Wednesday, November 05, 2008
Global Crisis Hits Chinese Migrant Workers
Millions of workers who flooded to China's booming coastal cities to find work during the past decade are now beginning to return home amid a wave of factory closures and unemployment sparked by the global financial crisis.
In a phenomenon more usual around the Lunar New Year holiday in late January, trains and long-distance bus networks are packed full of people heading west and inland, making tickets hard to come by as people head home to cut losses and be reunited with their families.
"A lot of people are workers returning to their family homes," one passenger on a packed train in southwestern China's Yunnan province said.
Factory closures and rising unemployment in the Pearl River Delta and eastern coastal regions are also sparking labor unrest, as workers stage demonstrations to demand their back pay and severance benefits from factories now in administration.
We detained a few people who were making trouble."
Bao'an police officer
Police in the southern boomtown of Shenzhen detained eight former workers for the now bankrupt Hong Kong-invested watchmaker Yijinli following days of sit-ins and clashes with hundreds of workers who had not yet been paid by the administrators.
"There were about six or seven security personnel detaining one person," a former Yijinli worker surnamed Ou said of clashes that began Friday in the city's Bao'an district.
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Iran: Obama Victory Proves Bush Failures
Foreign Confidential....
Iranian officials on Wednesday welcomed Barack Obama's victory in U.S. presidential elections, calling it a sign of failure of President George Bush's policies and Americans' demand for essential changes.
"Obama's election as the U.S. president shows the American people's demand for essential changes in the country's domestic and foreign policies," Iranian Foreign Minister Manouchehr Mottaki was quoted as saying by the official news agency IRNA, while urging the new administration "to distance itself from the wrong approaches of current politicians."
As the first reaction by an Iranian official earlier on Wednesday, Gholam-Ali Hadad-Adel - senior advisor to Iran's supreme leader - said the victory of the slogan of "change" is the admission of the American people to the failure of Bush's policies.
"The next U.S. president should abandon the course taken by President Bush and the American people have to change their policies in order to get rid of the quagmire that he created for them," former parliament speaker Hadad-Adel was quoted as saying by Iranian media.
The reactions to the U.S. elections came after a harshly worded statement issued earlier this morning by Iran's military, warning American forces in Iraq that it would strongly respond to any violation of Iranian airspace.
"American military helicopters were recently flying in short distances from Iraq's joint borders with Iran and while the borders are not straight there would be the possibility of violating Iran's airspace," Iran's army headquarters said in a statement carried by IRNA.
"So Iranian armed forces would strongly respond in case of any violations," said the statement.New N. Korean Advanced Missile Site Reported
A new North Korean missile launch site under construction is designed to fire rockets even more advanced than those already capable of reaching the western U.S., South Korea said Tuesday.
South Korean Defense Minister Lee Sang-hee told parliament that construction on the new site on North Korea's west coast began eight years ago and is about 80% complete.
The site in the village of Dongchang-ni appears to be designed to launch "a bigger-sized missile or satellite projectile" than rockets deployed from the North's east coast facility.
North Korea's clandestine missile program has been a key regional concern, along with its nuclear weapons program.
The country has some 200 "Nodong" missiles with a range of about 800 miles - far enough to reach Japan - and more than 600 Scud-type, short-range missiles that could reach South Korea.
-APShallower Recession Forecast for Japan
Foreign Confidential....
Japan's recession will be shallower than the U.S. and Europe because damage from the global credit crisis has been limited, the Cabinet Office's top economist said.
"The depth of Japan's recession won't be as severe as those of the U.S. and Europe because of the relatively healthy financial system,'' Jun Saito, an adviser to Economic and Fiscal Policy Minister Kaoru Yosano, said in an interview yesterday in Tokyo. "The pressure for adjustments in capacity, labor and inventory is smaller than that of previous recessions.''
Banks Still Lending
Japanese banks are still lending to each other as well as to companies, setting them apart from counterparts in the U.S. and Europe. The world's second-largest economy has become more resilient to global shocks after three recessions since 1990 forced companies and banks to fire workers and clean up debt.
Japan's financial institutions recorded about $15.6 billion in subprime mortgage-related losses as of June, according to the nation's financial regulator, a fraction of the $690 billion in writedowns and credit losses suffered by financial companies around the world.
The difference between what banks and governments pay to borrow money for three months, known as the TED spread, is 40 basis points in Japan, compared with 222 basis points in the U.S. and 200 basis points in Europe.
The Three Excesses
Overhangs of capacity, labor and debt -- known as the three excesses that were a burden on the economy since the nation's asset bubble burst in the late 1980s -- have also diminished. A key central bank measure of surplus production capacity stood at 2 in September, compared with a 12-year high of 33 in March 2002.
A shallower recession doesn't mean Japan will be one of the first to emerge from the downturn, said Saito, who is one of three advisors to Yosano.
"It's hard to imagine the economy will recover without a pickup in foreign demand,'' Saito said. "The timing of Japan's turning point will depend on when the U.S. economy comes back,'' he said, adding that resilient demand from China could help the global economy. Clear signs of a recovery in Japan won't be seen until the second half of next year at the earliest, he said.
-BloombergChina Inc. Recruiting in London and NY
AFP reports:Spotting an opening in the global fight for talent, China's ambitious financial institutions are planning recruiting trips to London and Wall Street on the wounded financial titans' home turf.
Sovereign fund China Investment Corporation has begun a global search, multi-billion dollar Chinese-French fund Fortune SGAM plans interviews on Wall Street and Shanghai's government is headed to London and New York next month with job offers in hand.
"There are layoffs on Wall Street since the crisis but China's financial industry is still in its infancy and is hungry for talent," Pei Changjiang, chief executive of the Fortune SGAM Fund, told AFP.
It is estimated that the economic turmoil could lead to 165,000 job losses in New York over the next two years, while British think tank Oxford Economics predicts 194,000 job cuts in London over the same period.
But from Shanghai the message to the brightest finance minds is unmistakable: China is hiring.
Click here to continue.Gold's Lackluster Performance Puzzles Investors
Foreign Confidential....
Gold futures fell in New York after the dollar rebounded, eroding the appeal of the precious metal as an alternative investment.
AP reports:For years, investors known as gold bugs snapped up the metal and socked it away, betting that a colossal economic crisis would one day slam financial markets and send gold prices through the roof.
For many investors, that grim scenario is in full swing, except for one thing: After briefly hitting $1,000 an ounce for the first time in March, gold has fallen into a rut and shows no sign of budging anytime soon.
Gold's failure to flourish despite broad financial carnage has disappointed many of the metal's champions. Others say it's simply in a lull and is ripe for another big surge. But most gold buyers agree that the metal's lackluster performance lately has been surprising.
"It's been a puzzle for most of us," said Geoff Farnham of Venice, Calif. who inherited some gold holdings and recently began buying gold coins as "insurance."
"In hard times, gold is a good thing to have," the retired software developer said. "Knowing that there aren't a lot of gold coins out there to buy, seeing the price continue to drop has been curious."
It's also been punishing for investment portfolios. Since soaring to an all-time high of $1,033.39 an ounce on March 17, gold has plummeted 30 percent. Gold for December delivery on Monday rose $8.60 to settle at $726.80 — roughly the same level where it traded a year ago.
So what happened? As the financial crisis pummels financial markets around the globe, hedge funds and other large investors who drove gold to dizzying heights earlier this year are now racing to unwind those positions to raise cash and cover huge losses. The massive deleveraging has pounded other commodities from crude oil to corn to copper.
"Gold is being pulled down by indiscriminate selling of virtually every asset," said Jeffrey Nichols, managing director at New York-based American Precious Metals Advisors. "You could call it collateral damage."
Instead of gold, investors are pouring money into the newest safe-haven asset: cash. That has pushed the dollar to multiyear highs against the euro and the pound, hurting demand for gold among investors who buy the metal as a safe-haven against inflation.
With economists now warning that a world economic slowdown could bring about deflation, or a sustained period of falling prices, gold analysts say it's unclear how the metal will respond.
"Gold hasn't been tested in a true deflationary crisis so we don't what will happen to prices," said Jon Nadler, precious metals analyst with Kitco Bullion Dealers Montreal.Karzai Appeals to Obama to Change US Strategy Following Air Raid Said to Have Killed 37 Civilians
Foreign Confidential....
Afghan President Hamid Karzai called Wednesday on U.S. President-elect Barack Obama to put a stop to civilian casualties resulting from U.S.-led operations in Afghanistan.
Afghan villagers say at least 37 people were killed, including members of a wedding party, when U.S. warplanes bombed a village in southern Afghanistan.
Witnesses say U.S. forces called in air strikes Monday during a battle with Taliban militants near a village in the Shah Wali Kot district of Kandahar province. They say the warplanes bombed a nearby housing complex where villagers had been celebrating a wedding.
Villagers say the bride was among several people who were wounded and taken to a hospital in Kandahar city. Kandahar Governor Rahmatullah Raufi says civilians were killed in the fighting but gave no figures.
US Military Investigating
The U.S. military says it is investigating casualty reports from Monday's battle. A military spokesman offered condolences and apologies if innocent people were killed.
Residents say U.S. troops entered the village late Monday in a search of militants and detained several men.
U.S. and NATO-led operations against militants in Afghanistan have caused scores of civilian deaths this year, prompting growing criticism from Karzai's government.
Speaking to reporters in Kabul Wednesday, the Afghan president called for a change in the U.S. strategy for fighting terrorism.
NATO and U.S.-led coalition forces say they do their utmost to avoid civilian casualties, but they say mistakes do happen.
U.S. Central Command chief General David Petraeus arrived in the Afghan capital, Kabul, Tuesday to assess efforts to combat growing insurgent violence in Afghanistan.
It is the general's first trip to Afghanistan since he took command of all U.S. military forces in the Middle East and Central Asia last week.
In another development, Britain's defense ministry says a British solider was killed by enemy fire Tuesday in the southern Afghan province of Helmand.Medvedev Vows to Deploy Missiles Near Poland
Foreign Confidential....
Russia will deploy short-range missiles near Poland to counter U.S. military plans in Eastern Europe, President Dmitry Medvedev warned Wednesday, setting a combative tone that clashed with global goodwill over Barack Obama's election.
In his first state of the nation speech, Medvedev blamed Washington for the war in Georgia and the world financial crisis and suggested it was up to Washington to mend badly damaged ties.
Medvedev also proposed increasing the Russian presidential term to six years from four — a change that could deepen Western concern over democracy in Russia and play into the hands of his mentor, Prime Minister Vladimir Putin, who has not ruled out a return to the Kremlin.
Extending the presidential term could mean a possible 12 more years in the top office for the popular Putin.
Echoing Putin
Echoing Putin, who made criticism of Washington and the West a hallmark of his two-term, eight-year presidency, Medvedev used the speech in an ornate Kremlin reception hall to cast Russia as a nation threatened by encroaching American military might.
"From what we have seen in recent years — the creation of a missile defense system, the encirclement of Russia with military bases, the relentless expansion of NATO — we have gotten the clear impression that they are testing our strength," Medvedev said.
He signaled Moscow would not give in to Western calls to pull troops from Georgia's breakaway regions of Abkhazia and South Ossetia, or rescind its recognition of their independence following the August war.
"We will not retreat in the Caucasus," he said, winning one of many rounds of applause during the televised 85-minute address.
Talking Tough
Talking tough, he fleshed out long-promised military measures in response to U.S. plans for missile defense facilities in Poland and the Czech Republic, former Soviet satellites now in NATO. The Kremlin claims the system is meant to weaken Russia, not defend against Iran, as Washington insists.
Medvedev said Iskander missiles would be deployed to Russia's western enclave of Kaliningrad, sandwiched between Poland and Lithuania, "to neutralize, if necessary, a missile defense system."
The Iskander has a range of about 280 kilometers (175 miles), which would allow it to reach targets in Poland but not in the Czech Republic — but officials have said its range could be increased. Medvedev did not say whether the missiles would be fitted with nuclear warheads.
Russia will also deploy electronic jamming equipment, Medvedev said.
After the speech, the Kremlin announced Medvedev had congratulated Obama for winning the U.S. presidency, saying in a telegram he was "counting on a constructive dialogue with you on the basis of trust and taking each other's interests into account."
In Washington, State Department spokesman Sean McCormack emphasized that the planned missile defenses were not aimed at Russia.
"The steps that the Russian government announced today are disappointing," McCormack said. "But, again, this is not directed at them. Hopefully one day they'll realize that."
-APJordan Muslim Brotherhood: Obama Win American Apology for Crimes Against Afghanistan and Iraq
Foreign Confidential....
The Islamic Action Front (IAF), Jordan's largest political party, on Wednesday expressed guarded optimism over the election of Barak Obama as the next US president and said they considered his win an "apology" from the American people to the peoples of Iraq and Afghanistan.
"We welcome Obama's election and believe that his win represents a clear message inside as well as outside America," IAF Secretary General Zaki Bani Ershaid told Deutsche Presse-Agentur.
"Obama's victory is also tantamount to an apology from the American people for the crimes committed by the outgoing Republican administration in Iraq, Afghanistan and elsewhere," he added.
Bani Ershaid said that his party, the political wing of the influential Muslim Brotherhood movement, was "cautiously optimistic" over the change promised by Obama and believed that the "starting- point for this change should find expression in a correction of the US foreign policy on Palestine, Iraq and Afghanistan."
"A real change in the US policies cannot materialize without rectifying the erroneous attitude considering Israel an ally, withdrawing troops from Iraq," he said.Arab Stock Markets Rise on Obama Win
Foreign Confidential....
Stock markets in the Arab world rose for the second consecutive day on Wednesday upon news of United States Democratic Senator Barack Obama's sweeping victory in Tuesday's presidential polls.
The Omani bourse in Muscat climbed 6.09 percent, driven up by a 9 percent surge in the shares of a number of banks.
The Saudi stock exchange in Riyadh opened 2.09 percent up, with shares across all sectors posting strong gains.
The United Arab Emirates' Dubai bourse rose 1.29 percent and Abu Dhabi's by 1.85 percent.
Shares on the Qatari stock exchange in Doha climbed 2.15 percent while those in Kuwait City and in Bahrain's capital, Manama, nudged up by 0.30 percent and 0.25 percent respectively.
Earlier on Wednesday, Asian stocks also rose after Obama's win. Japan's Nikkei 225 index closed 4.4 percent up, Hong Kong's Hang Seng rose by 5.7 percent and Singapore's benchmark index rose by 4.1 percent.
-AKIAnalysis: Turkey's Unique Position
Foreign Confidential....
Although Barack Obama wasn't the Turkish leadership's favorite US Presidential candidate--John McCain was seen as superior in the foreign affairs arena and the more pro-Turkish of the two candidates--Ankara is looking forward to an Obama administration.
The President-elect is considered the best person to repair the world's image of the United States, Turkish leaders say, They point out that only 12 percent of Turks had a favorable view of the United States, according to a June Pew Global Attitudes Project poll.
Straddling Europe and Asia
With a foot in Europe, a foot in Asia, and the Muslim connection with the Middle East, Turkey says its strategic position is truly unique.
Ankara has been mediating secret talks between Syria and Israel, and is engaged in Afghanistan-Pakistan dialogue. Last year the Israeli and Palestinian presidents were guests of the Turkish president, riding in the limousine together and addressing the Turkish Parliament.
A Turkish-led Israeli-Palestinian industrial zone in the West Bank is under way as well.
Turkish officials are wary of a U.S. withdrawal from Iraq that would embolden internal strife or allow too much Iranian or Saudi influence or greater Kurdish autonomy.
But despite the 2003 domestic decision preventing U.S. forces from using Turkish bases, Ankara backs U.S. policy in Iraq.
Turkey also wants to enhance its position as an energy hub, creating interdependence between European consumers and Middle Eastern and Asian energy producers -- largely without Russia, a key U.S. strategy for isolating the Eurasian power while increasing the supply of oil and gas.
Iran's natural gas is crucial for Turkey's domestic energy demands, but Iran's suspect nuclear program is blocking a new natural gas relationship.
Thursday, 6 November 2008
RFA reports:
The times are changing, alright.
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