Another two in China tainted milk scandal appear in court

Video: China milk scandal

firm files for bankruptcy

SHIJIAZHUANG, Dec. 30 (Chinese media) -- Two more people

involved in China's tainted milk scandal stood trial Tuesday at a court in

Shijiazhuang, capital of northern Hebei Province.

The Shijiazhuang Intermediate People's Court accused

Geng Jinping, manager of a milk production base and Geng Jinzhu, a driver at the

base, of adding 434 kg of "protein powder" that contained the industrial

chemical melamine to about 900 tonnes of raw milk.

Defendant Geng Jinping (2nd L), manager

of a milk production base, kneels down to show repentance at the

Shijiazhuang Intermediate People's Court in Shijiazhuang, capital of north

China's Hebei Province, Dec. 30, 2008. The Shijiazhuang Intermediate

People's Court accused Geng Jinping and Geng Jinzhu (1st R) of being

involved in China's tainted milk scandal of adding 434 kilograms of

"protein powder" that contained the industrial chemical melamine to about

900 tonnes of raw milk, and having sold the tainted milk to

Shijiazhuang-based Sanlu Group, the dairy at the center of the scandal.

(Chinese media/Ding Lixin)
Photo Gallery

The two Gengs sold the tainted milk to

Shijiazhuang-based Sanlu Group, the dairy at the center of the scandal, and

other places from October 2007 through August 2008, and made 2.8 million

yuan(409,000 U.S. dollars), the court heard.

The protein powder, mainly made of melamine, malt

dextrin and whey powder, was used to increase the apparent protein content in

milk. Children can develop kidney stones after drinking the

melamine-contaminated milk.

The Ministry of Health has said it was likely the

contamination killed at least six babies. Another 294,000 infants suffered from

urinary problems such as kidney stones.

So far, 17 people in the scandal have been put on

trial in Hebei in the past few days. No verdicts have been announced yet.

Tian Wenhua, Sanlu's former board chairwoman and

general manager, will face trial Wednesday in the Shijiazhuang Intermediate

People's Court. She faces charges of producing and selling fake or substandard

commodities, according to court sources.

Geng Jinping (L Front), manager of a

milk production base and Geng Jinzhu (R Front), a driver at the base,

stand trial at the Shijiazhuang Intermediate People's Court in

Shijiazhuang, capital of north China's Hebei Province, Dec. 30, 2008.

(Chinese media/Ding Lixin)
Photo Gallery

Sanlu Group stopped production on Sept. 12. A

bankruptcy petition for Sanlu has been filed in the face of an 1.1 billion yuan

debt, the city government said last week.

China's Dairy Industry Association announced Saturday

victims who fell ill or died after drinking tainted baby formula will soon get

financial compensation from 22 Chinese dairy producers. But the association did

not say the amount of compensation or when the victims will receive it.

Four more stand trial in China tainted

milk scandal

SHIJIAZHUANG, Dec. 29 (Chinese media) -- Four more people in

China's tainted dairy scandal went on trial Monday in a local court in

Shijiazhuang, capital of northern Hebei Province.

The Shijiazhuang Intermediate People's Court began the

hearing for Gao Junjie, Xue Jianzhong and two others at 8 a.m.. The charges are

not currently available. Full story

China milk scandal companies offer to

compensate victims

BEIJING, Dec. 27 (Chinese media) -- Victims who fell ill or died

after drinking tainted baby formula will soon get financial compensation from 22

Chinese dairy producers, China's Dairy Industry Association announced here

Saturday.

"The enterprises offered to shoulder the compensation

liability. By doing so, they hope to earn understanding and forgiveness of the

families of the sickened children," the association said. Full story

Six stand trial in China's milk powder

scandal

SHIJIAZHUANG, Dec. 26 (Chinese media) -- Six people involved in

China's melamine adulteration milk scandal went on trial on Friday in four

courts in northern Hebei Province.

At the Shijiazhuang Intermediate People's Court,

prosecutors charged Zhang Yujun and Zhang Yanzhang of having committed a crime

against public security.Full story

China milk scandal firm faces huge

debts

Saleswomen check the returned Sanlu

brand milk powders in a supermarket in Yinchuan, capital of northwest

China's Ningxia Hui Autonomous Region Sept. 17, 2008.A Chinese court has

accepted a bankruptcy petition for Sanlu Group which was at the center of

a tainted milk scandal and is facing huge debts, an official said

Thursday. (Chinese media/Liu Quanlong)

Photo

Gallery

SHIJIAZHUANG, Dec. 25 (Chinese media) -- A Chinese court has

accepted a bankruptcy petition for Sanlu Group which was at the center of a

tainted milk scandal and is facing huge debts, an official said Thursday.

Wang Jianguo, spokesman for the city government of

Hebei provincial capital Shijiazhuang, said the Intermediate People's Court of

Shijiazhuang City has accepted the petition made by the Heipingxi Road branch of

Shijiazhuang City Commercial Bank - a creditor of Sanlu. Full story

China milk scandal firm submits

bankruptcy application

SHIJIAZHUANG, Dec. 25 (Chinese media) -- A Chinese court has

accepted a bankruptcy petition for Sanlu Group which was at the center of a

tainted milk scandal and is facing huge debts, an official said Thursday.

Wang Jianguo, spokesman for the city government of

Hebei provincial capital Shijiazhuang, said the Intermediate People's Court of

Shijiazhuang City has accepted the petition made by the Heipingxi Road branch of

Shijiazhuang City Commercial Bank - a creditor of Sanlu. Full story

China law to recognize mental

distress, reflects milk scandal

BEIJING, Dec. 22 (Chinese media) -- China's top legislature

might add mental distress to conditions covered by the Tort Law to improve civil

rights protection, under legislation submitted on Monday.

The long-awaited draft Tort Law, designed to provide

compensation for those whose rights are violated, was tabled at the 11th

National People's Congress (NPC) Standing Committee for a second reading. Full story

China plans compensation after tainted

milk scandal

BEIJING, Dec. 10 (Chinese media) -- A compensation scheme

for families of sickened and dead babies in the tainted milk powder scandal,

which caused a food safety scare in China, is under review, a Health Ministry

spokesman said on Wednesday.

The ministry is collecting medical records and

checking statistics to make preparations for compensation, spokesman Mao Qun'an

told reporters. Full story

Almost 1,300 Chinese infants still

hospitalized from tainted milk

BEIJING, Nov. 12 (Chinese media) -- China's Ministry of

Health said on Wednesday that 1,272 infants nationwide were still receiving

hospital treatment for kidney disorders caused by tainted powdered milk.

Two were in serious condition, the ministry said on

its website. Full story

Shanghai sees 27% plunge in second-hand home deals

BEIJING, Dec. 30. -- Shanghai saw a nearly 27-percent

tumble in transaction volume of second-hand homes this year while average sale

prices edged up 2.6 percent, a leading industry research body said yesterday.

Around 131.6 million square meters of used apartments

changed hands in the city in 2008, or a year-on-year drop of 26.9 percent,

according to the research department of Shanghai Centaline Property Consultants

Ltd, operator of the city's largest real estate agency chain.

"A low sentiment among home buyers characterized by a

wait-and-see attitude has led to the lackluster performance in the city's

second-hand home sales market," said Ma Ji, head of the research department at

Shanghai Centaline. "The second half encountered extremely hard times with total

volume accounting for only half of those reached in the first six months."

Across the city, Minhang, Pudong and Baoshan

districts led in transaction volume this year, taking a combined market share of

nearly 40 percent.

Low to mid-end apartments have taken a lion's share

in total deals transacted, Centaline figures showed. For instance, apartments

costing no more than 800,000 yuan (116,960 U.S. dollars) accounted for about 70

percent of the total transactions whereas homes worth more than 3 million yuan

only grabbed a 3-percent market share.

Moreover, about 50 percent of used apartments sold in

the city in 2008 are smaller than 70 square meters, and those between 70 and 90

square meters accounted for 20 percent, Centaline said.

However, the city's leasing market showed a rather

different story, as more home owners decided to lease out their properties

rather than sell them.

"The leasing market remains rather stable in 2008 as

compared to the sales market," Ma said. "Transaction volume jumped 30 percent

from 2007 mainly due to increased supply."

However, the average rent for used apartments fell

4.7 percent during the period as landlords had to cut rents to attract tenants.

In particular, Pudong New Area, Putuo and Zhabei

districts saw the most active deals during the 12-month period when 5,223, 3,257

and 2,310 units of used apartments were leased, respectively.

For 2009, Centaline said it expects transaction

volume for sales of second-hand homes to jump 15 percent from 2008.

(Source: Shanghai Daily)

Foreign-funded firms in Shanghai slow as global recession intensifies

Special Report:Global Financial Crisis

SHANGHAI, Dec. 29 (Chinese media) -- Conditions of foreign-funded enterprises here have deteriorated in the past four months amid the global financial crisis, according to a municipal government report on Monday.

In the first 11 months of 2008, such enterprises had a 17.7 percent rise in operating income and a 9 percent rise in profits year-on-year, compared with 25.8 percent and 67.6 percent, respectively, last year.

Conditions changed in September as the global crisis intensified, said Liu Jinping, deputy director of the municipal leading office of overseas investment.

Foreign-funded enterprises have been an important part of the city's economy. They contributed 140.1 billion yuan (20.5 billion U.S. dollars) of tax revenue in 2007, about 19.2 percent of the total. They employed about 2.94 million people, accounting for 32 percent of all employees.

About 33,000 overseas-funded enterprises operate in Shanghai.

China's main steel plants lose nearly $1.9 bln in November

Special Report:Global Financial Crisis　

BEIJING, Dec. 29 (Chinese media) -- The country's main steel plants posted a loss of 12.77 billion yuan (1.87 billion U.S. dollars) in November, the second monthly net loss after October, according to the latest data released by China Iron and Steel Association (CISA) on Monday.

In the month, 48 out of the 71 steel makers were in the red, with a combined loss at 14 billion yuan. The number climbed from 42 in October, when losses were recorded at a combined 5.8 billion yuan.

Analysts attributed the loss to the high prices of raw materials the steel companies had purchased.

CISA vice secretary general Qi Xiangdong said the first six months saw price hikes of iron ore, coal, coke and crude oil, which led to a 70 percent rise in steel prices over the same period last year.

He said steel prices plunged since September and fell to 1994 levels.

"At present, price relations among steel and other steel-related sectors are twisted," he added.

Analysts said December's picture would be just as dismal, despite a 20 percent rise in iron ore spot prices.

From May to November, the spot price of iron ore fell due to weak demand. In October, the spot price fell below the long-term contract price for the first time in 7 years.

Hu Kai, an iron ore analyst with Umetal.com, said given that the port inventories of iron ore may fall to 64 million tonnes, the impairment losses of steel mills and traders would hit 25 to 30 billion yuan, if 60 percent of iron are bought at long-term contract iron price and the rest at spot price.

Nanjing Securities said steel producers would suffer losses in the fourth quarter as they hadn't consumed all the high-priced materials and property sector and auto industry were slacking. Impairment losses would also worsen.

Qi said the 10 stimulus measures carried out by the State Council, or Cabinet, would be expected to boost steel demand.

Putin: Global economy to improve in 2nd half of 2009

Special Report:Global Financial Crisis

MOSCOW, Dec. 29 (Chinese media) -- Russian Prime Minister Vladimir Putin told the

media on Monday that he foresaw an improvement in the global financial situation

during the third and fourth quarters of next year.

Putin said the world economy had never experienced a crisis like this

before.

He believed the situation will improve in the third and fourth quarters of

2009, and will produce a positive effect on the Russian economy in 2010.

Putin also said on Monday that Russia had designated 10 trillion rubles

(about 340 billion U.S. dollars), which is almost equal to the country's annual

budget, to cope with the impact of the global crisis.

Meanwhile, the Russian government's press office said that Putin had

approved the Finance Ministry's issuance of state negotiable securities with a

par value up to 535.8 billion rubles (about 18.5 billion U.S. dollars) next

year.

Record funds raised by companies across London Stock Exchange in 2008

LONDON, Dec. 29 (Chinese media) -- Companies across the London Stock Exchange (LSE) markets raised a record 63 billion pounds (92 billion U.S. dollars) in new and further issues of equity during the course of 2008, significantly ahead of the total for the whole of 2007.

"While the second half of 2008 has seen some of the most challenging IPO market conditions many of us can remember, the year has ended on a more positive note," said Martin Graham, director of markets at the London Stock Exchange.

He said that a stream of substantial further issues have continued right up to the end of the year, underlining the view that fundraising through secondary issues on LSE markets will become especially attractive in the coming year.

"During the year we continued to outperform the world's other major exchanges in attracting international IPOs, making very good progress in regions such as Latin America and the Middle East," he said. "We continue to pursue longer term prospects with the development of AIM Italia and our joint venture with the Tokyo Stock Exchange."

During the year to Dec. 15, 73 IPOs were conducted on the Main Market, Specialist Fund Market, Professional Securities Market and AIM of LSE, raising 7.2 billion pounds in total.

According to the statistics from LSE, the Exchange attracted 25international IPOs in 2008, raising 3.5 billion pounds. This compared with only 13 international IPOs on the New York Stock Exchange and Nasdaq combined.

Specifically, the Exchange helped 8 companies from the Middle East to raise a combined 1.5 billion pounds, including 3 from Kuwait and 2 from Qatar, as well as one each from Dubai, Egypt and Bahrain.

In April, the number of companies from Russia and the CIS (Commonwealth of Independent States) quoted on LSE markets reached 100. In addition, On May 14, silver miner Fresnillo became the first company from Mexico to join the Exchange. KSK Emerging India Energy Fund joined AIM of the Exchange on June 10, becoming one of the largest AIM floats of the year.

As for investment entities, Da Vinci CIS Private Sector Growth Fund became the first investment entity to join the Specialist Fund Market, LSE's new market for alternative investment vehicles.

French fashion brand Chanel to cut 200 jobs

PARIS, Dec. 29 (Chinese media) -- The luxury fashion brand Chanel is to cut 200 jobs on Dec. 31 amid the global economic crisis, said French press.

The luxury group will end all its fixed term contracts and interim CSD from Wednesday Dec. 31, which involve 200 employees. The cuts represent around 10 percent of production.

According to the sources, workers in France will be the most affected. In the company's historic rue Cambon, 16 employees are to lose their jobs.

Due to a sharp decline in business, Chanel's growth rate in 2008 appears to be zero. The brand had already canceled its "Mobile Art Tour," a contemporary art gallery world itinerant, to focus on its strategic investments.

OPEC weekly oil prices again dive below $40

VIENNA, Dec. 29 (Chinese media) -- After only one-week slight rebound, the weekly average prices of the Organization of Petroleum Exporting Countries (OPEC) again dived below 40 U.S. dollars a barrel to 34.92 U.S. dollars last week, the Vienna-based cartel said on Monday.

Statistics by the OPEC Secretariat showed the weekly prices were 5.36 dollars lower than last week, making a daily decline of almost 1.8 dollars within the only three trading days of last week, hitting a historic low since the second week of December, 2004.

OPEC's decision on Dec. 17 of a daily crude oil output cut of 2.2 million barrels failed to arrest oil slide. OPEC officials believed that a bigger output cut is necessary.

It is generally believed that the weak demand for crude oil due to a weakening world economy and the pessimistic prospect of the economic growth as well as reduced international oil speculation push down the oil prices.

In addition, international exchange rate fluctuations and relatively eased geopolitical tensions have also attributed to falling prices. But more economic experts began to consider other hidden factors behind the unconstrained fluctuation of oil prices.

Recently, Palestine and Israel have exchanged fire again, aggravating the geopolitical tension in the Middle East. The prices of U.S. WTI crude oil and Britain Brent crude oil have both shown different rises in the international market, which, according to market analysts, may be in connection with the sharpening Palestine-Israel conflict.

However, some experts noted that such conflicts have been common in the past," and may have "only limited effect" in pushing down oil prices.

HK stocks close lower on fall of banking, property shares

HONG KONG, Dec. 30 (Chinese media) -- Hong Kong stocks went down 92.98 points, or 0.65 percent, to close at 14,235.5 on Tuesday, on declines of banks and property developers on concerns of bleak outlook for the sectors.

Turnover totaled 26.38 billion HK dollars (3.4 billion U.S. dollars), the year's second-lowest level after Monday's 21.95 billion.

Some analysts said they were still optimistic the index will benefit from rallies in regional bourses on window dressing to trend higher Wednesday, the last trading day of the year.

"The current sentiment is fine, which coincides with our optimism in the remaining days of the year and even earlier next year," ICEA Securities Asia said in a research note.

However, Taifook Research said the low market volume in the local market suggests any year-end rally may not be sustainable. "While the low interest rates limit potential market downside, a sustained rally looks unlikely to extend much beyond the new year as investors begin to focus on the coming reporting season and the ensuing earnings prospects of 2009," it said in a research note.

Mainland's two largest banks by assets dropped as expectations of narrowing net interest margins continued to weigh on their performances, said YK Chan, a fund manager with Phillip Capital Management.

Industrial and Commercial Bank of China was 1.5 percent lower at 4.08 HK dollars and China Construction Bank fell 1.9 percent to4.17 HK dollars.

Developers mostly fell as property transactions are expected to drop as Hong Kong has fallen into recession, analysts said.

Henderson Land fell 3.4 percent to 28.10 HK dollars, Hang Lung Property was 0.6 percent lower at 17.22 HK dollars and Sino Land dropped 3.7 percent to 7.80 HK dollars. (1 U.S. dollar = 7.742 HK dollars)

Macao's BOP registers surplus of over 3.5 billion USD in 2007

MACAO, Dec. 30 (Chinese media) -- Macao's overall BOP (balance of payments) recorded a surplus of 28.2 billion patacas (3.57 billion U.S. dollars) in 2007, according to the figures released on Tuesday by the SAR's (Special Administrative Region) Monetary Authority.

The BOP is a statistical statement that summarizes external transactions of an economy with the rest of the world. The BOP of Macao SAR consists of current account, non-reserve capital and financial account, and change in reserve assets.

Although the visible trade deficit widened to 40.9 billion patacas (5.18 billion dollars), the fast growing invisible trade surplus brought about by the buoyant tourism industry, as well as a marked fall in net factor income paid abroad, more than offset the deficit in the visible trade in 2007, the Authority said.

The current account surplus therefore reached 47.1 billion patacas (5.96 billion dollars), which was 23.7 billion patacas (three billion dollars) higher than the 23.4-billion-pataca (2.96 billion) surplus shown in the previous year.

In 2007, the favorable economic condition continued to boost domestic demand. Imports of goods rose by 18.1 percent year-on- year, whereas exports of goods remained virtually unchanged. Surplus in the services account surged from 69.3 billion (8.77 billion dollars) to 93.8 billion patacas (11.9 billion dollars). Travel services recorded a 39.8-percent increase in surplus to 105. 7 billion patacas (13.4 billion dollars), whereas transportation and other services summed up to a deficit of 11.9 billion patacas (1.5 billion dollars).

The statistics also showed that the income account, which reflects net external factor income, recorded a net outflow of 1.2billion patacas (151 million dollars) in 2007, approximately one- tenth the level in 2006. This stemmed mainly from the significant rise in the inflow of factor income and the substantial reduction in profits earned by foreign direct investors in Macao, the Authority said.

Net inflows in the capital account fell further from 3.5 billion patacas (443 million dollars) in 2006 to 2.6 billion patacas (329 million dollars) in 2007 mainly due to a drop in inflows of migrants' transfers. Meanwhile, the BOP recorded an enlarged surplus in 2007, which caused reserve assets (after price, exchange rate and other adjustments) to increase significantly by 28.2 billion patacas (3.57 billion dollars).

Chinese shares edge down 0.95%, led by heavyweights

Special Report:Global Financial Crisis

BEIJING, Dec. 30 (Chinese media) --

Chinese shares closed 0.95 percentdown on Tuesday led by heavyweights, as confidence from investors remained low,

said market dealers.

The benchmark Shanghai Composite Index shed 0.95 percent or 17.57 points to

1,832.91. The Shenzhen Component Index fell 1.43 percent or 95.04 points to

6,558.16.

Combined turnover expanded to 60 billion yuan (8.8 billion U.S dollars)

from 57.2 billion yuan on the previous trading day.

China Eastern Airlines,the country's third largest air carrier,saw its

shares fall 3.65 percent to close at 4.49 yuan, despite the announcement of an

expanded government bailout plan.

Airline shares opened higher in the morning, but investors immediately

locked in profits and prices began to decline as of midday.

The air carrier announced on late Monday it would get a total of 7 billion

yuan in government capital injection, more than double the previous plan of 3

billion yuan.

"The gloomy market reflects investors' confidence is very low as there are

no fresh economy-boosting measures from the government, " said Li Feng, a senior

equity strategy analyst with Yinhe Securities.

Some steel makers and property developers also saw their sharesfall amid

worries about weak corporate earnings in the fourth quarter, Li added.

COFCO Property (Group) Co., Ltd. shed 3.67 percent to close at 4.99 yuan,

while China Vanke, the country's largest real estate developer, fell 1.66

percent to 6.50 yuan.

China Q3 non-cash payments fall for first time, in line with economic slowdown

Special Report:Global Financial Crisis

BEIJING, Dec. 30 (Chinese media) -- The amount of non-cash payments in China in

the third quarter declined for the first time, according to a central bank

report released Tuesday.

The amount of money involved in non-cash payments, including commercial

papers and bank cards, was about 157.3 trillion yuan (22.97 trillion U.S.

dollars) in the third quarter, down 8.3 percent year on year, according to the

People's Bank of China.

The first-ever fall was a proof of a less active economy, as the country

saw its third quarter growth slow to 9 percent, the slowest pace in five years.

The central bank said the biggest drop, without giving the exact number,

was reported with the use of commercial papers, which are more often used by

small and medium-sized enterprises.

Transactions made with bank cards continued to rise, with the amount of

money involved up 4.1 percent in the third quarter from the same period last

year. But the growth rate was 58.8 percentage points lower than last year's

figure.

The use of bank cards, instead of cash, continued to be more popular among

consumers. The report said transactions using bank cards, excluding large

commodities like real estate and wholesale purchases, took up 25.7 percent of

the country's total retail sales in the third quarter. The figure was 1.8

percentage points higher than in the second quarter.

The average spending on each bank card was 592 yuan in the third quarter,

up 0.7 percent than in the second quarter, and spending for each transaction was

1,435 yuan, down 8.7 percent than in the second quarter, according to the

report.

Tuesday's report also said the use of credit cards continued to spread

quickly despite a slowdown in economic growth. As of the end of the third

quarter, more than 130 million credit cards had been issued, representing a

year-on-year increase of more than 70 percent.

In the meantime, outstanding credit on these cards reached 891 billion

yuan, up 70.9 percent year on year, and the credit figure was 3.5 times that of

the end of third quarter in 2006.

Hong Kong stocks finish higher at midday

HONG KONG, Dec. 30 (Chinese media) -- Hong Kong's benchmark Hang Seng Index went

up 156.79 points, or 1.09 percent, to finish Tuesday's morning session at

14,485.27.

Iraq to announce 10 oil fields in 2nd bidding round for oil, gas contracts

BAGHDAD, Dec. 30 (Chinese media) -- Iraqi Oil Minister Hussein al-Shahristani said Tuesday that his ministry will offer ten oil fields to be developed by international companies in its second licensing round on Wednesday.

In an interview aired Tuesday with the state-run television of Iraqia, al-Shahristani did not name the ten oil fields due to be announced in the second round of licensing, but said that they would include the southern field of Majnoon and West Qurna Phase 2.

Shahristani will hold a press conference in the ministry building before noon on Dec. 31 to announce the petroleum fields that his ministry intends to develop in cooperation with the pre-qualified international oil companies.

In April, the Iraqi Oil Ministry said that only 35 companies and consortia out of 120 applicants were qualified to criteria put by the ministry to bid on its contracts.

Iraq offered six oil and two gas fields in the first licensing round.

Iraq oil reserve is reportedly to be the world's third-largest, which needs billions of dollars investment to overhaul its oil industry infrastructure and increase oil and gas output after 13 years of sanctions and war.

Libya to reduce oil production by 270,000 barrels a day next year

TUNISIA, Dec. 29 (Chinese media) -- Libya announced on Monday it will cut its daily oil output by 270,000 barrels as of Jan. 1, 2009 in response to an output-cutting decision adopted by the Organization of Petroleum Exporting Countries (OPEC).

The size of Libya's cut is larger than the OPEC demand, Shokri Ghanem, chairman of Libya's National Oil Corporation, was quoted as saying by news reports reaching here from Tripoli.

The OPEC decided at a meeting on Dec. 17 it will cut production by 2.2 million barrels per day starting next month, in order to shore up prices.

It was reported that the Abu Dhabi National Oil Company, the United Arab Emirates main producer, will also cut back its output starting in February next year.

The decision by Libya and the UAE caused the price of oil to rally on Dec. 29, in both New York and London to close above the level of 40 U.S. dollars per barrel.

S Korea to freeze foreigners' employment permit

SEOUL, Dec. 30 (Chinese media) -- The South Korean government announced Tuesday to

temporarily halt issuing employment permits to foreign nationals hoping to work

in the country as the recent number of newly employed foreigners exceeded a set

quota.

The freeze in permits will be in effect until February 2009, as the number

of foreign workers employed here from March has reached the set quota of 72,000,

said the Ministry of Labor.

The ministry said it plans to announce a new quota in February in

consideration of economic slump and a possible decrease of jobs for overseas

workers.

S. Korea's business confidence falls to nearly 11-year low

SEOUL, Dec. 30 (Chinese media) -- South Korea's business confidence index for next month dropped to a nearly 11-year low amid the ongoing global economic crisis, an industry survey showed Tuesday.

According to the Federation of Korean Industries (FKI), the monthly business survey index for

The figure was down from 55 in the previous month and also the lowest level since March 1998, when it posted 48, the FKI said.

"Exports are falling at a faster pace and a credit squeeze continues in the financial sector," the FKI said as the reason for the fall.

The business survey index is an indicator of companies' outlook for the coming month. If the number is below 100 it means that the number of pessimistic companies outnumbers optimists.

Tokyo stocks close higher in final trading session

TOKYO, Dec. 30 (Chinese media) -- Tokyo stocks closed higher Tuesday in the year's final half-day trading session, ending a hardest-hit year in history.

The 225-issue Nikkei Stock Average advanced 112.39 points, or 1.28 percent, from Monday to 8,859.56.

The broader Topix index of

Gainers were led by mining, rubber product and precision machinery issues. Major decliners included insurance, forestry and fishery, and real estate issues.

However, Tokyo stocks plunged more than 40 percent in a year marked by financial turmoil and economic recession.

Compared with the closing levels of last year, the Nikkei shed 42.1 percent from 15,307.78. The broader Topix index of all first-section shares ended the year down 41.77 percent. Both falls are steepest in history.

The Nikkei hit its highest closing level of 2008 -- 14,691.41 --on Jan. 4, the first trading day of the year. However, on the veryday Nikkei lost more than 600 points, or 4 percent, marking the first plunge on the first trading day in seven years.

Japanese stocks accelerated downward trend after the downfall of investment bank Lehman Brothers and the financial crisis spread outside the United States.

On Oct. 27, the Nikkei hit 7,162.90 -- its lowest closing level in 26 years.

Tokyo stocks close higher in final trading session

TOKYO, Dec. 30 (Chinese media) -- Tokyo stocks closed higher Tuesday in the year's

final half-day trading session.

The 225-issue Nikkei Stock Average advanced 112.39 points, or 1.28 percent,

from Monday to 8,859.56.

The broader Topix index of all First Section issues on the Tokyo Stock

Exchange was up 4.47 points, or 0.52 percent, to 859.24.

However, the Nikkei plunged about 40 percent in a year marked by financial

turmoil and economic recession.

Air New Zealand successfully conducted first biofuel test flight

AUCKLAND, Dec. 30 (Chinese media) -- Air New Zealand's two-hour test flight of a second generation new biofuel was successfully conducted above Auckland on Tuesday.

A Boeing 747-400 took off at 11:30 a.m. local time (2230 GMT Monday) and flied over the wider Hauraki Gulf area, powered by a 50:50 blend of jatropha and Jet A1 fuel.

Jatropha plants produce seeds that contain inedible lipid oil, which is used to produce fuel.

During the flight the crew conducted a number of fuel tests confirming and measuring the performance of the engine and fuel systems at various altitudes and under a variety of operating conditions.

The flight was part of a series of trials taking place at airlines around the world, testing different types of biofuel as a sustainable alternative to the fossil fuel-based Jet-A1 fuel.

Cambodian official: 70% of Soviet-era debt to be forgiven

PHNOM PENH, Dec. 30 (Chinese media) -- A Cambodian lawmaker insisted that most of

the 1.5 billion U.S. dollars of debt that Cambodia borrowed from Russia will be

scratched, although the lender had denied it, national media said on Tuesday.

This cancellation will potentially reduce almost two-thirds of the debt

that the kingdom owed to foreign nations, said English-language daily newspaper

the Phnom Penh Post.

Cheam Yeap, chairman of the Committee of Finance, Banking and Audits of the

National Assembly, on Monday assured other lawmakers that Russia will cut 70

percent of Cambodia's debt.

If not, Cambodia will still be in good shape financially, he said.

"If Russia doesn't eliminate our debt, Cambodia will continue to repay it

and will still be able to ask for additional loans from other countries," he

added.

According to the Ministry of Economy and Finance, Cambodia now owes 2.37

billion U.S. dollars to foreign countries, which is equivalent to 23 percent of

the country's Gross Domestic Product.

Around 63 percent of the debt is owed to Russia due to loans in the 1980s

when the former Soviet Union was a major benefactor to Cambodia.

Tokyo stocks open slightly lower

TOKYO, Dec. 30 (Chinese media) -- Tokyo stocks opened slightly lower Tuesday amid

lackluster New Year trading.

In the first 15 minutes, the benchmark 225-issue Nikkei Stock Average lost

27.79 points, or 0.32 percent, from Monday to 8,719.38.

The broader Topix index of all First Section issues on the Tokyo Stock

Exchange was down 4.23 points, or 0.49 percent, to 850.54. The Second Section

also lost ground.

Japan's stock markets are open only for a half-day session

Tuesday.

Air New Zealand conducts biofuel test flight

AUCKLAND, Dec. 30 (Chinese media) -- The world's first commercial aviation test

flight powered by a sustainable second-generation biofuel took place in New

Zealand's largest city of Auckland on Tuesday.

The two-hour test flight took off from Auckland airport at 11:30 a.m. local

time Tuesday (2230 GMT), with the jatropha biofuel blend powering one of the Air

New Zealand Boeing 747-400's Rolls-Royce RB211 engines.

Expert:Asia in best position to absorb shocks of financial crisis

LONDON, Dec. 29 (Chinese media) -- Among the emerging markets, Asia is in the best position to absorb the shocks of the recent financial crisis, said Gerard Lyons, chief economist of Standard Chartered in his recent analysis report.

There are big differences between the advanced economies and some of the emerging countries, particularly in Asia and the Middle East, Lyons said. He noted there are many structural problems in the West, such as the overhang of debt, which suggests the recession may not be followed by an early or strong rebound.

In contrast, in many emerging countries, savings are higher and domestic imbalances are not seen, suggesting that the downturn maybe more cyclical in nature in emerging economies than in the West. In that case, 2010 is likely to be a recovery year, he said.

It is always the case that a US downturn would impact Asia directly through slower exports and indirectly through equity markets and weaker confidence, said Lyons. But Asia, including Korea and Indonesia, should have sufficient policy tools and resources to cope. he said.

However, it is important not to be complacent about the outlook for emerging markets, he said, adding that policy makers across the emerging world should not fall into the trap seen in the advanced economies over the past year or so, where many early warning signs of impending problems were ignored.

He said Asia experienced its own financial crisis a decade ago, and since then, many countries across the region have ensured more policy ammunition to cope with shocks. "We are seeing their shock absorbers being tested to the full," he said.

On global economic gloom, Lyons said "it may be premature to suggest we are past the worst in the financial crisis, but it does seem that way."

"Whilst we may be past the worst, the financial sector, certainly in the West, is in a fragile situation. And to say we may be past the worst does not mean we are about to recover. It could take years to work through the problems of various derivative markets," he said, adding that 2009 will be a tough year for the advanced economies, notwithstanding all the stimulus measures.

S Korean weapons exports exceeds $1 bln in 2008

SEOUL, Dec. 29 (Chinese media) -- South Korea sold more than 1 billion U.S. dollars worth of weapons and defense articles to foreign countries in 2008, the country's Defense Acquisition Program Administration (DAPA) said Monday.

It is the first time that South Korea exported more than 1 billion U.S. dollars worth of weapons abroad since it began overseas sales in 1975, the DAPA said.

"Through its continued efforts, the administration was able to increase the amount of the country's defense exports to some 844 million U.S. dollars in 2007, up from an annual average of 250 million U.S. dollars in previous years, and finally reaching the 1billion-U.S. dollar mark this year for the first time in history," the DAPA said in a press release.

It is especially meaningful as it comes amid a worldwide economic downturn, a DAPA official said.

"We became the world's 17th largest defense exporter last year when we exported nearly 850 million worth of defense goods. We won't know how we did this year until later but I believe we have moved up at least a couple of notches," Col. Lee Hyun-soo, director of DAPA's export support division, was quoted as saying.

S Korea's facility investment predicted to decline next year

Special Report:Global Financial Crisis

SEOUL, Dec. 29 (Chinese media) -- South Korea's facility investment is expected to

decline next year for the second straight year as a global economic slump has

begun to spill over into the real economy, the central bank said Monday.

According to the Bank of Korea (BOK), the country's facility investment is

projected to decline 3.8 percent next year, even lower than 0.2 percent fall

estimated for this year. In the fourth quarter of 2008, South Korea's facility

investment is estimated to have declined 7.2 percent from a year ago, compared

with a 4.7 percent gain three months earlier, the BOK added.

If the projection is correct, it would be the first time that facility

investment has contracted for the second straight year since the 1997-98 Asian

financial crisis. In 1997 and 1998, facility investment dropped 9.6 percent and

42.3 percent, respectively compared to a year earlier, the central bank said.

The data comes as the South Korean economy expanded 0.5 percent in the

third quarter from the previous quarter, posting the weakest growth in four

years.

S Korean gov't approves $2.1 bln projects on road construction

Special Report:Global Financial Crisis

SEOUL, Dec. 29 (Chinese media) -- The South Korean

government said Monday that it has approved road-construction projects valued

2.7 trillion won (2.1 billion U.S. dollars) over the next five years in a bid to

bolster slumping domestic demand.

The investment will be used to construct three

separate roads, whose combined length will be 130.3 km, by 2014, the Ministry of

Strategy and Finance said.

The projects will also involve private investment and

are intended to bolster the nation's rapidly declining domestic demand, it said.

Civilian participation will be made through a

build-transfer-operate method, under which private builders construct public

facilities at their own expense and operate them for profit, with ownership

transferred to the government after a given period, the ministry said.

Philippine financial markets closed for week-long holiday break

MANILA, Dec. 29 (Chinese media) -- Philippine stock and foreign exchange markets

are closed for the entire week for the combined public holidays for the

Christmas and the New Year.

Normal trading will resume on Jan. 5, 2009.

Australian dollar ends higher

CANBERRA, Dec. 29 (Chinese media) -- The Australian dollar ended higher on Monday, with the Australian dollar trading at 68.66 U.S. cents, up from Wednesday's close of 67.83 cents.

During the day, the Australian dollar moved between 68.37 U.S. cents and 68.88 cents.

The Australian dollar closed the session at 62.15 Japanese yen, up from Wednesday's close of 61.30 yen and at 48.45 euro cents, down from 48.56 cents.

Seoul stock market close lower

SEOUL, Dec. 29 (Chinese media) -- South Korean stocks ended lower on Monday.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 0.27 points or

0.02 percent to 1,117.59.

The volume was moderate at 308.5 million shares worth 2.58 trillion won

(2.04 billion U.S. dollars).

The local currency finished at 1,263 won to the U.S. dollar, up 36 won from

Friday's close.

New Zealand share market closes higher

WELLINGTON, Dec. 29 (Chinese media) -- The New Zealand stock market closed higher on Monday with the benchmark NZSX-50 up 9.58 points at 2,677.64, and a turnover of 27.6 million NZ dollars (15.9 million U.S. dollars).

Top stock Telecom was up two cen

Indian stock market opens slightly down

MUMBAI, Dec. 29 (Chinese media) -- Indian shares opened lower on Monday, with the

key index Sensex down 0.10 percent shortly after opening.

Sensex lost 10.06 points, or 0.11 percent, to 9,318.86.

Sensex is the common name for the Bombay Stock Exchange Sensitive Index. It

consists of the 30 largest and most actively traded stocks, representative of

various sectors, on the Bombay Stock Exchange. The base year of Sensex is

1978-79 and the base value is 100.

Vietnam targets to export 4.8 mln tons of rice in 2009

HANOI, Dec. 29 (Chinese media) -- Vietnam made the target to export 4.8 million

tons of rice in 2009, exceeding the estimated 4.5 million tons in 2008, the

local newspaper Industry and Trade reported Monday.

The export is expected to go up next year because the global economic

crisis may drive some people into starvation and to rely on rice instead of

fruit, vegetables and meat, according to Vietnam's Ministry of Industry and

Trade.

The estimate is also based on increasing demands from potential foreign

importers. African countries, especially Nigeria and South Africa, have

expressed interest in importing Vietnam's rice in coming years, said the

ministry.

Despite the estimated increase in volume, the prices for Vietnam's rice

exports in 2009 are forecast to decrease, causing the shrink in export revenue,

according the ministry.

To achieve the target, Vietnam's Finance Ministry has recently approved the

elimination of the export tax for rice as part of the government's effort to

boost the country's rice export.

Nikkei down 0.8% in morning trading

TOKYO, Dec. 29 (Chinese media) -- Tokyo stocks edged down Monday morning with the key Nikkei index dipping 0.8 percent.

The benchmark Nikkei 225 Average fell 69.58 points to 8,669.94.

The broader Topix index slid 2.27 points to 844.31.

New Zealand fuel prices lowered

WELLINGTON, Dec. 29 (Chinese media) -- Three petrol companies in New Zealand dropped their retail fuel prices on Monday, less than 24 hours after the government urged cuts.

BP, Caltex and Shell lowered petrol and diesel prices by 4 cents per liter on Monday: 91 petrol is now 1.35 NZ dollars (78 U.S. cents) per liter at most outlets and 95 octane is 1.40 NZ dollars per liter. Diesel is 1.07 NZ dollars per liter.

New Zealand Energy Minister Gerry Brownlee on Sunday expressed concern that domestic fuel prices had not fallen further because of falling crude oil prices and a strengthening New Zealand dollar.

Shell was the first to move. The companies said they were responding to falling prices for refined petrol.

Brownlee said he was pleased with the move and he hoped there is room for more.

Dollar at upper 90 yen in Tokyo

TOKYO, Dec. 29 (Chinese media) -- The U.S. dollar stood at the upper 90 yen level early Monday in Tokyo.

The dollar was quoted at 90.61-66 yen at 9 a.m., compared with 90.76-86 yen in New York and 90.50-53 yen in Tokyo at 5 p.m. Friday.

The euro traded at 1.4103-4108 dollars and 127.84-89 yen, against 1.4025-4035 dollars and 127.25-35 yen in New York and 1.4058-4061 dollars and 127.25-29 yen.

Bangladesh to import 1.5 mln tons refined petroleum from Malaysia

DHAKA, Dec. 28 (Chinese media) -- The Bangladeshi government Sunday approved a proposal for import of some 1.5 million tons of refined petroleum from Malaysia, private news agency UNB reported.

Under the proposal of the country's Energy Ministry, the state-owned Bangladesh Petroleum Corporation (BPC) will make the bulk import of petroleum from Petco, a sister concern of the Malaysian state-owned Petronus Corporation, under a state-to-state deal.

Of the total fuels, 1.2 million tons are diesel while 150,000 tons jet fuel and another amount of 150,000 tons kerosene, the report said.

The premium was fixed at 5.98 U.S. dollars for a barrel of diesel and 6.60 U.S. dollars for each barrel of jet fuel and kerosene.

It will cost about 48.97 billion taka (about 699.6 million U.S. dollars).

The total petroleum fuels will be imported between March and December next year.

U.S. stocks fall amid Middle East tension

NEW YORK, Dec. 29 (Chinese media) -- Wall Street fell on Monday as the Middle East tension weighs on the market. A rebound in oil price and cancellation of a Dow Chemical joint venture helped end U.S. stocks' two-day rally.

Crude oil price rose back above 40 U.S. dollars a barrel on the New York Mercantile Exchange as the investors worry that the military tension in the Gaza Strip would disrupt the oil supply of the area. Energy shares were among top gainers Monday.

Kuwait's government scrapped its 17.4 billion K-Dow Petrochemicals joint venture with Dow Chemical Co., which was set to begin Thursday. Investors worried that the cancellation will affect Dow Chemical's takeover offer for Rohm Haas. Dow Chemical had proposed 15.3 billion dollars to acquire Rohm Haas. Both Dow Chemical and Rohm Haas shares tumbled nearly 20 percent.

SL Green Realty also weighed on the market, after New York's biggest office landlord cut its dividend by more than half.

The Dow Jones fell 31.62 to 8,483.93. Broader indexes also lost ground. The Standard Poor's 500 index dipped 3.38 to 869.42; and the Nasdaq shed 19.92 to 1,510.32.

Crude prices rise on Middle East tension

NEW YORK, Dec. 29 (Chinese media) -- Crude prices rose above

40 U.S. dollars a barrel Monday on the Middle East tension.

Israel launched massive air raids against the

Hamas-ruled Gaza Strip as Hamas shelled Israeli territory after a six-month

cease-fire between Israel and Gaza militants. The death toll has risen to 345

and more than 1,600 were wounded in the ongoing airstrikes. The tension in the

Middle East raised concern that supply maybe disrupted.

Oil prices were also supported as the U.S. dollar

lost more than 2 percent against the euro.

Light, sweet crude for February delivery rose 2.31

dollars to settle at 40.02 a barrel on the New York Mercantile Exchange.

Discount not enough to revive online retail sales: report

WASHINGTON, Dec. 29 (Chinese media) -- Online sales held up better than the rest of the retail market during the dismal holiday period, but the season is still likely to go down as one of the worst on record for the traditionally booming e-commerce sector, The Wall Street Journal reported Monday.

While online spending was down just 2 percent from Nov. 1 through Christmas Eve compared with a drop of 5.5 percent to 8 percent for retail as a whole, e-commerce strength wasn't widespread.

Instead, it was clustered around several big-name Web sites such as Amazon.com Inc., Apple Inc. and Wal-Mart Stores Inc.. Online sales were also fueled by discounts that aren't likely to continue.

Overall, in a sector where sales have historically increased 20percent annually, this is the first holiday season where online sales haven't grown. E-commerce sales were "not amazing by any stretch," says John Aiken, managing director and head of equity research for Majestic Research.

According to the report, those that played the discount and promotions game won big during the season. Amazon.com, for one, on Friday said sales for the holiday season were its "best ever" due in part to promotions.

The tactic helped boost the number of visitors to the site between early November and mid-December by 6 percent.

"We were heads-down focused on providing customers low prices this year," says Graig Berman, a spokesman for Amazon.

He declined to comment on how much sales grew or whether there was a corresponding jump in profit pending the Seattle company's quarterly earnings in January.

London FTSE-100 share index gains 100.72 points

LONDON, Dec. 29 (Chinese media) -- The FTSE-100 index of the London stock market rose 100.72 points, or 2.38 percent, at 4317.31 at midday on Monday.

Anglo American led the rising trend, winning 6.83 percent, and Royal Bank of Scotland Group was the second winner, gaining 6.79 percent.

Mining giant Rio Tinto ranked as the fifth winner with a 5.82-percent gain.

Liberty International, a London-based commercial properties firm, topped the losers, shedding off 5.75 percent.

Minimum wage removal calls louder as Britain's unemployment rises

Special Report:Global Financial Crisis

LONDON, Dec. 29 (Chinese media) -- Britain suffers the worst year for employment in 20 years as pressures rising for a halt to the annual rises in the national minimum wage to help businesses to cope with the downturn.

The recession will claim 600,000 jobs next year, making 2009 the worst year for job losses in two decades, with the overall joblosses from the recession are expected to top 1 million, while the total jobless to 3 million in 2010, according to employers' groups on Monday.

Meanwhile, the British Chambers of Commerce (BCC) is calling for a freeze in the level of the minimum wage, saying that business cannot afford any more costs.

A survey by the Chartered Institute of Personnel and Development (CIPD) found that pay expectations among employees had slumped, with many fearing pay freezes and a minority expecting pay cuts.

On the expected contraction in pay awards, the CIPD said that employers would have to find other ways to motivate employees, including nonfinancial rewards.

London stock market opens higher after Xmas break

LONDON, Dec. 29 (Chinese media) --The London stock market make a encouraging rise in early Monday trading as the market reopened after the Christmas break.

The FTSE 100 index of leading London shares added 2.4 percent, 102.6 points to 4,319.1 with oil firms climbing on analyst forecasts that prices would rise.

Mining groups led the climbers, with Rio Tinto up 6 percent, Anglo American adding 5.5 percent with Kazakhyms and BHP Billiton both putting on more than 4.5 percent.

Insurers Standard Life and Friends Provident slipped back.

Ford official: Turkey's automotive sector to shrink by 35%

Special Report:Global Financial Crisis

ANKARA, Dec. 29 (Chinese media) -- A Ford Otosan official warns that Turkish automotive market would shrink by 35 percent in 2009 due to the negative effects of the ongoing global financial crisis, local newspaper Today's Zaman reported on Monday.

Ford Otosan executive board member Ali Ihsan Ilkbahar was quoted as saying that the European automotive market recently shrank by 35 percent and that the Turkish automotive sector would also experience a similar fate.

"Turkish automotive exports have been declining with every passing day," said Ilkbahar, adding that declining demand in both domestic and foreign markets would result in a regression of two years in terms of growth.

Automotive manufacturers in Turkey would have to cut production and that in 2009 production could decrease to 800,000 annually from the current 1.3 million, foresaw by Ilkbahar, adding that the sector would become the same size it was two years ago.

The automotive sector is currently the key element of Turkey's economy, with 23.6 billion U.S. dollars in exports in the first 11months of 2008. However, it is inevitable that this sector will also be hit by the destructive waves of the storm, said the report.

"The Turkish automotive sector sells 80 percent of its production to foreign countries, meaning that it is almost entirely integrated with global markets. Thus, any problem in global markets will directly affect the sector," Ilkbahar noted, emphasizing that the faster global markets recover, the more easily the sector will weather the storm.

Meanwhile, he predicted that global markets would recover only after the third quarter of 2009 and that it would take at least two years for a total recovery worldwide.

Hong Kong stocks open 1% higher

HONG KONG, Dec. 30 (Chinese media) -- Hong Kong' benchmark Hang Seng Index rose

148.26 points, or 1.03 percent, to open at 14,476.74 on Tuesday.

Chinese equities open flat on Tuesday

BEIJING, Dec. 30 (Chinese media) -- Chinese shares open flat on Tuesday. The

benchmark Shanghai Composite Index, which covers both A and B shares, gained

0.08 percent, or 1.43 points, to 1,851.91 at the opening.

The smaller Shenzhen index was down 0.35 percent, or 23.32 points, to open

at 6,629.88 points.

Hong Kong's mortgage loans fall sharply in November

HONG KONG, Dec. 29 (Chinese media) -- Hong Kong's housing market took a harsh hit in November from the economic downturn with its new residential mortgage lending drawn down in November plunging 28.4 percent to 8.1 billion HK dollars (1.05 billion U.S. dollars), revealed the Monetary Authority's latest monthly survey.

New mortgage approvals were also down by 37.9 percent year on year to 8.5 billion HK dollars (1.1 billion U.S. dollars), according to the Monetary Authority, Hong Kong's de facto central bank.

Approvals for primary market transactions fell by 400 million HK dollars (51.67 million U.S. dollars), or 24.7 percent, from the same month in 2007.

Approvals for secondary market transactions dropped 37.4 percent, or 3.5 billion HK dollars (452 million U.S. dollars) while the approvals for refinancing loans plunged 49.1 percent, or1.3 billion HK dollars (168 million U.S. dollars).

The proportion of new loans approved at more than 2.5 percent below the best lending rate fell to 15 percent from 51.7 percent in October. The outstanding value of mortgage loans remained little changed at 600 billion HK dollars (77.5 billion U.S. dollars).

The mortgage delinquency ratio remained unchanged at 0.05 percent and the rescheduled loan ratio remained at 0.13 percent. The combined ratio remained at a record low of 0.18 percent.

Hong Kong stocks close higher on bargain hunting

HONG KONG, Dec. 29 (Chinese media) -- Hong Kong stocks went up 144.34 points, or 1.02 percent, to close at 14,328.48 on Monday, on bargain hunting after four consecutive days of losses.

Turnover was thin at 21.95 billion HK dollars (2.8 billion U.S. dollars), the lowest level for a full day's trading in 2008 and also the lowest point since August 2006. It was slightly higher than turnover of 18.34 billion HK dollars during Wednesday's half-day trading last week.

Analysts said they don't see the rebound lasting on expectations of disappointing corporate results to be issued in the first quarter and uncertainties in the U.S. economy.

"This year, fund managers haven't been window dressing, which traditionally boosts the Hang Seng Index at year-end, because most investors have redeemed their portfolios," said Adam Tam, portfolio manager at Pacific Sun Investment Management.

Tam said many institutional investors had lost a large part of their wealth in the last few months. "Most of them don't have the funds or the confidence to re-enter the market in the near term." Tam said he expects turnover on the local bourse to remain low in the first quarter as investors will remain reluctant to invest.

China Mobile rose 3.2 percent to 76.90 HK dollars on bargain hunting after a 12 percent decline in the previous five sessions on slowing subscriber additions.

Oil companies rose on intensifying fighting in the Gaza Strip, which was pounded by Israeli warplanes for a third straight day. Upstream oil company Cnooc rose 3.9 percent to 6.90 HK dollars and PetroChina gained 3.1 percent to 6.56 HK dollars.

Conglomerate Citic Pacific was the best-performing blue chip. It rose 7.4 percent to 8.27 HK dollars on hopes of greater synergies with its parent, which aims to reduce overlaps with Citic Pacific's operations.

China Life Insurance gained 1.8 percent to 23.15 HK dollars, after an 11 percent drop in the previous four sessions. (One U.S. dollar = 7.7742)

Chinese shares close 0.06% down, led by heavyweights

Special Report:Global Financial Crisis
BEIJING, Dec. 29 (Chinese media) -- Chinese shares continued to lose ground on Monday led by heavyweights, losing 0.06 percent.

The benchmark Shanghai Composite Index shed 0.06 percent or 1.04 points to 1,850.48. The Shenzhen Component Index fell 0.76 percent or 51.05 points to 6,653.20.

Combined turnover was 57.2 billion yuan ( 8.2 billion U.S. dollars), roughly the same with that in previous trading day.

Chinese share down more than 1% at midday

BEIJING, Dec. 29 (Chinese media) -- Weak sentiment continued to loom over the

Chinese market and drove equity prices lower on Monday following a record weekly

loss of 8.27 percent last week.

The benchmark Shanghai Composite Index lost 20.55 points, or 1.11 percent,

to 1,830.97 points in the morning session, led by heavyweights.

PetroChina, the country's leading oil producer, retreated 1.37 percent to

10.05 yuan. China Vanke, the country's largest real estate developer, tumbled

2.76 percent to 6.35 yuan.

Shenzhen Component Index on the smaller Shenzhen Stock Exchange slid 149.81

points, or 2.23 percent to 6,554.44.

Combined turnover was 30.4 (4.44 billion U.S. dollars), slightly higher

than 28.26 billion yuan in the morning session of the previous trading day.

Most stocks went down in the morning trade. Losses outnumbered gains by 643

to 183 in Shanghai, and more drastically by 640 to 89 in

Shenzhen.

Wall Street opens higher on GM rally

Special Report:Global Financial Crisis

NEW YORK, Dec. 26 (Chinese media) -- Wall Street opened modestly higher Friday, as struggling General Motors rallied after its financial arm GMAC was allowed to convert into a bank.

The Federal Reserve allowed GMAC Financial Services to become a bank holding company on Dec. 24 and thus qualify for the U.S. government's 700-billion-U.S. dollar rescue plan.

The market was also boosted by Amazon.com Inc. after the company sold 6.3 million items on Dec. 15, the busiest day of what the world's largest Internet retailer said was its best holiday shopping season.

The Dow Jones rose 40.06 points to 8,508.54. Broader indexes also moved higher. The Standard Poor's 500 index rose 4.85 points to 873.00, and the Nasdaq climbed 4.16 points to 1,529.06.

China's first nuclear power plant's expansion starts concrete pouring

HANGZHOU, Dec.26 (Chinese media) -- Workers Friday began pouring the foundation for one of two new generating units planned as an addition to the first phase of the Qinshan nuclear power plant in Fangjiashan, Haiyan, on the northern coast of Hangzhou Bay, Zhejiang Province.

The nuclear power plant, not far from Shanghai, is the first Chinese facility of its kind.

Each of the two pressurized reactors to be installed will have an installed capacity of 1 million kilowatts.

The two generating units will be operational by 2013 and 2014.

The State Nuclear Safety Bureau, an affiliate of the Ministry of Environmental Protection, also presented a construction permit for a civilian nuclear facility to China National Nuclear Corp, Friday.

The first phase of Qinshan Nuclear Power Plant was the first nuclear power plant on the Chinese mainland built by domestic engineers. Construction of the plant began in 1985. It was built with a 300,000 kilowatt prototype reactor with a lifespan of 30 years It started generating power in 1991.

The plant also has second and third phases.

Chinese engineers have installed two generating units in the second phase and plan to add at least two more.

The third phase houses two Canadian CANDU heavy-water reactors.

According to the country's long and mid-term development plan of nuclear power plants, China's nuclear power installed capacity will reach 40 million kw by 2020 and will generate 260-280 billion kwh electricity each year, accounting for four percent and six percent of the country's total.

China has nuclear power stations with 11 generating sets and an installed capacity of nine million KW. These generating units are with three phases of Qinshan, and Daya Bay, Lingao, both in Guangdong province, as well as Tianwan in Lianyungang, east China's Jiangsu Province.

China's state reserve agency stockpile to buoy aluminum sector

BEIJING, Dec. 26 (Chinese media) -- China's State Reserve Bureau (SRB) will buy 300,000 tonnes of aluminum at 12,300 yuan (about 1,750 U.S. dollars) per tonne next month to push up prices and support producers, Friday's Shanghai Securities News reported.

The price represents a 10-percent premium on current market levels.

The SRB will buy about half of the total from Aluminum Corporation of China (Chalco), a listed arm of state-owned metals firm Chinalco. The rest will come from seven other smelters, sources told the newspaper.

Several sources said officials were still discussing further purchases, which could total 1 million tonnes.

The SRB maintains stockpiles of key raw materials.

This is the government's first move in the current market crisis to prop up the ailing nonferrous metals industry. Slumping prices and weak demand, due to the global economic crisis and China's own slowdown, have forced smelters to slow production and cut jobs.

On Wednesday, Zhang Ping, minister in charge of the National Development and Reform Commission (NDRC), delivered an economic report to the Standing Committee of the National People's Congress, the top legislature.

Zhang said that the central government will take immediate measures to support nine industries, including the nonferrous metals sector.

Governments at all levels immediately announced policies to aid the smelting sector, including relaxed export controls, stockpiling metals, offering electricity subsidies and raising loan ceilings.

The southwestern province of Yunnan said it would buy 1 million tonnes of nonferrous metals from local smelters and neighboring Sichuan Province said it would cut electricity prices for smelters.

IMMEDIATE IMPACT ON PRICE, CONFIDENCE

These measures have had an immediate impact on the market, with Shanghai aluminum futures up 0.5 percent to a three-week high.

Analysts said the metals industry in general is regaining confidence as a result of the purchase plan, as well as increased demand for steel by promoting infrastructure construction.

"Although the market trend won't soon reverse, these procurement plans do help companies tide over the crisis," said Heng Kun, an analyst at Essence Securities.

Company inventories of aluminum are estimated at about 1 million to 1.5 million tonnes, industry sources said.

Zhang of the NDRC said procurement and reserves are "key measures" of the State Council, or Cabinet, to boost market confidence.

According to the National Bureau of Statistics (NBS), the profits of the non-ferrous metal and processing industry fell 34.1percent year-on-year and those of the iron and steel industry by 13.7 percent during the first 11 months of 2008.

On Thursday, the same day as the NBS announced the profit slump and the SRB announced the procurement plan, Bao Steel Group, China's top steel maker, raised its February steel prices by 100 yuan/tonne to 300 yuan/tonne.

That was Baosteel's fifth price adjustment since August but only the first raise in that period.

In November, China decided to launch a 4 trillion yuan stimulus plan to boost domestic demand over the next two years.

Combined with another 3 trillion yuan for railway construction and post-quake reconstruction, the investments are expected to increase steel demand by 200 million tonnes.

On Tuesday, two days before the price hike, Baosteel's board director Xu Lejiang said despite the many stimulus measures, the industry won't experience a full recovery in the short run.

Wu Wenzhang, general manager of Steelhome.com, an industry website, said steel prices would return to a profitable level in the second quarter next year.

Chinese mainland's CNOOC signs oil agreements with Taiwan's CPC Corp.

BEIJING, Dec. 26 (Chinese media) -- China National Offshore Oil Corp. (CNOOC), mainland's largest offshore explorer, signed four cooperation agreements with Taiwan's CPC Corp Friday.

The four cooperation agreements were signed by CNOOC's Chairman and CEO Fu Chengyu and CPC's Chairman Wenent Pan, who was visiting Beijing.

The agreements included a letter of intent for closer cooperation, a revised contract on joint exploration in the Tainan Basin of the Taiwan Strait and the Chaozhou Shantou Basin off mainland's Guangdong coast, joint study on the Wuqiuyu Basin off mainland Fujian coast, and transfer of a 30 percent stake of CNOOC's onshore Block 9 in Kenya to CPC.

Fu Chengyu said CNOOC has established good cooperation with CPC Corp. in 1994 when the two companies started cooperation.

CPC Corp., based in Taipei, is a fully integrated oil and gas company with about 15,000 employees.

Mainland, Taiwan hold economic,

cultural forum

The 4th Cross-Straits Economic, Trade

and Cultural Forum between the Chinese mainland and southeast China's

Taiwan begins in Shanghai, east China, Dec. 20, 2008. (Chinese media

Photo)
Photo

Gallery

SHANGHAI, Dec. 20 (Chinese media) -- The 4th Cross-Straits

Economic, Trade and Cultural Forum between the Chinese mainland and Taiwan began

here Saturday morning.

Jia Qinglin, member of the Standing Committee of the

Communist Party of China (CPC) Central Committee Political Bureau, and

Kuomintang (KMT) Chairman Wu Poh-hsiung and Honorary Chairman Lien Chan

attended. Full story

Chinese mainland, Taiwan start direct

links after 59 years

Passengers from southeast China's Taiwan

gesture before boarding the plane at the airport in Shenzhen, south

China's Guangdong Province, Dec. 15, 2008. A Shenzhen Airlines flight took

off from the Shenzhen Airport for Taiwan at 7:20 Beijing Time (2320 GMT

Dec. 14), the first when the Chinese mainland and Taiwan started direct

air and sea transport and postal services Monday morning. (Chinese media

Photo)
Photo

Gallery

BEIJING, Dec. 15 (Chinese media) -- The Chinese mainland and

Taiwan started direct air and sea transport and postal services on Monday amid

warming ties, ending a 59-year ban on such links.

Formerly, air and sea movements -- including mail -- had

to go by way of a third place.

The direct daily transport started as a mainland-based

Shenzhen Airlines flight took off from the Shenzhen Airport for Taipei at 7:20

a.m.(2320 GMT Sunday), which was followed by a Taiwan-based TransAsia Airways

jetliner from Taipei to Shanghai. Full story

Chinese mainland, Taiwan start direct

postal service

TAIPEI, Dec. 15 (Chinese media) -- Wu Min-yu, chairman of the

Taiwan-based Chunghwa Post Co. Ltd., sent out a letter to Liu Andong, president

of the Chinese mainland's China Post Corporation, on 9:17 a.m. (1:17 GMT),

marking the start of direct postal service between the two sides. Full story

China's industrial profits up 4.9% in first 11 months

BEIJING, Dec. 26 (Chinese media) -- China's major industrial firms reported 2.4066 trillion yuan (353.9 billion U.S. dollars) in profits in the first 11 months of this year, up 4.9 percent from the same period last year, the National Bureau of Statistics (NBS)said on Friday.

The growth was 31.8 percentage points lower than the same period of last year, or down 14.5 percentage points from the first eight months of this year.

Major industrial enterprises are defined as those with more than 5 million yuan in annual revenues from their main business.

Among them, the NBS said, state-owned industrial companies had combined profits down 14.5 percent to 798.5 billion yuan.

Oil and natural gas mining sector saw an increase of 37.2 percent in profits, while the coal sector reported a jump of 133.7 percent, followed by the building material sector with a growth of 27.7 percent in profits.

The power sector's profits fell 84.1 percent year-on-year, followed by chemical fiber sector with a drop of 74.9 percent, and non-ferrous metal and processing industry, which reported a drop of 34.1 percent in profits. The iron and steel sector recorded a decrease of 13.7 percent.

The oil refineries and coking plants reported a net loss of 126 billion yuan, as against a profit of 24.5 billion yuan in the same period of last year.

The NBS also said profits for privately-owned industrial firms were up 36.6 percent to 549.5 billion yuan, and foreign-funded companies down 3.1 percent to 637.4 billion yuan.

Cao Jianhai, research fellow with the Institute of Industrial Economy of the Chinese Academy of Social Sciences, attributed the unsatisfactory profit figures to substantially shrinking demand from abroad and sluggish needs at home.

Reduced demands have resulted in noticeable reduction in industrial sales, he said.

Ebbing profitability would discourage further corporate investment in the coming year, he added.

The Government should enhance support to industrial enterprises through tax cuts and other instruments, so as to lower corporate production costs, stabilize exports and expand domestic demand, Cao suggested.

China November consumer inflation eases to

2.4%

BEIJING, Dec. 11 (Chinese media) -- China's consumer price index

(CPI), the main gauge of inflation, rose at a slowing annual rate of 2.4 percent

in November, the National Bureau of Statistics (NBS) said here on Thursday. Full story

Rises in the CPI have now slowed for seven straight months

because of a sharp fall in world commodity prices and sluggish demand amid the

global financial crisis.

China GDP grew 9.9% in 1st three

quarters

BEIJING, Dec. 24

(Chinese media) -- A senior cabinet member supervising the national economy said here

on Wednesday that China's economy grew 9.9 percent in the first three quarters

of this year.

Zhang Ping, minister in charge of the National Development

and Reform Commission (NDRC), reported the implementation of the 11th Five-Year

Plan (2006-2010) on national economic and social development to the Standing

Committee of the National People's Congress (NPC). Full story

China's industrial output growth falls

to 5.4% in November

BEIJING,

Dec. 15 (Chinese media) -- China's industrial output rose 5.4 percent year on year in

November, 2.8 percentage points lower than October, the National Bureau of

Statistics (NBS) said on Monday.

The pace of growth, which decelerated for a fifth straight

month, was the lowest since January in 2001, when many factories shut down or

cut production for the traditional Spring Festival, according to statistics on

the NBS website. It was 11.9 percentage points lower than a year earlier. Full story

Official: China's industrial sector to

weaken further amid global downturn



BEIJING, Dec. 12 (Chinese media) -- China's industrial

sector will continue to suffer from the flagging world economy and the

technology sector and small businesses will require more support, a Chinese

minister said Friday.

"We estimate that the industrial sector has not bottomed

out yet," said Minister of Industry and Information Technology Li Yizhong at a

press conference. "The negative influence would further unfold in December and

in the first quarter of 2009." Full story

Industrial dynamic at core of China's

fight with economic slowdown



BEIJING, Dec. 6 (Chinese media) -- China's infrastructure construction has gone up a

gear after the massive capital input announced by central government at the

beginning of November. But still a number of industries are suffering the domino

effect of the deepening global financial crisis.

Henan Provincial Statistical Bureau chief Liu Yongqi said

that to give the Chinese economy "a boost strong enough", "the government needs

to optimize its investment to facilitate industrial dynamic so as to secure

production and employment." Full story

China PPI up 2% in Nov., lowest since

mid-2006

BEIJING, Dec. 10

(Chinese media) -- China's producer price index (PPI),a measure of inflation at the

factory level, decelerated sharply to an annual rise of 2 percent in November,

the National Bureau of Statistics (NBS) announced on Wednesday, prompting

worries about the fast-slowing economy and rising deflation risks. Full story

China PPI falls to 6.6 % in

October

BEIJING, Nov. 10 (Chinese media) -- China's producer price index

(PPI), rose at a slower annual rate of 6.6 percent in October, the National

Bureau of Statistics (NBS) announced on Monday.

The rise in factory gate prices was down from 9.1

percent in September and the 12-year high of 10.1 percent in August. Full story

China CPI eases to 4% in

October

BEIJING, Nov. 11 (Chinese media) -- China's consumer inflation

rose at a slower annual rate of 4 percent in October, giving the government more

room to ease macroeconomic controls to stimulate the economy.

Rises in consumer price index (CPI), the main gauge

of inflation, slowed for the six straight months. The figure, compared with 4.6

percent in September, 4.9 percent in August, 6.3percent in July, 7.1 percent in

June, and a nearly 12-year-high of8.7 percent in February, was broadly in line

with most forecasts. Full story

China's 4 trillion yuan stimulus to

boost economy, domestic demand

BEIJING, Nov. 9 (Chinese media) -- China said on Sunday it will

loosen credit conditions, cut taxes and embark on a massive infrastructure

spending program in a wide-ranging effort to offset adverse global economic

conditions by boosting domestic demand.

This is a shift long advocated by analysts of the Chinese

economy and by some within the government. It comes amid indications that

economic growth, exports and various industries are slowing. Full story

French investors request gov't disclosure of Madoff foundations

PARIS, Dec. 24 (Chinese media) -- The association of small investors in France on

Wednesday urged the government to disclose the list of foundations connected to

Bernard Madoff's alleged multibillion-dollar Ponzi scheme.

It asked the French Financial Markets Authority (AMF) on Mondayfor details

on the foundations linked to Madoff, the former chairman of the Nasdaq stock

market now accused of fraud.

The AMF declined the request, saying it was not its responsibility to

publicize such information.

The association has turned to the Financial Ministry for help. It said that

many small investors, who feared they may have fallen victim to the Madoff

scheme, have complained about a lack of access to necessary information

concerning their money.

The AMF announced last Wednesday that small investors in France could lose

up to 500 million euros (700 million U.S. dollars) in the Madoff scheme, where

new investors were secretly fleeced to pay returns to earlier investors.

China's foreign debt up 18% from end-2007 at $442 bln

BEIJING, Dec. 26 (Chinese media) -- China's outstanding foreign debt was 441.95 billion U.S. dollars through September, up about 18.3 percent from the end of 2007, the State Administration of Foreign Exchange (SAFE) said on Friday.

The figure excluded Hong Kong, Macao and Taiwan.

Medium- and long-term foreign debt was 161.9 billion U.S. dollars, up 5.45 percent from the end of 2007, accounting for 36.63 percent of the total foreign debt.

Short-term debt was 280 billion U.S. dollars, up 27.24 percent from the end of last year.

SAFE figures showed the country's registered foreign debt had reached 288.15 billion U.S. dollars by the end of September.

Of the total, sovereign debt accounted for nearly 12 percent. Debt owed by Chinese financial institutions was 108.22 billion U.S. dollars, or 37.56 percent of the total. Debt of foreign-invested enterprises was 93.21 billion U.S. dollars, or 32.35 percent.

SAFE said new debt reached 27.38 billion U.S. dollars, including medium- and long-term foreign debt, in the first nine months, up 7.49 percent year-on-year.

China repaid 13.78 billion U.S. dollars of principal on medium-and long-term debt in the first nine months, down 6.62 percent year-on-year.

It also repaid 2.96 billion U.S. dollars in interest on medium-and long-term debt, up 10.88 percent year-on-year.

Chinese shares close 0.05% down with record weekly loss in 11 weeks

BEIJING, Dec. 26 (Chinese media) -- Chinese equities failed

to reverse the slack run of the past four trading days and ended Friday 0.05

percent lower, creating a record weekly loss of 8.27 percent in 11weeks.

The benchmark Shanghai Composite Index shed 0.05 percent to 1,851.52. The Shenzhen Component Index fell 1.19

percent to 6,704.25.

Combined turnover shrank to 57.2 billion yuan (8.2

billion U.S. dollars) from 64.83 billion yuan the previous day.

Losses outnumbered gains by 535 to 287 in Shanghai

while gains outnumbered losses by 361 to 348 in Shenzhen.

Though there was a constant stream of bullish news

such as that the state assets watchdog had required big shareholders of

centrally-administered, state-owned enterprises to increase holdings in their

listed arms, many investors were still on "stand-by", analysts said.

After the week's fall, share prices in Shanghai hit a

new record low since the country announced its 4-trillion-yuan stimulus package

on Nov. 7.

Indices of oil refiners and property developers

dropped 3 percent and 2 percent, respectively. Asia's biggest oil refiner

Sinopec lost 0.56 percent to 7.05 yuan. Vanke, the country's largest real estate

developer, tumbled 2.54 percent to 6.53 yuan.

Boosted by the State Council's moves to reform the

fertilizer industry, fertilizer and pesticide sectors rose sharply. Shandong

Dacheng Pesticide Co. Ltd. rose by the daily limit of 10 percent. Hunan Haili

Chemical Industry Co. Ltd. was up 6.98 percent to 4.14yuan.

Chinese share prices slightly lower at midday

BEIJING, Dec. 26 (Chinese media) -- Though big shareholders of

centrally-administered state-owned enterprises were required to increase

holdings in their listed arms, Chinese equities failed to reverse the slack run

for the past four trading days and ended Friday's morning session slightly

lower.

The benchmark Shanghai Composite Index lost 5.31 points, or 0.29 percent,

to 1,842.47. Shenzhen Component Index on the smaller Shenzhen Stock Exchange

slid 95.94 points, or 1.41 percent to 6,689.10.

Combined turnover was 28.26 (4.13 billion U.S. dollars), down from 30.29

billion yuan in the morning session of the previous trading day.

Gains were dwarfed by losses by 252 to 556 in Shanghai, but the former

outnumbered the latter by 355 to 348 in Shenzhen.

Chinese shares open flat on Friday

BEIJING, Dec. 26 (Chinese media) -- Chinese shares opened flat on Friday, with the

benchmark Shanghai Composite Index, which covers both A and B shares, gaining

0.03 percent, or 0.49 points, to 1,852.91 at the opening.

The smaller Shenzhen index was down 0.65 percent, or 43.8 points, to open

at 6,741.24 points.

Senior official: Renminbi likely to be used as currency for forex reserves

Special Report:Global Financial Crisis

BEIJING, Dec. 25 (Chinese media) -- China's currency, Renminbi, is likely to join

other international currencies to be used for forex reserves by other economies,

according to Wu Xiaoling, former vice governor of the country's central bank and

now the deputy head of the financial and economic committee under the top

legislature.

Wu made the remarks in her article carried by the latest annual issue of

the leading business magazine Caijing.

Wu wrote that China should make preparations in its economic structure and

its financial regime for its currency to be internationalized.

Prior to making the Renminbi, also called yuan, a currency used for forex

reserves by other economies, it may be allowed to be used for trade settlements

between China and some other countries and regions, according to Wu.

In China's neighboring countries, there were calls for the yuan to be used

to settle bilateral trade payments, she said. China has signed settlement

agreements with eight neighboring countries, including Russia, Mongolia, Vietnam

and Myanmar, assuming a voluntarily choice of settlement currency, she added.

Many were confident of the yuan and willing to settle trade payments in the

Chinese currency, as it remained strong, Wu said.

"China should create conditions for the yuan to become an international

settlement currency," she stressed.

It is necessary to expand and deepen the yuan-denominated financial markets

and step up the process to realize the full convertibility of the currency and

provide investment channels for yuan holders, according to Wu.

Some believed the reason why China was able to remain untouched in the 1998

Asian financial woes was because of its lack of full convertibility under

capital accounts. And this was also the factor behind the fact that China has

not been so seriously affected by the current global financial crisis.

Wu said China should not become "self-complacent and close itself from the

outside world" because of its lack of full convertibility, which was "not a good

thing". Otherwise, the country would be "at a disadvantage when the world

economy stabilized and made a takeoff again," she added.

The Chinese Government has decided to allow the yuan to be used for

settlement between Guangdong Province and the Yangtze River Delta and the

special administrative regions of Hong Kong and Macao.

Meanwhile, Guangxi Zhuang Autonomous Region and Yunnan Province will be

allowed to use Renminbi to settle trade payments with ASEAN (Association of

Southeast Asian Nations) members, according to a government announcement on

Wednesday evening.

But the Government did not give any details of how and when the pilot

currency program would start.

"The move will mitigate the risk of exchange rate fluctuations for Chinese

exporters and their trade partners," Zhao Xijun, finance processor at Renmin

University of China, was quoted as saying by Thursday's China Daily.

Most of China's external trade is settled in U.S. dollar or the euro at

present. But, the paper said, many analysts predicted the dollar might

depreciate substantially in the coming years because of the ailing U.S. economy.

"The move will also increase the yuan's acceptance in Asia, which will help

it become an international currency in the long run," Zhao told the paper.

The yuan's acceptance has been rising in recent years, thanks to the

nation's economic prowess and its 1.9 trillion reserves of foreign exchange,

according to the paper.

"Don't move my food" Chinese netizens rebuke economist's attack on farm land bottom line

By Chinese media writers Jiang Xufeng, Zhao Wei and Ma Shukun

BEIJING, Dec. 26 (Chinese media) -- "Don't mess around with my food!" Many netizens have reacted with fury to an economist's criticism of the country's arable land bottom line policy.

A netizen named "sgy123" said on Friday that, "whoever went through the famine during the late 1950s and early 1960s in China knows how important food is. It is quite dangerous for 1.3 billion people to rely on imported grain."

Born in 1929, Mao Yushi, a domestic economist, should be familiar with that painful experience five decades ago and understand the importance of food to Chinese people. But he said on Wednesday, China's efforts to protect enough farmland for food security were harmful.

Mao, board chairman of Beijing-based Unirule Institute of Economics, said during a seminar held here on Wednesday that the government's set bottom line of 1.8 billion mu (120 million hectares) arable land was "a hurdle for Chinese further industrialization and urbanization" according to Thursday's National Business Daily.

Mao said unlike five decades ago, China had already solved the grain production and distribution problem and there was an abundant food supply in the world market, so there was a near zero possibility that starvation would hit China again.

Experts held that Mao's remarks were appalling and don't hold water. China consumes 500 million tonnes of grains annually, twice the size of global annual crops trading volume.

A netizen named "Heluofeng" said "we should not forget that since the second half of last year food prices surged in many parts of the world, which made millions of people suffer around the globe and caused social unrest."

What we should not forget either is that amid last year's global pressure to push up food prices, the Chinese grain price remained stable as the world's most populous country had enjoyed four consecutive years of high grain output.

In one of its latest moves to protect farm land, China's State Council, the Cabinet, approved a general outline for land use this August for the 2006-2020 period.

The goal is to ensure a proper use of farm land and guarantee a minimum of 120 million hectares of arable land, as feeding 1.3 billion people still remains one of the government's top concerns.

Zheng Weiyuan, an expert from the Ministry of Land and Resources, said 120 million hectares was enshrined in the outline after research and scientific calculation.

"China is on its fast track of urbanization and the land use outline achieved a balance between food security, ecological protection and economic development," Zheng said.

The world's largest developing country is facing a sharp conflict between land supply and demand. The area of arable land, shrank 610,100 mu (40, 673 hectares) in 2007 to 1.826 billion mu (121.7 million hectares). That was only slightly above the governments minimum total goal.

Zheng added experts predicted that the Chinese population would not surpass 1.5 billion and therefore we could got a rough idea of how much grain and cultivated land we need to feed them.

"We should leave some extra farm land and leeway for our future generations," Zheng said.

Figures revealed that China produced 501.5 million tonnes of grain in 2007, up 0.7 percent year on year. The country aims to ensure grain output staying above 500 million tonnes until 2010, and reaching 540 million tonnes by 2020.

That's part of the reasons why the country endeavors to replenish farmland before allocating it for non-farming purposes and steps up supervision to avoid arable land being seized against laws and regulations.

Zhang Xiaoshan, director of the Rural Development Institute of the Chinese Academy of Social Sciences, said 120 million hectares could only make China 95 percent self-sufficient in grain. He added if the country could have 200 million mu (13.3 million hectares) to 300 million mu (20 million hectares) extra farm land, the situation would be better.

To secure grain safety, the country aims to produce at least 95percent of the crops it consumes in the coming years.

A netizen called "Beibeibao" said "We would rather have a slower growth speed than make concession on the independent grain production policy. If a government fails to shoulder the responsibility in this regard, it would let Chinese people down. I fully support the protection policy of the farm land bottom line."

However, Mao blasted inflammatory remarks that to protect farm land shored up the country's real estate price.

He said Chinese housing price surge was not due to the price rise of steel and other building material or construction workers' salaries, but because of a limited supply of land, adding that this hindered the Chinese urbanization process.

A netizen named "lyuddd" said, "Even pupils in China know that the per capita farm land in China is shy of one third of the world's average level. The housing price rise in China involves complex reasons, but protecting farm land was definitely not one of them."

Another netizen called "cava" said, "To care nothing about food safety and push forward urbanization is just like the action of an insane guy who is not able to feed his starving belly but craves buying an iPhone."