Spain's Inditex, Europe's largest clothing retailer by sales, is looking to expand in China, attracted by the rising spending power of consumers in the fast-growing Asian country.
The firm, whose chains include Zara and Bershka, will focus its growth in Beijing, Hong Kong and the coastal city of Shanghai, Inditex chief executive officer Pablo Isla told an annual shareholders' meeting last month.
The announcement of the firm's Chinese expansion plans follows the opening in April of Swedish clothing retailer H & M's first store on the mainland and it underscores the growing appeal of China to international fashion retailers.
The Spanish fashion house has not set a specific goal as to the number of new stores it intends to set up in China, where it currently has nine Zara outlets, a spokesman told AFP.
But later this month Inditex will open its first Massimo Dutti store, which stocks smart casual items, in China in Macau, a former Portuguese enclave, with another outlet set to open in Hong Kong next year, he said.
"I think that China is the next frontier," said Marian Salzman, chief marketing officer with US-based advertising agency JWT which has studied the Chinese market.
"With everyday analysts becoming savvy about the sheer demographic reality of China, there is no retailer of scope without a plan for expansion," he told AFP.
There will be 220 million upper middle class households in China's cities, defined as those making between 5,000 and 12,500 US dollars (3,704 and 9,260 euros) a year, by 2025 compared to 23 million in 2005, international consulting firm McKinsey estimates.
Inditex already faces competition in China for a share of this growing market from Spain's Mango, Germany's C & A as well as a raft of local brands such as Hong Kong-based Esprit in addition to H & M.
The firm faces a cost disadvantage in China since competitors like H & M and Mango source a greater proportion of their merchandise from the region, said Matthew Stych, the global director for retailing research at London-based market research firm Euromonitor.
"Inditex may have to consider ramping up local production in order to maintain its ability to deliver fast fashion at prices that are competitive with its peers," he told AFP.
H & M, Europe's second-largest retailer, sources more than 60 percent of its products in Asia, more than half of that from China, compared to 34 percent for Inditex, which has said it has no plans to increase production in the region.
Inditex opened its first outlet in China in Hong Kong in 2004 and set up shop in mainland China two years later, selecting store locations in luxurious shopping areas.
To succeed in China, where the nation's rising middle class tries to emulate the West's fashion style, Inditex needs to continue positioning itself as a source of affordable but still pricey fashion, analysts said.
"Young Chinese consumers are very aspirational when it comes to fashion, so the more Inditex differentiates its brands from local cheap clothing the better," said Stych.
Amancio Ortega, Inditex's 71-year-old owner and chairman as well as Spain's richest man, is aware of the challenges that China presents.
"The Chinese market requires constant innovation," daily business newspaper Cinco Dias quoted him as saying in June.
Inditex, which was listed in 2001, has more than 3,200 outlets in 65 countries around the world. It aims to have 4,000 stores by 2009.
The firm's 59 stores in Asia -- including the nine Zara outlets in China -- accounted for nine percent of its total turnover of 8.2 billion euros (11.1 billion US dollars) last year.
Spain accounted for just under 37 percent of the company's sales while the rest of Europe was responsible for about 40 percent.
The company posted a net profit of just over one billion euros last year, up from 803 million euros in 2005.
Saturday, August 18, 2007
China eyes investing in private equity, hedge funds
SHENZHEN, China (Reuters) - The steep paper losses that China has suffered on its $3 billion investment in Blackstone Group will not deter its embryonic sovereign wealth fund from making further investments in private equity and hedge funds, according to a senior official.
Shares in Blackstone closed on Friday at $24.08, down 22.3 percent from its $31 debut price in June.
The poor performance has sparked criticism of the investment within China, which bought its non-voting share at a 4.5 percent discount and agreed to hold onto it for at least four years.
"The company (Blackstone) is currently excellent in terms of both quality and earnings performance," Jesse Wang, vice chairman of Central Huijin, the central bank's investment arm, said at the weekend.
"If you are going to invest in a private equity firm, there probably is no better company," he told reporters on the sidelines of a forum in the southern city of Shenzhen.
Blackstone, which is also active in hedge fund investing, asset management and corporate advisory, last Monday reported that net income in the second quarter more than tripled from a year earlier to $774.4 million.
Wang, one of the officials who signed the Blackstone deal, said China would make more such investments worldwide once its state investment agency was up and running.
"If you want to increase yields and still maintain low risk, then you should put aside part of the money to make alternative investments, such as private equity firms, hedge funds and real estate investment trusts," Wang said.
He said he was expressing his personal view.
Wang said there was no timetable for the launch of the state investment company, although media have said it will be in September.
Wang declined to reveal the name of the fund, but said it would not be called State Investment Corp. He would not say either what benchmark China had set for the fund's investment returns.
FOREIGN HELP
The agency will take over $200 billion of China's $1.3 trillion stockpile of foreign exchange assets from the People's Bank of China with a mandate to diversify the country's investment portfolio and seek higher returns.
Bankers believe some two-thirds of the reserves are now invested in dollar assets, principally bonds.
The Ministry of Finance will issue 600 billion yuan in special treasury bonds this week, the first tranche of a total of 1.55 trillion yuan, to the central bank in exchange for the assets, bankers say.
Wang said the new agency would hire foreign asset management firms to invest on its behalf, at least in the early days, as it lacked experience in the international markets.
"That's of course a learning opportunity for us -- to look at how they invest or ask them to help train our staff," he said.
China would also hire overseas management and investment professionals to help run the fund.
The agency's top management will include Gao Xiqing, vice chairman of the National Social Security Fund; Zhang Hongli, a vice finance minister; and Xie Ping, chief executive of Central Huijin, which will be folded into the new agency, according to media reports.
Central Huijin has pumped $60 billion into three state-owned commercial banks and analysts say it could be the vehicle to inject at least as much into two other banks -- Agricultural Bank of China and China Development Bank.
If so, the fledgling sovereign wealth fund would initially have much less than $200 billion at its disposal to put to work in global markets.
Shares in Blackstone closed on Friday at $24.08, down 22.3 percent from its $31 debut price in June.
The poor performance has sparked criticism of the investment within China, which bought its non-voting share at a 4.5 percent discount and agreed to hold onto it for at least four years.
"The company (Blackstone) is currently excellent in terms of both quality and earnings performance," Jesse Wang, vice chairman of Central Huijin, the central bank's investment arm, said at the weekend.
"If you are going to invest in a private equity firm, there probably is no better company," he told reporters on the sidelines of a forum in the southern city of Shenzhen.
Blackstone, which is also active in hedge fund investing, asset management and corporate advisory, last Monday reported that net income in the second quarter more than tripled from a year earlier to $774.4 million.
Wang, one of the officials who signed the Blackstone deal, said China would make more such investments worldwide once its state investment agency was up and running.
"If you want to increase yields and still maintain low risk, then you should put aside part of the money to make alternative investments, such as private equity firms, hedge funds and real estate investment trusts," Wang said.
He said he was expressing his personal view.
Wang said there was no timetable for the launch of the state investment company, although media have said it will be in September.
Wang declined to reveal the name of the fund, but said it would not be called State Investment Corp. He would not say either what benchmark China had set for the fund's investment returns.
FOREIGN HELP
The agency will take over $200 billion of China's $1.3 trillion stockpile of foreign exchange assets from the People's Bank of China with a mandate to diversify the country's investment portfolio and seek higher returns.
Bankers believe some two-thirds of the reserves are now invested in dollar assets, principally bonds.
The Ministry of Finance will issue 600 billion yuan in special treasury bonds this week, the first tranche of a total of 1.55 trillion yuan, to the central bank in exchange for the assets, bankers say.
Wang said the new agency would hire foreign asset management firms to invest on its behalf, at least in the early days, as it lacked experience in the international markets.
"That's of course a learning opportunity for us -- to look at how they invest or ask them to help train our staff," he said.
China would also hire overseas management and investment professionals to help run the fund.
The agency's top management will include Gao Xiqing, vice chairman of the National Social Security Fund; Zhang Hongli, a vice finance minister; and Xie Ping, chief executive of Central Huijin, which will be folded into the new agency, according to media reports.
Central Huijin has pumped $60 billion into three state-owned commercial banks and analysts say it could be the vehicle to inject at least as much into two other banks -- Agricultural Bank of China and China Development Bank.
If so, the fledgling sovereign wealth fund would initially have much less than $200 billion at its disposal to put to work in global markets.
Wednesday, August 15, 2007
美刊总结巴菲特式投资的六要素：不要频频换手
《美国新闻与世界报道》周刊在其最新一期文章中刊文介绍了巴菲特式投资的六要素，称巴菲特的神秘之处恰在于他简单有效的投资方式。
文章说，有“股神”之称的沃伦·巴菲特看起来是个慈祥长者，他似乎更喜欢家乡奥马哈的农场，而不是曼哈顿市中心的董事会会议室。这种朴素作风也体现在他的投资方式上。用他自己的话说，就是管好自己的事，做自己“力所能及”的事。
在２０世纪９０年代末，巴菲特成功地躲过了网络科技泡沫的破裂，只因为他觉得“我不懂这些”。同时，他却敢于大手笔投资可口可乐公司。
巴菲特的投资方式究竟有什么要素？文章列举了６点供投资者参考：
1、赚钱而不要赔钱
这是巴菲特经常被引用的一句话：“投资的第一条准则是不要赔钱；第二条准则是永远不要忘记第一条。”因为如果投资一美元，赔了５０美分，手上只剩一半的钱，除非有百分之百的收益，才能回到起点。
巴菲特最大的成就莫过于在１９６５年到２００６年间，历经３个熊市，而他的伯克希尔·哈撒韦公司只有一年（２００１年）出现亏损。
2、别被收益蒙骗
巴菲特更喜欢用股本收益率来衡量企业的盈利状况。股本收益率是用公司净收入除以股东的股本，它衡量的是公司利润占股东资本的百分比，能够更有效地反映公司的盈利增长状况。
根据他的价值投资原则，公司的股本收益率应该不低于１５％。在巴菲特持有的上市公司股票中，可口可乐的股本收益率超过３０％，美国运通公司达到３７％。
3、要看未来
人们把巴菲特称为“奥马哈的先知”，因为他总是有意识地去辨别公司是否有好的发展前途，能不能在今后２５年里继续保持成功。巴菲特常说，要透过窗户向前看，不能看后视镜。
预测公司未来发展的一个办法，是计算公司未来的预期现金收入在今天值多少钱。这是巴菲特评估公司内在价值的办法。然后他会寻找那些严重偏离这一价值、低价出售的公司。
4、坚持投资能对竞争者构成巨大“屏障”的公司
预测未来必定会有风险，因此巴菲特偏爱那些能对竞争者构成巨大“经济屏障”的公司。这不一定意味着他所投资的公司一定独占某种产品或某个市场。例如，可口可乐公司从来就不缺竞争对手。但巴菲特总是寻找那些具有长期竞争优势、使他对公司价值的预测更安全的公司。
２０世纪９０年代末，巴菲特不愿投资科技股的一个原因就是：他看不出哪个公司具有足够的长期竞争优势。
5、要赌就赌大的
绝大多数价值投资者天性保守。但巴菲特不是。他投资股市的６２０亿美元集中在４５只股票上。他的投资战略甚至比这个数字更激进。在他的投资组合中，前１０只股票占了投资总量的９０％。晨星公司的高级股票分析师贾斯廷·富勒说：“这符合巴菲特的投资理念。不要犹豫不定，为什么不把钱投资到你最看好的投资对象上呢？”
6、要有耐心等待
如果你在股市里换手，那么可能错失良机。巴菲特的原则是：不要频频换手，直到有好的投资对象才出手。
巴菲特常引用传奇棒球击球手特德·威廉斯的话：“要做一个好的击球手，你必须有好球可打。”如果没有好的投资对象，那么他宁可持有现金。据晨星公司统计，现金在伯克希尔·哈撒韦公司的投资配比中占１８％以上，而大多数基金公司只有４％的现金。
文章说，有“股神”之称的沃伦·巴菲特看起来是个慈祥长者，他似乎更喜欢家乡奥马哈的农场，而不是曼哈顿市中心的董事会会议室。这种朴素作风也体现在他的投资方式上。用他自己的话说，就是管好自己的事，做自己“力所能及”的事。
在２０世纪９０年代末，巴菲特成功地躲过了网络科技泡沫的破裂，只因为他觉得“我不懂这些”。同时，他却敢于大手笔投资可口可乐公司。
巴菲特的投资方式究竟有什么要素？文章列举了６点供投资者参考：
1、赚钱而不要赔钱
这是巴菲特经常被引用的一句话：“投资的第一条准则是不要赔钱；第二条准则是永远不要忘记第一条。”因为如果投资一美元，赔了５０美分，手上只剩一半的钱，除非有百分之百的收益，才能回到起点。
巴菲特最大的成就莫过于在１９６５年到２００６年间，历经３个熊市，而他的伯克希尔·哈撒韦公司只有一年（２００１年）出现亏损。
2、别被收益蒙骗
巴菲特更喜欢用股本收益率来衡量企业的盈利状况。股本收益率是用公司净收入除以股东的股本，它衡量的是公司利润占股东资本的百分比，能够更有效地反映公司的盈利增长状况。
根据他的价值投资原则，公司的股本收益率应该不低于１５％。在巴菲特持有的上市公司股票中，可口可乐的股本收益率超过３０％，美国运通公司达到３７％。
3、要看未来
人们把巴菲特称为“奥马哈的先知”，因为他总是有意识地去辨别公司是否有好的发展前途，能不能在今后２５年里继续保持成功。巴菲特常说，要透过窗户向前看，不能看后视镜。
预测公司未来发展的一个办法，是计算公司未来的预期现金收入在今天值多少钱。这是巴菲特评估公司内在价值的办法。然后他会寻找那些严重偏离这一价值、低价出售的公司。
4、坚持投资能对竞争者构成巨大“屏障”的公司
预测未来必定会有风险，因此巴菲特偏爱那些能对竞争者构成巨大“经济屏障”的公司。这不一定意味着他所投资的公司一定独占某种产品或某个市场。例如，可口可乐公司从来就不缺竞争对手。但巴菲特总是寻找那些具有长期竞争优势、使他对公司价值的预测更安全的公司。
２０世纪９０年代末，巴菲特不愿投资科技股的一个原因就是：他看不出哪个公司具有足够的长期竞争优势。
5、要赌就赌大的
绝大多数价值投资者天性保守。但巴菲特不是。他投资股市的６２０亿美元集中在４５只股票上。他的投资战略甚至比这个数字更激进。在他的投资组合中，前１０只股票占了投资总量的９０％。晨星公司的高级股票分析师贾斯廷·富勒说：“这符合巴菲特的投资理念。不要犹豫不定，为什么不把钱投资到你最看好的投资对象上呢？”
6、要有耐心等待
如果你在股市里换手，那么可能错失良机。巴菲特的原则是：不要频频换手，直到有好的投资对象才出手。
巴菲特常引用传奇棒球击球手特德·威廉斯的话：“要做一个好的击球手，你必须有好球可打。”如果没有好的投资对象，那么他宁可持有现金。据晨星公司统计，现金在伯克希尔·哈撒韦公司的投资配比中占１８％以上，而大多数基金公司只有４％的现金。
Friday, August 10, 2007
全世界见证：惊人发展复兴 中国模式挑战西方模式
全世界见证：惊人发展复兴 中国模式挑战西方模式 政治杂志
俄罗斯《政治杂志》周刊最新一期载文《和谐重于财神》，摘要如下：
全世界都见证了中国通过完善国家政治体制和进行面向市场的改革而惊人地快速发展和复兴。中国国家政治和经济建设的重点仍然是以提高效率和创新能力为目标的经济结构改革、农业现代化、增力社会保障，从而最终建成社会主义和谐社会。
据诺贝尔经济学奖得主斯彭斯教授的预测，中国经济发展的高速度具有长期性，至少还可以保持25年。就此应该指出，中国2006年的国内生产总值增长了 10.7％，达到2.68万亿美元。中国在这项指标上居世界第四位，仅次于美国、日本和德国。在国内生产总值这个指标上，中国在2004年超过了法国，在 2005年超过了英国。有理由认为，德国是下一个被超越的国家。
中国领导人目前在继续深入研究和宣传中国发展模式的政治思想理论和文化文明理论。这一理论赋予中国共产党各种职能，其中包括领导全国人民、协调社会各阶层的利益、维护国内的社会和政治稳定等。这符合中国领导层奉行的如下坚定方针：捍卫中国共产党不可动摇的领导地位，提高党在目前条件下管理社会和抵制西方政治制度模式冲击的能力。
在苏联解体之后，中国的发展模式无疑成为对发展中国家最具吸引力的模式。中国发展模式的独特性何在？中国领导人是如何成功地修正和更换一种政治观念，同时又不破坏政权结构的？应该如何理解中国众所周知的连续性？
中国在政策上的连续性得到高度评价。这种连续性证明了中国领导层的高度一致和政府在国内外市场行情不佳情况下的应对能力。引人注目的是，自中华人民共和国成立以来，中国领导人政主要目标始终是把国家变成在世界上有威望和影响的繁荣富强的国家。例如，国家的主要任务在2006年10月召开的中共中央全会上依然没有变化，中国人打算建设一个“富强、民主、文明、和谐、现代化的社会主义国家”。
与此同时，中国共产党再次肩负起维护社会公正与和谐的责任，这无疑是一大新要素。1949年以来中国共产党的所有工作都被定位为“为在中国建立和谐社会而付出的努力”。该路线一旦取得成功，中国共产党执政的合法性将得到进一步加强，而在改革时期，其政权基础主要是国家经济的飞速发展。
中国领导层将国家的政治和经济精英团结在更新后的国家发展学说的周围。这首先是构建社会主义和谐社会以及科学发展观，后者的含义是国家逐步转向高效的经济增长模式，通过提高经济增长的质量指标、缓解社会问题的尖锐度，来突破资源和生态方面的瓶颈。
不得不提的是，中国正在逐步提高自己在国际事务方面的影响力，积极发展与发达工业国家的全方位合作，与此同时，它仍以第三世界国家为政治支柱。为提升国际形象，中国领导层付出了不懈的努力，其措施包括加强对中国构建和谐社会理念、北京为缩小南北差距所作贡献的宣传。对于全球许多政治家、学者和研究者而言，中国是一个相对复杂的客体。人们时常会说，这个国家的未来走势难以预料，其发展模式终将崩溃。然而，近几十年来的实践表明，中国正在成为一个全球强国，中国的崛起?非神话，而是现实。
俄罗斯《政治杂志》周刊最新一期载文《和谐重于财神》，摘要如下：
全世界都见证了中国通过完善国家政治体制和进行面向市场的改革而惊人地快速发展和复兴。中国国家政治和经济建设的重点仍然是以提高效率和创新能力为目标的经济结构改革、农业现代化、增力社会保障，从而最终建成社会主义和谐社会。
据诺贝尔经济学奖得主斯彭斯教授的预测，中国经济发展的高速度具有长期性，至少还可以保持25年。就此应该指出，中国2006年的国内生产总值增长了 10.7％，达到2.68万亿美元。中国在这项指标上居世界第四位，仅次于美国、日本和德国。在国内生产总值这个指标上，中国在2004年超过了法国，在 2005年超过了英国。有理由认为，德国是下一个被超越的国家。
中国领导人目前在继续深入研究和宣传中国发展模式的政治思想理论和文化文明理论。这一理论赋予中国共产党各种职能，其中包括领导全国人民、协调社会各阶层的利益、维护国内的社会和政治稳定等。这符合中国领导层奉行的如下坚定方针：捍卫中国共产党不可动摇的领导地位，提高党在目前条件下管理社会和抵制西方政治制度模式冲击的能力。
在苏联解体之后，中国的发展模式无疑成为对发展中国家最具吸引力的模式。中国发展模式的独特性何在？中国领导人是如何成功地修正和更换一种政治观念，同时又不破坏政权结构的？应该如何理解中国众所周知的连续性？
中国在政策上的连续性得到高度评价。这种连续性证明了中国领导层的高度一致和政府在国内外市场行情不佳情况下的应对能力。引人注目的是，自中华人民共和国成立以来，中国领导人政主要目标始终是把国家变成在世界上有威望和影响的繁荣富强的国家。例如，国家的主要任务在2006年10月召开的中共中央全会上依然没有变化，中国人打算建设一个“富强、民主、文明、和谐、现代化的社会主义国家”。
与此同时，中国共产党再次肩负起维护社会公正与和谐的责任，这无疑是一大新要素。1949年以来中国共产党的所有工作都被定位为“为在中国建立和谐社会而付出的努力”。该路线一旦取得成功，中国共产党执政的合法性将得到进一步加强，而在改革时期，其政权基础主要是国家经济的飞速发展。
中国领导层将国家的政治和经济精英团结在更新后的国家发展学说的周围。这首先是构建社会主义和谐社会以及科学发展观，后者的含义是国家逐步转向高效的经济增长模式，通过提高经济增长的质量指标、缓解社会问题的尖锐度，来突破资源和生态方面的瓶颈。
不得不提的是，中国正在逐步提高自己在国际事务方面的影响力，积极发展与发达工业国家的全方位合作，与此同时，它仍以第三世界国家为政治支柱。为提升国际形象，中国领导层付出了不懈的努力，其措施包括加强对中国构建和谐社会理念、北京为缩小南北差距所作贡献的宣传。对于全球许多政治家、学者和研究者而言，中国是一个相对复杂的客体。人们时常会说，这个国家的未来走势难以预料，其发展模式终将崩溃。然而，近几十年来的实践表明，中国正在成为一个全球强国，中国的崛起?非神话，而是现实。
Monday, August 6, 2007
Lenovo to Sell $198 PC in China
Lenovo Group Ltd. is targeting lower-income consumers in China by offering a new PC with a suggested retail price of 1,499 renminbi (US$198).
The computer maker is also offering PCs for 1,999 renminbi, 2,499 renminbi, and 2,999, respectively, it announced Friday. All four are designed to make computer ownership available to 3 million new, rural users. The least expensive model includes a keyboard but is designed to be used with a television as its monitor.
Lenovo did not provide further details about the systems, such as the operating system or type of processor they would use.
The move came on the same day that Microsoft Corp. made its own thrust towards reaching more consumers in China by cutting the price of the simplified Chinese version of its Windows Vista operating system. Originally launched at 1,521 renminbi for the home version, Microsoft reduced the retail price to 499 renminbi. It also reduced the Home Premium version of Vista from 1,802 renminbi to 899 renminbi.
Based in China, Lenovo is the country's dominant PC maker. Last week it reported revenue of US$3.9 billion for its first fiscal quarter and a net profit of $67.8 million, more than 10 times the profit for the same period last year.
It did not say whether it planned to try to boost sales in other markets with the low-cost PCs.
The computer maker is also offering PCs for 1,999 renminbi, 2,499 renminbi, and 2,999, respectively, it announced Friday. All four are designed to make computer ownership available to 3 million new, rural users. The least expensive model includes a keyboard but is designed to be used with a television as its monitor.
Lenovo did not provide further details about the systems, such as the operating system or type of processor they would use.
The move came on the same day that Microsoft Corp. made its own thrust towards reaching more consumers in China by cutting the price of the simplified Chinese version of its Windows Vista operating system. Originally launched at 1,521 renminbi for the home version, Microsoft reduced the retail price to 499 renminbi. It also reduced the Home Premium version of Vista from 1,802 renminbi to 899 renminbi.
Based in China, Lenovo is the country's dominant PC maker. Last week it reported revenue of US$3.9 billion for its first fiscal quarter and a net profit of $67.8 million, more than 10 times the profit for the same period last year.
It did not say whether it planned to try to boost sales in other markets with the low-cost PCs.
China will use GPS to track Olympic food
China said Monday it will use global positioning satellites to ensure food safety at the Beijing Olympics as it steps up efforts to blacklist manufacturers who violate safety regulations.
Wang Wei, an executive vice president of the Beijing Olympic Committee, said the high-tech system will monitor food production, processing factories and food hygiene during the games to make sure healthy food is delivered to the 10,500 athletes residing in the Olympic Village.
Food products will be affixed with an "Olympic food safety logistics code" and transportation vehicles will be tracked using global positioning satellites, Wang said. He did not provide further details of either plan.
"The whole process will be monitored from the start of production through transportation to the end users," Wang said. "We are very confident about ensuring food safety in Beijing."
Wang said extra measures would also be taken to ensure food safety for the general public.
"During the games some special monitoring mechanisms will also be applied to monitor restaurants and public food sellers to let people know how they can buy safe food," he said.
The Beijing Olympics, which begin Aug. 8, 2008, are a huge source of pride for China.
In a separate announcement, Beijing-based Qianxihe Food Group, an Olympic sponsor, said it had begun selling a hormone-free line of pork for the games, a company official said.
The company's pigs have been fed food without hormones and are part of the "Olympics Special Supply Pork" range, which will be consumed by athletes and can be bought in supermarkets by ordinary citizens, said the official, who would give only her surname Tong.
Questions over the safety of Chinese products arose earlier this year when a Chinese-made pet food ingredient was linked to the deaths of cats and dogs in North America. Since then, Chinese goods ranging from toothpaste to tires have been banned or recalled in numerous countries.
The U.S. also has blocked imports of five types of farmed seafood from China that were found to contain unapproved drugs.
Wang's comments came after Vice Commerce Minister Gao Hucheng announced that 429 exporters have been blacklisted and punished for producing dangerously substandard products. The companies include two whose products were implicated in the pet deaths in North America.
Chinese authorities, while initially unwilling to address the problem, have in recent weeks released details on their efforts almost daily and announced aggressive campaigns to crack down on makers of shoddy products, both for domestic consumption and for export.
The state-run Beijing News said five brands of dried fish snacks have been pulled off shelves in Beijing because they contained formaldehyde, a preservative and an embalming fluid that has been linked to cancer in humans.
In a recent inspection, the Commerce Ministry said it found that 21 percent of soft drinks produced in 13 provinces and municipalities were unfit for consumption because they were filled with bacteria and high levels of artificial sweeteners and preservatives.
Last month, the General Administration for Quality Supervision, Inspection and Quarantine, a product safety watchdog, said it had shut the offices of the two companies and revoked their licenses.
Wang Wei, an executive vice president of the Beijing Olympic Committee, said the high-tech system will monitor food production, processing factories and food hygiene during the games to make sure healthy food is delivered to the 10,500 athletes residing in the Olympic Village.
Food products will be affixed with an "Olympic food safety logistics code" and transportation vehicles will be tracked using global positioning satellites, Wang said. He did not provide further details of either plan.
"The whole process will be monitored from the start of production through transportation to the end users," Wang said. "We are very confident about ensuring food safety in Beijing."
Wang said extra measures would also be taken to ensure food safety for the general public.
"During the games some special monitoring mechanisms will also be applied to monitor restaurants and public food sellers to let people know how they can buy safe food," he said.
The Beijing Olympics, which begin Aug. 8, 2008, are a huge source of pride for China.
In a separate announcement, Beijing-based Qianxihe Food Group, an Olympic sponsor, said it had begun selling a hormone-free line of pork for the games, a company official said.
The company's pigs have been fed food without hormones and are part of the "Olympics Special Supply Pork" range, which will be consumed by athletes and can be bought in supermarkets by ordinary citizens, said the official, who would give only her surname Tong.
Questions over the safety of Chinese products arose earlier this year when a Chinese-made pet food ingredient was linked to the deaths of cats and dogs in North America. Since then, Chinese goods ranging from toothpaste to tires have been banned or recalled in numerous countries.
The U.S. also has blocked imports of five types of farmed seafood from China that were found to contain unapproved drugs.
Wang's comments came after Vice Commerce Minister Gao Hucheng announced that 429 exporters have been blacklisted and punished for producing dangerously substandard products. The companies include two whose products were implicated in the pet deaths in North America.
Chinese authorities, while initially unwilling to address the problem, have in recent weeks released details on their efforts almost daily and announced aggressive campaigns to crack down on makers of shoddy products, both for domestic consumption and for export.
The state-run Beijing News said five brands of dried fish snacks have been pulled off shelves in Beijing because they contained formaldehyde, a preservative and an embalming fluid that has been linked to cancer in humans.
In a recent inspection, the Commerce Ministry said it found that 21 percent of soft drinks produced in 13 provinces and municipalities were unfit for consumption because they were filled with bacteria and high levels of artificial sweeteners and preservatives.
Last month, the General Administration for Quality Supervision, Inspection and Quarantine, a product safety watchdog, said it had shut the offices of the two companies and revoked their licenses.
Olympics can speed change in China
* Story Highlights
* Olympic chief says Beijing Games will be significant force for good in China
* IOC President Jacques Rogge in Beijing for one-year countdown to Olympics
* Rogge said his main concern was the environment and particularly air pollution
BEIJING, China (Reuters) -- Olympic chief Jacques Rogge thinks the Beijing Olympics will be a significant force for good in China, but cannot be expected to resolve all the issues facing the country.
The President of the International Olympic Committee (IOC) said, however, that it was "absolutely legitimate" for non-governmental organizations (NGOs) and human rights groups to bring attention to their causes both now and at Games time.
"We believe the Games are going to move ahead the agenda of the social and human rights as far as possible, the Games are going to be a force for good. But the Games are not a panacea," Rogge told Reuters in an interview on Monday.
This week's start of the one-year countdown to the Games has brought with it the release of several reports from pressure groups, many calling on the IOC to demand action on issues such as media freedom and political prisoners.
"One should not forget that we are a sports organization," Rogge said. "We are not a government, we are not the representative of all the NGOs of the world.
"We respect their point of view, we stand for human rights, we stand for strict social values, but we are only a sports organization."
Rogge said he "could not be more happy" about the state of preparations in Beijing, especially in the fundamental aspects of running the Games such as venue construction.
"They are well ahead of schedule, the infrastructure is there, there is still a little bit of work to do on the Olympic Stadium but that will be ready in March," he said.
"Since I've been involved in Games preparations, which is since Sydney, they are the best prepared of all," he added.
As Beijing witnessed another day of heavy smog, Rogge said his main concern was the environment and particularly air pollution in the Chinese capital.
But he was confident that measures undertaken by the Beijing government to rid the city of pollution over the last few years and special measures in August next year would deliver clean air.
"There is a positive trend and I really do hope and believe that this positive trend will continue," he said. "They still have a full year to run. I have confidence that their strategy will yield success. I'm optimistic for Games time."
Indeed, Rogge hopes a change in the way the Chinese approach environmental issues will be one of the "intangible" legacies of the Games.
"The intangible is the acceptance of procedures, norms and standards that were not here before, especially in the field of the environment," he said.
A sporting legacy would come as a result of the Sport for All programme in China, a "mind-blowing" project that was reaching "hundreds of millions" of people, he said.
He also foresaw benefits for the Olympic movement. "We are bringing the Olympics to one-fifth of mankind, we have an education program based on sport and Olympic values in no less than 500,000 schools, we are hoping 400 million children will benefit from this," he said.
One of the possible blights of any sporting event in the modern era is doping, and Rogge said the series of scandals at the Tour de France was a timely reminder for the IOC.
"I expect some positive cases in Beijing, that would be the sign that our testing is accurate, that our testing is efficient and that we are cleaning up the Games and that we are kicking out the cheats," he said. "There are still some loopholes but one has to say that it is extremely difficult to cheat and to get away with it."
The Belgian, who competed in sailing at three Olympic Games, clearly has little time for discussions over whether the U.S. or China will top the medals table next August.
"The spirit of the Olympic Games ... is not about nations, it's not about continents, it's not about supremacy," he said. "It's about the pursuit of excellence by individuals who train very hard for that and do that within the Olympic spirit of fair play, brotherhood."
Asked how he would like the Beijing Games to go down in history, the 65-year-old orthopaedic surgeon said: "I would like the Games to be held in peace, in maximum security, with the least number of doping cases possible. And definitely with great athletic prowess, with great champions emerging because that's the great magic of the Games.
"And if at the same time we can have a situation where the world at large discovers China, and it's values and its assets, then I will be a very happy man."
* Olympic chief says Beijing Games will be significant force for good in China
* IOC President Jacques Rogge in Beijing for one-year countdown to Olympics
* Rogge said his main concern was the environment and particularly air pollution
BEIJING, China (Reuters) -- Olympic chief Jacques Rogge thinks the Beijing Olympics will be a significant force for good in China, but cannot be expected to resolve all the issues facing the country.
The President of the International Olympic Committee (IOC) said, however, that it was "absolutely legitimate" for non-governmental organizations (NGOs) and human rights groups to bring attention to their causes both now and at Games time.
"We believe the Games are going to move ahead the agenda of the social and human rights as far as possible, the Games are going to be a force for good. But the Games are not a panacea," Rogge told Reuters in an interview on Monday.
This week's start of the one-year countdown to the Games has brought with it the release of several reports from pressure groups, many calling on the IOC to demand action on issues such as media freedom and political prisoners.
"One should not forget that we are a sports organization," Rogge said. "We are not a government, we are not the representative of all the NGOs of the world.
"We respect their point of view, we stand for human rights, we stand for strict social values, but we are only a sports organization."
Rogge said he "could not be more happy" about the state of preparations in Beijing, especially in the fundamental aspects of running the Games such as venue construction.
"They are well ahead of schedule, the infrastructure is there, there is still a little bit of work to do on the Olympic Stadium but that will be ready in March," he said.
"Since I've been involved in Games preparations, which is since Sydney, they are the best prepared of all," he added.
As Beijing witnessed another day of heavy smog, Rogge said his main concern was the environment and particularly air pollution in the Chinese capital.
But he was confident that measures undertaken by the Beijing government to rid the city of pollution over the last few years and special measures in August next year would deliver clean air.
"There is a positive trend and I really do hope and believe that this positive trend will continue," he said. "They still have a full year to run. I have confidence that their strategy will yield success. I'm optimistic for Games time."
Indeed, Rogge hopes a change in the way the Chinese approach environmental issues will be one of the "intangible" legacies of the Games.
"The intangible is the acceptance of procedures, norms and standards that were not here before, especially in the field of the environment," he said.
A sporting legacy would come as a result of the Sport for All programme in China, a "mind-blowing" project that was reaching "hundreds of millions" of people, he said.
He also foresaw benefits for the Olympic movement. "We are bringing the Olympics to one-fifth of mankind, we have an education program based on sport and Olympic values in no less than 500,000 schools, we are hoping 400 million children will benefit from this," he said.
One of the possible blights of any sporting event in the modern era is doping, and Rogge said the series of scandals at the Tour de France was a timely reminder for the IOC.
"I expect some positive cases in Beijing, that would be the sign that our testing is accurate, that our testing is efficient and that we are cleaning up the Games and that we are kicking out the cheats," he said. "There are still some loopholes but one has to say that it is extremely difficult to cheat and to get away with it."
The Belgian, who competed in sailing at three Olympic Games, clearly has little time for discussions over whether the U.S. or China will top the medals table next August.
"The spirit of the Olympic Games ... is not about nations, it's not about continents, it's not about supremacy," he said. "It's about the pursuit of excellence by individuals who train very hard for that and do that within the Olympic spirit of fair play, brotherhood."
Asked how he would like the Beijing Games to go down in history, the 65-year-old orthopaedic surgeon said: "I would like the Games to be held in peace, in maximum security, with the least number of doping cases possible. And definitely with great athletic prowess, with great champions emerging because that's the great magic of the Games.
"And if at the same time we can have a situation where the world at large discovers China, and it's values and its assets, then I will be a very happy man."
Bear Stearns held talks to sell stake to China: WSJ
Bear Stearns Cos. Inc. (BSC.N) has looked at selling part of itself to China Citic Group or setting up a joint venture with the state-controlled company, The Wall Street Journal said on Monday, citing people familiar with the matter.
But after Blackstone Group (BX.N) sold a nearly 10 percent stake to China for $3 billion, other Wall Street firms have been pursuing similar deals, so Chinese investors may have more attractive options than investing in Bear, the newspaper said.
Bear Stearns said on Sunday Warren Spector, co-president and co-chief operating officer, had resigned, as turmoil in the subprime market spurred the collapse of two Bear Stearns-managed funds and forced the investment bank to halt redemptions on a third.
Bear Stearns said on Friday it was weathering the worst storm in financial markets in more than 20 years. Standard & Poor's changed the outlook on the investment bank's debt ratings, signaling a higher chance of a downgrade over the next two years.
Last year, Bear Stearns held talks with China Construction Bank Corp. (0939.HK) about taking a minority stake, to give Bear more capital and a foothold in China, but those talks broke down after CCB's then-president, Chang Zhenming, left the bank, the Journal said.
But after Blackstone Group (BX.N) sold a nearly 10 percent stake to China for $3 billion, other Wall Street firms have been pursuing similar deals, so Chinese investors may have more attractive options than investing in Bear, the newspaper said.
Bear Stearns said on Sunday Warren Spector, co-president and co-chief operating officer, had resigned, as turmoil in the subprime market spurred the collapse of two Bear Stearns-managed funds and forced the investment bank to halt redemptions on a third.
Bear Stearns said on Friday it was weathering the worst storm in financial markets in more than 20 years. Standard & Poor's changed the outlook on the investment bank's debt ratings, signaling a higher chance of a downgrade over the next two years.
Last year, Bear Stearns held talks with China Construction Bank Corp. (0939.HK) about taking a minority stake, to give Bear more capital and a foothold in China, but those talks broke down after CCB's then-president, Chang Zhenming, left the bank, the Journal said.
Sunday, August 5, 2007
China says faces arduous food safety task
China faces a long and difficult task to improve food safety, but global cooperation is the only way to do it, official media said on Sunday after yet another week of global anxiety about the quality of Chinese goods.
A range of Chinese exports, from fish and toys to pet food and toothpaste, have been found to be mislabeled, unsafe or dangerously contaminated, creating an international backlash.
"At present, the food safety situation has improved, yet is still serious," Xinhua news agency quoted the deputy head of the State Food and Drug Administration, Hui Lusheng, as saying.
"Since last year reports of 'red-yolk duck eggs' and so on have often caused wide concern in society about food safety, and warned us that our country is in a period of high risk," Hui said, referring to a contaminated egg scare.
"Dealing with and preventing food safety risks is a long-term, arduous and complicated project, which needs society to work together and comprehensive prevention," she added.
But the government also insists the problems of a few small, rogue companies should not besmirch the whole made-in-China label, insisting it does take effective action to ensure safety.
In fact, China has always worked with other countries to tackle the issue, Xinhua said.
"Food safety and product quality is an international problem, and is also something the whole of mankind pays attention to," it said in a piece carried on the central government's Web site (www.gov.cn).
"It needs cooperation and better communication from governments to seek common solutions together. Strengthened international negotiations and cooperation are the only effective path to solving the safety problem," the report added.
It then listed the talks China had had with Japan, the European Union and the United States on the subject.
"The quality and inspection bureau has proactively attended international meetings, and taken part in setting standards," Xinhua said.
An agreement on food safety cooperation was signed with the United States on Saturday, the quality watchdog said in a statement on its Web site (www.aqsiq.gov.cn). It gave no details.
In the latest scare, Mattel Inc. said it was recalling 1.5 million Fisher-Price toys globally because their paint could contain too much lead.
The United States has stepped up inspections of imports from China since a chemical additive in pet food caused the death of some pets there earlier this year.
Beijing has complained though that it is the victim of biased news reports that have grossly overstated the depth of the quality problem and are being used to stoke protectionist demands.
"In many countries, protectionism has still not been wiped away," quality watchdog spokesman Liu Deping was quoted as telling state television, according to a transcript carried on official government Web site www.china.com.cn.
Some Chinese products were running into trouble overseas simply because of different food standards, it quoted a professor at China Agricultural University as saying.
"These differences in standards are actually to limit other country's trade and exports," Luo Yunbo said.
A range of Chinese exports, from fish and toys to pet food and toothpaste, have been found to be mislabeled, unsafe or dangerously contaminated, creating an international backlash.
"At present, the food safety situation has improved, yet is still serious," Xinhua news agency quoted the deputy head of the State Food and Drug Administration, Hui Lusheng, as saying.
"Since last year reports of 'red-yolk duck eggs' and so on have often caused wide concern in society about food safety, and warned us that our country is in a period of high risk," Hui said, referring to a contaminated egg scare.
"Dealing with and preventing food safety risks is a long-term, arduous and complicated project, which needs society to work together and comprehensive prevention," she added.
But the government also insists the problems of a few small, rogue companies should not besmirch the whole made-in-China label, insisting it does take effective action to ensure safety.
In fact, China has always worked with other countries to tackle the issue, Xinhua said.
"Food safety and product quality is an international problem, and is also something the whole of mankind pays attention to," it said in a piece carried on the central government's Web site (www.gov.cn).
"It needs cooperation and better communication from governments to seek common solutions together. Strengthened international negotiations and cooperation are the only effective path to solving the safety problem," the report added.
It then listed the talks China had had with Japan, the European Union and the United States on the subject.
"The quality and inspection bureau has proactively attended international meetings, and taken part in setting standards," Xinhua said.
An agreement on food safety cooperation was signed with the United States on Saturday, the quality watchdog said in a statement on its Web site (www.aqsiq.gov.cn). It gave no details.
In the latest scare, Mattel Inc. said it was recalling 1.5 million Fisher-Price toys globally because their paint could contain too much lead.
The United States has stepped up inspections of imports from China since a chemical additive in pet food caused the death of some pets there earlier this year.
Beijing has complained though that it is the victim of biased news reports that have grossly overstated the depth of the quality problem and are being used to stoke protectionist demands.
"In many countries, protectionism has still not been wiped away," quality watchdog spokesman Liu Deping was quoted as telling state television, according to a transcript carried on official government Web site www.china.com.cn.
Some Chinese products were running into trouble overseas simply because of different food standards, it quoted a professor at China Agricultural University as saying.
"These differences in standards are actually to limit other country's trade and exports," Luo Yunbo said.
Friday, August 3, 2007
China's shares reach new high
China's shares rose to a new record high Friday the third time in a week, surging back from an Asia-wide slump prompted by worries about U.S. mortgages.
The benchmark Shanghai Composite Index rose 3.5 percent to close at 4,560.77 points. The Shenzhen Composite Index for China's smaller second market also reached a new high, rising 2.3 percent to 1,323.40.
China's currency, the yuan, also rose, closing at 7.57 to the U.S. dollar.
The Shanghai stock index also set new record highs Monday and Tuesday, driven by expectations of strong corporate profits. Chinese stocks fell Wednesday as Asian markets reeled from a Wall Street sell-off prompted by concern that troubles over subprime mortgages might spread. But Chinese prices rose again Thursday, recovering some of their losses.
Chinese companies have been forecasting strong profit growth amid a boom that saw China's economy expand by 11.9 percent last quarter, its fastest quarterly growth since 1995.
The Shanghai index is up more than 60 percent this year, after more than doubling last year.
Friday, the biggest gains were among property and financial shares.
Analysts said they expected the market to edge even higher in coming sessions, led by a revival of speculative interest.
"The property sector is already overvalued, but its recent gains have spurred a strong appetite for property shares," said strategist Wang Sheng at Haitong Securities. "Investors seem unlikely to step back until the sector is way too overheated."
Shares in developer China Vanke jumped 7.1 percent. Beijing North Star rose 7.4 percent and Financial Street Holding surged 9.6 percent.
"Some new funds are building positions and many retail investors encouraged by the recent market rise are piling into stocks," said Qi Fupeng at China Jianyin Investment Securities.
China Minsheng Banking rose 8.5 percent, while Citic Securities and China Merchants Bank both rose by their 10 percent daily limit.
"Financial names are by no means cheap now," Wang said. "But compared with property firms and many other extravagantly priced companies, their valuations are acceptable."
The benchmark Shanghai Composite Index rose 3.5 percent to close at 4,560.77 points. The Shenzhen Composite Index for China's smaller second market also reached a new high, rising 2.3 percent to 1,323.40.
China's currency, the yuan, also rose, closing at 7.57 to the U.S. dollar.
The Shanghai stock index also set new record highs Monday and Tuesday, driven by expectations of strong corporate profits. Chinese stocks fell Wednesday as Asian markets reeled from a Wall Street sell-off prompted by concern that troubles over subprime mortgages might spread. But Chinese prices rose again Thursday, recovering some of their losses.
Chinese companies have been forecasting strong profit growth amid a boom that saw China's economy expand by 11.9 percent last quarter, its fastest quarterly growth since 1995.
The Shanghai index is up more than 60 percent this year, after more than doubling last year.
Friday, the biggest gains were among property and financial shares.
Analysts said they expected the market to edge even higher in coming sessions, led by a revival of speculative interest.
"The property sector is already overvalued, but its recent gains have spurred a strong appetite for property shares," said strategist Wang Sheng at Haitong Securities. "Investors seem unlikely to step back until the sector is way too overheated."
Shares in developer China Vanke jumped 7.1 percent. Beijing North Star rose 7.4 percent and Financial Street Holding surged 9.6 percent.
"Some new funds are building positions and many retail investors encouraged by the recent market rise are piling into stocks," said Qi Fupeng at China Jianyin Investment Securities.
China Minsheng Banking rose 8.5 percent, while Citic Securities and China Merchants Bank both rose by their 10 percent daily limit.
"Financial names are by no means cheap now," Wang said. "But compared with property firms and many other extravagantly priced companies, their valuations are acceptable."
Lenovo targets rural China with basic PC
Lenovo Group Ltd. said Friday it will sell a basic personal computer aimed at China's vast but poor rural market and priced as low as $199.
Lenovo's announcement follows rival Dell Inc.'s bid to boost its presence in China's booming market with the unveiling in March of a low-cost personal computer meant for novice Chinese users.
Beijing-based Lenovo, which acquired IBM Corp.'s PC division in 2005, is expanding abroad but is eager to maintain its dominance in China, where research firm Gartner Inc. says PC sales grew by 23 percent last quarter.
"Our focus is to get down to the rural market," said company spokesman Jay Chen.
The new PC will use a buyer's television set as a monitor. Chen could provide no other details on the configuration or other features.
The new PC goes on sale later this year, and will range in price from $199 to $399.
Lenovo is the world's third-largest PC manufacturer, behind U.S.-based Hewlett-Packard co. and No. 2 Dell.
Dell, based in Round Rock, Texas, announced in March that it will sell a basic desktop PC designed for China and priced at $223 to $515.
Chen denied that Lenovo was responding to Dell's initiative. He said Lenovo has been selling a low-cost PC loaded with educational and other software meant for rural Chinese families since 2004.
"It's a natural evolution. We are not responding to our competitors," Chen said. "After three years of market development in low-tier markets we have gained experience and understanding."
Some 800 million people live in China's countryside, where incomes average about $560 a year but are rising at an annual rate of more than 10 percent.
Lenovo said it will set up a rural sales network of 5,000 dealers to reach farmers and other customers.
On Thursday, Lenovo reported a 12-fold jump in profits in the quarter ending June 30, with earnings of $66.8 million on revenues of $3.9 billion.
Lenovo's announcement follows rival Dell Inc.'s bid to boost its presence in China's booming market with the unveiling in March of a low-cost personal computer meant for novice Chinese users.
Beijing-based Lenovo, which acquired IBM Corp.'s PC division in 2005, is expanding abroad but is eager to maintain its dominance in China, where research firm Gartner Inc. says PC sales grew by 23 percent last quarter.
"Our focus is to get down to the rural market," said company spokesman Jay Chen.
The new PC will use a buyer's television set as a monitor. Chen could provide no other details on the configuration or other features.
The new PC goes on sale later this year, and will range in price from $199 to $399.
Lenovo is the world's third-largest PC manufacturer, behind U.S.-based Hewlett-Packard co. and No. 2 Dell.
Dell, based in Round Rock, Texas, announced in March that it will sell a basic desktop PC designed for China and priced at $223 to $515.
Chen denied that Lenovo was responding to Dell's initiative. He said Lenovo has been selling a low-cost PC loaded with educational and other software meant for rural Chinese families since 2004.
"It's a natural evolution. We are not responding to our competitors," Chen said. "After three years of market development in low-tier markets we have gained experience and understanding."
Some 800 million people live in China's countryside, where incomes average about $560 a year but are rising at an annual rate of more than 10 percent.
Lenovo said it will set up a rural sales network of 5,000 dealers to reach farmers and other customers.
On Thursday, Lenovo reported a 12-fold jump in profits in the quarter ending June 30, with earnings of $66.8 million on revenues of $3.9 billion.
US to help China improve food and drugs exports safety
The United States will help China improve the safety of its food and drug exports, the US health chief said in a statement released here Friday after a string of health scandals surrounding Chinese-made goods.
US health officials in Beijing this week offered China's quality inspectors technical assistance to address food and drugs safety problems, Secretary of Health Mike Leavitt said in the statement.
They also offered to work with Chinese officials on a given firm under a US import alert to show local authorities how to help exporters take necessary steps to meet US requirements and safety standards, he said.
"If successful, this approach could be a model for other firms affected by an import alert," Leavitt said.
During the five-day visit that ends Saturday, the delegation also reached initial agreement with Chinese authorities for two deals on food and drug safety, which are expected to be finalised by the end of this year.
Leavitt said the next series of bilateral meetings would take place later this month.
"I am optimistic about our initial progress with our Chinese colleagues and I am hopeful the next series of bilateral meetings later this month, in Beijing, will keep us moving forward," he said.
US health officials in Beijing this week offered China's quality inspectors technical assistance to address food and drugs safety problems, Secretary of Health Mike Leavitt said in the statement.
They also offered to work with Chinese officials on a given firm under a US import alert to show local authorities how to help exporters take necessary steps to meet US requirements and safety standards, he said.
"If successful, this approach could be a model for other firms affected by an import alert," Leavitt said.
During the five-day visit that ends Saturday, the delegation also reached initial agreement with Chinese authorities for two deals on food and drug safety, which are expected to be finalised by the end of this year.
Leavitt said the next series of bilateral meetings would take place later this month.
"I am optimistic about our initial progress with our Chinese colleagues and I am hopeful the next series of bilateral meetings later this month, in Beijing, will keep us moving forward," he said.
Thursday, August 2, 2007
China insists '99 percent' of its exports safe as Fisher-Price recalls toys
China insisted Thursday more than 99 percent of its exports were safe as US giant Fisher-Price announced it was recalling nearly one million Chinese-made toys over fears they might be toxic.
Commerce Minister Bo Xilai's reassurance was made public as concern seemed to be growing in Beijing over the potential fall-out from a slew of cases involving shoddily made and dangerous products from China.
"More than 99 percent of the products China exports are of good quality and are safe," Bo said in a statement posted on his ministry's website.
"We hope that the relevant sides will handle Chinese products in an objective, fair and rational manner. This should not impact the normal development of trade."
He added that "China attaches great importance to the quality and safety of its products."
The comments were posted after Fisher-Price on Wednesday said it was recalling 967,000 toys including popular Sesame Street and Dora the Explorer-branded toys sold in US stores between May and August this year.
"Paint on some of these products could contain lead in excess of permissible levels," the company said in a statement.
The US Consumer Product Safety Commission warned that "consumers should immediately take the recalled toys away from children and contact Fisher-Price."
The recall covered around 80 types of toys, including playsets, toy vehicles, figures and musical instruments, many connected to the Nickelodeon children's TV network.
The company also said cautioned that some of its potentially dangerous toys might be on sale elsewhere around the world.
"Mattel is working with retailers worldwide to identify affected products, have them removed from retail shelves and intercept incoming shipments and stop them from being sold," the company statement said.
Fisher-Price, a subsidiary of Mattel Inc., said the items were produced by a single contract manufacturer in China but did not give the company's name or location.
"We realise that parents trust us with what is most precious to them -- their children. And we also recognise that trust is earned," Mattel chairman and chief executive Robert Eckert said in a statement.
"Our goal is to correct this problem, improve our systems and maintain the trust of the families that have allowed us to be part of their lives by acting responsibly and quickly to address their concerns."
China is the world's biggest exporter of toys but the industry has been battered by a storm of bad publicity in recent months alongside a wide range of Chinese-made products that have raised health and safety concerns overseas.
Millions of Thomas and Friends toys were recalled in the United States and Europe because the Chinese manufacturer allegedly substituted lead-free paint with a cheaper, lead-based version, in a similar case to Fisher-Price.
A report by China's safety watchdog in May said more than 20 percent of toys made for its domestic market were substandard or potentially dangerous.
And in the European Union, toys last year overtook electrical appliances as the type of Chinese product most likely to trigger product-safety alerts, the EU said recently.
In an effort to improve its toy industry, China said last month it would test each new product for safety risks before it could be manufactured and carry out random factory inspections and sample testing.
However, a senior quality supervision official warned then that completely eliminating unsafe toy exports would be a challenge "because of the huge volume of goods involved."
China exported 17.8 billion dollars worth of toys in 2006.
Other overseas health and safety scares to have tarnished the "Made in China" brand have included seafood, toothpaste, pet food and car tyres.
Commerce Minister Bo Xilai's reassurance was made public as concern seemed to be growing in Beijing over the potential fall-out from a slew of cases involving shoddily made and dangerous products from China.
"More than 99 percent of the products China exports are of good quality and are safe," Bo said in a statement posted on his ministry's website.
"We hope that the relevant sides will handle Chinese products in an objective, fair and rational manner. This should not impact the normal development of trade."
He added that "China attaches great importance to the quality and safety of its products."
The comments were posted after Fisher-Price on Wednesday said it was recalling 967,000 toys including popular Sesame Street and Dora the Explorer-branded toys sold in US stores between May and August this year.
"Paint on some of these products could contain lead in excess of permissible levels," the company said in a statement.
The US Consumer Product Safety Commission warned that "consumers should immediately take the recalled toys away from children and contact Fisher-Price."
The recall covered around 80 types of toys, including playsets, toy vehicles, figures and musical instruments, many connected to the Nickelodeon children's TV network.
The company also said cautioned that some of its potentially dangerous toys might be on sale elsewhere around the world.
"Mattel is working with retailers worldwide to identify affected products, have them removed from retail shelves and intercept incoming shipments and stop them from being sold," the company statement said.
Fisher-Price, a subsidiary of Mattel Inc., said the items were produced by a single contract manufacturer in China but did not give the company's name or location.
"We realise that parents trust us with what is most precious to them -- their children. And we also recognise that trust is earned," Mattel chairman and chief executive Robert Eckert said in a statement.
"Our goal is to correct this problem, improve our systems and maintain the trust of the families that have allowed us to be part of their lives by acting responsibly and quickly to address their concerns."
China is the world's biggest exporter of toys but the industry has been battered by a storm of bad publicity in recent months alongside a wide range of Chinese-made products that have raised health and safety concerns overseas.
Millions of Thomas and Friends toys were recalled in the United States and Europe because the Chinese manufacturer allegedly substituted lead-free paint with a cheaper, lead-based version, in a similar case to Fisher-Price.
A report by China's safety watchdog in May said more than 20 percent of toys made for its domestic market were substandard or potentially dangerous.
And in the European Union, toys last year overtook electrical appliances as the type of Chinese product most likely to trigger product-safety alerts, the EU said recently.
In an effort to improve its toy industry, China said last month it would test each new product for safety risks before it could be manufactured and carry out random factory inspections and sample testing.
However, a senior quality supervision official warned then that completely eliminating unsafe toy exports would be a challenge "because of the huge volume of goods involved."
China exported 17.8 billion dollars worth of toys in 2006.
Other overseas health and safety scares to have tarnished the "Made in China" brand have included seafood, toothpaste, pet food and car tyres.
Recalls: Should U.S. biz share blame with China?
Industry experts say U.S. companies need to monitor overseas factories more closely to prevent product safety lapses.
NEW YORK (CNNMoney.com) -- Are U.S. companies that make most of their products in China exposing American consumers to greater safety risks?
Not necessarily, at least according to one industry expert. Chris Byrne, an independent toy industry consultant, says that the increasing number of product scares - the most recent being Mattel's recall on Wednesday of 1.5 million Chinese made toys - isn't necessarily a "geographic issue."
U.S. companies that source from China "have to be more responsible for product safety themselves," he said. "Consumers will now insist on this."
Other analysts agree the onus should be on U.S. companies that do business in China to introduce much more rigorous testing standards.
"American companies have to put their own people on the ground [in China]," said Sean McGowan, analyst with Wedbush Morgan Securities.
"After this latest episode, I think the toy industry will have to implement a level of oversight that's never been seen before," he said.
Mattel (Charts, Fortune 500), the world's leading toymaker, said late Wednesday that its Fisher-Price pre-school division had issued a global recall of 1.5 million toys, including Elmo, Big Bird, and Dora that were made in China, because their paint may contain too much lead.
This marked the latest incident in a series of recent Chinese product recalls. China, the second-largest trading partner of the United States, is also the world's foremost toy supply center, producing more than 80 percent of the global supply.
Officials at the Chinese Embassy in Washington and the U.S.-China Business Council were not immediately available for comment.
In June, RC2 Corp., (Charts) recalled 1.5 million "Thomas & Friends" wooden railway toys that were also made in China over concerns that the surface paints on the toys contained lead, which could result in toxic poisoning in young children.
"Mattel is trusted as one of the safest brand names in the world," Byrne said. "Something like this is very serious because it can shake consumer confidence in the brand. There's no way to put a nice face on it, especially when parents entrust their child's safety to your products."
Jim Silver, a toy industry analyst and co-publisher of Toy Wishes magazine, said U.S. companies have to enforce stricter penalties on their manufacturers for any safety lapses. "If you have to fire the vendor, fire them," Silver said.
Mattel spokeswoman Jules Andres told CNNMoney.com that the company has "ceased production" of its products at the third-party Chinese factory contracted to make its toys.
"We don't own that particular factory that made the recalled products, so we can't shut them down," Andres said, adding that the factory remained a client pending an investigation.
Regarding Mattel's overseas factories, Andres said the company owns and operates 10 factories worldwide - including five located in China - that produce half of all Mattel toys. The other five are located in Mexico, Malaysia, Thailand and Indonesia.
"The other 50 percent of our production we outsource to third-party vendors in China," she said.
Not just a China issue
According to the Toy Industry Association (TIA), the agency has provided toymakers with voluntary safety standard for all toys.
The Consumer Product Safety Commission (CPSC) also regulates toys through its own inspectors that monitor the marketplace for both domestically produced and foreign-made toys.
But some consumer interest activists argue that limited budgets prevent federal agencies like the CPSC from enforcing adequate product safety mechanisms.
Apart from specific safety guidelines issued by the CPSC pertaining to use of hazardous substances, flammability and noise levels, there is no requirement that toy manufacturers must abide by the industry's own voluntary safety standards.
"The [CPSC] doesn't have pre-market jurisdiction, which means that they can't test products before they hit the market," said Rachel Weintraub, director of product safety and senior counsel with advocacy group Consumer Federation of America (CFA).
Said Byrne: "Obviously, these recalls could force the [toy] industry to reform those voluntary standards and maybe make them mandatory. If this could happen in China, it could also happen in a factory in any other country too."
Sean McGowan, analyst with Wedbush Morgan Securities, agreed.
"Does it make sense for U.S. companies to look at other locations? Yes," McGowan said, also pointing to rising labor and production costs in the southern China's manufacturing belt.
"If I was sourcing heavily in China, I would be exploring alternatives like Vietnam and Cambodia," McGowan said.
At the same time, McGowan said U.S. companies have to make their suppliers in China or elsewhere "realize that the cost of any recall to them is also very high."
"American companies have to ask their vendors, 'What can you do for me to convince me not to take my business away from you,'" McGowan said.
Gerrick Johnson, analyst with BMO Capital Markets, fears that the toy industry will suffer more recalls in the future unless companies like Mattel, Hasbro (Charts) and others tighten up quality standards and monitoring of their overseas factories.
"From the reports that I get about China, the manufacturing areas seem like the wild wild east. It's capitalism run amok with no enforcement of any standards," Johnson said.
As far as U.S. companies shifting sourcing to other low-cost manufacturing hubs in Asia, Johnson said it's not a realistic option right now.
"The infrastructure in countries like Vietnam and Cambodia is still underdeveloped, although the potential is there," Johnson said. "Vietnam right now can support manufacturing of some soft goods like clothing but not hard goods like electronics or toys." Top of page
Lax oversight, globalization erode product safety
NEW YORK (CNNMoney.com) -- Are U.S. companies that make most of their products in China exposing American consumers to greater safety risks?
Not necessarily, at least according to one industry expert. Chris Byrne, an independent toy industry consultant, says that the increasing number of product scares - the most recent being Mattel's recall on Wednesday of 1.5 million Chinese made toys - isn't necessarily a "geographic issue."
U.S. companies that source from China "have to be more responsible for product safety themselves," he said. "Consumers will now insist on this."
Other analysts agree the onus should be on U.S. companies that do business in China to introduce much more rigorous testing standards.
"American companies have to put their own people on the ground [in China]," said Sean McGowan, analyst with Wedbush Morgan Securities.
"After this latest episode, I think the toy industry will have to implement a level of oversight that's never been seen before," he said.
Mattel (Charts, Fortune 500), the world's leading toymaker, said late Wednesday that its Fisher-Price pre-school division had issued a global recall of 1.5 million toys, including Elmo, Big Bird, and Dora that were made in China, because their paint may contain too much lead.
This marked the latest incident in a series of recent Chinese product recalls. China, the second-largest trading partner of the United States, is also the world's foremost toy supply center, producing more than 80 percent of the global supply.
Officials at the Chinese Embassy in Washington and the U.S.-China Business Council were not immediately available for comment.
In June, RC2 Corp., (Charts) recalled 1.5 million "Thomas & Friends" wooden railway toys that were also made in China over concerns that the surface paints on the toys contained lead, which could result in toxic poisoning in young children.
"Mattel is trusted as one of the safest brand names in the world," Byrne said. "Something like this is very serious because it can shake consumer confidence in the brand. There's no way to put a nice face on it, especially when parents entrust their child's safety to your products."
Jim Silver, a toy industry analyst and co-publisher of Toy Wishes magazine, said U.S. companies have to enforce stricter penalties on their manufacturers for any safety lapses. "If you have to fire the vendor, fire them," Silver said.
Mattel spokeswoman Jules Andres told CNNMoney.com that the company has "ceased production" of its products at the third-party Chinese factory contracted to make its toys.
"We don't own that particular factory that made the recalled products, so we can't shut them down," Andres said, adding that the factory remained a client pending an investigation.
Regarding Mattel's overseas factories, Andres said the company owns and operates 10 factories worldwide - including five located in China - that produce half of all Mattel toys. The other five are located in Mexico, Malaysia, Thailand and Indonesia.
"The other 50 percent of our production we outsource to third-party vendors in China," she said.
Not just a China issue
According to the Toy Industry Association (TIA), the agency has provided toymakers with voluntary safety standard for all toys.
The Consumer Product Safety Commission (CPSC) also regulates toys through its own inspectors that monitor the marketplace for both domestically produced and foreign-made toys.
But some consumer interest activists argue that limited budgets prevent federal agencies like the CPSC from enforcing adequate product safety mechanisms.
Apart from specific safety guidelines issued by the CPSC pertaining to use of hazardous substances, flammability and noise levels, there is no requirement that toy manufacturers must abide by the industry's own voluntary safety standards.
"The [CPSC] doesn't have pre-market jurisdiction, which means that they can't test products before they hit the market," said Rachel Weintraub, director of product safety and senior counsel with advocacy group Consumer Federation of America (CFA).
Said Byrne: "Obviously, these recalls could force the [toy] industry to reform those voluntary standards and maybe make them mandatory. If this could happen in China, it could also happen in a factory in any other country too."
Sean McGowan, analyst with Wedbush Morgan Securities, agreed.
"Does it make sense for U.S. companies to look at other locations? Yes," McGowan said, also pointing to rising labor and production costs in the southern China's manufacturing belt.
"If I was sourcing heavily in China, I would be exploring alternatives like Vietnam and Cambodia," McGowan said.
At the same time, McGowan said U.S. companies have to make their suppliers in China or elsewhere "realize that the cost of any recall to them is also very high."
"American companies have to ask their vendors, 'What can you do for me to convince me not to take my business away from you,'" McGowan said.
Gerrick Johnson, analyst with BMO Capital Markets, fears that the toy industry will suffer more recalls in the future unless companies like Mattel, Hasbro (Charts) and others tighten up quality standards and monitoring of their overseas factories.
"From the reports that I get about China, the manufacturing areas seem like the wild wild east. It's capitalism run amok with no enforcement of any standards," Johnson said.
As far as U.S. companies shifting sourcing to other low-cost manufacturing hubs in Asia, Johnson said it's not a realistic option right now.
"The infrastructure in countries like Vietnam and Cambodia is still underdeveloped, although the potential is there," Johnson said. "Vietnam right now can support manufacturing of some soft goods like clothing but not hard goods like electronics or toys." Top of page
Lax oversight, globalization erode product safety
Treasury says can't force China currency change
A senior U.S. Treasury official warned Congress on Thursday that a legislative drive to force China into letting its currency rise in value more quickly could backfire and do damage to the U.S. economy.
Deputy Assistant Treasury Secretary Mark Sobel warned a House of Representative trade subcommittee that U.S. lawmakers risked creating a perception abroad that the United States is becoming "an isolationist nation" that does deserve foreign investment.
"If the United States adopts currency legislation that is perceived abroad as unilateralist, investors' confidence in the openness of our economy could be dampened, diminishing capital inflows into the United States and potentially putting upward pressure on interest rates and prices," Sobel said.
Two Senate committees have now approved legislation that aims to equip Treasury with new tools to pressure China into letting its yuan currency rise faster in value, which U.S. manufacturers say is necessary to eliminate an unfair price advantage for Chinese-made goods.
But Treasury Secretary Henry Paulson has made clear that he does not want the additional legislative tools and that he prefers to seek a faster pace of economic reform in China through discussion, especially in a "strategic economic dialogue" that he initiated with Beijing last December.
Sobel's appearance before the House subcommittee was a bid by Treasury to wave off more legislation in Congress, where anger at China has been mounting and has helped fuel the bid to force Beijing into faster currency appreciation.
"We appreciate the frustrations of Congress with the slow pace of Chinese reform. Indeed, we strongly share those frustrations," Sobel said. "Yet we continue to believe that direct, robust engagement with China is the best means of achieving progress."
Paulson has just returned on Wednesday night from his fourth trip to China since taking over Treasury just over a year ago. Again he was unable to persuade Chinese officials to offer any commitment to speed up currency reforms.
Paulson told reporters in Beijing that Chinese officials whom he met, including President Hu Jintao, intended to move ahead with economic reforms including on currency but that the country's economic stability was critically important.
The failure to get firm Chinese promises on currency has fed into a sense in Congress that China does not play fair on trade rules while public anger is mounting over recalls of potentially dangerous Chinese-made children's' toys and tainted food and medical products.
Sobel said Paulson had "conveyed a strong message about the need for far more vigorous action by China to correct the undervaluation of renminbi (RMB), take immediate action to lift the RMB's value and achieve far greater currency flexibility."
China's yuan is also known as the renminbi.
David Spooner, the Commerce Department's assistant secretary for import administration, echoed some of Sobel's worry that Congress's actions could rebound against the United States because they might violate global trade rules.
"I must make clear that the Department of Commerce is deeply concerned that the other legislative proposals that have been advanced to date raise serious concerns under international trade rules," Spooner said, adding that could trigger a global cycle of protectionist legislation.
Similarly, the U.S. Trade Representative's deputy general counsel, Daniel Brinza, warned that Congress needed to beware approving legislative proposals that did not comply with rules set by the World Trade Organization.
Doing so would undermine U.S. credibility when it tries to persuade others to abide by WTO rulings, Brinza said.
Deputy Assistant Treasury Secretary Mark Sobel warned a House of Representative trade subcommittee that U.S. lawmakers risked creating a perception abroad that the United States is becoming "an isolationist nation" that does deserve foreign investment.
"If the United States adopts currency legislation that is perceived abroad as unilateralist, investors' confidence in the openness of our economy could be dampened, diminishing capital inflows into the United States and potentially putting upward pressure on interest rates and prices," Sobel said.
Two Senate committees have now approved legislation that aims to equip Treasury with new tools to pressure China into letting its yuan currency rise faster in value, which U.S. manufacturers say is necessary to eliminate an unfair price advantage for Chinese-made goods.
But Treasury Secretary Henry Paulson has made clear that he does not want the additional legislative tools and that he prefers to seek a faster pace of economic reform in China through discussion, especially in a "strategic economic dialogue" that he initiated with Beijing last December.
Sobel's appearance before the House subcommittee was a bid by Treasury to wave off more legislation in Congress, where anger at China has been mounting and has helped fuel the bid to force Beijing into faster currency appreciation.
"We appreciate the frustrations of Congress with the slow pace of Chinese reform. Indeed, we strongly share those frustrations," Sobel said. "Yet we continue to believe that direct, robust engagement with China is the best means of achieving progress."
Paulson has just returned on Wednesday night from his fourth trip to China since taking over Treasury just over a year ago. Again he was unable to persuade Chinese officials to offer any commitment to speed up currency reforms.
Paulson told reporters in Beijing that Chinese officials whom he met, including President Hu Jintao, intended to move ahead with economic reforms including on currency but that the country's economic stability was critically important.
The failure to get firm Chinese promises on currency has fed into a sense in Congress that China does not play fair on trade rules while public anger is mounting over recalls of potentially dangerous Chinese-made children's' toys and tainted food and medical products.
Sobel said Paulson had "conveyed a strong message about the need for far more vigorous action by China to correct the undervaluation of renminbi (RMB), take immediate action to lift the RMB's value and achieve far greater currency flexibility."
China's yuan is also known as the renminbi.
David Spooner, the Commerce Department's assistant secretary for import administration, echoed some of Sobel's worry that Congress's actions could rebound against the United States because they might violate global trade rules.
"I must make clear that the Department of Commerce is deeply concerned that the other legislative proposals that have been advanced to date raise serious concerns under international trade rules," Spooner said, adding that could trigger a global cycle of protectionist legislation.
Similarly, the U.S. Trade Representative's deputy general counsel, Daniel Brinza, warned that Congress needed to beware approving legislative proposals that did not comply with rules set by the World Trade Organization.
Doing so would undermine U.S. credibility when it tries to persuade others to abide by WTO rulings, Brinza said.
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