NEWS,19.08.2013

Rare diamond to go under the hammer

A rare round blue diamond will go under the hammer in Hong Kong in October, with auctioneers hoping the sale will fetch a record-breaking $19m despite fears over the slowing Chinese economy.

Auction house Sotheby's expect the 7.59-carat fancy vivid blue diamond, which is about the size of a shirt button, to set a new record for price-per-carat.

Quek Chin Yeow, Sotheby Asia's deputy chairperson, said Hong Kong was the natural venue to sell the gem, known as "The Premier Blue", with collectors expected to fly in from all over the world.

"While there is a slowdown (in Chinese economy), the number of top-level collectors are still there," he told AFP.

"We have been selling very well in Hong Kong."

Jewellery auctions

Hong Kong has become a centre for jewellery auctions thanks to growing wealth in China and other parts of the region, as well as the region's increasing taste for art.

But there are fears for the future of the Chinese economy, the world's second largest, where growth fell to 7.8% in 2012 - its slowest pace in 13 years.

Blue diamonds seldom hit the market and have been coveted by royals and celebrities for centuries, while a round cut is rarely used in coloured stones because of the high wastage.

The most famous example of a blue diamond is the "Hope Diamond", which was bought by King Louis XIV of France in the 17th Century.

The term "fancy" is used to describe a diamond of intense colour, while a gem's saturation grading ranges from light to vivid for coloured diamonds.

The Premier Blue will go up for auction on October 7. Quek said the owner wanted to remain anonymous.

In April, a rare 5.3-carat fancy deep-blue diamond was sold for £6.2m ($9.5m) at a London auction, then setting a record for price-per-carat at $1.8m.

China bans more dairy products

More New Zealand milk products sold to China have been banned after elevated levels of nitrates were found, raising further concerns over quality and testing in the world's largest dairy exporter in the wake of a contamination scare earlier this month.
New Zealand's agricultural regulator said on Monday it has revoked export certificates for four China bound consignments of lactoferrin manufactured by Westland Milk Products after higher  than acceptable nitrate levels were found by tests in China.
Two of the four consignments had been shipped to China but had not reached consumers, New Zealand's Ministry of Primary Industries (MPI) said.
"Any food safety risk to Chinese consumers is negligible because the quantities of lactoferrin used in consumer products was very small, meaning the nitrate levels in those products would easily be within acceptable levels", Scott Gallacher, the acting director-general of the MPI, said in a statement.
The announcement comes just weeks after Westland's much bigger competitor, Fonterra, said some of its dairy ingredients were contaminated with a botulism-causing bacteria. This prompted a recall of infant formula products, sports drinks and other products in China, New Zealand and other Asia-Pacific nations.
"All of the product has been located, none of it has entered the retail food chain," Westland Chief Executive Rod Quin told . "We're well aware of the wider context of the issue and related concerns, so we've acted to make sure the product doesn't go any further."
China's top quality watchdog said it had halted all imports of the product from Westland and asked other New Zealand dairy companies exporting lactoferrin to provide nitrate test reports.
The General Administration of Quality Supervision, Inspection and Quarantine of China urged the New Zealand government to thoroughly scrutinise its dairy companies as well as their products to ensure the safety of exports to China, New Zealand's top dairy market.
Affected batches
The four consignments were derived from two affected batches of lactoferrin, a naturally occurring protein found in milk, manufactured by Westland at its Hokitika factory on the country's South Island.
Initial investigations pointed to contamination by cleaning products which contain nitrates that were not property flushed from the plant, Quin said.
Privately owned Westland makes about 120 000 tonnes of dairy product each year, exporting the majority. Its production pales in comparison with that of Fonterra, which exports 2.5 million tonnes of product.
ANZ agricultural economist Con Williams said that the 390 kg of affected Westland product was much smaller than the 38 tonnes of contaminated product produced by Fonterra. As a result, he expected it would have limited impact on global demand for New Zealand dairy products.
"The timing isn't ideal. There's heightened concern around food safety issues at the moment especially in the dairy sector in light of the Fonterra issue two weeks ago," Williams said.
"But in terms of the actual issues, it doesn't seem to be substantial ... It looks like only a very small amount of product was affected and it doesn't seem to be a food safety issue."
The two batches of lactoferrin showed nitrate levels of 610 and 2 198 parts per million, respectively, above the New Zealand maximum limit of 150 parts per million.
Westland exported one batch directly to a Chinese distributor, which sold the product on as an ingredient for other dairy products. The second batch was supplied to New Zealand's Tatua Co-operative Dairy Company, and also exported to China.
"MPI, the Ministry of Foreign Affairs and Trade and the companies concerned are working closely with the Chinese authorities on this issue," Gallacher said.
There was no affected lactoferrin used in products in New Zealand or exported elsewhere.
New Zealand relies on diary exports for about a quarter of its NZ$46bn ($37bn) in annual export earnings.

New Zealand plans tainted dairy probe

New Zealand on Monday announced plans for a government inquiry into how ingredients made by dairy giant Fonterra became contaminated with a botulism-causing bacteria, as the country tries to salvage its reputation as an exporter of safe agricultural products.
The inquiry, to be held alongside two internal Fonterra investigations and another by the country's agricultural regulator, will examine how the potentially contaminated products entered the international market and whether adequate regulatory practices were in place to deal with the issue.
"This will provide the answers needed to the questions that have been raised about this incident, both domestically and internationally," said Primary Industries Minister Nathan Guy, who is leading the inquiry along with Food Safety Minister Nikki Kaye.
"It is also an important step in reassuring our trading partners that we take these issues seriously," he said in a statement.
The contamination announced earlier this month has led to product recalls in countries from China to Saudi Arabia.
Fonterra, the world's largest dairy exporter, has come under attack at home and abroad for dragging its feet in disclosing the discovery of the bacteria.
Fonterra chief executive Theo Spierings welcomed the inquiry, saying in the statement that the company would provide all necessary information.
The inquiry will be expected to provide an interim report in around three months.
New Zealand depends on the dairy industry for a quarter of its total exports. China is a major export market for New Zealand's dairy products.
Foreign Affairs Minister Murray McCully is visiting Beijing this week in to smooth relations with the country's biggest milk powder customer, and Prime Minister John Key has said he plans to visit China later this year to discuss the contamination issue after the inquiry results are complete.

Greece sacks privatisation agency chief

Greece dismissed the chairperson of its privatisation agency on Sunday after a newspaper reported that he travelled on the private plane of a businessman who just bought a state company.
Stelios Stavridis is the second head of HRADF to leave in less than six months, reigniting controversy around Greece's ailing privatisation programme which is a key part of its international bailout.
Delays and privatisation receipt shortfalls are a constant headache for the European Union and the International Monetary Fund, which bankroll Greece's €240bn rescue.
The lenders said last month that they would review the way HRADF was operating, after it emerged that the agency would miss its 2013 revenue target by about €1bn.
"Finance Minister Yannis Stournaras asked today for the resignation of HRADF chairperson Stelios Stavridis," the finance ministry said in a brief statement.
A finance ministry official, speaking on condition of anonymity, told that Stavridis's resignation was effective immediately.
The official said the dismissal followed a report in Proto Thema on Saturday that Stavridis travelled last week on the private plane of shipowner Dimitris Melissanidis, a major shareholder of a Greek-Czech consortium which in May agreed to buy a 33% stake in state gambling firm OPAP.
Stavridis was not immediately available for comment.
According to the newspaper report, he admitted he used Melissanidis's plane to travel to his holiday home.
"Melissanidis, who was travelling to France, offered to take me with him to accommodate me," he was quoted as saying by the newspaper.
Stavridis took the flight immediately the signing of an agreement to finalise the €652m OPAP deal, Proto Thema said.
HRADF chief executive Yannis Emiris told he was keeping his post and that Greece's ailing privatisation programme would not suffer from Stavridis's resignation.
"There will be absolutely no delays to the programme," he said, rejecting the idea that the OPAP deal might be reversed as a result of Stavridis's resignation.
The finance ministry official confirmed the OPAP deal would not be affected and the Stavridis's resignation was for "ethical reasons".
Stavridis's predecessor Takis Athanasopoulos stepped down after he was charged by a prosecutor with breach of duty over his former role as chairman of a state utility.

China wants fewer free trade zone curbs

China hopes to suspend its laws governing foreign investment in proposed free trade zones, the cabinet said, in a sign the world's second-biggest economy could open further to foreign competition.
The State Council, China's cabinet, will ask senior members of the National People's Congress, or parliament, for the power to suspend laws and regulations governing both foreign-owned companies and joint ventures between Chinese and foreign companies in free trade zones, including Shanghai, the cabinet said on its website.
The move is aimed at "accelerating transformation of the government's role ... and innovating ways of (further) opening up (to foreign investment)," according to the statement, seen on Sunday. It set no timetable, and gave no further details.
Foreign direct investment in China slowed in 2012 but reversed its decline in the first quarter of this year as confidence improved.
China attracted $38.3 billion in foreign direct investment in the first four months of 2013, up 1.2 percent from the same period in 2012.
China's financial centre, Shanghai, will test yuan convertibility and cross-border capital flows in the free trade zone pilot programme.
The country's new leaders have signalled they want to speed the process of making the yuan fully convertible over the next few years, as part of efforts to boost the currency's use in trade and support wider financial reforms.
Shanghai officials are keen to experiment with freeing up the capital account and yuan convertibility, fearing the city could be left behind as rival centres, such as Hong Kong and Taiwan, move to develop cross-border yuan financial services.
Shanghai stepped up lobbying efforts after the 2012 creation of a special trade zone in Qianhai, near the southern boomtown of Shenzhen and across from Hong Kong, where yuan convertibility is being trialled.
The Qianhai zone, administered by the central bank, the People's Bank of China, lets banks from Hong Kong offer cross-border yuan-denominated loans to mainland firms.
Other initiatives announced in 2013 include trial programmes to smooth the way for foreign firms to move funds in and out of China, cutting the need for approvals and easing bank procedure.

Investors dump India as crisis deepens

Indian policymakers are looking increasingly panicky as they battle the worst currency crisis in more than two decades, and more worryingly there is no sign their remedies are working.
The rupee lurched to a new lifetime low of 62.03 to the dollar on Friday while the benchmark share index posted its biggest one-day fall since September 2011.
"None of the policymakers' Band-Aid measures (from capital controls to tightening liquidity) seems to be working. They have not been able to turn the tide," Rajeev Malik, economist at investment house CLSA, told AFP.
"The government and the Reserve Bank of India are taking fire-fighting measures."
The rupee has lost 57% of its value against the US currency since it peaked at 39.40 rupees to the dollar in February 2008.
The currency's strength began unravelling when Lehman Brothers collapsed later that year, triggering the global financial crisis.
But pressure on the rupee has mounted in the past two years as investor alarm over a slowing economy and a ballooning current account deficit - the widest measure of trade - has grown.
Part of the reason for the currency's most recent slide - it has fallen 13% this year against the greenback - lies outside Indian policymakers' remit.
The currencies of emerging markets globally have fallen on expectations that an increasingly buoyant United States will soon roll back stimulus responsible for funnelling big investments overseas in quest of high yields.
But other reasons for the rupee's drop are home-made - failure to move fast enough on economic reform, a series of government corruption scandals, perceptions of policy paralysis and the record current account deficit, analysts say.
Since June 1, overseas funds have pulled out $11.58bn from India's stock and debt markets.
Investors worry that despite the long-term growth potential of the country of 1.2 billion people, "things are not in shape in the interim period", said investment house IDBI research head Sonam Udasi.
As the rupee's woes have deepened, authorities have responded with a clutch of measures to try to stem its decline and avert a balance-of-payments crisis.
India has painful memories of its 1991 balance of payments crisis when it failed to attract enough foreign currency and was forced to fly 47 tonnes of gold as collateral for an International Monetary Fund loan in what was seen as a national humiliation.
Indian Prime Minister Manmohan Singh, who was finance minister at the time, was moved Saturday to rule out a repeat, saying: "There is no question of going back to the 1991 crisis."
In the past few weeks, Indian policymakers have hiked short-term interest rates, announced plans to allow state firms to raise foreign funds abroad and curbed gold imports.
They have also threatened to imposed higher duties on imported electronic appliances such as fridges, which are made locally.
But it is their most recent step - stealthily announced late Wednesday on the eve of a national holiday - that has fanned the deepest consternation.
The central bank sharply tightened controls on the amount of money firms and individuals can send abroad.
The move looked to observers like a disturbing throwback to the days before India unleashed its economic liberalisation drive in the early 1990s when Indians' access to foreign exchange was strictly limited.
Confederation of Indian Industry president Kris Gopalakrishnan criticised the move as "retrograde".
While the capital controls only apply to local individuals and firms, the restrictions may raise worries among overseas investors that they could be extended to foreign companies operating in India, analysts say.
Under the new policy, Indian individuals can send just $75,000 out of the country annually, down from $200 000 - making it tougher to pay children's overseas university fees, for example.
Companies can invest abroad only 100% of their net worth, down from 400% - though the central bank says firms can ship out more money if they give authorities a good reason for doing so.
"While the authorities aim to reduce foreign-exchange volatility, we fear they may end up sending a panic signal," Nomura economist Sonal Varma said.
There have been no signs so far of domestic capital flight but analysts say the controls may have been tightened to avert one in the face of India's troubles.
The economy expanded last year at a decade-low of five percent and indicators this year have been grim with economists warning about "stagflation" - a combination of high inflation and low growth.
With an election to be held by May 2014 and pro-market reforms divisive, there is no way the Congress government can undertake root-and-branch reforms needed to put the economy back on track, economists say.
"There is a complete lack of faith in the markets" about India's outlook, said Param Sarma, chief executive at consultancy firm NSP Forex.

NEWS,07.08.2013

BoE looks forward to help UK recovery

The Bank of England overhauled its policy strategy on Wednesday, saying it planned to keep interest rates at a record low until unemployment falls to 7% or below, something unlikely for another three years.
Barely a month after Canadian Mark Carney took over as governor, the central bank said it would keep interest rates at 0.5 percent unless inflation threatened to get out of control or there was a danger to financial stability.
Carney said a recovery in Britain's fragile economy was underway and it appeared to be broadening but he warned that it had a long way to go before it was on solid ground.
"This remains the slowest recovery in output on record," he told his first news conference since taking over at the Bank. "We're not at escape velocity right now."
The pound rallied after an initial fall on the announcement and British government bond prices were lower as the BoE's commitment on interest rates fell short of some expectations of a more aggressive plan to revive growth.
"It looks like rates are not going to rise in the next three years, though they could, as Carney has stressed they are not pre-committed, so again this is a rather valueless bit of 'forward guidance' as is the case with the ECB," said Mark Ostwald at Monument Securities.
The Bank of England followed the US Federal Reserve's approach by setting an unemployment target rather than committing to keeping rates low for a set period of time but included get-out clauses.
BoE policymakers said they stood ready to buy more government bonds if additional stimulus was needed and would not reverse existing purchases while unemployment was too high.
The central bank said inflation was forecast to stay above its 2% target until the second half of 2015 based on market rate expectations.
"Attempting to return inflation to the target too quickly risks prolonging the period over which the nation's resources are underutilised," it said.
A growing number of major central banks are providing so-called forward guidance to help nurse their economies back to health after the damage of the financial crisis.
For the BoE, the challenge is to hold off a premature rise in British borrowing costs at a time when signs of economic recovery at home and the US Federal Reserve's decision to phase out stimulus are pushing up market interest rates.
Last month its Monetary Policy Committee took a step towards guidance by saying that a rise in British market rates was not justified by economic fundamentals, and it reiterated that point on Wednesday.
Markets already did not expect the BoE to start to raise interest rates until late 2015 at the earliest.
Three years' grace?
The BoE said Britain's economy had strengthened over the past three months. But output still remains more than 3 percent below its pre-crisis peak, a much weaker recovery than in the United States or Germany.
It now forecasts the economy will grow 0.6% during the current quarter  the same as between April and June, and that growth will reach an annual rate of 2.6% in two years' time, compared with 2.2% forecast three months ago, assuming interest rates stay on hold.
Unemployment is forecast to fall only slowly from its current level of 7.8% of the workforce, with the central bank expecting it to average 7.1% in the third quarter of 2016, the end of its forecast horizon.
This implies that the BoE expects to keep interest rates unchanged until at least that time, unless one of three conditions is breached before then.
The BoE will consider raising interest rates if their low level poses a threat to financial stability, if the public's medium-term inflation expectations rise dangerously high or if it forecasts that inflation in 18-24 months will be at 2.5% or higher.
It said that if those thresholds or the 7% unemployment rate are reached, the MPC would consider the case for interest rate rises on a month-by-month basis.
"There is therefore no presumption that breaching any of these knockouts would lead to an immediate increase in Bank Rate or sale of assets," it said.
Inflation is forecast to average 2.9% in the last three months of this year  close to its current level and a lower peak than previously thought  and then to fall roughly as predicted three months ago.
Finance minister George Osborne named Carney in November to succeed King, impressed by the Canadian's reputation for innovative thinking and applying forward guidance while he led Canada's central bank.
Osborne welcomed the plan and said it was consistent with the government's "absolute commitment" to Britain's 2% inflation target.
Carney has previously stressed the importance of reassuring ordinary people and businesses that their debt costs are not going to rise any time soon in order to give them more confidence about spending which would help the economy.
The new governor also signalled he was not concerned about signs of a fast recovery in the housing market in some parts of Britain, especially London.
"The housing market is starting to recover and actually the overall level of housing activity relative to GDP is a couple of percentage points lower than where it was prior to the crisis," Carney said at the news conference.

China fines baby formula makers $110m

China fined six companies including Mead Johnson Nutrition, Danone  and New Zealand dairy giant Fonterra a total of $110m following an investigation into price fixing and anti-competitive practices by foreign baby formula makers.

The other three penalised were Abbott Laboratories, Dutch dairy cooperative FrieslandCampina and Hong Kong-listed Biostime International Holdings, the National Development and Reform Commission (NDRC) said on Wednesday.

The fines, announced just over a month after the NDRC said it was conducting the antitrust review, coincide with separate pricing investigations into foreign and local pharmaceutical firms as well as companies involved in gold trading. Those probes have yet to conclude.

The official Xinhua news agency said the fines were a record for China, although it did not elaborate.

Foreign infant formula is coveted in China, where public trust was damaged by a 2008 scandal in which six infants died and thousands of others were sickened after drinking milk tainted with the toxic industrial compound melamine. 

Foreign brands account for about half of total sales and can sell for more than double the price of local formula. The infant milk market in the world's second biggest economy is set to grow to $25bn by 2017.

The NDRC said in a statement the fines were for restricting competition, setting curbs on minimum prices for distributors and for using a variety of methods to disrupt market order. 

Swiss giant Nestle, Japan's Meiji Holdings  and Zhejiang Beingmate Scientific Technology Industry and Trade Co were not punished because "they cooperated with the investigation, provided important evidence and carried out active self-rectification", Xinhua said, citing the NDRC.

The commission fined Mead Johnson 203.8m yuan ($33.29m); Danone 172m yuan; Biostime 162.9m yuan; Abbott 77m yuan; FrieslandCampina 48m yuan and Fonterra m yuan.

Mead Johnson, Biostime, Abbott and Fonterra said they would not contest the penalties. Officials at French food group Danone and FrieslandCampina were not immediately available to comment. 

After the NDRC probe was announced, a number of companies including Mead Johnson, Danone and Nestle cut prices on their baby formula in China by up to 20%.

Analysts said the probe was possibly part of a broader Chinese plan to boost consumption of local infant milk products.

But they said the fines were unlikely to damage the reputation of the affected companies. If anything, foreign infant formula makers might increase their market share because of the price cuts.

"It will have an impact on domestic brands over the long term as the prices of high-end premium brands come down. Customers will tend to buy the foreign brands as the price gap between domestic and foreign brands narrows," said Jacqueline Ko, an analyst at Maybank Kim Eng Research.

Fonterra, the world's biggest dairy exporter, said it would give additional training to sales staff and review its distributor contracts in the wake of its fine. 

"We believe the investigation leaves us with a much clearer understanding of expectations around implementing pricing policies," Kelvin Wickham, president of Fonterra Greater China and India, said in a statement.

Fonterra is embroiled in a separate milk powder contamination scare that has led to product recalls in China, Hong Kong and elsewhere in Asia. 

    

Powerful commission

A source with direct knowledge of the China investigation said the NDRC was concerned with manufacturers suggesting retail prices to distributors and then offering incentives if these were met, believing this was tantamount to dictating retail prices.

The agency also told the firms they had inhibited fair competition by setting up regional distributors and discouraging them from selling outside their territories, said the source, who spoke on condition of anonymity because he was not allowed to speak to the media.

The commission is one of China's most powerful government bodies, with a role in overseeing prices as well as broad economic policies.

The milk sector is still relatively young in China, with consumption of dairy products growing at an annual compound rate of 20%, a contrast to US and European markets where demand has been shrinking in the past decade.

Some analysts also said the pricing investigation could result in tougher rules governing imports.

Indeed, the China Food and Drug Administration is proposing tightening conditions for the granting of licences for milk powder production, including requiring producers to have their own controlled milk sources and research and development capabilities. 

In a statement late on Tuesday, the regulator said it was seeking public comment on the proposals, which also include requirements for license holders to strengthen hygiene practices and management standards.

Mead Johnson said its fine would reduce its full-year earnings by about 12 cents per share, but it reiterated its 2013 earnings forecast for profit, excluding one-time items, of $3.22 to $3.30 per share. 

Shares of Biostime, which has a market value of $3.3bn, were up 5.3% at midday, beating a 0.3% drop in the benchmark index. It shares resumed trading after being suspended the day before. 

Obama cancels Putin meeting over Snowden

US President Barack Obama is cancelling a meeting with Russian President Vladimir Putin scheduled for next month in Moscow, the White House said on Wednesday.
The Obama administration has repeatedly expressed disappointment after Moscow granted temporary asylum to former US spy agency contractor Edward Snowden, rejecting US pleas to hand him over to face criminal charges including espionage.
The White House, in a statement, said it valued "achievements made" between Russia and the United States, but cited a "lack of progress" on a host of other issues "such as missile defence and arms control, trade and commercial relations, global security issues, and human rights and civil society."
"Russia's disappointing decision to grant Edward Snowden temporary asylum was also a factor that we considered in assessing the current state of our bilateral relationship," the statements said.
Obama plans to add a stop in Sweden as part of this travels to the G20 summit in early September, a White House official said.
On Tuesday, Obama confirmed that he would go to Russia this autumn for a G20 summit in St Petersburg, Russia, but said he was "disappointed" with Moscow's decision on Snowden.
Senator Charles Schumer praised Obama's decision to cancel the bilateral summit with Putin.
"The President clearly made the right decision. President Putin is acting like a school-yard bully and doesn't deserve the respect a bilateral summit would have accorded him," the New York Democrat said in a statement.

NKorea lifts ban on joint factory ops

North Korea said Wednesday it is lifting a ban on operations at a jointly run factory park shuttered since Pyongyang pulled out its 53,000 workers in April amid tensions with South Korea, and the rivals agreed to meet next week for talks meant to restart the complex.
The agreement revives hope for the resumption of production at the Kaesong complex, the last remaining symbol of inter-Korean cooperation from an earlier period of detente.
The industrial park combined South Korean initiative, capital and technology with cheap North Korean labour.
It was also a rare source of hard currency for North Korea, though the economically depressed country chafed at suggestions that it needed the money Kaesong generated.
North Korea said it will lift its ban on operations at the complex, including restrictions on the entry of South Korean managers.
But the two countries must reach a formal accord on their differences before production can resume, and six past meetings on the park's fate remained deadlocked.
The statement by the North's Committee for the Peaceful Reunification of Korea, which is responsible for dealings with Seoul, appeared to accept a demand that South Korean negotiators had made in the deadlocked sessions: That North Korea won't unilaterally close the industrial complex, just north of the heavily armed border, should tensions between the rivals rise again.
The fate of Kaesong
Ahead of Wednesday's statement, which North Korea described as "bold and magnanimous", there was unease in Seoul about the fate of Kaesong. The statement came after 10 days of silence from Pyongyang on a South Korean demand for "final talks."
It also came about an hour after Seoul said it would begin insurance payments to 109 South Korean businesses shut out of Kaesong, which some saw as a step toward closing the park.
South Korea's Unification Ministry, which handles relations with North Korea, accepted the North's proposal for talks on 14 August, a day before a holiday in both Koreas that celebrates independence from Japan's 1910-1945 colonial rule.
Seoul expressed hope the meeting would resolve differences on Kaesong.
South Korean businesses with operations at Kaesong welcomed the development. The park had survived previous periods of tension between the rivals, including attacks blamed on Pyongyang that killed 50 South Koreans in 2010, and the shutdown of other big cooperation projects.
North Korea banned South Korean managers from crossing the border to their jobs in Kaesong and then withdrew its workers from the park during a torrent of warlike threats it made in March and April, including vows of nuclear strikes on Washington and Seoul.
Military drills
Pyongyang said it was angry over annual US-South Korean military drills and UN sanctions over North Korea's February nuclear test - the country's third such test since 2006.
There have been recent attempts at tentative diplomacy by the Koreas, but tensions could rise again this month as South Korea and the United States are scheduled to begin a joint military exercise on 19 August.
Starting on Thursday, South Korean companies that had signed up for insurance were to receive payments to help cover investments in constructing production lines and buildings at Kaesong.
Both countries should ensure that operations at the complex continue normally regardless of external matters, the North's statement said.
North Korea also said it will guarantee the safety of the South Korean managers and property at Kaesong, and start sending North Korean workers to the park once South Korean businesses are ready to resume operations.
After breaking ground in 2003, earlier South Korean governments paved roads and erected buildings at Kaesong, which lies in a guarded, gated complex on the outskirts of North Korea's third-largest city.
By the end of 2012, South Korean companies had produced a total $2bn worth of goods during the previous eight years.
Pyongyang needs to reach out to Seoul and resume operations at Kaesong to resolve its huge economic problems, said Yoo Ho-yeol, a North Korea studies professor at Korea University in Seoul.
North Korea is estimated to have received $80m in workers' salaries in 2012, an average of $127 a month per person, paid in US dollars, according to the Unification Ministry.
For South Korea, Asia's fourth-largest economy, the complex was more than a business opportunity and a source of cheap labour it was a symbol representing the possibility of eventual unification.
Before April, the Kaesong industrial complex was the only place for South Korean entrepreneurs to collaborate with North Korean workers.

Talks will fail, say most Israeli Jews

Israel's Jewish population is overwhelmingly of the opinion that negotiations with the Palestinians will fail to achieve peace, according to a poll published on Wednesday.

About 80% of Israeli Jews said the chances of success of US-brokered talks, which resumed on 29 July after a three-year hiatus, were "low", against only 18% who said they were "high".

The survey, conducted by Tel Aviv University, interviewed 602 Israelis between 28 and 30 July and has an error margin of 4.5%.

Most of those interviewed  64%  believed Palestinian leaders were not genuine in wanting to resume talks, but 63% believed the Israeli government did want peace.

They were mostly unwilling, however, for the government to concede on issues deemed crucial to achieving an agreement.

Almost 63% opposed a return to the 1967 lines that existed before Israel occupied the West Bank - a key Palestinian demand  and 58% opposed the evacuation of Jewish settlements in the Palestinian territory, even if the largest settlements were allowed to remain.

Arab population more optimistic

The previous round of talks in September 2010 collapsed when Israeli refused to stop its settlement building.

About 77% on those interviewed also opposed the right of return for Palestinian refugees exiled after the Jewish state's creation in 1948 and the 1967 Six Day War.

And half the Jewish respondents opposed the partition of Jerusalem, which the Palestinians want as capital of their future state.

Israel's Arab population were more optimistic about the chances of peace.

Around 47% of Israeli Arabs thought talks were likely to achieve a peace agreement, against 41% who said the chances were low.

A vast majority 85%  believed the Palestinians genuinely wanted talks to succeed.

NEWS,02.03. AND 04.08.2013

BACK WITH VERY NICE POST 

Spanish jobless numbers continue to fall

The number of registered jobless in Spain fell in July from a month earlier, the fifth straight month of declines, the Labour Ministry said on Friday, boosted by seasonal factors including a strong tourist season.
Jobless numbers fell by 1.4% in July, or by 64 866 people, leaving 4.7 million people out of work, the data showed.
The follow a quarterly survey by the National Statistics Institute which reported an unemployment rate of 26.3% in the second quarter with 6 million people unable to find work.
"In annual terms, employment continues to be destroyed and unemployment continues to be generated, but less than before and this points to a change in trend. It suggests that the unemployment rate could be similar in the third quarter as the second," said Estefania Ponte, economy and strategy director at Cortal Consors.
Registered jobless numbers rose 2.4% in July from a year earlier, the ministry figures showed.
Spanish unemployment has soared to record levels since the property bubble burst in 2008 and is expected to remain high for years to come as the battered economy, in recession since the end of 2011, struggles to return to sustainable growth.
The Labour Ministry tends registered jobless figures tend to be lower than the statistics institute's estimates as the disillusioned long-term unemployed, who's benefits end after two years, stop signing on.
According to the statistics institute, some 1.9 million people who had previously held a job had been out of work for more than two years in the second quarter.
The number of people registering as out of work in July fell in all the main economic sectors, with the largest drop seen in the services industry, down 37 614 people, or 1.3%, boosted by a strong tourism season.
Spain's tourist sector, worth over 10% of economic output, has seen a boost this year as holiday makers avoid trouble spots in usually popular destinations in Northern Africa such as Egypt
Unemployed from construction dropped 16 310 people and was down 11 233 people from industry, the ministry said.

 

French winemakers eye China vintage

In a few remote corners of China, two of France's top winemakers have more on their minds than a trade row with their most promising export market.
In three far-flung provinces, a world away from Beijing's allegations of European wine dumping, makers of such lofty French brands as Chateau Lafite-Rothschild and Dom Perignon champagne are investing millions of dollars to produce vintages they hope will put Chinese wine on the world map.
In a country where cheap plonk and overpriced mediocre wines still define the domestic industry, the French are partnering with Chinese investors to produce super-premium wines for increasingly discerning drinkers at the market's top end.
They will likely charge hundreds of dollars per bottle when the wines start appearing in a year or two, turning out deeply rich reds and elegantly sparkling wines for wealthy Chinese drinkers who they hope will be proud to serve local vintages that are the equal of their imported collections.
"China deserves the production of great wines," said Christophe Salin, president of Domaines Barons de Rothschild (DBR), which owns the vaunted Chateau Lafite, Ch. Duhart-Milon and Ch. L'Evangile, among other French labels. "Without wanting to copy Lafite, we wish to produce a great wine on Chinese soil," he added in an interview.
"Shangri-La"
DBR is investing 100m yuan ($16.3m) with partner CITIC, a state investment firm, to develop 25 hectares (62 acres) of vineyards in eastern Shandong province to produce super-premium red wine for the Chinese market.
Moet-Hennessy, the wine and spirits arm of luxury group LVMH Moet Hennessy Louis Vuitton SA, is also looking to make a top-end Chinese red and is planting 30 hectares (74 acres) of grapes in remote mountains of southern Yunnan province.
Moet-Hennessy studied climate and soil conditions at hundreds of locations around China before settling on an area the government calls "Shangri-La", abutting Tibet, to grow Cabernet sauvignon, Cabernet franc and Merlot grapes.
Moet-Hennessy CEO Christophe Navarre won't divulge the investment there but says it is borne two-thirds by Moet-Hennessy and one-third by its Chinese partner, winemaker VATS.
"I dream one day to go back to France with a bottle of red wine produced in the region of Shangri-La and I can say it's the best wine in the world," Navarre said in announcing the venture last year.
Moet-Hennessy's wine portfolio includes the vaunted Ch. Cheval Blanc and Ch. d'Yquem, the world's most coveted dessert wine. Its champagnes include Dom Perignon, Moet & Chandon and Krug - and it is developing vineyards in Ningxia Hui autonomous region in north-central China with a view to producing China's first ultra-premium sparkling wine.
Neither DBR nor Moet-Hennessy plans to market its Chinese wines under existing brands. Both say they want to give the wines a unique Chinese identity a strategy that is questioned by some within the Chinese wine industry.
"If they don't put their brand on it then people won't buy it at a very high price," says Monica He, who works with wine importer Menvis in Beijing.
Growing thirst
DBR's and LVMH's investments into China aim to capitalise on China's growing thirst for premium wines, but could also help their extensive line-ups of mid-priced wines and spirits.
Chinese consumers are drawn to either high-end or cheap wine, leaving a gap in the middle of the market. By producing a Chinese "halo" wine marque, the French winemakers could draw drinkers to their imported mid-range lineup.
The French investors do not have plans to produce still white wines in China, as red wine and champagne are more fashionable for upwardly mobile Chinese wine drinkers.
China is the world's fifth-largest wine consumer, according to a study last year for VINEXPO, an annual wine trade show that alternates between Bordeaux and Hong Kong. The study forecast annual consumption growth in China and Hong Kong at 54.3% between 2011 and 2015, or a billion more bottles every year.
China's wine market is dominated by a few large local producers that make bulk and mid-priced wine, and some premium-priced wines selling for more than $100 a bottle, but these are usually considered far inferior to much cheaper imported wines.
Can China produce something at the highest level?
"The potential there is to make something very, very good," says Jim Boyce, who follows China's wine industry on his blog Grapewallofchina. "There are a lot of people who've been telling me for years that Yunnan is where it's going to happen."
Meanwhile, Beijing and Brussels are in talks to end their trade dispute over wine, with a settlement seen as likely after the two sides struck a deal last week in a separate row over Chinese solar panel exports to Europe. Beijing had launched its investigation into European wine sales after the European Union moved to impose steep import duties on Chinese solar panels.

US hiring slows, but jobless rate falls

US employers slowed their pace of hiring in July but the jobless rate fell anyway, mixed signals that could make the Federal Reserve more cautious about drawing down its huge economic stimulus programme.
The number of jobs outside the farming sector increased by 162 000, the Labour Department said on Friday.
That was below the median forecast in a poll of 184 000. Compounding that miss, the government also cut its previous estimates for hiring in May and June.
At the same time, the jobless rate fell two tenths of a point to 7.4%, its lowest in over four years. Gains in employment fueled some of that decline, but the labor force also shrank during the month, robbing some of the luster from the decline in the unemployment rate.
The data reinforces the view that the job market is inching toward recovery, with the broader economy still stuck in low gear.
"The US economy is grinding along for the better, but it's going to be a long and slow grind," Tanweer Akram, an economist at ING US Investment Management in Atlanta, said ahead of the report.
The question is whether the pace of job gains is enough for the Fed to feel the US economy is ready to get by with less support. The US central bank currently buys $85 billion a month in bonds to keep borrowing costs low.
The stimulus program has lowered interest rates, spurring growth in the country's beleaguered housing market and boosting car sales. Fed Chairman Ben Bernanke said last month the U.S. central bank would likely reduce the level of monthly purchases by the end of the year, and end them by mid-2014.
The Fed's policymaking committee wrapped up a two-day meeting on Wednesday without any change to the program. The panel's statement, however, referenced new factors that could be seen as risks to growth: a recent rise in mortgage rates and persistently low inflation. Central bank policymakers next meet in September.
Structural concerns
The growth in payrolls left the three-month average gain at 175 000. Many economists believe even hiring around that level could lead the Fed to trim its bond buying in September.
But Friday's jobs report could also entertain darker views on the economy.
For one, analysts wonder if the pace of job creation can be sustained given slower-than-expected economic growth.
Gross domestic product, a measure of the nation's economic output, grew at a mere 1.4% annual rate in the first half of the year, down from 2.5% in the same period of 2012.
Most economists expect GDP will accelerate in the second half of this year, which would make it more plausible for the current hiring trend to continue.
But the fact that job creation has been relatively robust despite weak output might point to a frightening possibility: perhaps the economy's growth potential has fallen.
This would mean less output is needed to create jobs, but that incomes would grow at a slower pace over the long run. The prospect of such a structural shift worries economists and investors.
"It's something we have been talking about a lot," Jeffrey Cleveland, a Los Angeles-based economist at investment management firm Payden & Rygel, said ahead of the report.
Friday's report showed the average work week declined to 34.4 hours, while average earnings slipped 0.1%.

 

China opposed to US sanctions on Iran

China, Iran's largest trading partner and top oil customer, repeated its opposition on Friday to tougher US sanctions on Iran after the House of Representatives approved a bill aimed at halting Iran's oil exports.
The bill seeks to cut Iran's oil exports by a further one million barrels per day to near zero over a year, an attempt to reduce the flow of funds to Tehran's disputed nuclear programme. The legislation provides for heavy penalties for buyers who do not find alternative supplies.
"China has long advocated resolution through dialogue and negotiations and opposes unilateral sanctions from one nation based on its domestic laws," the Ministry of Foreign Affairs said in a faxed statement .
"In particular, it opposes sanctions that will hurt the interests of a third party," it added, without elaborating.
The success of any toughening of the sanctions will depend on China, Iran's top customer, which has repeatedly said it opposes unilateral sanctions outside the purview of the United Nations.
China reduced oil purchases from Iran by 21% last year, but that was partly on account of differences in the first quarter over the renewal terms of annual contracts and shipping delays.
Chinese oil industry officials have said refiners are likely to cut shipments 5% to 10% this year from last. They cut imports 2% in the first six months of the year.
China has consistently advocated resolving the dispute over Iran's nuclear programme through talks and has opposed what it views as unilateral sanctions imposed by the United States and European Union made outside the framework of the United Nations.

Japan policies involve risks - IMF

A failure of the economic policies promoted by Japanese Prime Minister Shinzo Abe would take a toll on the global economy, the International Monetary Fund said late Thursday.
Abe has advocated aggressive monetary easing steps to reinvigorate the world's third-largest economy and pull it out of the deflation that has lasted more than a decade.
The IMF has supported the policies, and said in a report released in Washington that Abe's economic programme, so-called Abenomics, "would have clear positive net growth spillovers on the global economy."
However, the report added that without structural reforms, fiscal consolidation, and the achievement of a new inflation target, output in Japan could decrease by 4% after 10 years.
The IMF simulations suggested that global output losses could reach 2% of GDP if investors in Japan were to reconsider the risk of their investments, leading long-term interest rates to rise 2 percentage points, the report said.

EU signs off on China solar deal

European Union officials endorsed a deal on Friday to settle a dispute with China over solar panels, the biggest trade row to date between the two powers, after winning almost unanimous backing from member states.
The agreement will be officially published on Saturday and takes effect on August 6. Chinese firms who agree to its terms will avoid duties that the 28-nation EU had planned to impose.
In a statement, the European Commission, the EU's executive arm, said it had received almost unanimous support but declined to give details on any possible abstentions.
"We can't go into details. A huge majority of member states voted in favour. No member state voted against," a Commission spokesman said.
The EU trade chief and his Chinese counterpart agreed late last month to set a minimum price for panels from China near spot market prices.
European solar panel makers have accused China of benefiting from huge state subsidies, allowing them to dump about €21bn ($27.79bn) worth of below-cost panels in Europe last year.
The EU had planned to impose hefty tariffs from August 6 but, wary of offending China's leaders and losing business in the world's No. 2 economy, a majority of governments, led by Germany, opposed the plan, allowing for the compromise deal.
Europe is China's most important trading partner, while for the EU, China is second only to the United States. Chinese exports of goods to the bloc totalled €290bn last year, with €144bn going the other way.

Fukushima water rises above barrier

Radioactive groundwater at the crippled Fukushima nuclear plant has risen to levels above a barrier being built to contain it, highlighting the risk of an increasing amount of contaminated water reaching the sea, Japanese media report.
The Asahi newspaper, citing data from a meeting of a task force working on the Fukushima clean-up at Japan's nuclear regulator, estimated that the contaminated water could swell to the ground surface within three weeks.
The latest revelation underscores the hurdles facing Tokyo Electric Power (TEPCO) 2-1/2 years after a massive earthquake and tsunami destroyed the Fukushima plant, triggering the world's worst nuclear disaster since Chernobyl.
One of Tepco's biggest challenges is trying to contain radioactive water that cools the reactors as it mixes with about 400 tons of fresh groundwater pouring into the plant daily.
Tepco has been injecting a chemical into the ground to build barriers to contain the groundwater, but the method is only effective in solidifying the ground from 1.8m below the surface, whereas data from test wells shows the contaminated water has risen to one metre below the surface, the newspaper said.

NZ milk powder scare over botulism

China halted imports of all New Zealand milk powder, New Zealand's trade minister said on Sunday, after bacteria that could cause botulism found in some dairy products raised food safety concerns that threatened its $9.4bn annual dairy trade.
Global dairy trade giant Fonterra said on Saturday it had sold contaminated New Zealand-made whey protein concentrate to eight customers in Australia, China, Malaysia, Vietnam, Thailand and Saudi Arabia for use in a range of products, including infant milk powder.
Nearly 90% of China's $1.9bn in milk powder imports last year originated in New Zealand, so a prolonged ban could result in a shortage of dairy products in China.
Foreign-branded infant formula in particular is a prized commodity in China given consumer distrust of Chinese brands after a series of domestic food safety scandals.
New Zealand's neighbour Australia was caught up in the ban after some of the contaminated whey protein concentrate was exported there before being sent on to China and elsewhere.
"The authorities in China, in my opinion absolutely appropriately, have stopped all imports of New Zealand milk powders from Australia and New Zealand," said New Zealand Trade Minister Tim Groser.
Ingredient
"It's better to do blanket protection for your people and then wind it back when we, our authorities, are in a position to give them the confidence and advice that they need before doing that," he said.
There was no official word of a ban from Chinese authorities on Sunday.
Chinese state radio said on Saturday that Fonterra was notifying three Chinese firms affected by the contamination.
Some of China's biggest food and beverage companies are said to be customers of Fonterra, using its milk powder as an ingredient in everything from confectionery to cheese on frozen pizza.
Fonterra is a major supplier of bulk milk powder products used in formula in China but it had stayed out of branding after Chinese dairy company Sanlu, in which it had held a large stake, was found to have added melamine  often used in plastics  to bulk up formulas in 2008.
More than six children died in the industry-wide scandal and hundreds were made sick.

Goldman, LME face legal challenge

The London Metal Exchange and Goldman Sachs have been named as co-defendants in a US class-action lawsuit alleging anti-competitive behaviour in aluminium warehousing, said Hong Kong Exchanges and Clearing (HKEx).
Goldman on Wednesday tried to diffuse years of frustration over long waiting times and inflated prices at metals warehouses across the world by offering immediate access to aluminium for end users holding metal at its Metro warehouses.
Criticism of banks that own commodity assets and trade raw materials has ratcheted up in recent weeks, with the US Department of Justice starting a preliminary probe into the metals warehousing industry, sources said.
Britain's financial watchdog is also investigating the LME's warehousing system.
The lawsuit alleges "anti-competitive and monopolistic behaviour in the warehousing market in connection with aluminium prices", LME owner HKEx said in a statement on Sunday.
The lead plaintiff in the lawsuit, filed on Friday in the US District Court in Michigan, is Superior Extrusion  an end user of aluminium.
"LME management's initial assessment is that the suit is without merit and LME will contest it vigorously," HKEx said.
Customers and US lawmakers have accused Goldman and other warehouse owners of artificially inflating waiting times to boost rents for warehouse owners and lift metal prices.
London Metal Exchange aluminium for three months delivery closed at $1 809 per ton on Friday.