China to station troops in N. Korea: report

SEOUL, January 15, 2011 (AFP) - China is in discussions with North Korea about stationing its troops in the isolated state for the first time since 1994, a South Korean newspaper reported Saturday.

The Chosun Ilbo newspaper quoted an anonymous official at the presidential Blue House as saying that Beijing and Pyongyang recently discussed details of stationing Chinese soldiers in the North's northeastern city of Rason.

The official said the soldiers would protect Chinese port facilities, but the location also gives access to the Sea of Japan (East Sea), while a senior security official was quoted as saying it would allow China to intervene in case of North Korean instability.

A spokeswoman for the Blue House said she had no information.

"North Korea and China have discussed the issue of stationing a small number of Chinese troops to protect China-invested port facilities" in the Rason special economic zone, the unnamed official was quoted as saying.

"The presence of Chinese troops is apparently to guard facilities and protect Chinese nationals."

China reportedly gained rights in 2008 to use a pier at Rason, securing access to the Sea of Japan, as North Korea's dependence on Beijing continues to grow amid a nuclear stand-off with the United States and its allies.

The last Chinese troops left the North in 1994, when China withdrew from the Military Armistice Commission that supervises the truce that ended the 1950-53 Korean war.

Seoul's International Security Ambassador Nam Joo-Hong told the Chosun Ilbo that China could now send a large number of troops into the North in case of instability in the impoverished communist state.

"The worst scenario China wants to avoid is a possibly chaotic situation in its northeastern provinces which might be created by massive inflows of North Korean refugees," Nam was quoted as saying.

"Its troops stationed in Rason would facilitate China's intervention in case of contingencies in the North," he said.

China urges Taiwan to release fishermen: report

BEIJING, January 15, 2011 (AFP) - China has called for the release of four fishermen detained by a Taiwanese patrol vessel, state media said Saturday, in a rare dispute between the two sides amid warming ties.

The Taiwan Affairs Office in the southeastern Chinese province of Fujian said a Chinese fishing boat was seized near the Jinmen islands in the Taiwan strait on Friday, the state-run Xinhua news agency reported.

The islands are administered by Taiwan, but the Chinese authorities said fishermen from both sides had long operated in the area, according to Xinhua.

They called on Taiwan to release the four mainland Chinese "as soon as possible", the report said, giving no details on what led to their detention.

China and Taiwan have been divided since the late 1940s, when the Communist Red Army drove the Chinese Nationalists off the mainland to Taiwan. Taiwan went on to become a thriving democracy.

However, tensions between the two sides have eased since China-friendly Taiwan President Ma Ying-jeou came to power in 2008, pledging to improve ties with Beijing.

Japan arrested a Chinese trawler captain in disputed waters after his vessel collided with Japanese coast guard ships in early September.

He was eventually released but the incident sparked a series of protests and snubs from Beijing and Japanese accusations that China was taking retaliatory economic measures.

107 trillion emails sent last year: Pingdom

WASHINGTON, January 14, 2011 (AFP) - Internet users sent a total of 107 trillion emails last year, most of them spam, according to a Web monitoring service.

The number of emails sent last year were among the facts and figures about the Internet gathered by Pingdom from various sources and published Thursday at royal.pingdom.com/2011/01/12/internet-2010-in-numbers/.

Pingdom said that as of June 2010, there were 1.97 billion Internet users: 825.1 million in Asia, 475.1 million in Europe, 266.2 million in North America, 204.7 million in Latin America and the Caribbean, 110.9 million in Africa, 63.2 million in the Middle East and 21.3 million in Oceania and Australia.

Pingdom said an average of 294 billion email messages were sent per day and about 89 percent were spam.

It said there are 2.9 billion email accounts worldwide and 152 million blogs.

The total number of websites is 255 million, Pingdom said, up 21.4 million over the previous year.

It said there were 88.8 million .com domain names, 13.2 million .net domain names, 8.6 million .org domain names and 79.2 million country code domains such as .cn or .uk.

Pingdom also published figures on the growth of Twitter and Facebook.

Twitter added 100 million new accounts last year and had a total of 175 million as of September, Pingdom said, adding that 25 billion messages, or "tweets," were sent in 2010.

Facebook had nearly 600 million users at the end of the year with 250 million joining in 2010.

Japan foreign minister arrives in S. Korea

SEOUL, January 15, 2011 (AFP) - Japanese Foreign Minister Seiji Maehara arrived in Seoul on Saturday for talks focusing on North Korea and other regional issues, a Japanese embassy official said.

During the day-long trip he will meet counterpart Kim Sung-Hwan, unification and defence ministers and pay a courtesy call to President Lee Myung-Bak, the official said.

Maehara is travelling to South Korea for the first time since taking office last September.

His trip comes as the two neighbours seek closer diplomatic and military ties against threats posed by North Korea to regional security.

The North shelled a border island in late November, killing four South Koreans including two civilians, sending regional tensions soaring.

China's military leaps forward to catch up with US - Analysis

BEIJING, January 15, 2011 (AFP) - By quietly building up its stash of high-tech weaponry, China is threatening US military supremacy in the Pacific, worrying its neighbours and contributing to a renewed arms race in Asia, analysts say.

Just days before Chinese President Hu Jintao's visit to Washington and as US Defense Secretary Robert Gates was in Beijing this week to patch up frayed defence ties, China's military sent its first stealth fighter into the skies.

Analysts agree the test flight of the J-20 carried out by the People's Liberation Army (PLA), which surprised many military observers, was no coincidence.

"China is sending a strong message to the US and countries in the region that China's military modernisation is unstoppable, and China is determined to become this region's dominant actor," said Taiwan-based PLA expert Arthur Ding.

The emergence of the first photos of the J-20 just before Gates' visit forced the Pentagon chief to admit that China "may be somewhat further along in the development of that aircraft than our intelligence had predicted".

Analysts who have studied every pixel of these shots say while it is difficult to estimate just how advanced the plane -- seen as an eventual rival to the US Air Force's F-22A -- really is, the message sent by Beijing is clear.

"While it does not truly demonstrate China's capability in terms of developing the latest-technology military equipment, it certainly does demonstrate their ambition," said Gareth Jennings, an aviation expert at Jane's Missiles & Rockets magazine.

The PLA -- the largest army in the world -- is hugely secretive about its defence programmes, which benefit from a big military budget boosted by the nation's runaway economic growth.

Officially, China says its military technology is 20 to 30 years behind that of the United States, and maintains that the modernisation of its army is purely defensive in nature.

But its neighbours are worried. Japan last month labelled Beijing's military build-up a global "concern", citing its increased assertiveness in the East and South China Seas.

Analysts say Beijing's stated position no longer corresponds to the facts.

China, without formally acknowledging it, is building at least one aircraft carrier, which more than anything else will showcase its ability to project its military might further afield.

"They have equipment that is far from being defensive. More and more they have planes capable of striking ground targets," a Western military expert based in Beijing, who refused to be named, told AFP.

"What is the use of that when you say you want to defend yourself?"

In 2007, China -- a nuclear power -- sparked international concern when it destroyed one of its satellites with a missile strike. And last January, the Chinese military intercepted an airborne missile.

Now, it is developing a ballistic missile capable of striking aircraft carriers -- a move that threatens US supremacy in the Pacific.

Admiral Mike Mullen, head of the US Joint Chiefs of Staff, warned Wednesday that China's new weapons programmes, including the J-20, appeared to be directed against the United States.

Observers worry that the balance of power will shift in East Asia, where there are several potential sources of conflict revolving around Taiwan, North Korea and territorial disputes with neighbouring states.

They say a new arms race seems inevitable.

"Today, nobody knows for sure how many J-20s the PLA will eventually deploy, nor how many ballistic missiles," said Dennis Blasko, an expert on the PLA based in the United States.

"Neither can we predict the size and composition of US and allied forces beyond four or five years."

Dean Cheng, a China expert at the Heritage Foundation, a US think tank, said there was "still time for the US to take corrective measures to hedge against these Chinese capabilities, both in its own arsenals and in what it provides Taiwan."

The self-ruled island is a sore point in China-US military ties. Last year's multi-billion-dollar arms deal between Washington and Taipei angered Beijing so much it suspended defence relations with the United States.

But for Rick Fisher of the International Assessment and Strategy Center, the United States and its allies "have a very short timeframe to get really smart about the PLA's intentions and technology directions".

"If this cannot be done, for reasons of lack of information or lack of political will, Washington could soon find itself increasingly following China, and not leading the arms race," Fisher said.

US keeps up Malaysia engagement

WASHINGTON, January 15, 2011 (AFP) - US Secretary of State Hillary Clinton on Friday spoke to Malaysia's deputy premier on expanding education and security ties, the latest US effort to build ties with the Muslim-majority nation.

Clinton said relations with Malaysia were on "a positive track" as she met in Washington with Deputy Prime Minister Muhyiddin bin Mohamed Yassin, which followed up her on rare trip to the Southeast Asian nation in November.

"I look forward to continuing to work closely with the government and people of Malaysia for a better future," she told reporters afterward.

Clinton and Muhyiddin discussed "creating more linkages between the Malaysian and American people through English language instruction exports, and expanding security cooperation," a State Department spokesperson said.

President Barack Obama's administration has put an emphasis on building relationships with Southeast Asia and moderate Muslim-majority nations, seeing them as critical to US interests.

Relations between the United States and Malaysia were rocky during the 22-year tenure of Mahathir Mohamad, a passionate critic of US foreign and economic policy. He retired in 2003 but remains outspoken.

On her visit in November, Clinton raised another irritant in relations as she urged Malaysia to ensure a fair trial of opposition leader Anwar Ibrahim. The former deputy premier faces sodomy charges, which he says are politically motivated.

Google gains ground in US search market

SAN FRANCISCO, January 15, 2011 (AFP) - Market-tracker comScore reported on Friday that Google finished 2010 strong, handling 66 percent of US online queries.

Factoring in outside websites with search "powered by" by the California Internet titan, its share of the market climbed even higher, with 69.4 percent of US searches getting "organic" results from Google.

Microsoft's Bing search engine increased its share of the US market slightly to 12 percent, while AOL, Ask, and Yahoo! each lost ground with 1.9, 3.5, and 16 percent respectively, according to comScore.

Bing handles Internet searches at Yahoo! websites, raising to 28 percent the total portion of US queries it tended to in December. The combined Bing-Yahoo! share of the market remained unchanged from November.

US Internet users conducted 18.2 billion online searches in December, with Google handling 11.7 billion while 3.4 billion were done at Yahoo! sites and 2.2 billion at Microsoft sites, according to comScore.

Over half of US online adults use Wikipedia: survey

WASHINGTON, January 14, 2011 (AFP) - More than 50 percent of US adult Internet users look up information on Wikipedia, the online encyclopedia which marks its 10th anniversary on Saturday, according to a new report.

A Pew Internet and American Life Project survey found that as of May 2010, 53 percent of adult online Americans consult the user-generated site, up from 36 percent in February 2007.

Younger Internet users were more likely to use Wikipedia.

Sixty-two percent of Internet users under the age of 30 use the service compared with 33 percent of Internet users aged 65 and older, Pew said.

Fifty-two percent of online adults between the ages of 30 and 49 use Wikipedia and 49 percent of those aged 50 to 64.

Wikipedia use was highest among Internet users with a college degree, Pew said, with 69 percent saying they use the site compared with 41 percent of online adults with only a high school diploma.

Pew said using Wikipedia is more popular than sending instant messages, an activity 47 percent of Internet users engage in, but less popular than using social network sites, something 61 percent of adult Internet users do.

The Pew survey of 2,252 adults was conducted in April and May of last year and has a margin of error of plus or minus 2.7 percentage points.

Wikipedia founder Jimmy Wales launched the site on January 15, 2001.

Hu, Obama to share intimate dinner

WASHINGTON, January 14, 2011 (AFP) - US President Barack Obama will open President Hu Jintao's state visit next week with an unusual intimate private dinner for the Chinese leader at the White House.

Obama, Secretary of State Hillary Clinton and national security advisor Tom Donilon will dine with Hu and two counterparts from China in the Old Family Dining Room in the White House residence on Tuesday evening, officials said.

"It's a very unusually small dinner that we'll have with President Hu," said Donilon.

The setting will reflect "the relationship that we are building and the opportunity to have candid conversation in much less formal settings than you typically would see, at a meeting between the Chinese and the United States," Donilon said.

Earlier on Tuesday, Hu will fly into Andrews Air Force base to begin the visit and will be welcomed by Vice President Joe Biden, Donilon told reporters on Friday.

On Wednesday, Obama will unfurl the full pageantry of the state visit, including an official welcome ceremony, Oval Office talks and a state dinner in honor of the Chinese leader.

Foreign reporters will also get a rare chance to quiz the Chinese leader when the two leaders hold a press conference in the White House, and Hu will also address US business leaders.

On Thursday, Hu will meet congressional leaders before heading to Chicago for the second leg of his visit.

Father of modern Chinese navy dies at 95

BEIJING, January 14, 2011 (AFP) - Admiral Liu Huaqing, considered the father of the modern Chinese navy and a close confidant of Deng Xiaoping, died Friday at the age of 95, the official Xinhua news agency reported.

Liu, who joined the Communist Party in 1935, reached the highest levels of China's power structure as a member of the politburo standing committee from 1992 to 1997.

At the same time he was also vice-president of the party's powerful Central Military Commission.

In 1965, the then prime minister Zhou Enlai entrusted Liu with a project to build China's first nuclear submarine, according to the admiral's memoirs, extracts from which are published on the website sina.com.

Nonetheless China did not have an operational nuclear submarine when Liu took command of the Chinese navy in the 1980s.

Liu recalled having argued since the 1970s that China should equip itself with an aircraft carrier, which it still does not have today, although at least one is currently under construction, according to Western military sources.

Under Liu, the navy saw its resources increase considerably, and gained a capacity to operate far from the Chinese coast, which it did not previously have.

Launch of Murdoch's The Daily delayed: report

WASHINGTON, January 14, 2011 (AFP) - Rupert Murdoch's News Corp. and Apple have delayed next week's launch of The Daily, the media tycoon's digital newspaper for the iPad, a News Corp.-owned technology blog reported Friday.

AllThingsD.com, citing sources familiar with the companies' plans, said the delay is intended to give Apple time to tweak its new subscription service for publications sold through its iTunes online store.

According to AllThingsD, iTunes will automatically bill subscribers to The Daily on a weekly or monthly basis with a new edition showing up on their iPad every morning.

A source familiar with News Corp.'s plans told AFP earlier this week that The Daily, which has been the object of months of top secret development at News Corp., would be introduced at an event in San Francisco on January 19.

Murdoch, News Corp.'s chairman and chief executive, and Apple head Steve Jobs were expected to personally take part in the event at the San Francisco Museum of Modern Art.

Murdoch has touted the iPad as the potential savior of the struggling newspaper industry.

News Corp. has been tight-lipped about the project but Murdoch acknowledged its existence for the first time in an interview in November, listing it as one of the "exciting projects" his media and entertainment company was working on.

Forbes magazine has put the total staff on the project at around 150 and said News Corp. has budgeted 30 million dollars for the first year of the launch.

The Daily would bring together three of Murdoch's passions -- newspapers, the iPad and finding a way to charge readers for content online in an era of shrinking newspaper circulation and eroding print advertising revenue.

News Corp.'s The Wall Street Journal requires a subscription for full access to WSJ.com and Britain's The Times and The Sunday Times, two other News Corp. newspapers, recently erected pay walls around their websites.

In an interview in April with The Kalb Report, Murdoch called the iPad a "glimpse of the future."

"There's going to be tens of millions of these things sold all over the world," he said. "It may be the saving of newspapers because you don't have the costs of paper, ink, printing, trucks.

"It doesn't destroy the traditional newspaper, it just comes in a different form," he said.

Clinton presses China on rights before visit

WASHINGTON, January 14, 2011 (AFP) - US Secretary of State Hillary Clinton on Friday made a passionate call for China to improve human rights, pledging not to shy away from disagreements ahead of a state visit by President Hu Jintao.

In a wide-ranging speech less a week before Hu was due in Washington, Clinton said the United States sought a "positive, cooperative and comprehensive relationship" with China and welcomed the Asian power's rise, dismissing calls for a Cold War-style containment policy.

Clinton was unusually forthright in her call for human rights, urging China to free dissidents including Nobel laureate Liu Xiaobo who is serving an 11-year prison sentence after authoring a petition for political reform.

"A vibrant civil society would help address some of China's most pressing issues, from food safety to pollution to education to health care," Clinton said.

"The longer China represses freedoms, the longer it will miss out on these opportunities and the longer that Liu Xiaobo's empty chair in Oslo will remain a symbol of a great nation's unrealized potential and unfulfilled promise."

China has tried to block news at home of Liu's Nobel Peace Prize and urged a boycott of last month's ceremony in Oslo, where where the activist writer was represented by a poignant empty chair.

"Many in China resent or reject our advocacy of human rights as an intrusion on their sovereignty," Clinton acknowledged.

"But as a founding member of the United Nations, China has committed to respecting the rights of all its citizens. These are universal rights that are recognized by the international community," she said.

Clinton also raised the cases of Gao Zhisheng, a human rights lawyer who has not been heard from since April, and Chen Guangcheng, a blind activist jailed after recounting abuses in the one-child policy.

Clinton's remarks come after criticism by human rights groups over President Barack Obama's embrace of China. Obama will welcome Hu on Wednesday at the White House with the full pomp of a gun salute and dinner, unlike former president George W. Bush who reserved state visits for leaders of democracies.

Clinton came under fire at home early in her tenure when she said human rights would not "interfere" with cooperation between the United States and China on issues such as reviving the global economy and fighting climate change.

She took a different tone on Friday, saying that the Pacific powers needed to be "honest about their differences."

Clinton was also critical of China's treatment of its ally North Korea, particularly its refusal to condemn its neighbor over last year's sinking of South Korea's Cheonan vessel.

"We warned China that failure to respond clearly to the sinking of a South Korean military vessel would embolden North Korea to continue on a dangerous course," she said.

But Clinton also reiterated the Obama administration's view that cooperation was vital, saying that "this is not a relationship that fits neatly into black-and-white categories like friend or rival."

"We are two complex nations with profoundly different political systems and outlooks. But we are both deeply invested in the current order, and we both have much more to gain from cooperation than from conflict," she said.

Clinton said that Asian nations -- many of them increasingly uneasy about Beijing's military expansion -- should not have to choose between Washington and Beijing.

"In the 21st century, it does not make sense to apply zero-sum 19th century theories of how major powers interact. We are moving through uncharted territory," she said.

In phrases likely to be watched closely in Asian capitals, Clinton said the United States and China had "as important as any bilateral relationship in the world" but said there was "no such thing as a G-2" -- the idea that Washington and Beijing should determine major global issues together.

Clinton was delivering what the State Department said would be an annual lecture in memory of Richard Holbrooke, the hard-charging US diplomat who suddenly died last month at age 69.


China raises banks' reserve requirement ratio

BEIJING, January 14, 2011 (AFP) - China's central bank said Friday it would raise the amount of money lenders must keep in reserve, the latest in a series of such hikes aimed at reining in high inflation.

The bank reserve requirement ratio would be raised by 50 basis points beginning on January 20, the People's Bank of China said in a statement.

Ever fearful of inflation's potential to spark social unrest, Beijing has been pulling on a variety of levers to check consumer prices and calm growing anxiety about soaring food costs and property values.

In December, the central bank hiked interest rates for the second time in less than three months.

It also increased the reserve requirement ratio six times in 2010, a move that effectively limits the amount of funds banks can lend and thereby curbs the liquidity blamed for helping fuel inflation.

The central bank statement gave no other details.

The move will come as little surprise, however, as the government has repeatedly declared its intention to bring inflation under control this year after it hit 5.1 percent in November, the highest rate in more than two years.

In a research note, China analyst Mark Williams of London-based Capital Economics said the announcement "will be seen in part as a response to rapid lending reported in the first week of January".

The move indicated China was wary of a new interest rate hike for now due to the belief it could further fuel speculative money flows from overseas blamed for contributing to inflation, he wrote.

In December, after China raised interest rates for the second time in less than three months, Premier Wen Jiabao acknowledged the price pressures faced by low-income families and said the government was "fully able to control" prices.

Central bank governor Zhou Xiaochuan on December 31 also reiterated the bank would keep prices stable in 2011, which analysts said likely meant further interest rate hikes and other tightening measures were on the way.

Beijing is desperately seeking to calm public concern over rising prices, particularly the everyday food costs that hit China's hundreds of millions of poor hard.

Authorities have taken repeated steps to turn off the spigot of bank lending that saw new loans nearly double to 9.6 trillion yuan in 2009 as banks heeded the government's call to spur the economy amid the global financial crisis.

Beijing is also concerned soaring property prices will lead to a real estate bubble that could burst with calamitous results for the world's second-largest economy.

The World Bank said on Thursday that China still had plenty of room for further interest rate hikes.
"There's a lot of scope for increasing interest rates further," Ardo Hansson, the bank's chief economist for China, told reporters.

The China Securities Journal on Friday quoted unnamed analysts as saying another rise could be on the way in the next few weeks.

The latest hike brings the average reserve requirement ratio to 18.5 percent, Williams of Capital Economics said, adding the rate was higher for larger banks.

Renault takes legal action over alleged spying

PARIS, January 14, 2011 (AFP) - French car maker Renault has launched legal action for industrial espionage after it suspended three top managers who it reportedly suspected of leaking secrets about its new electric cars.

The company said on Thursday it had lodged a complaint for "industrial espionage, corruption, breach of trust, theft and handling stolen goods."

State prosecutor Jean-Claude Marin said the charges alleged that "elements concerning France's economic secrets" had been leaked "to a foreign power."

The French daily Le Figaro has reported that Chinese interests stood to benefit from spying on Renault's electric car programme, on which it is staking its future. China has angrily denied any involvement.

Renault last week suspended three senior managers -- Michel Balthazard, Matthieu Tenenbaum and Bertrand Rochette -- over suspicions they had leaked strategic information.

The three deny involvement and were not named in the company's judicial complaint on Thursday. Under the French judicial system prosecutors can investigate allegations without a defendant being named.

Taiwan develops face-recognising vending machine

TAIPEI, January 14, 2011 (AFP) - A face-recognising vending machine developed in Taiwan is able to offer hair-growing tonic to balding men and razors to people with beards, one of the inventors said Friday.

The vending machine, from Taipei-based Innovative DigiTech-Enabled Applications and Services Institute, is equipped with a camera that reads the faces of shoppers and then suggests products according to their gender and age.

"Our facial-recognition technology is more active than what has been developed in the United States and Japan, because it can actually offer shopping advice," said Tsai Chi-hung, a researcher at the institute.

As well as perceiving male baldness or facial hair, it is also able to suggest beauty products for young women and health drinks for older ones, according to Tsai.

The machine can also record the choices of shoppers who do not follow its tips to learn from its "mistakes" to be able to offer better suggestions in the future, he said.

Taiwan woman gets Tw$2 mn after two-day marriage

TAIPEI, January 14, 2011 (AFP) - Taiwanese authorities have decided to recognise a marriage that lasted two days before the bridegroom died and saw the bride inherit Tw$2 million ($67,000) as a result, a report said Friday.

The woman, identified by her family name Chen, married the 50-year-old man in his hospital room in Taipei last year just before he died of cancer, said the TVBS cable news channel.

The man's two grown-up children accused Chen of exploiting their terminally-ill father and sued her for fraud, saying she sold his house after he died while trying to avoid them, the report said.

But prosecutors decided to drop the charge against Chen after a household registration official who validated the marriage stated that the man was lucid and capable of making the decision despite his condition, it added.

Young Japanese losing sex drive: govt

TOKYO, January 14, 2011 (AFP) - Young Japanese men are losing interest in sex, according to a study commissioned by the government, in a further warning sign for a nation notorious for its low birth rate, a doctor said Friday.

The survey also found that more than 40 percent of married people said they have not had sex in the past month, said Kunio Kitamura, head of the clinic of the Japan Family Planning Association, who took part in the survey.

"This is directly linked with falling birth rate. Policy actions are necessary," Kitamura told AFP.

The data confirmed a wider social belief that younger men are becoming "herbivorous", a label attached to passive men who do not actively seek women and sex.

The latest biennial survey found that 36.1 percent of Japanese males between the ages of 16-19 said they had no interest or even despised sex, a jump from 17.5 percent in the 2008 study.

Compounding the issue was data that showed 59 percent of girls in the same age group felt the same way, up 12 percentage points from 2008.

The data is a worry for a government aiming to encourage couples to have children to reverse a falling birth rate and avert a potential economic calamity.

Japan's total fertility rate in 2009 was estimated by the government at 1.37 births per woman, one of the world's lowest, compared with 2.06 in the United States and 1.97 in France.

The trend has been largely blamed on a widespread belief, especially in rural Japan, that women who give birth should quit their jobs, amid shortages of childcare centres and other systemic factors.

Japan's population has already started to decline as younger people delay starting a family due to the perceived burden on their finances, lifestyles and careers.

A growing population of elderly, known for their longevity, is meanwhile overwhelming a welfare system that is decreasingly supported by a shrinking workforce, meaning that tax revenue is declining.

Collectively, the survey found all age categories showed a general lack of interest toward sex, except for men in their 30-34 years of age with just 5.8 percent of these respondents not interested, as opposed to 8.3 percent in 2008.

The survey also found that 40.8 percent of married people said they had not had sex in the past month, up from 36.5 percent in the 2008 survey and 31.9 percent in the 2004 survey.

Nearly 50 percent of married people older than 40 years old said they have not had sex in the past month, the study said.

Among reasons for not having sex, survey participants cited vague reluctance after childbirth, that they could not be bothered, or that they were too tired after work, it said.

The survey, conducted by a team of experts commissioned by the health ministry, received valid answers from 671 men and 869 women in interviews.

It was originally designed to gauge the success of Japan's birth control education with an aim to reduce unwanted pregnancies, Kitamura said.

But the falling abortion rate may be a result of a general indifference toward sex and not attributable to the success of sex education, he said.

China central bank vows to further loosen capital flows

SHANGHAI, January 14, 2011 (AFP) - China's central bank on Friday pledged to further relax restrictions on cross-border currency flows after a series of recent steps to ease controls and promote wider international use of the yuan.

Beijing will also increase the flexibility of its yuan exchange rate and continue to push the opening-up of its financial markets, a senior People's Bank of China official said in a speech posted on the bank's website.

Li Dongrong, assistant governor of the central bank, said emerging markets are facing increasing pressure from capital inflows, which pump up inflation and lead to asset bubbles.

China will proceed with reforms to further the yuan's convertibility "in an orderly manner" and manage cross-border fund flows in a "balanced way," he said.

He gave no further details or timetable.

The Chinese yuan is not fully convertible under the capital account, making it difficult to make cross-border investments, such as securities, for both domestic and foreign investors.

Beijing has recently stepped up efforts to relax restrictions and increase overseas use of the yuan as it seeks to reduce China's exposure to the US dollar and allow its currency to take on a greater role worldwide.

The central bank on Thursday launched a trial allowing Chinese firms to use yuan to finance new ventures, mergers and stake purchases overseas, a move seen as another step towards making the unit a global currency.

Earlier this week, Shanghai, the nation's financial hub, announced a trial programme to allow select foreign private equity firms to convert foreign currency into yuan for investment in the country.

Malaysia plans sanctuary for captive tigers

KUALA LUMPUR, January 14, 2011 (AFP) - Malaysia plans to set up a large enclosed natural habitat for captive tigers, a senior wildlife official said Friday, an ambitious proposal that has raised concerns among conservationists.

The authorities say the reserve will provide a good home for tigers rescued from poor living conditions, but campaigners argue the focus should be on protecting the animals in the wild.

"It is still at the preliminary stage. It will be an enclosed area big enough for the big cats to roam," a wildlife and national parks department official told AFP on condition of anonymity.

"Tigers in the park will be fed and it will be a tourist attraction."

A final decision on the programme, which will be located in peninsular Malaysia, will be made by the end of the year, the official said.

The plan was prompted by the discovery of 27 captive tigers living in poor conditions in a zoo in southern Malacca state, the official said.

He played down fears of poachers raiding the tiger park, saying it would be "enclosed and guarded."

But William Schaedla, regional director of TRAFFIC Southeast Asia, which monitors trade in wildlife, urged the authorities to concentrate on battling poaching rather than breeding tigers.

"TRAFFIC Southeast Asia agrees that something must be done to care for the tigers that are casualties of poaching and conflict. However, the facilities undertaking these efforts should avoid becoming factories for more captive tigers," he said.

"Captive tigers would not have the ability to feed themselves or a fear of humans, and so cannot be returned to the wild. Also, this will not prevent tiger extinction in the wild," he added.

Schaedla said the priority should be to protect tigers in the wild where they still face a serious threat.

Last year WWF-Malaysia said tribesmen in Malaysia were being paid by syndicates to trap wildlife, including critically endangered tigers, to meet demand from China.

Conservationists have called for a war on poachers who are undermining Malaysia's ambitious goal to double its population of wild tigers to 1,000.

In the 1950s, there were as many as 3,000 tigers in Malaysia but their numbers fell as the country opened up more land for agriculture.

Foxconn engineer jumps to death in China: state media

SHANGHAI, January 14, 2011 (AFP) - A factory worker apparently jumped to her death after an incident at Taiwan's high-tech giant Foxconn, which has been plagued by a spate of suicides and labour problems, state media said Friday.

Taipei-based Foxconn said the 25-year-old engineer died last week after falling from her brother's home in the southern boomtown of Shenzhen, where the firm runs a massive complex, according to the official Xinhua news agency.

The unnamed employee, who had worked for Foxconn since 2005, had "been on sick leave" at the time of her death after factory officials rebuked her for an unspecified reason and said she would lose her job, Hong Kong media reported.

Foxconn was not immediately available for comment when contacted by AFP.

Labour rights activists have blamed a string of suicides at Foxconn on tough working conditions, highlighting the difficulties millions of factory workers face across China.

At least 13 employees at Foxconn -- the world's largest maker of computer components, which produces goods for Apple, Sony and Nokia -- died in similar circumstances last year, the official Global Times reported.

Following a number of suicides, Foxconn raised wages by nearly 70 percent at its China plants.

The death was the latest in a series of incidents involving Foxconn to make headlines in China.

A female worker at a Foxconn plant in Beijing was stabbed to death this week by her boyfriend, who had been a colleague, the Beijing News reported on Thursday, citing police and employees.

On January 6, a fight erupted between two groups of workers at a complex with 22,000 employees in the southwestern city of Chengdu, leaving two injured, Xinhua reported.

Web outcry wins retrial for jailed Chinese toll dodger

BEIJING, January 14, 2011 (AFP) - A Chinese man sentenced to life in prison for evading massive road toll fees has been granted a retrial, judicial authorities said Friday, after the severity of the sentence caused a huge online outcry.

Shi Jianfeng, a self-employed driver in the central province of Henan, was sentenced earlier this week after using fake military licence plates on his trucks to dodge toll fees to the tune of more than 3.7 million yuan ($558,000) over an eight-month period.

The harsh sentence sparked a firestorm of criticism in Chinese blogs and online forums, with many netizens hitting out at exorbitant road fees and noting that Shi's income was far smaller than the road costs he would typically have incurred.

The intermediate court of the city of Pingdingshan, which had sentenced Shi, said in a statement that the case had "triggered the media's attention and heated debate".

Authorities had subsequently interrogated Shi and found "new evidence" that could change the outcome of the case, and had decided to hold a retrial, said the statement on the court's website.

Online commenters welcomed the decision, with many calling Shi's sentence a travesty amid regular reports of corrupt government and Communist Party officials getting relatively light punishments for abusing their positions.

"Compared to officials who have pocketed hundreds of millions of yuan, this is not a serious case," one netizen said on the popular sina.com web portal.

The case highlights the growing power of web users in China -- which has the world's largest online population at 450 million users -- to force the government's hand in a nation where ordinary citizens have few outlets to address perceived injustices.

China has witnessed a number of similar cases over the past few years.

In one celebrated example, Deng Yujiao, a waitress in the central province of Hubei, walked free from court in June 2009 despite being convicted of stabbing to death an official who demanded sex.

Her release followed a nationwide outpouring of sympathy and support in the media and on the Internet.

China prepares for record Lunar New Year travel

BEIJING, January 14, 2011 (AFP) - China will see its biggest-ever Lunar New Year travel rush in coming weeks, prompting authorities nationwide to brace for potential complications such as bad weather, state media said Friday.

The movement of hundreds of millions of Chinese for the Lunar New Year, the country's most important holiday, is considered the biggest annual mass human migration in the world.

The number of separate passenger trips on the nation's transport grid is expected to reach 2.85 billion during this year's travel period from late January to late February, up 11.6 percent, Xinhua news agency said.
Lunar New Year's day falls on February 3 this year.

Xinhua said the figures were given by Liu Tienan, deputy director of the National Development and Reform Commission, the country's top economic planning agency, in a nationwide video conference Thursday on travel preparations.

Each year, masses of Chinese swamp the transport grid on their way back to their hometowns to celebrate the holiday with families.

China has well over 200 million migrant workers working away from their homes.

The numbers will swell further this year due to the rising ability of Chinese to afford travel, but the situation could be complicated by icy weather across large areas, Liu said.

A record 230 million passengers are expected on China's railways, up 12.5 percent, Liu said.

Road passenger trips will reach 2.55 billion, up 11.6 percent, while air trips will reach 32 million, an increase of 10.8 percent.

Liu and other officials ordered authorities across the nation to take measures to ensure rapid responses to transport problems such as accidents, vehicle breakdowns, and weather-related hurdles.

Millions of New Year travellers were stranded for days in early 2008 when freezing rain and other icy weather across much of the country's south and central regions threw the transport network into chaos.

Japan PM adds new faces to cabinet in reshuffle

TOKYO, January 14, 2011 (AFP) - Japan's Prime Minister Naoto Kan added new faces to his cabinet on Friday to help his push to restore the country's tattered public finances and boost free trade to spur growth.

Among the changes in Kan's third cabinet since becoming prime minister were new fiscal policy, trade, justice and transport ministers, but the premier kept other key posts such as foreign, finance and defence portfolios unchanged.

Kan's move was seen as a bid to appease the conservative opposition to help secure the passage of bills to finance the 2011 budget, as he looks to energise an economy mired in deflation, saddled by huge debt and burdened by a greying population.

Battling low support ratings after only seven months as premier, Kan made the changes to his centre-left Democratic Party of Japan (DPJ) government ahead of a tough 150-day parliamentary session starting this month.

"For Japan and the DPJ government, this cabinet reshuffle has come at a particularly difficult time," said new Chief Cabinet Secretary Yukio Edano, replacing Yoshito Sengoku, who takes a top party post.

"We see a good balance of old and young. This allows each one of us to make the most of ourselves," added Edano.

Kan appointed 72-year-old conservative former finance minister, fiscal hawk Kaoru Yosano, as his new fiscal policy minister, also putting him in charge of tax and social welfare.

His brief will be to help balance state finances in Japan, where the public debt is now twice the size of the $5 trillion economy, and where the rapid ageing of the population will put more pressure on the public purse.

Kan replaced his trade minister, Akihiro Ohata, who has been reluctant to support the premier's initiative to join the US-backed Trans-Pacific Partnership being debated by nine countries.

Membership in the trade pact now taking shape has been strongly backed by Japanese industrial lobbies, but opposed by politically powerful farmers' groups who fear floods of cheap imports, especially rice.

Ohata will be replaced by Banri Kaieda, who previously served as fiscal policy minister. Satsuki Eda takes on the role of Justice Minister.

The foreign, finance and defence ministers retained their posts in the new cabinet, which was due to be sworn in by Emperor Akihito in the evening.

Analysts said the premier's hand was forced by the conservative opposition, which had threatened to hold up crucial budget financing bills unless Kan sacked two cabinet members against whom it has launched censure motions.

The two -- Sengoku and the Land, Infrastructure, Transport and Tourism Minister Sumio Mabuchi -- left the cabinet. Former trade minister Ohata stayed on to replace Mabuchi.

The opposition last year passed non-binding censure motions against Sengoku and Mabuchi over what it said was their mishandling of a heated row with China over a maritime incident in disputed waters involving Japan's Coast Guard.

Analysts say Edano's appointment also signals Kan's determination to drive out his political enemy Ichiro Ozawa, a veteran powerbroker embroiled in a political funds scandal.

Edano has spearheaded efforts against Ozawa, a faction boss who failed in a leadership challenge against Kan four months ago and now has come under growing pressure from his own party to resign over the scandal.

Singapore imposes new curbs on property speculation

SINGAPORE, January 14, 2011 (AFP) - Singapore on Friday imposed fresh measures to curb property speculation after its economy grew the fastest in Asia last year.

The government said the city-state's property market remains hot despite previous measures to cool it down, and additional curbs are needed to prevent the formation of risky asset bubbles.

"Previous government measures have to some extent moderated the market, but sentiments remain buoyant," said a statement issued by the finance and national development ministries and the central bank.

"Low interest rates plus excessive liquidity in the financial system, both in Singapore and globally, could cause prices to rise beyond sustainable levels based on economic fundamentals," it added.

"Therefore the government has decided to introduce additional targeted measures to cool the property market and encourage greater financial prudence among property purchasers."

Singapore's economy expanded 14.7 percent in 2010, the fastest in Asia.

Properties in land-scarce Singapore are now among the most expensive in Asia, boosted in large part by the building of two huge casino complexes that opened last year.

Nicholas Mak, executive director of research and consultancy at SLP International Property Consultants, described the latest measures -- the fourth government intervention in less than two years - as "quite punitive".

"The combined effects of the measures would strongly discourage short-term investors," he told AFP, noting the "knee-jerk" dips in stock market shares of property developers.

Under the new measures, owners who sell houses and apartments within four years will have to pay extra in stamp duties, more than five times previous rates.

And the timeframe for tax liability has changed from three years previously.

Non-individuals such as companies that buy residential properties can now only borrow up to 50 percent from banks, instead of 70 percent previously.

Individuals who already own one or more properties and wish to buy a new house can now only borrow 60 percent of its value compared to 70 percent previously.

Shares of major property firms slid by midday Friday, with CapitaLand shedding 3.39 percent to Sg$3.71 ($3), Keppel Land plunging 3.07 percent to Sg$4.73 and City Developments sliding 4.24 percent to Sg$12.20.

In US, China's Hu to confront battered image

WASHINGTON, January 14, 2011 (AFP) - For all the hot topics between the two nations, Chinese President Hu Jintao will also seek a broader goal when he visits the United States next week: to repair his country's battered image.

China has become a political byword in the United States for both economic competition and strategic rivalry. While differing on approach, few US politicians have kind words for China on issues from trade to human rights.

People planning the state visit said the usually formal Hu will reach out to ordinary Americans including with a stop to President Barack Obama's hometown of Chicago, where he will showcase a Chinese-run factory creating jobs.

Most Washington-based China watchers believe that Beijing remains sensitive about its image overseas, and that its sometimes shrill denunciations of international criticism is meant largely for domestic consumption.

"The Chinese government and intellectuals read our media very carefully and I think there is concern on their part that coverage has been overwhelmingly negative, particularly in the past year," said Nina Hachigian, a senior fellow at the Center for American Progress who served in Bill Clinton's White House.

Hachigian believed that the Obama administration also wanted to tone down the anti-China sentiment as it saw Beijing -- in the lingo of the Facebook era -- as a "frenemy," a competitor that is also a critical partner on issues from Iran to climate change.

"This negativity can snowball on both sides of the Pacific and take a life of its own," she said.

Obama will offer Hu the pomp of a White House state visit, including a gun salute and a formal dinner. Obama's predecessor George W. Bush only offered a lunch to Hu, reserving state visits for leaders of democracies.

Some experts wondered whether a Chinese charm offensive could work in light of human rights concerns. Protesters, including Tibetans and Uighurs alarmed over treatment by China, are expected to rally throughout Hu's visit.

Bonnie Glaser, a senior fellow at the Center for Strategic and International Studies, noted that Obama was rolling out the red carpet for the leader jailing the latest Nobel Peace laureate -- writer and dissident Liu Xiaobo.

"That’s an extremely awkward juxtaposition to say the least," Glaser said.

Glaser said that Hu's domestic audience wanted to see him as a "good, responsible steward" of relations with the United States, a year before his presidency ends.

"I think the Chinese were unnerved by the discussions here that took place in the run-up to the midterm elections about China stealing our jobs and I think they would like to try and shape that narrative in a more positive direction," she said.

US politicians across the spectrum have taken swipes at China in recent months.

Lawmakers of Obama's Democratic Party ran advertisements ahead of the November elections warning that free trade deals sent factories to China. On the other end, a group opposed to Obama's stimulus spending ran commercials depicting a Chinese professor in 2030 who lets out a sinister laugh as he tells students how Beijing took over the United States by buying its debt.

A poll conducted this month by the Pew Research Center found that nearly half of Americans believed China was the world's leading economic power, more than said so about their own country and a sharp change from a few years ago.

However, the survey found no spike in US hostility, with only 22 percent of Americans seeing China as an adversary. Views of China were more hostile in parts of Europe and especially in Asian neighbors such as Japan and India.

Cheng Li, director of research at the Brooking Institution's John L. Thornton China Center, said that despite China's growing clout, it still relied on the United States in areas such as trade and technology.

"Some criticisms of China are valid, some may not be," he said. "But the atmosphere may not be enhancing public understanding in both countries on their relationship."

Gates warns of leadership 'disconnect' in China

TOKYO, January 14, 2011 (AFP) - US Defense Secretary Robert Gates Friday said there had been signs of "a disconnect" between China's military and civilian leadership but stressed that President Hu Jintao is "in command and in charge".

When Gates met Hu and other top officials on Tuesday, Chinese state media published photos that were said to show the debut flight of the J-20, the country's first radar-evading combat aircraft.

The incident illustrated the Asian juggernaut's confidence and also raised questions about the role of its military, as a senior US defence official said Hu and other top civilians apparently were unaware of the test flight.

Gates, speaking in Tokyo on Friday, said "this is an area where over the last several years we have seen some signs of, I guess I would call it a disconnect between the military and the civilian leadership".

He said the civilian leadership appeared to be unaware of aggressive actions by Chinese naval ships in recent years, about an anti-satellite test and that there were "pretty clear indications they were unaware of the (J-20) flight test".

But Gates also stressed: "I have no doubt about the fact that President Hu Jintao is in command and in charge."

Gates argues for keeping US forces in Japan

TOKYO, January 14, 2011 (AFP) - Defense Secretary Robert Gates on Friday said US forces needed to remain in Japan to deter the volatile North Korean regime and counter China's assertive stance in the region.

Making the case for a continued American military presence in Japan, Gates said in a speech at Keio University in Tokyo that US forces were crucial to meeting new security threats and challenges in the region.

"Without such a presence, North Korea’s military provocations could be even more outrageous, or worse, China might behave more assertively towards its neighbours," said Gates, according to a prepared text of the speech.

"Without the forward presence of US forces in Japan, there would be less information sharing and coordination, and we would know less about regional threats and the military capabilities of our potential adversaries," he said.

Gates, on a week-long Asia tour, cited a new strategy by Tokyo that stresses the importance of the country's southwestern islands, which he said underlined the importance of a "forward presence of US military forces in Japan".

He also said without US forces in the country it would take longer to evacuate civilians affected by war or natural disasters and crucial joint military exercises would be more costly and complicated to carry out.

The presence of almost 50,000 US troops in Japan, dating back to World War II, has been a source of friction over the years, with strong opposition in Okinawa over plans to relocate an air base on the southern island.

However, tensions on the divided Korean peninsula and China's rising military power have renewed interest in the US-Japan alliance, with officials in Tokyo calling for bolstering defence ties with Washington.

Japan's relations with China plunged to the lowest point in years over a territorial dispute involving islands in the East China Sea, called Senkaku in Japanese and Diaoyu in Chinese, last year.

The row erupted in September after a Chinese fishing trawler collided with two Japanese coastguard ships near the uninhabited islets.

Gates, who paid a visit to Beijing this week to shore up defence ties, renewed his warnings about China's latest weaponry, which he said presented a possible threat to the US military's long-running presence in the Pacific.

He said that "advances by the Chinese military in cyber and anti-satellite warfare pose a potential challenge to the ability of our forces to operate and communicate in this part of the Pacific".

But he said Washington and Tokyo were well-placed to counter the threat with high-tech hardware and that it was not a foregone conclusion that China would turn into a military rival.

"I disagree with those who portray China as an inevitable strategic adversary of the United States," he said.

"We welcome a China that plays a constructive role on the world stage," said Gates, referring to his visit this week aimed at improving defence ties with Beijing.

Gates tried to reassure Japan over the difficult issue of US forces on Okinawa, saying plans to relocate a US base would mean Americans would have a lower profile on the island.

In talks in Tokyo on Thursday, Gates and his Japanese counterpart, Toshimi Kitazawa, struck a positive tone on the issue with the Pentagon chief saying the United States hoped to move forward while "reducing the impact on the communities nearby".

The allies reached an accord in May to move the US Marine Corps Futenma Air Station from an urban to a coastal area of Okinawa, but the Japanese government still faces strong opposition to the plan from islanders, many of whom want the noisy air base off the island altogether.

Japan's pacifist constitution bars it from deploying troops in combat missions abroad, and US officials have long argued that the country ultimately benefits from the American military presence, with US forces guaranteeing the country's security at a relatively low cost.

Hong Kong, Singapore freest economies: study

WASHINGTON, January 13, 2011 (AFP) - The Asian commercial hubs of Singapore and Hong Kong are the freest economies in the world, while communist North Korea ranks dead last, an annual index said Thursday.

The Index of Economic Freedom, conducted by the conservative Heritage Foundation think-tank and The Wall Street Journal, found that the world's overall state of economic freedom rose in the past year but only modestly.

Hong Kong retained its overall score while Singapore gained ground, with the index saying the city-state had the world's least government involvement in the labor market.

"The differences between Singapore and Hong Kong are, frankly, very little," said Kim Holmes, vice president for foreign and defense policy studies at the Heritage Foundation.

"This year Singapore, I think, is within striking distance of Hong Kong, but it will probably take them a couple of more years of some substantial changes," he said.

Hong Kong, in turn, could face downgrades if it goes ahead with a law that would set up a special commission to investigate anti-competitive practices.

Australia and New Zealand ranked third and fourth in the index.

The free-market index gave lower scores than in the previous year to the United States, which ranked ninth, and Britain, which ranked 16th, due to regulatory measures taken in the wake of the recession.

The index data was taken largely before British Prime Minister David Cameron took charge and launched a belt-tightening effort.

On the other end of the index, communist North Korea was ranked dead last. Other states near the bottom included Myanmar, Venezuela, Eritrea, Cuba and Zimbabwe.

The index did not provide rankings for violence-torn Iraq, Afghanistan and Sudan.

Intel reports record earnings for 2010

SAN FRANCISCO, January 13, 2011 (AFP) - US computer chip giant Intel on Thursday reported that it posted its best earnings ever in 2010 as businesses and consumers snapped up processors for networks and mobile devices.

Intel said it took in a net profit of $11.7 billion for the year on revenue of $43.6 billion, a 167 percent jump from the profit it posted in 2009.

"2010 was the best year in Intel's history," the California-based company's chief executive Paul Otellini said in comments released with the earnings report. "We believe that 2011 will be even better."

Intel's net profit for the final quarter was $3.4 billion, a 48 percent increase from the same quarter a year earlier.

Intel's stock price climbed more than two percent to $21.75 a share shortly after the release of the earnings results.

Intel noted that the $140 million it took in from investments for the year was better than it expected and it caught an unexpected tax break due to a retroactive credit for research and development costs.

Intel projected revenue of $11.5 billion for the current quarter and said that it expected to spend nearly $14 billion this year on researching and developing products and acquisitions or mergers.

Intel on Monday announced it would pay graphics card developer NVIDIA $1.5 billion over the next five years to settle a patent dispute.

The companies have been arguing for nearly two years about whether a deal they inked allows NVIDIA to produce chipsets that work with Intel microprocessors.

Intel filed a complaint in court in February 2009, asking a judge to decide which side is right.

NVIDIA counter-sued a month later.

"This agreement ends the legal dispute between the companies, preserves patent peace and provides protections that allow for continued freedom in product design," Doug Melamed, Intel general counsel, said in a statement.

Intel will be allowed to use some of NVIDIA's patents under the deal.

Last week, Intel wowed a major Consumer Electronics Show (CES) in Las Vegas with a speedy new generation of chips that thwart film piracy and enable quick handling of data-rich video and games.

The second-generation Intel Core processors, referred to as "Sandy Bridge," have been built into computers big and small, many of which were displayed at CES.

Otellini called the chip with processor-based graphics "the best product we've ever built."

Building graphics computing into chips enables slick handling of games, images and video at a time when lifestyles are increasingly shifting to online entertainment loaded with data sent online.

Intel worked with major US and India film studios, including Warner Brothers, DreamWorks, Yash Raj Films and 20th Century Fox to craft copyright-guarding technology into the chips.

Sandy Bridge chips will be featured in 500 devices from mobile handsets to notebook and desktop computers, according to Intel.

Sandy Bridge will represent more than a third of Intel's revenue this year, and generate 125 billion dollars in revenue for the PC industry, Otellini predicted.

Google buys eBook Technologies

WASHINGTON, January 13, 2011 (AFP) - Google, which opened an online bookstore last month, said Thursday that it has acquired eBook Technologies, a company which makes digital reading products.
Financial terms of the deal were not disclosed.

"We are happy to welcome eBook Technologies' team to Google," a Google spokeswoman said in a statement.

"Together, we hope to deliver richer reading experiences on tablets, electronic readers and other portable devices," she said.

In a statement on the company website, eBook Technologies said it was "excited to announce that we have been acquired by Google.

"Working together with Google will further our commitment to providing a first-class reading experience," said eBook Technologies, which offers e-book readers and an e-reading platform.

With the opening of Google eBookstore in the United States last month, the Internet search giant jumped into the booming e-book market long dominated by Kindle-maker Amazon.

Google eBookstore features the Mountain View, California-based company's massive library of digitized works online at books.google.com.

Hundreds of thousands of digital books from leading publishers such as Macmillan, Random House and Simon & Schuster will be for sale in the eBookstore, which Google said will expand internationally next year.

Digital books sold through the eBookstore can be read on the Sony Reader, the "Nook" from Barnes & Noble and other dedicated e-readers but not on the popular Kindle from Amazon.

US spending on e-books is expected to total 966 million dollars this year, up from 301 million dollars last year, and to reach 2.81 billion dollars in 2015, according to market research firm Forrester.

Olympic body 'needs' BBC evidence in corruption probe

LAUSANNE, January 13, 2011 (AFP) - Olympic chief Jacques Rogge said Thursday that the IOC's ethics body needs evidence from the BBC to carry out its inquiry into senior sports officials after allegations of corruption at FIFA.

"I'm not privy to the decisions of the ethics commission, but I believe that the BBC, under the condition that the identity of the sources would be preserved, would be willing to give information," Rogge told journalists.

"We need that information; without information we can only rely on what you (the media) write," the International Olympic Committee's president said.

The IOC told its ethics commission last month ago to examine evidence from a BBC programme that targeted three senior executive officials at world football's governing body during bidding for the 2018 and 2022 World Cups.

The included African football chief Issa Hayatou, who became a member of the IOC in 2001, and other members of FIFA's executive committee - Ricardo Teixeira of Brazil and South America's Nicolas Leoz.

They were alleged to have received secret payments from TV rights marketing firm ISMM/ISL more than a decade ago before it went bankrupt.

An IOC source told AFP that the material was going through the BBC's standard approval process before being released, although the subsequent investigation was likely to take several months.

China disappointing, India 'mixed' on WTO Doha talks: US

GENEVA, January 13, 2011 (AFP) - China has been disappointing and India has been taking "one step forward, one step back" in Doha negotiations for a global free trade pact, the US envoy to the World Trade Organisation said Thursday.

Michael Punke, who is also the US deputy trade representative, warned that plans to conclude the long-stalled talks this year would be torpedoed if member states failed to step up and engage immediately in substantive negotiations.

"We were somewhat disappointed with what we heard from China when we met with them in December," Punke told reporters in Geneva.

"We had very much hoped, especially in the wake of the G20 discussions, that we (would) begin discussions on substantive negotiations. What we have heard instead is essentially what we heard before."

Punke also had a negative assessment of India's engagement, saying that New Delhi was sending "mixed signals."

"My personal assessment of India is that it's one step forward, one step back. Signals we have received from India have been very mixed," he noted.

Punke said that when he travelled to New Delhi in August, he found that "we were on a cusp of entering into ... specific types of discussion... (that were) critical for the juncture that we're at now."

However, upon his return, those "never materialised despite our efforts to engage."

The ambassador also had harsh words for Brazil, saying recent moves to raise tariffs hurt progress on negotiations.

"Brazil has taken several steps over the last couple of weeks to raise tariffs. That to me is really a stick in the eye of Brazil's trading partners.

"It creates a more difficult environment for Doha negotiations which are obviously focused on the goal of reducing tariffs," he said.

The Doha Round of negotiations, which began in 2001, have foundered amid disagreements between developed and developing countries over the level of market access for industrial products as well as agriculture subsidies.

The US ambassador reiterated Washington's stance that developed nations have given more concessions that emerging economies, and that it was now up to the latter group to stump up in order for the talks to succeed.

"We are ready, willing and able to negotiate anywhere, to negotiate any issue, to negotiate with anybody -- except ourselves," said Punke.

"That last point is important because we need interlocutors across the table from us who are prepared to talk about key substantive issues that we've worked together to identify over the past couple of months," he said.

For Punke, it is now necessary to begin negotiating in earnest in order to conclude the round this year.

"The endgame is now from my perspective so it's critical that we begin to get into the meat of negotiating the real give and take of negotiations," he said.

"It's no longer going to be sufficient if we are going to be successful in 2011 to come and to repeat talking points," he added.

News Corp. exploring options for Myspace

NEW YORK, January 13, 2011 (AFP) - News Corp. said Thursday it is exploring "strategic options" for Myspace amid reports it is considering a sale, merger or spinoff of the ailing social network.

The reports that News Corp. is looking to sell Myspace, which it bought for 580 million dollars in 2005, only to see it be eclipsed by Facebook, surfaced a day after the social network cut 500 employees, nearly 50 percent of its staff.

Asked about the reports, a News Corp. spokeswoman told AFP: "We're exploring all our strategic options for the business."

The News Corp.-owned Wall Street Journal reported on Thursday that Myspace chief executive Mike Jones told employees in a companywide meeting on Wednesday that News Corp. is exploring a sale, merger or spinoff of Myspace.

Citing a "person familiar with the matter," the newspaper said News Corp. is in the early stages of the process and plans to conduct meetings with potential partners in the near future.

Wedbush Securities social media analyst Lou Kerner told AFP following the layoffs that the move was potentially setting the stage for a sale of Myspace, whose numbers have dwindled as Facebook has grown to over 500 million members.

"I think this is likely a first step to selling the asset," Kerner said.

"It certainly makes sense for News Corp. to take a hatchet to the company as preparation for a sale so when somebody acquires it that's not the first thing that they have to do." he said.

In November, News Corp. president and chief operating officer Chase Carey said the losses at the social network were "unsustainable."

With tens of millions of users, Carey said Myspace still "has the potential to be an exciting business for us" but "we need to make real headway in the coming quarters to get this business to a sustainable level."


S. Korea, Japan ships in island dispute

SEOUL, January 13, 2011 (AFP) - South Korean and Japanese patrol ships were locked in a dispute Thursday over an alleged violation of territorial waters near a disputed island controlled by Seoul, the South's coastguard said.

The incident involving a 29-ton South Korean fishing boat occurred near a rocky outcrop in the Sea of Japan (East Sea) known as Dokdo in Korea and Takeshima in Japan, a coastguard spokesman said.

"A probe is under way after the Japanese side insisted the fishing boat violated its exclusive economic zone," he told AFP.

A South Korean coastguard ship and two Japanese patrol boats faced off briefly before launching a joint inquiry, the spokesman said. The incident happened around 40 miles (70 kilometres) southeast of Dokdo.

"This is not a tense situation. Both sides are now trying to solve the dispute," the spokesman added.
The neighbours have been at loggerheads for decades over the islands, which are virtually uninhabited except for a small South Korean police force.

Japan claimed the islands in 1905 and went on to annex the Korean peninsula from 1910 until its World War II defeat in 1945. South Korea says its ownership of the islands dates back centuries.

The row comes as the two neighbours seek closer diplomatic and military ties against threats posed by North Korea to regional security.

The defence ministers of South Korea and Japan met in Seoul this week and agreed to enhance military cooperation and to push for talks on forging their first military accord.

Japanese Foreign Minister Seiji Maehara will visit Seoul on Saturday.

China launches trial to allow overseas yuan investment

BEIJING, January 13, 2011 (AFP) - China on Thursday launched a trial allowing Chinese firms to use yuan to invest abroad, a move seen as another step towards making the unit a global currency.

Chinese companies now can use the yuan to finance new ventures, mergers and stake purchases overseas, the central bank said in rules governing the programme posted on its website.

The programme will "further expand the use of the yuan in cross-border trade and investment and better support (Chinese) companies to go abroad," the People's Bank of China said.

Under the rules, only non-financial firms registered in regions that are on the list of an existing yuan cross-border trade settlement trial are allowed to participate in the investment programme.

Despite the global success of Chinese exporters, the yuan plays only a minor international role due to restrictions on exchanging it for other currencies. Official controls make it difficult to move the yuan in and out of China.

China is stepping up efforts to increase overseas use of the yuan as the nation seeks to reduce its exposure to the US dollar and allow its currency to take on a greater worldwide role.

In the past two years, China has signed currency swap arrangements with several nations and launched trials for yuan trade settlement with a number of mainly Southeast Asian countries.

In December, Beijing increased the number of firms allowed to use the yuan to settle international trade to 67,359 from 365, moving closer to its pledge to eventually expand the trial programme to the entire country.

Canada's RIM hits back in row with Indonesia

NUSA DUA, January 13, 2011 (AFP) - The Canadian maker of the popular BlackBerry smartphone hit back Thursday at Indonesian officials' claims it does not pay taxes or contribute to the Southeast Asian country's booming economy.

Research in Motion (RIM) Southeast Asia managing director Gregory Wade said he would "like to clarify that it always has and will continue to operate within the laws set by governments around the world, including Indonesia".

"RIM dutifully pays all applicable taxes that are exercised from its business within the region in the same manner as all other importing manufacturers," he said at a conference in Bali.

The company was a "significant contributor" to the Indonesian economy and generated "significant profits" for its local partners in the mainly Muslim archipelago of 240 million people, he added.

Communications and Information Technology Minister Tifatul Sembiring has led attacks on RIM over its alleged failure to pay taxes, using his Twitter feed to issue regular broadsides against the global power in smartphone technology.

This week he gave RIM an ultimatum to remove pornographic content from its web services for its two million customers in Indonesia within two weeks or lose its operating licence in the rapidly growing market.

He posted a rhyme on the microblogging site on Thursday that appeared to be a cryptic retort to those Indonesian BlackBerry users who are worried about the future of their favourite gadget.

Loosely translated into English, it reads: "Baby crows exchanging rings/Why defend when don't pay taxes?"

Sembiring is a leader of the Prosperous Justice Party, a conservative Islamic member of the ruling coalition.

Earlier this week he framed the dispute with RIM in terms of Indonesia's historic struggle with colonialism.

"Must we always bow to foreigners? Are we being arrogant if we remind foreigners to respect the laws in Indonesia?" he Tweeted.

The minister became the butt of jokes in November when he Tweeted about his reluctance to shake US First Lady Michelle Obama's hand when she visited Jakarta.

His ministry has launched a controversial drive to filter explicit sexual content from the Internet.

China is Taiwan's first overseas property choice: poll

TAIPEI, January 13, 2011 (AFP) - China is now the number one choice for Taiwanese people when buying overseas property, reflecting fast warming ties between the two sides, a survey showed Thursday.

More than one-third of 1,320 people interviewed said they wanted to buy properties abroad, of which the majority listed China as their first choice, according to the poll by the Taipei-based Chinatrust Real Estate Co.

The company attributed the choice to improving trade and tourism links between Taiwan and China, particularly after the signing of a major trade pact last year.

The second favourite location was Japan due to its high investment return rates and a new direct air route between Taipei and Tokyo, according to the survey, which was completed in December.

Government moves to cool down the real estate market via means such as tougher mortgage policies and higher taxes also prompted potential buyers to go abroad, Chinatrust said in a statement.

Skyrocketing housing prices have emerged as a major public complaint, and the central bank last year raised interest rates three times while tightening credit for housing loans, but so far to little effect, observers say.

Government data indicate that it will take an average Taiwanese family at least 11 years to be able to buy a house, even if it were to spend nothing on food or anything else.

India angered by China visa policy

NEW DELHI, January 13, 2011 (AFP) - India reacted angrily Thursday to an extension of what it views as a provocative Chinese visa policy towards Indians living in areas disputed by the giant Asian neighbours.

In a move likely to put further strain on an already sensitive relationship, China issued stapled visas to an Indian athlete and his coach from the northeastern state of Arunachal Pradesh, which China claims as its territory.

This comes barely a month after the visit of China's Premier Wen Jiabao, during which India had complained about similar visas being issued to residents of Indian Kashmir, part of which is also under dispute.

India argues that stapling in visas amounts to a gratuitous challenge to its sovereignty and usually refuses to let Indian residents with such visas travel to China.

"We have unequivocally conveyed to the Chinese side that a uniform practice on issuance of visas to Indian nationals must be followed, regardless of the applicant’s ethnicity or place of domicile," foreign ministry spokesman Vishnu Prakash said Thursday.

Although Wen's visit last month was used by both countries to stress the importance of future cooperation -- especially on trade -- ties between the two emerging Asian giants have been dogged by mutual mistrust ever since a brief border war in 1962.

In the past year, China has expressed its anger with New Delhi over visits to Arunachal Pradesh by Indian Prime Minister Manmohan Singh and the Dalai Lama, the spiritual leader of Tibet who lives in exile in India.

Chinese officials have been handing out different visas to Kashmiris since 2009.

Competing territorial claims to Kashmir are the main source of friction between India and arch-rival Pakistan, which is a close ally of Beijing.

N. Korea must take action to defuse tension: Gates

TOKYO, January 13, 2011 (AFP) - US Defense Secretary Robert Gates Thursday urged North Korea to take concrete steps to show it is "serious" about talks after the nuclear-armed regime offered to resume dialogue after months of tension.

Gates, in Tokyo as part of an Asia tour, called on the regime to cease its "belligerent behaviour" and said that US efforts were focused on preventing Pyongyang from resorting to aggression.

Although the US supported reviving talks, "there must be concrete evidence on the part of the North that they are finally serious about these negotiations," Gates said at a news conference with his Japanese counterpart, Toshimi Kitazawa.

During an earlier stop in Beijing, Gates suggested North Korea could prove its sincerity by freezing further missile or nuclear tests.

Describing his talks in the region this week, the Pentagon chief said the United States, Japan, South Korea and China all had a "common interest" in securing peace and stability on the divided Korean peninsula.

Washington has worked with all four countries to try to prevent tensions in the region from spinning out of control after Pyongyang shelled a South Korean island in November, killing four people.

The United States has repeatedly pressed China to exercise its influence with its ally North Korea, and Gates this week credited Beijing with playing a helpful role.

The North quit six-party nuclear disarmament talks in April 2009 and conducted its second atomic weapons test a month later, but has indicated willingness to return to the talks.

The forum, chaired by the North's major ally China, also includes the two Koreas, the United States, Japan and Russia.

South Korean Foreign Minister Kim Sung-Hwan meanwhile said efforts to revive the negotiations had gained momentum.

"China has slightly different opinions on the North's stance so we have more to discuss (with Beijing)," the minister told Yonhap News Agency.

Despite Pyongyang's positive statements, the United States, Japan and South Korea say the North must mend ties with the South and show seriousness about denuclearisation before discussions resume.

Gates -- who will fly to Seoul on Friday -- warned earlier this week that North Korea had made progress with its long-range ballistic missile programme and that Pyongyang would pose a direct threat to the United States within five years.

Cross-border ties have been severely strained since South Korea accused the North of mounting a torpedo attack on a warship, the Cheonan, last March with the loss of 46 lives. The North denies involvement in the sinking.

Tensions rose to their highest level for years when the North on November 23 shelled South Korean border island.

The US and Japanese defence chiefs struck a positive tone on the thorny issue of relocating a US military base in Okinawa, with Gates saying the United States hoped to move forward while "reducing the impact on the communities nearby."

The allies reached an accord in May to move the US Marine Corps Futenma Air Station from an urban to a coastal area of Okinawa, but the Japanese government still faces domestic opposition to the plan from islanders, many of whom want the noisy air base off the island altogether.

The two also discussed Japan's plans for new fighter jets, with Gates suggesting Tokyo consider buying American aircraft, a US defence official said.

Kitazawa said his government was reviewing the possibility of providing a joint US-Japan sea-based missile shield system to other countries.

A bilateral accord now bars the export of the Standard Missile-3 ballistic missile interception system to other countries without Japan's contract.

Taiwan, China to build first direct undersea cable

TAIPEI, January 13, 2011 (AFP) - Five major telecom operators from Taiwan and China signed a contract Thursday to build the first undersea cable directly linking the island and the mainland to meet mounting demand, officials said.

Chang Xiaobin, chairman of China Unicom, signed the contract during a ceremony in Taipei that also included representatives from Chunghwa Telecom and three other leading telecom operators from the island.

Under the contract, pending the Taiwanese government's final approval, a 220-kilometre (136-mile) undersea cable will link Tamshui, a coastal town in the island's north, with southeast China's Fuzhou city.

If the project is realised, the cable will become the first of its kind since 1949 after Taiwan and China split at the end of a civil war.

Two other Chinese telecom operators will sign the contract, thought to be worth around Tw$800 million ($26 million), at a later date.

"Clients' demand for Internet and audio-video transmission from the two sides are very strong," an official at Chunghua Telecom told AFP.

Demand is expected to surge in the years ahead as Chinese telecom operators press for third-generation mobile communication, and so-called "cloud computing" -- whereby shared resources, software, and information are hosted online -- moves up telecom operators' development agendas.

The undersea cable project comes amid fast-warming ties between Taiwan and its former bitter rival China under China-friendly President Ma Ying-jeou, who took office in May 2008 on promises to boost economic ties with the mainland.

Gates suggests US fighters for Japan

TOKYO, January 13, 2011 (AFP) - Defense Secretary Robert Gates on Thursday suggested Japan should consider buying US fighter jets, during talks in Tokyo, as the country plans for new warplanes, a US official said.

In a meeting with Defence Minister Toshimi Kitazawa, Gates "suggested Japan consider three US planes to upgrade their fleet," the F-35 Joint Strike Fighter, the F/A-18 Hornet and the F-15 Eagle, the senior defence official told AFP.

Gates offered that the Pentagon could provide Japan with an analysis of the merits of each aircraft, said the official, who spoke on condition of anonymity.

Japan is taking stock of its defence hardware in the face of China's growing military might and assertive stance in the Pacific.

Gates flew to Tokyo Wednesday after a visit to China, where his fence-mending talks were overshadowed by a Chinese stealth fighter test, which came sooner than US military officials had anticipated.

During his visit to Beijing this week, Gates noted that Japan was looking for a new fighter aircraft.

"And so that would give Japan the opportunity -- if they bought the right airplane -- to have a fifth generation capability. And I might have a few suggestions for them," he told reporters on Tuesday.

"Fifth-generation" fighters are equipped with stealth, radar-evading equipment, and the F-35 -- which is still under development -- would meet that requirement.

Lockheed Martin's F-35, the most expensive weapons programme in Pentagon history, has been plagued by cost overruns and technical delays, with the project expected to cost an estimated $382 billion.

The United States is covering 90 percent of the cost of the F-35's development but has participation from Britain, Italy, Turkey, the Netherlands, Canada, Denmark, Norway and Australia.

Other nations, including Israel and Singapore, have signed contracts to buy the aircraft.

Japan initially aimed to acquire the F-22 stealth fighter to replace its ageing F-4EJ fighter fleet, but US law prohibits exports of the F-22 and the United States has announced a plan to halt production of the model.

Japan has also studied other models such as the F/A-18 and F-15FX, and the Eurofighter, produced by a consortium of European manufacturers, as possible replacements for its fighter fleet.

WikiLeaks chief blasts Chinese Internet censorship

LONDON, January 13, 2011 (AFP) - WikiLeaks founder Julian Assange has blasted China as the "technological enemy" of his whistleblower website because of its aggressive Internet censorship, in comments published Thursday.

Assange has enraged the United States with his site's release of leaked diplomatic cables, and lawyers for the Australian believe efforts are under way to send him to the US where they claim he could face the death penalty.

But China, with its vast Internet censorship system know as the "Great Firewall of China," is the site's most feared foe in cyberspace, the 39-year-old told Britain's New Statesman magazine.

"China is the worst offender" when it comes to censorship, said Assange, who is on bail in Britain fighting attempts to extradite him to Sweden over claims of sexual assault.

"China has aggressive and sophisticated interception technology that places itself between every reader inside China and every information source outside China.

"We've been fighting a running battle to make sure we can get information through, and there are now all sorts of ways Chinese readers can get on to our site."

China's system of censorship is designed to filter out any information deemed sensitive or politically harmful by the country's Communist government.

Social networking site Facebook, video-sharing giant YouTube and microblogging site Twitter are among those blocked by Chinese censors.

In the interview Thursday, conducted by veteran journalist John Pilger, a prominent supporter of the Australian hacker, Assange also claimed he had files on media mogul Rupert Murdoch.

"If something happens to me or to WikiLeaks, 'insurance' files will be released," Assange was cited as saying.

"There are 504 US embassy cables on one broadcasting organisation and there are cables on Murdoch and News Corp," without going into more detail on what they contained.

Assange insists that attempts to extradite him to Sweden over allegations of sexual assault by two women are politically motivated and linked to WikiLeaks' activities.

He appeared briefly in a London court Tuesday and a judge ruled that Sweden's bid to extradite him would be heard in full on February 7-8.

The hacker has been living at the country estate of a friend in eastern England since being released on bail on December 16, nine days after his arrest by British police on a Swedish warrant.

His defence team has argued that if he is sent to Sweden he could then face extradition or illegal rendition to the US and there was a "real risk" he could face the death penalty.

Assange's British lawyer Mark Stephens accused Swedish authorities of secretly planning to extradite him to the US, in an interview with German newspaper Die Zeit on Thursday. Sweden's justice ministry denied the claim.

A US court has reportedly subpoenaed the Twitter accounts of four WikiLeaks supporters as part of a criminal investigation into the leaks. US Vice President Joe Biden has described Assange as a "hi-tech terrorist."

The whistleblower website has also released classified documents about the wars in Iraq and Afghanistan.
US soldier Bradley Manning is in military custody in the United States awaiting trial for having allegedly obtained and leaked the cables.

Assange said Thursday that he thought the US was trying to use Manning to build a case against him, but denied ever having heard of him before his name appeared in media reports.

"Cracking Bradley Manning is the first step," he continued. "The aim clearly is to break him and force a confession that he somehow conspired with me to harm the national security of the United States."

Taiwan bans government ads disguised as news

TAIPEI, January 13, 2011 (AFP) - Taiwan's parliament has barred the government from buying advertisements disguised as news after critics said it was unethical to spend taxpayer money on positive coverage.

The government, Taiwan's biggest single ads client, is required from now on to mark ads clearly when promoting its policies via the media, according to an amendment to the budget law passed by legislators Wednesday.

It also bars government units from attempting to manipulate the media by paying money for more exposure in the news.

According to data from a marketing research firm AC Nielsen, Taiwan's top 50 government agencies spent Tw$1.24 billion ($42 million) on media ads last year, more than any single client in the private sector.

The legislative amendment came after the major opposition Democratic Progressive Party accused the Kuomintang government of using public money to "bribe" local media.

"The government has tried to control the media with this method. This is definitely negative to Taiwan's news freedom," DPP legislator Huang Wei-che told AFP.

The practice began in 2003, while the DPP was in power, but it has expanded drastically since 2008, when the Kuomintang took over, the opposition claims.

Among other things, the Kuomintang government has used paid-for reports to promote the Economic Cooperation Framework Agreement, a controversial trade agreement forged with Beijing last year, the DPP said.

The Kuomintang has retorted saying it has merely continued what the DPP started.

Even so, the criticism -- endorsed by more than 100 local college professors -- led President Ma Ying-jeou, also the chairman of the Kuomintang party, to order the government last month to stop launching such ads.

Taking their cues from the top of the party, KMT legislators did not oppose the amendment when it was tabled in parliament, and it was passed with no opposing votes, according to observers.

World Bank says China has room for more rate hikes

BEIJING, January 13, 2011 (AFP) - The World Bank said Thursday that China has plenty of room for further interest rate hikes as the country battles to tame inflation, but warned anxious policymakers not to overreact to rising prices.

A stronger currency would also help the world's second-largest economy rein in food and property costs by reducing the price of imported crude oil, iron ore, grain and other commodities, the Washington-based lender said.

"There's a lot of scope for increasing interest rates further," Ardo Hansson, the bank's chief economist for China, told reporters at a briefing to coincide with the launch of the latest Global Economic Prospects report.

The benefits of raising interest rates, which would help cool the red-hot property market, outweighed the risks of attracting more speculative money from overseas, Hansson added.

After cutting rates by 200 basis points during the global crisis, China has raised its key lending and deposit rates by just 50 basis points each since October, leaving room for a "couple of increases" this year, Hansson said.

But he warned Beijing should be "prudent and careful not to overreact" when tightening monetary policy to avoid slowing the economy too quickly.

Ever fearful about inflation's potential to spark social unrest, top leaders have been pulling on a variety of levers to reduce food and property costs after inflation in November rose at the fastest pace in more than two years.

Beijing has blamed the United States' loose monetary policy for pushing down the value of the dollar and fueling a flood of liquidity into fast-growing emerging economies, such as China.

While the volume of capital flowing into East Asian developing countries surged 52 percent year-on-year in 2010, this was not the reason for China's inflation problem, World Bank chief economist for East Asia Vikram Nehru told reporters during a teleconference.

Nehru said the country's strict currency controls -- which prevent the yuan from appreciating too quickly and drain money from the banking system -- have been effective in stemming inflows into the economy.

"Very expansionary fiscal and monetary policies have been behind the price increases in China which have been exacerbated to some extent by supply disruptions on the food front," Nehru said.

Beijing opened the credit valves in late 2008 with a $586 billion stimulus package and massive bank lending, which released a flood of capital into the economy, fuelling property prices and inflation.