Friday, January 24, 2014

Banker "targeted" in shooting at Essex station

A 44-year-old banker was shot in a station car park in what police believe was a targeted attack. The man received a gunshot injury to the leg after the assailant wearing a balaclava shot him before fleeing the scene.

The victim, who has been named as Robin Clark, a broker with City firm RP Martin, got out of his car in Mount Avenue car park behind Shenfield station, Essex, and was approached by a balaclava-wearing man at around 05:51 GMT. He was taken to Basildon hospital to receive treatment, though police said his condition was not life-threatening.

Meanwhile police carried out a detailed examination of the scene before removing Mr Clark's vehicle, a Ford S-Max, on a lorry. Speaking about the incident Detective Superintendent Gary Richardson said, "At this stage we believe the victim of this assault was deliberately targeted."

"We do not believe this incident was gang-related and I would like to reassure the public that there is no reason for any undue concern," he added.

Trains running through the station were disrupted and a number of services were cancelled while investigations were conducted by police. However services resumed at about 07:00 GMT.

Many commuters also faced problems parking as the main railway station car park remained closed for much of the day.

© tvnewswatch, London, UK

Wednesday, January 22, 2014

Dotted lines, slowing economy and cigarette bans

China's economy is slowing or, as some media outlets have described it, stabilising. But the country faces many troubles ahead, financially, politically, territorially and domestically. With potential property bubbles, a rise in corruption, a risk of clashes in the South China Sea and growing pollution, the future looks extremely uncertain. With all that stress a proposed ban on indoor smoking might be a step too far.

Slowing economy

According to official data China's 2013's growth rate matched that for 2012. Gross domestic product (GDP) grew at an annual rate of 7.7% in the October-to-December period, down from 7.8% in the previous quarter. Nonetheless it was still higher than the government's target rate of 7.5%.

Monday's announcement of another lackluster economic performance struck investors hard. To many in the west, where growth of 2% would be considered an achievement, China's numbers may still inspire awe and envy. However China's ailing performance might be of some concern given it has routinely seen 10% growth a year since the 1980s. On the surface it may appear worrying but China's steady growth through the Great Recession of 2008 helped prevent the entire global economy from slipping into an even more destructive downturn.

These are the views of many financial analysts, though there are some who believe that all is not what it appears to be.

Economic concerns

China is well known for having an opaque political system. But its financial system too is far from open, and given that statistics are compiled and issued by state bodies there is scepticism amongst some that the whole truth is not being told.

Writing in Forbes only days before China released its annual financial report Gordon Chang spoke of issues that could devastate the Chinese banking system and the larger economy as well. In short, wrote Chang, "China's growth since the end of 2008 has been dependent on ultra-loose credit first channelled through state banks, like ICBC and Construction Bank, and then through the WMPs [Wealth Management Projects], which permitted the state banks to avoid credit risk."

"Any disruption in the flow of cash from investors to dodgy borrowers through WMPs would rock China with sky-high interest rates or a precipitous plunge in credit, probably both. The result? The best outcome would be decades of misery, what we saw in Japan after its bubble burst in the early 1990s."

Chang is not the only one to raise concerns. Al Jazeera reported that shadow banking - non-transparent, less regulated credit - could stoke asset bubbles and threaten stability. Indeed, one of the biggest worries for Chinese policy makers has been the rapid increase of debt, much of it channelled through a loosely regulated shadow banking system.

Rising debt

Furthermore there are increased concerns that burgeoning local government debt will only add to China's economic problems.

"Borrow and spend, or in China's case, borrow and invest, works great to prop up growth for a while but eventually debt rises, investment becomes less productive and the risks rise," says Steven Barnett, division chief at the International Monetary Fund, who covers China.

There is also the growing concern of a crash in property prices if the housing market bubble bursts. This is highly possible given the saturation of empty properties sitting idle across China, bought up by individuals and corporations as an investment. Should the price of property crash millions would find themselves in negative equity. The consequences could spiral out of control and make the sub-prime mortgage fiasco in the US, that triggered the 2008 downturn, look like a mere blip [BBC / Time].

Rise in nationalism

Faced with devastating economic problems, massive unemployment, bankruptcies and a property crash, president Xi Jinping is rallying support under the flag of nationalism and once again wielding the Communist sledgehammer [American Thinker].

China's radically undervalued Yuan currency has allowed the country to import manufacturing jobs and export low-priced products under a form of state-sponsored capitalism called "Socialism with Chinese Characteristics".

From 1993 to 2008, China's economy quadrupled, raising 500 million people out of abject poverty. The US economy only doubled, while Europe's rose by just half and Japan stagnated. Now there are concerns that could all become unravelled in a matter of years.

However, China's growth could receive a boost from one unexpected source as demand for Chinese exports from strengthening developed economies, led by the US, picks up in 2014, Jamil Anderlini writes in the Financial Times.

In the years since the financial crisis, China's economy has become less dependent on exports than it once was, and slowing investment and shrinking overcapacity should more than negate any positive effect from stronger trade, Anderlini suggests. But China's economic future is far from certain.

Dotted lines

Another issue that raises concern and uncertainty is the territorial dispute in the South and East China Sea.

In the last month concerns were raised further after China implemented new rules which required all foreign fishing vessels seek Beijing's permission to operate in most of the South China Sea. The US called the rules "provocative" [BBC]. Meanwhile some countries directly affected by the new rules responded in other ways. For the first time since Vietnam clashed with China some 40 years ago in a territorial battle, the country announced it would mark the occasion with a memorial to the dozens of Vietnamese soldiers who were killed in the bloody battle [BBC].

Meanwhile a government spokesperson in Hanoi called the new regulations "illegal and invalid" and stated, "Vietnam demands that China abolish the above said erroneous acts, and practically contribute to the maintenance of peace and stability in the region." [Yahoo News]

In Chinese state media there have been continued dismissals of those criticising China's territorial claims. In one article published by Xinhua it was claimed that the South China Sea rules were no threat to peace, this according to "experts."

Those "experts" were, needless to say, academics belonging to state run bodies.

One such "expert" quoted in the article was Wu Shicun, president of the National Institute for South China Sea Studies. He insisted that China's claim, defined by the South China Sea "nine-dash line", was established long before the United Nations Convention on the Law of the Sea took effect.

"In accordance with the intertemporal law, the nine-dash line should be recognized by the international community," Wu said. "The waters that China claims had been under Chinese jurisdiction long before the United Nations Convention on the Law of the Sea was established [in 1982], and therefore should be taken into consideration," he added.

Drifting pollution

Closer to home Xi Jinping is facing another battle to curb the ongoing threat of industrial pollution. Not only is it directly affecting China's citizens' health, it may also be affecting their wealth. New statistics appear to show that tourism has dropped, partly due to the rise in air pollution.

The "Green Book of China's Tourism" issued by the Chinese Academy of Social Sciences said revenue at hotels with a three-star rating or above dropped by nearly 12% in the first half of 2013, compared with the same period in 2012. Foreigners' reluctance to come to China was attributed by researchers to poor travel services and damage to tourist cities' reputations because of air pollution, food safety scandals and traffic congestion, the South China Morning Post reported.

But those staying at home may not escape Beijing's smog it has been revealed. According to several articles published in the last few days China's pollution is drifting across the Pacific Ocean and arriving on American shores.

The US study, upon which the reports were based, suggests that up to 25% of the sulphates found in the air of cities on the western seaboard may have originated in China [Daily Mail / Business Week].

Smoking curbs

Back in China many face more localised pollution in the form of cigarette smoke. But lawmakers are about to curb smoking in enclosed spaces, though such attempts have failed in the past. Recent reports suggest that by the end of 2014 those wishing to light up will have to go outside, a practice now seen the world over [SCMP].

China ratified the World Health Organisation's Framework Convention on Tobacco Control in 2005, but missed the deadline to honour it by 2011. The latest announcement, published in state media, indicates that China may be more serious in its commitment [Xinhua].

So far only a few cities have implemented the 2011 rules, but they are rarely enforced and often flouted [Guardian].

About one in three cigarettes smoked in the world is smoked in China, according to the World Health Organization. And more than half of Chinese men smoke, according to the Global Adult Tobacco Survey in 2010. China had the highest number of smokers in the world in 2012 with 281 million, about one-third of the world's smoking population. A report late last year by the state-run broadcaster CCTV [CNTV - Chinese] put the number of smokers in China around 350 million [NYT blog].

The statistic in themselves will make it difficult for authorities trying to impose such a ban. While many comply with no smoking bans in hospitals, stations, airports and buses, in other places notices are simply ignored. It is quite common in Beijing, for example, to see a 'no smoking' sign placed adjacent to an ashtray on a restaurant table.

Meanwhile even where restaurants do enforce the ban more strictly patrons often either blatantly ignore the restriction or smoke in the toilets.

Tax loss

With such a large percentage of the population smoking, China could face unrest should such a ban be imposed. Furthermore the country could face big financial issues. Some of China's provinces rely heavily on tobacco. Yunnan province, for example, produces around 40% of China's entire tobacco harvest, the sales of which account for around 45% of the provincial government's tax revenue. And while cigarettes are not taxed as highly as in the west, tobacco taxes account for a tenth of central government revenue.

There are also social issues. Tobacco companies often sponsor and fund schools, ironic given the health concerns, and any drop in revenue could have a knock on effect on many children's education.

But Dr. Judith Mackay, the senior adviser at the World Lung Foundation, who examines tobacco issues in China, says that there are far more important considerations. "This isn't a health problem. It's a huge economic problem. There's all these things ranging from medical and health care costs, the costs to the families and there's the cost of second-hand smoke," she told CNN.

It may be that the new rules will not be applied strictly, as was seen in 2011. Indeed with the risk of losing tax revenue, angering 250 million smoking men and potentially running some businesses into the ground [as was seen when the smoking ban was implemented in the UK as hundreds of pubs saw their custom drop], Xi Jinping may be more focused as waving the nationalist flag, asserting dominance in the South China Sea and stabilising the economy.

tvnewswatch, London, UK

Saturday, January 11, 2014

China consolidates and asserts its power

Xi Jinping has been China's president for less than a year but he is already attempting to consolidate his power under the guise of a clampdown on corruption.

Ongoing purge

The ongoing purge has already seen top party chief Bo Xilai ousted and sentenced to life imprisonment for taking millions of pounds of bribes, embezzling public money and trying to cover up the murder of the British businessman Neil Heywood [Telegraph].

But while Bo Xilai drew strong interest and headlines in both domestic and the international press, others have slipped under the radar and glare of the media spotlight.

In late 2012 Li Chuncheng, a deputy party chief of Sichuan, was investigated for corruption [BBC]. Within a year he had joined the growing list year of others ousted from the party.

Amongst them were Wang Suyi, former senior official of north China's Inner Mongolia Autonomous Region, Li Daqiu, former vice chairman of the Guangxi Committee of the Chinese People's Political Consultative Conference (CPPCC) and former chairman of the Guangxi Federation of Trade Unions, and Jiang Jiemin, head of the State-owned Assets Supervision and Administration Commission [BBC / China Daily / Telegraph].

Liu Tienan, former deputy director of the National Development and Reform Commission, and Wang Yongchun, the deputy general manager of the China National Petroleum Corporation also found themselves investigated and ousted from their positions [BBC / WSJ / Caixin].

These individuals escaped lightly in that they were merely expelled from the party. Other were less fortunate such as Former railways minister Liu Zhijun who in July was given a suspended death penalty for taking bribery and abuse of power [Xinhua].

Tiger hunt

The ongoing purge is now focussing on Zhou Yongkang and his allies in what appears to be a concerted campaign to rid the party of any individuals that might oppose Xi Jinping [SCMP / NYT / NYT / CDT]. Rumours had circulated as early as March 2012 that Bo Xilai and communist party official and domestic security chief  Zhou Yongkang had been plotting for a political takeover within the upper ranks of the Communist Party [tvnewswatch: Suspicious death of Briton with links to Bo Xilai / tvnewswatch: Rumours of coup..].

Whispers surrounding President Xi Jinping's "tiger hunt", a metaphor for seeking out corrupt senior government officials, have been circulating ever since he assumed the top positions in party and state in 2012. But Zhou's ousting would be relatively unprecedented in recent Chinese history, indeed it would hark back to the days of Mao when even top officials could be purged, jailed or even meet an unsavoury end.

Until 2012, Zhou was a member of the Politburo Standing Committee, with oversight for the police, courts and intelligence services. Although Zhou is widely believed to be guilty of corruption and abuse of power, no current or retired member of the Politburo Standing Committee has ever been prosecuted.

Last month Li Dongsheng, a deputy national police chief with close ties to Zhou Yongkang, became the latest target in the ever widening anti-corruption probe [SCMP]. While claims that Zhou may have been involved with Bo Xilai in a planned coup might be highly exaggerated, it is clear the noose is tightening.

Tightening grip

The few details which filter out paint a picture of much infighting within the CCP, though there are no official statements on the matter. There is also concern raised since the ousting of Zhou will result in Xi having more control over both the security services and the military than any Chinese leader in decades.

This is particularly concerning given a rise of nationalism across the country, a condition which has been exacerbated by China's slowing economy.

In an address made in February last year at the Center for Security Policy's National Security Group Lunch on Capitol Hill, Gordon Chang, author of The Coming Collapse of China, suggested that a slowing and distressed economy, as well as a crisis of political legitimacy would only further nationalism within China which in turn would increase hostility with its neighbours [YouTube].

Territorial claims

This something that has already manifested itself in China's establishing of a new "air defence identification zone" which covered much of the east and south China sea [BBC].

Tensions between China and its neighbours have been growing sometime concerning claims by China over disputed territory. However China's aggressive approach is seen by some as being particularly dangerous.

The newly declared zones has not been accepted by the international community and herein lies the danger. Soon after China implemented the new zone the US ignored it and flew unarmed B52s through the zone without declaring their presence. The US flights were followed soon after by brazen intrusions by South Korean and Japanese aircraft. Though China did not respond directly they subsequently put military reconnaissance flights into operation within the newly declared zone.

In a tit for tat move the South Korean then extended its air defence zone to partially overlap with the zone declared by China [Reuters]. But the most dangerous incident occurred only three days before when a United States guided missile cruiser, the USS Cowpens, was forced to take evasive action as a PLA [People's Liberation Army] Navy vessel neared each other on 5th December [BBC].

Described by some experts as the most serious Sino-US confrontation in the South China Sea since 2009 the US defence secretary Chuck Hagel warned the Chinese action was "irresponsible" and future incidents could "set off some eventual miscalculation" [BBC / NYT].

Risk of conflict

It could be argued that China is merely barking and asserting its feelings. However any missteps could well lead to a dangerous and widespread conflict. With other tensions existing between India and China over the Arunachal Pradesh region the risks are all too clear. China once again tested its nuclear neighbour when it sent troops into the disputed region on the 11th August before making a tactical withdrawal four days later [BBC].

China has continually tested the US's resolve over the last decade. It has harassed unarmed US Navy reconnaissance vessels most notably the blocking of the Impeccable in the South China Sea in 2009 [Wikipedia / BBC]. In 2001 China forced down a Navy EP-3 in the infamous Hainan Island incident and in 2006 China surfaced a Song-class attack submarine in the middle of the Kitty Hawk strike group near Okinawa [Washington Times].

So far the United States have resolved such issues diplomatically, but such impotent reactions could be read as signs of weakness by Chinese military strategists. While conflict is best averted, China's arrogance and assertiveness could well lead to a very dangerous year in 2014. Indeed, one day into the new year China implemented new rules on fishing access to disputed areas of the South China Sea which require foreign fishing vessels to ask for permission to enter its waters.

War of words

The new rules have been described as "provocative and potentially dangerous." by the United States which could itself become embroiled in any future conflict between China and its neighbours [BBC / Reuters].

"The passing of these restrictions on other countries' fishing activities in disputed portions of the South China Sea is a provocative and potentially dangerous act," State Department spokeswoman Jen Psaki told a news briefing. "China has not offered any explanation or basis under international law for these extensive maritime claims."

"Our long-standing position has been that all concerned parties should avoid any unilateral action that raises tensions and undermines the prospects for a diplomatic or other peaceful resolution of differences," Psaki added.

China however maintains the new rules were legitimate. In a report in the state run China Daily. "The goal is to strengthen the security of fisheries resources and to reasonably utilize and exploit them," ministry spokeswoman Hua Chunying said at a regular news conference and added that the implementation of the rules were "a normal routine practice" for an ocean state.

The Global Times, another mouthpiece for the Chinese Communist Party, and Xinhua both quoted Hua saying that "under international laws, universal practice and domestic laws" China had the "right and obligation to manage the biological and non-biological resources on relevant islands, reefs and in relevant waters"

Past tensions

The waters concerned have certainly seen tensions in the past. In March 2013, Hanoi accused China of shooting at a Vietnamese fishing boat in the area and setting fire to its cabin. In May, a Taiwanese fisherman was shot dead by Philippines coastguards in waters claimed by both countries, an issue which Beijing capitalised on given its territorial claims concerning Taiwan.

Speaking to BBC's Newshour today [Friday 10th January] Hu Xijin, editor of the Global Times reiterated China's stance concerning its operations in the East and South China Sea.

Occasionally described as China's Fox News, the Global Times, with a distribution of some 1.5 million, outputs often aggressive and strident nationalist articles and sharp critiques of the west and US foreign policy in particular.

"They can't interfere in our politics and we don't interfere in their politics," Hu insists, when quizzed on China's aggressive stance in the South and East China Seas concerning its neighbours. "Do you see the cannon in the South China Sea? You don't. Do you hear the cannon in the South China Sea? You don't." Hu concedes there is always an ongoing struggle but maintains the situation is not volatile. "Now in the South China Sea there is peace, not war."

Uneasy peace

There may not be a war, but the tensions existing in the South and East China Seas could hardly be described as peaceful. Xi may be attempting to maintain stable relations with the United States and Britain, trying to build business and economic ties. But at the same time Xi is expanding China's military capabilities and asserting its regional interests.

With a quickening arms race in Asia, growing nationalist rhetoric, and continued tensions with Japan, Vietnam and the Philippines, there is a risk of misunderstandings and possible mishaps.

Xi Jinping's domestic policy is intrinsically tied into its foreign policy. His anti-corruption policy may, on the face of it, seem laudable. However it is likely a whitewash.

While many of the ousted officials may indeed be guilty of massive corruption and other crimes, their dismissal from the party is likely to serve Xi's interests by shedding officials which are less willing to back his own agenda.


How many of Xi's closest allies are guilty of corruption is difficult to assess. But given that corruption runs so deep within the Chinese power structure it is hard to believe his own supporters are not taking bribes or involved in illegal activities.

Indeed according to public documents compiled by Bloomberg, Xi's own extended family have over many years expanded their business interests to include minerals, real estate and mobile-phone equipment.

The documents do not implicate Xi himself, his wife or daughter, but the massive holdings of his extended family are not comfortable reading for a man claiming to be on an anti-corruption drive.

Xi was said to be "repulsed by the all-encompassing commercialization of Chinese society, with its attendant nouveau riche, official corruption, loss of values, dignity, and self-respect," according to a leaked US cable disclosed by Wikileaks.

However Beijing's attempt to cover up foreign investigations which reveal the wealth of its top leaders, through media blackouts and censorship, only increases suspicions that corruption goes right to the top.

Thus the ongoing campaign to rein in corrupt officials is clearly a smokescreen to cover-up the central committee's wrong-doing and to rally support for the CCP as a whole. Indeed this and the nationalist campaigns are all designed to avert eyes from the very real economic problems China faces in the coming years.

tvnewswatch, London, UK