CPI stimulated by festive spending

China's consumer prices spiked to a 10-month high in February, driven up by traditional spending during the Spring Festival holidays, and leaving less room for the government to negotiate an easing of tightened monetary measures.
The Consumer Price Index, a main gauge of inflation, rose sharply to 3.2 percent from 2 percent in January, the highest year-on-year increase since May 2012, according to data released by the National Bureau of Statistics on Saturday.

A customer selects fruits at a market in Changchun, capital of northeast China's Jilin Province, March 9, 2013. China's consumer price index (CPI), a main gauge of inflation, grew 3.2 percent year on year in February, the highest level in ten months, the National Bureau of Statistics announced Saturday.  [Photo/Xinhua]

It was mainly lifted by a 6 percent rise of food prices last month, compared to a rise of 2.9 percent in January. This segment accounted for about 30 percent of the components for calculating CPI. It contributed a 1.98 percentage point hike, the NBS said.
In February, fresh vegetable prices increased 10 percent year-on-year, while aquatic product prices rose by 7.7 percent, stimulated by strong demand during the one-week Spring Festival holidays from Feb 9.
"Price fluctuation around this traditional holiday is mainly seasonal, and will likely ease later on," said Yu Qiumei, an economist with the NBS. "The CPI may cool in March."
Liu Ligang, chief economist in China with the ANZ Banking Group Ltd, said China's inflation pressure remains high.
"The upward trend for inflation is evident, fueled by the largely expanded credit and strong inflow of overseas capital," Liu said. "Inflation will be a serious problem in the second half (of the year)."
Before raising the commercial banks' reserve requirement ratio or elevating the benchmark interest rates, the central bank is likely to continue to repurchase agreements in an open market operation right after the Spring Festival holidays to tighten liquidity, according to Liu.
Industrial product prices continued to decrease in February, with a negative 1.6 percent on the index, same as in January. It has remained in contraction for a year, the NBS data indicated.
The pace of growth in industrial output during the first two months of this year was 9.9 percent, similar to the fourth quarter of 2012. The non-metallic and automobile industries also suffered slower growth during that period, according to the NBS.
Total retail sales in January and February were boosted by a 12.3 percent year-on-year, but still recorded a sharp drop compared to 15.2 percent in December 2012.
The report also indicated that fixed-asset investment accelerated in January and February to 21.2 percent, compared to 20.6 percent from the whole of last year. Total planned investment for construction projects was 34.63 trillion yuan by the end of February, an increase of 18.8 percent from a year earlier, the NBS said.
Qu Hongbin, the chief Chinese economist of HSBC Holdings Plc said the current and main driving force of the Chinese economy is still from investment, which may need an easing of the monetary policies to retain the rebound momentum.
chenjia1@chinadaily.com.cn

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Bandith charges reinstated

Former Bavet town governor Chhouk Bandith appears at the Appeal Court last week. Photograph: Heng Chivoan/Phnom Penh Post

In just 30 minutes, and out of public view, the Court of Appeal yesterday ordered the Svay Rieng Provincial Court to reinvestigate the case against former Bavet town governor Chhouk Bandith, who stands accused of shooting three garment workers during a protest last year.
The decision effectively places the reinvestigation back in the hands of a court that in December dropped charges against Bandith, citing insufficient evidence
Speaking to journalists after the hearing, prosecuting judge Khun Meng Leang said Bandith’s charges of causing unintentional injury had been re-levied.
“We are sending the case back to the Svay Rieng Provincial Court to prosecute legally,” he said.
The decision came after two days of hearings that included some two dozen witness testimonies – all but one of whom supported Bandith’s side of the story.
Rights workers have said their own investigations suggest there were a number of eye-witnesses who refused to testify after learning who the suspect was.
The single witness who challenged Bandith’s version of accounts, Prasat commune deputy police chief Long Phorn, said he was just seven metres away from Bandith when the former governor opened fire.
“He did not shoot into the air,” Phorn said last week.
Victims and rights monitors alike were tempered in their reaction: pleased, on the one hand, that the case would remain open, but sceptical for the prospects of a fair investigation at the lower court.
Smiling as she left the courtroom, plaintiff Keo Near said she was thrilled that charges were re-filed.
But, the 19-year-old continued, “I’m not so confident that they have returned the case to Svay Rieng court.”
Asked whether he was concerned that the decision would simply result in the same outcome, the prosecutor, who appealed the December decision to drop the charges, said it was out of his hands.
“I cannot predict whether the provincial court will decide to drop the accusation again, because it is a discretion of judges,” said prosecutor general Ouk Savuth.
Svay Rieng court chief Pich Choeut declined to comment, saying he hadn’t yet received the case file.
More than a year after a bullet pierced her lung as she and 6,000 others called for better working conditions, 21-year-old Buot Chenda said the outcome was a tentative step forward.
“The suspect who shot us has to be punished.”
She and others, however, remained disappointed that the “unintentional” charge was used, rather than a stronger – and more likely accurate, many argue – “intentional” charge.
“The result is too small,  because it’s just the accusation of causing unintentional injury. It’s not right,” said Ath Thorn, president of the Coalition of Cambodian Apparel Workers’ Democratic Union.
In a joint statement released yesterday, rights groups Adhoc and the Cambodian Human Rights Action Committee said they were “concerned” by the court’s decision and urged transparency.
“This process should be transparent and offer guarantees of independence and rights of the defence if it is to provide justice for the victims and demonstrate that the rich and powerful cannot act with impunity when accused of grave crimes,” it reads.

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Spanish bank bailout gets go-ahead

Bankia is one of four Spanish banks to get the green light for a eurozone bailout

LONDON (CNNMoney) -- The European Commission has approved Spain's plans to restructure four of its weakest banks, clearing the way for them to receive nearly €37 billion in fresh capital from the eurozone's bailout fund.
All four banks were nationalized to prevent them collapsing after Spain's property bubble burst, leaving them facing massive losses on their loan books.

The bailout should allow three lenders - BFA-Bankia, NCG Banco and Catalunya Banc -- to become viable in the long term without continued state support, the Commission said. Their balance sheets will be reduced by 60% by 2017.
The fourth, Banco de Valencia, will be sold to CaixaBank and will cease to operate independently.
"Our objective is to restore the viability of banks receiving aid so that they are able to function without public support in the future," said European Competition Commissioner Joaquin Almunia. "Restoring a healthier financial sector capable of financing the real economy is indispensable for economic recovery in Spain."
Related: Spanish economy shrinks again
Independent stress tests conducted on the Spanish banking sector earlier this year identified a capital hole of about €59 billion.
Spain's eurozone partners have agreed to provide up to €100 billion from the currency area's permanent bailout fund -- the European Stability Mechanism -- but only once restructuring plans are submitted and approved.
The overhaul requires the banks to cease lending to the real estate sector, limit their activities in wholesale funding, and focus on providing services to retail clients and small businesses. Real estate assets are being transferred to an asset management company or "bad bank".
Spain has committed to privatize NCG and Catalunya Banc before the end of the five-year restructuring period. Bankia, the biggest of the four lenders, and Catalunya will sell their fixed-income trading businesses.
Bankia said it would shed 6,000 jobs, more than a quarter of its staff, and close around 1,200 branches over the next three years.
The International Monetary Fund said Spain was on track with its efforts to emerge from the banking crisis, but said implementing the restructuring and making the "bad bank" effective were challenging steps that would have to be taken in the face of further economic headwinds.
Spain is suffering its second recession in three years and its economy is expected to contract further in 2013. Unemployment stands at 25%.
"Although this outlook remains broadly consistent with the baseline scenario used in the bank stress tests, risks around the baseline are large," the IMF said.
Related: Service sector adds to eurozone gloom
Standard & Poor's cut its rating on Spain last month, citing the risk of social discontent and rising tensions between the central government and Spain's semi-autonomous regions.
Weekend elections in Catalonia resulted in a majority for parties that support independence.
The European Commission is expected to decide next month on restructuring plans for a second group of Spanish banks -- Banco Mare Nostrum, Banco Caja 3, Liberbank and Ceiss, which also failed the stress tests.
Spain has held off joining Greece, Ireland and Portugal in requesting a full-blown bailout, but some analysts believe it is only a matter of time. A "doom loop" of spending cuts and weaker-than-expected growth may make it impossible for Spain to meet its budget targets.
The yields on Spain's 10-year bond fell to around 5.4%, and the spread to the benchmark German bond narrowed, as investors welcomed the bank bailout news. The yield touched 7.5% earlier this year, but has fallen back sharply since the European Central Bank announced it was ready to buy bonds of troubled eurozone nations provided they request a bailout.

First Published: November 28, 2012: 7:32 AM ET

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Romney says Obama campaign all about 'hatred'

 

Mitt Romney complained that Barack Obama's re-election bid was steeped in "hatred" while the president said his Republican foe would strip the elderly of state health benefits.

Romney, hoping to turn the Democrat out of the White House after a single term, said that Obama and backers were stoking divides based on income, age and ethnicity, to whip up a sense of "enmity and jealousy and anger."
"The president's campaign is all about division and attack and hatred," Mitt Romney told CBS News. "My campaign is about getting America back to work and creating greater unity in this country."
"The president seems to be running just to hang onto power -- I think he'll do anything in his power to try to get reelected," he said.
Obama denied running a divisive campaign, but admitted that controversial remarks by Vice President Joe Biden -- who told a crowd in the former slave-owning state of Virginia on Tuesday that Republican banking policies would "put y'all back in chains" -- had been a "distraction."
"What Joe Biden was talking about, again, is an example of a substantive argument, a substantive issue that the American people should be concerned about," Obama told the "Entertainment Tonight" program.
"His phrasing is a distraction from what is at stake."
Romney had earlier characterized Biden's remarks as "one more example of a divisive effort to keep from talking about the real issues."
The Obama campaign responded to Romney's outburst by implicitly questioning whether the Republican's temperament was suited for the Oval Office.
"Governor Romney's comments ... seemed unhinged and particularly strange coming at a time when he's pouring tens of millions of dollars into negative ads that are demonstrably false," Obama spokesman Ben LaBolt said Tuesday.
"Hope it's not hateful to say that Mitt's budget math doesn't add up," wrote Obama senior advisor David Axelrod on Twitter.
The president, wrapping up a three-day bus tour of Iowa, the state that served as his launchpad in 2008, declined to wage a tit-for-tat battle, as he tapped the political firepower of his popular wife Michelle.
"Your president knows what it means when a family struggles. This is not a hypothetical situation for him. He knows what it means to want something better for your kids and your grandkids," Michelle Obama said.
"That's why I love him. That's why I married him."
Obama also opened a new assault on Romney on health care for the elderly, taking aim at his Republican running mate Paul Ryan, who backs a voucher plan for patients to buy private health insurance.
"I think they know their plan's not very popular. You can tell that because they are being pretty dishonest about my plan," Obama told a 3,000-strong crowd, which included many seniors, in front of a red brick brewery here.
Romney had earlier accused Obama of pulling $700 million from Medicare to pay for his landmark health reform, which Republicans oppose. Obama in turn accused his rival of throwing "everything at the wall to see if it sticks."
"I have strengthened Medicare. I have made reforms that have saved millions of seniors with Medicare hundreds of dollars on their prescription drugs," Obama said, adding that his reforms would not touch a "dime" of benefits.
"Mr Romney and his running mate have a very different plan. They want to turn Medicare into a voucher program," he said, warning that such vouchers would not keep up with fast-rising health care costs.
The row over Medicare, a popular federal government program, could be pivotal in electoral battlegrounds with substantial populations of retirees, including Florida, the largest US swing state.
Most political experts believe the race to the November 6 election remains close, with Obama perhaps slightly in the lead and well positioned in the dozen or so swing states that will decide whether he gets a second term.
Obama argues that Romney, a multi-millionaire former venture capitalist, would further enrich his wealthy friends with tax cuts -- and put the burden on a middle class struggling to cope in a slow economic recovery.
Romney paints Obama as out of ideas and an enemy of job-creating small businesses, saying the president is bent on a big government takeover of many aspects of American life and has failed to ignite the sluggish US economy.

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Spain seeks French support as eurozone crisis deepens

Europe's economic crisis has deepened, with a slump in German confidence, worsening British recession and a debt-wracked Spain seeking French support in the face of soaring borrowing costs.

While fears grew Wednesday that Spain, the fourth largest eurozone economy, is going to need a fresh bailout, storm clouds were also gathering over Europe's top economy.
Data showed that business confidence in Germany dropped again in July as companies grow increasingly wary of fallout from the eurozone debt turmoil.
The Ifo economic institute's closely watched business climate index dropped to 103.3 points in July from 105.2 points in June, a slightly steeper decline than analysts expected. It was the third month in a row the index fell.
Later Wednesday, ratings agency Moody's handed Berlin more bad news, downgrading the outlook for 17 German banks after a similar move against the government's credit rating earlier this week.
Moody's cut the outlook on a swathe of state-backed regional banks, known in Germany as landesbank, but also included IKB Deutsche Industriebank and Deutsche Postbank.
On Monday Moody's cut Germany's ratings outlook from "stable" to "negative", citing exposure to European financial woes and the possible cost of future bailouts.
That was the first step toward stripping Germany of its coveted AAA credit rating -- a stark warning that not even Europe's largest economy is immune from the eurozone's rolling crisis.
Though not a member of the eurozone, Britain is no disinterested bystander to the financial turmoil on the continent.
Britain's economy shrank in the second quarter by more than expected, official data showed Wednesday, as a double-dip recession tightened its grip on the country on the eve of the costly London Olympics.
Britain's gross domestic product (GDP) slumped 0.7 percent between April and June from the first three months of the year, on steep output declines in the construction and manufacturing sectors, the Office for National Statistics said.
But Spain is currently the main focus of financial firefighting in Europe.
After talks in Berlin Tuesday, Spanish Finance Minister Luis de Guindos met French counterpart Pierre Moscovici in Paris, as the eurozone tries to contain fears that Spain may be heading for a full-blown bailout.
In Berlin, de Guindos and German Finance Minister Wolfgang Schaeuble had issued a joint statement saying Spain's borrowing costs do not correspond to its economic strength or the "sustainability of its public debt".
A German finance ministry spokesman denied Spain was seeking a new bailout, saying: "This is wrong, it is not on the agenda."
The statement warned more downgrades could occur if there was a "further deterioration of the creditworthiness" of Germany's central or regional governments.
Economists increasingly agree that a previous eurozone bailout of up to 100 billion euros agreed for Spain's banks will be insufficient to get the country through the crisis brought on by a collapse of its real estate boom in 2008.
One Spanish region, Valencia, has already requested help from the 18-billion-euro fund set up by the central government to rescue struggling regions, while another region, Catalonia, has indicated it may do the same.
Spain's borrowing costs have hit their highest level since the country adopted the euro, with yields on 10-year government bonds hitting 7.621 percent Tuesday -- the kind of level that forced Greece, Ireland and Portugal to seek EU-IMF bailouts.
But the yield eased on Wednesday to a still high 7.376 percent.
The euro meanwhile rose against the dollar on Wednesday amid hints of further steps to ease the European debt crisis and signs of more US stimulus.
The euro climbed 0.7 percent to $1.2151 in New York, a day after touching two-year lows.
The euro got some support when Austrian central bank governor Ewald Nowotny, a member of the European Central Bank (ECB) governing council, said that the future European Union 500-billion-euro ($600 billion) financial rescue fund might be granted a banking licence.
That would allow the fund to exchange bonds for ECB cash, bolstering its capacity without governments having to contribute additional funds.
Analysts said Spain needs either a bailout or market intervention by the European Central Bank to force its borrowing costs down by buying bonds.
The ECB has done this before but it is not clear if it is ready to step in again now without clear backing from the major eurozone states, especially Germany.
The spotlight will also be on Italy on Thursday as it seeks to raise up to 2.5 billion euros in a two-year bond auction.
Meanwhile Greek Finance Minister Yannis Stournaras will meet head auditors from the EU, the IMF and the European Central Bank, whose ongoing inspection of government reforms will determine whether the country will receive pending loans.
European Commission president Jose Manuel Barroso meanwhile protested against efforts to cut the 2013 European budget, saying they undermined plans to promote growth and jobs.
In a letter to European heads of state and government, he lashed out at plans to cut the draft budget by five billion euros ($6.1 billion).

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From hot dogs to slick ads: Unions spent $4.4 billion on politics in past 6 years

A Wall Street Journal analysis of political spending unveiled Tuesday found that organized labor groups dropped a combined $4.4 billion on political activities between 2006 and 2011, about four times more than previously estimated.

The Journal cast a wide net to determine what counted as "political spending," including activities that range from traditional candidate donations to the cost of hot dogs for union demonstrators at political rallies.

To find the additional costs, the newspaper added spending reports filed with the Labor Department to Federal Election Commission spending data. From the report, which is partially behind a paywall at WSJ.com, but is available in full at FoxNews.com:

The usual measure of unions' clout encompasses chiefly what they spend supporting federal candidates through their political-action committees, which are funded with voluntary contributions, and lobbying Washington, which is a cost borne by the unions' own coffers.

These kinds of spending, which unions report to the Federal Election Commission and to Congress, totaled $1.1 billion from 2005 through 2011, according to the nonpartisan Center for Responsive Politics.

The unions' reports to the Labor Department capture an additional $3.3 billion that unions spent over the same period on political activity.

The costs reported to the Labor Department range from polling fees, to money spent persuading union members to vote a certain way, to bratwursts to feed Wisconsin workers protesting at the state capitol last year. Much of this kind of spending comes not from members' contributions to a PAC but directly from unions' dues-funded coffers. There is no requirement that unions report all of this kind of spending to the Federal Election Commission, or FEC.

Union spending goes overwhelmingly to Democratic candidates and liberal causes. According to the Center for Responsive Politics, which tracks political spending, 92 percent of the $58.5 million in direct candidate donations from 1990 to 2012 went toward Democratic candidates.
Update: Jeff Hauser, a spokesman for the AFL-CIO, responded to the Journal report Tuesday afternoon, arguing that much of the union political activity on the local and state level cannot be equally compared to spending by super PACs:

The Wall Street Journal treats all advocacy for working people at the local, state and federal levels as "political" work. Everything from someone writing policy proposals to create jobs to working in a local community to elect a working families-friendly City Council is viewed as equivalent to corporations anonymously attacking President Obama.
Providing expert input for the formulation of mine safety rules, assisting the civil rights community—be it the 1963 March on Washington or voting protection efforts year-round—everything labor works on is said to be a counter-weight to the Super PACs of Karl Rove, the Koch Brothers and more shadowy figures.
By this definition, the entire budget of the Chamber of Commerce would be considered political, but the Chamber doesn't report its spending on Department of Labor forms or anywhere else.

The Journal misses the central point that unions are advocacy organizations. The job of a union is to advocate on behalf of working men and women.

Moreover, the Journal ignores the fact that corporations outspend unions by more than 10 to one but are free to hide their spending while unions disclose everything.

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Diabetes: The dark side of the Gulf's economic boom

DUBAI (Reuters) - Dhari al-Fadli, a patient being treated at a diabetes clinic in Kuwait, is a victim of the dark side of his country's economic boom.

After his weight hit a peak of 123 kg (271 pounds), Fadli developed such serious diabetes that he had to inject himself with insulin before every meal. Helped by the insertion of a gastric balloon into his stomach to reduce hunger, he has now lost enough weight to stop the injections, but still has to take diabetic medication.

"We're all overweight in my family...We have a saying that if you don't have diabetes, you're not a Kuwaiti," said Fadli, a 49-year-old father of five.

In fact, more than one in five Kuwaitis suffer from the disease.

Oil wealth has given Kuwait and nearby countries in the Gulf some of the highest per capita incomes in the world. But it has also created lifestyles - overeating, high-sugar diets, cushy jobs and heavy reliance on automobiles for transport - that are leading to an explosion of diabetes in the region, experts say.

Five of the 10 countries where diabetes is most prevalent are located in the six-nation Gulf Cooperation Council, according to the International Diabetes Federation (IDF), an umbrella organisation of more than 200 national associations.

Kuwait is No. 3 while Qatar is sixth, Saudi Arabia seventh, Bahrain eighth and the United Arab Emirates No. 10. The rest of the top 10 are Pacific island nations with much smaller populations, apart from Lebanon which comes in fifth.

A staggering 21.1 percent of people in Kuwait are diabetes sufferers while prevalence rates are around 20 percent in other GCC countries, IDF figures show. In the United States, the rate is 9.6 percent; worldwide, it is 8.5 percent.

The problem is so widespread in Kuwait, said Abdulmuhsen al-Shammari, an endocrinologist working at Mubarak al-Kabeer Hospital in the country, that "it is now normal for half a dinner party to be diabetic and for them to ask for each other's medication after they eat".

LIFESTYLES

Genetic factors apparently contribute to the Gulf's high incidence of diabetes, an incurable disease in which the body has difficulty absorbing sugars and which is closely associated with obesity, scientists say. It can lead to cardiovascular problems, blindness, strokes and kidney disease.

"Research suggests that people (in the Gulf) have a lower set-point at which their body-mass index levels trigger the onset of diabetes," said Maha Taysir, endocrinologist at the Imperial College London Diabetes Clinic (ICLDC) in Abu Dhabi.

However, even expatriates living in the Gulf have a higher incidence of diabetes than they do in their home countries, Taysir said. This suggests lifestyles are a major reason for the region's problem.

Just two or three generations ago, many inhabitants of region made their living through strenuous work such as fishing, goat-herding and pearl-diving.

The development of the Gulf's oil riches changed lifestyles drastically, luring tens of thousands of people into comfortable jobs at lavishly funded state enterprises, or allowing them to live on ample unemployment benefits. Physically tough jobs in the GCC, such as construction and oil field operation, are almost entirely done by millions of foreign workers.

Gulf rulers responded to last year's political unrest in the Middle East by increasing welfare benefits for their citizens to buy social peace, which some officials in the Gulf have conceded privately risks further reducing the pressure on people to work.

"Exercise is the single most important factor for reducing diabetes ... but it takes a lot of work to get patients here to follow a lifestyle they really don't want to," Taysir said.

Some Gulf residents believe the first Gulf War against Saddam Hussein in 1990-1991 may have contributed indirectly to the spread of obesity by fostering a junk food culture. Fast food outlets blossomed in Kuwait, Saudi Arabia and other countries where thousands of U.S. troops were stationed, and remained part of daily life after the troops withdrew.

"The lifestyle, the luxury we live in, the lack of activity and our fatty junk food culture are all contributing factors... Food is delivered, kids play sitting down at their computers... even physical education is a written exam," said Fadli.

COSTS

Even for the wealthy Gulf oil exporters, the financial costs of diabetes are unwelcome. Medical care is heavily subsidised, and the UAE spends $272 million on diabetes treatment annually. A study by Abu Dhabi health authority estimated the overall social costs of the disease at about $1.9 billion.

"Now people are getting in to the later stage of the disease where it really begins to cost money, which is why governments are now pushing for prevention and early intervention," said Andrew Miles, Gulf regional director at global medical products and services supplier MSD.

Beyond the immediate financial costs, diabetes may threaten Gulf countries' long-term plans for development. Aware that their dependence on oil leaves them vulnerable to global markets, the countries are trying to diversify their economies and bring more of their people into the workforce.

"How can you develop your economy if one-fifth of your people are sick?" Miles said.

Governments are reacting to the problem by launching public awareness campaigns to encourage healthy diets, exercise and early medical testing. Since 2007, the ICLDC has worked on a national campaign in the UAE which includes a series of public talks, free blood tests, an annual walkathon and arranging sports activities in workplaces.

In Kuwait, Qatar, Saudi Arabia and the UAE, MSD has worked with authorities to introduce a training programme for nurses on counseling diabetics, a diabetic cookbook, and a Ramadan iPhone application to advise diabetics who fast during the Muslim holy month.

But it may take many years to change the culture which is fostering diabetes, experts acknowledge.

"You need greater coordination between the different government ministries so that the road traffic authority is thinking about pavements to facilitate walking at the same time as the health authorities are thinking about encouraging activity to decrease obesity and diabetes," said Miles.

"There is more awareness of the need to coordinate between the various ministries and planners, but this will undoubtedly take some time to come into effect... In the meantime, we need as much exposure and awareness of this disease as possible."

(Additional reporting by Tony Faddoul and Sylvia Westall in Kuwait; Editing by Andrew Torchia and Sonya Hepinstall)

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