China stocks end up 2.1 pct on stable policy outlook

July 19 (Reuters) – China’s key stock index closed up 2.1 percent on Monday, boosted by expectations that the government will maintain stable economic policies for the rest of the year.

Premier Wen Jiabao said on Sunday that China’s economy was responding appropriately to stable policies, adding “relatively fast” growth would help create jobs and boost domestic demand. [ID:nTOE66H00H] The Shanghai Composite Index .SSEC closed at 2,475.4 points after shedding 1.9 percent last week. The index, which is one of the world’s worst performers, second only to Greece, has lost over 24 percent of its value since the start of the year.

Yuan-denominated A-shares have been hard hit by Beijing’s moves to cool the country’s fiery property sector, while a raft of recent initial public offerings including that by Agricultural Bank of China (601288.SS) (1288.HK) have sapped investor demand.

“Investors are more confident that economic policies will remain stable and there is not a large possibility of major changes,” said Xu Yinhui, analyst at Guotai Junan Securities in Shanghai.

AgBank was the most active stock, ending up 0.7 percent, while property heavyweight Gemdale (600383.SS) rose 1.7 percent.

Shanghai’s property sub-index .SSEP was up 2.3 percent.

Turnover picked up to 79 billion yuan ($11.7 billion) versus 56 billion yuan on Friday. Volume has been picking up in recent sessions, indicating the possibility of a potential upward path for the index.

Gaining shares outnumbered losers 894 to 19. (Reporting by Farah Master; Editing by Jason Subler)

China stocks gain 2 pct on stable policy expectations

July 19 (Reuters) – China’s key stock index rose more than 2 percent in afternoon trade on Monday, boosted by expectations that the government will maintain stable economic policies for the rest of the year.

Premier Wen Jiabao said on Sunday that China’s economy was responding appropriately to stable policies, adding “relatively fast” growth would help create jobs and boost domestic demand. [ID:nTOE66H00H] The Shanghai Composite Index .SSEC rose to as high as 2,483.9 by 0638 GMT, following a 1.9 percent decline last week. The index, which is one of the world’s worst performers, second only to Greece, has lost over 24 percent of its value since the start of the year.

Yuan-denominated A-shares have been hard hit by Beijing’s moves to cool the country’s fiery property sector, while a raft of recent initial public offerings including that by Agricultural Bank of China (601288.SS) (1288.HK) have sapped investor demand.

“Investors are more confident that economic policies will remain stable and there is not a large possibility of major changes,” said Xu Yinhui, analyst at Guotai Junan Securities in Shanghai.

AgBank was the most active stock, trading up 0.4 percent at 0631 GMT, while property heavyweight Gemdale (600383.SS) rose 1.9 percent.

Shanghai’s property sub-index .SSEP was up 2.2 percent. (Reporting by Farah Master; Editing by Jason Subler)

China’s Wen: “relatively fast” growth needed

(Reuters) – Premier Wen Jiabao said China’s economy was responding appropriately to its stable policies, adding “relatively fast” growth would help create jobs and boost domestic demand, the Xinhua news agency reported on Sunday.

Ending a three-day visit to the northwestern provincial capital of Xi’an, Wen said the country’s economic performance was consistent with the government’s macro-economic controls.

China last week reported a moderation in annual gross domestic product growth in the second quarter to 10.3 percent from 11.9 percent in the first three months of the year.

On Friday, the premier attributed the slowdown in part to his government’s policies, which include steps to limit lending to property developers, home buyers and indebted local governments.

In Xi’an, he reiterated a call for restructuring to boost domestic demand.

“The global economy is recovering, but at a slow pace. There are many uncertainties. We should expand domestic demand while stabilizing overseas demand,” he said.

“Only through sound and relatively fast economic growth can we ensure employment and facilitate the restructuring of the economic development mode.”

Wen made visits to an auto-assembly line, a high-tech agriculture firm and aerospace and metals research firms, stressing the need for Chinese initiative and creativity.

“The world is experiencing a technological revolution and one of its key fields is materials technology. We must always remember that high technologies cannot be bought. We have to rely on ourselves,” he said.

(Reporting by Ken Wills, editing by Jonathan Thatcher))

China’s CNPC seeks to contain oil spill after pipe blast

(Reuters) – China’s largest oil company, China National Petroleum Corp (CNPC), sought to contain ocean pollution and other impacts from an explosion of two crude oil pipelines in the northeastern port of Dalian, state media reported on Sunday.

Hundreds of firefighters battled for more than 15 hours to extinguish the blaze that started late on Friday when a pipe transporting crude oil from a ship to a storage tank blew up, causing a second pipeline nearby to explode.

There were no casualties, but state television CCTV reported that oil had contaminated a 50 sq km area of the ocean off the port city in Liaoning Province.

Xinhua, citing company officials, said a valve had been closed and oil had stopped leaking into the sea, adding that the spill area had been “fenced off and contained.”

But it was not immediately clear how much oil had leaked into the sea.

Calls to the company on Sunday went unanswered.

CNPC, the parent of PetroChina, said that monitoring of the air and sea environment had been stepped up in the affected areas.

The incident drew the attention of top Chinese officials, including President Hu Jintao, Premier Wen Jiabao and security chief Zhou Yongkang, who all issued statements and instructions during the blaze.

The cause of the blast was under investigation.

(Reporting by Ken Wills; Editing by Jeremy Laurence)

China’s CNPC seeks to contain oil spill after pipe blast

July 18 (Reuters) – China’s largest oil company, China National Petroleum Corp (CNPC), sought to contain ocean pollution and other impacts from an explosion of two crude oil pipelines in the northeastern port of Dalian, state media reported on Sunday.

Hundreds of firefighters battled for more than 15 hours to extinguish the blaze that started late on Friday when a pipe transporting crude oil from a ship to a storage tank blew up, causing a second pipeline nearby to explode. [ID:nTOE66G007]

There were no casualties, but state television CCTV reported that oil had contaminated a 50 sq km area of the ocean off the port city in Liaoning Province.

Xinhua, citing company officials, said a valve had been closed and oil had stopped leaking into the sea, adding that the spill area had been “fenced off and contained”.

But it was not immediately clear how much oil had leaked into the sea.

Calls to the company on Sunday went unanswered.

CNPC, the parent of PetroChina (PTR.N)(0857.HK), said that monitoring of the air and sea environment had been stepped up in the affected areas.

The incident drew the attention of top Chinese officials, including President Hu Jintao, Premier Wen Jiabao and security chief Zhou Yongkang, who all issued statements and instructions during the blaze.

The cause of the blast was under investigation.

(Reporting by Ken Wills; Editing by Jeremy Laurence)

China’s economy slows moderately

(Reuters) – China’s economy slowed in the second quarter as the government steered monetary and fiscal policy back to normal after a record credit surge last year to counter the global crisis.

Annual gross domestic product growth moderated to 10.3 percent from 11.9 percent in the first quarter, the National Bureau of Statistics (NBS) said on Thursday. The reading was slightly below market forecasts of 10.5 percent growth.

Other data suggested that curbs on lending to home buyers and local authorities, along with an ebbing of government stimulus spending and an end to inventory rebuilding, were biting with greater force as the quarter drew to a close.

Economists expect no dramatic policy response to Thursday’s data. The government has engineered the slowdown — markets feared overheating earlier this year — and Premier Wen Jiabao has said the economy is going in the expected direction.

“The GDP and other activity data are basically in line with expectations, and consistent with our view that China’s recovery is slowing from the fast pace set in the first quarter but remains relatively solid so far,” said Brian Jackson, strategist at Royal bank of Canada in Hong Kong.

Factory growth slowed to 13.7 percent in the year to June, below forecasts for 15.3 percent and May’s 16.5 percent growth.

“The good news is the economy is holding up. The bad news is investment is coming down, hence demand for commodities will fall,” said Dong Tao, chief non-Japan Asia economist for Credit Suisse in Hong Kong.

Offshore yuan forwards showed little reaction to the figures, which have circulated widely in China’s markets since Tuesday. The Shanghai stock market edged up 0.5 percent and stocks in Asia-Pacific outside Japan pared early losses and were broadly steady in a sign of relief that the data brought no major negative surprises.

GO SLOW, PAPER URGES

But the slower growth makes it increasingly likely that the pace of monetary tightening will slow, as Shanghai money markets have been speculating this week.

The government should refrain from any further policy tightening as the economy may slow more sharply than expected in the second half of the year, the official China Securities Journal said on Thursday.

“In the second half of the year, external demand will gradually weaken and the dividend from the trade surplus will fall. This requires an increase in overall social investment and a halt to tightening of both fiscal policy and monetary policy,” an editorial said.

Financial markets have been increasingly jittery that the government is applying the brakes too hard to an economy that has been a major engine of the global recovery from the deepest recession in 80 years.

China last year became the leading trade partner of Brazil, India and South Africa. German exports to China of machinery are booming.

Unlike many of its Asian peers, most recently Thailand on Wednesday, China has not raised interest rates this year.

But year-on-year growth in the stock of outstanding yuan loans slowed to 18.2 percent at the end of June from 33.8 percent as recently as November. Growth in the M2 measure of money supply moderated to 18.5 percent from 29.7 percent over the same period.

And half-year figures are expected to show that China, in contrast to deeply indebted Western governments, ran a fairly big budget surplus, according to market sources.

FALLING INFLATION

It is hard to judge the immediate impact of the tightening from year-on-year data and China does not issue seasonally adjusted month-on-month or quarter-on-quarter statistics.

But Thursday’s figures reinforce the view that the first quarter marked the cyclical peak for China, which is set to overtake Japan this year as the world’s second-largest economy after the United States.

Consumer price inflation fell to 2.9 percent in the year to June from 3.1 percent in May, below forecasts of a 3.3 percent rise. Consumption was resilient, even though annual retail sales growth eased to 18.3 percent in June from 18.7 percent in May.

Export growth has also remained robust, but the exit from last year’s super-loose monetary policy and tightening measures for the housing market are now having an impact on infrastructure and real-estate spending.

Year-to-date investment in fixed-assets such as flats and factories slowed, growing 25.5 percent against a year ago period after a 25.9 percent rise in May.

The swing factor, many economists say, is how abruptly private residential construction slows in response to the campaign against property speculation and whether the government can compensate for it by ramping spending on public housing.

A Reuters poll of economists released on Wednesday pointed to full-year growth of 10 percent in 2010, slowing to 9.0 percent in 2011.

(Writing by Alan Wheatley; Editing by Tomasz Janowski)

China’s Wen: second global downturn possible

May 31 (Reuters) – Chinese Premier Wen Jiabao warned on Monday that global economic growth remained vulnerable to sovereign debt risks and the possibility of a second downturn, while saying his own country’s growth remain on track.

Currencies | Bonds

“The world economy is stable and beginning to revive, but this revival is slow and there are many uncertainties and destabilising factors,” Wen told a meeting with Japanese business leaders in Tokyo.

Wen mentioned problems of countries including Greece and added: “Is this phenomenon over? Now it seems that it is not so simple.” (Reporting by Chris Buckley)

South Korea, Japan united against North Korea

South Korea and Japan on Saturday vowed to stand united against North Korea ahead of a regional summit likely to press China over its reluctance to taken on Pyongyang over the sinking of a South Korean ship.

Leaders of the three big northeast Asian powers are meeting in Seogwipo, a honeymoon resort on the South Korean island of Jeju, with the original intention of boosting plans for greater regional cooperation and economic integration.

Instead, the quarrel between North and South Korea has stolen the limelight. The two sides of the divided, heavily armed peninsula are in a deepening standoff after a South Korean warship was sunk in late March, killing 46 sailors, and Seoul has concluded that North Korea was responsible.

In talks over two days, South Korean President President Lee Myung-bak, Japanese Prime Minister Yukio Hatoyama and Chinese Premier Wen Jiabao are likely to dwell the dispute, which has opened a breach between China and its neighbours, both of whom back firm international action against Pyongyang.

At Hatoyama’s suggestion, the three leaders observed a moment’s silence for the dead sailors before starting their talks.

“North Korea’s provocative actions are unforgivable,” Hatoyama was quoted by a senior Japanese government official as telling Lee ahead of the main three-way summit. “Japan, along with the international community, is condemning such moves and strongly backs South Korea.”

The mounting antagonism between the two Koreas has unnerved investors, worried the confrontation could erupt into conflict in this region holding the world’s second and third biggest economies — Japan and China.

Many analysts say that neither side is ready to go to war, but warn there could be more skirmishes, especially along their disputed sea border off the west coast.

China counts neighbouring North Korea as a friend and a buffer against the other, U.S.-allied neighbours. It has stayed away from condemning Pyongyang, saying it needs to consider the evidence and urging restraint on all sides.

Wen held to that position in a meeting with Lee on Friday, but he also said Beijing would not protect anyone found culpable for the sinking. In his opening remarks to the three-nation summit, Wen did not mention the Cheonan and struck an upbeat tone.

“I look forward to working with President Lee and Prime Minister Hatoyama to achieve solid results (at the meeting) and send a message to the world of confidence and hope in peace, stability and development (in the region),” said Wen.

Beijing’s reticence makes for tricky diplomacy for Seoul, which will need China’s backing or abstention from voting to secure a U.N. Security Council statement or resolution criticising North Korea over the sinking. As a permanent member of the Security Council, China can veto such actions.

The leaders of South Korea and Japan made a show on unity over that issue on Saturday.

“Hatoyama said he will take a leading role in international cooperation (against North over the Cheonan) and expressed strong will to back South Korea’s position at the U.N. Security Council,” said South Korea presidential aide Lee Dong-kwan after President Lee’s meeting with the Japanese prime minister.

Hatoyama later told reporters: “We believe what North Korea did is an objective fact.”

North Korea state media said on Saturday the United States blamed it for sinking the South Korean warship to “put China into an awkward position and keep hold on Japan and south Korea as its servants”.

North Korea has said it will rip up military agreements with the South guaranteeing safety of cross-border exchanges and has reportedly put its military on combat readiness after Seoul said it would ban trade with the North and stop its commercial ships using South Korean waters.

(Additional reporting by Chris Buckley in SEOGWIPO; Writing by Chris Buckley; Editing by Nick Macfie)

South Korea, Japan make show of unity over North Korea

South Korea and Japan on Saturday vowed to stand united against North Korea ahead of a regional summit likely to press China over its reluctance to blame Pyongyang for the sinking of a South Korean ship.

Leaders of the three big northeast Asian powers are meeting in Seogwipo, a honeymoon resort on the South Korean island of Jeju, for a summit that was meant to boost plans for greater regional cooperation and economic integration.

Instead, the quarrel between North and South Korea has stolen the limelight. The two sides of the divided, heavily armed peninsula are at odds after a South Korean warship was sunk in late March, killing 46 sailors, and Seoul has since concluded that North Korea was responsible.

The mounting antagonism between the two Koreas has unnerved investors, worried the confrontation could erupt into conflict. Many analysts say that neither side is ready to go to war but warn there could be more skirmishes, especially along their disputed sea border off the west coast.

In talks over two days, South Korean President President Lee Myung-bak, Japanese Prime Minister Yukio Hatoyama and Chinese Premier Wen Jiabao are likely to dwell the dispute, which has opened a breach between China and its neighbours, both of whom back firm international action against Pyongyang.

“Japan wholeheartedly supports South Korea,” Hatoyama told Lee in a bilateral meeting ahead of the main three-way summit, according to a South Korean government statement.

China counts neighbouring North Korea as a friend and a buffer against the other, U.S.-allied neighbours. It has stayed away from condemning Pyongyang, saying it needs to consider the evidence and urging restraint on all sides.

Wen held to that position in a meeting with Lee on Friday, but he also said Beijing would protect nobody found culpable for the sinking.

“Premier Wen especially stressed that China has always advocated and worked for peace and stability on the Korean peninsula, and opposes and condemns any action that wrecks that peace and stability,” Chinese Foreign Ministry spokesman Qin Gang told reporters in Seoul on Friday, describing Wen’s talks with Lee.

“The more complicated the situation, the more we have to bear in mind the broader context,” Qin added.

Beijing’s reticence makes for tricky diplomacy for Seoul, which will need China’s backing or abstention from voting to get through a U.N. Security Council statement or resolution criticising North Korea over the sinking. As a permanent member of the Security Council, China can veto such actions.

The leaders of South Korea and Japan made a show on unity over that issue on Saturday.

“Hatoyama said he will take a leading role in international cooperation (against North over the Cheonan) and expressed strong will to back South Korea’s position at the U.N. Security Council,” said South Korea presidential aide Lee Dong-kwan after President Lee’s meeting with the Japanese prime minister.

Hatoyama later told reporters: “We believe what North Korea did is an objective fact.”

North Korea has said it will rip up military agreements with the South guaranteeing safety of cross-border exchanges and has reportedly put its military on combat readiness after Seoul said it would ban trade with the North and stop its commercial ships using South Korean waters.

(Additional reporting by Chris Buckley in SEOGWIPO; Writing by Chris Buckley; Editing by Nick Macfie)

U.S. out to make China feel awkward, says North Korea

North Korea said the United States was blaming it for sinking a South Korean warship in order to keep a U.S. Marine base in Japan and make China, the North’s only major ally, feel “awkward”.

Chinese Premier Wen Jiabao, South Korean President Lee Myung-bak and Japanese Prime Minister Yukio Hatoyama are meeting on South Korea’s Jeju island on Saturday and escalating tension on the Korean peninsula will certainly be high on the agenda.

The United States and South Korea have accused North Korea of the March 26 sinking of the Cheonan, in which 46 South Korean sailors die. But China, eager not to upset stability on the Korean peninsula, has not apportioned blame.

The mounting antagonism between the two Koreas has unnerved investors, worried the confrontation could erupt into conflict. Many analysts say that neither side is ready to go to war but warn more skirmishes may lie ahead, especially along their disputed sea border off the west coast.

“The U.S. secretary of state (Hillary Clinton) let loose a spate of sheer lies to brand the DPRK as the chief culprit of the warship sinking during her junkets to Japan, China and south Korea,” the KCNA news agency quoted the North Korean Foreign Ministry as saying.

DPRK stands for North Korea’s official name, the Democratic People’s Republic of Korea. In English, KCNA refers to “south” Korea, with no capital “S”, as it considers it part of the DPRK, not a separate country.

KCNA said the Obama administration was using the episode to appear strong ahead of mid-term elections, to scare Japan into keeping U.S. troops on Okinawa and to justify its policy of “strategic patience” designed to “degrade the environment for international investment” in North Korea.

“Fourthly, it became possible for the U.S. to put China into an awkward position and keep hold on Japan and south Korea as its servants,” it said.

WALKING DELICATE LINE

Hatoyama has abandoned a pledge to move a U.S. Marine base of the island of Okinawa, saying it was essential for security.

Japan is also toughening sanctions against North Korea, the top government spokesman, Chief Cabinet Secretary Hirofumi Hirano, said on Friday.

South Korea, the United States and Japan have urged China, host of on-again, off-again talks aimed at dismantling North Korea’s nuclear programme, to take a stand on the Cheonan incident. Beijing has resisted turning publicly on North Korea, whose leader Kim Jong-il visited China this month.

Wen is walking a delicate line between shielding North Korea in an effort to maintain stability in the region and assuaging the deepening worries about China’s perceived neutrality in South Korea and Japan, two of its largest trading partners.

Wen told the South Korean president on Friday that Beijing would not “harbour” anyone responsible once China had made its own “fair and objective judgment on who’s at fault”, a South Korean official told reporters.

North Korea has denounced the investigation as biased.

It says it will rip up military agreements with the South guaranteeing safety of cross-border exchanges, and has reportedly put its military on combat readiness, after Seoul said it would ban trade with the North and stop the North’s commercial ships from using South Korean waters.

(Editing by Bill Tarrant)

China PM seeks to cool Korean standoff

Chinese Premier Wen Jiabao told South Korea’s President Lee Myung-bak on Friday he condemned acts threatening stability on the Korean Peninsula and understood South Korean grief over the sinking of a naval ship, which Seoul has blamed on the North.

The Chinese leader is on a three-day visit to South Korea, whose deepening standoff with North Korea is straining China’s efforts to stay friendly with both sides of the divided peninsula and keep out of the fray over the sinking of the corvette Cheonan in late March.

Seoul is convinced North Korea torpedoed the Cheonan and, with the United States and Japan, has urged Beijing to join denunciation of the sinking, which killed 46 sailors.

Wen held to China’s position of avoiding blaming its partner North Korea. But he also told South Korea’s Lee Beijing would not “harbour” anyone responsible once China had made its own “fair and objective judgment on who’s at fault”, South Korean official Lee Dong-kwan told reporters.

“China always opposes and condemns any acts detrimental to peace and stability on the peninsula,” Wen told Lee, according to China’s official Xinhua news agency.

“Wen said that as a responsible country, China takes serious note of the results of a joint investigation by South Korea and other countries, as well as the reactions of all parties,” reported Xinhua.

“I understand the grief of the Korean people, especially the family members of those who died,” said Wen.

ON THE BACK FOOT

Wen’s comments reflected China’s efforts to avoid entanglement in the crisis while seeking to dispel regional worries that Beijing is dismissing South Korea’s complaints and protecting Pyongyang.

“China feels it’s on the back foot and has to find a more active posture on the Cheonan incident,” said Zhang Liangui, an expert on North Korea at the Central Party School, a training school for officials in Beijing.

“It’s difficult even for China to influence North Korea’s behaviour. But China will also hope that South Korea steps back so that confrontation can cool down,” he said.

North Korea has said it will rip up military agreements with the South guaranteeing safety of cross-border exchanges, and has reportedly put its military on combat readiness, after Seoul said it would ban trade with the North and stop its commercial ships using South Korean waters following the sinking.

The mounting antagonism between the two Koreas has unnerved investors, worried the confrontation could erupt into conflict. Many analysts say that neither side is ready to go to war but warn there could be more skirmishes, especially along their disputed sea border off the west coast.

Beijing has resisted turning on North Korea publicly, whose leader Kim Jong-il visited China early this month in a show of friendship between the two communist neighbours.

U.S. officials have said Wen may use his visit to South Korea, including a weekend three-nation summit with Japan’s Prime Minister Yukio Hatoyama, to spell out how China wants to deal with the confrontation at its northeastern doorstep.

Japan will toughen sanctions against North Korea, the top government spokesman, Chief Cabinet Secretary Hirofumi Hirano, said on Friday.

Wen told South Korea’s Lee that “all concerned parties should take a long-term perspective,” said Xinhua.

CHINA UNLIKELY TO CHANGE STANCE

U.S. officials said this week there were signs China, the North’s main benefactor and ally, is reviewing ties with the isolated state.

But South Korean officials doubted Beijing would side with them when Seoul takes the North to the United Nations Security Council over the sinking.

A senior South Korean official said that ultimately Beijing was likely to abstain from a vote on the ship sinking, rather than an outright veto of any statement or resolution directed at North Korea. Wei Zhijiang, a Chinese expert on Korea, agreed.

“I personally do not think that Wen’s visit (to South Korea) will mark a fundamental change in China’s position on the Cheonan incident,” said Wei, a professor at Zhongshan University in southern China who is now a visiting scholar in Tokyo.

“China has its own strategic stake in the Korean Peninsula, and if North Korea is further isolated or sanctioned that would escalate tensions and risk serious instability,” he said.

North Korea has escalated blistering rhetoric since the release of the South Korean investigations’ findings into the warship sinking, threatening to sever all ties with the South.

On Thursday, the North said it was taking the first steps in severing the border link which provides access for South Korean workers to the Kaesong factory park project — the last major commercial link that had been a symbol of reconciliation.

(Additional reporting by Jonathan Thatcher in SEOUL and Huang Yan in BEIJING; Editing by Paul Tait)

China PM faces Korean standoff over warship sinking

Chinese Premier Wen Jiabao confronts mounting regional tensions on Friday, when a summit with South Korean President Lee Myung-bak will test China’s efforts to stay above the fray of strife with North Korea.

Seoul is convinced that North Korea torpedoed the South Korean warship Cheonan in March, and along with the United States and Japan has urged Beijing to join international denunciation of the sinking, which killed 46 sailors.

North Korea has said it will rip up military agreements with the South guaranteeing safety of cross-border exchanges, and has reportedly puts its military on combat readiness, after Seoul said it would banned trade with the North and stop its commercial ships using South Korean waters following the sinking.

The mounting antagonism between the two Koreas has unnerved investors, worried the confrontation could erupt into conflict. But most analysts say that neither side is ready to go to war but warn there could be more skirmishes, especially along their disputed sea border off the west coast.

Beijing has resisted turning publicly on North Korea, whose leader Kim Jong-il visited China early this month in a show of friendship between the two communist neighbours.

U.S. officials have said Wen may use his visit to South Korea, including a weekend three-nation summit with Japan’s Prime Minister Yukio Hatoyama, to spell out how China wants to deal with the confrontation at its northeastern doorstep.

Wen is unlikely to give President Lee full-throated support against North Korea, but will be looking to ease antagonism and cool South Korean disquiet with China’s efforts to stay above the dispute, said several Chinese analysts.

“China feels it’s on the backfoot and has to find a more active posture on the Cheonan incident,” said Zhang Liangui, an expert on North Korea at the Central Party School, a training school for officials in Beijing.

“It’s difficult even for China to influence North Korea’s behaviour. But China will also hope that South Korea steps back so that confrontation can cool down,” he said.

On Friday, a Chinese newspaper said it was time for all sides to step back before confrontation got out of hand.

“The United States and Japan must step back more to turn around the situation, as the room for North Korea to move in is limited,” said a commentary in the Global Times, a Chinese newspaper that focuses on international affairs.

CHINA UNLIKELY TO CHANGE NKOREA STANCE

Wen will be the first Chinese leader to meet South Korea’s prime minister after Seoul officially concluded last week that Pyongyang torpedoed its corvette.

U.S. officials said this week that there were signs that China, the North’s main benefactor and ally, is reviewing ties with the isolated state.

But South Korean officials doubted that Beijing will side with them and the United States, when Seoul takes the North to the United Nations Security Council over the sinking.

A senior South Korean official said that ultimately Beijing was likely to abstain from a vote on the ship sinking, rather than an outright veto of any statement or resolution directed at North Korea. Wei Zhijiang, a Chinese expert on Korea, agreed.

“I personally do not think that Wen’s visit (to South Korea) will mark a fundamental change in China’s position on the Cheonan incident,” said Wei, a professor at Zhongshan University in southern China who is now a visiting scholar in Tokyo.

“China has its own strategic stake in the Korean Peninsula, and if North Korea is further isolated or sanctioned that would escalate tensions and risk serious instability,” he said.

“If South Korea and the United States really take this to the Security Council, then China won’t want to have a falling out with them but won’t want more sanctions over this, so an abstention vote seems likely.”

North Korea has escalated blistering rhetoric since the release of the South Korean investigations’ findings into the warship sinking, threatening to severe all ties with the South.

On Thursday, the North said it was taking the first steps in severing the border link which provides access for South Korean workers to the Kaesong factory park project — the last major commercial link that had been a symbol of reconciliation.

The South will send in troops if the North shuts down the border and holds its citizens hostage in Kaesong, a South Korean official said on Friday on the condition of anonymity.

South Korea’s navy is holding a three-way exercise aimed at better deterring submarine infiltration by the North. But the South’s defence minister told local journalists that there were no signs that North Korea was getting ready for such actions.

(Additional reporting by Jonathan Thatcher in Seoul and Huang Yan in Beijing; Editing by Michael Perry)

NEWSMAKER – China’s Wen faces diplomatic test in S.Korea

Chinese Premier Wen Jiabao is on a delicate diplomatic mission this weekend as he attends a trilateral meeting expected to be dominated by North Korea and tries to shore up his influence at home.

The trilateral talks will be a tricky task. International pressure is growing for China to acknowledge, and then act upon, evidence that a North Korean torpedo sank the South Korean navy corvette Cheonan in March.

In overseas summits, Wen has to operate within the constraints of China’s collective leadership, without the spontaneity that has allowed him to build a reputation as a caring man of the people.

Domestically, a deft deal would shore up support for Wen, who faces declining power over the next two years. His successor will be anointed at the next Communist Party congress in 2012.

“Wen would increase his own standing with the leadership if he negotiated a successful outcome,” said Russell Moses, a Beijing-based analyst of Chinese affairs.

“It would certainly add to his credibility as a problem-solver within the leadership.”

Wen bows out in early 2013, after a decade at the helm of China’s one-party government where the 67-year-old premier has espoused policies to spread wealth and reduce inequalities.

But it won’t be easy to set the agenda this weekend, given China’s collective decision-making.

“He will need consensus before departure, and cannot just change policies,” said Bo Zhiyue, a researcher at National University of Singapore’s East Asian Institute.

“He has very little room to manoeuvre … That’s a constraint of the collective leadership system.”

During climate change negotiations in Copenhagen last year, Wen raised hackles when he retreated to a hotel room and sent a junior official to negotiate with other world leaders.

Critics accused China of deliberately obstructing a deal, but many analysts felt Wen’s actions reflected his lack of autonomy or power to negotiate for his country. Wen told his annual news conference in March that China was on the invitation list but was never formally notified.

GRANDPA WEN

At home, Wen uses public appearances to his advantage despite a relatively weak power base. He is more approachable and more personable than his counterparts in the Party’s nine-man Politburo Standing Committee, China’s top political body.

“Because the end of his term is so visible, in many ways Wen is considered a lame-duck premier,” Bo said. “He’s fully aware of his limited time in office and wants to leave some legacy.”

He recently generated controversy within China for penning a nostalgic essay commemorating Hu Yaobang, the reformist Party chief whose death on April 15, 1989, sparked pro-democracy protests by students and workers centred on Tiananmen Square.

Some interpreted the essay as an attempt to regain favour with the Communist Youth League, the power base of incumbent Party chief and President Hu Jintao.

Wen was noticeably absent during the opening of the World Expo in Shanghai in May, visiting instead displaced Tibetan victims of a strong earthquake in Yushu, Qinghai province.

After the devastating Sichuan quake in 2008, Wen’s visits to the disaster zone kept the rescue in the public spotlight and spurred the army and bureaucracy to respond to pressing problems.

The burst of popularity for “Grandpa Wen” may also have aroused envy and adoring state media coverage of Wen was soon replaced by images of the more sedate President Hu.

Narrowing the urban-rural income gap is a policy goal for Wen. He abolished a grains tax dating back two millenia, promoted rural industry and sketched out a broad social welfare net.

Other initiatives to coax growth away from cheap exports, big state projects and polluting factories have met resistance.

A geologist by training, Wen spent 14 years in poor, arid Gansu province, rising through the Party as a loyal and ever-prepared aide.

His reputation for unassuming service helped him survive 1989, when his boss, then party chief Zhao Ziyang, was purged and put under house arrest for opposing the military crackdown on the pro-democracy protests. Zhao died in 2005.

“My heart will always belong to my noble hopes, and for this I would have no regrets even if I died nine times over,” Wen said in March, quoting Qu Yuan (340 BC-278 BC), the poet-statesman who threw himself into a river in present-day Hunan province to protest against misrule by the king of Chu.

Wen’s immediate predecessor as premier, Zhu Rongji, seemed to relish lambasting officials, baiting reporters and making bold policy gambles, only some of which were successful.

Wen by contrast casts himself as a humble servant of the people, smiling, conciliatory, often tearful in the face of their suffering and with a relentless capacity for new jobs.

“Zhu Rongji had his iron fist and Wen Jiabao has had his tears, but in the end both men have found neither way works magic,” Zheng Yongnian, head of the National University of Singapore’s East Asian Institute, told Reuters.

In private, officials sometimes scoff at Wen’s shows of sentimentality, seen as unbecoming from a state boss.

“You can be popular by being soft. But eventually all policies have to be enforced by bureaucrats and special interests, and then crying doesn’t work,” said Zheng.

(Editing by Benjamin Kang Lim and Paul Tait)

China’s Wen condemns all acts against stability Korean Peninsula

Chinese Premier Wen Jiabao told South Korean President Lee Myung-bak on Friday that he condemned all acts that threaten peace and stability on the Korean Peninsula and would not “harbour” anyone over the sinking of a South Korean naval ship in March.

“China objects to and condemns any act that destroys the peace and stability of the Korean peninsula,” Wen said during a meeting with Lee in Seoul, according to a South Korean official citing the Chinese leader’s comments.

Wen is on a three-day visit to South Korea.

Antagonism between North and South Korea has escalated after South Korea said it was convinced that in late March North Korea torpedoed its warship, the Cheonan, killing 46 sailors.

North Korea has denied sinking the ship, and China has stayed low-key about the dispute, urging restraint from all sides.

(Reporting by Jack Kim)

(If you have a query or comment on this story, send an email to newsfeedback.asia@thomsonreuters.com)

President Patil to visit China on May 26

New Delhi, May 19 (ANI): President Pratibha Patil will embark on a five-day official visit to China from May 26-31 to commemorate the 60th anniversary of the establishment of diplomatic relation between the two countries.

A press release from the Ministry of External Affairs said President Patil would visit Beijing, Luoyang and Shanghai.

During the delegation level talks with Chinese President Hu Jintao, the two sides will discuss bilateral, regional and global issues.

President Patil will also meet other Chinese leaders, including Premier Wen Jiabao and Chairman of the National People”s Congress Wu Bangguo.

In Luoyang, she will dedicate to the Chinese people an Indian-style Buddhist temple, which was inspired by the Sanchi Stupa in Madhya Pradesh. (ANI)

Chinese man sentenced to death for school stabbing

A Chinese man who stabbed 29 school children and three teachers has been sentenced to death after a half-day trial, state media reported on Saturday.

Xu Yuyuan, 47, an unemployed local man, was found guilty of attacking a kindergarten in Taixing city in eastern Jiangsu province last month.

A string of attacks at Chinese schools has killed a total of 27 people and injured more than 80 since March, prompting calls for better protection of students and worries about the social malaise that some see underneath China’s rapid economic growth.

Xu told the court that his motive was to “vent his rage against society”, the official Xinhua news agency reported.

Premier Wen Jiabao said this week the outburst of violence had deep-seated roots in the country’s social tensions that need addressing.

Officials have vowed to “strike hard” against the problem.

(Reporting by Simon Rabinovitch; Editing by Paul Tait)

China’s Wen says social tensions behind school killings

A spate of school killings in China has “deep-seated” roots in the country’s social tensions which need addressing, Premier Wen Jiabao said.

Wen made the comments to Hong Kong’s Phoenix television after a man in rural northwest China on Wednesday hacked to death seven young children and two adults after an argument over a kindergarten lease.

The attack was the sixth attack on schoolchildren by angry and apparently deranged men since March and prompted official vows to “strike hard” against the problem.

Wen told Phoenix late on Thursday that he “felt extremely distraught” at the children’s deaths and that the country had to look into the reasons.

“As well as adopting vigorous safety measures, we also have to pay attention to addressing some deep-seated causes behind these problems, including dealing with some social conflicts and resolving disputes,” Wen told the Hong Kong-based satellite television network that broadcasts into mainland China.

“We must strengthen the role of (dispute) mediation at the grassroots. That’s something we all have to work on,” he said in comments also reported on the Phoenix website (www.ifeng.com).

The premier’s remarks were the most direct yet from a senior leader on the deadly assaults that has stoked worry about the social malaise that some see underneath China’s rapid economic growth and anger among ordinary citizens, especially parents.

There have been several attacks on schools and universities in recent years. In the five previous school attacks since March, 18 people were murdered — all but three of them children — and more than 80 were injured.

China bans nearly all citizens from owning handguns, and the attackers used knives, cleavers and, in one case, a hammer.

Triggers for the attacks have included pent-up grievances over lost jobs, business failures, broken relationships, and a new home that officials had ordered torn down. (Reporting by Chris Buckley; Editing by Benjamin Kang Lim)

Chinese Premier vows to address social problems that led to school attacks

New Delhi, May 14 (ANI): Chinese Premier Wen Jiabao has promised to address the underlying social problems that have led to the shocking incidents of stabbing in China’s schools.

“We need to handle social problems, resolve disputes and strengthen mediation at the grassroots level”, he told Phoenix TV on Thursday.

Minister of Public Security Meng Jianzhu ordered police forces to ensure criminals “dare not and cannot” get their hands on children, the China Daily reports.

He stressed that security measures in privately-run schools and kindergartens as well as those in remote areas and rural regions should be reassessed to stem risks.

The directive followed Wednesday”s deadly attack in Northwest China”s Shaanxi province, the fifth on children in the past month.

Many social scientists in China have attributed the attacks to pent up and deep rooted rage felt by the perpetrators due to their abject economic conditions. Engulfed by a feeling of helplessness amd frustration, these men became unhinged leading them to commit these sordid acts.

There is a common thread running linking the attackers, most of them were men in their 30s or 40s and were unemployed.

“Severe punishment is not a deterrent because they are not afraid of death, which has been demonstrated in some cases in which the attackers later committed suicide,” said Law professor Li Yunlong Li, who is at the Jiangxi provincial academy of social sciences.

“Their motives are to exact revenge on society and expose social problems, such as unemployment and unfair distribution of wealth,” he added.

These desperate men sadly ended up making children their target because of the lack of security in schools.

“They turned to children to express their resentment because they had no direct targets to do so, and compared to other places, schools and kindergartens are not as heavily guarded,” Fang Changchun, associate professor at the sociology department of Nanjing University, told the paper. (ANI)

In building boom, no place like home

Beijing, April 23 — This year, the term ‘naked marriage’ started appearing in the staid pages of China’s State-run newspapers and the Internet. Luo hun or naked marriage is how the Chinese refer to the trend of couples getting married without the traditional wedding feast, diamond ring, car – and critically – a new apartment. Chinese analysts may disagree with hedge fund manager James Chanos’ controversial comparison of China’s property boom as ‘Dubai times 1,000 or worse’. But you know Beijing is worried about its failure to control property prices when it discusses social instability. An essay in the official media on Thursday said that decision-makers now believe that the housing crisis could cause ‘social instability’ if handled ineffectively. Right after China posted nearly 12 per cent first quarter economic growth, the cabinet moved to cool the overheating economy by issuing the strictest property control measures since 2007. Regional officials were held responsible for stabilising the ‘abnormally high’ property prices. Developers were warned of penalties for artificially hiking prices and hoarding. Property prices in 70 Chinese cities rose 11.7 per cent in March, the fastest rate since 2005. Premier Wen Jiabao has compared the housing prices to a wild horse that must be tamed. A majority of professionals in the world’s fastest-growing economy cannot afford an apartment even on the capital’s outskirts. Thousands of Chinese respondents in a recent online survey said they plan to exit big cities like Beijing, Shanghai and Guangzhou because of the costly, competitive lifestyle. A Thursday poll linked the Chinese middle-class’ health problems to the housing crisis. Recent surveys rank China’s big cities lower on the happiness index than the less developed and cheaper cities. “Achieving balance in China’s real estate market is the government’s most difficult task,” said the Global Times on Wednesday. The latest rules curb lending for third-home purchases and require higher down payment and mortgage rates for property sales.

Advertising professional Li Jie left Beijing for lesser-known Zhengzhou city in central China in 2006, because he couldn’t afford a post-marriage apartment. “As a traditional Chinese, I think a house is most important for married life,” he said. This year, he says, his apartment in cheaper Zhengzhou is worth the same price as the apartment he couldn’t afford in Beijing four years ago.

China quake toll mounts to 1,100, hopes for survivors fade

Beijing, Apr 17(ANI): The death toll from the devastating earthquake that struck a Tibetan area in northwest China’s Qinghai Province rose to 1,100 on Saturday morning, with another 417 remaining missing.

Wednesday’s earthquake that measured 7.1 on the Richter scale, is believed to be the strongest to hit the country in nearly two years, and has left 11,744 people injured, including 1,192 serious cases.

Rescuers said that the toll is expected to rise as freezing nights, with temperatures around minus three degrees C, become increasingly difficult for survivors under the debris to bear.

Altitude sickness and low oxygen have already caused tremendous challenges for rescuers, volunteers and reporters alike, The China Daily reports.

The quake and a string of aftershocks, the biggest being 6.3 magnitude, toppled houses, temples, gas stations and electric poles, triggered landslides, damaged roads, cut power supplies and disrupted telecommunications. A reservoir also developed cracks, which workers are trying to patch.

Chinese President Hu Jintao and Premier Wen Jiabao have ordered local authorities to spare no effort in search and rescue operations, and in the caring of the victims.

According to the Qinghai provincial government, over 5,000 rescuers, including soldiers and medical workers, are at the quake-hit region,

Authorities in the neighboring provinces of Gansu and Sichuan and the Tibet autonomous region are also involved in the rescue efforts. (ANI)