India
has test launched its first long-range intercontinental ballistic
missile (ICBM), capable of reaching deep into China and as far as
Europe, with a scientist at the launch describing the mission
as successful. "It has met all the mission objectives," S P Dash, director of the test range, told the Reuters news agency on Thursday. "It hit the target with very good accuracy." It took the missile about 20 minutes to hit its target somewhere near Indonesia in the Indian Ocean.
The
launch of the Agni V, which can carry nuclear warheads and has a range
of 5,000km, thrusts the country into an elite club of nations with
intercontinental nuclear capabilities.
Only the UN Security Council permanent members - China, France, Russia, the US and Britain - along with Israel, have such long-range weapons. "The successful launch of Agni V missile is a tribute to the sophistications and commitment to national causes on the part of India's scientific technological community," Manmohan Singh, India's prime minister, said. Singh said he hoped Indian scientists and technologists would in the future contribute a "lot more to promoting self reliance in defence and other walks of national life". 'Confidence boost' Al Jazeera's Prerna Suri, reporting from New Delhi, said the launch was "significant because Indian scientists have been working for years to get the programme off the ground". "It is the most strategic and ambitious programme this country has undertaken in recent years," she said. "What's important is that this missile has been completely indigenously produced and designed. It's cost the Indian government over $500m to do that." Harsh Pant, a defence expert at King's College, London, described the launch as a "confidence boost", adding that the mission "signalled India's arrival on the global stage [and] that it deserves to be sitting at the high table". But Richard Bitzinger, a military specialist at Nanyang Technological University in Hong Kong, told Al Jazeera that India would need to carry out "several more tests" before it could declare Agni V missile operational. "It's not gonna happen overnight," he said. The launch came as India nears completion of a nuclear submarine that will increase its ability to launch a counter strike if it were attacked. Delhi insists its nuclear weapons programme is for deterrence only. One of the fast emerging economies known as the BRICS - Brazil, Russia, India, China and South Africa - India is keen to play a larger role on the global stage and has been clamouring for a permanent seat on the Security Council. It has in recent years emerged as the world's top arms importer as it rushes to upgrade equipment for a large but outdated military. China's reaction There was no immediate criticism from world powers over the launch, which was flagged well in advance, but China noted the launch with disapproval. "The West chooses to overlook India's disregard of nuclear and missile control treaties," China's Global Times newspaper said in an editorial published before the launch, which was delayed by a day because of bad weather. "India should not overestimate its strength," said the paper, which is owned by the Chinese Communist Party's main mouthpiece the People's Daily. State-owned China Central Television said the missile "does not pose a threat in reality", enumerating some of its shortcomings, from a problem with guidance systems to its 50-ton-plus weight. Delhi has not signed the non-proliferation treaty for nuclear nations, but enjoys a de facto legitimacy for its arsenal, boosted by a landmark 2008 deal with the US. On Wednesday, NATO said it did not consider India a threat while the US state department urged restraint and said India's non-proliferation record was "solid". India lost a brief Himalayan border war with its larger neighbour, China, in 1962 and has since strived to improve its defences. In recent years, the government has fretted over China's enhanced military presence near the border. Experts said the launch could trigger a renewed push from within India's defence establishment to build a fully fledged ICBM programme capable of reaching the Americas. "Policy-wise it becomes more complicated from now on, until Agni V, India really has been able to make a case about its strategic objectives, but as it moves into the ICBM frontier there'll be more questions asked," said Pant. Source: Al Jazeera and agencies Newscribe : get free news in real time Related posts: India, Asia #1 world's top weapons importer! India Upgrades Its Military With China in Mind! India sees China as 'de facto competitor' India's increasing troop may go nowhere |
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Thursday, April 19, 2012
India tests China Killer long-range ballistic muke missile
Thailand-China upgrades ties while Philippines spat with China worsens
China, Thailand upgrade bilateral ties, vow closer trade links
Chinese Premier Wen Jiabao greets Thai Prime Minister Yingluck Shinawatra in Beijing on April 17, 2012. Xu Jingxing / China Daily
Chinese
Premier Wen Jiabao (R) shakes hands with Thai Prime Minister Yingluck
Shinawatra in Beijing, capital of China, April 17, 2012. (Xinhua/Zhang
Duo)
BEIJING, April 17 (Xinhua) -- Premier Wen Jiabao and his Thai counterpart Yingluck Shinawatra agreed on Tuesday to upgrade bilateral relations to a "comprehensive strategic cooperative partnership."
"Establishing the China-Thailand strategic cooperative partnership is of great significance for both countries and the peaceful development of East Asia," Wen told Yingluck during their meeting at the Great Hall of the People.
"China hopes to enhance strategic communication with Thailand, jointly face challenges and boost cooperation in diversified areas," Wen added.
Yingluck, who is visiting China for the first time as Thailand's prime minister, said the creation of the partnership meets the common interests of both countries.
She vowed to facilitate stronger cooperation with China in all areas, adding that her country will play a positive role in boosting ASEAN-China cooperation and maintaining peace and stability on the South China Sea.
The Chinese premier proposed expanding bilateral trade to 100 billion US dollars annually before 2015 and enhancing cooperation in ocean, telecommunication, technology, energy and agriculture.
Wen pledged continuous support for Thailand in its post-disaster reconstruction and water conservancy following last year's devastating flood, the worst flood to hit Thailand in nearly 50 years.
The two premiers also agreed to boost joint patrols of China, Laos, Myanmar and Thailand along the Mekong River and jointly safeguard peace and stability on the South China Sea.
Yingluck said Thailand will conclude judicial proceedings regarding the murder of Chinese crewmen on the Mekong river as soon as possible and punish the criminals involved in accordance with the law.
Two Chinese cargo ships were attacked on Oct. 5 last year, with the attackers killing 13 sailors.
After their talk, the two premiers witnessed the sealing of seven bilateral cooperation agreements on issues ranging from trade, agriculture and railways to flood and drought prevention and ocean research.
Yingluck arrived in Beijing earlier Tuesday for a three-day official visit. The first female prime minister of Thailand was accompanied by executives from about 100 Thai companies.
According to Chinese Customs statistics, China is both the largest export market and second-largest import source for Thailand. The two countries' trade volume hit 64.7 billion U.S. dollars in 2011.
Philippines spat with China worsens in violating maritime law
- Associated PressBEIJING – China said Wednesday that the Philippines is violating maritime law by claiming a shoal in the South China Sea and dismissed Manila's request to take the dispute to an international court.
"We believe it runs counter to historical facts and violates the law," said Liu Weimin, a spokesman for the Foreign Ministry.
Philippine navy and Chinese maritime patrol vessels engaged in a standoff last week over a fishing incident near the Scarborough shoal in the South China Sea, an area both sides claim as sovereign territory.
Liu said China had "lodged solemn representations" with the Philippines and that Fu Ying, a vice foreign minister, had called in the Philippine envoy on Wednesday over the issue.
The Philippines plans to seek resolution in an international court, arguing that the shoal is well within the country's 370-kilometer (230-mile) exclusive economic zone that is recognized under the U.N. Convention on the Law of the Sea.
Liu said the Philippines is violating international law by using the U.N. convention to call into question sovereignty over the territory, known as Huangyan island in Chinese.
"China has sufficient legal evidence for its jurisdiction over the Huangyan island. China was the earliest to discover (12th century) and name the island, and has included it on maps and exercised its sovereignty over it ever since," Liu said.
Liu said that the Philippines never objected to China's territorial control of the shoal before 1997 and that its claim now is "completely baseless."
A Philippine government statement on Wednesday contradicted Liu's remarks, saying it has effectively occupied and exercised jurisdiction over the shoal -- which it calls Bajo de Masinloc, or Panatag shoal -- for decades.
A map published in 1734 showed the shoal was part of the northwestern Philippine province of Zambales, the government said, adding that a Philippine flag and lighthouse were erected on Scarborough islets in 1965.
U.S. and Philippine warships engaged in defense exercises at the shoal when American forces maintained a naval base in Zambales, the government said. The shoal "is an integral part of the Philippine territory" and Chinese vessels in the area are committing "serious violation of the Philippines' sovereignty and maritime jurisdiction," it said.
The shoal is among numerous islands, reefs and coral outcrops in the South China Sea claimed by China, the Philippines and other nations for their potential oil and gas deposits, rich fishing grounds and proximity to busy commercial sea lanes.
The controversy flared on April 10 when two Chinese ships prevented a Philippine warship from arresting several Chinese fishermen who were accused of illegal entry and poaching. The fishermen slipped away from the shoal over the weekend, angering Philippine officials.
Manila lodged a protest with China on Monday, accusing one of the Chinese ships and an aircraft of harassing a Philippine-registered yacht that was conducting archaeological research in the shoal.
Liu said tensions started to ease after bilateral talks.
"We hope that the Philippines can stay with their commitment and pull back their ships as soon as possible, and resume peace and stability in waters near the Huangyan island," Liu said.- Associated Press
Wednesday, April 18, 2012
Philippine Group Protests US-Filipino War Games!
Maritime claims in the South China Sea (Photo credit: Wikipedia)
U.S. Plays Philippines War Games | ASEAN Beat.
Fresh from a standoff with the Chinese in the South China Sea, the Philippine government is trying to figure out how to incorporate the US in its defensive shield.
Meanwhile, the Philippine left is playing games:
“Renato Reyes of the leftist group Bayan summarized the opposition to the entry of U.S. soldiers in the Philippines: “The U.S. wants it known that it is still top dog in this region, to the great dismay of many peace-loving peoples in Southeast Asia. We do not want our country to be used as a U.S. outpost and playground. We are not a laboratory for U.S. drone wars. We do not want the U.S. meddling in our internal conflicts and regional issues. We do not want the Philippines acting like the U.S. troops’ doormat in the region. We do not want U.S. troops using our country as their Rest and Recreation destination of choice.”We’ll see what tune Mr. Reyes is playing when Luzon becomes the 32nd province of China. Or maybe he’s already cut a deal with his future overlords?
Sources: The Pacific Bull Moose
Tensions in South China Sea: US and Philippines Naval drills, students attack US embassy
- As Standoff Continues, Philippines and US Play War Games (blogs.the-american-interest.com)
- Filipino Activists Deface Entrance of US Embassy (abcnews.go.com)
- Tensions in South China Sea: US and Philippines Naval drills,students attack US embassy (rightways.wordpress.com)
- Philippine president: No war with China over shoal (sacbee.com)
- Philippines hails start of US war games (globalnation.inquirer.net)
- Philippine President: No War With China Over Shoal (abcnews.go.com)
Hugo Boss Plays Catch-Up in China
Even though it’s the world’s hottest market, especially for luxury goods, China offers no guarantees. Just ask Hugo Boss (BOS). The German luxury clothing maker began selling its apparel through franchisees or by wholesaling goods to independent retailers in Hong Kong as early as 1982, but it didn’t open its first company-run stores in China until 2006, 15 years after Italian suitmaker Ermenegildo Zegna.
That slow start, and an emphasis on opening stores in lots of cities rather than concentrating on the most affluent metropolises, have taken a toll. Although Hugo Boss now has about 90 of its own stores in Greater China (which includes Macau and Hong Kong) and 30 percent of all its shops in Asia, the region made up a mere 15 percent of the clothier’s €2 billion ($2.67 billion) revenue last year. At Burberry Group (BRBY), Asia sales almost equaled European revenue last year, at 32.6 percent.
“They entered China in too timid a way, and now they need to change their distribution strategy” to retailing, says Armando Branchini, founder of luxury consultancy InterCorporate in Milan. “Competition is much tougher than years ago. The wholesale strategy does not provide the service quality and product assortment that the consumer wants for luxury items.”
Makers of pricey apparel and accessories cannot ignore China’s brand-conscious consumers. Luxury goods sales in Greater China climbed 29 percent, to €23.5 billion in 2011, Bain & Co. estimates, with Chinese customers accounting for more than 20 percent of global luxury consumption. To raise its brand’s profile among the mainland’s affluent, Hugo Boss will open about 20 stores in China this year, including an 800-square-meter (8,600 square foot) flagship in Shanghai, start online sales, and invite 1,500 guests to a fashion show in Beijing in May. “If you want to be successful in China, you need to be visible in Beijing, in Shanghai, as well as in Hong Kong,” Chief Executive Officer Claus-Dietrich Lahrs says. “In the past, we underestimated the need to make an impact in those three cities.”
Hugo Boss elsewhere sells a variety of lines, including lower-priced sportswear and leisure clothing. But in China, it’s pushing its high-end Selection line, with suits for €649 ($865) and jeans for €249. That’s expensive, but frequently less so than Zegna, which offers suits for €1,490 and leather shoes for €380.
Under Lahrs, who joined Hugo Boss in 2008 after stints with Christian Dior and LVMH Moët Hennessy Louis Vuitton (MC), store locations are improving, says Anna Patrice, an analyst at Berenberg Bank. He’ll add a store in Taipei 101, the world’s second-tallest building, in May. Hugo Boss’s two-story Shanghai store, to open in December in the Jingan district’s Kerry Center, is near Gucci, Giorgio Armani, and Montblanc stores. “If there are sophisticated, high-end stores in those new luxury malls, it’s the right place for Hugo Boss also to be,” Chief Financial Officer Mark Langer says.
Although the Hugo Boss brand is almost 90 years old, it didn’t begin operating company-owned stores until the 1980s. It had 622 stores worldwide at the end of 2011. The wholesale model works well in Europe and the U.S., where department stores have long hawked multiple high-end brands. Not so on the mainland. “In China, our typical wholesale distribution model does not exist,” CFO Langer says. By 2015, Hugo Boss hopes to build its own retail operations to 55 percent of its total revenues, up from 45 percent currently. Retail staff may also make up the biggest proportion of employees for the first time this year, says Lahrs, who wants to raise Asia sales to more than 20 percent of Hugo Boss’s total by 2015.
Still, the company is expanding in China after the “gravy train” has passed, figures Luca Solca, global head of European equity research at brokerage CA Cheuvreux. That’s because growth in luxury sales is slowing even as competition increases. Michael Kors Holdings (KORS) will open 15 stores in Greater China in 2012 and hopes to have a total of 100 in five years. Zegna this year will add 10 stores to the 82 it has in China, which is its strongest-growing market. And Hermès International (RMS) plans to open a flagship store in Shanghai in late 2013. “I expect that our catch-up activity in this part of the world will eventually help us to go beyond what we see as a slight slowdown of activity in the retail world,” Lahrs said in March.
The bottom line:
Hugo Boss was slow in operating its own stores in China. Now it gets
just 15 percent of sales in Asia, far less than some luxury rivals.
Speaking up for religious tolerance
Differences of religion should not make people fight one another,
rather they should cooperate in doing good and warding off evil.
AS a Muslim I am deeply distressed and perplexed at the incendiary view, allegedly emanating from the Saudi Grand Mufti, that all churches in the Arab peninsula be destroyed.
This view, if it were really expressed, is offensive. It violates all canons of decency, international law and the human rights of our Christian brothers.
It contradicts many exquisite passages in the Quran and the practices of Prophet Muhammad. It runs contrary to centuries of Islamic history of peaceful co-existence with other religions. The syariah gives ample guidance on inter-faith relations.
Multiplicity of faiths: In innumerable passages, the Quran recognises religious pluralism. In 2:256, it is stated: “There is no compulsion in religion.” In 109:6, there is the exquisite passage: “Unto you your religion, unto me mine.”
In Surah 11:118, it is declared: “If thy Lord had so willed, He could have made mankind one people: but they will not cease to dispute.”
In Surah 10:99, Allah gave this admonition: “Had your Lord willed, those on Earth would have believed, all of them together. Will you then compel people against their will to believe?”
In 18:29, it is commanded: “Let him who will, believe; and let him who will, disbelieve.”
Common fountain: In the Quran 42:13, it is implied that the divinely-revealed religions all stemmed from the same source. “He has ordained for you the same religion which He ordained for Nooh (Noah) … and which He ordained for Ibrahim (Abraham), Musa (Moses) and Esa (Jesus) saying you should establish religion and make no divisions in it.”
“Every nation has its messenger” – 10:47. “Nothing has been said to you save what was said to the messengers before you” – 41:43.
Respect for all prophets: Plurality of prophets and multiplicity of revelations reflect a divine will. The Prophets of all revealed religions are brothers and there is no difference between them with regard to the message. Muslims are obliged to believe in them all.
In Surah 2:136, it is stated: “We believe in Allah and that which has been sent down to us and that which has been sent down to Ibrahim (Abraham), Ismail (Ishmael), Ishaq (Isaac), Yaqoob (Jacob), and to Al-Asbaat (the offspring of the 12 sons of Yaqoob), and that which has been given to Musa (Moses) and Esa (Jesus), and that which has been given to the Prophets from their Lord. We make no distinction between any of them, and we are Muslims in submission to Him.”
According to the renowned Malaysia-based Afghani scholar Hashim Kamali, “Islam sees itself as the third of the Abrahamic religions.
“The Hebrew prophets and Christ are deeply respected by Muslims. The Virgin Mary is given the most exalted spiritual position in the Quran: a chapter of the Quran is named after her, and she is the only woman mentioned by name.
“The tombs of the Hebrew prophets, who are also Islamic prophets, are revered by Muslims to this day.”
All Christians and Jews are given the special status of ahle-kitab (believers in a book).
Respect for places of worship: All places of worship are sacred and must be defended. In Surah 22:40, the Quran speaks of monasteries, churches, synagogues and mosques “as places in which God is commemorated in abundant measure”.
In Islamic history, the clergy in the churches were given full authority over their flocks with regard to all religious and church matters. Mosques were often built next to churches. When the Muslims conquered Egypt, they gave the Coptic churches back to the Copts and restored their rights.
In the early history of Islam, Muslims and Christians often prayed simultaneously in many churches, e.g. at the Cathedral of Saint John in Damascus. Likewise, Prophet Muhammad allowed the Christians of Najran to pray in Muslim mosques. When Prophet Muhammad migrated to Madinah, there was a large number of Jews in the city. One of the first affairs of state that he dealt with was to establish a treaty with them, according to which their beliefs were to be respected and the state was obliged to ward off harm from them.
Duty of civility: In the book Civilisation of Faith by Mustafa as-Sibaa’ie, it is stated that the Quran obliges the Muslim to believe in all the Prophets and Messengers of Allah, to speak of all of them with respect, not to mistreat their followers, to deal with them all in a good and gentle manner, speaking kindly to them, being a good neighbour to them and accepting their hospitality.
Differences of religion should not make people fight one another or commit aggression, rather they should cooperate in doing good and warding off evil (Quran 5:2, 5:5).
“Allah alone is the One who will judge between them on the Day of Resurrection” – Quran 2:113.
“And do not argue with the People of the Scripture except in a way that is best” – Quran 29: 46. “And insult not those who invoke other than Allah, lest they should insult Allah wrongfully without knowledge” – Quran 6:108.
In the light of the above, it is obvious that any view that exhorts Muslims to destroy Christian places of worship is in serious conflict with the letter and spirit of tolerance in the Quran.
The Malaysian Constitution honours this spirit. Article 3 states: “Islam is the religion of the Federation; but other religions may be practised in peace and harmony.”
The alleged view of the Saudi Mufti has been repudiated by the top Muslim cleric in Turkey, Mehmet Gormez, who has stated categorically that the Islamic civilisation is not hostile towards previous religions.
Those whose hearts are filled with hate and whose lips drip the blood of vengeance must remind themselves of the caution administered by Kamali that fanaticism is not part of Islam, as the Prophet confirmed in a hadith: “One who promotes fanaticism (asabiyyah) is not one of us, nor is one who fights for asabiyyah, nor the one who dies for asabiyyah.”
Shad Saleem Faruqi is Emeritus Pro-fessor of Law at UiTM and a consultant to USM.
AS a Muslim I am deeply distressed and perplexed at the incendiary view, allegedly emanating from the Saudi Grand Mufti, that all churches in the Arab peninsula be destroyed.
This view, if it were really expressed, is offensive. It violates all canons of decency, international law and the human rights of our Christian brothers.
It contradicts many exquisite passages in the Quran and the practices of Prophet Muhammad. It runs contrary to centuries of Islamic history of peaceful co-existence with other religions. The syariah gives ample guidance on inter-faith relations.
Multiplicity of faiths: In innumerable passages, the Quran recognises religious pluralism. In 2:256, it is stated: “There is no compulsion in religion.” In 109:6, there is the exquisite passage: “Unto you your religion, unto me mine.”
In Surah 11:118, it is declared: “If thy Lord had so willed, He could have made mankind one people: but they will not cease to dispute.”
In Surah 10:99, Allah gave this admonition: “Had your Lord willed, those on Earth would have believed, all of them together. Will you then compel people against their will to believe?”
In 18:29, it is commanded: “Let him who will, believe; and let him who will, disbelieve.”
Common fountain: In the Quran 42:13, it is implied that the divinely-revealed religions all stemmed from the same source. “He has ordained for you the same religion which He ordained for Nooh (Noah) … and which He ordained for Ibrahim (Abraham), Musa (Moses) and Esa (Jesus) saying you should establish religion and make no divisions in it.”
“Every nation has its messenger” – 10:47. “Nothing has been said to you save what was said to the messengers before you” – 41:43.
Respect for all prophets: Plurality of prophets and multiplicity of revelations reflect a divine will. The Prophets of all revealed religions are brothers and there is no difference between them with regard to the message. Muslims are obliged to believe in them all.
In Surah 2:136, it is stated: “We believe in Allah and that which has been sent down to us and that which has been sent down to Ibrahim (Abraham), Ismail (Ishmael), Ishaq (Isaac), Yaqoob (Jacob), and to Al-Asbaat (the offspring of the 12 sons of Yaqoob), and that which has been given to Musa (Moses) and Esa (Jesus), and that which has been given to the Prophets from their Lord. We make no distinction between any of them, and we are Muslims in submission to Him.”
According to the renowned Malaysia-based Afghani scholar Hashim Kamali, “Islam sees itself as the third of the Abrahamic religions.
“The Hebrew prophets and Christ are deeply respected by Muslims. The Virgin Mary is given the most exalted spiritual position in the Quran: a chapter of the Quran is named after her, and she is the only woman mentioned by name.
“The tombs of the Hebrew prophets, who are also Islamic prophets, are revered by Muslims to this day.”
All Christians and Jews are given the special status of ahle-kitab (believers in a book).
Respect for places of worship: All places of worship are sacred and must be defended. In Surah 22:40, the Quran speaks of monasteries, churches, synagogues and mosques “as places in which God is commemorated in abundant measure”.
In Islamic history, the clergy in the churches were given full authority over their flocks with regard to all religious and church matters. Mosques were often built next to churches. When the Muslims conquered Egypt, they gave the Coptic churches back to the Copts and restored their rights.
In the early history of Islam, Muslims and Christians often prayed simultaneously in many churches, e.g. at the Cathedral of Saint John in Damascus. Likewise, Prophet Muhammad allowed the Christians of Najran to pray in Muslim mosques. When Prophet Muhammad migrated to Madinah, there was a large number of Jews in the city. One of the first affairs of state that he dealt with was to establish a treaty with them, according to which their beliefs were to be respected and the state was obliged to ward off harm from them.
Duty of civility: In the book Civilisation of Faith by Mustafa as-Sibaa’ie, it is stated that the Quran obliges the Muslim to believe in all the Prophets and Messengers of Allah, to speak of all of them with respect, not to mistreat their followers, to deal with them all in a good and gentle manner, speaking kindly to them, being a good neighbour to them and accepting their hospitality.
Differences of religion should not make people fight one another or commit aggression, rather they should cooperate in doing good and warding off evil (Quran 5:2, 5:5).
“Allah alone is the One who will judge between them on the Day of Resurrection” – Quran 2:113.
“And do not argue with the People of the Scripture except in a way that is best” – Quran 29: 46. “And insult not those who invoke other than Allah, lest they should insult Allah wrongfully without knowledge” – Quran 6:108.
In the light of the above, it is obvious that any view that exhorts Muslims to destroy Christian places of worship is in serious conflict with the letter and spirit of tolerance in the Quran.
The Malaysian Constitution honours this spirit. Article 3 states: “Islam is the religion of the Federation; but other religions may be practised in peace and harmony.”
The alleged view of the Saudi Mufti has been repudiated by the top Muslim cleric in Turkey, Mehmet Gormez, who has stated categorically that the Islamic civilisation is not hostile towards previous religions.
Those whose hearts are filled with hate and whose lips drip the blood of vengeance must remind themselves of the caution administered by Kamali that fanaticism is not part of Islam, as the Prophet confirmed in a hadith: “One who promotes fanaticism (asabiyyah) is not one of us, nor is one who fights for asabiyyah, nor the one who dies for asabiyyah.”
Shad Saleem Faruqi is Emeritus Pro-fessor of Law at UiTM and a consultant to USM.
China FDI at record pace: overseas uptick, policy steady
Q1 inflow leaves country on course to surpass 2011 record of US$116bil
* FDI momentum is slowing though and trade outlook difficult
* Suggests policy will be biased towards supporting economy
The first quarter inflow of US$29.8bil leaves China on course to surpass 2011's US$116bil record, even though inflows compared with a year earlier have fallen for five successive months, Commerce Ministry data showed.
A 53% leap in inflows to US$11.8bil in March from February typical after the Lunar New Year was a fresh sign that capital flow is firming enough to underpin money supply growth, following a US$124bil first-quarter jump in foreign exchange reserves, providing policy stays on its current pro-growth bias.
“I don't think this changes anything for monetary policy,” Alistair Thornton, economist at IHS Global Insight in Beijing, told Reuters.
Steady growth:
Workers assemble automobile parts at Changan Ford Mazda Automobile
plant in Chongqing. A 53% leap in inflows to US$ 11.8bil in March from
February is a fresh sign that China’s capital flow is firming enough to
underpin money supply growth— AP
The People's Bank of China (PBOC) has cut by 100 basis points (bps) the ratio of deposits banks are required to keep as reserves (RRR) to keep credit and money supply growth steady. The two moves added an estimated 800 billion yuan (US$127bil) of lending capacity to the economy.
The PBOC said last week that broad money supply rose 13.4% in March from a year earlier, stronger than market expectations for 12.9% and ahead of the previous month's 13% pace.
Economists forecast another 150 bps, or 1.2 trillion yuan in RRR cuts, for the rest of 2012 to help cushion China's worst slowdown since the global financial crisis of 2008-09.
“There are signs that the economy has reached a bottom, but there's nothing to suggest in recent data that equity investors should be positioning for a strong rebound or anything like a V-shaped recovery,” Thornton said.
EXTERNAL DEMAND
China's economic growth has slowed for five straight quarters. The annual growth rate in the first quarter eased to 8.1% from 8.9% in the previous three months, below an 8.3% consensus forecast in a Reuters poll.
Reasonably strong FDI and a return to an overall trade surplus of US$5.35bil in March heralds the prospect that a revival in global growth is lifting overseas demand just in time to compensate for a slowdown in the pace of domestic activity.
FDI is an important gauge of the health of the external economy, to which China's vast factory sector is orientated, but is a small contributor to overall capital flows compared to exports, which were worth about US$1.9 trillion in 2011.
Ministry of Commerce spokesman, Shen Danyang, told a news conference on the FDI data that the government was confident of achieving its target for trade growth in 2012 despite a difficult international economic backdrop.
China targets 10 percent growth for exports and imports in 2012, but both goals were missed in March when imports rose 5.3 percent and exports increased 8.9 percent over a year earlier.
Beijing has pledged to bring its current account into balance as it refocuses the economy more towards domestic consumption and away from volatile foreign demand for manufactured goods.
China's two biggest export markets faltered through 2011. Demand from the European Union was dogged by the sovereign debt crisis, while a U.S. recovery was slow to take hold, especially among consumers.
For the first quarter as a whole, Customs Administration data from China shows the value of total exports was $430.02 billion, while imports were $429.35 billion - bringing the trade account roughly into the balance targeted by the government.
"If we want export growth to be stable, we must ensure that policies are stable," Shen said. "If there are any policy adjustments, these adjustments will be more towards pro-exports rather than limiting exports."
CURRENCY RISKS
But he said some exporters were nervous about the outlook for their business, particularly after China loosened its tightly controlled currency regime by doubling to 1 percent the daily trading band for the yuan against the dollar.
"Some exporters are a little bit worried, so they are not so sure about taking long-term orders, but only took short-term orders, mainly because they are not confident in managing exchange rate fluctuations," Shen said.
The change, a crucial one as China further liberalises its nascent financial markets, underlines Beijing's belief that the yuan is near its equilibrium level, and that China's economy is sturdy enough to handle important, long-promised, structural reforms despite its cooling growth trajectory.
Slower growth is cautiously welcomed by China's leadership as it allows them to make reforms, particularly to prices the government sets, with a reduced risk of igniting inflation that the ruling Communist Party fears could trigger social unrest.
The widening of the yuan's trading band is the most significant adjustment made to China's currency regime since a landmark decision in 2005 to de-peg the yuan from the dollar, which set the Chinese unit on an appreciating path that has seen it gain about 30 percent against the dollar.
In tandem, China has encouraged direct settlement of international trade in yuan, amounting to 2.08 trillion yuan ($333 billion) in 2011, more than triple that in 2010, central bank data shows.
Dariusz Kowalczyk, senior economist and strategist at Credit Agricole CIB in Hong Kong, said 11.7 percent of March FDI flows were settled in yuan, up from 9.5 percent in February, 8.5 percent in January and 3.2 percent for all of 2011.
"Direct investment has become a new frontier for Chinese yuan internationalisation," he wrote in a note to clients.
Beijing targets $120 billion in FDI inflows for each of the next four years, drawing up new rules to encourage foreign investment in strategic emerging industries, particularly those that bring new technology and know-how to China.
The Q1 numbers are on course to achieve that.
"For foreign investors, China remains attractive compared to other countries," Zhao Hao, economist at ANZ Bank in Shanghai, said.
China's efforts to expand its own direct investments in foreign countries are surging. Outbound FDI rose 94.5 percent in the first quarter versus a year earlier to $16.55 billion.
"In the future, the trend is that FDI inflows will pick up while outbound FDI will rise even faster, so the net inflows will fall," Zhao said.
By Zhou Xin and Nick Edwards
Tuesday, April 17, 2012
Asia from an Asian perspective
Singapore’s Channel News Asia plans to penetrate the US and
European pay TV markets, but faces challenges posed by surging social
media.
SINGAPORE television, which helped Lee Kuan Yew defeat his left-wing foes and stay in power for 50 years, plans to go worldwide 24 hours a day from next year.
The global push by the state-owned Channel News Asia (CNA) to extend its reach from Asia to cover the United States and Europe is an ambitious project, given the adverse cable news market.
Last week, America’s CNN (Cable News Network), despite its vast resources and experience, reported a ratings drop of up to 50% in the first quarter.
All three global networks suffered declines, having lost audiences to the new digital media.
The declines are not deterring CNA, whose predecessor had played a historic role in the People’s Action Party’s (PAP) elimination of the powerful left-wing Barisan Sosialis in the 60s.
Despite its near-monopoly, circulation of Singapore’s main Straits Times broadsheet has stagnated.
“For us to be a true global player in the news channel space we need to broadcast 24 hours, every hour on the hour, with live news,” said a CNA spokesman.
“This will eventually allow us to penetrate the US and European pay TV markets, so that people there can get Asian news with Asian perspectives whenever they want.”
Having their state TV moving into the world arena has raised a little sense of pride among some Singaporeans.
Informed citizens, however, are questioning its chances of success considering that it is considered to be a government mouthpiece. And taxpayers are worried about footing the bill for potential losses.
A small-time businessman commented: “I wish it well, but if powerful global networks like CNN are losing out, what chance has the state-owned Singapore TV to succeed?”
Not everyone agrees. A polytechnic lecturer said Singapore has become an economic international player and a provider of jobs for professionals.
So TV has a small part, but, he added, if it is thinking of taking on the big players in providing global news, “I would say forget it”.
The vast majority of Americans and Europeans don’t really care for Singapore’s idea of “Asian coverage of Asian news”.
The biggest handicap is its ties to the government.
Most people I talked to doubted if many Westerners would be well disposed to news from a government news channel (BBC is different because of its long history of objective reporting).
Even among Singaporeans, one in every two believes that the Singapore media is biased, according to a survey last year.
On average, in a normal day, however, newspapers and television are the top sources of news here, with the Internet coming in a close third.
But in last year’s election, some 48% turned to Yahoo! for quick news, with CNA in second place at 23.8%. Newspapers, however, were the people’s main source of news.
Television was launched in 1963, the year Singapore joined Malaysia, and when it left two years later, the telecast of Lee Kuan Yew weeping caught the imagination of the world.
At the launch, only 2,400 Singaporean homes had TV sets, but tens of thousands of people, young and old, would sit on wooden benches in community centres to watch the magic box.
As a 23-year old then, I joined enthusiastic friends to meet outside a department store TV display window and watched celluloid scenes of the PAP developing Jurong or building public flats at a rate of one unit every 45 minutes.
It was a powerful message for a poor squatter country.
Eventually the leftwing hold among the vast Chinese-educated was broken. To the viewers, moving pictures could not lie.
The hard-working Barisan Sosialis representatives resorted to knocking on doors to get to the people, but they could not match the power of moving pictures.
Since then, the government has kept 100% ownership of television. Despite much talk of going public, TV news remain in official hands. About half of Singaporeans polled last year felt that “there is too much government control of newspapers and television”, according to an analysis by the Institute of Policy Studies.
With 3.37 million Internet users out of a 5.18 million population, the expectation is that while mainstream newspapers and TV remain on top of the pole for news, erosion among young readers is likely to continue.
This is because CNA is widely perceived as the voice of the government. An advisory committee said in 2009 that this factor could hamper its credibility as a news conduit.
The circulation of the Straits Times has been dismal over the decades despite a big population jump.
Not exactly good news for the ruling PAP.
An authoritative source once told me that for the PAP to remain in power, it must have control over three things – security forces, finance and the media.
The first two remain more or less in place, but control of the third – the media – is being challenged by the day by the surging social media where every citizen can be both a reporter and a reader.
INSIGHT DOWN SOUTH By SEAH CHIANG NEE
Related post
Foreign worker flow choked in Singapore
SINGAPORE television, which helped Lee Kuan Yew defeat his left-wing foes and stay in power for 50 years, plans to go worldwide 24 hours a day from next year.
The global push by the state-owned Channel News Asia (CNA) to extend its reach from Asia to cover the United States and Europe is an ambitious project, given the adverse cable news market.
Last week, America’s CNN (Cable News Network), despite its vast resources and experience, reported a ratings drop of up to 50% in the first quarter.
All three global networks suffered declines, having lost audiences to the new digital media.
The declines are not deterring CNA, whose predecessor had played a historic role in the People’s Action Party’s (PAP) elimination of the powerful left-wing Barisan Sosialis in the 60s.
Despite its near-monopoly, circulation of Singapore’s main Straits Times broadsheet has stagnated.
“For us to be a true global player in the news channel space we need to broadcast 24 hours, every hour on the hour, with live news,” said a CNA spokesman.
“This will eventually allow us to penetrate the US and European pay TV markets, so that people there can get Asian news with Asian perspectives whenever they want.”
Having their state TV moving into the world arena has raised a little sense of pride among some Singaporeans.
Informed citizens, however, are questioning its chances of success considering that it is considered to be a government mouthpiece. And taxpayers are worried about footing the bill for potential losses.
A small-time businessman commented: “I wish it well, but if powerful global networks like CNN are losing out, what chance has the state-owned Singapore TV to succeed?”
Not everyone agrees. A polytechnic lecturer said Singapore has become an economic international player and a provider of jobs for professionals.
So TV has a small part, but, he added, if it is thinking of taking on the big players in providing global news, “I would say forget it”.
The vast majority of Americans and Europeans don’t really care for Singapore’s idea of “Asian coverage of Asian news”.
The biggest handicap is its ties to the government.
Most people I talked to doubted if many Westerners would be well disposed to news from a government news channel (BBC is different because of its long history of objective reporting).
Even among Singaporeans, one in every two believes that the Singapore media is biased, according to a survey last year.
On average, in a normal day, however, newspapers and television are the top sources of news here, with the Internet coming in a close third.
But in last year’s election, some 48% turned to Yahoo! for quick news, with CNA in second place at 23.8%. Newspapers, however, were the people’s main source of news.
Television was launched in 1963, the year Singapore joined Malaysia, and when it left two years later, the telecast of Lee Kuan Yew weeping caught the imagination of the world.
At the launch, only 2,400 Singaporean homes had TV sets, but tens of thousands of people, young and old, would sit on wooden benches in community centres to watch the magic box.
As a 23-year old then, I joined enthusiastic friends to meet outside a department store TV display window and watched celluloid scenes of the PAP developing Jurong or building public flats at a rate of one unit every 45 minutes.
It was a powerful message for a poor squatter country.
Eventually the leftwing hold among the vast Chinese-educated was broken. To the viewers, moving pictures could not lie.
The hard-working Barisan Sosialis representatives resorted to knocking on doors to get to the people, but they could not match the power of moving pictures.
Since then, the government has kept 100% ownership of television. Despite much talk of going public, TV news remain in official hands. About half of Singaporeans polled last year felt that “there is too much government control of newspapers and television”, according to an analysis by the Institute of Policy Studies.
With 3.37 million Internet users out of a 5.18 million population, the expectation is that while mainstream newspapers and TV remain on top of the pole for news, erosion among young readers is likely to continue.
This is because CNA is widely perceived as the voice of the government. An advisory committee said in 2009 that this factor could hamper its credibility as a news conduit.
The circulation of the Straits Times has been dismal over the decades despite a big population jump.
Not exactly good news for the ruling PAP.
An authoritative source once told me that for the PAP to remain in power, it must have control over three things – security forces, finance and the media.
The first two remain more or less in place, but control of the third – the media – is being challenged by the day by the surging social media where every citizen can be both a reporter and a reader.
INSIGHT DOWN SOUTH By SEAH CHIANG NEE
Related post
Foreign worker flow choked in Singapore
Tensions in South China Sea: US won't take sides, US-Philippines Naval drills, students attack US embassy
Philippine and Chinese officials are holding talks on the stand-off at the Huangyan Island (Scarborough Shoal)
Dialogue 20120414 China & Phillippines ships standoff CCTV News - CNTV English
By CHOW HOW BAN, The Star
Dialogue 20120414 China & Phillippines ships standoff CCTV News - CNTV English
The Philippines and China in troubled waters
By CHOW HOW BAN, The Star
China attaches great importance to friendly ties with
countries around the South China Sea but a recent altercation between
Chinese fishermen and the Philippines Navy in the disputed Huangyan
Island may turn into a full-scale war.
TENSION is rising in the South China Sea. China’s navy is ready to hit back if a clash between several Chinese fishing boats and a Filipino naval vessel in the waters of Huangyan Island cannot be resolved diplomatically,
Chinese patriots have been flooding the media with provocative comments stating that they are ready to go to war.
On Tuesday, the Chinese embassy in Manila received a report that the 12 Chinese fishing boats that sailed into a lagoon in Huangyan Island (or internationally known as Scarborough Shoal) to shelter from bad weather were challenged by the Warship, BRP Gregorio del Pilar.
Twelve from the navy warship, six of whom were armed, boarded the Chinese vessels and apparently harassed the fishermen. Later, two Chinese patrol ships, Haijian 75 and Haijian 84, arrived and prevented the Philippines navy from detaining the fishermen.
On Thursday, the Philippines Foreign Affairs Secretary Albert del Rosario was quoted by Manila Bulletin as saying that its warship had left Scarborough Shoal back to Poro Point for refuelling and re-provision of food.
Fishing for trouble:
An April 10 photo showing members of the Philippine Army inspecting one
of the eight Chinese fishing boats in the Scarborough Shoal —
Reuters/Philippine Army
However, the Philippines Navy
Flag officer-in-command Vice-Admiral Alexander Pama said the vessel was
just relieved for operational reasons and would play a supporting role
until the Philippines Coast Guard took over maritime law enforcement
duties.
He stressed that the departure of the Gregorio del Pilar should not be construed as a retreat on the part of the Philippines government.
In Beijing, Chinese Foreign Ministry spokesman Liu Weimin said they had sent law-enforcement ships rather than naval ships to back up the existing patrol ships and safeguard Chinese fishermen in the area.
The Chinese government demanded that the Filipino ships leave the area as it violated China’s sovereignty over Huangyan Island.
In a counter-claim, the Philippines accused the fishermen of being there illegally, saying that the area is in its territory by virtue of it being part of its Exclusive Economic Zone as recognised by international law.
A Netizen, on a Chinese forum, said the fact that China was acting too rationally in the South China Sea dispute had led to the intemperate conduct of its rivals.
“A reminder to the Chinese government and military: 1.3 billion people have raised you all but we have lost almost all the islands in the South China Sea,” another Netizen said.
“If you cannot safeguard South China Sea, you will become the culprits in Chinese history.”
A Chinese military fan called La Te wrote in cankaoa.com that in every Chinese mind the war in the South China Sea was inevitable but the question is how to fight the battle if it did indeed takes place.
He said that among the more than 50 major islands in the Spratlys in the South China Sea, China and Taiwan had control over eight while the others were occupied by Vietnam (29), the Philippines (eight) and Malaysia (five).
Although Brunei had sent troops to Louisa Reef in 1990 before, it did not declare its sovereignty over the reef.
In its editorial, Global Times said China had never thought of resolving the South China Sea issue by force and that China had the patience to sort out the matter via negotiations.
“If the Philippines and Vietnam really want to fight this sea battle, then they should fire the first shot.
China will certainly fight to the finish and give them a painful lesson of going to war with China,” the newspaper said.
China Daily said the Philippines and Vietnam had gained considerable economic benefits from the South China Sea by illegally tapping the rich deposits of oil and natural gas in the area since the late 1970s.
It said Manila and Hanoi should stop coveting interests that they are not entitled to.
“China attaches great importance to maintaining friendly ties with countries in the region, including the Philippines and Vietnam, and it has always exercised the utmost restraint as it desires a stable peripheral environment.”
Dialogue 20120416 Philippines-US war games CCTV News - CNTV English
TENSION is rising in the South China Sea. China’s navy is ready to hit back if a clash between several Chinese fishing boats and a Filipino naval vessel in the waters of Huangyan Island cannot be resolved diplomatically,
Chinese patriots have been flooding the media with provocative comments stating that they are ready to go to war.
On Tuesday, the Chinese embassy in Manila received a report that the 12 Chinese fishing boats that sailed into a lagoon in Huangyan Island (or internationally known as Scarborough Shoal) to shelter from bad weather were challenged by the Warship, BRP Gregorio del Pilar.
Twelve from the navy warship, six of whom were armed, boarded the Chinese vessels and apparently harassed the fishermen. Later, two Chinese patrol ships, Haijian 75 and Haijian 84, arrived and prevented the Philippines navy from detaining the fishermen.
On Thursday, the Philippines Foreign Affairs Secretary Albert del Rosario was quoted by Manila Bulletin as saying that its warship had left Scarborough Shoal back to Poro Point for refuelling and re-provision of food.
He stressed that the departure of the Gregorio del Pilar should not be construed as a retreat on the part of the Philippines government.
In Beijing, Chinese Foreign Ministry spokesman Liu Weimin said they had sent law-enforcement ships rather than naval ships to back up the existing patrol ships and safeguard Chinese fishermen in the area.
The Chinese government demanded that the Filipino ships leave the area as it violated China’s sovereignty over Huangyan Island.
In a counter-claim, the Philippines accused the fishermen of being there illegally, saying that the area is in its territory by virtue of it being part of its Exclusive Economic Zone as recognised by international law.
A Netizen, on a Chinese forum, said the fact that China was acting too rationally in the South China Sea dispute had led to the intemperate conduct of its rivals.
“A reminder to the Chinese government and military: 1.3 billion people have raised you all but we have lost almost all the islands in the South China Sea,” another Netizen said.
“If you cannot safeguard South China Sea, you will become the culprits in Chinese history.”
A Chinese military fan called La Te wrote in cankaoa.com that in every Chinese mind the war in the South China Sea was inevitable but the question is how to fight the battle if it did indeed takes place.
He said that among the more than 50 major islands in the Spratlys in the South China Sea, China and Taiwan had control over eight while the others were occupied by Vietnam (29), the Philippines (eight) and Malaysia (five).
Although Brunei had sent troops to Louisa Reef in 1990 before, it did not declare its sovereignty over the reef.
In its editorial, Global Times said China had never thought of resolving the South China Sea issue by force and that China had the patience to sort out the matter via negotiations.
“If the Philippines and Vietnam really want to fight this sea battle, then they should fire the first shot.
China will certainly fight to the finish and give them a painful lesson of going to war with China,” the newspaper said.
China Daily said the Philippines and Vietnam had gained considerable economic benefits from the South China Sea by illegally tapping the rich deposits of oil and natural gas in the area since the late 1970s.
It said Manila and Hanoi should stop coveting interests that they are not entitled to.
“China attaches great importance to maintaining friendly ties with countries in the region, including the Philippines and Vietnam, and it has always exercised the utmost restraint as it desires a stable peripheral environment.”
Dialogue 20120416 Philippines-US war games CCTV News - CNTV English
US and Philippines begin South China Sea drills
By Jonathan Marcus BBC Diplomatic Correspondent
Joint
military exercises between the US and the Philippines are getting under
way in the South China Sea, even as Manila remained locked in a
stand-off with Beijing over a disputed shoal.
This year they are taking place off Palawan, near parts of the South China Sea both Manila and Beijing claim.
Meanwhile Philippine and Chinese vessels remain at the Scarborough Shoal, a week after the deadlock began.
The Philippines said its warship found eight Chinese fishing vessels at the shoal - which both sides claim - when it was patrolling the area on 8 April.
When navy personnel boarded the Chinese fishing vessels on Tuesday they found a large amount of illegally-caught fish and coral, it said.
Two Chinese surveillance ships then arrived in the area, preventing the navy from making arrests.
China insists that its rights in areas like the disputed Spratly Islands are paramount, despite rival claims from the Philippines, Vietnam and other countries too.
The government in Manila is taking steps to modernise its small naval and air forces. But it is looking to Washington to help balance China's growing power.
Two decades after US forces were evicted from their biggest base in the Pacific, there has been talk of a renewed US military presence. The fact that the joint exercises are being held on the island of Palawan - the closest Philippines territory to the Spratlys - will doubtless irritate China.
But the Philippines government must walk a tightrope here - China is its third largest trading partner. It wants to defend its corner but doesn't want to provoke a crisis with Beijing.
Attempts to resolve the stand-off do not as yet appear to have been successful.
"The stalemate remains. Both sides are in touch with each other," Philippine foreign ministry spokesman Raul Hernandez said in a statement on Sunday.
'New context'
The joint exercises are taking place in a different area, to the southwest of the shoal. Some 7,000 troops will be taking part.
A Philippine military spokesman said that the exercises were unrelated to events at Scarborough Shoal.
The focus of the exercises would be on "improving security, counter-terrorism and humanitarian and disaster response", Major Emmanuel Garcia said.
At the opening ceremony, the Philippines' armed forces chief Jessie Dellosa hailed the joint exercise as ''timely and mutually beneficial''.
"The conduct of this annual event reflects the aspirations to further relations with our strategic ally, a commitment that has to be nurtured especially in the context of the evolving challenges in the region,'' he said.
The exercises take place every year but, reports the BBC's diplomatic correspondent Jonathan Marcus, this year they are different because the context within which they are taking place has changed.
China's maritime power is growing and the Philippines - along with many other small countries in the region - is worried.
It wants to bolster its own defences and underline its growing ties with Washington, our correspondent says, and the US sees these exercises as an opportunity to demonstrate its renewed interest in Pacific security.
Six countries claim competing sovereignty over areas in the South China Sea, which is believed to contain huge deposits of oil and gas.
Along with China and the Philippines, they are Brunei, Malaysia, Vietnam and Taiwan.
China's claim includes almost the entire South China Sea, well into what the UN Convention on the Law of the Sea recognises as the 200-mile-from-shore Exclusive Economic Zones of other claimants.
That has led to occasional flare-ups and to competition to occupy islands, reefs and sandbars.
Filipino students attack US embassy to protest war games near South China Sea
By Associated PressLeft-wing protesters in the Philippines have splattered paint on the seal of the US Embassy to demand a pullout of American troops taking part in annual war games.
About 70 student activists took police and embassy guards by surprise early Monday when they threw blue-and-red paint at the seaside mission's main gate and scrawled 'US troops out now.'
They also chipped away letters from the bronze signage and burned a mock American flag.
outrage: Students attacked the US Embassy sign
in Manila to protest war games the Filipino military is conducting with
American forces
US and Philippine military officials say nearly 7,000 American and Filipino troops have begun two weeks of major military exercises but they stress that China is not an imaginary target.
Philippine army Maj Emmanuel Garcia said Monday that the annual drills, called Balikatan or shoulder-to-shoulder, will include combat maneuvers involving the mock retaking by US-backed Filipino troops of an oil rig supposedly seized by terrorists near the South China Sea.
US Marine Lt Col Curtis Hill says most other events will focus on humanitarian missions and disaster-response drills.
Beijing has protested military drills involving Americans near the South China Sea, where it is locked with the Philippines and four other nations in territorial rifts.
Flag burning: About 100 students turned out to
the protest and called for an end to the military relationship between
the US and the Philippines
Problems began on Sunday when Manila dispatched its largest warship, a US Hamilton-class cutter, to Scarborough Shoal, a group of rocky outcrops off the main Philippine island of Luzon, after it spotted eight Chinese fishing boats anchored in the area.
The shoal, which is crossed by major shipping lanes, is believed to be rich in oil and gas reserves as well as fish stocks and other comercially-attractive marine life.
On Friday, Philippine officials confirmed that three Chinese fishing boats had left the area, but said five other Chinese boats remained. It was unclear whether they carried illegal catches, they added.
Damage: A student helps deface the seal outside the U.S. embassy building
'We are watching five fishing vessels that are still collecting coral in that area,' Lieutenant General Anthony Alcantara, chief of the army's northern Luzon command, told reporters on Friday.
Asked if the three fishing vessels which left had carried illegal catches, he said: 'I have no data on that.'
China also withdrew one of its three naval ships from the area on Friday, a day after a Philippine warship pulled out to be replaced by a coast guard vessel. Manila's move had been interpreted as a sign that tensions were easing as diplomats rushed to find a solution to the dispute.
But on Friday the Philippine navy sent a ship into the area to back up a coast guard cutter tasked to enforce the country's maritime laws, suggesting tensions were still high.
'The mandate is to support our coast guard there,' Alcantara said.
'Our mandate is to take care of our own people there and sovereignty.'
US won't take sides in South China Sea dispute
Updated: 2012-05-02 12:24
The United States said on Monday that it would not take sides in the Huangyan Island standoff between China and the Philippines in the South China Sea and reiterated support for a diplomatic resolution to the territorial dispute.Washington does not take sides on competing sovereignty claims there, but has a national interest in maintaining freedom of navigation as well as peace and stability, US Secretary of State Hillary Clinton said, after meeting top diplomatic and defense officials from the Philippines.
Philippine Foreign Secretary Alberto del Rosario and Defense Secretary Voltaire Gazmin attended the 2+2 dialogue with their US counterparts, Clinton and Leon Panetta, in Washington.
"The United States supports a collaborative diplomatic process by all those involved for resolving the various disputes that they encounter," Clinton said. "We oppose the threat or use of force by any party to advance its claims."
Gazmin alluded to tension with China over islands in the South China Sea as he called for the need to "intensify our mutual trust to uphold maritime security and the freedom of navigation".
"We should be able to work together to build a minimum, credible defense posture for the Philippines, especially in upholding maritime security," Gazmin said.
The Philippines and China have been embroiled in the Huangyan Island dispute, with both nations stationing vessels there for nearly three weeks to assert their sovereignty.
China on Monday highlighted remarks made by the Philippine president about de-escalating the tension over the island, urging the Philippines to "match its words with deeds" and return to the proper pathway of diplomatic solutions.
Speaking of the tension, Philippine President Benigno Simeon Cojuangco Aquino III said he had issued instructions to his military, telling them not to intensify the issue.
Chinese Foreign Ministry spokesman Liu Weimin stressed that there is no change in China's stance of using diplomatic channels to peacefully resolve the issue, which was triggered when a Philippine warship harassed Chinese fishermen and raised concerns over China's sovereignty of the island.
The Philippine officials also stressed diplomacy when asked what aid they had requested from Washington, saying that Manila sought to bring the South China Sea issue to international legal bodies.
Clinton reaffirmed the US commitment to the 60-year-old Mutual Defense Treaty with the Philippines, calling the Philippines a country "at the heart" of the new US strategy toward the Asia-Pacific.
Washington would help improve the Philippines' "maritime presence and capabilities" with the transfer of a second high-endurance (coast guard) cutter this year, Panetta said.
The US emphasis on neutrality and a diplomatic resolution would encourage Manila to be more restrained on the Huangyan Island issue, said Fan Jishe, a US studies expert at the Chinese Academy of Social Sciences.
"Washington doesn't want territorial disputes between its Asian allies and China to be obstacles to China-US relations," he said.
Xinhua and Reuters contributed to this story.
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