Thursday, 11 July 2013

China's present scars of past Resistance against Japan

For the Chinese people, July 7, 1937 is a day etched on their minds. It was the day which marked the beginning of the eight-year-long China's War of Resistance Against Japanese Aggression.
Nowadays, the 1.3 billion Chinese people could still feel the pain, because of not only the atrocities of the aggression, but also the current Japanese government's denial of the history.
Today, the July 7 Incident, or the Lugouqiao Incident, should bear greater significance for Japan than for China.
Japanese Prime Minister Shinzo Abe, since taking office last December, has repeatedly made remarks seen as attempts to whitewash Japan's wartime atrocity. He has gone so far as to say that there is no clear definition of aggression and raise questions over Japan's past war apologies.
Ancient Chinese talents suggested that people should often look into the mirror of history to avoid making reckless decisions that could endanger their country.
The Japanese government, however, is trying to get rid of the mirror. That's why Tokyo made the decision, among others, to nationalize some of the Diaoyu Islands, an integral part of the Chinese territory, last year, raising hackles of Beijing and badly impacting the ties between Asia's two largest economies.
In a recent development, Abe on Wednesday criticized China for shutting "all the doors" to dialogue because of the countries' territorial disputes.
he world's third largest economy only after the United States and China, has already slid further into the fourth recession in the past 12 years.
Furthermore, the recklessness of Tokyo, concerning not only China but a few other countries, could affect Asia as a whole by sowing seeds of instability into the region and placing blockade into the continent's economic cooperation.
As one of the important players in Asia and on world arena, it is high time for Japan to have a responsible attitude when it comes to the problems of history and respect the feelings of the Asian people.
Source: Xinhua

National Strike in Chile

Protest and national strike, convened by the Single Confederation of Workers (CUT, for its acronym in Spanish), and supported by the Council of Student Federations of Chile (CONFECH, for its acronym in Spanish) in Santiago, capital of Chile, on July 11, 2013. The protest aims to end the "laws and the conditions of precariousness with which the employment in the country has been built, and the need for a tributary reform, thus avoiding the inequality in education, health and housing", according to the organizers. 

Source  Xinhua

Brazil: Strikes by Trade Unions

A series of strikes organized by trade unions on Thursday resulted in the blockage of important highways and three of Brazil's largest ports.
Brazil's most important port of Santos, and other two large ports of Itaguai and of Suape were blocked for several hours with trucks with cargo unable to reach the port area, according to reports collected here.
The Dutra highway linking Brazil's largest cities -- Rio and Sao Paulo -- was blocked, as were over 20 other highways all over the country, the reports said.
Bus and subway workers' unions in some state capitals such as Belo Horizonte and Porto Alegre joined the strikes, leaving people in these cities without public transportation to go to work.
Teachers' associations also joined the strikes, so some schools and universities had their classes suspended.
The unions' demands include changes in the social security regulations, reduction in work hours, and better salaries for retired workers and pension beneficiaries.
Source: Xinhua

More Americans accept immigration

Americans are more accepting of immigration than in years past, with 40 percent saying current levels should be maintained, increasing the possibility that Congress will pass immigration reform, Gallup found in a poll released Thursday.
Thirty-five percent say immigration should be decreased, and 23 percent - the highest rate Gallup has on record - said immigration should increase.
The figures stand in sharp contrast to a decade before, especially after the Sept. 11, 2001 terror attacks, when nearly half of Americans favored a decrease in immigration and a mere 12 percent to 18 percent wanted an increase.

U.S. credit increased by US$ 19.6 billion in May

Americans are once again spending more on credit, increasing their borrowing by $19.6 billion in May, according to the US Federal Reserve.
It is the biggest increase in borrowing in more than a year and reflects renewed confidence among US consumers.
More debt could help increase consumer spending, which accounts for more than 70% of US economic activity.
The total amount of borrowing reached a record $2.84 trillion, with student loans reaching $1 trillion.
Borrowing in the category that includes credit cards was at its highest level since 2010.
Economists say that is significant as credit card debt is often quickly translated into economic activity.
Source: BBC

U.S. starts investigation on Sany's patent infringement

The U.S. International Trade Commission (USITC) initiated a Section 337 investigation Thursday into Chinese multinational heavy machinery manufacturing company Sany for patent infringement.
The probe is grounded on a complaint filed by Manitowoc Cranes, LLC in the U.S. state of Wisconsin on June 12, 2013, the USITC said in a statement.
Manitowoc Cranes accused Sany and its U.S. entity of infringing its patents related to mobile cranes that use variable position counterweight (VPC) technology to improve operation and use of the cranes.
Source:  Xinhua

China's Defense Minister harsh words for Japan

China's military is strongly discontented with and firmly opposed to a recent Japanese defense report and has lodged a solemn representation to the Japanese side, said a Defense Ministry spokesman on Thursday.
"The new edition of Japan's defense white paper deliberately ignores facts and plays up the 'China's military threat'", said spokesman Geng Yansheng in a press release.
The Japanese white paper, which was released on Tuesday, improperly commented about China's defense and military building, made groundless accusations against China's legitimate conduct for safeguarding national sovereignty, and attempted to sow dissensions between China and its neighboring countries, said Geng.
He said China is on a path of peaceful development and its defense policies are purely defensive in nature.
The strategic aims of China's military development are very clear, he said, noting that China will be committed to safeguarding world peace and stability.
The Japanese white paper said "some of China's activities involve its intrusion into Japan's territorial waters, its violation of Japan's territorial airspace and even dangerous actions that could cause a contingency".
Citing a January incident in which Japan says a Chinese navy frigate locked weapons' radar on a Japanese destroyer in the East China Sea, the paper criticized China for denying use of the radar.
It also said the lack of transparency of Chinese military intentions is "a concern" for the region and the international community.
In response to these accusations, Geng said Japan's dissemination of China's lack of military transparency has ulterior motives.
He rejected the so-called China intrusion into Japan's territorial waters and airspace as well as the so-called Radar incident as ridiculous, saying Japan's actions of sowing discords have revealed its dangerous intentions to defame China and the Chinese military.
eng reiterated that China is unswerving in its determination and resolve to maintain territorial sovereignty and it cannot be criticized for taking actions to safeguard sovereignty.
The Japanese government illegally "purchased" part of the Diaoyu Islands in the East China Sea last September, which was a grave violation of China's territorial sovereignty and caused tensions in bilateral relations, said the spokesman.
However, Japan seems unwilling to reflect on its mistakes, instead, it falsely accuses China for destroying bilateral relations and being tough on the external front, said Geng, adding Japan's remarks will mislead international opinions and create tensions in the region.
The spokesman said Japan has used many pretexts for its military expansion in recent years. It has developed offensive combat powers and carried out joint military drills with some countries outside the region.
He also accused the irresponsible remarks by Japanese leaders on the country's wartime history, noting that Japan's moves will arouse the strong concern and high alert of its Asian neighbors and the international community for its development direction.
"We urge the Japanese side to reflect on its aggressive history, choose the path of peaceful development and win the trust of its Asian neighbors by concrete actions", said Geng.

Source: Xinhua

Renminbi has become more market oriented

 Yi Gang, deputy governor of the People's Bank of China said in Washington on Thursday that the two-way fluctuation expectation of Renminbi (RMB) exchange rate indicated that the Chinese currency had become more market-oriented.

BOJ: Japan having a modest economic recovery

The Bank of Japan (BoJ) has said the country's economy is "starting to recover modestly".The upbeat assessment of the economy came as the BoJ left its huge monetary easing programme unchanged.

It is the first time the BoJ has described the world's third-largest economy as being on the path towards expansion in more than two years.
The bank is to stick to its plan of pumping more than 60tn yen ($606bn; £402bn) a year into the economy.
The programme is known as "Abenomics'' after Prime Minister Shinzo Abe, who took office late last year.
The BoJ has been flagging up steady improvements in the economy for the past six months, but Thursday's announcement is the first to point to a broad recovery.
"With regard to the outlook, Japan's economy is expected to recover moderately on the back of the resilience in domestic demand and the pick-up in overseas economies," the BoJ said in a statement.
Source: NewsonJapan

China is not having a Hard Landing,Lou Jiwei Finance Minister

China's Finance Minister Lou Jiwei said here(Washington) Thursday that his country's economy will not take a hard landing and a slower economic growth rate is a necessary phenomenon from economic restructuring.
"Despite the slowdown of China's economic growth rate, the structural reform is paying off," Lou told the press after a session on reform and sustainable development on the second day of the two-day China-U.S. meeting.(see previous post)

He said China's growth performance and quality had been enhanced and the country has the confidence to deal with the current challenges and promote the economic sustainable growth.
"The contribution of consumption to GDP (Gross Domestic Product) growth has increased, the proportion of service sector to GDP has also enhanced, the ratio of current account surplus of GDP has dropped, employment situation is good, and CPI (Consumer Price Index) is not high," said Lou.
He added that China's expected GDP growth rate this year is seven percent. In the first quarter the growth rate was 7.7 percent, and the rate in the first half of this year will be slightly lower than 7.7 percent. There is no doubt that China can achieve the growth target, though the seven-percent goal should not be considered as the bottom line.
With regard to the exit of U.S. quantitative easing policy, Lou said the U.S. economy has maintained 40 consecutive months of recovery, so China understood and supported U.S. consideration of tapering. China has not fully liberalized its capital account, so the impact on China will not be serious, he added.

Central Bankers Dilemma

According to the Wall Street Journal, although central bankers mainly referred to the rise in bond yields when worrying about market reactions to interest rate expectations, their real fear was what was happening to equities. After all, in the past, rising bond yields have been taken as signals that the economy was recovering as long as they were accompanied by stable or rising equity prices.
"But this official sensitivity to equity prices is a worry, especially given that on at least two long-term valuation metrics, equities are seriously overpriced. The cyclically adjusted price-to-equity ratio and the replacement cost measure (the so-called Tobin-Q) suggest fair value on U.S. shares is a third or more below where indexes are currently trading. Even former Bank of England Governor Mervyn King warned earlier this year that equity markets had got ahead of themselves.
For central bankers, equity markets are doubly important. They are a leading indicator of the economy’s prospects and they are also a driver of those prospects through wealth effects: as people feel richer they spend more, giving the economy upward momentum".

Wall Street and Bernanke Dance

From the Wall Street Journal
Excerpts

The dollar has fallen and stock and bond markets are rallying worldwide,all because Ben Bernank told us what he and other Federal Reserve officials have, quite frankly, been saying ever since he laid out plans to taper bond purchases on June 19. The Chairman’s message then, as now, was that while the Fed might start gradually reducing its asset-buying, the broad thrust of loose monetary policy – and particularly record-low interest rates – will last for a long time.

Wall Street and Bernanke Dance
Investors want loose monetary conditions to continue indefinitely and the Fed wants bond market rates low enough and stock prices high enough to support economic growth. And yet tapering must go on. So the Fed has to send soothing messages to its dance partner. And with the Dow Jones Industrial Average now trading all the way back at record highs, it seems the Fed has finally succeeded in assuring investors that they won’t be left alone on the floor.

The more the Fed ties itself to the market’s interests, the more difficult that withdrawal becomes without prompting another, destabilizing selloff. Meanwhile, in this post-crisis age the Fed is extra- sensitive to the risks of fueling bubbles in asset markets. Who’s to say the stock market, which is performing far more positively than the underlying economy, isn’t already experiencing one?

U.S. Market Indexes at Close



  DJI                              15,460.92                169.26              1.11%

  S&P 500                       1,675.02                 22.41               1.36%

  Nasdaq                         3,578.30                  57.54               1.63%


  Source: Schwab

House Passes Farm Bill without Food-Stamps

U.S. House(Republicans) passes Revised Farm Bill without Food-Stamp Aid

Source:  Marketwatch

China becoming a Big Brother? Part I

Last week, the Nicaraguan congress approved a US$40 billion project for a Chinese company to build an Isthmian canal parallel to Panama's. For those of us prone to peering anxiously into the future, this gave a disquieting advance picture of the new world of Chinese hegemony into which we are probably entering, whether we like it or not.

There is no question that China's enormous economic success in the last 40 years has brought forth a desire, both among the regime and among China's people as a whole, to resume the position of global dominance it enjoyed for two millennia. Ten years ago, this ambition would have seemed quixotic, except over the time-frame of half a century or more. Today, both because of China's economic successes and because of US economic, military and foreign policy blunders, it appears entirely realistic, and for many observers inevitable. 

Whether China's advance is something to be welcomed depends entirely on what kind of regime China has as a hegemon. Two possibilities exist. First, China may continue its current growth on its current trajectory with its current regime, with its GDP per capita increasing from about 15% of the US figure to about 50%. At that point, the inefficiencies and corruption of China's current government system would prevent further progress towards the "frontier" affluence of the United States and the better-run European and Asian free-market economies. 

Indeed, China's GDP would be as great as that of the US and the EU combined, although smaller free-market countries like Canada, Australia and the free-market East Asian economies of Japan, South Korea and the 10-member Association of Southeast Asian Nations would still give the West a modest preponderance. 

In this case, you can imagine the Chinese playing the game of international power politics rather like the old Soviet Union, at least in its less malign days after Stalin's death. 

The Nicaraguan canal, a $40 billion investment that is hopelessly economically unviable (as Panama's adjacent canal has annual revenues of only $2.4 billion) would be followed by a naval base. China would enjoy the enthusiastic cooperation of the anti-American Ortega government, which would have been propped up by Chinese money and when necessary information about its opponents. Daniel Ortega, is only 67 and in good health. Another 20 years of his rule would cement China's position in the Western Hemisphere.  

Like Rafael Correa's Ecuador would also cement itself into long-lasting dictatorships under Chinese dominance. Countries like Venezuela and Argentina, with anti-Western regimes that got into economic trouble, would find China very helpful, although not all of these interventions would be successful. Africa would also be dotted with Chinese satrapies.

AsianTimes

Martin Hutchinson

Italy's Tax Evasion

 Italian police have recovered less than 70 billion euros (91 billion U.S. dollars) out of hundreds of billions from tax dodgers in the past 13 years, the economy ministry said on Thursday.
More than 807 billion euros (over 1,046 billion U.S. dollars) in suspected evasions have been flagged for audits between 2000 and 2012, according to a report of the ministry.
Meanwhile some debtors have gone bankrupt due the current global economic crisis, and many cases have been contested and remain open, it said.
According to the Italian central bank, record high tax burdens continued to be a major obstacle to recovery in the country, which is in its longest recession in more than 20 years.
Last year, tax burdens increased to 44 percent of gross domestic product (GDP), up from 42.6 percent in 2011, the central bank said in a recent report.
Earlier this week, Standard and Poor's downgraded its rating for Italy down to BBB from BBB+ with a negative outlook, showing that the eurozone third largest economy's situation "remains complex," according to Prime Minister Enrico Letta.

OPEC output declines in June

Output by the OPEC oil exporters declined in June, and its share in global oil supply is expected to fall in the next two years due to the increasing non-OPEC oil supply in foreseeable years, OPEC said in a monthly report on Wednesday.
"Total OPEC crude oil production averaged 30.38 million b/d in June, representing a decline of 0.31 million b/d, compared with previous month," the Organization of the Petroleum Exporting Countries said in its report.
Statistics shows that the decline was led by the output reduction of Libya, whose output decreased by 206,000 barrels a day in June, accounting for nearly 70 per cent of the total output decline, while Saudi Arabia continues to increase its output in the past two months.
The non-OPEC supply is expected to be the most dynamic crude oil production growth in the year 2013 and 2014, forecast to average 53.92 million b/d in 2013 and 55.06 million b/d in 2014, according to the report.
The strong growth trend of the supply is led by the US crude production, the growth of which is supposed to be the highest among the non-OPEC countries in 2013 and 2014, and the output is forecast to average 11.33 million b/d in 2014 in the report.
Due to the non-OPEC crude supply growth and the weak world oil demand, the OPEC might see a lower share in the world oil market in the year 2013 and 2014, which is estimated to be 33.8 percent in 2013.

IMF: Revises up GDP growth of U.K.

The International Monetary Fund (IMF) has revised up British economic growth from 0.6 percent to 0.9 percent this year in its World Economic Outlook Update report, released on Tuesday in Washington.
Though trimming down the world output by 0.2 percent to 3.1 percent and 3.8 percent respectively in 2013 and 2014, IMF turns to be more optimistic on the British economic outlook than it was in April.
It expects the 2.43-trillion-US dollar economy to grow at 1.5 percent next year, which would be higher than the 0.9 percent growth in Euro Area.
But IMF warned that in advanced economies, longer-term interest rate and financial market volatility have risen. Peripheral euro area sovereign spreads have widened again after a period of sustained declines.
The IMF pointed out emerging market economies have generally been hit hardest, as recent increases in advanced economy interest rates and asset price volatility, combined with weaker domestic activity, have led to some capital outflows, equity price declines, rising local yields, and currency depreciation.
The National Institute of Economic and Social Research said on Tuesday that Britain's economic growth rate would double to 0.6 percent in the second quarter, largely driven by the private service sector. That reflects the more pleasant chorus on the country's output from the think tanks.
Source: Xinhua

BOJ: 2% target inflation achievable

The Bank of Japan will be able to achieve its 2 pct inflation target in around two years, BOJ Governor Haruhiko Kuroda said Thursday.

"The BOJ has taken enough policy measures for achieving the target in about two years," Kuroda told a press conference held after the central bank's two-day monetary policy meeting that ended earlier in the day.
At the meeting, the BOJ upgraded its assessment on the Japanese economy, saying that it "is starting to recover moderately."


  Source:NewsonJapan

Japan's Machinery orders up 10.5% in May

Japan's core private-sector machinery orders jumped a seasonally adjusted 10.5 percent on month in May to its highest reading in four and a half years, the government said Thursday, signaling the yen's slide has raised hope for recovery in exports and prodded companies to boost investment.
After a fall in April, the orders -- regarded as a leading indicator of capital spending -- came to 799.2 billion yen, the highest since October 2008, when the country's economy started to wane against a backdrop of the global financial crisis, the Cabinet Office said.

Currencies Quotes



  FXA                                  91.54

  FXC                                  95.54

  FXE                                129.35

  FXF                                 103.29

  FXY                                  99.10

GOVERNMENT BONDS QUOTES

Government Bonds
                                                                                      PRICE            YIELD
                                                                                      CHANGE          %
                                                                                                   
U.S. 2 Year0/320.351
U.S. 5 Year7/321.414
U.S. 10 Year12/322.587
U.S. 30 Year11/323.634
Germany 2 Year0/320.111
Germany 10 Year4/321.631
Italy 2 Year-8/322.136
Italy 10 Year-19/324.510
Japan 2 Year0/320.132
Japan 10 Year11/320.819
Spain 2 Year-3/322.111
Spain 10 Year-16/324.831
U.K. 2 Year0/320.366
U.K. 10 Year10/322.376

Dow Jones and S&P 500 at record highs

Dow Jones Index at 13,560.01 and S&P 500 Index at 1670.47

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