Taking small steps in its own path

Made In China By Chow How Ban

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Despite calls on the Internet to emulate the political unrest in Middle-Eastern and African nations, most Chinese prefer to stay away from even peaceful strolls – they are happy with the direction China has taken thus far. 

CHINA has every reason to believe that a Middle East or North African-style uprising would not occur in the country.

Time is still on the Communist Party-led government’s side to set everything right and show its people that it will be able to address inflation, their grievances on social injustice, corruption and lack of democracy.

In general, the Chinese are quite happy with the way the government has propelled the nation to economic and social successes.

Nevertheless, the minority pre-democracy activists circulated messages on the Internet, encouraging the public to take to the streets in Beijing, Shanghai, Guangzhou and other cities for a peaceful stroll every Sunday.

However, in the past four weeks, few actually turned up.

The preventive measures taken by China, like blackouts of postings calling for revolts on the Net and reminders to university students against gatherings were effective, not to mention the large police presence at the suggested places of protests.

The Chinese Foreign Ministry, pressed by the foreign media on the issue, described the issue as something “created out of thin air”.

Last week, its minister Yang Jiechi said that he had not seen any sign of tension in China. Rather, its people had a joyful Lunar New Year and are focussed on pursuing development.

After the Chinese National People’s Congress (NPC) session in Beijing on Monday, premier Wen Jiabao told reporters it was not right to draw parallels between China and the troubled countries.

“After 30 years of reforms and opening up, China has achieved rapid economic and social development,” he said.

“I believe the Chinese people have seen that the government is taking serious steps to address the challenges and problems brought about by development.”

He said although China had become the world’s second largest economy, its people were aware that China remained a developing country with a huge population, weak economic foundation and uneven development.

He dismissed suggestions that China had developed its very own model that could be emulated by other countries.

“We simply embarked on a path that fits China’s conditions.”

Wen hinted that China would continue to push for political reforms that the Communist Party deemed necessary to vitalise both the party and country.

He cited elections for NPC deputies at county and cities without districts, full administrative power in villages, indirect elections at and above city levels, and multi-candidates elections for members of the party’s central committees, as some examples of China’s efforts to promote democracy.

“Nothing in this world stays immutable and it is only through reform that we ensure continuous existence and growth,” he added.

However, Wu Bangguo, chairman of the NPC Standing Committee, China’s top legislative body, told about 3,000 deputies that China would not adopt a multi-party rotation system or other Western political systems.

“Following our own path and promoting socialism with Chinese characteristics is the only correct road to development for China. If we waver, it is possible the country will suffer internal disorder,” he said.

Two weeks after comprehensive foreign media coverage on the protests, several state-owned newspapers finally voiced out their views.

The government’s mouthpiece People’s Daily said that while the world was reeling from the loss of lives in the Middle Eastern nations, crippled by political turmoil, some quarters with ulterior motives were hoping that the Chinese would embark on similar street protests.

“China is not the Middle East. The Chinese are taking small steps to become prosperous. They deeply understand that if they want to lead a better life the precondition is a stable society,” the daily said.

Chen Jingqiu, a member of the China Association for Promoting Democracy and Chinese Political Consultative Conference (CPPCC), said the government was trying its best to address the people’s grievances on government transparency and social injustice.

“The government will have to meet some benchmark in running the country, and the CPPCC members and NPC deputies will gauge their performance,” he said.

“More importantly, we must sort out our domestic relations. I believe revolutionary protests like those in the Middle East and North Africa will not happen in China.”

After the tsunami - Chaos theory in real life

THINK ASIAN By ANDREW SHENG 

Chaos theory in real life
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http://www.youtube.com/watch?v=93OkKykpovw&feature=player_detailpage#t=59s

I was at an IMF conference on capital flows in Bali when the Japanese earthquake and tsunami occurred. As the tragedy unfolded over the weekend, it became clear that the crisis was complicated by nuclear considerations. All of our sympathies and condolences go with our Japanese friends as they go through this terrible natural disaster, possibly larger than the Kobe earthquake.

When the Year of the Rabbit ushered away the Year of the Tiger, there was a false spring in February when financial markets were buoyant as everyone thought recovery was in the air. Even the Nikkei stock market index reached a recent peak. The US economy seemed to be on the upswing as unemployment numbers declined one percentage point. The earthquake shattered that illusion of recovery.

Chaos theory is always introduced by the idea that the flutter of a butterfly's wings can cause a hurricane the other side of the world. We now see Chaos theory in real life. A tsunami in Japan can hit the west coast of the United States, but financial markets immediately reacted around the world, as everyone tried to assess what the largest net foreign asset holder in the world would do. Will the Japanese sell off their foreign assets to finance their own post-earthquake reconstruction? If they do so, will they sell off foreign currencies and buy back yen, which will make the yen stronger?

On the other side of the world, there was another earth-shattering pronouncement, not immediately comprehensible by ordinary investors, but very significant in terms of financial markets.

On Oct 15, 2010, Pimco, the world's largest bond fund manager, with probably US$1 trillion under management, announced that their Total Return Bond fund was cutting their holdings in US Treasuries as a result of quantitative easing. Most retail investors probably did not notice that announcement.

But on March 9 this year, the head of Pimco, Bill Gross, announced that at the end of February 2011, the fund had sold off all its US Treasuries and agency debt. To me, that is as significant as a tsunami in financial markets.

I did not fully digest the significance of that event because I was travelling from Washington DC to Bali. But after I downloaded Gross' comments, available at www.pimco.com, I began to understand his thinking. He showed a fascinating chart on who was and will be holding US Treasuries. In the past, the Federal Reserve only held 10%, foreigners 50% and US institutions and individuals held 40%. Since the beginning of QE2, the Fed has been buying 70% and foreigners are buying 30%, while US institutions are staying on the sidelines.

So why are US funds like Pimco not buying? Part of the reason is that “Treasury yields are perhaps 150 basis points or 1.5% too low when viewed on a historical context and when compared with expected nominal GDP growth of 5%.”

In other words, the US dollar is violating the second of the three pillars which give it the most-favoured-currency status, according to Barry Eichengreen, professor at University of California at Berkeley, who has a great understanding of the special role of the US dollar from the span of economic history.

On March 2, 2011, Prof Eichengreen wrote an article in the Wall Street Journal arguingL: “Why the Dollar's Reign is Near an End”. The three pillars are firstly, the depth of US dollar-denominated debt securities, secondly, the dollar is the world's safe haven, and thirdly, the dollar benefits from a dearth of alternatives.

Currently, 42.5% of global foreign exchange transactions are conducted in US dollars, compared with 19.5% for the euro, 8.5% for the yen and 6.4% for sterling. This is because commodities like oil and gold are priced in dollars. Moreover, a large chunk of foreign exchange reserves are held in US dollars, the largest being Asian and Opec central banks and sovereign wealth funds.

The preliminary report on foreign holdings of US securities as at the end of June 2010 was published at the end of February 2011 by the US Treasury. Foreign holdings increased US$1 trillion from a year ago to US$10.7 trillion, of which US$2.8 trillion was in equities and the balance in debt securities. Out of the US$10.7 trillion, China held US$1.6 trillion (15%), Japan US$1.393 trillion (13%) and Middle East oil producers US$350bil. So, the real fear of Bill Gross is the question: “Who will buy Treasuries when the Fed doesn't?”

More important, what happens if the foreigners decide like Pimco not to buy any more Treasuries, especially when they decide to bring their money home for their own domestic purposes?

Consequently, we are even closer to the edge of higher currency volatility than what the market is telling us. One of the big lessons of the recent past is that the price of money and risk spreads (and credit rating agencies) have not warned investors of the inherent risks in financial securities.

With QE2 and near-zero interest rates in the major reserve currencies, the spreads simply do not reflect the inherent risks that I have outlined above. This means that sooner or later there will be a spike in the price, or a sharp fall in value, if history is any lesson to go by.

Indeed, I have argued that even though the Dow Jones Industrial Average has doubled since the beginning of QE2 in 2008, if you deflate the index by the price of gold, the equity market has crashed already.

I would be the first one to hope that the current economic recovery in the United States and Europe will be sustainable. I strongly hope that Japan will recover quickly from this sudden shock and tragedy. But I would not be responsible if I did not think that the financial markets are once again not reflecting the risks out there. Just like Bill Gross, it is legitimate to ask “whether Quantitative Easing policies actually heal, as opposed to cover up, symptoms of an unhealthy economy.”

Watch this space.

Andrew Sheng is the author of the book “From Asian to Global Financial Crisis”.

Quake shifted Japan 2.4 meters east

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The massive earthquake that devastated northeastern Japan has shifted the country more than 2 meters away from the neighboring Korean Peninsula, scientists said.

The Korea Astronomy and Space Science Institute (KASSI) said the Korean Peninsula moved east up to five centimeters while Japan shifted some 2.4 meters east.

Consequently, the distance between the countries increased by more than 2 meters, the institute said.

The disputed Dokdo islands, also claimed by Japan where they are known as Takeshima, relocated the furthest, moving 5 cm east, as the islands in the Sea of Japan are relatively closer to the epicenter.

The southwestern port of Mokpo drifted 1.21 cm.

"We are closely monitoring to see whether the shift was temporary or perpetual," KASSI said.

"But don't worry. You will never feel the change anyway," she said.

According to NASA, the magnitude-9.0 earthquake also shortened Earth's day by just over one-millionth of a second and shifted the Earth's axis by about 16.5 cm.


Source: China Daily,Agence France-Presse

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Con man fleeces firms of RM 270,000

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KUALA LUMPUR: An account executive cheated several companies, including a prominent local bank, of some RM270,000 as he job-hopped from one company to another.

All his employers did not know that he was wanted by police for several cheating cases since 1999.

His latest employer, a property management company in Petaling Jaya, lost a total of RM89,000 in rental collection when he disappeared after working there for three months.

Company director Kamil Othman said he was shocked to learn that Rizal Ridzuan Abdul Rasap, 40, was actually a wanted man.

“My company’s accounts department hired Rizal on Nov 22 last year as an account executive.

“He was assigned to collect rental for the company,” he said at a press conference organised by the MCA Public Service and Complaints Department.

Kamil, 53, said Rizal had promptly banked in all rental collections into the company’s account during the first month.
-The Star-

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Major nuclear accidents around the world, What relationship & causes earthquakes & Tsunamis? Water to cool reactor in Japan!

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 Major nuclear accidents around the world

BEIJING - The Fukushima No.1 nuclear power plant in northeast Japan started to leak radioactive material after an hydrogen explosion, which was caused by a devastating earthquake and ensuring tsunamis, occurred Saturday afternoon.


The following are major nuclear accidents around the world since the former Soviet Union set up the world's first nuclear power plant in 1954:


On Oct. 10, 1957, a fire broke out at the Windscale nuclear reactor (later renamed Sellafield) in northwest England, destroying the core and releasing a cloud of radioactive material. The sale of milk and other produces from nearby farms were banned for a month. Scores of people later developed cancer and died because of exposure to radiation.


On March 28, 1979, a partial core meltdown occurred at Three Mile Island in the United States due to its cooling system failure, in the most severe nuclear leak accident in the country which forced the evacuation of at least 150,000 local residents.


On April 26, 1986, the No.4 reactor at the Chernobyl nuclear plant in the former Soviet Union exploded, causing the worst nuclear disaster in history. The explosion killed 30 people on the spot, released more than eight tons of highly radioactive material, contaminated 60,000 square km of land, and caused more than 3.2 million people to be affected by radiation.


On April 6, 1993, a tank containing radioactive liquid exploded at the Tomsk-7 Reprocessing Complex in the Siberian region of Russia. A total of 10 square km of land was contaminated by radioactive material and a number of nearby villages were evacuated.


On Sept. 30, 1999, a nuclear accident occurred at a nuclear fuel plant at Tokai village, Ibaraki prefecture, Japan, killing two workers, exposing dozens of people to radiation and forcing the evacuation of local residents.


On Aug. 9, 2004, four workers were killed and seven others injured by a steam leak at the No.3 reactor at Kansai
Electric's Mihama power plant, 350 km west of Tokyo, Japan.

Relationship between earthquakes, tsunamis

BEIJING - An 8.9-magnitude earthquake struck northeastern Japan on Friday afternoon, the largest temblor ever recorded by the Japanese Meteorological Agency. The earthquake triggered a tsunami that swamped hundreds of kilometers around the epicenter.

The following is a brief introduction of the relationship between earthquakes and tsunamis.

A tsunami is a series of destructive waves, sometimes tens of meters high, caused by the displacement of a large volume of water, usually an ocean. With gigantic energy and fast movement, the waves are catastrophic to the affected coastal areas.

Tsunamis are usually triggered by earthquakes, volcanic eruptions and underwater explosions, landslides and other mass movements. Underseas earthquakes have generated nearly all the major tsunamis in history.

Tsunamis can be generated when the sea floor abruptly deforms and vertically displaces the overlying water. Tectonic earthquakes are a particular kind of temblor associated with the earth's crustal deformation.

When these earthquakes occur beneath the sea, the water above the deformed area is displaced from its equilibrium position.

However, undersea earthquakes do not necessarily lead to tsunamis.

Statistics from the China Earthquake Administration show that of the past 15,000 undersea tectonic earthquakes, only about 100 generated tsunamis. Some experts hold that only earthquakes of above 6.5 magnitude and with a focal depth of less than 25 km underground can cause tsunamis.

Sometimes even strong earthquakes, such as the 8.5-magnitude qukae that occurred near Sumatra in 2005, do not trigger tsunamis because the quake intensity can be largely compromised by the great focal depth, experts say.

In addition to the earthquake magnitude, global climate change may also have a bearing on the occurrence of tsunamis.

According to experts from the China Meteorological Administration, the 2004 tsunami that struck Southeast Asia was partially linked to the rising sea level caused by global climate change.

What causes earthquakes?

The earth has four major layers: the inner core, outer core, mantle and crust.

The crust and the top of the mantle make up a thin skin on the surface of our planet. But this skin is not all in one piece -- it is made up of many pieces like a puzzle covering the surface of the earth.

Not only that, but these puzzle pieces keep slowly moving around, sliding past one another and bumping into each other. We call these puzzle pieces tectonic plates, and the edges of the plates are called the plate boundaries.

The plate boundaries are made up of many faults, and most of the earthquakes around the world occur on these faults. Since the edges of the plates are rough, they get stuck while the rest of the plate keeps moving.

Finally, when the plate has moved far enough, the edges unstick on one of the faults and there is an earthquake.

Helicopters dump water to cool reactor in Japan

TOKYO - Japan's Self-Defense Force are dumping water on the damaged No 3 reactor by helicopter following the plant's operator Tokyo Electric Power Co (TEPCO) failing to cool it sufficiently on Wednesday and Thursday.

A video grab show a helicopter is dumping water on a stricken reactor in Japan to cool overheated fuel rods inside the core on March 17, 2011. [Photo/Xinhua]

Related readings: Spotlight reveals concerns over safety Nuclear crisis  may be 'out of control'  Australian FM urges nationals to consider leaving Japan Fuel rods damaged at reactor's 1 and 2

The plan was originally shelved as it was deemed too dangerous in light of the high levels of radiation, but following the rising heat of the reactor the government decided the water drop by the helicopters would be the best way to deal with climbing hydrogen levels.

The GSDF Ch-47 helicopters can carry up to 7.5 tons of water and have also started dumping water on the No 4 reactor as well.

Meanwhile, a Tokyo police unit is primed to use a water cannon truck to cool down a spent fuel rod pool in the No 4 reactor at the quake-stricken Fukushima Daiichi nuclear power plant.

The police announced that the ground operation will involve spraying water from outside of the reactor and is due to start on Thursday morning.

Following Friday's devastating earthquake and tsunami in northeastern Japan, the temperature has been rising in the building that housing the No 4 reactor and its spent fuel storage pool, as cooling systems failed.

The building was rocked by a hydrogen explosion on Tuesday as well as a fire early on Wednesday adding to complications and raising concerns the fuel rods will melt and release radiation.

The police will aim their high pressure cannons at a hole in the wall of the damaged No 4 reactor housing structure to target the fuel storage pool.

A video grab show helicopters are dumping water on a stricken reactor in Japan to cool overheated fuel rods inside the core on March 17, 2011. [Photo/Xinhua]

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WiFi blues at hotspots

By KOW KWAN YEE

Penang users of free wireless service complain of connection woes

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PENANG’S Free Wireless (WiFi) Internet service is not working in some hotspots, according to several users.

They complained of inaccessibility and instability of the service.

A user called May expressed her disappointment in the Lowyat Internet forum, saying that she kept getting disconnected at the hotspot at Van Praagh Road although her laptop indicated excellent speed in the area.

“Is this what is called free? Please check on this and do something about it. I am totally fed up with all these problems,” she said in her post.

Another user called gogo2 said the line was not stable for the past few months. “It goes on and off numerous times. It comes right back up but get disconnected halfway. This is weird,” gogo2 said in the same forum.

Penang Gerakan Youth chief Oh Tong Keong complained that he was unable to access the free WiFi while conducting voter registration at the Chowrasta and Campbell Street markets for the past two weeks.

“The laptops detected the WiFi signal but we were unable to register and eventually had to use our own broadband,” he said yesterday.

“These areas are near Komtar which is one of the WiFi hotspots but why is the service not working?” he questioned.

Oh said his friends had also complained about inaccessibility of the WiFi service in several hotspots.

“The service is in demand as many youngsters now own mobile devices such as iPhone. The state government should overcome the problem as soon as possible,” he said.

This reporter was unable to access the free WiFi on her mobile phone at several hotspots listed in the PDC Telecommunication Services (PDC Telco) website. The hotspots are the ground floor of the Bukit Jambul Complex, Queensbay Mall’s third floor (south zone) and Prangin Mall’s ground floor.

Penang Telecommunications Task Force chairman Jeff Ooi said the reasons for wireless disconnection were user and device problems.

“Some of the users log in and register with fake email addresses before they connect to the wireless service.
“Sometimes their devices, such as smartphones, are not working due to operating system problems,” he said when asked to comment on the complaints.

Ooi said some users downloaded movies using the free service and this paralysed the network.

“To tackle this problem, we have adopted the wireless system used in several international airports where users will be logged off automatically after 15 minutes.

“Hotspots are monitored every day and our team will conduct physical inspection for any router that is not functioning,“ he said, adding that a routine check was done every two weeks.

Ooi said the 750 free WiFi locations can be checked at www.pdctelco.com.my.
He said users could call the hotline 1800-87-7790 if they have difficulty connecting to the free wireless network.

World Energy Market Adjusting to Japan Nuclear Crisis

By Greg lakus | Houston

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Snow falls as rescue workers in Japan search for victims of earthquake and tsunami -Photo: AP 

The earthquake and tsunami disaster in Japan has disrupted that Asian nation's power plants, including nuclear facilities that are still threatening the area with radiation leaks. The crisis at Japan's nuclear plants has caused a re-assessment of nuclear power plants and projects worldwide and could cause an uptick in demand for other sources of energy including coal, petroleum and natural gas. But energy experts do not believe the Japanese crisis will cause a major upset in world energy markets or even a major pullback from nuclear energy.

The disaster in Japan will have some short-term effect on the world energy market, but energy experts say there is unlikely to be a strong long-term impact. Japan is the third largest economy in the world and it imports almost all of its energy, with nuclear plants, until now, providing around 27 percent of the country's electrical generation. The price of crude oil dipped in recent days on speculation that Japan's demand for oil will continue to be low for many months to come as a result of the catastrophe. Damage to ports and refineries in Japan as well as a lack of electrical power to run those facilities has already caused a sharp decrease in petroleum use.

But Ken Medlock, an energy analyst at Rice University's James Baker Institute for Public Policy, says Japan will be importing some of its oil in a different form. “That crude is going to be redirected to other refineries and Japan will, as soon as they can get things back up and running with some sense of normalcy, will be importing petroleum products instead of crude, likely from some of their Asian neighbors, possibly from the US as well because we have some slack in our refining capacity here,” he said.

Some economists have suggested that there may be a spike in crude oil prices in coming months as Japan imports more oil to use in its recovery and rebuilding effort.  But Medlock does not foresee that either, because he believes the Japanese will have to restrict much of their normal energy usage until they have fully recovered.

“There's a lot of people who will not be driving in their cars they way they were before the accident. Their power consumption patterns may not be the same and quite frankly, the Japanese have demonstrated in the past when they have crises that they are willing to ration electricity to their customer base. I suspect they will do that even as they start to rebuild,” he said.

Medlock does see some increase in Japan's use of coal and natural gas as the country repairs coal and gas-burning power plants damaged by the earthquake and perhaps uses those plants more than nuclear plants for electricity generation. Japan is already imports more coal than any other nation. But, Medlock notes, building new power plants will take a long time and the world market will have time to absorb the additional demand.

The picture for nuclear, however, is mixed. While the Japanese struggle to deal with their current problems it is too early to say what  impact this disaster will have there. But news reports about the disaster are seen around the world and many people are now rethinking their plans to use nuclear power.  Here in Texas plans for expansion of a nuclear plant south of Houston have been shelved. Germany  has shut down seven of its nuclear plants, France has increased inspect, but is continuing its extensive use of nuclear power and Italy remains committed to building its first nuclear power plant.

Robert Bryce, author of the book  “Power Hungry” is an energy expert who advocates more use of nuclear energy. But he concedes the fear kindled by images of the stricken plants in Japan will set back the industry in some countries.

“Regardless , I think, of what happens from now forward, the psychological effects, the political issues surrounding nuclear are going to be much more difficult for any country or any company that is proposing to build them, particularly in the West,” Bryce said.

But Bryce says developing nations are likely to continue their aggressive programs to build nuclear capacity. China, which accounts for around 40 percent of the world's planned nuclear reactors, has suspended approval of new plants because of the crisis in Japan, but once new safety measures are instituted, the projects will probably move forward.

Bryce says interest in nuclear will continue because countries hungry for more electrical power have few other options.“For India, for China, for a lot of other developing countries nuclear is going to continue to be their most attractiveoption simply because of basic physics and math. The power densities that you can get with nuclear are just not available anywhere else,” Bryce said.

Bryce also notes that the damaged reactors in Japan were built decades ago before the development of safer designs that address some of the problems the Japanese now face in containing radiation and preventing a reactor meltdown.

“This is an important accident, it is going to change the industry, but a lot of the reactors that are now being designed are this new Generation Three reactors, they use passive fueling designs that should be far safer than the boiling water reactors that are 40-years-old-plus that are now causing the problems in Japan,” Bryce said.

Some environmental groups and anti-nuclear activists have suggested that Japan should abandon its nuclear sector and opt for “green” energy projects like wind and solar. But, as Robert Bryce has long argued, such energy alternatives are no where close to being able to replace the energy generated by a nuclear plant. Both wind and solar produce intermittent energy, depending on when the wind blows and when the sun shines, and neither of them are yet capable of producing more than a small fraction of  the energy demanded by a nation like Japan. In order to recover and get its economy back on track, Japan will have to rely on what is left of its nuclear power sector and increase its use of coal, natural gas and oil.