WSJ: Argentine Peso Comes Back Under Pressure

Pressure is once again building on Argentina’s peso after the central bank lowered borrowing rates over the past month, sowing doubts among investors about whether President Cristina Kirchner is serious about corralling one of the world’s highest rates of inflation.

The peso in recent days has ended four months of stability, weakening slightly in the country’s official market. It closed Thursday at 8.06 per dollar, down 0.8% so far this month. It has fallen more steeply in the underground currency market, which acts as a barometer of confidence in the peso. On Thursday, it closed at 11.73 per dollar, firming 1.4% on the day but 10% weaker since the start of the month, according to online newspaper Ambito.com, which tracks black-market rates.

“I would be very wary about some sort of [currency] event this summer,” said Daniel Freifeld, managing director of U.S.-based Callaway Capital Management LLC. He sees lower rates as a worrisome sign of complacency by the government over imbalances in the economy. His firm sold half of its Argentine bondholdings this month to lock in profits after the rally following January’s peso devaluation.

The central bank’s move to loosen monetary policy comes after it nearly doubled interest rates to almost 30% during January and February to contain the fallout from the country’s biggest currency slide since the 2001 debt default. The rise in rates meant that for the first time in years, borrowing costs were approaching inflation.

But since early April, the bank has trimmed rates about two percentage points even as inflation has remained high.

The government says prices rose 11.9% through April from January, but it hasn’t given an annualized figure. Some private-sector forecasts put annual inflation close to 40%. When interest rates fall well below the rate of inflation, Argentines have fewer incentives to hold pesos.

Many analysts think the central bank’s about-face came from political pressure from the administration of President Kirchner. Speculation has centered on a rift between Economy Minister Axel Kicillof, an advocate of pro-growth policies, and central-bank chief Juan Carlos Fabrega, whose tighter money policies early in the year stabilized the currency but likely slowed economic growth further.

Argentina’s central bank has limited autonomy, as the president has broad discretion to hire and fire its board members and governor.

Mrs. Kirchner’s chief of staff, Jorge Capitanich, on Wednesday denied there was a rift between the two men. He said that the country’s fiscal policy was “reasonable” and that interest rates were aligned with the exchange rate, adding that the government has observed speculative activity by financial groups aimed at damaging the economy.

Argentina has just $28 billion of dollar reserves to defend the peso. Other moves the government could take to shore up the currency include keeping interest rates high or cutting spending. But those policies would likely be unpopular. Cuts to expensive natural-gas and water subsidies announced in March were followed last week by almost $2 billion in additional spending on popular social programs.

WSJ: Thai Stocks Fall in Early Trade; Nikkei Rises

Thailand’s benchmark SET index fell 2% at the open Friday, after the armed forces seized power in a coup on Thursday, two days after declaring martial law.

Thai stocks have proved resilient during months of turmoil, with the SET flat this week and up 6% year to date, but the coup marked a further level of dysfunctionin one of Southeast Asia’s biggest economies, rattling investors.

The baht initially weakened after the coup was announced to as low as 32.72 to the U.S. dollar from around 32.45, but was last at 32.51.

Elsewhere in Asia, most markets moved modestly higher after a tepid session on Wall Street, where gains were capped by three slightly weaker-than-expected readings on the world’s largest economy, including on sales of existing homes in April.

Japan’s Nikkei led gainers in Asia, rising 0.9%, as a weaker yen prompted buying at the end of a positive week for Tokyo. The Nikkei is on track to complete its best week in more than a month, having risen 2.7% so far.

The dollar gained 0.4% against the yen on Thursday and pushed slightly higher in Asian trade. It was last at ¥101.79, compared with ¥101.73 late Thursday in New York.

Australia’s S&P/ASX 200 was up 0.3%, South Korea’s Kospi was flat, and Singapore’s Straits Times Index rose by 0.2%.

In China, Hong Kong’s Hang Seng Index and the Shanghai Composite were both flat.

In corporate news, Sony Corp. fell 2.2% in Tokyo after company’s chief executive’s failed to impress investors with an ambitious goal of increasing operating profit threefold in the next fiscal year.

In Hong Kong, shares in property developer Sunac China Holdings jumped 8.8% higher after the company said it would pay HK$6.3 billion (US$813 million) for a 24% stake in fellow developer Greentown China Holdings. Shares in Greentown were up 6.1%.

UKRAINE: Poll: Poroshenko leading by 30 percent margin six days before election

The margin between the leaders of the Ukrainian presidential race, Petro Poroshenko and Yulia Tymoshenko, was over 30 percent six days before the election, according to the findings of a poll conducted by the Institute of Social and Political Psychology of the Ukrainian National Academy of Pedagogic Sciences.

Pravda: Americans seem unwilling to take an honest look in the mirror (About Ukraine)

The world seems so chaotic all around us. Ukraine. Diaoyu Islands. Afghanistan. Iran. Most Americans don't understand why other places in the world can't enjoy the same peace that they do. "What is everybody fighting about?" Many Americans have been convinced that the rest of the world is simply jealous of them and their freedom. Right wing media outlets like Fox News tells them that bad guys across the world just won't do what the loving and altruistic United States tells them to and that countries are malevolently trying to disrupt the international order. But, when you look all around the world, you almost can't help but notice one common denominator. No matter how far away it may be from the shores of the continental United States, the United States always seems to be close by wherever trouble is found. And these four major hotspots mentioned above are certainly no different.

The actions that Putin has (both explicitly and covertly) taken are no doubt likely both too extreme and wrong. But one thing that Americans often fail to do is to try and explore the real background behind another actor's actions. In a digital world where what happened 10 minutes ago is already old news and forgotten, Americans have little knowledge or concern for history. In their minds, the fall of the Soviet Union happened decades ago and has no bearing on the actions of nations 25 years later. If, back in the early 1990's, the first President Bush promised Russia that NATO would not expand to Russia's borders then that is immaterial to the American people and the American government (for some reason). Things change, I guess. The fact that the U.S. government, through the State Department, spends millions of dollars funding political groups in Ukraine should not matter, either. Americans believe they have every right to try and influence the politics of countries thousands of miles from their borders.

But Russia is not allowed any influence in any of its own next-door neighbors,even in those who share a common language, history, and culture. The background makes no difference to the neocons in America. All that matters is that Americans are the good guys (always trying to bring peace and prosperity to everywhere they go) and everybody else that opposes them are the bad guys. End of story.

The escalating conflict over the Diaoyu Islands between China and Japan is no different. The historical fact is that prior to the First Sino-Japanese War, the Diaoyu Islands were part of China. At that time, Japan "annexed" the islands. For decades China struggled with imperialist Japan, until Japan was finally defeated by the U..S. in World War II. Strangely, when the United States and Japan signed the Treaty of San Francisco officially ending the Second World War, Japan was given "administration rights" over the islands (re-named the Senkakus by the Japanese after taking them from China in the mid-1890's). The People's Republic of China, the official government in the Mainland at that time, declared the treaty illegal. But of course they were not strong enough at that time to do anything about it. Why didn't the U.S. return the islands to China, to whom they originally belonged? Was it part of a strategy, intentionally planting a time bomb that could go off later when it was needed? Who knows? Only the United States government knows. 

In Afghanistan, many Americans struggle to understand why they kill American soldiers who are on Afghan land. Certainly many of those same Americans would certainly shoot and kill any Afghan soldiers who dared to invade the American homeland. But once again, Americans are simply trying to bring peace and prosperity everywhere they go and so they can't fathom why somebody would kill their soldiers who are on foreign land. It almost seems like the mujahadeen in Afghanistan aren't thankful for when Ronald Regan armed them to fight against the Soviets. It is ironic, in a way, that America would arm the mujahedeen in the 1980's so they could fight the Soviet Union...only to fight them 20 years later. Certainly America should have learned that Afghans don't like foreigners who invade their land. Why did America stay in Afghanistan after they had defeated Al Qaeda there? Why did they stay in an effort to try to rid the country of Taliban (as if that were possible)? Why did America ignore Pakistan's support for terrorism in Afghanistan? Does America really need bases in Afghanistan for a war with Iran that badly? Maybe so.

And finally there is Iran. How did the mullah come to power in Iran? America tried so hard to support the Shah, the ruthless dictator who they had propped up to sell them cheap oil. The Shah was brutal in his crackdown against his political enemies. Perhaps the only place safe to organize against him was in the mosques. I think it's safe to say that many Iranians now regret the mullahs coming to power. The huge protests several years ago, that were violently suppressed by the Iranian regime, certainly gives some support for this theory. But Iranians also haven't forgotten history. They haven't forgotten the U.S. turning a blind eye when Iraq used chemical weapons against them in the 1980's. And they haven't forgotten when a U.S. Navy missile shot down Iran Air Flight 655, a commercial passenger flight originating out of Tehran, on which 290 people were killed. Americans just can't understand why these countries, all the way on the other side of the world, hate them.

This is not to say that the United States is solely to blame for all of the world's troubles. Far from it. The other side almost always bears some share of the blame, as well. However, the United States government is certainly not free from any responsibility, either. The United States tries to hold other nations accountable for their actions. But who holds the United States' government accountable for its actions? Until now, no one. In the past the U.S. could say one thing, and then do another, and then try to force others to play by rules that the U.S. didn't agree to abide by themselves. But the world is changing and other countries are no longer willing to be held to these "international standards." After the United States has invaded other countries without U.N. approval (Iraq), assassinated world leaders they didn't like (in several countries), and demanded sole regional influence in the Western Hemisphere, don't expect the rest of the world to continue to agree to rules that the United States itself does not obey. The world is about to get more chaotic. And the United States' government would be remised if it didn't look in the mirror for some of the blame.

Doug Pancoast

theguardian: Attack on Ukrainian army checkpoint leaves at least 11 dead

The conflict between pro-Ukraine and separatist forces in the east of Ukraine led to one of its bloodiest days yet on Thursday, days before presidential elections due to take place on Sunday.

At least 11 pro-Ukraine forces were killed in a surprise dawn attack on a Ukrainian army checkpoint, apparently by a group of armed separatists. Ukraine's interim president Oleksandr Turchynov put the death toll at 13, while a military source said two of the seriously wounded had also died. Journalists on the scene confirmed they had seen 11 bodies.

About 30 soldiers were injured, including four who remained in critical condition on Thursday afternoon. Adding confusion to the incident was the presence of two Ukrainian helicopters, which arrived after the engagement and may have opened fire, leading many locals to believe the operation had been staged by the Ukrainians against their own forces – something that was reported as fact by the press service for the self-proclaimed Donetsk People's Republic. It remained unclear whether any soldiers had been killed by "friendly fire" or whether all the casualties were from a separatist attack.

Journalists from the Associated Press met rebels in the town of Horlivkaearly on Thursday morning who said they had just returned from the attack and showed them a seized weapons cache, passports they had removed from dead bodies and an armoured vehicle riddled with bullets.

"We destroyed a checkpoint of the fascist Ukrainian army deployed on the land of the Donetsk Republic," the commander of the Horlivka rebels told the journalists. He said one of his men had also been killed. "The weapons you see here have been taken from the dead, they are trophies," he said, displaying a huge collection of automatic weapons, sniper rifles, rocket grenade launchers and knives.

Ukraine will go to the polls on Sunday in an attempt to draw a line under months of chaos. Former president Viktor Yanukovych fled Kiev in February, and since then the interim government has seen the Crimea peninsula annexed by Russia and instability has grown bloodier in the east. On Thursday Arseniy Yatsenyuk, Ukraine's prime minister, demanded an emergency meeting of the UN security council to present what he claimed was proof that Russia is stoking the violence in the east.

graph: Brendan Hoffman/Getty Images

Nato has confirmed that an at least partial withdrawal of Russian troops from the border with Ukraine, which Vladimir Putin announced this week, appears to be under way. But Kiev says Moscow is waging a clandestine war by offering military and intelligence support to the rebels in the east. Many in the east have tired of the separatist militias, but as Kiev's ill-fated "anti-terrorism" operation continues in the region, there is also increasing anger and distrust of the Ukrainian government.

At the hospital in Volnovakha, where most of the injured were recuperating, several doctors said the injured soldiers were confused by what had happened and did not understand who had attacked them and why. Ten wounded soldiers left the hospital in the middle of the afternoon in two ambulances, but would not answer questions about where they were being taken or what had happened in the morning.

A man who said he was part of the pro-Kiev forces but did not want to give his name told journalists at the hospital that the people who attacked the checkpoint were "professionals" and that the helicopters had been sent to support them. He had arrived on the scene as backup shortly after the attack.

"I don't know who sent them or what they were doing, I am scared to think of it," he said. He added that the Ukrainians involved were a regiment made up mainly of reservists. In heated exchanges with locals at the hospital, he apologised for the Ukrainian military operation in the east of the country, and said he no longer knew what to believe.

The incident appears to be more proof that the various militias acting on behalf of the separatists are not under central control, and more divisions are opening between rival factions. 

Russia to "stick to" economic policies to survive Western sanctions

Russian Finance Minister Anton Siluanov said Thursday the best way to survive Western sanctions is to stay consistent with already-implemented economic policies, as well as stimulating economic structural reform.

Calling Russia's current economic situation "considerably complicated," Siluanov cited the restoration of investor confidence as one of the priorities.

"The most important thing is to stick to the economic policies which have been implemented in (recent) years, and not to loosen the fiscal policy," he told reporters at the 18th St. Petersburg International Economic Forum, a leading annual economic event in Russia.

He said the government will not apply extra restrictions to the credit business, nor raise taxation. Meanwhile, Russia will stimulate economic structural reform and create favorable conditions for the development of enterprises.

"Currently, we have noticed signals of economic improvement, the ruble has been appreciating, and the capital outflow has been slowing," he said, adding Russia may see capital inflow in one or two months.

"Thus, I see no grounds to discuss the change of currency policy," the minister said.

The Russian economy has been struggling to maintain its growth amid domestic difficulties and outside pressure, partially from several rounds of sanctions imposed by the United States and the European Union over Moscow's position on the Ukrainian crisis.

The International Monetary Fund said last month the Russian economy had slid into recession, while the the country's Ministry of Economic Development estimated seasonally adjusted gross domestic product in the first quarter of 2014 dropped 0.5 percent year-on-year.

Source: Xinhua

European Parliament elections kick off in Britain, strained relations with EU likely to continue

Elections to the European Parliament (EP) kicked off Thursday in Britain as millions of Britons flocked to polling stations to decide who can represent them in the European legislature.

As the Eurosceptic political party UK Independence Party (UKIP) has topped most opinion polls in Britain in recent months, political forecasters predicted that the right-wing party is likely to be the biggest winner in the elections.

David Cutts, a British party politics scholar at the University of Bath, attributed the rise of UKIP to its growing appeal to the "left behind" voters.

"UKIP has been able to broaden its appeal to those voters 'left behind' and alarmed by the extent of social and economic change - concerns about European immigration - while retaining their mainstream political legitimacy on the European issue," he said.

Analysts also pointed to a growing trend of euroscepticism across European countries, which reflected a surge of right-wing politics throughout the continent.

"It's not just in Britain that this is an issue. We've seen across Europe, anti-European or Euro-sceptic parties growing in their support," said Joe Twyman, director of political and social research at YouGov, a leading British polling firm.

With growing skepticism over the island nation's integration with Europe, the Britain-EU relations are predicted to continue to be strained in the coming years.

"From the beginning Britain has had an uneasy relationship with European integration. Some people talk about an 'awkward partner', some people talk about the politics of semi-detachment, but there has been this reluctance to sign up for political union," said Dr Susan Milner, a political scientist specializing in European politics at the University of Bath.

Voters were also particularly divided over the prospect of Britain-EU relations.

"I don't like anything to do with Europe," said A. Ladsky, an 87-year-old retired lawyer who supported the UKIP, adding that "I'd like to get rid of Europe and get out of Europe. We are big enough to stand on our own feet. We don't need Europe. Europe needs us more than we need them."

Kenneth Alaka, a 53-year-old social worker, said he has always voted for the Labor Party since 1997 because they carried out the reforms which he needed, particularly the national minimum wage policy.

Unlike Ladsky, Alaka is in favor of more British integration into Europe, warning that "Britain's withdrawal from the European Union will be a disaster."

"You can't withdraw from Europe now. Europe is good for the British economy and business. There is a big market in Europe. It's good for Britain to be in Europe and be a leader in Europe," he said.

Dozens of political parties, including the Conservatives, the Liberal Democrats, the Labor Party and the UKIP, were vying for a bigger share of the vote in Britain on Thursday.

A total of 73 Members of the European Parliament (MEPs) were up for grabs in the country based on the proportional representation voting mechanism, with citizens being asked to vote for a party rather than an individual.

The elections, conducted in 12 electoral regions across Britain, employ the single transferable vote system in Northern Ireland and the regional party list proportional representation system in the rest of the country.

Voters are asked to cast their ballots between 7 a.m. and 10 p.m. at one of the polling stations nearest to them.

Results of the elections are scheduled to be announced on Sunday, when voting is closed across the 28 member states of the European Union.

Britain and the Netherlands are the first two countries to start the European Parliament elections this year.

Source: Xinhua

Algae bloom emerges in China's Yellow Sea

An algae bloom, or "green tide," has broken out in waters off China's east coastline, spreading to nearly 1,500 square km, the country's maritime authorities said Thursday.

About 1,492 square km of seawater in the Yellow Sea were found to have algae, while some 11 square km were fully covered by the plant, the North China Sea Marine Forecasting Center of State Oceanic Administration said in a statement. The figures were based on an analysis of May 20 satellite monitoring statistics.

The center forecast that the green algae will continue to spread northeastward.

Though the green algae is not poisonous, it can block sunshine and consume large amounts of oxygen, which can threaten marine life.

The green algae will also choke the shipping channel and affect offshore fisheries if washed ashore.

The green tide in the Yellow Sea has been one of the most serious in the world and usually occurs in early summer each year.

It first emerged in the Yellow Sea in 2007. Residents and soldiers removed tens of thousands of tonnes of algae in 2008 for the sailing events of the Beijing Olympics.

Source: Xinhua

China's police chief calls for severe punishment on Xinjiang terrorist attackers

China's minister of Public Security Guo Shengkun on Thursday called for doing utmost to treat the injured people in Xinjiang terrorist attack, and severely punishing those terrorists.

Guo, also a state councilor and leader of the national anti-terrorism leadership group, went to Urumqi immediately after the deadly attack.

The attack on a market in Urumqi left at least 31 dead and 94 injured on Thursday morning. Two vehicles, without license plates, broke through roadside fences and plowed into people at an open-air market at Gongyuanbei Street near Renmin Park at 7:50 a.m. and explosive devices were set off.

Evidence on the scene of the crime showed that it was a premeditated and organized terrorist attack.

After checking the scene and learning the process of the crime, Guo held a meeting in Xinjiang Uygur Autonomous Region's publicity department, deploying the investigation of the case.

He said the incident showed the terrorists' nature of anti-human and anti-society, calling for making a thorough investigation of the case quickly, and severely punishing the terrorists in accordance with law.

"The case warned us that we should keep a vigilant eye on anti-terrorist work, and take an iron-handed attitude to launch a special campaign against terrorism in Xinjiang," said Guo.

Guo went to the People's Hospital of the Xinjiang Uygur Autonomous Region (XUAR), visiting the injured people in the attack, and conveyed President Xi Jinping and Premier Li Keqiang's regards.

He urged medical staff and related departments to spare no efforts to treat the injured people.

Guo also urged to make all efforts to safeguard social stability, strengthen integrated prevention and control measures, and further screen potential dangers.

He also called for strengthened armed patrol in crowded places, control of dangerous and explosive items, and severely punish all kinds of serious crimes. Guo urged the local authorities to rely on the people and the grassroots.

Guo urged officials to keep a clear mind and a firm stance in the complicated situation, and do more to promote ethnic unity.

On Thursday night, Meng Jianzhu, head of the Commission for Political and Legal Affairs of the Communist Party of China Central Committee and a member of the Political Bureau of the CPC Central Committee, also held an emergency video conference to address the Xinjiang incident.

Meng called for a more resolute attitude and more forceful measures to be taken to crack down on terrorists.

International community strongly condemn Urumqi terror attack

 Strong condemnation of the terrorist attack that claimed over 31 lives in China's northwestern city of Urumqi poured in from the international community on Thursday.

Russian President Vladimir Putin sent his condolences to the victims of the attack, which took place at a morning market earlier on Thursday and left 94 injured, via a message to Chinese President Xi Jinping.

In the message, Putin strongly condemned the bloody crime, saying he hoped the organizers will be found and prosecuted, and confirmed Moscow's interest in further strengthening Russia-China cooperation in fighting terrorism and extremism.

Putin also sent condolences to the relatives of those killed and wished a speedy recovery to those injured in the attack.

Afghan President Hamid Karzai on Thursday condemned in the strongest terms the killing and injuring of many innocent people.

Karzai offered his heartfelt condolences to the people and government of China and called the attack "an act by the enemies of peace and stability who don't want to see our region grow secure, stable and developed."

The president stressed that the Afghan people, more so than others, can well understand such pains and grief as they have long been victims of terrorist attacks.

He also expressed his deep condolences to the families of the victims and wished a quick recovery to those injured.

The South African government condemned all forms and manner of terrorism.

"We believe that terrorism in any form and from whichever quarter cannot be condoned," the country's Department of International Relations and Cooperation said in a statement.

France, Hungary and Greece, as well as the European Union (EU), also lashed out at the terrorist activity and showed sympathy with those who fell victim, with the EU branding it a "senseless act of violence."

French Foreign Ministry spokesman Romain Nadal expressed his country's solidarity with the government and the people of China in this ordeal.

Hungary was shocked by the Urumqi attack, stressing that terrorist activities targeting innocent civilians are severe crimes and can not be accepted under any circumstances.

Greece also strongly condemned the act, expressing solidarity with the Chinese people.

"We condemn in the most unequivocal manner the deadly terrorist attack carried out today in China, in the city of Urumqi, in the Xinjiang region," Greek Deputy Prime Minister and Foreign Minister Evangelos Venizelos said in a statement released by the ministry.

"We express our solidarity with the Chinese people and our condolences to the families of the victims, and we wish those who were injured a speedy recovery," he added.

"The European Union condemns this senseless act of violence and extends its heartfelt sympathies to the families and friends of the victims," Maja Kocijancic, a spokeswoman for EU foreign policy chief Catherine Ashton, told Xinhua on Thursday.

Australia's ambassador to China, Frances Adamson, has joined the global chorus of condemnation, reporting that the Australian government is concerned by reports of the explosions in Urumqi.

"We extend our condolences and deepest sympathy to the victims of the attack and their families," she said.

"The Australian government deplores all forms of terrorism and condemns any attack on innocent people."

Pakistan also voiced its condemnation and showed sympathy with the government and the people of China.

Iran said acts of violence and extremism targeting innocent people anywhere in the world are condemned and such moves have no connection with the principles of Islam at all, Iran's Foreign Ministry spokeswoman Marzieh Afkham said.

Vietnam strongly condemned the terrorist attack and extended deep condolences to the Chinese people and relatives of the victims. Vietnam's Foreign Ministry spokesman Le Hai Binh said he hoped that the culprits would be brought to justice.

Also on Thursday, Shanghai Cooperation Organization (SCO) Secretary-General Dmitry Mezentsev condemned the violence, expressing the SCO's strong indignation and deep sorrow.

"We express deep-felt condolence to the victims and convey sincere solace to relatives of the victims and the injured people," Mezentsev said in a statement.

It is the priority of the SCO to fight terrorism, the statement said, adding the international community should further boost cooperation to combat terrorist activities effectively.

The Palestinian presidency condemned the terrorist attack.

"We condemn with the strongest words this heinous crime," Nemer Hammad, political advisor to President Mahmoud Abbas told Xinhua.

"We support our Chinese friends, and wish speedy recovery to the injured, as well as prosperity, safety and stability to the people of China," Hammad added.

Chinese Foreign Ministry spokesman Hong Lei said China has the confidence and capability to crack down upon the audacious terrorists.

"The violence, a further indication of the terrorists' anti-human, anti-society and anti-civilization nature, should be condemned by the Chinese people and society," Hong said.

In response to the attack, Chinese President Xi Jinping pledged to severely punish terrorists and spare no efforts in maintaining stability, asking local authorities to solve the case quickly, put the injured under proper care and offer condolences to families of the victims.

Two vehicles, without license plates, broke through roadside fences and plowed into people at an open air market in Urumqi, capital of northwest China's Xinjiang Uygur Autonomous Region, on Thursday morning. Explosive devices were set off, causing the deaths of at least 31 people and injuring 94 others.

Source: Xinhua

Senior leader meets Hong Kong political advisors

China's top political advisor Yu Zhengsheng on Thursday met with political advisors from Hong Kong, calling on them to stick to "one country, two systems" policy and promote harmony in the special administrative region.

Yu, chairman of the National Committee of the Chinese People's Political Consultative Conference, said at the meeting that he hoped political advisors in Hong Kong can unite people from all walks of life, promote the development of Hong Kong's political system on the basis of the "one country, two systems" policy, the basic law of Hong Kong and the decisions made by the Standing Committee of the National People's Congress.

He also urged political advisors in Hong Kong to take advantage of the chances of mainland's development and globalization, making contributions to the harmonious relations in Hong Kong, and improving the special administrative region's competitive power.

Yu asked the political advisors to act as conduits for exchanges between Hong Kong and the mainland, and make contributions to understanding between the two sides.

Source: Xinhua

China says passing Syrian issue to ICC now harms efforts for political solution

It will jeopardize the international efforts to push ahead with resolving the long-drawn Syrian crisis via political means if the issue of Syria is referred to the International Criminal Court (ICC) forcibly under current situation, said a Chinese envoy Thursday.

Wang Min, the deputy Chinese permanent representative to the United Nations, made the remarks after UN Security Council's meeting where Russia and China, two permanent members of the Council, vetoed a draft resolution intended to refer the Syrian civil war to the ICC Thursday morning.

"China believes that any action to seek recourse to ICC for prosecuting perpetrators of serious violations should be conducted based on the premise of respecting state judicial sovereignty and respecting the principle of complementary," Wang said.

Though the efforts to seek political settlement to the issue of Syria have encountered difficulties, the international community should be patient and firm with confidence, and stick to the overall direction of the political settlement, he said.

"What is most urgently needed now is to urge the government of Syria and opposition to immediately start a ceasefire and end violence so that the third round of the Geneva negotiations can be resumed to push forward the political process and start the political transition," Wang went on.

"Under the current circumstances," he stressed, "to forcibly refer the situation of Syria to the ICC is neither conducive to building trust among all the parties in Syria, or to the early resumption of the negotiations in Geneva, it will only jeopardize the efforts made by the international community to push forward the political settlement."

The envoy emphasized that at a time when there is "a serious divergence of views" concerning the draft resolution among all sides, the Council should continue to hold consultations, rather than simply push for a vote on the draft resolution, so as not to undermine the unity of the Council or obstruct the coordination and cooperation in dealing with problems such as Syrian crisis and other major issues.

The Chinese diplomat also reiterated China's position that all parties in Syria should respect human rights and international humanitarian law, and make every effort to prevent harming innocent civilians during the conflict.

"China is firmly opposed to all acts of violation of international humanitarian law or serious violations of human rights committed by all parties to the conflict in Syria," he said.

Source: Xinhua

Gas deal to bring benefits, price pressure for China

After securing the long-awaited gas agreement with Russia, China may have to take on more tasks on the energy front while enjoying the benefits, according to analysts.

One of the immediate benefits from the landmark deal was seen in China's equity market, where share prices of gas companies jumped across the board on Thursday.

"The cooperation will bring new blood to China's domestic gas industry," said Sun Yang, an analyst with the commodity service website, www.chem365.net.

Sun expected pipeline construction, equipment manufacturers and gas companies to be boosted by the deal.

The 30-year gas supply deal, worked out on Wednesday in Shanghai between China National Petroleum Corp (CNPC) and Russia's state-controlled entities Gazprom, ended a decade of negotiation between the two countries.

CNPC said in a statement that the imported natural gas will mainly supply regions around Beijing, cities in northeast China as well as the Yangtze River Delta.

According to the agreement, the east route pipeline will start providing China with 38 billion cubic meters of natural gas annually from 2018.

The price details have not been disclosed but earlier media reports projected the contract price could be 400 billion U.S. dollars.

Even though China has increased its gas imports in recent years, some gas importers ended up in losses due to a lower domestic natural gas price, thus discouraging some companies to increase gas imports.

Analysts widely agreed that if China can strike an imported price at 2.19 yuan (about 36 U.S. cents) per cubic meter with Russia, it would be competitive for China.

The gas price stands at 2.28 yuan per cubic meter for residential use in Beijing and 3.23 yuan per cubic meter for industrial and commercial use.

Dong Xiucheng, director of China Oil & Gas Center, said the gas imports from Russia will accelerate price reform in China, and that raising the gas price might be inevitable in the long run.

"The bottom line is to guarantee that gas imports won't incur loss," Dong said, "because in the long run, the price hiking pressure will come from a new pricing scheme for both existing and newly imported gas."

He said China desperately needs to improve its energy structure by cutting coal consumption and turning to cleaner energy, as the government vowed to raise the use of non-fossil energy to 15 percent in the country's whole energy consumption by 2020.

The natural gas must also account for 15 percent of China's entire energy consumption by 2020, from 5.9 percent now.

Lyu Ying, a gas analyst working for chemical industrial website oilgas.com, said the Sino-Russian gas cooperation creates a win-win situation for both countries

The agreement enables Russia to expand the market for its gas, which now goes mostly to Europe, while gas-thirsty China can also make up a great part of its gas consumption through its cooperation with Russia.

But Lyu also expressed caution that China must not rely too much on Russia for gas imports, but needs to diversify its energy imports.

"In the future, China needs to look for more gas supply sources to avoid economic and political restraints arising from over-reliance on a single country," she added.
Source: Xinhua

Xinhua Insight: Retirement of "naked official" reflects tightened corruption control

 A "naked official" is to be replaced in south China's Guangdong Province, as the country's anti-graft campaign begins to target this specific group of Party officials.

According to a statement on Monday from the Organization Department of the provincial committee of the Communist Party of China (CPC), Fang Xuan, deputy chief of Guangzhou City's Party Committee, will be replaced by Li Yiwei, party chief of Foshan City in Guangdong.

Fang, born in 1954, was due to reach the official retirement age of 60 in October. The statement said he was taking early retirement.

Fang was also Zhuhai City's party chief as well as head of the organization department of Guangzhou CPC committee.

It has been reported the reason for this is because authorities found him to be a "naked official". The term refers to officials whose spouse and children have emigrated overseas.

According to selection and appointment regulations issued in January, these officials will not be considered for promotion.

Anonymous sources with the province's organization department told Xinhua Fang's early retirement was part of a large-scale campaign to stamp out "naked officials".

Guangdong Province has launched a slew of investigations into such officials.

Guangdong's move came after a central disciplinary inspection team statement in February, which said the number of "naked officials" in the province was a serious problem.

Xin Ming, professor with Party School of the Central Committee of CPC, said that Fang's early retirement shows the local government's determination to solve the problem.

"The number of 'naked officials' has to decrease rather than merely have their chances of promotion cut off," said Xin.

However, some have questioned whether Fang's early retirement was actual punishment. The public's impression is that such officials must be corrupt.

Xiao Bin, professor with the School of Government, Sun yat-sen University, said "naked officials" are considered high-risk when it comes to corruption. Some have transferred large amounts of assets overseas and sent relatives abroad to escape punishment.

"These officials who can easily escape to foreign countries are more inclined to act in a corrupt manner, which damages the credibility of the government and the Party," Xiao added.

China has grappled with the "naked official" problem for a long time.

Statistics from the Supreme People's Procuratorate in 2011 showed that 1,631 corrupted fugitives were arrested, a 27 percent year on year increase. Proceeds from their crimes worth 7.7 billion yuan (1.25 billion U.S. dollars) have been recovered.

In 2011 Luo Yinguo, deputy party secretary of Guangdong's Maoming City, was detained for accepting bribes and power abuse. Luo had fake identity cards so he could easily cross the border. Luo's children had acquired foreign nationality.

Another corrupt cadre from Dongguan City in Guangdong was arrested in 2012. His wife and children had moved to Hong Kong and bought properties there.

Xin Ming said the problem has been because of a shortage of sufficient and effective measures to control this group of people.

The anti-graft body issued regulations as early as 1997 ordering officials and cadres to disclose details of their spouses and children who had emigrated.

A reporting system was implemented in 2010 but has had little impact.

Xinhua: Ken Loach returns for competition, youngest director's film screened in Cannes

British veteran director Ken Loach, 77, returned to compete for the Palme d'Or (Golden Palm) for the best film at the 67th Cannes Film Festival, and the new movie of Canadian young filmmaker Xavier Dolan, 25, was screened on Thursday.

Winning the Palme d'Or for "The Wind that Shakes the Barley" in 2006, Loach this time tells a story in the early 20th century.

In 1921, Jimmy Gralton opened a dance hall on a rural crossroads in Ireland, where young people could come to learn, to argue, to dream, but above all to dance and have fun, according to the official Synopsis provided by the festival organizer.

With the portrayal of the "uncompromising" character, "Jimmy's Hall" is Loach's 14th participation in the Selection of the Cannes Film Festival.

It is a film "that is true to his style," commented the official daily digest of the film festival.

At a press conference on Thursday for "Jimmy's Hall", Loach and his team spent a while discussing the traditional and the latest technology on filming.

Talking about the difference between the 35mm film and the digital one, Loach said "with 35mm film, which has to be cut, you pay more attention to what you're doing, because it's a much more human cooperation."

"35mm film is something you can touch and see," said the veteran director.

While chief cameraman Robbie Ryan said "it's a shame that things have changed so much. I hope the two systems could coexist but it hasn't turned out that way."

Screenplay writer Paul Laverty said "people like traditional technology so we're going to keep on cutting films."

On Thursday, the latest movie directed by Dolan, the youngest of the 18 selected in Competition, was screened in Competition.

Dolan, who was born in 1989, tells a story of a widowed single mom, who finds herself burdened with the full-time custody of her 15-year-old son with the disease of attention deficit hyperactivity disorder (ADHD), in his new film "Mommy."

As they try to make ends meet and struggle with daily life, they meet their new woman neighbor Kyla, who is willing to help.

It takes Dolan five years to feature in Competition at the Cannes Film Festival since he shot his first feature "I Killed My Mother" in 2009. "Mommy" is the young director's fifth film.

Talking about his choice of a 1:1 aspect ratio, Dolan told a press conference on Thursday that "distractions are removed. The spectator's vision is captured by the character's gaze."

Asked about his decision to work on several aspects of the film, especially the costumes, the young talent said, "They are often neglected in films. Yet it is the first visual contact with the viewer."

"I do what I like to do, I try to stop when I don't know what I am doing," added the director.

Actresses who contributed to the success of his past films Anne Dorval, plays the mother Diane, Suzanne Clement, plays Kyla, and the son Steve is played by Antoine-Olivier Pilon in the maternal eulogy. All the three attended the press conference.

Clement said the filming was well structured, and spoke highly of the director.

"Everything is written down already, even the music, it is all extremely structured," said Clement, adding "Xavier knows all his characters. He becomes each of his characters."

A total of 18 feature films have been selected in Competition. The winners will be announced on May 24, one day before the originally planned date due to the European Parliament elections on May 25.

Meanwhile, the winners of the 2014 Cinefondation Prizes, a parallel section of the official selection of the Cannes Film Festival, were announced here on Thursday, chosen by the 2014 Cinefondation and Short Films Jury led by Iranian filmmaker Abbas Kiarostami.

The First Prize goes to "Skunk" directed by Annie Silverstein from the University of Texas at Austin, the United States. The Second Prize is awarded to "Oh Lucy!" by Atsuko Hirayanagi, NYU Tisch School of the Arts Asia, Singapore.

While the Third Prize is shared by "Lievito Madre" directed by Fulvio Risuleo, Centro Sperimentale di Cinematografia, Italy, and "The Bigger Picture" by Daisy Jacobs, National Film and Television School, Britain.

The Cinefondation Selection consisted of 16 student films, chosen out of 1,631 entries from 457 film schools around the world.

Besides cash prize, the First Prize winner is also guaranteed to present his or her first feature film at the Festival de Cannes, according to an official press release of the festival.

The Cinefondation, a selection for short and medium-length films produced by film school students from all over the world, was set up in 1998.

Why is the Gas Deal between China and Russia a Game Changer ?

   Geopolitically it is very important for Russia, because it has opened the Chinese market, and the LNG  markets in Asia. It brings closer ties between China and Russia to counterbalance U.S. lonesome role as the World's superpower.

   The pricing of Russian natural gas will be its comparative advantage over other possible suppliers of natural gas and LNG, and will be the driving force to stop projects in the  global gas industry who's costs have overrun original Capex's and will also halt marginal gas projects. It will mean less competition.

   It changes political relationships between the EU, China, Russia and the U.S.

   It will change the composition of the Energy matrix for China,and improve its economy to a cleaner
environment, cutting coal consumption and changing it to gas consumption.

Brazil Inflation Will Return to Normal, Itau CEO Setubal Says

"Brazil’s inflation rate, which this month quickened to the highest level since last July, will return to normal in the “long run,” Itau Unibanco Holding SA  Chief Executive Officer Roberto Setubal said.

“I was more worried about inflation maybe six months, one year ago,” Setubal said today in an interview with Bloomberg CEO Dan Doctoroff at Bloomberg’s Sao Paulo office. “In the long run, inflation will be returning to normal levels, which in Brazil is 4 percent to 5 percent.”

The central bank has responded to above-target inflation with nine straight interest-rate increases, which Setubal said helped ease his concern inflation would continue to accelerate.

Brazil’s annual inflation rate rose to 6.31 percent in mid-May from 6.19 percent the previous month, the national statistics agency said yesterday. That compares with the central bank’s target of 4.5 percent, plus or minus two percentage points. The monetary authority increased the benchmark Selic rate to 11 percent last month".

Source: Bloomberg

Chinese online retailer JD.com began trading today on the Nasdaq

 Shares of JD.com JD +10.84% rallied 15% Thursday morning to $21.92, as the Chinese online retailer began trading on the Nasdaq Stock Market under the ticker symbol "JD." The company on Wednesday priced its initial public offering for 93.7 million shares at $19, above its range of $16 to $18. JD.com opened at $21.75. JD.com is going public at a time of heightened interest in another Chinese Internet giant, Alibaba Group, which filed paper for its own U.S. IPO earlier this month.

Source: Marketwatch

U.S. Existing-home sales rose 1.3% in April

 Sales of existing homes in April hit the fastest pace in four months, as more homes came on the market and price growth slowed down, according to data released Thursday.

Existing-home sales rose 1.3% in April to a seasonally adjusted annual rate of 4.65 million — the fastest pace since December and the first increase this year, the National Association of Realtors reported.

“The increase reverses just a fraction of recent weakening. Sales will need to keep rising to establish a renewed uptrend,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics.

Economists polled by MarketWatch had expected sales to spring up in April after a rough winter, hitting a rate of 4.66 million, compared with a March rate of 4.59 million. For context, there was an average monthly sales pace of more than 6 million existing homes over the five years leading up to a 2005 bubble peak.

Source: Marketwatch

U.S. jobless claims jump 26,000 to 326,000

New applications for unemployment benefits rose sharply in mid-May, reversing a a big drop earlier in the month that put initial claims at a seven-year low.

The number of people who applied for new benefits climbed by 28,000 to 326,000 in the week ended May 17, the Labor Department said Thursday. Economists surveyed by MarketWatch expected initial claims to total 315,000 on a seasonally adjusted basis.

Initial claims had fallen two weeks ago to the lowest level since May 2007, but the decline appeared to reflect seasonal quirks tied to a late Easter holiday that have now mostly faded away. The timing of the holiday often causes the weekly claims numbers to swing sharply in April and May.

Still, the level of claims continues to hover near a post-recession bottom, a sign that companies are cutting the fewest workers since the end of the downturn in mid-2009. In the same week in 2013, initial claims were 5% higher at 344,000. And claims were one-third higher four years ago.

SOurce: Marketwatch

WSJ: China's Gas Deal with Russia Could Benefit Rest of Asia

             The WSJ reports,"Russia's Gas deal with China may pave the way for cheaper energy for the rest of Asia and put in question the viability of future gas developments around the world.

 Beijing will help finance the development of two vast gas fields in Eastern Siberia. While much of that output will go to China, there will still be plenty of relatively cheap gas left over that Russia plans to pipe to the Pacific coast near Vladivostok and ship as liquefied natural gas to elsewhere in Asia.

That will put downward pressure on energy prices in the region and avoid Russia becoming too reliant on China. Russia made a similar maneuver several years back when it built a crude-oil pipeline to the Pacific with a spur pipeline into China.

The significance so far of the deal is mostly political given the boost it provides to Russian President as his relations with the West sour. It remains to be seen what the deal will do to prices, but that will be crucial in determining the impact on other suppliers, many of whom are already experiencing cost overruns.While good news for buyers, lower prices are a potential threat for developers of other multibillion-dollar gas projects being planned that also target Asian markets, which need to decide soon if this new supply could lose them customers and impact their profits.

The agreement "will have profound impacts on multiple fronts including political relationships among China, Russia, Europe and the U.S., domestic gas market in China, and [the] LNG market in Asia," said analysts at Bernstein Research in Hong Kong. Higher-cost LNG projects "will be less likely to be developed."

Developing sites capable of producing gas can costs tens of billions of dollars and take years to bring online, leaving their backers vulnerable to sudden changes in the market, like the recent China-Russia deal or the unlocking of shale gas reserves in North America.

Some in Australia have already been hit by big cost overruns, including projects backed by Chevron Corp., ConocoPhillips, Total SA and BG Group PLC. Others like those planned offshore Mozambique by Anadarko Petroleum Corp. and Italy's Eni SpA are awaiting a final go-ahead.

While the Russia deal and development of China's own shale reserves and offshore gas deposits may put some projects at risk, producers say things aren't that bad".

WSJ: North, South Korea Exchange Fire

          The WSJ reports,"North and South Korea briefly exchanged artillery fire across their disputed western sea border on Thursday. No damage was reported but the skirmish is the latest reminder of the potential for conflict in an area that has been the site of several deadly exchanges.

Around 6 p.m. local time, North Korea fired two shells into South Korean waters about 14 kilometers southwest of the island of Yeonpyeong, a South Korean Defense Ministry official said.

The shells landed near a South Korean warship, which returned several rounds of fire back, he said.

South Korea briefly evacuated residents of the island into shelters and ordered fishing boats in the area to return to harbor.

The exchange of shelling comes at a time when rhetoric between the two Koreas has been relatively muted, and as South Korea is focused on the fallout from the recent ferry disaster that has left over 300 people dead or missing.

But in an uptick in tension in the western sea border area on Tuesday, South Korea fired warning shots at three North Korean patrol boats that crossed over before returning. North Korean state media called that a "grave provocation" and warned that it could target South Korean warships in the area. The South Korean navy warned of a "merciless counterattack" in response.

The Yellow Sea border between the Koreas, known as the Northern Limit Line, is considered by experts to be the most likely site of another bloody confrontation between the two rival states.

North Korea doesn't recognize the border, which was drawn by United Nations forces after the Korean War of 1950-1953. North Korea's fishing boats routinely stray over the border and in February this year, Seoul said a North Korean warship had made three crossings during one night".

Thailand Military Declares a Coup

          The WSJ reports, "Thailand's army chief announced a military coup in a televised statement Thursday, after two attempts to negotiate an end to a monthslong political impasse failed.

The military, together with the police, "needs to seize control of the situation in the country, effective May 22," Gen. Prayuth Chan-ocha said, citing the worry that political violence could escalate.

The country's Constitution was "temporarily suspended," the military announced, excluding any articles related to the monarchy. And the military said it terminated the caretaker government but said it expected the nation's Senate, courts and independent organizations to function normally.

The military imposed a nationwide curfew from 10 p.m. to 5 a.m., ordered all street protesters to leave their rallying sites and banned gatherings of more than five people.

Gen. Prayuth's announcement came after he headed a second day of meetings with pro- and antigovernment groups, top government ministers and other key figures in Thai politics.

The country has been bitterly divided between supporters of the populist government and its conservative opponents who have been massing on the streets for more than half a year in a bid to topple the administration.

Some two dozen people have been killed in political violence since the current wave of protests began in November, deepening the fissures in a country where the memory of the coup that removed former leader Thaksin Shinawatra from power in 2006 remains vivid. The crisis escalated earlier this month when Thailand's Constitutional Court removed Mr. Thaksin's sister, Yingluck Shinawatra, from her post as the country's prime minister for improperly removing a top bureaucrat after her election win in 2011, a move that exasperated many of her supporters.

Gen. Prayuth's meeting with pro- and antigovernment groups lasted for more than two hours on Thursday. Then, armed soldiers were deployed and reporters were ordered to stay away. Meeting participants were rushed out in vehicles, headed off to an unknown location.

All regular television programing was suspended before Gen. Prayuth appeared on TV, with commanders from other armed forces, including police officials, by his side. The military ordered all radio and television stations to broadcast content from the military only.

"The military has to return peace and order to the country as soon as possible and to reform [the] political and social structure to ensure fairness for every side," he said. "I ask the people to remain calm and carry on with their business as usual."

The government of acting Prime Minister Niwattumrong Boonsongpaisan couldn't be reached for comment. The military summoned Mr. Niwattumrong and his cabinet ministers to report immediately to an army base".