Ukrainian President to Unveil Peace Plan to End Fighting in Eastern Ukraine

     The WSJ reports,"Ukrainian President Petro Poroshenko said Monday that he would unveil a detailed peace plan in the coming days to end fighting with separatists in the east and that a cease-fire could be achieved as early as this week, despite continuing clashes.

Mr. Poroshenko laid out the broad outlines of the peace plan during his inauguration this month, saying he was willing to negotiate and offer an amnesty to fighters who didn't have "blood on their hands." The remarks appeared to backtrack from his call following his May election victory for an accelerated military operation to stamp out the pro-Russia rebellion".

"But the president said that a cease-fire could happen only after Ukraine regains full control of its Russian border, of which the separatists now control wide stretches in the Donetsk and Luhansk regions. Ukraine has accused Russia of allowing arms and fighters to cross the boundary unhindered. Last week, Kiev and the U.S. said they had fresh evidence the Kremlin had armed fighters with tanks and heavy weapons".

"As soon as the border is secured, we shall be able to declare a cease-fire straight away. Declaring a cease-fire now with an open border is irresponsible given the situation that exists in Donetsk and Luhansk," Mr. Poroshenko said at a meeting of Ukraine's National Security and Defense Council.

He said the length of any cease-fire would be limited and the immediate goal would be to guarantee the safety of people living in the separatist-controlled regions and stop looting there. Afterward, the focus would be on disarmament and sorting out an amnesty for those who haven't committed "egregious crimes."

The council's secretary, Andriy Parubiy, said earlier Monday that there are now up to 20,000 separatist fighters in the region and that more than half of them had come from Russia. He also said there were signs that Russian soldiers—whom Russian President Vladimir Putin had ordered back to their bases from the border last month—were returning to their positions along the frontier.

A military spokesman for the North Atlantic Treaty Organization said while there are signs of Russian troop movement on a regular basis, there was no evidence yet of a substantial build up on the border. Russia had stationed an estimated 40,000 soldiers along the border following the ouster of Ukraine's then-President Viktor Yanukovych in February. But NATO says the vast majority appear to have pulled back.

The Organization for Security and Cooperation in Europe said Monday that fighting in eastern Ukraine has damaged a key water pumping station outside the regional capital of Donetsk, threatening water supplies to four million people.

China lowers US debt for third straight month

China cut its holdings of United States government debt in April for the third straight month, which may reflect a continuing move from US assets, according to an analyst.

China, the largest foreign holder of US Treasuries, held $1.26 trillion in US debt as of April, down $8.9 billion from the previous month and below the $1.27 trillion mark for the first time since August 2013, the US Treasury Department said Monday in a monthly report. China's holdings hit a high of $1.317 trillion in November.

Kent Troutman, a research analyst at the Washington-based Peterson Institute for International Economics (PIIE), said the decreases each month could be due to benign shifts in the portfolio.

"April is the first month where there is a larger decrease, but it is still small. What is worth noting, however, is that, even if China's holdings of US Treasuries are flat, its share of overall foreign exchange reserves is declining," Troutman wrote Monday in an email to China Daily.

"What we've seen in the past four months, if we accept that the data accurately reflects China's true holdings of US assets, is the continuation of a shift that began in 2010 of diversifying their portfolio away from US assets," he said.

Japan remained the second-largest US creditor in April, increasing its debt securities by $9.5 billion to $1.21 trillion.

Foreign demand for US assets strengthened as net foreign purchases of long-term securities totaled $24.2 billion in April, compared to purchases of $4 billion in March, the data showed.

The Treasury's monthly release of its Treasury International Capital (TIC) data details foreign ownership of US securities. For transactions and banking data, there is a 1.5 month lag between the release and the as-of date.

Marc Chandler, Global Head of Markets Strategy at Brown Brothers Harriman & Co, a New York-based investment bank and securities firm, said that though there are limits on the accuracy of TIC data, it still provides an "authoritative source" on the domestic and foreign holdings of US securities.

"Some people want to initiate policy based on the TIC data, and maybe you don't want to bet the farm on it," Chandler said Monday in an interview with China Daily. "There are definitely limits on the framework and methodology, but it's the best source we have."

Chandler, who also serves as a contributing writer for Seeking Alpha, a leading online investment research platform, said he does not put too much stock in April's "minor" decline in China's holdings of US securities because there's not enough information to contextualize the drop.

"It is interesting to note that China is still the world's largest holder of Treasury bonds," he said Monday in an interview with China Daily. And despite the lowered Chinese holdings, it did not prevent the US bond market from continuing to rally."

"Right now, Chinese banks are some of the biggest in the world, so maybe they'd want to move away from relying on foreign banks for their commercial transactions," Chandler said.

The last decline of China's Treasury holdings that exceeded three months came in the final five months of 2011, according to a June 16 report by Bloomberg News.

Source: ChinaDaily USA

US should 'attune itself to China's rise'

Singapore FM says two nations must establish an 'accommodation'

The United States must understand and accept that China's rise is inevitable, and both countries, one an established and the other an emerging power, must find an accommodation, Singaporean Minister for Foreign Affairs and Law K. Shanmugam said.

Shanmugam, who has just concluded a visit to China, was interviewed by China Daily in Beijing on Thursday.

History has a number of examples where this type of accommodation has failed to materialize and led to catastrophic consequences.

So the big question is what sort of accommodation can China and the US establish, Shanmugam said.

His comments came as Washington's Asia pivot and China's growing clout in the Asia-Pacific region have resulted in increased regional tension, with countries in the region expressing growing concern about stability.

During the Shangri-La security dialogue in May, a "war of words" erupted between China, the US and other nations with competing maritime claims.

As an Asian country with long-established contacts with the West, Singapore feels it is able to utilize its unique position and act as a bridge for countries in and outside the region.

Calling Singapore a friend of China, Shanmugam said China should try various routes to address issues relating to other countries, while outsiders must realize the huge domestic challenges it faces.

China now faces an aging society, the underdeveloped western region and income disparity, and sovereignty issues that cannot be compromised.

"China doesn't seek or want a troublesome external environment. So how do you make sure it's not troublesome? It is going to require wisdom, tact and diplomacy," Shanmugam said.

The Asia-Pacific region, while becoming the world's economic engine, is seeing profound geopolitical changes. In addition to the impact of the US Asia-pivot policy, Japan, after six decades of the Pacifist Constitution, is reconsidering the role it can play in regional security, amid an islands dispute with China.

China and several ASEAN members have seen their ties stalled over competing maritime claims in the South China Sea.

Shanmugam also warned of a nervous Japan re-arming itself, which is in no one's interests.

"Japan is a technologically very advanced country. It's better that Japan is not nervous and stays under the US nuclear umbrella, and at the same time everything remains stable while there's the economic progress."

He also reminded China of the importance of public opinion in other countries. "You have to accept that public opinion in many countries is being influenced against China. It's not good for China ... once it hardens."

This was Shanmugam's third visit to China in his three years as foreign minister, and he met Vice-President Li Yuanchao and top diplomats, including State Councilor Yang Jiechi and Foreign Minister Wang Yi.

In 2013, Singapore was the largest foreign investor in China and China's second-largest trading partner of the 10 ASEAN countries.

Trade volume between the two countries reached $91.4 billion in 2013, up 11 percent year-on-year, according to International Enterprise Singapore.

Singapore is also the largest offshore RMB clearing center outside the Chinese mainland and Hong Kong.

The year 2015 marks the 25th anniversary of bilateral ties being established between the two countries.

Shanmugam said the two countries want to mark the anniversary with high-level state visits on both sides.

As the coordinating country for China-ASEAN relations from 2015, Singapore will exert itself to push forward bilateral cooperation, he said during a meeting with Yang.

Source: ChinaDaily USA

China will upgrade old and massive underground urban pipelines in five years

The move will require close cooperation among different departments, which will present challenges, experts said.

The country will finish the study on the complex underground pipeline networks in cities by the end of 2015. The governments then will create a new management system for the networks and work out a comprehensive plan on the urban underground pipelines, said the guideline, released by the State Council on Saturday.

In 10 years, the country will have well-functioning underground pipeline networks in cities, it said.

"The national guideline will push the governments at the grassroots to pay more attention to the underground pipelines, enough to reveal problems," said Li Xun, vice-president of China Academy of Urban Planning & Design, based in Beijing.

But he has doubts that the government will finish the national evaluations in more than 660 cities within 18 months, saying that financing will be a major stumbling block.

Yang Hongshan, professor of urban planning at Renmin University of China, agreed with Li on the limited allocation of resources in the underground pipeline networks. The study and upgrades will require a huge amount of money from the governments, while many of them cannot afford it. In addition, some of them are unwilling to do it because the underground pipeline work is not as obvious a political accomplishment as work aboveground.

In addition, the underground pipelines serve different departments, and the multiple management, which is usually not coordinated, poses many obstacles to upgrading, the two experts said.

The guideline needs to specify the responsibilities when setting up the unified management platform, they said.

The massive pipelines running underground play a major role in urban development, carrying the water, sewage, gas, electricity, telecommunications, cable signals and other necessary supplies for daily life as well as the industrial production.

However, along with the rapid urbanization in China, the larger cities with fast-growing populations witnessed more accidents with severe economic losses and casualties.

For example, an explosion in a gas line in Qingdao, Shandong province, in November killed 62 people and injured 136.

Leakage in a petrochemical pipeline contaminated the water supply in Lanzhou, Gansu province, in April.

On May 11, a torrential rain hit Shenzhen, Guangdong province, flooding more than 2,500 roads in the city and causing an economic loss of about 80 million yuan ($12.9 million).

"The main reason for the flooding inside the city is the out-of-date underground sewage pipelines," said Qiao Jianping, chief engineer of Shenzhen Urban Planning & Design Institutes.

He said that the cities expanded to cover some rural areas, while many of them did not have the urban underground network, showing the lack of management from the government.

"When planning such networks, the decision-makers should consider coordination among different regions, especially with rural areas," he said.

Source: ChinaDaily USA

Alibaba Taps Former Hong Kong Figure for Board

      The WSJ reports, "Alibaba passed on holding its initial public offering in Hong Kong. But when it looked for board members, it found one all too familiar to residents of that Chinese city".

"Alibaba Group Holding Ltd. said in a new filing with U.S. securities regulators on Monday that Tung Chee Hwa, 77 years old, had accepted a role as a director of the e-commerce giant, pending regulatory approval of its share-offering documents. Mr. Tung would become one of four independent directors and join the board’s nominating and corporate governance committee".

"A scion of a wealthy shipping family, Mr. Tung is currently a senior official at the Chinese People’s Political Consultative Congress, a political advisory body. The group is largely powerless, as the big decisions in China are made by the Communist Party’s top leadership – though two years ago he did leave the impression that he is in the know about the country’s top leadership, as he described Chinese President Xi Jinping’s back problems to CNN".

"He is most famous for the tumultuous years in which he was Hong Kong’s top official. The U.K.-educated Mr. Tung was appointed by Beijing to be the city’s chief executive in the wake of the 1997 British handover of the territory despite a lack of political experience. He developed a reputation for working hard – one of his nicknames was Mr. 7-Eleven".

"But Mr. Tung’s popularity ebbed following a series of problems, ranging from the Asian financial crisis to his administration’s response to the outbreak of severe acute respiratory syndrome, or SARS. In 2003, he backed down from proposed new internal security law following massive street protests. Turnover among his ministers and opposition to a number of land deals also hurt his standing.

In 2004, he was publicly rebuked by then Chinese President Hu Jintao, who told him at a televised event to “summarize your experience, look for inadequacies and constantly raise your governance ability.” He resigned the next year, two years earlier than scheduled, citing ill health".

China's Alibaba submits updated prospectus

HANGZHOU, June 16 (Xinhua) -- Chinese e-commerce firm Alibaba submitted an updated initial public offering prospectus to the U.S. Securities and Exchange Commission (SEC) on Monday (Beijing time).

The updated filing revealed for the first time the 27-person partnership, future listed company's nine-member board of directors, and its financial situation.

The partnership includes 22 members of management, four members of the company's Small and Micro Financial Services Co and one management member of China Smart Logistics.

Alibaba's founder Jack Ma, Executive Vice-Chairman Joseph Tsai, Chief Executive Officer Jonathan Lu and others are found in the namelist.

According to its planned corporate structure, partnership will play a decisive role in the development of the company. They are selected from employees who have worked more than five years in Alibaba and will have the right to nominate a majority of the company's nine-member board of directors.

Joseph Tsai said the value of partnership is it gives bigger strategic decision-making rights to the company's core managers and reduces the impact of rapid fluctuation of capital market, so as to ensure long-term interests of customers, the company itself and all shareholders.

In early May, Alibaba filed an initial public offering document to the U.S. SEC.

Hong Kong was once the top choice for its IPO but the plan was aborted partly because of Hong Kong's Securities and Futures Commission's opposition to Alibaba's unique corporate structure.

Under Alibaba's statutes, the company's partners are able to nominate and control the board, a challenge to the one share -- one vote standard applied in Hong Kong.

In the updated prospectus, Alibaba also announced the composition of the nine-member board, which includes five directors and four independent directors.

Former Hong Kong Chief Executive Tung Chee Hwa is included in the four independent directors, who have been invited to join the board.

Meanwhile, the updated prospectus revealed Alibaba's financial situation.

It said the total revenue of Alibaba reached 52.504 billion yuan (about 8.4 billion U.S. dollars), up 52.1 percent year on year, and its net income almost tripled to 23.403 billion yuan in 2014 fiscal year (from April 1, 2013 to March 31 this year).

In the 2014 fiscal year, its mobile transactions increased 394 percent compared to the previous year, it said.

Sources said Alibaba will make its IPO debut in the U.S. as early as August.

Free trade zones (FTZs) will not flourish everywhere in China

 Free trade zones (FTZs) will not flourish everywhere in China, a senior official with the Ministry of Commerce said on Monday.

The statement came almost nine months after the country's Shanghai pilot FTZ started operating as a test bed for deepening market-oriented reforms and boosting economic vitality.

At least 20 local governments have reportedly submitted proposals for similar zones.

In response, the official, who did not give his or her name, told Xinhua that FTZs would not be set up everywhere and it was not the goal of the central government to build zones in areas featuring a whole range of preferential policies.

The FTZ "frenzy" goes back to before the Shanghai zone opened. Last year, south China's Guangdong Province announced it was upgrading one of its "special economic development zones," calling it a "trade zone" and boasting unrivaled connections with neighboring Hong Kong.

This year has seen other provinces maneuvering to join the party: The coastal city Qingdao in Shandong Province wants to leverage its proximity to Japan and the Republic of Korea; Xiamen in east China's Fujian Province has said similar things about Taiwan; and Chongqing said it will open up westwards.

Despite all these proposals, authorities have given almost no indication that they intend to approve other zones.

Where and when to set up a FTZ and what and how to test favorable policies in the zone will depend on whether they are replicable elsewhere in the country, the official said.

However, the ministry supports local governments' efforts to study and learn from experiences of the Shanghai FTZ, the official added.

Source: Xinhua

China to accelerate nuclear power development

 China still relies too heavily on coal for power, with nuclear power seen as the route to an optimized energy structure and cleaner growth.

In a meeting of the Central Leading Group for Financial and Economic Affairs on Friday, President Xi Jinping said clean and efficient use of coal and development of other energy sources were crucial to development plans. An energy supply system should be driven diversely by coal, oil, gas, nuclear, new energy and renewable resources, he said.

"By adopting top international standards and ensuring safety, China should lose no time in constructing nuclear power projects in eastern coastal regions," he said.

At the end of 2013, nuclear power accounted for a paltry 2.11 percent of China's total, dwarfed by 80.4 percent of thermal power and 15 percent for hydropower. The installed nuclear power capacity represented only 1.19 percent to total power generation capacity.

The need to conserve energy, reduce emissions and steer away from reliance on coal--the dirtiest form of energy--has never been more obvious.

China aims to reduce energy consumption per unit of GDP by 16 percent from the 2010 level by 2015. The indicator dropped 9.03 percent from 2011 to 2013, accounting for only 54 percent of the overall target.

"In reality, the development of nuclear power is all about substituting coal," said Liu Qiang, an energy expert with the Chinese Academy of Social Sciences.

Considering the economic realities, nuclear power is not likely to face great opposition, Liu said.

Since the Fukushima nuclear disaster in 2011, China has reinforced safety at all nuclear plants. Plans for nuclear power safety and long-term development of nuclear power were passed in 2012, with approval planned for only a few projects in coastal areas before 2015, and none in inland regions.

By the end of last year, 17 nuclear plants were in operation, with a total capacity of nearly 15,000 megawatts of electricity.

At a meeting of the National Energy Commission on April 18, Premier Li Keqiang announced the introduction of new nuclear power plants along the east coast "at a proper time".

Earlier this month, the Ministry of Environmental Protection released the environmental impact statements for two new nuclear power plants, one in Guangdong Province and another in Shandong, but this is still not enough in the longer term.

"China's nuclear power sector still has a long way to go before reaching the global average," said Ye Qizhen of the Chinese Academy of Engineering.

A proportion of 10 percent of nuclear power is an ideal number for China, Ye said.

Source: Xinhua

Beijing housing sales slump 35 %

Home sales in Beijing slumped 34.9 percent year on year in the first five months of the year, a sign of cooling in property sector.

Real estate developers in the city sold 3.29 million square meters of housing during the period, the municipal bureau of statistics said in a statement Monday. Housing starts edged 0.3 percent lower to 4.84 million square meters.

Ssales of commercial buildings, which include residential and commerical property, fell 33.6 percent year on year to 4.54 million square meters, it said.

Sales of residential property in China fell 7.7 percent during the first quarter of 2014 to 1.1 trillion yuan (about 175 billion U.S. dollars). Month to month, home prices have been falling in more of the pool of 70 major cities surveyed by the National Bureau of Statistics.

Source: Xinhua

China sees rising number of new companies

The number of newly registered companies has grown fast since a new registration rule took effect in the beginning of March, new data showed on Monday.

Between March and May, some 929,000 companies were registered, soaring 74.5 percent year on year, according to State Administration for Industry and Commerce data.

Aggregate new capital doubled over the same period last year to 4.8 trillion yuan (780 billion U.S. dollars).

Liu Yuting, deputy head of the administration, said the new rule to lower the minimum registered capital requirements for new companies, which became effective in March, has been very successful in invigorating the market.

China is pushing ahead with market-oriented reforms to combat an economic slowdown. The economy expanded 7.4 percent year on year in the first quarter, the lowest quarterly expansion since the third quarter of 2012. During this period, the number of new private companies stood at 878,000, with aggregate capital reaching 3.78 trillion yuan, up 78.3 percent and 225 percent respectively.

Source: Xinhua

Xinhua: China, 13 executed over terror attacks, violent crimes in Xinjiang

URUMQI, June 16 (Xinhua) -- Thirteen people were executed on Monday for terrorist attacks and violent crimes in northwest China's Xinjiang Uygur Autonomous Region.

They were involved in seven cases and convicted of organizing, leading and participating in terrorist groups; murder; arson; theft; and illegal manufacture, storage and transportation of explosives, according to local courts in prefectures of Aksu, Turpan and Hotan.

All death penalties have been approved by the Supreme People's Court, as required in China.

The 13 planned attacks and killed police officers, government officials and civilians. They took innocent lives, caused huge property losses, and seriously endangered public security, according to local courts.

In one case, three defendants -- Ehmetniyaz Sidiq, Abdulla Srepli and Gulam Eli-- were convicted of organizing and leading terrorist attacks on a police station, hotel, government office building and other venues, killing 24 police officers and civilians and injuring 23 others at Lukqun Township in Shanshan County of Turpan Prefecture on June 26 last year.

In another case, Abdujelil Metnasir joined a terrorist group in February 2012 under the influence of extremism, participated in illegal religious activities many times and led physical training for terrorists. In May 2012, he and other members of the group killed two members who wanted to quit, and planned the assassination of government officials. In June 2012, he provided the bombs that killed one child and injured 17 others at an illegal preaching venue.

"The execution of criminals involved in terrorist attacks and violent crimes answers the calls of all ethnic groups, deters criminal activities, and demonstrates the resolve of the Communist Party of China and the government in cracking down on terrorism," said a spokesman of Xinjiang regional higher people's court.

He said the local judicial organs will continue to perform their functions; severely punish terrorists and criminals using legal weapons; defend the dignity of the law; and safeguard fairness, justice, social harmony and stability.

Also on Monday, three other people were sentenced to death by the Urumqi Intermediate People's Court over a terror attack near Beijing's Tian'anmen Square in October 2013.

A year-long crackdown on terrorism was launched in China with Xinjiang as the major battleground after a terrorist attack on May 22 in an open market in the regional capital Urumqi. The attack, the deadliest in recent years in the region, killed 39 innocent people and injured 94 others.

Related:

China's police chief calls for anti-terrorist readiness

BEIJING, June 16 (Xinhua) -- Minister of Public Security Guo Shengkun on Monday told Chinese police to step up anti-terrorism measures and be prepared to cope with various risks and challenges "at any given time".

Guo stressed that the police must fully realize the role of stability in ensuring the country's reform, development and people's happiness.

News Analysis: China's Huawei's Kirin 920 to shake global chip market?

When it comes to chips for powering smartphones, it has long been a story of the world's leading smartphone chip-maker -- U.S. firm Qualcomm. This time, it is a Chinese-made chip that has caught the eye of market observers.

The octa-core Kirin 920, unveiled by Huawei-owned HiSilicon on Friday, features support for QHD displays, 4K video recording and a high-speed LTE category-6 platform, something even the global industry leaders find it difficult to offer.

While it is too early to say this signals the rise of China in the global mobile processor market, the news should still come as a boon to the country's IT sector, especially the chip-making industry, which has been lagging far behind the world heavyweights.

China relies heavily on imported chips, which are among the country's top four import categories in terms of value, along with oil, iron ore and LCD panels.

As its reliance on foreign oil and iron ore cannot be reversed overnight, China has been working hard to promote the other two industries.

China has become less reliant on LCD panel imports in recent years, as its two leading makers of the panels, BOE and TCL, have been making strides in innovation. However, chips, known as the "heart" of the digital information industry for their importance, continue to be imported in massive quantities.

With China's smartphone market booming, the country imported 232.2 billion U.S. dollars' worth of integrated circuits, generally known as chips, in 2013, up 34.6 percent year on year, according to customs authorities.

The figure was higher than the 219.6 billion U.S. dollars' worth of imported oil for the year, making chips top the list of imports, resulting in a trade deficit of 144.1 billion U.S. dollars for the industry, which had been expanding for four years in a row.

However, there is still a long way to go before China can significantly reduce its chip imports.

Li Mingjun, deputy secretary general of the Shenzhen Semiconductor Industry Association, was quoted by local media as saying that most Chinese chip-makers are still only capable of making medium-to-low-end chips.

In addition, China's chip-making firms are still too small to challenge the U.S. dominance of the market, at least in the near future

Qualcomm registered a business revenue of 17.3 billion U.S. dollars in 2013, up 31.6 percent from a year earlier. The business revenue of HiSilicon, China's leading chip-maker, was only one eighth of Qualcomm's last year.

Another obstacle preventing HiSilicon's Kirin 920 from challenging the dominance of Qualcomm and other U.S. players is Huawei's reluctance to do so.

Huawei is not aiming to export its chips and does not see them as a stand-alone product, the 21st Century Business Herald quoted Xu Zhijun, deputy president of Huawei, as saying.

Xu said, "The strategy we adopt is one plus one or one plus N," which means that for every HiSilicon chip that Huawei incorporates in its products, it will integrate one chip or more from other suppliers.

The reason for this is that Huawei doesn't want to stir concerns with Qualcomm or other industry giants, fearing such a situation might affect chip supplies, the Herald reported.

Huawei was taught a tough lesson in March 2012 when it unveiled its quad-core processor K3V2 and said it would use the new chips in its Ascend D smartphones.

The new mobile phones appeared on the market several months later than planned. A source close to Huawei told the Herald that the delay was at least partly down to the high-profile release of the chips making its screen supplier Samsung nervous and leading it to stall the supply.

"We can only lead U.S. companies in sectors the size of a needle. But it is out of the question for our lead to expand to sectors the size of a matchstick," said Ren Zhengfei, Huawei's founder and CEO, during a speech earlier this year when publishing the firm's 2013 annual report.

Source: Xinhua

Chinese premier arrives in Britain for official visit

 Chinese Premier Li Keqiang arrived here Monday for an official visit to Britain, with a series of cooperation deals worth 30 billion U.S. dollars expected to be signed.

Upon his arrival in London, Li said that this year marks the 10th anniversary of the establishment of the China-Britain comprehensive strategic partnership and the two sides are faced with an important opportunity to carry forward bilateral relations into a new phase.

"I am looking forward to having in-depth exchanges of views with British leaders on bilateral affairs and other issues of common concern, adding fresh impetus to and charting the course for the bilateral partnership so as to speed up the development of China-Britain relations in the upcoming decade," he said.

During his stay in Britain, Li will meet Queen Elizabeth II and hold an annual meeting with British Prime Minister David Cameron.

The Chinese premier will also attend China-UK Global Economic Round-table and the China-UK Financial Forum, give a speech to top British think tanks and meet with business leaders from both countries.

The trip is Li's first visit to Britain since he took office in March last year, and another major diplomatic event between China and Europe following President Xi Jinping's tour in late March.

Observers in China view the visit as a sign that both countries have managed to ride out a rough patch in their relationship that started with Cameron meeting the Dalai Lama in May 2012 despite Beijing's objections.

Britain is China's third largest trading partner in the European Union and second largest investment source as well as a major destination for China's overseas investment. Two-way trade topped 70 billion dollars last year.

The visit is the first leg of Li's two-nation trip to Europe, which will also take him to Greece.

Source: Xinhua

China urges restraints after Ukrainian military airplane shot down

 A Chinese Foreign Ministry spokeswoman on Monday urged calm and restraint after a Ukrainian military transport plane was shot down and all 49 soldiers on board killed.

"As the situation in Ukraine is at a critical period, (we) hope all sides will keep calm," Spokeswoman Hua Chunying told a daily news briefing. Media reports say the plane was shot down by pro-Russia rebels.

Hua said all sides concerned are intensely pursuing a political solution to the Ukrainian crisis after Ukrainian President Petro Poroshenko mapped out a peace plan.

She urged the sides to cease fire as soon as possible to create favorable conditions for a political solution.

During the briefing, Hua also condemned the attack by hundreds of Ukrainian protesters on Russia's embassy in Kiev.

According to the Vienna Convention on Diplomatic Relations and other international conventions, the safety of diplomatic missions and personnel should be ensured effectively, said the spokeswoman.

Source: Xinhua

China will effectively respond to security challenges

China is determined to effectively respond to security challenges, a Chinese Foreign Ministry spokeswoman said on Monday after Japan's deployment of anti-ship missiles in Okinawa.

Hua Chunying made the remarks at the ministry's regular press briefing when asked to comment on the Japan Ground Self-Defense Force's deployment of surface-to-ship missiles and its 2016 plan to equip Kumamoto Prefecture with the missiles.

She said China adheres to the diplomatic policy of good neighborhood and friendly relations, and will take effective measures to respond to security challenges and safeguard national and territorial sovereignty.

Japan's military deployment will complicate the security situation in the region, Hua said, noting that Japan should explain its intention of the military move.

Source: Xinhua

Seeking Alpha: Argentine stocks slump after U.S. Supreme Court rejects defaulted bond plan

Seeking Alpha: Some analysts say energy stocks are getting too hot

Alibaba Gives More Details About Internet Business in New IPO Filing

       The WSJ reports,"In an amended filing for its initial public offering, released Monday, Alibaba included a host of details investors had complained were missing in its initial filing in May. Chief among them: a sales breakdown for the e-commerce company's two main shopping sites; names of the 27 people who control nominations for a majority of the board; details related to its Alipay online-payments affiliate; insight into the company's acquisition strategy; and more information on how the company is planning to handle shipping inside China".

"Alibaba also released new financial figures that showed the company's margins were under pressure—falling to 45.3% in the quarter ended in March from 51.3% a year earlier—due to rising spending to attract mobile users".

"The broader disclosure in the amended filing, which was released as part of a back-and-forth with U.S. securities regulators prior to the IPO's approval, is aimed at making sure global investors are comfortable with Alibaba, which is a household name in China but relatively unknown in the West. 

Yet some investors say there are plenty of questions left, from how much the company charges merchants for marketing and advertising on its site, to guidance on acquisition and spending plans".

In Monday's filing, Alibaba for the first time revealed that Taobao, its biggest consumer marketplace with millions of small Chinese merchants, handled $177 billion of transactions last year—more than twice as much as Tmall, an online mall that hosts brands and retailers, which handled $70 billion. But Tmall has been growing much faster than Taobao over the past year, with transaction volume in the first quarter of the year rising 90% over the previous year, versus 32% for Taobao.

Alibaba also said Tmall, which charges commissions, generates more revenue per transaction than Taobao, which makes money mostly through advertising.

Alibaba expanded the section on acquisitions to explain some of the rationale behind its recent multibillion-dollar acquisition spree. Its recent acquisition of mobile Web browser operator UCWeb helped Alibaba gain access to 264 million monthly active smartphone users, while another investment in one of China's most successful soccer teams gives it a "marketing platform" that could expose the company to millions of Chinese soccer fans, the filing said.

Alibaba said it takes minority investments in companies to feel out its relationship with potential acquisition targets, before moving to buy the entire company. Alibaba's minority stakes in Youku Tudou Inc.,a Chinese online video site, and popular China social-networking site Weibo would give it a better grasp of Internet users' behavior, which could be useful for marketing, the company said.

Alibaba also gave new details of risks facing its payments affiliate Alipay, which has been extremely successful at pushing into areas that are traditionally the preserve of banks, like investment management. Alibaba said some Chinese banks had put caps on the amount consumers are allowed to transfer to Alipay per day, ranging from 10,000 yuan ($1,610) to 50,000 yuan. Alibaba says the caps aren't significant, but admits it cannot predict the banks' future behavior.

Alibaba listed the nine members of its post-IPO board—a group that includes Alibaba's charismatic founder Jack Ma and the company's executive vice chairman, Joseph Tsai, as well as former Hong Kong Chief Executive Tung Chee-hwa.

The company revealed the 27 members of its "partnership" structure, which has the power to nominate more than half of its board. Twenty-two of those members are from Alibaba's management including Messrs. Ma and Tsai, while four are executives of Alipay, and one is an executive at Alibaba's logistics joint venture.

China Smart Logistics, a joint venture in which Alibaba holds a 48% stake, plans to build a nationwide network of logistic hubs such as warehouses, distribution centers and other facilities, placing them in locations where it expects the highest consumer demand. In some cities, China Smart Logistics will form partnerships with other companies to build out delivery infrastructure, at times taking on debt to do so, Alibaba said. The joint venture's long-term goal is "to support the delivery of over 100 million packages a day to consumers' doorsteps anywhere in China within 24 hours of an order being placed," Alibaba said.

Alibaba is aiming to list in New York during the first half of August, according to people familiar with the company's plans.

WSJ:Supreme Court Sides With Holdout Creditors in Argentina Debt Case

The U.S. Supreme Court on Monday handed Argentina a pair of legal setbacks in cases stemming from its historic 2001 default, a major blow for the country in its lengthy battle with holdout creditors.

In one highly anticipated case, the justices rejected Argentina's request that the high court intervene in litigation with holdout hedge funds that had refused to accept the country's debt-restructuring offers.

The Supreme Court, without comment, left in place a lower-court ruling that said Argentina can't make payments on its restructured debt unless it also pays the holdouts.

In a second related case, the high court ruled that bank records about Argentina's international assets can be made available to one holdout creditor seeking to collect on court judgments stemming from the default.

Argentina is fighting over billions of dollars with the holdouts, which include Aurelius Capital Management and Elliott Management Corp. affiliate NML Capital Ltd. The country has blasted the hedge funds as "vultures" seeking to reap a financial windfall on debt they bought at deeply discounted prices.

Argentina had warned the Supreme Court that the lower-court ruling in the main case left it facing the possibility of a new, court-ordered default, "which could trigger a renewed economic catastrophe with severe consequences for millions of ordinary Argentine citizens."

The country also said the rulings threatened international credit markets and impeded the debt-restructuring process.

In the wake of the ruling, Argentina's 2033 dollar bonds issued under New York law were trading at about 74 cents on the dollar from around 82 cents on Friday to yield 11.61%, according to Reuters. The bond is trading at its lowest price since March.

The hedge funds had urged the court to reject Argentina's appeal, saying the country had far overstated the financial impact of the case and has the money to pay up. They also said the Argentine government has a history of mistreating creditors and didn't deserve Supreme Court review because it will disobey the U.S. court rulings if it ultimately loses.

Argentina defaulted on about $100 billion of its debt during its financial crisis. The country in 2005 and 2010 offered holders of the defaulted bonds new heavily discounted debt in exchange. Between the two swaps, investors agreed to exchange about 93% of the defaulted bonds.

A New York federal trial judge and the Second U.S. Court of Appeals each ruled that Argentina's refusal to pay the holdouts while paying on the newer debt violated a so-called equal-treatment promise the country made on the older bonds.

The Second Circuit rejected Argentina's "blanket assertion" that a ruling against the country would plunge it into a new economic crisis.

The Supreme Court refused to disturb those rulings, saying in a brief written order that it wouldn't consider Argentina's appeal.

In the related bank-records case Monday, the Supreme Court sided with NML Capital, which had served subpoenas on Bank of America Corp. and Banco de la Nación Argentina, seeking records on bank accounts maintained by Argentina. NML said it wanted the records to learn how Argentina moves its assets around the world and to aid its attempt to collect on its judgments.

Argentina was seeking to shut down NML's discovery campaign on immunity grounds because it is a sovereign foreign state.

The Supreme Court, in the 7-1 ruling, affirmed a lower-court ruling allowing the subpoenas.

Justice Antonin Scalia, writing for the majority, said legal rules allow creditors to seek information on a debtor in order to collect on judgments. 

WSJ: White House: U.S. Won't Coordinate Military Actions With Iran

The WSJ reports, "the U.S. won't take coordinated military action with Iran as part of a broader effort to stem escalating violence in Iraq", the White House said on Monday.

"Any conversation with the Iranian regime will not include military coordination," White House spokesman Josh Earnest told reporters traveling with President Barack Obama on Air Force One. "We're not interested in any effort to coordinate military activity with Iran."

The Pentagon also said Monday it had no intention of coordinating a military response to the crisis in Iraq with Iran or its military forces, a position that appeared to vary from earlier comments by Secretary of State John Kerry.

Mr. Kerry said in an interview airing Monday that the U.S. was open to talks with Iran on the Iraq crisis, and that he wouldn't rule out the possibility of military cooperation between the two longtime adversaries.

"There is absolutely no intention, no plan to coordinate military activities between the United States and Iran," Adm. Kirby the Pentagon press secretary said, adding that they agreed that conversations on the sidelines of international talks over Iran's nuclear program would be appropriate.

U.S. Deadline Could Force Grand Bargain on Internet Taxes

      The WSJ reports,"This week, a House committee is expected to vote to renew a longstanding federal moratorium on Internet-access taxes. The 15-year-old moratorium on Internet access taxes prevents most states and local governments from applying telecommunications excise taxes and other levies on Internet connections, of which there are about 262 million in the U.S.

But the move to extend the moratorium on access taxes creates an opening for senators who see it as a vehicle for their legislation to allow states to collect online sales tax from out-of-state Internet merchants. Right now, that’s difficult for states, because the Supreme Court said in 1992 that a state can’t force an out-of-state merchant to collect its sales tax unless the merchant has a physical presence in the state. With Internet sales growing rapidly, governors and state lawmakers of both parties are pushing Congress to pass legislation that would set up a legal means for states to begin collecting their sales tax from more out-of-state vendors.

So, when the moratorium bill comes over from the House to the Senate, it’s likely that key senators will seek to add their online sales-tax legislation.

Then the question becomes what the House will do, as the clock ticks down to a fall deadline.

The eventual outcome is far from clear. But one thing is certain: unless Congress makes up its mind by Nov. 1, the current Internet tax moratorium will expire. That means many states and local governments would be able to start imposing telecommunications taxes on the online world.

Already, big telecommunications companies are preparing notices to send out to customers in coming weeks, saying the possibility exists that they will have to start collecting state and local taxes on Internet access soon. That’s gotten the attention of lawmakers who worry about angering constituents ahead of the November election.

Congress could eventually blink, and re-enact the moratorium without the online sales-tax legislation.

But sponsors of the sales-tax bill aren’t likely to give up without a fight. They see this as a big pressure point for passing some version of their bill.

Even a few online retailers are looking for a national solution to the sales-tax mess, to prevent a patchwork of state rules.

But many lawmakers – especially House Republicans – view the legislation as a burden on businesses and also a politically unpopular new tax on consumers".