Police detained eight unlicensed welders Tuesday in connection with Monday’s deadly apartment fire in Shanghai that left 53 people dead and at least 70 injured, city officials said.

Investigators believe that the welders may have been using their equipment improperly, sparking a blaze that engulfed a 28-story building in the heart of the sprawling Chinese metropolis.

About 17 people remain in critical condition, said Shanghai Deputy Mayor Shen Jun.
Family members were reportedly scouring local hospitals for any information on missing loved ones, and aiming their frustration at authorities.

“It is hard to believe the government now. The drills on TV are successful, but when a fire truly happens, it’s just useless. We feel helpless,” a woman who gave only her surname, Liu, told the Associated Press. Her mother lived on the ninth floor of the building and died in the fire.

Chen Fei, director of the city’s firefighting bureau, said the blaze erupted on the building’s 10th floor.

Survivors either had to scamper down stairs or descend scaffolding that surrounded the tower. The apartment block, which housed 440 people, was undergoing renovations to add insulation at the time of the fire.

Firefighters facing difficulty reaching the upper levels set up hoses on top of an adjacent building to finally contain the blaze, which raged for more than four hours.

Rescuers were seen carrying survivors out of the building. Earlier attempts to airlift people off the roof with helicopters had to be called off because of thick smoke.

One resident said he and his wife climbed down to safety on the scaffolding from the 23rd floor, where their apartment was, according to the Xinmin Evening Post, a local newspaper.

The man, who identified himself as a retired teacher with the surname Zhou, said he was napping when he was awakened by smoke. He said he rushed through his front door into the hallway and uncoiled a fire hose to extinguish flames next to a window by a stairwell. He and his wife were then able to flee, the newspaper said.

Another survivor, Li Xiuyun, 61, said she hurried down stairs inside the building with her husband, son and granddaughter from their home on the 16th floor, cutting her feet on shattered glass along the way.

“The smoke was very strong and the glass from the windows was scalding,” she told the Agence France-Presse news service.

“My son took off his socks and soaked them with water, and we used them to cover our noses. I stumbled on people on the floor when walking,” she said at one of the nine hospitals that took in victims.

China’s minister of public security, Meng Jianzhu, rushed to Shanghai and called for a thorough investigation through the State Council, the country’s Cabinet, the New China News Agency said.

Although China has been undergoing a construction boom for many years, building safety has remained controversial.

Last year, firefighters could do little to stop a massive blaze in a nearly completed Beijing skyscraper housed in the same complex as China’s state television headquarters. The building, slated to be a luxury hotel, burned after being set alight by an illegal fireworks show.

Critics also point to substandard construction practices as a major source of safety problems.

They cite the collapse of thousands of buildings, including many shoddily built schools, during the deadly 2008 Sichuan earthquake as a prime example of the poor construction common in much of China.

The following year, a nearly completed 13-story apartment tower in Shanghai toppled, killing one worker in a high-profile incident that attracted stunned onlookers for days because the building remained largely intact on its side.

Chinese have come to call buildings constructed poorly for the sake of cutting costs “tofu dregs,” a reference to the mushy curds left behind in the tofu-making process.

david.pierson@latimes.com

Tommy Yang of The Times’ Beijing Bureau contributed to this report.
8 welders detained in deadly Shanghai high-rise blaze

General Motors Co. is set to reemerge as a public company this week in one of the year’s hottest initial public stock offerings, but many American taxpayers who helped rescue the company won’t be going along for the ride.

That’s because most Americans won’t have access to the new shares of the Detroit automaker. And many of those who do are likely to be well-heeled customers at big Wall Street firms.

The situation is not much of a surprise on Wall Street, where little guys often are shut out of deals, especially coveted ones where demand far outstrips supply and where fast-rising prices usually provide quick profits to anyone getting IPO shares.

But some experts said an opportunity to reward average Americans is being wasted, even though the Treasury Department said two months ago that individuals would have “ample opportunity” to participate in the IPO.

“Wall Street thumbed its nose at” individual investors, said David Menlow, president of research firm Ipofinancial.com. “We continue to help Wall Street out, and Wall Street seldom feels the need to say thank you.”

Concern about small investors getting a piece of the action underscores the nation’s outrage over the massive bailouts of banking and auto companies during the deepest recession since the Great Depression. Even the four major banking companies handling the IPO deal were bailed out by taxpayers.

The federal government put nearly $50 billion into GM to rescue it and usher it through Bankruptcy Court last year, ending up with a 61% ownership stake in the company.

On Thursday, when the offering goes public, the new owners are likely to include a wide swath of investors from large U.S. mutual funds to foreign entities, such as sovereign wealth funds and China’s largest car company, SAIC Motor Corp.

The major underwriters are JPMorgan Chase & Co., Morgan Stanley, Bank of America Corp. and Citigroup Inc. — all of which received billions of taxpayer dollars to rescue them during the severe credit crunch in the recession.

In one twist from the ordinary IPO, a number of female- and minority-owned brokerages are involved in the deal. Among them are Loop Capital Markets in Chicago and Williams Capital Group in New York. Helping to market shares overseas are China International Capital Corp. and two Brazilian banks, Itau and Bradesco.

“There is just an inordinate amount of foreign companies in this considering this is taxpayer money,” said Bill King, president of female-owned M. Ramsey King brokerage outside Chicago. He said his firm didn’t receive the customary request for information from the Treasury Department asking it to participate.

The IPO is garnering such demand that underwriters reportedly are expected to boost the price of initial shares to more than $30 from the stated range of $26 to $29.

The automaker plans to sell 365 million shares, or roughly one-quarter of the company, in a deal currently worth about $10.6 billion.

The Treasury Department is expected to sell $7 billion to $8 billion of its holdings, reducing its position to as little as 43%. GM has repaid $7.4 billion to the government and agreed last month to repay an additional $2.1 billion by repurchasing preferred stock from the government once the IPO closes.

By some measures, individual investors could fare better than they normally do in coveted IPOs.

Underwriters are expected to allocate about 20% of the shares to so-called retail investors, more than the 15% that’s normal in IPOs, said Scott Sweet, senior managing partner at IPO Boutique.

However, Sweet said, there were rumors last week that as much as 30% of the deal would go to individuals before demand rose among large institutional investors, forcing the retail amount to be scaled back.

Discount brokerage firms such as Charles Schwab Corp. and TD Ameritrade aren’t getting shares to allocate to their customers. Those firms sometimes get IPO shares, though it varies from deal to deal.

“In general, the hotter the IPO the harder it is to get an allocation of shares,” said Ram Subramaniam at TD Ameritrade. “We’d have loved to have gotten GM’s IPO. We just don’t have it.”

Access to General Motors stock offering won’t include many of its rescuers

Ford Motor Co. demonstrated the growing strength of the U.S. auto industry Tuesday by posting a third-quarter profit of $1.7 billion, a 69% jump over the same period a year ago and surpassing a previous record set in 1997.

The automaker — which unlike General Motors Co. and Chrysler Group avoided bankruptcy reorganization last year — benefitted from both cost cutting and top-line performance, gaining U.S. market share and selling vehicles for higher prices.

“Overall, we are doing better than we expected through the first nine months of the year,” said Alan Mulally, Ford’s chief executive, “and we expect to deliver solid profits in the fourth quarter and for the full year.”

Ford has reduced its level of sales-incentive spending at the same time buyers are adding options to their cars and spending more, according to Edmunds.com, the auto information company. Edmunds.com estimated that buyers paid an average of $30,636 for a Ford in September, slightly higher than a year ago and up 10% from five years ago.

“For a long time, they weren’t really in the car market very strongly, depending mostly on trucks and SUVs. Now they have good cars, and the car market is where the action has been in recent years,” said Jessica Caldwell, an analyst with Edmunds.com.

Ford’s profit equaled 43 cents a share and compared with earnings of $1 billion, or 29 cents a share, in the same period a year earlier. It was the automaker’s sixth consecutive profitable quarter. Revenue fell to $29 billion from $30.3 billion a year earlier, before the company sold off Volvo, the Swedish automaker, to focus on its core Ford and Lincoln brands. Year to date, the company has earned $6.4 billion.

In early trading, Ford shares rose 7 cents to $14.22.

“This was another strong quarter,” said Mulally. “The key drivers for improvement in 2011 will be our growing product strength, a gradually strengthening economy and an unrelenting focus on improving the competitiveness of all our operations.”

On Friday, Ford plans to use some of the cash it is generating to pay off the remaining $3.6 million it owes to the United Auto Workers union retiree healthcare trust, which will save it about $330 million in annual interest expenses. The automaker borrowed heavily to stay afloat during the recession and is working to pay back those loans.

The payment will reduce the company’s total debt to $22.8 billion, a net reduction of $10.8 billion from the end of 2009. Ford said it expected its cash holdings to be equal to its total debt by the year’s end, earlier than it previously anticipated. Ford also plans a stock offering that would convert $3.5 billion in debt to common stock during the fourth quarter.

“We are clearly ahead of where we thought we would be on improving our balance sheet and repaying our loans,” Mulally said. “This allows us to reduce our annualized interest payments by over $800 million.”

Ford’s American operations had an operating profit of $1.6 billion, compared with $300 million in the same period a year earlier. The company was profitable in South America and in Asia, driven by gains in China and India, but lost money in Europe. The company said it expected its European operations to become profitable in this year’s fourth quarter.

Much of the automaker’s success is coming from a string of successful new products, such as the Fusion sedan and the Edge SUV. Truck sales, especially government and business fleet sales of the F-150 pickup also added to the quarterly profit, Caldwell said.

Ford’s latest vehicles have been well received by consumers.

“It’s much better than the Ford of five years ago,” Caldwell said.

Ford sales have risen 21% to 1.4 million vehicles through the first nine months of this year. That’s more than double the overall industry gain. Its share of the U.S. market has grown to 16.7% from 15.2% — the largest jump of any automaker this year, according to Autodata Corp.

The automaker has been able to restructure so it can operate profitably with what are considered historically low auto sales numbers.

There are some signs of a more robust rebound in the U.S. auto market, which was up about 10% through the first nine months of the year.

Mark Fields, Ford’s president of the Americas, said Monday that U.S. auto sales hit an annualized pace of about 12 million vehicles in October, its best rate so far this year. Automakers will report their October sales results next week.

jerry.hirsch@latimes.com

Ford third-quarter profit soars 69% over a year ago

Thirty-three men stuck a half mile underground are now the longest-trapped miners in recent history as a huge drill is the early stages of digging a planned escape route.

The men were trapped Aug. 5 when a landslide blocked the shaft down into the San Jose copper and gold mine in northern Chile’s Atacama Desert. Last year, three miners survived 25 days trapped in a flooded mine in southern China, and the Chileans surpassed that mark Tuesday.

While doubts and extreme challenges remain, experts said the rescuers have the tools to get the job done — though the government still says it will take three to four months to reach the miners.

“The drill operators have the best equipment available internationally,” said Dave Feickert, director of KiaOra, a mine safety consulting firm in New Zealand that has worked extensively with China’s government to improve dangerous mines there.

“This doesn’t mean it will be easy,” he added. “They are likely to run into some technical problems that may slow them down.”

The 31-ton drill made a shallow, preliminary test hole Tuesday in the solid rock it must bore through, the first step in the weeklong digging of a “pilot hole” to guide the way for the rescue. Later the drill will be outfitted with larger bits to gradually expand the hole and make it big enough so the men can be pulled out one by one.

Before rescuers dug small bore holes down to the miners’ emergency shelter, the men survived 17 days without contact with the outside world by rationing a 48-hour supply of food and digging for water in the ground.

Aside from their rescue, a union leader has expressed concern for the men’s livelihoods.

San Esteban, the company that operates the mine, has said it has no money to pay their wages and absorb lawsuits, and is not even participating in the rescue. State-run mining company Codelco has taken over.

Union leader Evelyn Olmos called on the government to pay the workers’ wages starting in September, plus cover the roughly 100 other people at the mine who are now out of work and 170 more who work elsewhere for San Esteban. Its license has been suspended by the government.

“We want the government to pay our salaries in full until our comrades are freed and then pay our severances,” said Olmos.

Mining Minister Laurence Golborne said the government was prohibited by labor laws from assuming responsibility for the salaries. He said it was up to the mining company and would have to be worked out in Chilean courts.

Golborne noted the extraordinary circumstances of the mine collapse but pointed out there are many other Chileans who lack a job and said the government cannot be responsible for all of them.

Union leaders and others blame the government in part for the San Jose accident because the mine had been cited for safety violations in the past but was allowed to continue operating.

In 2007, executives were charged with involuntary manslaughter in the death of a miner. The worker’s family settled and the mine was closed until it could comply with safety rules, said Sen. Baldo Prokurica, who has long called for tougher regulations.

The next year, the mine reopened even though the company apparently had not complied with all the regulations, he said, adding that the circumstances surrounding the reopening are being investigated.

Workers at the current rescue operation are using the three existing bore holes to deliver food, water, air and medicine to the 33 miners, who are trapped about 2,300 feet underground in a shelter large enough to walk around in.

In an eight-minute video released by the government, the second made by the trapped miners, about a dozen of the men send greetings to their families and say they are feeling better since receiving the sustenance and supplies, including special clothes to keep them dry in the hot, humid mine.

The government last week said that five of the miners were suffering from depression, but Golborne said Sunday from the mine site that those men were doing better, had received antidepressants and were getting counseling.

Helping raise their spirits, the men spoke for about three minutes each to a family member on Sunday after a telephone line was lowered down one of the three existing 6-inch bore holes.

The men, while showing courage that has inspired people throughout Chile and the world, could not help but break down when speaking about their loved ones on the latest video.

“I’m sending my greetings to Angelica. I love you so much, darling,” said 30-year-old Osman Araya, as his voice choked and he began to cry. “Tell my mother, I love you guys so much. I’ll never leave you. I will fight to the end to be with you.”

The video showed the men mostly upbeat, joking on camera and talking about their absolute certainty that they would get out alive.

Experts say maintaining high morale among the men is essential. They will play a key role in winning their own rescue: The drilling technique that must be used means that up to 4,000 tons of rock and debris will fall down into a large mine shaft near the shelter — but far enough away from the men that they will not be in any danger.

Officials have said that it is essential the men be at their best physically and mentally because their own work clearing the rocks will be vital to keeping their eventual escape route from becoming plugged.
Drilling begins as Chile miners become longest-trapped in recent history

Chinese Premier Wen Jiabao on Sunday toured an area in north-central China racked by an avalanche of rain and mud that killed at least 127 people and left hundreds missing, the latest disaster in a summer that has brought the nation’s worst flooding in a decade.

Wen’s visit came as rescue teams franticly searched flooded homes for survivors in Zhouqu county in Gansu province. Authorities were reportedly trying to find 1,300 people, down from an earlier estimate of 2,000.

The first of four days of a powerful show of joint U.S. and South Korean sea and air power ended without incident Sunday, despite North Korea’s pledge to start a “sacred war” over the maneuvers.

Dubbed “Invincible Spirit,” the joint military exercises, featuring about 20 vessels including the Nimitz-class USS George Washington aircraft carrier, left port just after dawn, shadowed by hundreds of U.S. and South Korean fighter jets.

The drills provided a potent reminder for Pyongyang of the consequences of escalating tensions on the Korean peninsula. The exercises have been in the works since the March 26 sinking of a South Korean naval ship that killed 46 crewmen. A probe led by South Korea concluded that the ship was struck by a North Korean torpedo; North Korea has denied involvement.

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]]> http://www.washedit.com/90-dead-as-china-endures-severe-flooding-landslides/feed/ 0 http://www.washedit.com/china-embarrasses-us-in-nsa-hacking-contest/ http://www.washedit.com/china-embarrasses-us-in-nsa-hacking-contest/#comments Wed, 10 Jun 2009 19:46:39 +0000 admin http://washedit.com/?p=402

National Security Agency-backed TopCoder Open competition raises big questions

By Patrick Thibodeau

Programmers from China and Russia have dominated an international competition on everything from writing algorithms to designing components.

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Whether the outcome of this competition is another sign that math and science education in the US needs improvement may spur debate. But of the 70 finalists in it, 20 were from China, 10 from Russia and only two from the US.

TopCoder, which runs software competitions as part of its software development service, operates TopCoder Open, an annual contest.

About 4,200 people participated in the US National Security Agency-supported challenge. The NSA has been sponsoring the program for a number of years because of its interest in hiring people with advanced skills.

Participants in the contest, which was open to anyone – from student to professional – and finished with 120 competitors from around the world, went through a process of elimination that finished this month in Las Vegas.

China’s showing in the finals was also helped by the sheer volume of its numbers, 894. India followed at 705, but none of its programmers were finalists. Russia had 380 participants; the United States, 234; Poland, 214; Egypt, 145; and Ukraine, 128, among others.

Of the total number of contestants, 93 percent were male, and 84 percent were aged between 18 and 24.

Rob Hughes, president and COO of TopCoder, said the strong finish by programmers from China, Russia, Eastern Europe and elsewhere is indicative of the importance those countries put on mathematics and science education.

“We do the same thing with athletics here that they do with mathematics and science there,” Hughes said. He said the US needs to make earlier inroads in middle schools and high school math and science education.

That’s a point Hughes is hardly alone on. President Barack Obama, as well as many of the major tech leaders including Bill Gates, have called for similar action.

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Of the participants in the contest, more than 57 percent had bachelor’s degrees, most in computer science, and of that 20 percent had earned a masters degree, and 6 percent a PhD.

But the winner of the algorithm competition was an 18-year-old student from China, Bin Jin, who went by the handle “crazyb0y”. Chinese programmers have a history of doing very well in this contest.

Mike Lydon, TopCoder’s CTO, said Jin’s future in computer science is assured. “This gentleman can do whatever he wants,” he said.

The participants are tested in design, development, architecture, among others, but one of the most popular is the algorithm coding contest.

To give some sense of difficulty, Lydon provided a description of a problem that the contestants were asked to solve:

“With the rise of services such as Facebook and MySpace, the analysis and understanding of such networks is a particularly active area of current computer science research. At an abstract level, these networks consist of nodes (people), connected by links (friendship).

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“In this problem, competitors were given the description of two such networks, but with the names of all the nodes removed from each. The networks were each scrambled up before given to the competitors. The task was to determine if the two networks could possibly be from the same group of people.

“The competitors were to unscramble and label the two networks so that if Alice was connected to Bob in one of the two networks, then Alice was also connected to Bob in the other network. This problem is known as the network isomorphism problem, and solving it for large networks is a major unsolved problem in the realm of theoretical computer science.”

Lydon said the overall problem is unsolved for larger networks, and what’s considered a correct answer for this problem would not be considered large enough for the solution in this case to be groundbreaking.

Two people solved the problem.

]]> http://www.washedit.com/china-embarrasses-us-in-nsa-hacking-contest/feed/ 0 http://www.washedit.com/china-grows-more-picky-about-debt/ http://www.washedit.com/china-grows-more-picky-about-debt/#comments Thu, 28 May 2009 16:47:06 +0000 admin http://washedit.com/?p=362

China has actually bought Treasury bonds at an accelerating pace over the last year, but the borrowing needs of the United States government have grown even faster. Prime Minister Wen Jiabao of China, right, and President Obama.

HONG KONG — Leaders in both Washington and Beijing have been fretting openly about the mutual dependence — some would say codependence — created by China’s vast holdings of United States bonds. But beyond the talk, the relationship is already changing with surprising speed.

China is growing more picky about which American debt it is willing to finance, and is changing laws to make it easier for Chinese companies to invest abroad the billions of dollars they take in each year by exporting to America. For its part, the United States is becoming relatively less dependent on Chinese financing.

China has actually bought Treasury bonds at an accelerating pace over the last year — notwithstanding Chinese officials’ complaints about American profligacy. But the borrowing needs of the United States government have grown even faster. So China represents a rapidly shrinking share of overall purchases of Treasury securities. “China’s demand for Treasuries has increased over the past year, but it hasn’t increased at anything like the pace of the Treasury’s sale of new Treasury bonds,” said Brad W. Setser, a specialist in Chinese financial flows at the Council on Foreign Relations.

Americans and investors elsewhere are buying Treasuries instead. They are saving more and have been shifting out of other investments — including equities until the past two months — and into Treasuries.

China bought less than a sixth of the Treasuries issued in the 12 months through March. Less than two years ago, by contrast, Chinese purchases of Treasuries, which included purchases in the secondary market as well as newly issued securities, briefly exceeded the entire borrowing needs of the United States.

Financial statistics released by both countries in recent days show that China paradoxically stepped up its lending to the American government over the winter even as it virtually stopped putting fresh money into dollars.

This combination is possible because China has been exchanging one dollar-denominated asset for another — selling the debt of government-sponsored enterprises like Fannie Mae and Freddie Mac in a hurry to buy Treasuries. While this has been clear for months, new data shows that China is also trading long-term Treasuries for short-term notes, highlighting Beijing’s concerns that inflation will erode the dollar’s value in the long run as America amasses record debt.

So China’s rising purchases of Treasuries do not represent the confident bet on America’s future that they might seem to be on the surface. For instance, China does not appear to be dumping euros or yen to buy Treasuries, economists said.

That said, recent Chinese and American data suggest that an astounding 82 percent of China’s $2 trillion in foreign reserves is in dollars, according to calculations by Standard Chartered.

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The development has caught the attention of the leaders of both countries.

“The long-term deficit and debt that we have accumulated is unsustainable — we can’t keep on just borrowing from China,” President Obama said last Thursday.

Wen Jiabao, prime minister of China, also has expressed concern.

“We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried,” Mr. Wen said earlier this year.

China now earns more than $50 billion a year in interest from the United States, Mr. Setser at the Council on Foreign Relations calculated.

China’s leaders were able to buy more Treasuries in recent months without buying more dollars because they have abruptly turned their back on the market for securities issued by government-sponsored enterprises.

China was the world’s biggest buyer of these securities a year ago, splashing out more than $10 billion a month.

But in the 12 months through March, it actually had net sales of $7 billion, and ramped up purchases of Treasuries instead.

China has also changed which Treasuries it buys. It has done so in ways calculated to reduce its exposure to inflation or other problems in the United States. As recently as a year ago, China actively bought long-dated bonds, seeking the extra yield they could bring compared to Treasury securities with short maturities, of which China bought virtually none.

But in each month since November, China has been buying more Treasury bills, with a maturity of a year or less, than Treasuries with longer maturities. This gives China the option of cashing out its positions in a hurry, by not rolling over its investments into new Treasury bills as they come due should inflation in the United States start rising and make Treasury securities less attractive.

The big question now for policy makers and economists alike lies in whether the Chinese government’s purchases of American securities will rise or fall in the coming months.

Two big forces are at work — but they are pushing Chinese investments in opposite directions and might cancel each other out.

The first big shift is that Chinese foreign exchange reserves might start growing again, after shrinking early this year.

A senior Chinese economic policy maker, Xu Lin, expressed concern here on Monday that the reserves might grow faster if speculators started pushing more foreign exchange into China in the months ahead.

China is strongly opposed to any significant appreciation or depreciation of its currency, Mr. Xu said at a press conference. But if international investors conclude that the Chinese economy has stabilized ahead of economies elsewhere, they may start pumping more money into the Chinese economy, he said.

To keep its currency at the same level, the Chinese government buys foreign currency flowing into the country in excess of China’s needs. If overseas demand for Chinese exports recovers, then China’s trade surplus could start widening again as well. This would also tend to fatten Chinese reserves.But the countervailing trend is that the Chinese government is trying to foster channels for foreign currency to be pumped out of the country without the involvement of the central bank. The government has been buying a wider range of assets and encouraging the private sector to invest more money overseas.

“That’s part of a strategic move by the authorities to diversify,” said Wensheng Peng, the head of China research at Barclays Capital. “The reserves growth should accelerate because of inflows, but it will not be as large as what we observed in 2007 and the first half of 2008.”

The State Administration of Foreign Exchange, which is part of the central bank, issued draft regulations on Monday that would make it considerably easier for private companies to raise dollars in China to spend on overseas investments — a step that would lessen the need for the Chinese government to buy up those dollars.

This spring China has also been stepping up its purchases of commodities, which are usually bought in dollars. Iron ore has been piling up on Chinese docks, government stockpiles of crude oil and grain are being expanded and stockpiles are being started for products like gasoline, diesel and sugar.

After six years of silence, China unexpectedly disclosed last month that it had been gradually buying gold from domestic producers. The country’s reserves had climbed from 600 tons in 2003 to 1,054 tons, worth $31.8 billion at prices late Wednesday.

The disclosure, which produced a frisson of excitement in gold markets, may have been aimed at reassuring a domestic audience that the Chinese government was not putting all the nation’s savings into American dollars. But the actual investment was tiny compared with China’s foreign exchange reserves — and showed that China was accumulating gold at a much slower rate than foreign currency.

A person in periodic contact with China’s central bank, who insisted on anonymity to preserve his access, said that a Chinese central banker complained to him last year that “we have so much money and there’s so little gold, we can’t buy much without driving up the price.”

NY Times

]]> http://www.washedit.com/china-grows-more-picky-about-debt/feed/ 0 http://www.washedit.com/petrochina-co-briefly-overtook-exxon-mobil-corp-as-worlds-most-valuable-company-336-billion/ http://www.washedit.com/petrochina-co-briefly-overtook-exxon-mobil-corp-as-worlds-most-valuable-company-336-billion/#comments Tue, 26 May 2009 15:48:55 +0000 admin http://washedit.com/?p=307

State-controlled PetroChina Co. briefly overtook Exxon Mobil Corp. as the world’s most valuable company yesterday after its Shanghai-traded shares rose as much as 3 per cent to 13.25 yuan ($1.94 U.S.) for a market value exceeding $336-billion, surpassing Exxon’s $335.9-billion as of May 22. Over the weekend, Asia’s largest oil and gas producer PetroChina announced it will acquire a 45.5 per cent stake in Singapore Petroleum Company (SPC) for $1.02-billion. The acquisition, the first for PetroChina in an overseas downstream asset, will be a boost to the company’s trading and supply chain in the region. PetroChina’s main markets include Indonesia, Vietnam, Singapore, China and South Korea.

SHARES ON A ROLL

PetroChina shares have advanced 29 per cent this year as government spending has increased fuel consumption in China, while the worst recession since the Great Depression curbs demand in the United States. China’s benchmark Shanghai Composite Index has surged 43 per cent this year on optimism that the $586-billion economic stimulus and record bank lending will counter a slump in exports and boost growth. The Standard & Poor’s 500 Index has dropped 1.8 per cent.

BIG PLAYER IN ASIA

PetroChina’s trading arm, Chinaoil, is involved in trading of both crude oil, light distillates, middle distillates and fuel oil. In Asia, it has branches in Singapore, Hong Kong, Japan, Vietnam and Indonesia. .

SEEKING OPPORTUNITIES

PetroChina is due to finalize a deal by July 1 to buy a 49 per cent stake in Nippon Oil’s 115,000-bpd Osaka refinery, building on long-term co-operation. It also has a 35 per cent stake in Singapore’s 2.3 million cubic metres Universal Terminal, which started operations early last year.

REFINERY EXPANSIONS

PetroChina and its smaller rival China Petroleum & Chemical Corp., or Sinopec, have announced plans to expand refining capacity to meet demand for fuels in the world’s third-largest economy.

China National Petroleum Corp. (CNPC), PetroChina’s state-owned parent, plans to build a 55 billion-yuan refinery in southern Guangdong province with Venezuela, the Guangzhou Daily reported in March.

CNPC and Russia’s OAO Rosneft may start building a 21.1 billion-yuan refinery in the northern port city of Tianjin next year, the local government said in March.

PetroChina last month agreed to buy a 50 per cent share in AO Mangistaumunaigas through its CNPC Exploration & Development Co. unit for as much as $1.4-billion after China agreed to lend $10-billion to Kazakhstan, the largest energy producer in the former Soviet Union after Russia.