Sunday, January 31, 2010

Problems at Toyota, JAL taint Japan Inc.'s image

Asian Defense News: TOKYO – Toyota is the latest Japanese corporate icon making headlines for all the wrong reasons.
News of the automaker's massive vehicle recalls over faulty gas pedals in the U.S. came just days after Japan Airlines, a once proud flag carrier, filed for bankruptcy, saddled with billions in debt.
Sony has lost its lead in consumer gadgets to the likes of Apple Inc. and has suffered its own quality mishaps. Honda, Japan's No. 2 automaker, is recalling 646,000 cars worldwide because of a faulty window switch.
Taken together, Japan Inc.'s stellar reputation for quality has taken a hit _ just as China is about to overtake it as the world's No. 2 economy and rising South Korean companies compete ever more aggressively.
What went wrong with the economic giant that arose from the ashes of World War II?
The problems that confront Toyota, Sony and JAL differ, but experts say their struggles have some common themes: the perils of global expansion, a tendency to embrace the status quo, and smugness bred from success or a too-big-to-fail mentality.
"Arrogance and some complacency came into play, driven by the idea that their ranking as No. 1 producer of quality goods wasn't at risk," said Kirby Daley, a veteran Tokyo trader who is now chief strategist at Newedge Group, a financial services firm in Hong Kong.
The global economic crisis helped to expose weaknesses, he said. "There was nowhere to hide."
Added to the mix for Toyota and Sony is intense competition from upstarts in South Korea, China and elsewhere in Asia.
"They can offer products as good as Japanese at much lower cost, even though quality of Japanese products is on the decline," said Shinichi Ichikawa, chief strategist at investment bank Credit Suisse.
Some new Asian rivals, particularly in electronics, learned their techniques from Japanese operations set up around the region.
Cutting costs to stay competitive while meeting growing demand, Toyota, Sony and others compromised on quality control as they tried to reach ever-larger sales targets, analysts say.
Toyota adopted the practice of using the same part across a range of models _ saving vast sums of money but exposing itself to the risk that even a small defect could cause global mayhem for the company.
It also faced difficulties ensuring quality as its global sales expanded rapidly, reaching 8.9 million vehicles in 2008, when it displaced General Motors as the world's biggest automaker. Experts say its growth outpaced management's ability to anticipate looming problems.
The result: recalls of more than 7 million vehicles in the U.S., Europe and China for problems with their accelerators and floor mats, and the suspension last week of U.S. sales and production of eight models including the Camry, America's top-selling car.
It's a "terrible blow" for Toyota because its identity is so closely linked to quality and the company seemed slow to recognize the problems, said Kenneth Grossberg, a marketing professor at Waseda University who has lived in Japan for 16 years.
"This is the company of zero defects," he said. "How could such a major fault get past them? It violates their operating principle."
As far back as March 2007, Toyota started getting reports of gas pedals being slow to rise after being stepped on. Engineers fixed the problem in the Tundra pickup early in 2008, but troubles persisted in other models, eventually leading Toyota to announce massive recalls for the accelerator and floor mats that could trap the gas pedal.
Grossberg said a common problem at Japanese companies is "group think" that makes it hard for an individual to raise a troublesome issue.
"It either falls flat and people ignore it, or it creates a problem for the individual who brings it up," he said.
Sony started facing problems after it misjudged several critical market trends.
It was slow to predict the switch to LCD televisions and fell behind South Korea's Samsung Electronics Co., which zoomed ahead to become a market leader.
Content with the success of the Walkman, the portable music player that became a global hit in the 1980s. Sony was slow to jump into digital players. It has been hammered by Apple's iPod, as well as by cheaper gadgets and consumer electronics from other Asian competitors.
With Sony's empire sprawling into finance, movies and other businesses, some analysts said the corporation was losing its focus. In 2006, it recalled nearly 10 million laptop batteries after some caught on fire.
The company is still losing money even as CEO Howard Stringer wins praise for taking it back to basics.
At Japan Airlines, problems had festered for decades but were repeatedly papered over because of Japan's reluctance to let major companies go under.
It became the victim of its own ambitions when risky investments in foreign resorts and hotels went bad after Japan's property and stock bubble burst in the early 1990s. Bloated pension and payroll costs, as well as a network of unprofitable but politically necessary domestic routes, led to government bailouts.
JAL had a good reputation for comfortable travel, but its lavish running costs had "generally been something of an industry joke," said Peter Harbison of the Sydney-based Centre for Asia Pacific Aviation.
Quality, too, eventually proved problematic: A spate of safety lapses tarnished JAL's image, and its rival, All Nippon Airways Co., benefited.
And while filing for bankruptcy with $25.6 billion in debt was an embarrassment, analysts expect JAL to slim down and emerge healthier.
Toyota, too, will bounce back, they say.
"Toyota expanded too rapidly, and that's always a risk," said Martin Schulz, an economist at Fujitsu Research Institute. "But they will get this quality problem under control."
In Japan, reaction to Toyota news has been more muted because the recall doesn't affect models in the domestic market. Japanese are proud of Toyota's leading role on the roads, including its move into hybrid and other green vehicles.
So far, the automaker's sterling reputation is holding up at home, partly because Japanese often assume that Japan-made products are better than those made abroad. Toyota's Japanese models use a different parts supplier than CTS Corp., the American parts maker rushing to fix the faulty gas pedals.
Still, the blaze of bad publicity has struck at the idea of Japan as a technology powerhouse where companies can be world leaders despite the nation's deeper problems of an aging population, mounting debt and anemic economic growth.
Toyota must take "urgent measures" to regain consumers' confidence, the Yomiuri newspaper said in an editorial Sunday.
"For other Japanese automakers and manufacturers, it's not somebody else's problem. They should keep in mind that safety and quality make the foundation of public trust in the Japanese way of manufacturing."
___
Associated Press writer Mari Yamaguchi contributed to this report.
By MALCOLM FOSTER,Associated Press Writer - Monday, February 1

Malaysia arrests 10 for 'terrorism'

Asian Defense News: KUALA LUMPUR (AFP) - – Malaysia said Wednesday it had arrested 10 people including nine foreigners for "acts of terrorism", saying they were members of an international terror outfit and threatened national security.
Home Minister Hishammuddin Hussein said the 10 were being held under the Internal Security Act (ISA) which allows for indefinite detention without trial.
"I can confirm that 10 people have been arrested under the ISA for acts of terrorism," he told a press conference.
"They are internationally linked and will affect the security of our country if we do not take action," he said. "We have worked with international intelligence organisations in this operation."
Hishammuddin said that "all 10 are involved in international terrorism" but would not reveal whether they had planned or carried out attacks. He also declined to say when and where they were arrested.
Neither would he say which intelligence organisations had helped in the arrests, but said that "if they are with an international terror organisation and if they are caught in Malaysia, then we will take action on them."
Malaysia's controversial ISA has been used in the past against alleged militants, including members of regional terrorist organisation Jemaah Islamiyah (JI) which is linked to Al-Qaeda.
Government officials said there were now 25 people, including the 10 new detainees, being held under the ISA. Detainees are typically held at the Kamunting detention centre in the northern state of Perak.
The ISA dates back to the British colonial era when it was originally designed to be used against communist insurgents.
But it has also been used to muzzle government opponents, and in 2007 five ethnic Indian rights activists were detained for organising anti-government protests, and held for almost two years.
Rights activists condemned the new detentions and said that suspected militants should face the normal justice system.
"We oppose the new arrests. We are against detention without trial and the use of ISA on these 10 individuals. We want the government to charge or release them," said E. Nalini, coordinator of the Abolish ISA Movement.
"If the government has evidence that they pose a threat to national security, please bring them to court and put them through an open trial, don't use ISA on Malaysian citizen or any other individuals."
In September last year, five alleged JI members were released from ISA detention. The government said they had been rehabilitated after spending between two and seven years behind bars without trial.
AFP - Thursday, January 28

Malaysian blogger charged with insulting royalty

Asian Defense News: KUALA LUMPUR, Malaysia – A Malaysian court has charged a blogger with posting comments that insulted a late state sultan.
In recent years prosecutors have charged several bloggers with writing derogatory comments, rescinding an earlier promise that Malaysia would not censor online content.
Khairul Nizam Abdul Ghani, a freelance computer technician, pleaded not guilty Friday at a court in central Negeri Sembilan state. He was accused of insulting Sultan Iskandar Ismail of southern Johor state, who died Jan. 22, The Star and New Straits Times newspapers reported.
He was charged with "improper use of network facilities" by transmitting comments deemed "obscene, indecent, false, menacing or offensive." The offense carries a maximum penalty of a year in prison and a fine.
The court did not set a trial date. Khairul Nizam, who was detained Monday, confirmed the charge on his blog.
It was unclear what Khairul Nizam wrote. It has been removed from his blog and lawyers and court officials could not immediately be reached for comment Saturday.
Sultan Iskandar was Malaysia's king from 1984 to 1989 under a rotation system among the country's nine titular state heads. Though the sultans' roles are largely ceremonial, they command wide respect and insulting them can be deemed seditious.
Last year, several people were charged with posting allegedly derogatory comments. One pleaded guilty and was fined 10,000 ringgit ($3,000). The others are on trial.
One blogger was charged with sedition over an article in which he allegedly linked Prime Minister Najib Razak to the murder of a Mongolian woman. The blogger has gone into hiding.
Blogs and online commentary _ often offering strong anti-government criticism _ have flourished as an alternative to Malaysia's tightly controlled mainstream media.
___
On the Net:
Khairul Nizam's Malay-language blog: adukataruna.blogspot.com

AP - Saturday, January 30

Toilet fire forces plane to turn back

Asian Defense News: An incident in an aircraft toilet caused a passenger flight in China to be aborted over the weekend.
A China Southern Airlines flight had to turn around after a passenger set fire to paper in the toilet.
The plane, on a flight from Urumqi, the capital of China's restive Xinjiang region, returned to the airport when the passenger was discovered by crewmembers.
A man and a woman were arrested when the flight landed.
The government in Beijing, after having faced a serious separatist threat in the Xinjiang region, has recently stepped up identity checks at Urumqi Airport, in an attempt to avoid any extremist action.

China National News Sunday 31st January, 2010

China complains about Taiwan arms sale to US Ambassador

Asian Defense News: China has threatened sanctions on US firms that sell arms to Taiwan.
It has also threatened to retaliate with suspension of military exchanges and security talks with the US, after it was revealed Taiwan would receive military equipment from US sources.
After the United States on Saturday said that the arms sales were contributing to maintaining security and stability across the Taiwan Strait, China immediately announced the suspension of security talks with the United States, and threatened sanctions against the US firms that sell the armaments to Taiwan.
The US Ambassador to China, Jon Huntsman, was summoned on Saturday for the formal Chinese protest against the plans for $6.4 billion in military equipment to Taiwan.
In Taiwan, President Ma Ying-jeou said the arms deal would boost the island's defences and allow its people a greater sense of security.
While relations between Beijing and Taipei have recently been improving, the United States still maintains a treaty commitment to help the island maintain its defences.

China National News Sunday 31st January, 2010

Friday, January 29, 2010

China, Norway train link may speed up freight to US

Asian Defense News: The northern Norwegian port of Narvik might serve as a new rail transport hub for freight en route from China and Russia to the US, a Norwegian cabinet member said Friday.'Several countries are in serious talks, including China, Sweden, Russia, Finland and Norway.
It is really exciting,' Transport Minister Magnhild Meltveit Kleppa told broadcaster NRK.The distance between Narvik and Beijing is some 6,000 km.
But moving freight by train to Narvik and reloading it onto ships would cut the transport to the eastern seaboard of the US by 14 days.Current sea transports from China take 40 days, Kleppa said.
Narvik is ice-free due to the Gulf Stream that flows past Norway, and the port has for years been important for ore shipments from neighbouring Sweden.
China National News Friday 29th January, 2010

Thursday, January 28, 2010

President of Sri Lanka Is Re-elected by Wide Edge

Asian Defense News: COLOMBO, Sri Lanka — Mahinda Rajapaksa, Sri Lanka’s president, was re-elected by a wide margin, election officials here said Wednesday, defeating the newly retired army general who had tried to lay claim to Mr. Rajapaksa’s biggest political victory, the defeat of the Tamil Tiger insurgency.
Official results gave Mr. Rajapaksa an 18-point advantage over his nearest opponent, Sarath Fonseka, the general who carried out the successful military operation against the Tigers. General Fonseka rejected the result, saying that the campaign had been marred by violence and irregularities in the vote counting. “The enthusiasm of the people we noticed in the campaign is not reflected in the result,” he said at a news conference.
Independent Sri Lankan election monitors said there was no evidence of major fraud in the voting, but left open the possibility of problems in the counting.
More broadly, election observers and advocacy groups have questioned the fundamental fairness of the campaign, accusing Mr. Rajapaksa of using state resources to run his campaign. State-owned news media all but shut out opposition candidates.
The election results illustrate the still yawning ethnic and religious divides that plunged Sri Lanka into civil war in the first place, and underscore the difficulties that Mr. Rajapaksa will face in trying to reconcile the country after 26 years of conflict.
General Fonseka spent the day secluded in a five-star hotel, which the government surrounded with commandos, saying they had been placed there for security reasons. He said he feared for his safety. “They are trying to make me a prisoner,” General Fonseka said, addressing a conference room packed with journalists. “They have made things very clear today.”
Lucien Rajakarunanyake, a government spokesman, rejected the suggestion that General Fonseka was in danger, saying that the troops outside the hotel were merely for his safety. “He is free to leave at any time,” the spokesman said.
The Tamil Tiger insurgency fought to create a Tamil homeland in the north and east of Sri Lanka, separate from the Sinhalese majority. But over the years the group became little more than a criminal enterprise famous for its cruel tactics, human rights groups say, like holding civilians as human shields as well as using child soldiers and female suicide bombers.
While Mr. Rajapaksa won a big majority, Tamil and Muslim voters largely rejected him. Mr. Rajapaksa pledged to be a president for all Sri Lankans, not just those who voted for him, an apparent effort to reach out to Tamil voters who shunned him in large numbers.
“Six million people voted for me,” Mr. Rajapaksa said at a news conference on Wednesday evening. “Even the people who voted for other candidates, I have to look after their interests.”
It had been an ugly and sometimes violent campaign between two men who had once been close allies. The evidently exasperated elections commissioner, Dayananda Dissanayake, described numerous transgressions by the government during the campaign, concluding that “state institutions operated in a manner not befitting state organizations.” Guidelines for the state media to behave fairly toward both candidates were ignored, he said, adding that the stress of overseeing the election had taken a toll on his health.
A long night of counting ballots confirmed that turnout in northern Tamil areas was very low, in the single digits in some war-hit areas, while voters had flocked to the polls in Mr. Rajapaksa’s southern stronghold.
Dayan Jayatilleka, a political analyst who was Sri Lanka’s representative to the United Nations in Geneva until the government fired him last year, said that the Tamil political parties had lost touch with the electorate during the war. “They have been engaging in the politics of exile,” Mr. Jayatilleka said. “They have not done the hard yards of rebuilding their political network.”
But election observers said that explosions and other disturbances, along with the heavy militarization of the northern and eastern Tamil areas, had also suppressed the vote.
The other political parties in General Fonseka’s coalition also struggled to bring in voters. The center-right United National Party failed to deliver the capital, Colombo — its stronghold — for General Fonseka. And the Marxist party known as the J.V.P., the Sinhalese acronym for People’s Freedom Party, seemed to make little headway against the president in its southern Sinhalese bastions.
General Fonseka, who ran on his record of winning the war against the Tamil Tigers, had counted on support from Tamil voters, who he hoped would choose him over Mr. Rajapaksa as the more palatable of the two options. Though General Fonseka led the military campaign that may have killed thousands of Tamil civilians, he portrayed himself as committed to healing ethnic divisions and allowing communities a greater measure of self-rule.
He also sought to capitalize on dissatisfaction with Mr. Rajapaksa in some quarters of the Sinhalese majority. Voters expressed concern about the concentration of state power within Mr. Rajapaksa’s family. One of his brothers is the powerful secretary of defense, another is a senior adviser, and many members of his extended family work in senior government positions.
But Mr. Rajapaksa emerges from the election in many ways stronger than ever. He ran on his war record, arguing that if he delivered on his pledge to win the war he could also bring a peace dividend and heal the nation’s ethnic rifts.
“The president keeps his promises,” said Gamage Banduwathie, a voter who left the United National Party to support Mr. Rajapaksa. “I hope that he will be a savior for Sri Lanka.”
NYTimes By LYDIA POLGREEN Published: January 27, 2010

China plans $5.9 bln industrial zone for aviation

Asian Defense News: BEIJING, Jan 28 (Reuters) - An ambitious 40 billion yuan ($5.9 billion) industrial zone for aircraft parts is being planned in South China to produce up to a quarter of the supply for big Chinese planes, a provincial official said on Thursday.
Jiangxi province has begun seeking investors, including foreign firms, for the 25 square-kilometre zone with an eye toward breaking ground in two years, Yao Mugen, director of the provincial Development and Reform Commission, told Reuters.
The province will draw on talent from an aviation research institute and two universities plus interest among three local aircraft manufacturers, Yao said.
Output could equal 25 percent of all parts made in China for large Chinese aircraft, he said.
"Jiangxi is now designing a big national aircraft production base drawing on the province's infrastructure and advantages to develop the aviation parts industry," Yao said in an interview.
The 40 billion yuan would cover the zone's infrastructure and equipment for manufacturers, he said.
The province is talking to aircraft manufacturing giant Boeing about an investment in the zone, Yao said. Boeing (BA.N) already makes 747-8 commercial airliner parts in Jiangxi, the company's China spokesman Wang Yukui said.
China, like other countries, is keenly interested in aviation in part because of the large impact airplane exports can have on a nation's balance of trade. [ID:nHKG104281]
Beijing has declared its goal to manufacture large passenger jets with more than 150 seats and freighters capable of handling more than 100 tonnes of cargo, with the explicit aim of taking on Boeing and Airbus (EAD.PA).
(Reporting by Ralph Jennings; Editing by Muralikumar Anantharaman)

Taiwan companies push e-book readers but lack Chinese-language content

Asian Defense News: TAIPEI, Taiwan - Taiwan leads the world in development of readers for the fast-growing electronic book market, but when it comes to satisfying the e-appetites of the island's highly literate population, it seems distinctly pre-digital.
The problem: A gaping lack of appealing Chinese-language content.
At this week's 18th annual Taipei Book Exhibition, cutting-edge gadgets offered by Taiwanese tech companies were loaded with little beyond translations of classical Western literature and well-known Chinese standards like The Romance of the Three Kingdoms. Compelling material to entice contemporary-minded readers was conspicuously absent.
And while buyers of devices like the nReader K60 — made by Taiwanese PC maker BenQ — are given the opportunity to purchase additional material from affiliated Web sites, the selection is limited and best sellers are almost nowhere to be found.
The problem arises partly because publishers are uncertain what impact e-books may have on their revenues, said Albert Hsu, a manager in the e-Publishing Service Platform Department of Taiwan computer maker Acer Inc.
"One major problem is that publishers are worried that if they sell books in their electronic format, it could hurt the sale of paper copies," Hsu said.
Hsu added that publishers are also concerned the content could be more easily shared — and sales suffer — if books are published in electronic format.
One company trying to buck the dull content trend is Yuan-Liou Publishing Co., a Taipei-based firm cooperating with e-book reader developer Koobe Inc. to produce an e-reader that will feature the works of a renowned writer of Chinese martial art novels.
Yuan-Liou assistant marketing supervisor Ophelia Chen said her company's reader will come with all 36 books by Hong Kong-based Louis Cha — better known as Jin Yong — in their electronic format.
By DEBBY WU , Associated Press Last update: January 28, 2010 - 4:07 AM

China bans dog and cat meat

Asian Defense News: China has decided to ban consumption of dog and cat meat in the country through a new law which seeks a fine of $730 and up to 15-day detention for offenders.
A proposed draft of China's first law on animal welfare, being prepared by a panel of legal experts, has provision of a fine of up to 5,000 yuan ($730) and up to 15 days' detention for the guilty.
Those found guilty of selling the meat can be fined anywhere between 10,000 yuan to 500,000 yuan, China Daily reported quoting Beijing-based Mirror Evening News.
'There are still many difficulties to overcome before (legislators) include the article against consumption of dog and cat meat into the draft law,' Chang Jiwen, head of the legal panel was quoted as saying.'
I hope the problem can be solved as soon as possible, although it will be solved sooner or later,' he said.
Chang said the prohibition, however, would not affect the lives of common Chinese a lot as very few people eat dog or cat meat in the country.
He said the proposed draft, which focuses on preventing animal mistreatment, protects six categories of animals -- those on farms, in laboratories, pets, working animals, animals for entertainment purposes, and wild animals.
The proposed draft will be submitted to relevant government departments in April.
China National News Wednesday 27th January, 2010

Tuesday, January 26, 2010

Malaysia likely emerged from recession: think-tank

Asian Defense News: KUALA LUMPUR (AFP) - – Malaysia's economy likely emerged from recession in the fourth quarter of 2009 and will post 3.7 percent growth in 2010 as the global economy recovers, a leading think-tank said Tuesday.
Southeast Asia's third-largest economy suffered three consecutive quarters of contraction in 2009 and the government forecasts it will shrink 3.0 percent over the year before rebounding to modest growth of 2.0-3.0 percent in 2010.
"The technical recession is likely to end in the fourth quarter 2009," the Malaysian Institute of Economic Research (MIER) said in a report.
"This is supported by effects of the larger public infrastructural expenditure, manufacturing turnaround, improved services trade, and higher domestic spending," the influential think-tank said.
The MIER maintained its forecast for Malaysia's export-dependent economy to contract by 3.3 percent in 2009, before growing at 3.7 percent this year and 5.0 percent in 2011.
"From 2010 onwards, we expect the economy to be on a normal track," MIER chief Zakariah Abdul Rashid told reporters, saying the services sector "will be a pillar of strength" against a stodgy manufacturing sector.
"However, the road ahead will be a bumpy one so we have to be cautious," he said, citing downside risks such as weak business and consumer sentiments, as well as volatile commodities prices that may impede a faster recovery.
Malaysia has announced two stimulus packages. The second package unveiled in March last year was billed as containing some 60 billion ringgit (17.7 billion dollars) in measures to pump-prime the economy.
The government in its 2010 annual budget slashed operating expenditure by 13.7 percent to 138.3 billion ringgit (40.7 billion dollars), to reduce the fiscal deficit from 7.4 percent in 2009 to 5.6 percent this year.
*AFP - Wednesday, January 27

PM Lee maps out 3 priorities for govt: economy, population, politics

Asian Defense News ~ SINGAPORE: Economy, population and politics are the key areas the Singapore government has marked as major priorities going forward, said Prime Minister Lee Hsien Loong.
Speaking at the Singapore Perspectives Conference on Monday, he said they are not one—off projects but are continuing challenges for a long time to come.
Home, Heart, Horizon — the theme of the annual Singapore Perspectives Conference went to the very heart of the issues that the prime minister wanted to discuss.
Picking up on the issue of productivity, Mr Lee said economic policy is not just about achieving the highest GDP figure but also ensuring the quality of growth.
He added: "Becoming more productive is not just a matter of working harder but also means restructuring, and change and flux, uncertainties, experiments, discontinuities.
"There will be good years when we should go faster and there will be other years which are tough where we will do more poorly. But overall, if you take over the next decade, I think five per cent will be a stretch. So MTI is now studying what is a realistic long—term growth target will be.
"Workers cannot expect to be carried along by a generally rising tide. They too have to be psychologically prepared to adopt and to change and to make the effort to upgrade themselves not just once, but again and again, continually throughout their working lives."
So Singapore’s economic policies must foster this transition, something the Economic Strategies Committee will address in its report next week. Mr Lee said the government will respond to the committee’s report in the Budget on February 22.
Mr Lee also added that a key attribute to sustaining economic growth is the importance of rejuvenating the population and also attract the best talent. He stressed that the best economic policies in Singapore will not bring about growth if the population starts to decline.
He said: "I am not sure what is the right measure to cause more babies to be born. After the mountain has moved we are waiting for the mouse to come out.
"The Korean government department has recently decided that they will have one early day off, turn off the lights, you go home and hope you have more time with family and babies to come. We have not yet tried that. I’m not sure we can overcome that."
Last year, there were 170 fewer babies born, compared with 2008. This would mean that the country’s total fertility rate would have gone down further and he added that this was perhaps because of the economic troubles.
Mr Lee noted that this was a grave trend and if unchecked, Singapore will face not just an ageing but a shrinking population. So besides more pro—family incentives, there is a continuous need to top up the population through immigration, in a calibrated way.
Finally, underpinning Singapore’s ability to tackle its challenges is having a good political system, which Mr Lee said still depends on having the right people in charge. He said leadership renewal will be a major issue at the next general election.
He said: "There is a mini general election fever in town. The general election is due sometime within the next two years but it is not imminent."
Mr Lee is confident that by the next general election, the People’s Action Party will field a team with the next generation leadership in place to assure the country’s future. — CNA/vm
*Channel NewsAsia - Tuesday, January 26

India ranked 84th in corruption index

Asian Defense News: India continues to be widely perceived as a highly corrupt nation, with Transparency International's corruption perception index (CPI) 2009 ranking the country at 84 out of the 180 surveyed. There is no significant difference from India's earlier standing at the 85th position last year.
India's integrity score, a major component of the survey, stands at 3.4 out of the highest score of 10, which indicates that the country has a long way to go as far as eradicating corruption is concerned. However, the good news is that India's integrity score is the second-highest one among all south Asian countries. Bhutan, with a score of 5, fared the best in the integrity parameter among all south Asian countries.
The top three countries with the highest CPI score and rank are New Zealand, followed by Denmark and Sweden. A country with a higher score is considered to be less corrupt.
India's rank has been calculated by collecting data from 13 sources. All sources measure the overall extent of corruption by gauging the frequency and size of bribes in public and political sectors. The survey does not take into consideration corruption in private sector enterprises.
India was ranked 72nd in 2007. However, the cash-for-vote scandal in 2008 brought the country down to the 85th position in the same year. The perception of corruption among politicians and public service officers still persist and has continued to affect India's rankings in the index in 2009.
"It is a commonly perceived notion that politicians are spending too much on elections and that corruption prevails. India's performance for this year is not a flattering one and one can only draw comfort from the fact that it has not fared worse than last year," Transparency International India Chairman R H Tahliani said.
Out of the various departments analysed, India's police department fares the worst in terms of corruption, while school education was the sector where least corruption prevails. The most corrupt state is Bihar, followed by Jammu and Kashmir and Madhya Pradesh.
Posted On: 26-Jan-2010 08:17:27 By: Ch. Narendra

India and Nigeria discuss cooperation in Hydrocarbon Sector

Asian Defense News: The Minister of Petroleum and Natural Gas Murli Deora met Henry Odein Ajumogobia, Minister of State of Petroleum Resources during his visit to Nigeria and held discussions on various issues. Dr. Emannual Egbogah, Special Advisor to the President on Petroleum matters was present. Mr Deora was scheduled to have meetings with Dr. Rilwanu Lukman, Minister of Petroleum in Nigeria; however, because of bereavement in the family of Minister of Petroleum, that meeting could not take place.
The Minister was accompanied by Ministry officials and CEOs of ONGC, IOC, GAIL and Oil India Ltd.
On the Nigerian side, senior Ministry officials and Top Management of National Nigerian Petroleum Corporation were present.
During the meeting, the following major issues were discussed:
1. ONGC(Videsh )Ltd through a JV that is OMEL is operating in two exploration blocks namely OPL 279 and OPL 285 which are deep water blocks. It was informed in the meeting to the Nigerians that the exploration is on track and that Govt of India has recently approved OVLs share of investments of USD 359 million. It was also informed that one well has been spudded. OVL sought assistance in resolution of issues relating to repayments in respect of another block. It was informed that the Steering Committee meeting would take place in about two days time to settle outstanding issues.
2. GAIL India Ltd along with its consortium members has been shortlisted as one of the fifteen companies for having qualified in the participation of an ambitious USD 30 billion National Gas Master Development Plan and its implementation. GAILs interest in participation in this huge development plan was reiterated and GAILs strengths and expertise were highlighted to the Nigerian side. GAIL expressed its interest in setting up of petrochemical plants, LPG plants and LPG transportation pipelines in which they have very strong technical and managerial expertise. As Nigeria is embarking on its development of natural gas resources which are currently under utilised, this offer was received with a great deal of interest.
3. Currently India imports about 10% of its crude oil requirement from Nigeria. The interest to procure more crude from Nigeria was reciprocated. Indian Oil Corporation offered to assist in the refinery upgradation, improving operations of refineries by imparting training to the technical personnel, providing consultancy etc. The Nigerian side said that it is a priority area for them and would look forward to cooperation in this sector.
4. Another area of interest of the Indian companies is in LNG liquefaction plants. As Nigeria is planning to have new plants, both IOC and GAIL have expressed interest in participation in such projects.
5. Oil India Limited which is a consortium partner in a block gave an account of its activities and sought assistance in finding a suitable Nigerian partner company to fill in the gap created by exit of one of its partners.
6. The Minister of State mentioned about the new Petroleum Bill which would bring in reforms in the sector. He said that it would bring in a situation of exploration companies to also orient towards bringing about socio-economic developments in the region where they operate.
Minister of Petroleum and Natural Gas expressed the hope that more Indian companies would get opportunities to invest in Nigeria when the new bill becomes an Act. He also mentioned about OVL’s activities. OVL has set up the first Geological and Geo-physical Centre in Nigeria. Special Advisor to the President highlighted the need for providing a stake to the communities. He appreciated the model of Indian companies in this regard.
*Posted On: 26-Jan-2010 06:54:41 By: Ch. Narendra

Opium farming surges in northern Myanmar: group

Asian Defense News: BANGKOK – Opium cultivation in Myanmar is increasing rapidly in areas under the control of the military government, an ethnic minority organization said Tuesday.
Myanmar is the world's second-biggest producer of opium, which is the main ingredient in heroin, though it trails Afghanistan by a large margin. The ruling junta has vowed to eliminate the drug.
However, opium cultivation in Shan State the major production area has tripled in certain areas over the past three years in Myanmar, also known as Burma, according to a report by the Palaung Women's Organization. The Palaung are an ethnic minority in the northern state.
Researchers found cultivation in two townships under government control rose from 2,380 acres (964 hectares) in 2007 to 11,230 acres (4,545 hectares) in 2009.
"The number of villages growing opium has tripled from 2006 to 2009," Lway Aye Nang, an executive committee member for the organization, said at a news conference Tuesday in Bangkok.
The areas had been under the authority of the rebel Palaung State Liberation Army, but the insurgent group ceded control in 2005 after laying down its arms.
Soldiers, local officials and pro-government militiamen were profiting by extorting opium farmers, said Palaung researcher Lway Dang Jar. The report said drug addiction in the area was increasing with "devastating" impact.
Critics of the military regime have accused it of abetting or turning a blind eye to the illicit drug trade.
Myanmar officials were not immediately available for comment.
A United Nations Office on Drugs and Crime survey of opium poppy in Myanmar released in December 2009 found cultivation increased to a total of 78,330 acres(31,700 hectares) throughout the country, an 11 per cent rise from 2008.
The U.N. agency would not immediately respond to a request for comment.
*AP - 2 hours 53 minutes ago

Australian PM's nephew fined after racism protest

Asian Defense News: MELBOURNE, Australia – Prime Minister Kevin Rudd's nephew was fined for offensive behavior after dressing in a Ku Klux Klan costume to protest racism at a demonstration outside the Australia Open tennis championship on Tuesday.
Van Thanh Rudd, the son of the prime minister's brother Malcolm Rudd, and another man were protesting a recent spate of violence against Indians in Melbourne when police broke up the demonstration and told them to move along. They were each issued a 234 Australian dollar ($210) ticket for offensive behavior, Victoria state police said.
There has been a highly publicized spate of street violence against Indian students in recent months in Melbourne, Australia's second-largest city. Australian police say that while some attacks on Indians are racially motivated, many are ordinary crimes.
Earlier this month, Australia condemned an Indian newspaper cartoon that depicted an Australian police officer as a member of the Ku Klux Klan. The cartoon, published in New Delhi's Mail Today, satirizes Victoria police for saying there is no evidence the recent stabbing murder of an Indian-born Australian resident in Melbourne was racially motivated.
Van Thanh Rudd told Australian Broadcasting Corp. the protest was also meant to call attention to the plight of asylum seekers who are turned away from Australian shores.
The prime minister's office declined to comment.
*AP - Wednesday, January 27

China sentences four more to death in Xinjiang

Asian Defense News: BEIJING (AFP) - – A court in China's Xinjiang region has sentenced four people to death over deadly riots in July, bringing to 26 the number of those condemned to die for the unrest, a government official said on Tuesday. The verdicts were handed down on Monday by a court in the regional capital Urumqi -- the site of deadly clashes that left nearly 200 dead and over 1,600 injured.
"They were sentenced yesterday by the Urumqi Intermediate Court," a spokesman at the Xinjiang government who gave only his surname, Li, told AFP.
"Four people were sentenced to death, one was sentenced to death with a two-year reprieve and eight others got prison terms of up to life."
A death sentence with a reprieve is normally commuted to life in prison.
The sentences brought to 26 the number of people who have been reported executed or condemned to die over their roles in the unrest, some of the worst ethnic violence in China in decades.
The Xinjiang Daily newspaper said verdicts came in five separate cases with the 13 defendants charged with the "violent crimes of attacking, smashing, looting and burning", a Chinese term that means violent rioting.
The defendants' names provided by the Xinjiang Daily appeared to be Uighur, the Turkic-speaking Muslim minority group that has long complained of Chinese repression.
During the initial eruption of violence on July 5, Uighurs attacked Han Chinese, but in subsequent days mobs of Han roamed the streets seeking revenge.
Uighurs say the violence was sparked when police cracked down harshly on peaceful demonstrations in Urumqi that were held to protest the beating deaths of two Uighur migrant workers at a factory in southern China.
Authorities quickly implemented a clampdown on communications in and out of Xinjiang after the riots, blocking Internet access, text messages and international phone calls.
These restrictions have only just been lifted, although the Internet is still only partly accessible.
China says it faces a serious separatist threat in Xinjiang and has vowed harsh retribution for those found guilty of wrongdoing in the unrest.
State media said earlier this month that funding for public security in Xinjiang would nearly double in 2010.
A budget proposal placed before Xinjiang's legislature called for 2.89 billion yuan (423 million dollars) to be spent on public security, up from 1.54 billion yuan in 2009, the official China Daily reported.
But exiled Uighurs say Beijing exaggerates the separatist threat to justify harsh controls in the strategic western region, which is rich in energy reserves and borders on several central Asian countries.
Earlier this year, authorities also issued orders to step up identity checks and monitor religious activities in Xinjiang in a renewed bid to quash terrorism, separatism and extremism, state media reported.
*AFP - Wednesday, January 27

Car bomb wounds 6 near US base in Afghan capital

Asian Defense News: KABUL – A Taliban suicide car bomber struck near a military base in Afghanistan's capital Tuesday, wounding at least six people, Afghan and NATO officials said.
The militant group claimed responsibility for the attack in a text message to The Associated Press from a phone number commonly used by the insurgent group. The target was an international military convoy, the extremist group said.
An AP reporter at the scene saw the wreckage of a vehicle from afar. U.S. soldiers had blocked off access to the site right outside Camp Phoenix, an American base inside Kabul.
The attacker was driving a minibus laden with explosives that wounded at least six Afghan civilians when it went off, said Jamil Jumbish, the head of Afghanistan's criminal investigation unit. Jumbish said he had no reports of deaths but added that he did not know if there were any casualties among NATO forces.
NATO forces confirmed an explosion about 5 p.m. local time outside the main gate of Camp Phoenix. A statement issued by the international military coalition said initial reports indicated it was a vehicle-born bomb but did not give further details.
Lt. Nico Melendez, a NATO spokesman, said he did not yet have reports of injuries.
The strike follows on a bold attack last week by Taliban militants on government buildings in the heart of Kabul. The Jan. 18 attack paralyzed the city for hours and left five civilians and Afghan security forces dead, along with the seven assailants.
*AP - Wednesday, January 27

Moderate quake hits southern Sumatra

Asian Defense News: New Delhi ~ A 5.4 magnitude earthquake rocked southern Sumatra Island of Indonesia today, official sources said.
According to India Meteorological Department, there were no immediate reports of damage or casualty from the quake, which was epicentred at 00.1 degrees south Latitude and 99.3 degrees east Longitude.
The tremor struck the Island at about 1223 hrs (IST), the IMD said.

Travellers preferred South Korean airport overall

Asian Defense News: The South Korea International Airport at Incheon has been named the world's best terminal.US magazine, Global Traveler, gave Incheon airport, which is just west of Seoul, the annual "Best Airport in the World" award in New York.
The runner-up was Changi Airport of Singapore, with Schiphol in Amsterdam and Hong Kong's Chek Lap Kok ranking third and fourth respectively.
The winner was chosen through a survey of the magazines subscribers worldwide.25,000 readers took part in the survey.

Some Chinese milk tests positive for toxic chemical

Asian Defense News: Melamine-tainted dairy products have been taken off the shelves of convenience stores in southern China.
Even though it has been more than a year since hundreds of thousands of children became sick or died from tainted milk, the Chinese government has decided to remove the product after health inspectors found some cartons of milk, dating from early 2009, positive for melamine.
Milk in and around the province of Guizhou has been affected by the recall and includes products from three companies, Shandong Zibo Lusaier Dairy, Liaoning Tieling Wuzhou Food and Laoting Kaida Refrigeration.
Melamine in milk can cause kidney stones and kidney failure
The ingredient had originally been added to the milk to trick inspectors who were testing for protein.
Both melamine and protein are high in nitrogen.

Two Indian students assaulted in Melbourne

Asian Defense News: Melbourne ~ Even as Indian and Australian flags go side by side on their national day on Tuesday, two Indian students were allegedly assaulted by a group of thugs here.
Eight persons, described as being of Asian appearance, have been arrested after several hours of the incident and were being questioned, police said in a statement.
The accused had allegedly made comments to the duo before one of the student was pushed to the ground and kicked at about 10.20 pm (local time) last night in central Melbourne.
The 18-year-old Indian man suffered a wound on his left ear from what appeared to be an edged weapon, police said, adding the 22-year-old student was also punched to the ground and suffered minor abrasions to the forearm.
Police confirmed the two victims were Indian students but were unable to say whether the comments made were racial.
The 18-year-old was taken to St Vincents Hospital with lacerations to the left ear, while the other student did not required hospital treatment, an AAP report said.
The attack comes just weeks after an Indian student Nitin Garg was stabbed to death in a park in Yarraville in Melbourne’s inner-west.
Posted On: 26-Jan-2010 11:07:22 Source: Agencies

Taiwan, China to offer 385 charter flights for New Year

Asian Defense News: Taiwanese and Chinese airlines will operate 385 charter flights during the upcoming Chinese New Year holidays, the Civil Aeronautics Administration (CAA) said Tuesday.
In February, Chinese airlines will offer 287 round-trip flights to Taiwan, while Taiwanese airlines will provide 98 round-trip flights to China, CAA said.
The 10-day Chinese New Year holidays begin February 14.Due to the high frequency of flights, some are forced to operate in the early morning hours, the Central News Agency said.
The charter flights are in addition to 270 regular cross-strait flights per week, which were introduced on August 31 when Taiwan dropped its six-decade ban on air links with China.
There are some half a million Taiwanese working in China, either opening factories or working in high-tech companies.
The Chinese New Year, also called the Spring Festival, is the most important holiday for Chinese all over the world.

Indonesia delays deadline for single bank ownership

* No new deadline for single bank ownership rule
* Govt to study impact on four state-owned banks
* Policy forced Temasek to sell BII stake, Bank Niaga merger
* Analysts say govt could lower stake in top lender Mandiri

By Telly Nathalia and Neil Chatterjee
Asian Defense News: JAKARTA, Jan 26 - Indonesia will delay an end-2010 deadline requiring investors to own only a single bank in Southeast Asia's largest economy, giving the government more time to work out what to do with its major stakes in four banks.
Analysts said it was unclear exactly what would happen to the government's stakes, but any asset sales could attract strong interest to get exposure to a fast-growing economy that investors hope could reach investment-grade status in a few years.
The policy from the central bank requires all banks that share a major shareholder to merge, divest or create a single holding company.
The government owns controlling stakes in four major banks, including 66 percent of Indonesia's top lender Bank Mandiri , 56 percent of Bank Rakyat Indonesia >, 76 percent of PT Bank Negara Indonesia and 73 percent of the recently listed PT Bank Tabungan Negara .
"There has been no indication of the Indonesia government selling its stake in the banks. Mandiri has indicated that government ownership will be reduced to below 60 percent, to qualify for a lower tax rate. We do not know whether it will be through divestment or a new share issue," said Salman Ali, head of Indonesia research at Citi Securities in Jakarta.
The policy, originally set for 2008 but pushed back several times already, forced Singapore state fund Temasek [TEM.UL] to sell a stake in one of its two banks in Indonesia, and could bring about management changes at state-owned banks, government officials have said.
Said Didu, secretary of the state enterprises ministry, did not give a new deadline for the policy, which aims to consolidate the banking sector and help improve transparency.
MERGERS UNLIKELY
The policy led to the 2008 merger of Bank Niaga and PT Bank Lippo Tbk to form CIMB Niaga .
Purbaya Yudhi Sadewa, an analyst with Indonesian broker Danareksa, said it would be difficult for any potential further mergers to win shareholder approval.
Didu said the government had to tread carefully over the state-owned banks, because decisions could affect the banking system and the economy.
"We need to draft and do deep research about it, about its impact for state-owned banks," Didu told Reuters on Tuesday.
Singapore's state investor Temasek, which still owns 68 percent of Indonesia's PT Bank Danamon , sold its majority stake in Bank International Indonesia to Malaysia's Maybank in 2008 because of the policy.
Temasek profited from the deal, but investors have since been pouring into Indonesian markets in the past year to get exposure to Southeast Asia's strongest growth, a surge in the stock market <.JKSE> and a buoyant rupiah currency.
Fitch Ratings gave the country a vote of confidence on Monday, upgrading its sovereign rating [ID:nSGE60O0EV]. And private equity group CVC Partners joined retail firm Matahari Putra Prima in a joint venture buying Matahari's department store chain arm for $773 million on Monday.[ID:nSGE60O0J0]
Indonesia's stock market jumped over 80 percent and bonds posted equity-like returns last year as investors bought into the prospect that relatively stable politics and healthy economic growth could push the country to investment-grade status in a few years, alongside BRIC nations Brazil, Russia, India and China.

India, China border personnel meet to mark Republic Day

Asian Defense News: Leh: It was a scene of bonhomie as the border personnel of India and China met to mark the Republic Day in Chushul belt along the LAC in Ladakh, putting behind the tension over recent incursions by the PLA in the area.
Both sides also agreed on different measures to maintain peace, stability and to work for development of the region.
The Chinese delegation was received by the leader of Indian delegation Brigadier Y K Joshi.
After the reception, the Indian national flag was hoisted and both the Chinese and Indian delegations saluted the tricolour.
According to a Northern Command spokesperson, in the formal meeting held in atmosphere of mutual trust and camaraderie, greetings were exchanged by both the sides amid agreements to join hands in contributing to peace, stability and development of the region in consonance with border peace and tranquility agreements.
Posted On: 26-Jan-2010 17:22:19 Source: Agencies

Pakistan continues to violate ceasefire

Asian Defense News: New Delhi: Even as India celebrated its 61st Republic Day, Pakistan violated a ceasefire near the International border in Jammu twice on Tuesday.
Pakistan allegedly fired on two posts in Kanachak and Akhnoor in the wee hours of the morning.
A private television report said it was the 15th cease-fire violation by Pakistan in just one month.
Tuesday's first violation came around 2.30 a.m. when intermittent firing was reported in Kanachak area near the international border. The Alfa Machal post was allegedly targetted from across the border.
The second violation was on the Akhnoor sector's Tent Post, when two rockets were reporedly fired by Pakistani Rangers at about 2:45 a.m. from the Pakistan side.
"There was firing at around 2 a.m. in the morning today, and continued for a few hours," the channel quoted Jammu and Kashmir police chief Kuldeep Khoda, as saying.
"The intensity was initially huge, later on it died down a bit. We are watching the situation, our forces are there, they are very alert, our patrolling parties and the BSF are there supportnig them. And things are well under control right now," he added.
A red alert has been sounded in the Akhnoor sector in response to the cease-fire violation.
Posted On: 26-Jan-2010 18:38:16 By: Rizwan Khan

Monday, January 25, 2010

Light Combat Aircraft 'Tejas' in R-Day Parade

Asian Defense News: Bangalore: Indigenously developed Light Combat Aircraft (LCA) 'Tejas' will be seen during the Republic Day Parade in New Delhi on January 26.
Official sources here today said ''the prestigious ''TEJAS'' will be seen in the Republic Day Parade for the first time in New Delhi.''
The two-seater indigenous LCA made its maiden flight at the Hindustan Aeronautics Limited (HAL) Airport here on November 26, 2009.
The successful flight flew at an altitude of nine km and attained Mach 0.85. The prototype was flown by Group Captain Ritu Raj Tyagi of the National Flight Test Centre with Project Director (Flight Test) Air Commodore Rohit Varma in the rear.
The IAF is reported to have a requirement for 200 single-seat and 20 two-seat conversion trainers, while the Indian Navy may order up to 40 single-seaters to replace its Sea Harrier FRS.51 and Harrier T.60.
The LCA naval variant is expected to take to the skies by 2009. Recent developments suggest that the aircraft will be inducted into the Indian Air Force by end of 2010 or early 2011.
During its sea level flight trials off Goa during December 2009, Tejas notched a speed of over 1,350 km per hour, thus becoming the first supersonic fighter being manufactured indigenously by Hindustan Aeronautics Limited.

India developing Next Generation Fighter Aircraft

Asian Defense News: Recently when Requirements of MCA now re-named to NGFA (Next Generation Fighter Aircraft) by Indian Air force was made public in section of media , IAF clear dedicates what it wants for NGFA and seems to leave very little room for developers ADE and other DRDO labs .
IAF seems will not compromise on the aircrafts capabilities from the start.
For years NGFA was rumored to be a strike aircraft with secondary role of Air defence capabilities.
Now IAF wants a fully multirole Aircraft with almost all the technology which only a 5th Generation Aircraft like Pak-Fa which India is partnered with Russia for its development will have, India’s contribution to Pak-Fa is limited to sub-system of it avionics and its core software very similar work which was done with Sukhoi-Su30 MKI.
Other then Avionics which can be further developed from Tejas MK-II platform they are tones of other things which NGFA will need to make it truly a 5TH Generation Aircraft .
IAF seems to be clear that it wants most of the Avionics and Engine for NGFA to be indigenous, Specially the AESA Radar; it seems IAF will not settle for AESA which has been developed by LRDE for Tejas Mk-II, it want to be more sophisticated than the Current AESA technology what LDRE is working on and better Avionics and Self-defence systems for the aircraft which will take lot of time unless similar Pak-Fa Avionics package is chosen.
The Kaveri-Snecma Engine based on core of M-88 has been seen has the possible engine which will power NGFA, Details of this engine is still not clear and what level of Technology French will bring is also crucial, GTRE failed to develop current Kaveri engine in time to power Tejas Combat aircraft .
The new engine should be based on consultation with IAF to avoid future disappointments and should be ready in time to power NGFA which will have a tech demonstrator, three prototype vehicles and two production jets. No intermediate Engine has been sought, Kaveri-II have to be ready in time for NGFA to make its first flight.
Stealthy Airframe Requirements seems to have thrown out any DRDO’s plans of having Aircraft with low Stealth characters, it wants Stealthy Airframe from the start and Current level of technology in India does not have such high end materials, composites and radar observing airframe materials and paints.
Wind-tunnel model which was displayed at Aero India 2009 of MCA will need designs changes to meet IAF’s demand of full Stealthy Airframe, while wind tunnel model seemed like Aircraft with Stealth features but not fully stealth aircraft.
Time frame set by ADA is again over ambitious. ADA plans to have the first test flight of the NGFA by 7-8 years, once go head is given which may come by end of 2010, this is simply not possible since most of the technology required for it is still not in pipeline, since various Labs will be working on it any delays by any Lab will affect the schedule flight plan and again it will look similar way which LCA was made to go.
Consultancy and joint development of various systems should be considered to meet the deadline for NGFA’s first flight; Aircraft should be developed with possible export market in mind. To give air forces around the world a cheap and high technology 5TH Generation fighter this can compete with American and Chinese aircrafts in future. Note: Vinayak shetti is a free lance journalist and also admin of www.lca-tejas.org

Sunday, January 24, 2010

Bank of China to sell up to $5.8 billion in bonds

~Bank of China to sell up to $5.8 billion in bonds to replenish capital
Asian Defense News: BEIJING January 24, 2010, (AP) -- Bank of China plans to sell up to 40 billion yuan ($5.8 billion) in bonds to replenish its capital and meet government standards following a record surge in lending last year amid Beijing's stimulus measures, a state-run news agency reported.
Regulators have warned some banks that they have fallen below minimum capital requirements after handing out some 9.5 trillion yuan in loans last year. Banks are expected to scale back lending to roughly 7.5 trillion yuan in 2010.
Bank of China's proposal still requires shareholder approval at a meeting in March, the Xinhua News Agency said in its report late Saturday. Approval is likely a formality because the government and state-linked institutions control a majority of the bank's shares.
China's banking industry is regarded as the healthiest of any major economy because institutions avoided the mortgage-related turmoil that battered Western lenders.
Beijing hopes cooling the pace of lending will keep its economy growing without creating inflation and overheating. Other nations are counting on that growth and a healthy demand from China for their goods for their own recoveries.
Record bank lending in 2009 to support government spending on infrastructure and other projects under Beijing's stimulus package has led to fears of asset bubbles and huge bank losses if too many loans sour.

Assets of Headley in crores spread across US, Pak and Gulf

Asian Defense News: MUMBAI: With investigators ready to file chargesheet in Headley-Rana case, security agencies have found that the American terror suspect had assets running into crores of rupees in Pakistan, the US and a Gulf nation.
There were indications that Headley was into the real estate business in a Gulf country as per documents procured by the security agencies and the National Investigating Agency (NIA), probing the role of Headley and his Pakistani-Canadian accomplice Tahawwur Rana.
According to sources privy to the investigations, the 49-year-old Headley owns palatial houses in Pakistan and the US besides flats in a Gulf country and vast estate land running into several crores of rupees.
The sources said the probe findings were an eye-opener as the investigators were trying to ascertain the financial transactions of Headley, who was arrested by the Federal Bureau of Investigation in Chicago on October three last year.
The investigators were trailing the credit card payments made by Headley, charged by the FBI with conspiring in the 26/11 attacks, while he was staying in Mumbai and travelling in rest of the country including Delhi, Ajmer, Goa and Pune.
While majority of transactions were carried out by Headley with cash only, he had used his credit cards including an American Express card for purchases in Mumbai and paying hotel bills at five-star hotels in the megapolis.
Source: 24 Jan 2010, 1427 hrs IST, PTI

Al Jazeera: Bin Laden claims Dec 25 US plane attempt

Asian Defense News: DUBAI: Qatar's Al Jazeera television said on Sunday it will air a new voice recording of al Qaeda leader Osama bin Laden in which he claims
responsibility for a Dec. 25 attempt to blow up a U.S.-bound airline. Nigerian Umar Farouk Abdulmutallab is charged with attempting to blow up a Delta Airlines plane as it approached Detroit on a flight from Amsterdam with almost 300 people on board.
Source: 24 Jan 2010, 1459 hrs IST, REUTERS

China now world's second largest diamond market

Asian Defense News: BEIJING: China last year overtook Japan to become the world's second largest diamond market behind the United States with trade on the Shanghai diamond exchange rising 16.4 percent to more than $1.5 billion, state media said.
The official Xinhua news agency said on Sunday the year-on-year rise, when much of the rest of the world was mired in deep recession, was due to China's boisterous economic growth in 2009, which reached 8.7 percent.
"As the economy continued to develop in a stable manner, consumer demand for jewellery continued to grow, especially for diamonds for the wedding market," Xinhua said on its website (www.xinhuanet.com).
"In this year, China overtook Japan to become the world's second largest diamond market for consumers behind the United States," it added.
China's increasingly affluent middle class and vast pool of customers are seen as key factors for the rise in diamond sales in the world's most populous country.
Demand for diamonds only really started to develop in the 1990s when De Beers brought its global advertising campaign to China, tapping into the Chinese desire for conspicuous consumption and pursuit of Western lifestyle trends.
De Beers is 45 percent-owned by mining group Anglo American.

China chalks out plan for lasting stability in Tibet

Asian Defense News: China has formulated a plan for lasting stability in Tibet, it was announced at a high-level meeting held here.
The meeting, attended by Chinese President Hu Jintao and other senior leaders Jan 18-20, agreed that more efforts must be made to improve the living standards of Tibetans to ensure ethnic unity and stability in the region.
Hu said that it was a challenging task to carry out development, build a well-off society and establish a national ecological protective screen in Tibet.
The work was also vital for ethnic unity, social stability and national security, as well as a favorable international environment, Xinhua quoted Hu as saying.
During the meeting, senior leaders also outlined plans to develop Tibetan-inhabited areas in Sichuan, Yunnan, Gansu and Qinghai.

Indian Air Force offers help to Bangladesh Air Force to modernize its aircraft

Asian Defense News: The Indian Air Force is offering a Bangladesh Biman Bahini (Bangladesh Air Force) use of its facilities to modernize and make maintenance in fighter aircraft MiG-29 and Mi-17 helicopters, said a defense official for the newspaper The Telegraph.
Arriving in Dhaka, the capital of Bangladesh, with an offer to help modernize the aircraft fleet, India move to an area in which Bangladesh has been mainly dependent on China and to some extent, Pakistan, Russia and the United States.
MiG-29 in BangladeshSpeaking Indian Air Force, you understand that the offer came from a defense of the public sector Hindustan Aeronautics Limited (HAL), Bangalore, to help modernize the MiG-29 and Mi-17 helicopters to Bangladesh .
The Indian Air Force flies and made the modernization of two of its own aircraft fleet. HAL is engaged in modernizing the MiG-29 India.
Despite the Bangladesh Air Force aircraft have mostly Chinese and some of North America, it also has a squadron of MiG-29 fighters from Russia.
Approximately 70% of Bangladesh's air fleet is old, with fighter aircraft near 20 years of operation, or even older. Bangladesh received A-5 fighter and A-7, Chinese-made, second-hand in helping shape of China and Pakistan.
But the Indian Air Force said that the aid for helicopters Mi-17 (IAF flies many units of the transport helicopter Mi-17), the MiG-29 fighters and transport aircraft Antonov 32 could be recovered for an Air Force limited in Bangladesh.
Bangladesh fly with three An-32 aircraft and 14 helicopters Mi-17.
Source: The Telegraph - Via: Cavok

Saturday, January 23, 2010

Burmese fighter pilot killed in crash

Asian Defense News: (heraldsun.com.au January 24, 2010) A BURMESE fighter pilot was killed during training this morning when his plane crashed in an airfield in the military-ruled country, an official said.
The 27-year-old died when he overshot the runway landing a Chinese-made F7 plane at Mingaladon air field in the north of Rangoon city, the official told AFP.
"It happened because of a technical problem,'' he said, asking not to be named. He could not give further details.
Burma, which has been ruled by the military since 1962, mainly buys fighter planes from China and Russia, although official statistics are difficult to obtain.
Burma and Russia signed a contract worth nearly $US570 million ($632 million) last month to deliver 20 MiG-29 fighter planes.

World stocks tumble as Obama targets banks

Asian Defense News: LONDON -- World markets fell Friday, led by bank stocks after U.S. President Barack Obama proposed a sweeping overhaul of Wall Street to avert future financial crises.
Obama said he would seek to limit the size and complexity of large financial institutions so that their collapse wouldn't imperil the broader financial system and world economy or cost taxpayer money in bailouts.
The announcement spooked investors, causing a sell-off in Europe after sharper falls in the U.S. and Asia.
Britain's FTSE 100 stock index was down 1.2 percent at 5,270.81 and Germany's DAX shed 1.1 percent to 5,684.88. France's CAC-40 lost 1.1 percent to 3,818.79.
U.S. futures suggested another drop on Wall Street later. Standard & Poor's 500 futures were down 2.2 points at 1,108.90 and Dow industrials futures were 30 points lower at 10,308.00.
Obama's announcement and Wall Street's reaction unnerved markets already on edge over China's recent moves to prevent its economy from overheating amid worries of inflation and asset bubbles.
Bank stocks were hit hardest, with Barclays Plc down 6.7 percent, Royal Bank of Scotland Plc 5.0 percent and Deutsche Bank 4.8 percent lower.
Adding to the uncertainty are questions about whether this year's economic prospects justify more gains after the run-up in stock prices that began in early 2009, said Mark Matthews, strategist at Macquarie Capital Securities in Hong Kong.
Last year “was such an amazing ride and people are starting to wonder if the recovery that we're seeing in 2010 was already priced in,” Matthews said.
Upbeat earnings from McDonald's, General Electric and Kimberly-Clark failed to reassure investors, who moved to cash in on their gains on a 10-month rally in equities.
In Europe, attention remained focused on the debt problems of Greece, with officials stressing the country will not need a bailout but will manage its funding on the market. The possibility that other countries, such as Portugal or Ireland, could also have trouble handling their debt has kept markets on edge, pushing the euro to 5-month lows against the dollar.
The euro recovered somewhat on Friday, to $1.4129 from $1.4082 late Thursday. The dollar weakened to 90.12 yen from 90.49 yen.
In the U.K., officials statistics confirmed that British consumers splurged on food and drink during the holidays, with retail sales rising 3.6 percent in December. The rise, however, was not a strong as some analysts expected, suggesting recovery from recession will be gradual.
In Asia earlier, Japan led the drop, with the Nikkei 225 stock average diving 2.6 percent to 10,590.55. Hong Kong's Hang Seng dropped 0.7 percent to 20,726.18 and Korea's main market index lost 2.2 percent to 1,684.35.
Elsewhere, China's Shanghai benchmark fell 1 percent, India's Sensex shed 1 percent and Australian stocks retreated 1.6 percent.
While banks in the U.S. fell steeply, shares in Asian financial institutions performed better, with many closing the session higher. Japanese lender Mitsubishi UFJ edged up 0.2 percent and China's ICBC gained 2.3 percent in Hong Kong. Other industries like commodities suffered big drops as concerns about future global demand prompted investors to scale back their riskier bets.
In the U.S. Thursday, Wall Street was yanked lower by heavy selling in bank stocks.
The Dow fell 213.27, or 2 percent, to 10,389.88, its biggest point and percentage drop since Oct. 30.
The broader Standard & Poor's 500 index fell 1.9 percent to 1,116.48 while the Nasdaq composite index fell 1.1 percent to 2,265.70.
Oil prices edged lower, with benchmark crude for March delivery down 24 cents at $75.84 a barrel. The contract dropped $1.66 to settle at $76.08 overnight.

Weaker dollar fuels demand for gold

Asian Defense News: LONDON -- Gold, little changed in London Friday, may climb as a weaker dollar and the metal's drop to a three-week low prompt investors to buy. Platinum and palladium declined.
The dollar slid as much as 0.6 percent against the euro on concern a U.S. proposal to curb banks' bets with their own capital will deter investors from buying assets in the world's largest economy. Bullion, which Thursday fell to the lowest price since Dec. 30, usually moves inversely to the greenback.
“Yesterday we had a lot of pressure on gold, and overnight we've seen some physical demand,” said Afshin Nabavi, a senior vice president at bullion refiner MKS Finance SA in Geneva.
Gold for immediate delivery added US$1.55, or 0.1 percent, to US$1,095.50 an ounce at 11:04 a.m. local time. The metal is down 3.1 percent this week, headed for its biggest slide in six weeks. Bullion for February delivery was 0.7 percent lower at US$1,095.30 on the New York Mercantile Exchange's Comex division.
The metal declined to US$1,096.50 an ounce in the morning “fixing” in London, used by some mining companies to sell production, from US$1,108.25 at Thursday's afternoon fixing. Spot prices are 11 percent below a record US$1,226.56 set on Dec. 3.
Among other precious metals for immediate delivery in London, silver added 0.2 percent to US$17.43 an ounce. Platinum fell as much as 3 percent to US$1,547.65 an ounce, the lowest price since Jan. 8, and was last at US$1,553.90. Palladium dropped as much as 4.5 percent to a one-week low of US$431 an ounce and was last at US$435.25.

China claims U.S. Internet accusations are 'baseless'

Asian Defense News: BEIJING -- China hit back at U.S. criticism of Internet censorship and hacking on Friday, warning that relations between the two global heavyweights were being hurt by a feud centered on web giant Google.
U.S. Secretary of State Hillary Clinton on Thursday challenged Beijing and other authoritarian governments to end Internet censorship, an issue that has jumped to the heart of U.S.-China ties after Google threatened to quit China due to hacking and web restrictions.
China's Foreign Ministry said the U.S. criticisms could hurt relations between the world's biggest and third biggest economies, already strained by disagreements over trade imbalances, currency values and U.S. weapons sales to Taiwan.
“The U.S. has criticised China's policies to administer the Internet and insinuated that China restricts Internet freedom,” said spokesman Ma Zhaoxu. “This runs contrary to the facts and is harmful to China-U.S. relations.
“We urge the United States to respect the facts and cease using so-called Internet freedom to make groundless accusations against China,” Ma said in a statement carried on the Foreign Ministry website www.mfa.gov.cn.
But the spokesman also indicated that his government did not want to see the dispute overwhelm cooperation with the Obama administration, which has sought Beijing's backing on economic policy and diplomatic standoffs, such as Iran and North Korea.
Ma said each side should “appropriately handle rifts and sensitive issues, protecting the healthy and stable development of China-U.S. relations.”
On Thursday, Chinese Vice Foreign Minister He Yafei played down the dispute with Google and indicated that his government was more worried about broader economic and political disputes that could flare up in coming months.
Clinton's speech criticised the cyber policies of China and Iran, among others, and demanded Beijing investigate the hacking complaints from Google.
Facebook, Twitter and YouTube are blocked in China, which uses a filtering “firewall” to prevent Internet users from seeing overseas web sites with content anathema to the Communist Party.
“Sino-U.S. ties have been impacted,” Shi Yinhong, an international relations professor at Renmin University in Beijing, said of Washington's push on Internet controls.
“China has admitted there are areas where it can improve, and then Clinton made her comments in a public venue, comparing us to Egypt and Saudi Arabia,” he added. “So I think over the past year Clinton's speech is the most undiplomatic thing she's said.”
Murky Media Response
Some sections of the Chinese media were quick to criticise Clinton's remarks. But many of the Chinese reports were themselves cut from websites within hours of appearing.
It was unclear why they were removed, but Chinese websites often adjust or cut content based on propaganda authority instructions, especially for volatile issues.
Many cyber-experts suspect that the hacker attacks from China on Google and other targets were so sophisticated that official involvement was likely.
Ties between China and the United States have been put to the test in recent months over trade, currency, climate change and arms sales to Taiwan.
With the two giant nations joined at the hip economically, Sino-U.S. tensions are unlikely to escalate into outright confrontation, but could make cooperating on global economic and security issues all the more difficult.
Earlier this month, China denounced the U.S. sale of Patriot air defence missiles, capable of intercepting Chinese missiles, to Taiwan, which Beijing claims as its own.
China announced its own anti-missile test soon after.
Beijing has warned that more U.S. weapons sales to Taiwan could badly bruise relations with Washington, and has urged President Barack Obama not to meet the Dalai Lama, the exiled Buddhist leader of Tibet who Beijing denounces as a separatist.