Thursday, December 18, 2014

French ex-airline boss claims cover-up on MH370

Former airline boss and famous French author Marc Dugain argued Thursday that there had been a cover-up in the disappearance of Malaysia Airlines flight MH370, speculating that the passenger jet could have been hacked and then shot down by the US.

Dugain, a well-respected French author, argues that the Boeing 777 carrying 239 people crashed near Diego Garcia, a British island in the middle of the Indian Ocean used as a strategic air force and intelligence base by the US military, in the six-page article in Paris Match.
The US has always officially denied that flight MH370 came anywhere near Diego Garcia.
The latest theory into the disappearance of Malaysia Airlines flight MH370 on March 8, 2014 has all the ingredients of a spy thriller and has grabbed the French public’s attention.
The former boss of Proteus Airlines travelled to the neighbouring Maldives where residents told local media that they had seen an airliner fly in the direction of Diego Garcia. Their claims were promptly dismissed by the authorities.
“I saw a huge plane fly over us at low altitude,” a fisherman on Kudahuvadhoo island told Dugain. “I saw red and blue stripes on a white background” – the colours of Malaysia Airlines. Other witnesses confirmed the sighting.
Fire on board?
Dugain speculates – adding to the numerous other existing hypotheses about what happened to flight MH370 – that a modern aircraft such as Malaysia Airlines' Boeing 777 could have been hijacked by a hacker.
“In 2006, Boeing patented a remote control system using a computer placed inside or outside the aircraft,” he noted. This technology lead Dugain to the idea of a “soft” remote hijacking.
But the writer also suggests that a fire could have led the crew to deactivate electrical devices, including transmission systems.
Whatever the initial reasons for leaving its flight path, Dugain suspects that the plane then headed to Diego Garcia, where a number of scenarios may have played out – including the US Air Force shooting it down for fear of a September 11-style attack.
Dugain met the mayor of neighbouring Baarah island, who showed him pictures of a strange device found on a beach two weeks after the plane had disappeared and before the Maldives military seized it. Two aviation experts and a local military officer concluded that the object was a Boeing fire extinguisher. Dugain points out that for the extinguisher to have floated, it must have been empty, having been automatically triggered by a fire. He adds that precedent exists in which fires on board aircraft caused all passengers and crew to die of asphyxiation, while the plane’s automated systems extinguished the blaze and kept it in the air.
Cover-up
The rest of his article draws more conclusions from the information that has remained buried than from new facts.
The writer notes that the search operation in the southern Indian Ocean was based on satellite data from UK-based Inmarsat – the last organisation to receive a signal from the airliner – which is "very close to intelligence agencies".
For Dugain, the suppression of testimonies from the Maldives, the unlikely event that Diego Garcia’s US intelligence officers “equipped with the best technology in the world may have ‘lost’ a 63-metre-long object”, and the secrecy surrounding the cargo in the plane’s hold all point towards a large-scale cover-up.
So does the friendly advice of a “Western intelligence officer” – a British one, Dugain said in a radio interview on Thursday – who cautioned him against the “risks” of investigating the flight’s disappearance and suggested that he “let time do its work” instead.
The writer’s conclusion is that “the only firm belief left from this investigation is that someone knows”.

N. Korea denies Sony attack but hails ‘righteous deed’

North Korea released a statement Sunday denying responsibility for last week’s cyber attack on Sony Pictures, while indirectly praising what a spokesman said might be part of the isolated nation’s call for a “just struggle” against US imperialism.

While denying responsibility for an attack last week that disrupted Sony’s computer system and spewed confidential information onto the Internet, an unidentified spokesman for the North’s powerful National Defense Commission acknowledged that it “might be a righteous deed of the supporters and sympathizers” of the North’s call for the world to turn out in a “just struggle” against US imperialism.
“We do not know where in America the Sony Pictures is situated and for what wrongdoings it became the target of the attack, nor (do) we feel the need to know about it,” the statement carried in state media said. “But what we clearly know is that the Sony Pictures is the very one which was going to produce a film abetting a terrorist act while hurting the dignity of the supreme leadership” of North Korea.
North Korea has built a cult of personality around the Kim family, which has ruled for three generations, and sees any outside criticism or mockery of its leader as an attack on its sovereignty. It recently opened fire on anti-Pyongyang propaganda balloons that North Korean defectors in the South were floating across the border into the North.
The Sony movie in question, “The Interview,” is a comedy starring Seth Rogen and James Franco, and its plot concerns an attempt on the life of leader Kim Jong Un.
Pyongyang is not amused.
The statement said the North’s enemies, the United States and South Korea, had “groundlessly linked the hacking attack with” Pyongyang, but the denial also included a threat.
The United States should know that “there are a great number of supporters and sympathizers with (North Korea) all over the world as well as the ‘champions of peace’ who attacked the Sony Pictures,” the statement said. “The righteous reaction will get stronger to smash the evil doings.”
Some cybersecurity experts say they’ve found striking similarities between the code used in the hack of Sony Pictures Entertainment and attacks blamed on North Korea that targeted South Korean companies and government agencies last year.
Experts are divided, however, over the likelihood that North Korea or independent hackers were involved.

Twelve Vietnamese workers trapped in collapsed tunnel


Rescuers drilled a hole through a collapsed tunnel in central Vietnam and were communicating with 12 trapped workers who said they were safe on Wednesday, according to an official.

UN General Assembly seeks North Korea ICC charges


The UN General Assembly has voted in favour of referring North Korea to the International Criminal Court to face charges of crimes against humanity.
The resolution was passed by 116 votes to 20, with more than 50 abstentions.
Australia PM orders investigation after
gunman dropped off watch list

Australians laid mounds of flowers at the site where a gunman held hostages for 16 hours at a popular Sydney cafe. The siege ended early Tuesday with a barrage of gunfire that left two hostages and the Iranian-born gunman dead, and a nation that has long prided itself on its peace rocked to its core.Prime Minister Tony Abbott joined the outpouring of national mourning and laid a bouquet at Martin Place, the plaza in Sydney's financial and shopping district where the crisis occurred that has since become the site of a makeshift memorial.

Tuesday, December 16, 2014

China looks to up investment in central, eastern Europe

2:17pm EST
BELGRADE (Reuters) - China said on Tuesday it would create a new investment fund of $3 billion (2.4 billion euros) targeting central and eastern Europe, seeking to strengthen its foothold in the region as a door to the wider European Union.

South China Sea Dispute: Philippines And Vietnam Allies In Position Papers Against China

 on 

Spratly Islands, South China Sea
A Chinese coast-guard vessel patrols near the BRP Sierra Madre, a marooned transport ship employed as a military outpost by Filipino marines, in the disputed Second Thomas Shoal, part of the Spratly Islands in the South China Sea, March 30, 2014. 
ASEAN Should Confront Laos On Rights Abuses: NGOs Call issued on anniversary of disappearance of Lao civil society leader Sombath Somphone

By Prashanth Parameswaran December 16, 2014

ASEAN member states should abandon their principle of not interfering in each other’s internal affairs and confront Laos on rights abuses in the country as responsible members of the international community, a group of leading regional and international non-governmental organizations said yesterday. “Instead of invoking the principle of non-interference into one another’s internal affairs, ASEAN member states must act as responsible members of the international community and uphold the…key tenets enshrined in the ASEAN charter, which recognizes the promotion and protection of human rights and fundamental freedoms….,” a statement, signed by 82 regional and international NGOs, said.

Monday, December 15, 2014

Deadly landslide destroys village in Indonesia

A landslide destroyed a village in Indonesia, killing at least 11 people, an official said on Saturday, as rescuers used their bare hands to search through the rain and mud for 108 missing people

Hundreds have been evacuated from around Jemblung in Banjarnegara, central Java, about 450 km (280 miles) from the capital, Jakarta, where media pictures showed a flood of mud and water cascading down a wooded mountainside. The landslide hit on Friday night.
Landslides and mudslides are common in Indonesia during the monsoon season, which usually runs from October until April.
Sutopo Purwo Nugroho, spokesman for the National Disaster Mitigation Agency, said 11 people had been killed and 379 people from the surrounding areas had been taken to temporary shelters.
“Jemblung village was the most affected,” he said in a statement. “Rescuers are still trying to find more victims. The challenge is that the evacuation route is also damaged by the landslide.”
The rescue team, which included police, military and local volunteers, were using their bare hands to search for people and clear the area but further rain was making the search difficult.
“There was a roaring sound like thunder,” Imam, who lives in a neighbouring village, told television. “Then I saw trees were flying and then the landslides.
“People here also panicked and fled,” he added.
Delaying rescue efforts was a lack of heavy equipment, Nugroho added, while media showed power lines and houses buried under the mud.

Police storm Sydney cafe in bid to free hostages; fatalities reported

Gunfire and explosions heard in climax to standoff; at least two people killed, according to local media

Heavily-armed Australian police stormed a downtown Sydney cafe early Tuesday following a 16-hour standoff with a gunman who was holding an unknown number of hostages..

Japan's ruling party wins in landslide victory

Prime minister’s ruling coalition triumphs in lower house elections, securing mandate to continue economic reforms

Japan's ruling coalition won big in Sunday's lower house elections, returning the party of Prime Minister Shinzo Abe to power and ensuring the continuation of reforms aimed at lifting the country's economy out of its two-decade funk.
At stake in the snap elections, called by Abe last month, was the 475-seat lower house, which is the more powerful of Japan's two houses and has the final say in picking a prime minister and approving most legislation.
With most of the votes counted, the ruling coalition claimed 326 seats, with the Liberal Democrats' 291 and 35 for the Buddhist-backed Komei party, according to NHK. The main opposition party, the Democratic Party of Japan, had about 73 seats — a stronger showing than many had expected.

Last Hong Kong pro-democracy camp cleared

A small group chanted ‘We will be back’ as Hong Kong police removed what remained of the Causeway Bay encampment

Hong Kong police pulled down barricades Monday, folded up tents and arrested some protesters at the third and final pro-democracy protest camp, putting an end to demonstrations that have blocked traffic in the southern Chinese city's streets for 2 1/2 months.

Thursday, December 4, 2014

Thai lawmakers vote to outlaw surrogacy industry


Thailand's parliament has voted to ban commercial surrogacy after outrage erupted over the largely unregulated industry following allegations an Australian couple abandoned a baby with Down's syndrome, a legislator said Friday.

A draft bill - which would see anyone profiting off surrogacy given a maximum ten year prison sentence - passed its first reading in the country's military-stacked parliament on Thursday, legislator Wallop Tungkananurak said.
"We want to put an end to this idea in foreigners' minds that Thailand is a baby factory," he told AFP. "The bill was adopted with overwhelming support."
Commercial surrogacy was technically banned by Thailand's Medical Council, but until recently even top fertility clinics were believed to offer the service.
The murky industry came under intense scrutiny this summer after a series of surrogacy scandals broke involving foreigners.
In August, a Thai mother who carried twin babies for an Australian couple accused them of abandoning a baby boy with Down's syndrome while taking his healthy sister.
The couple have denied deliberately leaving the boy, called Gammy, with the surrogate mother - who was paid around $15,000 to carry the twins.
In a separate case, police believe a Japanese man fathered at least 15 babies with surrogate mothers for unknown motives.
A gay Australian couple were also stopped from leaving Thailand with a baby because they had incomplete documents.
Thailand's military junta, which took over in a May coup, vowed to crack down on the industry.
Dozens, possibly hundreds, of foreign couples are thought to have been left in limbo after entering into surrogacy arrangements through clinics in the kingdom.

Taiwan’s premier resigns after local election losses

Taiwan’s pro-China ruling Nationalist Party suffered stronger-than-expected defeats in municipal elections Saturday, dealing a stiff blow to a president who has staked his reputation on closer ties with Beijing, and leading the premier to resign.

With more than 80 percent of precincts reporting, the Nationalists had lost eight city and county elections, including in longtime strongholds Taipei, the capital, and the major central city of Taichung. Nationalist Party candidates also lost elections in three counties, the northern port city of Keelung, the southern agricultural city of Chiayi and the city covering Taiwan’s main airport.
Pre-election polls had forecast Nationalist Party losses only in Taipei, Taichung and Keelung. Premier Jiang Yi-huah – the government’s No. 2 – resigned Saturday night after the defeats.
The heavy losses point to an electorate that is souring on President Ma Ying-jeou’s forging of closer ties with mainland China. The defeats will make it tougher for the Nationalists to hold onto the presidency in 2016 and jeopardize six years of landmark talks with China that have led to 21 agreements.
Those trade and investment deals have lifted Taiwan’s half-trillion-dollar economy, while raising Beijing’s hopes for political reunification. Beijing has claimed sovereignty over Taiwan since the Chinese civil war of the 1940s, but since taking office in 2008, Ma has set aside the old disputes to ease tensions through talks.
Taiwanese have been watching closely as Beijing takes a hard-line stance on demands for democratic rule in Hong Kong, a semiautonomous Chinese city that has been gripped by more two months of pro-democracy protests.
“We want to send the Nationalists a warning,” said Lin Wen-chih, a 48-year-old film producer who voted for the winning independent Taipei mayoral candidate, Ko Wen-je. “Taiwan is an independent country. We don’t want the Nationalists to take measures that would have it eaten up (by China).”
Preliminary results show that the chief opposition Democratic Progressive Party gained most in Saturday’s vote. The DPP favors continuing talks with China’s Communist leadership, but disputes the dialogue framework that binds the two sides under Beijing’s jurisdiction, instead preferring talks in an international setting.
A weakened Nationalist Party, also known as the Kuomintang, or KMT, may erode Ma’s mandate before 2016 to sign a pact with China to cut import tariffs, set up official representative offices on both sides and push for a meeting with Chinese President Xi Jinping. If the opposition party wins the presidency, Beijing is likely to suspend deals with Taiwan.
Alan Romberg, East Asia Program director with the Stimson Institute, a think tank in Washington, said the opposition party remains a wild card in Taiwan-China relations.
“The Democratic Progressive Party has made a number of adjustments over time, moving from outright opposition to various economic ties to acceptance of such ties as important,” he said.
When Democratic Progressive Party President Chen Shui-bian ruled the island from 2000 to 2008, he angered China by advocating for constitutional independence. Beijing threatened then to use force to stop the move.
In March, Ma’s government faced thousands of student-led protesters who occupied parliament and nearby streets in Taipei to stop ratification of a service trade liberalization agreement with China.
“The electorate in general is not happy with the KMT running the country overall, and they’re also not happy with the local administration run by the KMT, and they want to have someone new to be in office,” Democratic Progressive Party Secretary-General Joseph Wu said.
Taiwanese elected a total 11,130 people to local offices Saturday after months of fierce campaigning marked by personal insults, truck-mounted loudspeakers and firecracker shows.
(AP)

Deaths reported in China 'terrorist attack'

State news agency says 15 people, including 11 assailants, killed in Shache district of violence-hit western region.



Up to 15 people have been killed in an attack in China's western Xinjiang region, according to the state news agency.
Xinhua said besides the dead, 14 people were injured in what it said was a terrorist attack on Friday in Shache county.
The Tianshan news portal said on Saturday that the attackers used vehicles, knives and explosives in the assault. The dead included 11 of the attackers, it said.

China to end using executed prisoners' organs

Under pressure from human rights groups, China set January 1 to end using executed prisoners for organ transplants.


China has said it will stop relying on executed prisoners as the source of transplanting organs, in response to human rights concerns, although uncertainties linger over where a replacement supply will come from, state media reported.
China has previously said it would phase out the practice by sometime in early 2015, but state media on Thursday reported January 1 as the first firm date to end the practice, citing the architect of China's transplant system, Huang Jiefu.

Lockdown lifted at US base in South Korea

Lockdown on Osan Air Base was put in place as precaution after an unscheduled "active shooter drill" was reported.



The US Osan Air Base in South Korea lifted a lockdown that had been ordered as a precaution after someone reported an unscheduled "active shooter drill" at a high school on the base.
Security forces swept the school and its perimeters and found no injuries or suspicious activities, according to a posting on the base's Facebook site on Monday.

Hong Kong Protesters Considering Retreat

Student Leaders Weigh Pullback as Tactics Frustrate Public, Fail to Sway Officials


HONG KONG—Student protesters demanding greater democracy for Hong Kong said Thursday they are more seriously weighing a retreat from the roads they have occupied for more than two months.
The remarks were the latest sign of the narrowing options that the protesters face as police have increased their efforts to remove the demonstrators from the streets and public support for the occupation of busy city thoroughfares has faded significantly.
The Hong Kong Federation of Students, a group of university students at the helm of the protests, and Scholarism, a teenage student protest group, could issue a decision over whether to retreat from the encampments within the next week, according to student leaders.
Yvonne Leung, a spokeswoman for HKFS, made the remarks on a local radio program. Eighteen-year-old Scholarism leader Joshua Wong separately told The Wall Street Journal that his group, which works closely with HKFS, is also considering a retreat. Mr. Wong is in the third day of a hunger strike, along with four other teen members of his group.
Protesters are calling for the right of citizens to select their own candidates for the city’s top leadership post, not those vetted by Beijing as per a decision handed down by the National People’s Congress in August. Those calls have been rejected by the government as nonnegotiable under Hong Kong’s Basic Law, a “mini-constitution” held with Beijing. The city will vote in 2017 for its next chief executive, a five-year appointment.
A street cleaner pushes her cart between rows of tents at the pro-democracy movement's main protest site in Hong Kong's Admiralty district.ENLARGE
A street cleaner pushes her cart between rows of tents at the pro-democracy movement's main protest site in Hong Kong's Admiralty district. AGENCE FRANCE-PRESSE/GETTY IMAGES
Student leaders for weeks have grappled with how to proceed with the protest but have been hesitant to leave the streets without a strong concession from the government. City leaders have repeatedly dismissed the protesters’ demands as unreasonable, and new clashes in recent days between protesters and police have further eroded public support. A government spokesman on Thursday reiterated that the protesters should retreat from the protest area as soon as possible because the assembly is illegal under Hong Kong law.
“For me, I think it’s time to adjust tactics,” said one student leader. “Retreat doesn’t necessarily mean failure.”
A large encampment in Hong Kong’s Admiralty district, home to the city’s main government offices, is largely what remains of the demonstration after a separate site in the Mong Kok neighborhood was dismantled last week by thousands of police on a court order. Dozens of protesters continue to agitate for their cause nightly there, disrupting shopping and playing cat-and-mouse with police. Tents are still standing and roads are still blocked at a third, much smaller site in the city’s Causeway Bay neighborhood.
Weather in the subtropical city has turned harsher this week, posing another challenge for the occupation. Temperatures on Thursday fell as low as 13 degrees Celsius, or 55 degrees Fahrenheit, according to the Hong Kong Observatory. Protesters at the Admiralty site Thursday wore down jackets and scarves. Some die-hard protesters said they also agreed it was time to retreat and focus on other tactics.
“Occupying here doesn’t put enough pressure on the government,” said 18-year-old student Timothy Sun, who said he has camped at the site since the demonstration began in late September. “If it put enough pressure, we wouldn’t be here two months.”
He said he believes canvassing the city and educating the public on their cause is the best way to proceed with the demonstration. “In the end, we didn’t get what we want, but this movement inspired people that we can’t live like this anymore.”
In a statement Wednesday evening, Hong Kong’s chief executive’s office said, “Expressing views on constitutional reform through illegal and confrontational means is bound to be futile. We hope the students who are undergoing hunger strike could take good care of their health.”
Another major pro-democracy group effectively ended its support for street protests on Wednesday when the founders of the group, Occupy Central with Love and Peace, attempted to surrender to police. Three middle-aged founders of that group this week urged the students to leave the streets and said their offer to surrender was in response to escalating violence. Police on Wednesday declined to arrest them.
A court injunction on Monday called for police to clear part of the main protest site in the Admiralty district on Hong Kong island. A judgment on the injunction, filed by a bus company claiming the protest has led to financial losses, is expected to be issued Friday.
—Chester Yung and Fiona Law contributed to this article.

Hong Kong protesters defy calls to abandon camps

One day after three movement leaders urged an end to the months-long democracy protest, many activists remain committed

Pro-democracy protesters who have been occupying public streets in Hong Kong since September dug their heels in for a prolonged battle, one day after three of the movement’s leaders announced they would surrender to authorities and urged demonstrators to abandon their encampments.
Benny Tai, Chan Kin-man and Reverend Chu Yiu-ming on Wednesday entered a police station just two subway stops from their movement's main protest site in Admiralty to turn themselves over to police. After completing paperwork, the three leaders were allowed to leave without facing criminal charges.
"I hope we can show others the meaning of the surrender. We urge the occupation to end soon and more citizens will carry out the basic responsibility of civil disobedience, which is to surrender," said Tai, one of the most prominent protest leaders, after he left the police station.
Police said that 24 people aged between 33 and 82 had also surrendered for "taking part in an unauthorized assembly," and authorities would conduct follow-up investigations based on the information provided. 
The South China Morning Post reported Wednesday that at least 200 people have been placed on a list for investigation. Citing an unnamed police source, newspaper said that no action had been taken yet because the current focus was on clearing the remaining protest camps.
The mostly peaceful protests, led by a restive generation of students, have called for China's Communist Party rulers live up to constitutional promises to grant full democracy to the former British colony, which returned to Chinese rule in 1997.
Hong Kong is ruled under a "one country, two systems" formula, which allows the territory wide-ranging autonomy and freedoms and specifies universal suffrage for Hong Kong as an eventual goal.
But Beijing ruled on Aug. 31 that it would screen candidates who want to run for the city's chief executive in 2017, which democracy activists said rendered the universal suffrage concept meaningless. The protesters are demanding free and open elections for their leader.
On Tuesday the three protest leaders called on demonstrators, many of whom are students, to retreat from protest sites in Asia’s financial hub amid fears of further clashes with police.
Joshua Wong, leader of student protest group Scholarism, responded by calling on supporters to regroup and launch a hunger strike.
The students' defiance underscored the growing split between young protesters and veteran activists, according to the Wall Street Journal.
“We are on a hunger strike until the chief executive will agree to talks with students,” Wong said.
Two more members of Scholarism said Wednesday night they would join Wong in his hunger strike, the Journal reported.
In a statement issued late Wednesday, Hong Kong's chief executive’s office said the hunger strikes were "futile."
"Expressing views on constitutional reform through illegal and confrontational means is bound to be futile," the statement read. "We hope the students who are undergoing hunger strike could take good care of their health."
More than 100,000 people took to the streets at the height of the demonstrations in late September but numbers have dwindled to only a few hundred, mostly students. Public support has also waned as the protests continue to block key roads and disrupt business.
Jean Pierre Cabestan, an expert in Chinese politics at Hong Kong Baptist University, said Wednesday the movement was "in tatters."
"The trouble and one of the weaknesses of the movement is there's not much coordination between the Hong Kong Federation of Students and the pan-democrats," he told foreign correspondents in Beijing.
The protesters are united in their calls for democracy for the former British colony but are split over tactics, two months after the demonstrations, also branded illegal by Beijing, began.
Hong Kong returned to Chinese Communist Party rule in 1997 under a "one country, two systems" formula that gave it some autonomy from the mainland and a promise of eventual universal suffrage.
Al Jazeera and Reuters

Obama says China's Xi has consolidated power quickly, worrying neighbors

(Reuters) - U.S. President Barack Obama said on Wednesday Chinese President Xi Jinping had consolidated power faster than any Chinese leader in decades, raising human rights concerns and worrying China's neighbors.
Obama, who met Xi last month in Beijing, told the Business Roundtable group of U.S. chief executives that the Chinese leader had won respect in the short time since he had taken over.
"He has consolidated power faster and more comprehensively than probably anybody since Deng Xiaoping," Obama said, referring to the man who led China from 1978 to 1992.
"And everybody's been impressed by his ... clout inside of Chinaafter only a year and a half or two years."

Tuesday, December 2, 2014

Thailand's Royal Family Embroiled In Corruption Scandal

Thai Royal Family
Thailand's Crown Prince Maha Vajiralongkorn and Royal Consort Princess Srirasmi watch the royal plowing ceremony in Bangkok, May 9, 2008. 
News about Thailand’s royal family, the country’s most venerated institution, is difficult to come by, thanks to tight secrecy, a culture of reverence around the monarchy and strict censorship laws. But a growing corruption scandal involving relatives of the crown princess has opened a small window into some of the drama unfolding inside the palace walls.

Australia Woes Boost Rate-Cut Bets

Australia’s Central Bank Keeps Interest Rates on Hold in Attempt to Cushion Economy From China’s Slowdown and End of Mining Boom


SYDNEY—Tumbling commodity prices and signs of slowdown in China have reversed bets on the chances of an Australian rate cut next year.
As recently as two weeks ago, financial markets were pricing in a negligible chance of interest rates—currently at a record low to help spur a weak economy—moving up or down for at least the next year.

China says British complaints on ban on MPs' Hong Kong visit 'useless'

Photo
Tue, Dec 2 2014
BEIJING (Reuters) - China rebuffed as "useless" on Tuesday complaints from Prime Minister David Cameron about a ban on a group of British MPs from visiting Hong Kong, saying the former colonial power would reap what it sowed.

Wednesday, November 19, 2014

Japan's economy unexpectedly slips into recession

Japan’s economy unexpectedly slipped into recession in the third quarter, falling at an annualised 1.6 percent rate after plunging 7.3 percent in the second quarter following a rise in the national sales tax that undercut consumer spending.

The world’s third-largest economy, after the United States and China, had been forecast to rebound by 2.1 percent in the third quarter but consumption and exports remained weak, saddling companies with huge inventories.
The news sets the stage for Prime Minister Shinzo Abe to delay another deeply unpopular sales tax hike and call a snap election halfway through his term.
Abe has said he would look at the data when deciding whether to press ahead with a second increase in the sales tax to 10 percent in October next year as part of a plan to curb Japan’s huge public debt, which is the worst among the industrialised nations.
Japanese media have said the prime minister, who returns from an Asia tour on Monday, could announce his decision to delay the hike as early as Tuesday and state his intention to call an election for parliament’s lower house, which ruling party lawmakers expect to be held on December14.
An economic adviser to Abe termed the economic slide “shocking” and urged the government to reconsider steps to support the economy.
“This is absolutely not a situation in which we should be debating an increase in the consumption tax,” Etsuro Honda, a University of Shizuoka professor and a prominent outside architect of Abe’s reflationary policies, told Reuters.
No election for parliament’s powerful lower house need be held until late 2016, but political insiders say Abe wants to lock in his mandate while his ratings are still relatively robust, helping him push ahead with economic and other policies such as a controversial shift away from Japan’s post-war pacifism.
Facing a divided and weak opposition, Abe’s Liberal Democratic Party (LDP) is expected to keep its majority in the lower house, but it could well lose seats. As election talk heated up last week, a poll by NHK public TV found that Abe’s voter support had fallen 8 percentage points to 44 percent from a month earlier.
A senior LDP lawmaker said the data made Abe’s decision to postpone the tax hike certain and that he expected the premier to call a snap poll, arguing that his “Abenomics” strategy to re-energise the economy was working but needed more time.
“For sure, minus 1.6 percent is not good, but if you look at individual indicators, things are beginning to turn up,” the lawmaker told Reuters.
“The prime minister feels strongly that he wants to make certain of the economic trend so I think he will put off the sales tax rise from next October,” he said.
Even before the GDP announcement, Abe appeared to suggest he was leaning towards delaying the tax hike, telling reporters travelling with him in Australia that raising the tax rate would be meaningless if deflation returned.
Consumption stagnant
The yen slipped on the poor GDP reading, with the dollar briefly pushing to a seven-year high above 117 yen. The benchmark Nikkei stock average fell 2.6 percent.
Sluggish growth and downward pressure on inflation due to sliding global oil prices prompted the Bank of Japan to unexpectedly expand its massive monetary stimulus last month.
Abe inherited the sales tax plan when he took power in December 2012, pledging to revive the economy with his “Abenomics” mix of ultra-easy monetary policy, spending and reforms.
The LDP, its smaller ally and the then-ruling Democratic Party enacted the legislation requiring the tax to be raised unless economic conditions were judged too weak.
Economy Minister Akira Amari said the GDP data showed the April hike to 8 percent from 5 percent had made it harder than anticipated for the public to shake off their deflationary mindset.
Household spending is stagnating, with housing investment and corporate capital spending down, Amari said, while finding a bright spot in strong corporate profits.
On a quarter-on-quarter basis, the economy shrank 0.4 percent in the third quarter, following a contraction of 1.8 percent in the second quarter. Recessions are typically defined as two or more consecutive quarters of economic contraction.
Private consumption, accounting for about 60 percent of the economy, rose 0.4 percent from the previous quarter, half as much as expected.
Some economists, however, said growth could improve in the October-December quarter.
“If you look at other fundamental indicators, they’ve shifted over to an increasing trend, so if this continues ... the next quarter should be better,” said Junko Nishioka, chief economist at RBS Securities Japan.