China Announces 4 Trillion Yuan Economic Stimulus

By Li Yanping and Chia-Peck Wong, Bloomberg 

Nov. 9 (Bloomberg) -- China announced a 4 trillion yuan ($586 billion) stimulus plan to spur expansion in the world's fourth-largest economy, helping sustain global growth as the U.S., Europe and Japan teeter on the brink of recession. 

The funds, equivalent to almost a fifth of China's $3.3 trillion gross domestic product last year, will be used by the end of 2010, the Beijing-based State Council said today on its Web site. China will adopt a ``pro-active fiscal policy'' and pursue a ``moderately loose'' monetary policy, it said. 

China is taking steps to bolster its economy less than a week before Premier Wen Jiabao goes to Washington for talks with global leaders on ways to alleviate the world's biggest financial crisis since the Great Depression. People's Bank of China Governor Zhou Xiaochuan said yesterday boosting domestic demand is the best way China can help stabilize the economy. 

``The downside risks to economic growth are significantly greater now than just a few months ago,'' said Ma Jun, chief China economist at Deutsche Bank AG in Hong Kong. ``China needs an aggressive fiscal stimulus package.'' 

The spending announced today, of which 100 billion yuan is earmarked for this quarter, will cover low-rent housing, infrastructure in the rural areas, as well as roads, railways and airports, the State Council said. The government will also allow tax deductions for purchases of fixed assets such as machinery to stimulate investment, a move that will reduce companies' costs by an estimated 120 billion yuan. 

Manufacturing, Property Slump 

Wen is trying to stop China's economic slowdown from deepening as exports wane, manufacturing contracts and a property slump undermines domestic demand. The central bank has already cut interest rates three times in two months, reducing the one-year lending rate to 6.66 percent. 

Manufacturing contracted by the most since at least 2004 in October and export orders dropped to their lowest, according to CLSA Asia Pacific Markets. Home sales have plunged in major cities including Beijing and the stockpile of unsold new vehicles was at a four-year high in September. 

China's economy may grow 7.5 percent or less, the slowest pace in nearly two decades, in 2009, according to UBS AG and Credit Suisse AG. Last year, the expansion was 11.9 percent. 

``The golden years have shuddered to a dramatic halt,'' said Stephen Green, head of China research at Standard Chartered Bank Plc in Shanghai. 

To contact the reporters on this story: Li Yanping in Beijing at yli16@bloomberg.net

Russia: Fire system poisoned 20 killed on sub

CNN

MOSCOW, Russia (AP) -- The fire safety system on a new Russian nuclear-powered submarine malfunctioned on a test run in the Sea of Japan, spewing chemicals that killed at least 20 people and injured 21 others, officials said Sunday. 

A file photo of the Shchuka-B type Russian submarine, classified by NATO as Akula

 

It was Russia's worst naval accident since torpedo explosions sank another nuclear-powered submarine, the Kursk, in the Barents Sea in 2000, killing all 118 seamen aboard. 

The victims died of poisoning from Freon gas that was released Saturday when the fire-extinguishing system accidentally turned on, said Sergei Markin, an official with Russia's top investigative agency. 

His agency has launched a probe into the accident, which Markin said will focus on what activated the firefighting system. He suggested there could be possible violations of operating rules, which points to human error. 

The submarine itself was not damaged and traveled back to its base on Russia's Pacific coast under its own power Sunday, Russian navy spokesman Capt. Igor Dygalo said. 

The nuclear reactor that powers the sub was operating normally and radiation levels in the sub were also normal, Dygalo said. 

The submarine returned to Bolshoi Kamen, a military shipyard and a navy base near Vladivostok, state-run Rossiya television said. 

Dygalo said the deaths and injuries were due to the "unsanctioned activation" of the firefighting system in the two sections of the submarine closest to the bow. 

Seventeen civilians and three seamen died in the accident and 21 others were hospitalized after being evacuated to a destroyer that brought them to shore, Markin said in a statement, revising earlier casualty figures. 

Dygalo said the submarine had 208 people aboard, including 81 servicemen, and was to be commissioned by the navy later this year. 

Officials did not reveal the name of the submarine, but Russian news agencies quoted officials at the Amur Shipbuilding Factory saying the submarine was built there and is called the Nerpa. 

Construction of the Nerpa, an Akula II class attack submarine, started in 1991 but was suspended for years because of a shortage of funding, they said. Testing on the submarine began last month and it submerged for the first time last week. 

First Deputy Defense Minister Alexander Kolmakov and navy chief Adm. Vladimir Vysotsky were heading for the Pacific Coast in the wake of the accident, Dygalo said. 

Saturday's accident came as the Kremlin is seeking to restore Russia's naval reach, part of a drive to show off the nuclear-armed country's clout amid strained ties with the West. A naval squadron is headed to Venezuela for joint exercises this month in a show of force near U.S. waters. 

Despite a major boost in military spending during Vladimir Putin's eight years as president, Russia's military is still hampered by decrepit infrastructure, aging weapons and problems with corruption and incompetence. 

The Kremlin said President Dmitry Medvedev was told about the accident immediately and ordered a thorough investigation. 

Putin, now prime minister, was criticized for his slow response to the Kursk disaster. 

In 2003, 11 people also died when a Russian submarine that was being taken out of service sank in the Barents Sea.

Brazil demands sweeping global financial overhaul

The Jakarta Post

Alan Clendenning, The Associated Press, Sao Paulo | Sun, 11/09/2008 8:28 AM  

Brazil's president on Saturday demanded that major reforms of the international financial system include strong input from large emerging nations and said the collapse of modern banking structures is victimizing the world's poor. 

Those who have the least stand to lose the most from a credit crunch that has slammed businesses from Brazil to China, President Luiz Inacio Lula da Silva said at a meeting of finance ministers and central bank presidents from 20 of the world's wealthy and emerging economies ahead of a Nov. 15 summit in Washington. 

The Group of 20 nations must "formulate proposals for a substantial change of the world's financial architecture," Silva said. "This system collapsed like a house of cards that dragged down with it the dogmatic faith in the principles of nonintervention by the state in the economy." 

In closed-door talks, leaders also discussed ways for nations to boost government spending to counter a global slowdown that could lead trade to contract next year for the first time since 1982, said World Bank President Robert Zoellick. 

Chinese officials in particular discussed a strong fiscal expansion, Zoellick said. 

Millions of people in developing nations are suffering from a worldwide credit crunch that started in the U.S. and Europe and has spread to rapidly growing emerging market nations, Silva said. In Brazil, farmers are now are planting less soy, and corporations are cutting output of iron ore, steel, automobiles and other products. 

After lending by rattled U.S. and European banks slowed, foreign investors sold off emerging market assets, forcing extreme measures by governments including Brazil's to prop up sagging currencies and provide credit lines to companies. 

"Foreign investment funds are withdrawing their assets in the capital markets of emerging countries to cover the losses they sustained in advanced markets," Silva said. "This loss of funds affects balance of payments and makes it difficult for companies to finance themselves." 

France has proposed incorporating emerging economies into the exclusive G-8 club of industrialized nations. Brazilian Finance Minister Guido Mantega suggested that group should include as many as 15 countries, but didn't specify which emerging-market nations besides Brazil, Russia, India and China should be allowed to join. 

The International Monetary Fund could also become the world's financial watchdog, with increased powers to curb financial crises with more money to aid troubled economies, European presidents suggested Friday. 

But Brazil and other emerging-market nations have long complained their representation in the IMF and World Bank is insufficient, and Silva on Saturday said the G-20 is better positioned to forge new international financial regulations, because it more broadly represents both rich and developing countries. 

"We need a new, more open and participative governance," said Silva, a former union leader who is Brazil's first working class president. "This is not the moment for narrow-minded nationalism or of individual solutions." 

Washington supports giving Brazil and other developing nations a significant role, said David McCormick, the U.S. Treasury Department's undersecretary for international affairs. 

Silva "presented a constructive overview of the challenges we face and the need for developed and developing nations to work together in addressing those challenges," McCormick said in a statement. 

Large emerging economies will inevitably form part of whatever group wins the task of rebuilding and strengthening the financial system, Zoellick said. But he warned that extremely poor nations whose economies are most vulnerable, including many in Africa, also need a voice because their citizens will be most hurt by the current turmoil. 

"We need to make sure that the financial crisis doesn't become a human crisis," Zoellick said.

TIGHTEN SECURITY

The Jakarta Post

The Associated Press | Sun, 11/09/2008 10:40 AM 

  

Indonesian ellite Brigade Mobile stand guard after the execution of the three Bali bomber convicts at the Nusakambangan ferry port in Cilacap, Central Java, on Sunday. Indonesia executed Imam Samudra, 38, and brothers Amrozi Nurhasyim, 47, and Ali Ghufron, 48 Saturday for helping plan and carry out the 2002 Bali bombings that killed 202 people, many of them foreign tourists. (AP/Tatan Syuflana)

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Some families of Imam Samudera alias Abdul Aziz, a Bali bomber in October 2002, are praying for their brotherhood in Lopang Gede, Serang, Banten Province, Saturday (Nov.8). The family prays before Imam Samudera and two others Bali bombers, Amrozi and Mukhlas, executed in Nusakambangan prison Saturday night. (ANTARA photo/Jefri Aries)

China tells rich polluting nations to change lifestyle

By Chris Buckley and Emma Graham-Harrison, Fri Nov 7, 2008 2:17am EST  

BEIJING (Reuters) - Chinese Premier Wen Jiabao said rich nations must abandon their "unsustainable lifestyle" to fight climate change and expand help to poor nations bearing the brunt of worsening droughts and rising sea levels. 

Wen told the opening of a conference Friday the financial crisis was no reason for rich nations to delay fighting global warming. 

"As the global financial crisis spreads and worsens, and the world economy slows down apparently, the international community must not waver in its determination to tackle climate change," Xinhua news agency quoted him as saying. 

The two-day meeting is to push China's call for rich nations to fund a huge infusion of greenhouse gas-cutting technology for developing countries. But foreign officials at the meeting raised doubts about Beijing's proposal, which could stoke contention over who pays and how much. 

China is widely believed to be the biggest emitter of carbon dioxide, the main greenhouse gas from industry, power plants and vehicles lifting global temperatures. But Wen threw the onus back on rich nations, with their much higher emissions per person and long history of polluting the air. 

"Developed countries shoulder the duty and responsibility to tackle climate change and should alter their unsustainable lifestyle," he told the meeting. 

Chinese officials have said wealthy nations should divert as much as 1 percent of their economic worth to paying for clean technology transfers and helping the Third World overcome damage from the rising temperatures bringing more heatwaves and droughts, more powerful storms and rising sea levels. 

This would mean a total $284 billion a year if members of the Organization for Cooperation and Economic Development (OECD) paid up based on the size of their economies in 2007. 

Over 190 nations have agreed to seek a new treaty to curtail greenhouse gases from industry, vehicles and land-clearing. China wants technology aid to feature in that pact, which negotiators hope to seal in Copenhagen late next year. 

HOW TO PAY FOR IT? 

Climate officials gathered in Beijing welcomed China's growing activism on the issue but questioned its proposal, especially with an economic downturn draining coffers. 

"It is undeniable that the financial crisis will have an impact on the climate change negotiations," said Yvo de Boer, who heads the U.N. Climate Change Secretariat. 

"If we go to citizens under the current circumstances ... and say 'I'm increasing your tax burden in order to pay for climate policy', that might not go down very well," he told Reuters. 

Denmark's Climate Change Minister, Connie Hedegaard, who is helping guide negotiations leading to Copenhagen, said other governments wanted to see what China offers in future emissions goals in return for help and big emissions cuts by rich nations. 

Few rich nations have lived up to vows to give a sliver of their GDPs to development aid, giving little hope for any similar approach to climate change, she said in an interview. 

"I think we will not be able to do this at an adequately big scale unless we also activate market forces," she said of technology transfers. 

But Beijing will wait to see what U.S. President-elect Barack Obama offers in greenhouse gas goals and aid before showing more of its own bargaining cards, said Hedegaard. 

"I definitely believe that behind the scenes things are being prepared and analysed," she said of China. "But I take it that China, as we all do, will await the new signals coming out of Washington." 

(Editing by Nick Macfie and Bill Tarrant) 

 

Representatives from Indonesia, Israel sign medical agreement

Muhammad Nafik, The Jakarta Post, Jakarta |  Fri, 11/07/2008 10:54 AM  

Indonesian delegates signed a medical cooperation agreement with Israel's national emergency medical service Magen David Adom (MDA) and the American-Israel Joint Distribution Committee in Tel Aviv last week. 

The US$200,000 agreement involved Sudibyo Markus, deputy chairman of Muhammadiyah, which, with some 30 million members, is Indonesia's second largest Muslim organization. 

The Indonesian delegation was led by Prof. Aryono Pusponegoro from the University of Indonesia, who chairs both the 118 Emergency Ambulance Service Foundation and the Indonesian College of Surgeons. 

"I was invited there (to Tel Aviv) to sign the agreement only as a witness. It was Pak Aryono who was directly engaged in the cooperation," Sudibyo told The Jakarta Post on Thursday. 

"There was no a memorandum of understanding between Muhammadiyah and Magen David Adom," he stressed. 

However, Sudibyo said Aryono currently serves as an health advisor to Muhammadiyah. 

"Muhammadiyah is interested in such a program," Sudibyo added. 

The Muhammadiyah runs dozens of clinics, hospitals, orphanages, schools and universities across Indonesia, which are recognized by the government as well as international organizations. 

Sudibyo said the accord, signed with MDA chairman Noam Yifrach on Oct. 30, was a cooperation between Israel and Indonesia regarding humanitarian emergency health services. 

The visit was also intended to promote an "interfaith" dialog between the Jewish state and the world's largest Muslim nation, he added. 

He said the visit would not have happened if the MDA had not been recognized as an equal member of the International Committee of the Red Cross two years ago. 

The agreement was preceded by a week-long MDA course on the "management of multi-casualty incidents", something that the two countries sadly share a need for. A group of 23 leading Indonesian health system professionals attended the course. 

Yifrach and the MDA coordinator of the Red Cross and Red Crescent, David Abadi, came to Jakarta in September to finalize plans for the Indonesian doctors to take part in the training. 

Both Yifrach and Abadi held meetings in Jakarta during the visit, The Jerusalem Post reported. 

Sudibyo said the cooperation was made as Israel is home to the world's leading experts in medical emergencies. 

"I was interested in going there to learn about its medical emergency services system," he said. "In India it takes some 30 minutes for an ambulance to bring a victim to hospital, while in Israel it takes a maximum of 10 minutes," he added. 

"It's easier to order a pizza in Indonesia than an ambulance," Aryono was quoted by The Jerusalem Post as saying to the laughter of his colleagues. The dismal paramedic units he alluded to face severe financial difficulties and were hit hard by the tsunami that devastated Southeast Asia in 2004. 

"People don't know what a paramedic is in Indonesia. "But after this trip, they will," he continued. 

The accord will lead to the training of Indonesian medics and paramedics in Israel and at home. 

Sudibyo said the Indonesian doctors who were trained in Tel Aviv would pass their knowledge on to other paramedics upon returning home. 

The recent exchange visits between Indonesia and Israel are rare events, since the two countries have no diplomatic ties. 

"When there are people-to-people interactions, and personal relationships being built, things start happening," Aryono said. 

"This is how you make peace. As soon as politics comes into it and politicians get involved the whole thing falls apart," Yifrach was quoted as saying. 

"I believe this could lead to a process of eventual diplomatic relations between the two countries," he added.

Black pope "possible" after Obama`s White House win

Turin, Italy (ANTARA News) - Barack Obama's victory in the US presidential vote marks a "great step forward for humanity" that could be mirrored with the election of a black pope, according to a top US Roman Catholic cleric. 

"If Obama at the White House is like the first time man (stepped on) the moon, then it can certainly happen at the threshold of St Peter's," the Archbishop of Atlanta, Wilton Daniel Gregory, was quoted as saying in an interview published Thursday in an Italian newspaper. 

The election of a black man as successor to Pope Benedict XVI is "certainly possible," Gregory told Turin-based daily La Stampa. 

Gregory is the first African-American to have served as president of the US Conference of Catholic Bishops, holding the position from 2001 to 2004. 

"Through the wisdom of the cardinals guided by the Holy Spirit, this could happen at the next conclave," Gregory said, referring to the assembly of top prelates that elects popes. Not wanting to seem to wish ill health for Benedict, he quickly added: "We all hope this will take place as far away in the future as possible." 

Gregory pinpointed the efforts of several recent popes who, he said, gave the Roman Catholic Church and the Vatican hierarchy more of an international outlook. 

Among these were, John XXIII (1958-1963), who paved the way for masses to be held in local languages, instead of Latin; Paul VI (1963-1978), the first modern-era pontiff to undertake major journeys abroad; and the globetrotting John Paul II, the first non-Italian pontiff in over 400 years. 

Gregory also gave credit to the German-born Benedict, who before his 2005 election said that an election of an African as pontiff would be "a beautiful sign." 

"For some time there's been a new mentality in the Church. It is no longer centred on the West but it is global, and this is expressed through its ecclesiastical mission," Gregory was quoted by DPA as telling La Stampa.

Poll: Indians, Indonesians most positive in Asia in face of slump

Hong Kong (ANTARA News/dpa) - India and Indonesia have Asia's highest levels of consumer confidence in the face of the global economic slump, according to a survey published Friday.

India ranked first in the global survey of consumer confidence conducted in September and October while Indonesia finished third behind Denmark, the South China Morning Post reported. 

Australia ranked fifth in the survey of 52 countries and territories while New Zealand was joint eighth, Vietnam ninth and mainland China joint 10th. 

The survey was conducted by the market research company Nielsen and ranked consumer confidence on a scale of one to 200. India scored 114, Denmark 112 and Indonesia 110, compared with an average of 84. 

Other countries in the top 10, which included 18 countries because of a high number of tied positions, were the United Arab Emirates, Norway, Brazil, the Philippines, the Netherlands, Switzerland, Canada, Columbia and Venezuela.

China and Taiwan in landmark deal

BBC 

China and Taiwan have signed landmark agreements to improve direct trade and transport links, following the highest-level Chinese visit in decades. 

The agreements are set to triple the number of weekly direct passenger flights and allow cargo shipments between ports in China and Taiwan. 

They also aim to improve the postal service and food safety. 

China claims sovereignty over Taiwan though they have been separately governed since 1949. 

The agreements were announced on the second day of a five-day visit to Taiwan by Chen Yunlin, China's top official for handling relations with Taiwan. 

Previously, sovereignty issues involving vessels and crews forced costly detours through third countries, while China-Taiwan flights were forced to stop in Hong Kong or Macau.

Under the agreements: 

• Direct charter flights will increase from 36 to 108, and can operate daily rather than four days out of seven
  
• Routes will be shortened and private business jet flights will be allowed
  
• Direct cargo shipments will be allowed between 11 Taiwan sea ports and 63 in China, tax free
  
• Sixty direct cargo flights will be allowed per month
  
• Direct postal links will be expanded to improve delivery time, currently up to 10 days
  
• Food safety alerts between the countries will be set up.
  

 

Taiwan has the diplomatic recognition of a handful of states. 

But since Mao Zedong's Communists won the Chinese civil war and the defeated Kuomintang fled to Taiwan, China has regarded it as a breakaway province which it has threatened to reunify using force.

Taipei protests 

The latest trade agreements come after the two sides held their first, high-level meeting in a decade in June this year, in Beijing.

The improvement in relations follows the election of President Ma Ying-jeou in Taiwan. 

However, Mr Ma's overtures of ending decades of political rivalry with Beijing have sparked fierce protests in Taiwan, including accusations that he is "selling out" to the mainland.

Pro-independence groups staged small protests around Taipei to coincide with Mr Chen's visit, waving flags and banners.

Thousands of police were deployed to ensure Mr Chen's safety, after his deputy Zhang Mingqing was jostled and knocked to the ground by protesters during a visit to Taiwan in October.

China, Indonesia vow to deepen cooperation

www.chinaview.cn  2008-11-04 13:44:15     

JAKARTA, Nov. 4 (Xinhua) -- Senior leader of the Communist Party of China (CPC), Zhou Yongkang, on Monday pledged to deepen China's all-round cooperation with Indonesia. 

In a meeting with Indonesian Vice President Yusuf Kalla, Zhou, one of the nine-member Standing Committee of the Political Bureau of the CPC Central Committee, reviewed bilateral relations. 

"As two big developing countries in Asia and the world, China and Indonesia share extensive common interests in regional and global issues. The two also have important responsibilities to ensure and promote the regional peace, stability and development," Zhou said. 

On the economic front, the two countries are highly complementary and enjoy a broad outlook for cooperation, he said. 

Zhou said the CPC and the Chinese government valued the strategic partnership with Indonesia and would like to make joint efforts to deepen cooperation in all fields and benefit the two nations. 

Yusuf Kalla said bilateral relations had progressed rapidly in recent years particularly thanks to the joint efforts of the two presidents. 

Yusuf spoke highly of the role of Chinese corporations in Indonesia's energy development, power, telecommunications and other infrastructure. 

He said the stronger economic and trade relations between the two countries would be of special significance to tacking the difficulties resulting from the global financial crisis. 

Later on Monday, Zhou also met with Speaker of the Indonesian House of Representatives Agung Laksono. 

Zhou said the inter-party relationship and legislative ties are important parts of bilateral relations and play a very import role. 

"China pays much attention to developing friendly cooperation with parties and the parliament in Indonesia," he said. 

He said he hoped the two countries would carry out their policies and enhance exchanges in both bilateral and multilateral arenas so as to further promote understanding and friendship. 

Agung said Chinese corporations' investment in Indonesia had kept a robust growth despite the global financial crisis. 

He said Indonesia has seen a huge potential in bilateral trade cooperation. 

The parliament and parties in Indonesia would like to work more closely with Chinese counterparts and make due contribution to deepening bilateral strategic partnership. 

Editor: Yao

Prince Charles meets with religious leaders

Jakarta (ANTARA News) - Visiting Prince Charles of Britain met with several religious leaders at a Conference on Religion and the Enviroment organized by the Nahdlatul Ulama (NU) Islamic organization here on Monday. 

Prince Charles was at the conference, attended by religious leaders from several regions in the country, for only about 15 minutes after giving a lecture at the state palace earlier. 

He arrived at the conference at around 3pm, welcome by NU chief Hasyim Muzadi who then introduced him to a number of religious leaders present at the conference including environment minister Rachmat Witoelar. 

He chatted with the religious leaders for a while before leaving the venue. 

The conference discussed readiness of religious leaders to participate in informing the people about the danger of climate change and appealing to the people to conduct mitigation and adaptation. 

In his visit to Indonesia, Charles raised two issues namely climate change and inter-faith dialogue. 

He said in his explanation that Indonesia as an archipelagic country was very vurnarable due to the increasingly unfriendly environmental development including the prediction that in the next five years the ice cap would totally vanish in the summer. 

He said "the rise of the sea level has affected the life of the people living on the coastal regions in Java and other places." 

Prince Charles also said Indonesia faced a great challenge with regard to protecting and conserving its tropical forests. In view of that he called on developed countries to give a right incentive to countries hat had tropical forests. 

He said the ultimate goal of all efforts in forest conservation and greenhouse gas reduction was creating a good environment for mankind. 

Prince Charles that day also visited a public cemetary in Menteng Pulo where a number of British citizens and soldiers, mostly victims of war against Japan in 1942, were buried, and the national museum. 

During the current visit Prince Charles was not accompanied by his wife, Princess Camilla. 

In his first visit to Indonesia in 1989 he was accompanied by then his wife, Princess Diana.

A cultural divide? While the West axes jobs, Asia cuts pay

By Kevin Lim, Reuters, Mon Nov 3, 2008 5:52am EST,   

SINGAPORE (Reuters) - From bankers to factory staff, workers in the West face the bleak prospect of losing their jobs as a global recession starts to bite. For colleagues in the East, the pain is more likely to come through a pay cut. 

Human resource experts say cultural differences explain why Asian firms try harder to preserve jobs in difficult times, which will stem unemployment and may help keep Asian economies afloat at a time of slowing exports. 

The more paternalistic East Asian attitude may also make it easier for firms to recover quickly from the economic downturn since they will not need to rehire or train new staff, leaving some experts predicting a Western shift to Eastern flexibility. 

"In the Confucian mindset, the right thing to do is to share the burden. There's that sense of collective responsibility whereas in the West, it's more about individual survival," said Michael Benoliel, associate professor of organizational behavior at Singapore Management University (SMU). 

In Hong Kong, senior staff at CLSA, the Asian brokerage arm of Credit Agricole, have agreed to a voluntary pay cut of up to 25 per cent to stave off the threat of redundancy. CLSA made similar cuts in 2003 when business slowed due to SARS. 

A Western CLSA employee, who declined to be identified, told Reuters he accepted the cut because he would have looked like "scum" in the eyes of his colleagues if he did not agree. 

Singapore's Chartered Semiconductor also implemented temporary salary reductions of 5-20 percent after posting a loss, with senior management taking the biggest hit. And in Japan, chipmaker Elpida cut its chief executive's pay by 50 percent. Steven Pang, Asia regional director for Aquent, a headhunting firm, said in many East Asian companies there was an obligation "to take care of members of the family and go through the pain together" even if that meant incurring losses. 

In contrast, Western counterparts often felt compelled to make dramatic statements to show investors they were serious about cost-cutting, Pang said. 

U.S. firms from General Motors to Goldman Sachs plan to lay off workers by the thousands, but at the Asian units of Western multinationals, job cuts will probably be less severe. 

Firms have to adapt labor practices according to the countries they operate in, which means they tend to be more restrained when sacking staff lest it hurt their ability to sell products and attract people, Benoliel said. 

JOB FLEXIBILITY 

Mark Ellwood, who heads the Singapore, Malaysian and Thai operations of Robert Walters, an executive search firm, said labor laws in most Western nations favored employees and made it difficult for firms to reduce salaries without attracting lawsuits from disgruntled employees. 

"In many cases, it's easier to make the retrenchments." 

Employment law in East Asia tended to favor employers, allowing them to be more creative, and there was also government and public support for measures that help save jobs. 

Singapore, for instance, encourages firms and unions to develop "flexi-wage" packages that allow employers to adjust salaries according to economic conditions. 

According to the city-state's Manpower Ministry, about 83 percent of people in the private sector were employed under some form of flexible wage system, and 38 percent had variable components built into their monthly wages as at end-2006. 

The monthly variable component could run as high as 70 percent in the case of top executives, said Ho Geok Choo, president of the Singapore Human Resources Institute (SHRI). 

The policy has kept the city-state's unemployment at a low 2.2 percent, versus 1.7 percent in last year's fourth quarter. 

Japan's jobless rate was 4 percent in September, up from 3.8 percent in January, while Hong Kong's was flat at 3.4 percent. But U.S. unemployment is expected to have jumped to 6.3 percent last month from below 5 percent in January. 

WEST MEETS EAST? 

Experts say that while there are noticeable differences in labor practices in East and West, the gap will narrow as more firms become more multinational and competition forces firms to adopt the best practices of rivals from abroad. 

Aquent's Pang noted many large Japanese firms no longer offer jobs-for-life, while Western multinationals now employ a large number of people in Asia. 

"With the trend of major Japanese companies being run by non -Japanese CEOs, slowly but surely they are starting to adopt more of a Western management style and philosophy." 

However, SHRI's Ho said the global crisis has raised questions about the Anglo-Saxon way of doing business, and he predicted a shift toward a more paternalistic work culture. 

Western firms are trying harder to put on a more human face amid growing distrust among the youth in their home countries. 

In the past, layoffs meant an empty box and an escort to the carpark, but firms now offer counseling and consultants to help staff find jobs elsewhere, said SMU's Benoliel. 

"They'll still kill you, but they now do it gently." 

(Additional reporting by Jennifer Tan; Editing by Neil Chatterjee & Ian Geoghegan)

Melamine already in global food chain

The Jakarta Post 

Gillian Wong, The Associated Press, Beijing     

First, it was baby milk formula. Then, dairy-based products from yogurt to chocolate. 

Now, chicken eggs have been contaminated with melamine, and an admission by state-run media that the industrial chemical is regularly added to animal feed in China is fueling fears the problem could be more widespread, affecting fish, meat and who knows what else. 

Peter Dingle, a toxicity expert at Murdoch University in Perth, Australia, said, however, that aside from the tainted baby formula that killed at least four Chinese infants and left 54,000 children hospitalized just over a month ago, it is unlikely that humans will get sick from melamine. 

The amount of the chemical in a few servings of bacon, for instance, would simply be too low, he said. 

But Dingle and others said China should have cracked down sooner on feed companies that have boosted their earnings by fortifying their products with the chemical, which is normally used in the manufacture of plastic and fertilizers. 

Rich in nitrogen, melamine gives low-quality food and feed artificially high protein readings. 

"Traders can make a lot of profit by doing it," said Jason Yan, the U.S. Grains Council's technical director in Beijing. 

Extremely high levels of melamine - as found in the Chinese baby formula - can cause kidney stones and in extreme cases can bring on life-threatening kidney failure. 

But while scientists say it's not dangerous to ingest small amounts, they cannot be definitive because there have been no tests on melamine's effects in humans. Until the contaminated baby formula became public in September, there was never any reason to. 

That leaves consumers worldwide, particularly parents, worried about food products from China and even those made elsewhere with ingredients imported from Chinese companies. 

Among those not taking any chances is Pranee Suankaew, a homemaker in Bangkok, Thailand. 

"Let's go, let's go," the 37-year-old mother said as she tugged her 4-year-old away from the candy aisle where he eagerly eyed a bag of M&Ms. "We're getting you fruit and a lollipop. There's no milk in that." 

She said she usually gives in to avoid tantrums. "But this time, I told him, no, no, no." 

Experts say melamine sometimes accidentally leaches into the food supply in low levels, from things like plastic dinnerware. It can also seep in from some pesticides and fertilizers. 

But in China, it's become clear that the chemical is deliberately added. 

The baby formula set off a global recall of foods made with Chinese dairy products and sparked raids in supermarkets across Asia. Twelve truckloads of candy, yogurt and other dairy-based goods were burned in Indonesia's capital, Jakarta, just this week. 

In light of state media reports Wednesday on the widespread use of the chemical in animal feed, health experts say the government clearly knew melamine was being added for more than a year, since contaminated dog food made it to markets in North America, but authorities didn't crack down on producers as promised. 

With the scandal escalating, Chinese leaders are now desperate to clean up the country's image, making dozens of arrests in recent weeks and firing local and even high-level officials for negligence. 

John Chapple, a Singapore-based adviser to Sinoanalytica, a food analysis laboratory in the Chinese city of Qingdao, said the decision to allow state media to report on the years of melamine use seems to show the government is ready to be more active in dealing with food safety. 

"However, one is not going to change a hierarchical government system overnight," he added. "It is usually going to be slow to start to react to a crisis, but quick to finally nail it." 

Though China has vowed to boost inspections for melamine contamination, it will be difficult to monitor the countless small, illegally operating manufacturers found across the country, other experts said. 

"It could take five or even 10 years" before some companies stop adding the chemical to food products, said Yan, of the U.S. Grains Council.

Indonesia to host Int`l humanitarian conference on Palestine

Jakarta (ANTARA News) - Indonesia will host an International Humanitarian Conference on Assistance for Palestine at the Jakarta Convention Center (JCC) here from October 31 to November 2, 2008, the chief organizer said. 

Deputy Chief of Commission III of the House of Representatives (DPR) which deals with legal and human rights affairs, Suripto, said here on Thursday that about 300 domestic and international non-governmental organizations (NGOs) would take part in the conference. 

Suripto who is also the conference`s chief organizer said that the participants would discuss various forms of assistance for the Palestinian people, both for those who lived the Palestinian areas and for those who still stayed in refugee camps in the Middle East. 

The conference is also expected to stress rejection of the Israeli occupation of the Palestinian territories. Besides, it will also voiced its rejection of the Israeli oppression and captivation of Palestinians who are posing a threat to the people of Palestine. 

Indonesia will host the conference as part of its efforts to create world peace and justice. During the colonial era, Indonesia in its struggle for independence also got support from other countries, including nations in the Middle East. 

"India provided food assistance. So was Egypt, a country which was the first to give its international recognition of the Indonesian Independence in 1945," Suripto said. 

Suripto who is also chairman of the National Committee for the Palestinian People (KNRP), said that a number of KNRP noted members would attend the conference, such as Permadi (of the Indonesian Democratic Party of Struggle), Abdullah Toha (of the National Mandate Party-PAN), Khofifah Indar Parawansa (of the National Awakening Party -PKB) and women`s prominent figure Tuty Alawiyah. 

Sometime in the past a number of countries in Asia and Africa (beginning from Indonesia and South Africa) in turn hosted ministerial conferences on capacity building for Palestine. 

Various sides were able to play significant roles in the program, Suripto said.

China says it can withstand world financial crisis

The Jakarta Post 

The Associated Press, Almaty, Kazakhstan  

China said Thursday its financial markets would remain stable enough to allow it help ex-Soviet Central Asian countries weather the global economic crisis - assistance that would augment Beijing's increasing influence in the region. 

Chinese Premier Wen Jiabao appeared to snub Western calls, however, for Beijing to help boost the International Monetary Fund's bailout pot for countries worst hit by the financial meltdown. 

On Tuesday, British Prime Minister Gordon Brown called on Beijing to put up money from its enormous cash reserves of $1.9 trillion for an enhanced fund aimed at helping countries whose banking systems and currencies are being devastated by the crisis. 

Wen, who was speaking to prime ministers from the Shanghai Cooperation Organization, said that ensuring the security of China's economy would be the country's most important contribution toward global financial stability. The organization is a security grouping dominated by Moscow and Beijing that also includes the four Central Asian countries of Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. 

"It is necessary to exercise greater interaction between our financial and business communities," Wen said. "SCO members must work ... to enhance the coordination of monetary policies and improve financial controls to prevent and neutralize financial risks." 

China sits on the world's largest cash reserves, giving it significant clout in the energy-rich Central Asia and Caspian Sea region, which is believed to contain the world's third-largest energy reserves. 

Russia and China have used SCO to try to keep the West out of Central Asia, but they also compete with each other for regional dominance. The Kremlin's hand, however, has been weakened by the financial crisis, which has ravaged Russian markets and put some of the nation's top companies in trouble. 

At Thursday's meeting, Wen said China would consider issuing loans to members of the organization to ensure food security and support joint economic projects in the region. 

"Because of the increasing relevance of food security, China stands ready to assist SCO member organizations in the establishment of important technical facilities for agriculture," Wen said. 

Food prices across the region have soared drastically over the past year as a result of increasing energy costs and disappointing grain harvests. Impoverished Tajikistan has been worst hit. 

The global crisis has also prompted Moscow to ask China for loans to help top Russian energy companies pay their obligations to global lenders. The loans-for-shares deal currently being negotiated would oblige Russia to supply 15 million tons of oil a year to China in 2011-2030 in exchange for $25 billion in loans to the state-controlled Rosneft oil company and Transneft pipeline operator, Russian news reports said. 

Russian Prime Minister Vladimir Putin sounded an aggressive note at Thursday's meeting, blaming "economic egoism" for precipitating the current crisis in a thinly veiled attack on the United States. 

Putin added that it was necessary for governments to increase their role in national economies. 

"We believe that future developments will be accompanied by an increase in the role of the state as a guarantor of successful national development," he said. 

Russia and Kazakhstan - which both sit on vast mineral reserves - recently pledged to pump billions of dollars into their respective economies in a bid to stave off concerns of spiraling financial insecurity.

RI will be more stable than India, Malaysia and Thailand in 2009

The Jakarta Post, Jakarta | Tue, 10/28/2008 9:41 PM  

With concern setting in about the declining rupiah and share prices, there is good news yet: Indonesia next year will be much more stable than regional peers India, Malaysia and Thailand, a Hong Kong-based political risk consultancy said Monday. 

"Indonesia is much more stable today than it was when the regional financial crisis hit in 1997-98. The coming election campaign is likely to see the present government return, with (President Susilo Bambang Yudhoyono) winning the presidency and keeping Jusuf Kalla as his vice president," the Political & Economic Risk Consultancy (PERC) said in a report, whose executive summary is available on PERC's website. 

Source: PERC

Following a massive crackdown on alleged terrorist group Jamaah Islamiyah in recent years, coupled with improving social conditions, Indonesia seems almost guaranteed of stability. But the threat of terrorism is still a factor, PERC warned. 

"There is still a possibility of more terrorist incidents, but overall social conditions are more stable now than at any time in a decade," it said. 

PERC assessed 16 countries in its Asian Risk Prospects -- 2009 on factors such as the risk of racial and communal tensions, struggle for power, the threat posed by social activism, and vulnerability to policy changes by other governments. 

Indonesia, Southeast Asia's biggest economy, rated as the fourth least stable country in the region, with a score of six on a scale of 10, in which zero represents the best socio-political conditions and 10 the highest risk. 

South Asian behemoth India topped the table with the highest political and social risk, scoring 6.87, mainly because of internal and external instability. PERC cited fears over Pakistan, a major player in the global war on terror. 

"India faces some of the biggest risks in 2009 because of uncertainties surrounding the coming general election, rising communal violence and terrorism incidents. 

"The biggest risk is that a deterioration in political and economic conditions in neighboring Pakistan could aggravate social unrest in India further and hurt national security," PERC said. 

Thailand is pegged to be the next least stable country in Southeast Asia next year, scoring 6.28, as the current political mayhem and the separatist violence looks set to run into 2009. 

Surprisingly, Malaysia, which escaped much of the wrath of the 1997 financial crisis, will be the third least stable in the region, with the report noting the political wranglings were aggravating racial and religious tensions. 

"The status quo is changing in ways that will see a stronger political opposition than in the past and UMNO (the ruling party) forced to share more power with non-Malay groups," the report said. 

But these three countries could be relatively immune to the global financial fallout. 

"India, Thailand and Malaysia are not so much vulnerable to negative fallout from the global financial crisis as they are to factors that are mainly internal," Robert Broadfoot, PERC managing director, told Reuters on Tuesday. 

"For these countries, the coming global economic storm is only going to make a bad situation worse," he said. 

The tightly controlled city-state of Singapore was ranked the most stable country, boasting an extremely low political risk in 2009, though its economy is expected to take a big hit from the financial crisis as it heads toward recession. 

This is expected to mirror the current situation in the United States, badly weakened economically and psychologically. 

"It is a humbling experience that, coinciding with a change in government, is likely to see the U.S. become less aggressive in pushing its views on other countries," PERC said. 

With a score of 5.33, China will have a tough year economically in 2009 but not a disastrous one. 

PERC is a consulting firm specializing in strategic business information and analysis for companies doing business in East and Southeast Asia.

Manmohan urges Europe to "do more" to combat climate change

The Hindu

Beijing (PTI): India on Saturday appealed to its European partners to "do more" to combat climate change as it suggested adoption of a "holistic approach" to tackle the problem which threatened the global environment and development. 

Noting that the progress on the implementation of the Kyoto Protocol has been slow, Prime Minister Manmohan Singh said that emissions of developed countries have actually increased by 2.6 per cent from 2000 to 2005. 

"We should call upon our European partners to do more in this regard. The developing world is committed to doing its share," Singh told the Asia-Europe Meeting (ASEM) Summit here. 

"A holistic approach is needed to tackle this problem. We cannot do so by perpetuating the poverty of the developing countries, or by preventing their industrialisation," he said. 

The challenge ahead is to put in place development strategies which improve living standards, create job opportunities and are also environment friendly, Singh said. 

"Thus, common but differentiated responsibility should be the cardinal principle of negotiations to find practical and pragmatic solutions within the UN Framework Convention on Climate Change," Singh said, advocating India's stance. 

He also said the principle of convergence of per-capita emissions of developing countries with advanced developed countries is catching imagination of international community. 

"We should recognise that each citizen of the world has equal entitlement to the global atmospheric space," he said. 

Asserting that the dependence on fossil fuels was a "cause of many problems," Singh said "greater effort is needed to promote clean and renewable sources of energy, including nuclear energy" as he highlighted India's quest for enhancing its share of atomic power. 

The world, therefore, needs a new compact plan to increase efficiency in the use of available energy resources, he said.