China won't fold on RMB

By Xin Zhiming (China Daily)

Analysts say a hasty appreciation of the yuan will be detrimental to China's economy.

China yesterday urged the United States to "objectively and rationally" consider its renminbi exchange rate while economists said the country is not likely to bow to US pressure to hasten an appreciation of the yuan.

"China does not seek a trade surplus with the US," said Foreign Ministry spokesman Ma Zhaoxu yesterday.

The yuan's exchange rate against the dollar is largely at a reasonable level, he added, and the yuan's value is not a major element in the US trade deficit with China.

US President Barack Obama has vowed to "get much tougher" with China on trade and currency issues to fuel US exports and narrow its trade deficit with China, the world's largest exporter.

With the US promising to sell arms to Taiwan and Obama planning to meet with the Dalai Lama, analysts said the possibility of a speedy yuan appreciation is slim.

"Even if the yuan's value rises, it is China's own business," said Li Jian, economist with the research institute under the Ministry of Commerce. "China will not (appreciate the rate) in accordance with the US' demand."

He said the yuan's value will largely be stable this year without any sudden or quick revaluation.

What China should consider is its own economic stability, which bears heavily on the global economic recovery, analysts said. China reportedly contributed to about half of the global economic growth last year.

"Although China's export sector is recovering from deep slumps last year, its growth is not yet stable," said Liu Dongliang, currency analyst of the China Merchant Bank. "A quick yuan appreciation will be detrimental to China's economy, especially considering that the government is expected to gradually withdraw its stimulus policies".

China's stimulus package helped expand the economy by 8.7 percent year-on-year in 2009. Economists said that with the nation's exit strategy implemented, its economy could face the danger of a slowdown, especially in the second half of this year.

Analysts said the market expected the yuan's appreciation to lose momentum due to China's drive to stabilize economic growth this year.

"Even if the yuan appreciates, it should be done after the US softens its stance," Liu said.

China does not want to be seen as too responsive to US pressure and if Sino-US tensions continue, the possibility of a hasty yuan appreciation is slim, he said.

The nation, responding to the US' recent and provocative actions, has announced for the first time unspecified sanctions against US firms involved in the Taiwan arms sale. China said it will also curtail military exchanges with the US and cooperation on a range of global and regional issues.

Analysts said it is unreasonable to accuse China of manipulating its currency and trying to seek a trade surplus with the US.

It has been a long-standing theory that the different economic structures of the two countries account for their trade gap, due to China's relatively low costs in manufacturing and high production costs in the US.

"Even if the yuan appreciates and Chinese exports to the US are reduced, the US would import those goods from other low-cost countries," Li Jian said. It won't help employment in the US, he added.

Analysts also said that Obama's criticism of the yuan may be an appeal to a domestic audience rather than pressuring China.

Li Wei, a scholar on US studies with Tsinghua University, said that Obama is consistently riling China up these days because he wants to please voters and reverse his declining popularity as midterm elections draw near.

China's role as a rising power has also made the US feel uneasy, he said.

Li Xiaokun and Ai Yang contributed to the story

China Daily

Karachi bomb blasts leave many dead

Two bomb blasts in the Pakistani city of Karachi, apparently targeting Shia Muslims marking a religious ceremony, have killed at least 22 people.

A bomb-laden motorcycle first exploded on a main road in the city as a bus carrying Shia worshippers passed on Friday, killing at least 12 people and wounding 40 others.

The second blast went off outside the hospital where the wounded were being taken, reportedly killing another 10 people, witnesses said.

"An explosion occurred at the Jinnah hospital near the emergency ward, where the bodies and injured were being taken," Dr Mushtaq Ahmad said.

"I heard a large blast. People are running all over the place. Casualties are feared".

Shia ceremony

Shias in Pakistan are marking Arbaeen - the end of a 40-day mourning period for Imam Hussein, a grandson of the Prophet Muhammad who was killed in a seventh century battle in Karbala.

The violence in Karachi echoed similar attacks in Iraqagainst Shia Muslims gathered in Karbala to mark the occasion.

It was not clear if either attack was carried out by a suicide bomber.

"A bomb was planted on the motorcyle and it hit the bus," Waseem Ahmad, the city police chief, said.

"We cannot determine in one and a half hours whether it was a suicide blast or not. We are examining the site. We are collecting the evidence. We are taking witness statements and then we will say something concrete".

'Destabilising' Karachi

Kamal Hyder, Al Jazeera's correspondent in Islamabad, said that it was unclear who had carried out the two attacks on Friday, but he noted that the city had previously seen ethnic, sectarian and political violence.

"It would appear that whoever is conducting these acts of terror in Karachi wants to destabilise Karachi," he said.

"There has been a lot of talk that Karachi is a strategic city, it is a port city, but whoever wants to hit Karachi primarily wants to do so because it is the financial heart of the country.

"Karachi has also seen an unrelenting wave of firing incidents, snipers shooting at ordinary people across the city".

The Pakistani Taliban have claimed past attacks against Shia Muslims in Pakistan.

Two attacks in Karachi last Decemberclaimed by the Tehrik-e-Taliban Pakistan left at least 60 people dead and unleashed a wave of angeron the city's streets.

Pakistan had tightened security in the city to protect mass processions of worshippers during Ashura- deploying tens of thousands of police and paramilitary forces.

Al Jazeera

UK banks exposed to struggling European economies

By Russell Lynch, Press Association 

UK banks have a near-£100 billion exposure to the struggling European economies currently sending shockwaves through global markets.

Nerves are frayed because a sovereign debt default by Greece - and even Portugal and Spain - could rip another major hole in bank balance sheets shaken by the financial crisis.

According to the Basel-based Bank for International Settlements (BIS), UK banks had a total £76.2 billion exposure to the Spanish economy in corporate and government lending at the end of September last year.

They also lent £7.8 billion to Greece and £15.6 billion to Portugal, according to the BIS figures.

The fears have weighed on bank stocks, with Barclays shares down almost 20 per cent in the past month. Royal Bank of Scotland and HSBC have shed 16 per cent and 13 per cent respectively.

The spiralling deficits racked up by the southern European countries in the recession are now requiring firm action, but pushing through with the drastic plans could provoke industrial action and social unrest.

According to figures from Barclays Capital, Greece's deficit stands at a mammoth 14.1 per cent of national output, with Portugal and Spain at 9.4 per cent and 10 per cent respectively.

This week the Greek Government pledged to cut its soaring deficit to less than 3 per cent in 2012 - under pressure from the European Union - through tax hikes and 10 per cent cuts in public sector wages.

This has already provoked strikes, and two of the three major ratings agencies currently rate the country's debt at little more than junk.

The woes are also putting intense pressure on the single currency, sending it to an eight-month low against the dollar as investors seek the relative safety of the greenback.

James Hughes, a market analyst at CMC Markets, said: "The Greece sovereign debt story is starting to dominate markets as fears start to grow of the country defaulting on debt payments, being bailed out by the IMF and even the possibility of being thrown out of the euro.

"This story also has the added equation of Portugal, Spain and even Ireland going the same way. The feeling is that if Greece goes then others will follow in the domino effect".

Ratings agency Moody's has taken a damning view on the prospects for Portugal, where a bond sale by the Government flopped earlier in the week.

"Given its historical performance on fiscal adjustment, Portugal faces a kind of 'slow death', where growth remains sluggish, thereby stalling incomes, and debt continues to build over time.

Spain's economy has taken "a very severe hit" but has not been permanently damaged by the crisis, making it more resistant to a ratings downgrade, Moody's added.

But what lies ahead for the UK, where borrowing is expected to reach a record £178 billion in the current financial year?

Despite the doom-laden predictions of the world's biggest bond fund, Pimco, which last month warned UK bonds were "resting on a bed of nitroglycerine", Barclays Capital economist Simon Hayes believes there is little risk of a sovereign default.

He said: "The UK had a better starting position because we had a lower level of debt to begin with although the pace of deterioration has been alarming.

"The issue for the UK is more about halting the pace of decline, that things are not going to keep getting worse at the same sort of rate".

Tackling this will be down to the next Government after a looming general election at which the economy and spending cuts are likely to take centre stage.

"People know that the squeeze is coming," Mr Hayes warned.

The Independent

Akademi Fantasia's Stacy dines with fans, impressed with Brunei

By Edwin Eng

Twenty-five lucky fans that won a contest had an intimate dinner with Stacy, the winner of popular Malaysia show, Academy Fantasia 6 in 2008. During the dinner, several fans got to play some games with Stacy.

Stacy is also the ambassador for Intimate products since 2009.

In an interview, Stacy said that it was her first time in the country and that the country is fantastic.

"What makes it fantastic are the Bruneian fans who are very supportive of me and Bruneians are very sporting".

Stacy also commented that she will be going to study in one of Malaysia's top, Lim Kok Wing University, to further her education in sound and music. She mentioned her new single entitled 'Jahat' will be out in February.

Stacy will also be presenting prizes to two winners of the contest at the Consumer Fair 5 at the International Convention Centre today.

An autograph session was also held yesterday at some supermarkets and department stores. Today, she will be having another autograph session at Hua Ho Manggis Mall branch, Bunut branch and Kiulap branch.

Borneo Bulletin

Toyota president Toyoda 'deeply sorry' for recalls

Toyota President Akio Toyoda has apologised for the recall of millions of cars across the world and pledged to set up a new quality control committee.

Mr Toyoda said he was "deeply sorry" for the recalls and admitted Toyota faced "a moment of crisis".

He added the firm was still deciding what to do about brake problems on some Prius hybrid models.

Toyota has already recalled more than eight million cars worldwide over concerns about accelerator pedals.

The US Transportation Department is investigating braking problems in the 2010 Toyota Prius after Toyota admitted brake problems with the model.

"There are reasons to believe that a recall could be put in place [in the US and Japan], but it's still early hours and early days," said Toyota UK's managing director Miguel Fonseca.

"There is still an investigation going on with the relevant authorities".

Further investigation

The US National Highway Traffic Safety Administration has received 124 reports from drivers about the braking issue, including four of crashes.

There have been no reports of any such accidents in the UK.

The investigation will look into allegations of momentary loss of braking power while travelling over uneven road surfaces.

As depressing the brakes further activated normal braking, Toyota said the glitch was not legally a safety hazard and said it had received no reports of any accidents related to it.

Mr Fonseca told the BBC that the braking problem was "not a defect, but a characteristic of the way the ABS system is tuned".

However, he did say that "we are very disappointed to have let customers down and accept that we could have handled [the problem] better".

On Thursday, the carmaker reported a net income of 153 billion yen ($1.68bn; £1.06bn) for the final three months of 2009, compared with a loss of 164 billion yen a year earlier.

The firm also said it still expected higher sales and to make a profit this year, despite the heavy blow to the company's reputation.

Toyota estimates its losses will reach $2bn (£1.23bn) in costs and lost sales from its worldwide recall of vehicles that might have faulty accelerator pedals, but a recall of Prius models would send this figure even higher.

"The losses could escalate if it turns out that the trust and reputation the company built up over a period of decades has been demolished almost overnight," said BBC business reporter Jorn Madslien.

BBC News

North Korea to free 'repentant' US missionary Robert Park

Richard Lloyd-Parry, Asia editor

An American missionary who walked into North Korea proclaiming Christian salvation and demanding the resignation of the country's dictator, Kim Jong Il, will be released after "repenting" of his crime, according to the country's official media.

The state-run Korean Central News Agency reported this morning that Robert Park, a 28-year-old US citizen of Korean descent, will soon be released six weeks after his Christmas Day crossing into North Korea from China.

Before his departure Mr Park had spoken of his wish to free the occupants of North Korea's gulags and his willingness to die in the attempt.

However, according to KCNA, a faithful mouthpiece of the North Korean regime, he has changed his view of one of the world's most isolated and repressive countries.

"According to the results of the investigation, he trespassed on the border due to his wrong understanding of the Democratic People's Republic of Korea," the news agency reported.

"The relevant organ of the DPRK decided to leniently forgive and release him, taking into consideration his admission and sincere repentance of his wrongdoings".

"I trespassed on the border due to my wrong understanding of the Democratic People's Republic of Korea caused by the false propaganda made by the West to tarnish its image," Mr Park was quoted as saying.

"I would not have committed such a crime if I had known that the DPRK respects the rights of all the people and guarantees their freedom and they enjoy a happy and stable life".

He said that his Bible had been returned to him and that he had attended a service at Pongsu Church in Pyongyang.

He added: "There's complete religious freedom for all people everywhere ... Being a devout Christian, I thought such things as praying are unimaginable in the DPRK due to the suppression of religion. Everybody neither regarded praying as something unusual nor disturbed. I was provided with conditions for praying every day as I wished.

"What I have seen and heard in the DPRK convinced me that I misunderstood it. So I seriously repented of the wrong I committed, taken in by the West's false propaganda".

The strength and sincerity of Mr Park's new faith and the freedom with which he declared it will be questioned when he finally is released. Foreign governments and human rights organisations have repeatedly accused North Korea of suppressing freedom of religion in a country where the only tolerated faith is the personality cult of Kim Jong Il and his late father, the founding "Great Leader" Kim Il Sung.

Pongsu Church is regarded by many observers as a bogus institution, maintained as a front for visiting foreigners.

"When he comes out and is interviewed again what he truly thinks will come out from the bottom of his heart," said Jo Sung Rae, a South Korean Christian rights activist. "But we do not trust the interview done by North Korea for now."

The release of Mr Park will bring to an end an awkward situation both for North Korea and the US Government. By releasing him without trial, Pyongyang is attempting to undermine Mr Park's claims that it is a vicious dictatorship. But it risks encouraging similar gestures by other Christians and activists who are dedicated to opposing the North Korean regime.

Washington will be relieved to have avoided a repeat of the situation last year when two female American journalists were arrested while filming a television documentary close to the Chinese border. They were tried and sentenced to 12 years of hard labour before being released after five months after a personal visit by the former US President Bill Clinton.

Last month North Korea reported the arrest of another US citizen for trespassing in its territory. No name or details have been released.

Times Online

Job losses from Great Recession about to get worse

CHRISTOPHER S. RUGABER

The Associated Press

WASHINGTON - Job losses during the Great Recession have been huge and they're about to get bigger.

When the Labor Department releases the January unemployment report Friday, it will also update its estimate of jobs lost in the year that ended in March 2009. The number is expected to rise by roughly 800,000, raising the number of jobs shed during the recession to around 8 million.

The new data will help illustrate the scope of the jobs crisis. Analysts think the economy might generate 1 million to 2 million jobs this year. And they say it will take at least three to four years for the job market to return to anything like normal.

"It's going to take a long time to dig out of this hole," said Julia Coronado, senior U.S. economist at BNP Paribas.

Wall Street economists expect the January report will show a tiny increase of 5,000 jobs. That would be only the second monthly gain since the recession began. But it probably wouldn't be enough to hold down the unemployment rate, which is forecast to rise to 10.1 percent. That would match October's 26-year high. And it would be the fourth-straight month of double-digit joblessness.

The Labor Department's revisions on employment levels are done every year. They are based on unemployment insurance tax data that companies submit to states.

Jobs remain scarce even as the economy is recovering: Gross domestic product, the broadest measure of the nation's output, has risen for two straight quarters. GDP rose by 5.7 percent in the October-December quarter, the fastest pace in six years.

But hiring is still lagging. Many economists say businesses are reluctant to add workers because it's not clear whether the recovery will continue once government stimulus measures, such as tax credits for home buyers, end.

The debate over health care reform and the scheduled expiration of some Bush administration tax cuts at the end of this year may also cause companies to restrain hiring, many economists said.

"Until some of these uncertainties from Washington get cleared up, businesses, particularly small businesses, are going to be loath to do any additional hiring," said Hank Smith, chief investment officer at Haverford Investments.

High unemployment is likely to hold back consumer spending, which has led most recoveries in the past. That's why many economists think the current rebound will be weak.

Public concern about persistent unemployment has forced President Barack Obama and members of Congress to shift their attention to jobs and the economy and away from health care reform. The Senate will begin working Monday on legislation that would give companies a tax break for hiring new workers, Majority Leader Harry Reid said Thursday.

The budget plan Obama released this week projects unemployment will still be very high , 9.8 percent , by the end of this year.

Instead of adding workers, many companies are squeezing their existing work forces to produce more. Productivity rose by a seasonally adjusted 6.2 percent in the fourth quarter, the Labor Department said Thursday, above analysts' expectations of a 6 percent rise. That was the third straight quarter of sharp gains.

Productivity often increases at the end of recessions as companies ramp up output before hiring new workers. Rising productivity can raise living standards in the long run. But it can also make it easier for companies to put off adding jobs.

A separate Labor Department report on initial claims for jobless benefits said claims rose unexpectedly last week by 8,000 to 480,000. The rise in claims was the fourth in the past five weeks. It disappointed economists, who thought claims would resume a downward trend evident in the fall and early winter. The four-week average, which smooths fluctuations, rose for the third straight week to 468,750.

Most economists say claims need to fall to about 425,000 or below for a month to signal that employers are stepping up hiring.

Still, some positive signs emerged in the productivity report. Hours worked in the fourth quarter rose 1 percent. That was the first increase since the second quarter of 2007. Output rose 7.2 percent, the largest increase since the third quarter of 2003.

To continue increasing production, economists say companies will eventually have to start adding jobs again. That should bring productivity gains back down toward their long-run average of about 2.5 percent.

"You can push your workers but so far," said Anika Khan, an economist at Wells Fargo Securities. "At some point businesses have to begin to hire".

But the main question is when. The economy could begin generating net job gains as early as March, Khan said. But they won't be enough to hold down the unemployment rate. Wells Fargo expects the rate to peak at 10.5 percent in the second half of this year.

Philadelphia Daily News

H.R. Giger’s Cyborg Horror Merges Sex, Tech, Legend

By Scott Thill

Wired