has been partly broken, and the shortage of electricity in the northeast will last until this summer."

Hideaki said a downward trend exists in Japan's production industry, but as roads and railways are being repaired, it is hoped that the production chain will be smooth in June or July.

He also said he was optimistic that Japan's economy would be on the recovery track this year, as the country's production and supply chains recover.

Hideaki made the remarks at the forum called "Rediscover the Growth Potential of Japan."

Government officials, entrepreneurs and scholars joined the discussion to share their thoughts about Japan's post-quake economic recovery.

Akio Mimura, Chairman of Nippon Steel Corporation, said Japan's severe fiscal 45 deficit 46 would drag down the pace of Japan's economic recovery.

He said he doubted Japan's ability to issue a large stimulus 47 package for reconstruction under such circumstances and insisted on levying 48 more taxes.

"Rather than thinking about today's happiness, we should think about the future. That is to say, we should be forward-looking to solve the huge fiscal deficit through increasing taxes. By doing so, the government, in the longer term, is capable of supporting Japan's reconstruction work and enterprises."

Haruhiko Hirate, Senior Vice 49 President of Takeda Pharmaceutical 50, said a long-term strategy is crucial for economic recovery.

"Japan should have more strategic plans to guide the recovery from both the country level and enterprise level. China has a plan for every five years. Japan can also have one. Until now, Japan only has an annual development plan in which enterprises can't clearly see the development direction of the country and opportunities to invest."

Attendees at the forum believe despite the current economic depression, there is no reason to underestimate Japan's potential in technology and human resources.

They believe Japanese experiences in innovation, management and corporate 51 culture are still valued and emulated 52 in many ways, which will help Japan's economic recovery in the long term.

For CRI, I'm Zhang Cheng, in Boao.

Webber to Start 18th while Team-mate Vettel Takes Pole

In sports....Formula One world champion Sebastian Vettel seized his fourth pole position in a row for Red Bull at the Chinese Grand Prix on Saturday.

Britain's Jenson Button, winner in China last year after Vettel also set pole in that race, will start second on the grid for Sunday's race with McLaren team mate Lewis Hamilton third and Nico Rosberg fourth for Mercedes.

From Shanghai, Paul Ryding reports.

Sebastian Vettel will start in pole position for a third successive race in Shanghai on Sunday after posting the quickest time ever seen in China.

Vettel's run of one minute 33.706 saw him finish almost three-quarters-of-a-second quicker than nearest rival Jenson Button who finished just ahead of his compatriot Lewis Hamilton.

After qualifying, Vettel spoke 14 of his satisfaction at the weekend so far.

McLaren's British duo of Lewis Hamilton and Jenson Button topped the charts in Q2 after edging ahead of Vettel. It was the first and only time the German hasn't been top of the time charts so far this weekend.

After qualifying Jenson Button discussed the difficulty of producing a car capable of challenging Red Bull this weekend.

The biggest shock of the qualifying session was last year's championship runner-up Mark Webber being eliminated from qualifying at the first hurdle 53 after finishing just outside the qualifying group in Q1.

Harder option tyres combined with Webber's malfunctioning 54 KERS system to leave him outside the top 17 who advanced into the second qualifying period.

Britain's Paul Di Resta was the surprise package of qualifying as he eased into Q3 at his maiden 55 Chinese GP. His time put him in the final pack ahead of former world champion Michael Schumacher and Renault's Nick Heidfeld, eventually placing him eighth on the grid.

For CRI Sports, I'm Paul Ryding in Shanghai.

China Daily: Local Governments Should Use Land to Improve the Lives of Residents Rather than Earning Income

At a recent meeting convened 56 by the Ministry of Land and Resources, almost all of the 31 provinces and autonomous 57 regions claimed that their land use quotas 58 only met one-third of their needs.

However, official statistics show that many of them have large areas of land left undeveloped, even though they have had approval for some time.

A commentary from China Daily points out that, behind the call for more land use quotas is the urge for higher gross domestic product and more income from land sales, which undoubtedly 59 goes against the central government's strategy for transformation 60 of the country's development mode.

The author cites investigation 61 results by the ministry, which suggests that quite a large number of localities use the approved quotas of land to guarantee the GDP growth rather than using them for necessary infrastructure 62 and projects to improve residents' lives.

The author further argues that according to the 12th Five-Year Plan, the new development mode requires quality rather than quantity, and sustainability rather than the GDP figures at the expense of the environment and resources.

In that spirit, sales of land cannot remain the major channel of financial revenue for local governments as has been the case in the past years. Urban development cannot be sustained only by continued construction of huge projects, which not only waste resources, but also divert money that should be used to improve the lives of citizens.

The author finally says that the central government needs to have more effective measures to tighten 63 control over their local counterparts.

Otherwise, the transformation of the development mode will not materialize, and the conflict between governments and citizens will get worse, at the cost of the country's sustainable growth and social stability.