That the biggest names on Wall Street are staying afloat thanks to huge injections of cash from China reveals how hard the debt crisis has hit.
The idea of China rushing to the rescue of the capitalist world seems so unlikely as to be unbelievable.
Except that it is happening. The China Investment Corporation - a newly-formed fund which helps control £100bn of China's foreign exchange reserves - yesterday ploughed $5bn into Morgan Stanley, the Wall Street firm. It has also taken stakes in US private equity firm Blackstone - owner in the UK of Cafe Rouge restaurants, Madame Tussauds and Center Parcs. Closer to home, the Chinese Development Bank, controlled by the Chinese state, owns 3% of Barclays.
The Chinese involvement in Wall Street is even more surprising given the protectionist stance of the Americans towards their own businesses until recently. When Dubai Ports World took over strategically important US ports last year, it caused a political furore. It was not enough to stop the deal, but it did require the bidder to sell off the US ports.
Until recently, it has been more common for Wall Street firms to take stakes in Chinese banks, in a search for exposure to the fast-growing economy and the burgeoning wealth of the Chinese population.
How times change, though. The involvement of the Chinese and other so-called sovereign wealth funds in US banks could well prove to be critical to their survival in the short term. Wall Street is suffering a painful hangover from the excesses of easy credit. The subprime mortgage crisis is causing huge dents in the financial sector's profits. The size of the problem is awesome. One bad bet by a group of traders caused Morgan Stanley to drop $8bn, and left the bank with a $3.6bn loss in the fourth quarter of the year.
Such holes are difficult to fill; hence Morgan Stanley welcomed the $5bn in cash from CIC with open arms. In return, it is handing over an estimated 9.9% stake to the Chinese investor. The deal comes hot the heels of the move by Citigroup to sell a £3.5bn stake to the Abu Dhabi Investment Authority, and a step by Bear Stearns also to take investments off the Chinese from Citic Securities, another state-owned investment fund.
These are unlikely to be the last investments in a big US business, given that China has the world's biggest foreign exchange reserves, worth $1.3trillion and growing by $1m a minute. And neither should it be. When shares trade freely on stock markets, anyone is allowed to buy them - whatever their politics and whatever their nationality.
While its economy continues to remain unscathed by the current credit crisis, the Chinese may well take the chance to flash their cash and extend their influence. Wall Street may not like it, but it seems to be in no position to shut it out.
Per-capita income in China is less than 1/10 of America's and its per-capita greenhouse gas emission is less than 1/5 of ours. But if 1.3 billion Chinese were to consume at the level Americans do, we'd need several more Earths. China's effect on world resources, quantified:
China is
• The world's largest consumer of coal, grain, fertilizer, cell phones, refrigerators, and televisions
• The leading importer of iron ore, steel, copper, tin, zinc, aluminum, and nickel
• The top producer of coal, steel, cement, and 10 kinds of metal
• The No. 1 importer of illegally logged wood
• The third-largest producer of cars after Japan and the United States; by 2015, it could be the world's largest car producer. By 2020, there could be 130 million cars on its roads, compared to 33 million now.
More Facts
• China produces half of the world's cameras, 1/3 of its television sets, and 1/3 of all the planet's garbage.
• There are towns in China that make 60% of the world's button supply, 1/2 of all silk neckties, and 1/2 of all fireworks.
• China uses half of the world's steel and concrete and will probably construct half of the world's new buildings over the next decade.
• Some Chinese factories can fit as many as 200,000 workers.
• China used 2.5 billion tons of coal in 2006, more than the next three highest-consuming nations—Russia, India, and the United States—combined.
• It has more than 2,000 coal-fired power plants and puts a new one into operation every 4 to 7 days.
• Between 2003 and 2006, worldwide coal consumption increased as much as it did in the 23 years before that. China was responsible for 90% of the increase.
• China became the world's top carbon dioxide emitter in 2006, overtaking the United States.
• Russia is China's largest timber supplier; half of all logging there is illegal. In Indonesia, another timber supplier to China, up to 80% of all logging takes place illegally.
• 90% of all wood products made in China are consumed in the country, including 45 billion pairs of wooden chopsticks each year.
• The value of China's timber-product exports exceeds $17 billion. About 40 percent go to the United States.
• More than 3/4 of China's forests have disappeared; 1/4 of the country's land mass is now desert.
• Until recently, China was losing a Rhode Island-sized parcel of land to desertification each year.
• 80% of the Himalayan glaciers that feed Chinese rivers could melt by 2035.
• In 2005, China's sulfur-dioxide emissions were nearly twice those of the United States.
• Acid rain caused by air pollution now affects 1/3 of China's land.
• Each year, at least 400,000 Chinese die prematurely of air-pollution-linked respiratory illnesses or diseases.
• A quarter of a million people die because of motor-vehicle traffic each year—6 times as many as in the United States, even though Americans have 18 times as many cars.
• Of the world's 20 most polluted cities, 16 are in China.
• Half of China's population—600 to 700 million people—drinks water contaminated with human and animal waste. A billion tons of untreated sewage is dumped into the Yangtze each year.
• 4/5 of China's rivers are too polluted to support fish.
• The Mi Yun reservoir, Beijing's last remaining reliable source of drinking water, has dropped more than 50 feet since 1993.
• Overuse of groundwater has caused land subsidence that cost Shanghai alone $12.9 billion in economic losses.
• Dust storms used to occur once a year. Now, they happen at least 20 times a year.
• Chinese dust storms can cause haziness and boost particulate matter in the United States, all the way over to Maine.
• In 2001, a huge Chinese storm dumped 50,000 metric tons of dust on the United States. That's 2.5 times as much as what U.S. sources produce in a typical day.
• Currently, up to 36 percent of man-made mercury emissions settling on America originated in Asia.
• Particulate matter from Asia accounts for nearly half of California's annual pollution limit.
• Environmental damage reportedly costs China 10 percent of its GDP. Pollution-related death and disability heath care costs alone are estimated at up to 4 percent of GDP.
• In 2005, there were 50,000 pollution-related disputes and protests in China.
• China's middle class is expected to jump from 100 million people today to 700 million people by 2020.
Go back to main article - The Last Empire: China's Pollution Problem Goes Global.
WASHINGTON (AFP) - The CIA obstructed an official US commission investigating the September 11 attacks by withholding tapes of interrogations of Al-Qaeda operatives, according to former panel members quoted in a report on Saturday.
A review of documents by former members of the 9/11 commission revealed the panel made repeated, detailed requests to the spy agency in 2003 and 2004 for information about the interrogation of members of the extremist network but were never notified of the tapes, the New York Times reported.
The review of the commission's correspondence with the Central Intelligence Agency came after the agency earlier this month revealed it had destroyed videotapes in 2005 that showed harsh interrogations of two Al-Qaeda members.
The review, written up in a memo prepared by Philip Zelikow, the former executive director of the 9/11 commission, said that "further investigation is needed" to resolve whether the CIA's failure to hand over the tapes violated federal law.
The memorandum does not assert that withholding the tapes was illegal but states that federal law penalizes anyone who "knowingly and wilfully" withholds or "covers up" a "material fact" from a federal inquiry, the newspaper said.
The revelation adds to pressure on President George W. Bush's administration, already under fire over the affair by human rights groups and lawmakers who allege it has tried to cover up proof of torture.
The CIA responded that the panel never specifically asked for interrogation videos.
CIA spokesman Mark Mansfield told AFP the agency had gone to "great lengths" to satisfy the panel's requests, and that commission members had been provided with details from interrogations of detainees.
"The 9/11 Commission certainly had access to, and drew from, detailed information that had been provided by terrorist detainees. That's how they reconstructed the plot in their comprehensive report," he said.
"Because it was thought the commission could ask about tapes at some point, they were not destroyed while the commission was active."
The two chairs of the commission, former Democratic lawmaker Lee Hamilton and former New Jersey governor Thomas Kean, told the newspaper the review showed the CIA had actively tried to obstruct the panel's work.
Kean said the panel would give the memorandum to federal officials and lawmakers in Congress who are investigating the destruction of the tapes. Hamilton said the CIA "clearly obstructed" the panel's probe.
According to the memo posted on the New York Times' website, the commission was interested in interrogations of Al-Qaeda members because it was trying to reconstruct the events leading up to the attacks of September 11, 2001, on New York and Washington.
The commission made initial general requests for intelligence information from interrogations, including the two detainees on the destroyed videotapes, Abu Zubaydah and Abd al-Rashim al-Nashiri, said the memorandum.
It followed up with more requests for "very detailed information" about the context of the interrogations, the credibility of statements from detainees, the quality of language translation and other issues.
"The commission was dissatisfied with the answers it received to these questions," the memorandum said.
None of the officials who communicated with the panel ever revealed the existence of the videotapes, it said.
The CIA spokesman cited public comments about cooperation from the CIA made by the 9/11 Commission, which said "the CIA provided great assistance."
"The CIA has cooperated fully in making available both the documents and interviews that we have needed so far on this topic," it said.
"As Director (CIA Director Michael) Hayden pointed out in his December 6th statement, the tapes were destroyed only when it was determined they were no longer of intelligence value and not relevant to any internal, legislative, or judicial inquiries," Mansfield added.
A senior intelligence official speaking on condition of anonymity told AFP that news stories about interrogation techniques had already appeared when the commission made its final report.
"If the commission had wanted to make an issue of how the information was obtained from the detainees as opposed to what was learned from them, they had an opportunity to do so at the time," the official said. "They didn't do that."
4 comments:
Credit Crunch: China to the Rescue?
That the biggest names on Wall Street are staying afloat thanks to huge injections of cash from China reveals how hard the debt crisis has hit.
The idea of China rushing to the rescue of the capitalist world seems so unlikely as to be unbelievable.
Except that it is happening. The China Investment Corporation - a newly-formed fund which helps control £100bn of China's foreign exchange reserves - yesterday ploughed $5bn into Morgan Stanley, the Wall Street firm. It has also taken stakes in US private equity firm Blackstone - owner in the UK of Cafe Rouge restaurants, Madame Tussauds and Center Parcs. Closer to home, the Chinese Development Bank, controlled by the Chinese state, owns 3% of Barclays.
The Chinese involvement in Wall Street is even more surprising given the protectionist stance of the Americans towards their own businesses until recently. When Dubai Ports World took over strategically important US ports last year, it caused a political furore. It was not enough to stop the deal, but it did require the bidder to sell off the US ports.
Until recently, it has been more common for Wall Street firms to take stakes in Chinese banks, in a search for exposure to the fast-growing economy and the burgeoning wealth of the Chinese population.
How times change, though. The involvement of the Chinese and other so-called sovereign wealth funds in US banks could well prove to be critical to their survival in the short term. Wall Street is suffering a painful hangover from the excesses of easy credit. The subprime mortgage crisis is causing huge dents in the financial sector's profits. The size of the problem is awesome. One bad bet by a group of traders caused Morgan Stanley to drop $8bn, and left the bank with a $3.6bn loss in the fourth quarter of the year.
Such holes are difficult to fill; hence Morgan Stanley welcomed the $5bn in cash from CIC with open arms. In return, it is handing over an estimated 9.9% stake to the Chinese investor. The deal comes hot the heels of the move by Citigroup to sell a £3.5bn stake to the Abu Dhabi Investment Authority, and a step by Bear Stearns also to take investments off the Chinese from Citic Securities, another state-owned investment fund.
These are unlikely to be the last investments in a big US business, given that China has the world's biggest foreign exchange reserves, worth $1.3trillion and growing by $1m a minute. And neither should it be. When shares trade freely on stock markets, anyone is allowed to buy them - whatever their politics and whatever their nationality.
While its economy continues to remain unscathed by the current credit crisis, the Chinese may well take the chance to flash their cash and extend their influence. Wall Street may not like it, but it seems to be in no position to shut it out.
The Last Empire: China's Pollution Problem Goes Global
Can the world survive China's headlong rush to emulate the American way of life?
By Jacques Leslie
China Eats the World
News: The last empire, by the numbers
Per-capita income in China is less than 1/10 of America's and its per-capita greenhouse gas emission is less than 1/5 of ours. But if 1.3 billion Chinese were to consume at the level Americans do, we'd need several more Earths. China's effect on world resources, quantified:
China is
• The world's largest consumer of coal, grain, fertilizer, cell phones, refrigerators, and televisions
• The leading importer of iron ore, steel, copper, tin, zinc, aluminum, and nickel
• The top producer of coal, steel, cement, and 10 kinds of metal
• The No. 1 importer of illegally logged wood
• The third-largest producer of cars after Japan and the United States; by 2015, it could be the world's largest car producer. By 2020, there could be 130 million cars on its roads, compared to 33 million now.
More Facts
• China produces half of the world's cameras, 1/3 of its television sets, and 1/3 of all the planet's garbage.
• There are towns in China that make 60% of the world's button supply, 1/2 of all silk neckties, and 1/2 of all fireworks.
• China uses half of the world's steel and concrete and will probably construct half of the world's new buildings over the next decade.
• Some Chinese factories can fit as many as 200,000 workers.
• China used 2.5 billion tons of coal in 2006, more than the next three highest-consuming nations—Russia, India, and the United States—combined.
• It has more than 2,000 coal-fired power plants and puts a new one into operation every 4 to 7 days.
• Between 2003 and 2006, worldwide coal consumption increased as much as it did in the 23 years before that. China was responsible for 90% of the increase.
• China became the world's top carbon dioxide emitter in 2006, overtaking the United States.
• Russia is China's largest timber supplier; half of all logging there is illegal. In Indonesia, another timber supplier to China, up to 80% of all logging takes place illegally.
• 90% of all wood products made in China are consumed in the country, including 45 billion pairs of wooden chopsticks each year.
• The value of China's timber-product exports exceeds $17 billion. About 40 percent go to the United States.
• More than 3/4 of China's forests have disappeared; 1/4 of the country's land mass is now desert.
• Until recently, China was losing a Rhode Island-sized parcel of land to desertification each year.
• 80% of the Himalayan glaciers that feed Chinese rivers could melt by 2035.
• In 2005, China's sulfur-dioxide emissions were nearly twice those of the United States.
• Acid rain caused by air pollution now affects 1/3 of China's land.
• Each year, at least 400,000 Chinese die prematurely of air-pollution-linked respiratory illnesses or diseases.
• A quarter of a million people die because of motor-vehicle traffic each year—6 times as many as in the United States, even though Americans have 18 times as many cars.
• Of the world's 20 most polluted cities, 16 are in China.
• Half of China's population—600 to 700 million people—drinks water contaminated with human and animal waste. A billion tons of untreated sewage is dumped into the Yangtze each year.
• 4/5 of China's rivers are too polluted to support fish.
• The Mi Yun reservoir, Beijing's last remaining reliable source of drinking water, has dropped more than 50 feet since 1993.
• Overuse of groundwater has caused land subsidence that cost Shanghai alone $12.9 billion in economic losses.
• Dust storms used to occur once a year. Now, they happen at least 20 times a year.
• Chinese dust storms can cause haziness and boost particulate matter in the United States, all the way over to Maine.
• In 2001, a huge Chinese storm dumped 50,000 metric tons of dust on the United States. That's 2.5 times as much as what U.S. sources produce in a typical day.
• Currently, up to 36 percent of man-made mercury emissions settling on America originated in Asia.
• Particulate matter from Asia accounts for nearly half of California's annual pollution limit.
• Environmental damage reportedly costs China 10 percent of its GDP. Pollution-related death and disability heath care costs alone are estimated at up to 4 percent of GDP.
• In 2005, there were 50,000 pollution-related disputes and protests in China.
• China's middle class is expected to jump from 100 million people today to 700 million people by 2020.
Go back to main article - The Last Empire: China's Pollution Problem Goes Global.
CIA obstructed 9/11 investigators
WASHINGTON (AFP) - The CIA obstructed an official US commission investigating the September 11 attacks by withholding tapes of interrogations of Al-Qaeda operatives, according to former panel members quoted in a report on Saturday.
A review of documents by former members of the 9/11 commission revealed the panel made repeated, detailed requests to the spy agency in 2003 and 2004 for information about the interrogation of members of the extremist network but were never notified of the tapes, the New York Times reported.
The review of the commission's correspondence with the Central Intelligence Agency came after the agency earlier this month revealed it had destroyed videotapes in 2005 that showed harsh interrogations of two Al-Qaeda members.
The review, written up in a memo prepared by Philip Zelikow, the former executive director of the 9/11 commission, said that "further investigation is needed" to resolve whether the CIA's failure to hand over the tapes violated federal law.
The memorandum does not assert that withholding the tapes was illegal but states that federal law penalizes anyone who "knowingly and wilfully" withholds or "covers up" a "material fact" from a federal inquiry, the newspaper said.
The revelation adds to pressure on President George W. Bush's administration, already under fire over the affair by human rights groups and lawmakers who allege it has tried to cover up proof of torture.
The CIA responded that the panel never specifically asked for interrogation videos.
CIA spokesman Mark Mansfield told AFP the agency had gone to "great lengths" to satisfy the panel's requests, and that commission members had been provided with details from interrogations of detainees.
"The 9/11 Commission certainly had access to, and drew from, detailed information that had been provided by terrorist detainees. That's how they reconstructed the plot in their comprehensive report," he said.
"Because it was thought the commission could ask about tapes at some point, they were not destroyed while the commission was active."
The two chairs of the commission, former Democratic lawmaker Lee Hamilton and former New Jersey governor Thomas Kean, told the newspaper the review showed the CIA had actively tried to obstruct the panel's work.
Kean said the panel would give the memorandum to federal officials and lawmakers in Congress who are investigating the destruction of the tapes. Hamilton said the CIA "clearly obstructed" the panel's probe.
According to the memo posted on the New York Times' website, the commission was interested in interrogations of Al-Qaeda members because it was trying to reconstruct the events leading up to the attacks of September 11, 2001, on New York and Washington.
The commission made initial general requests for intelligence information from interrogations, including the two detainees on the destroyed videotapes, Abu Zubaydah and Abd al-Rashim al-Nashiri, said the memorandum.
It followed up with more requests for "very detailed information" about the context of the interrogations, the credibility of statements from detainees, the quality of language translation and other issues.
"The commission was dissatisfied with the answers it received to these questions," the memorandum said.
None of the officials who communicated with the panel ever revealed the existence of the videotapes, it said.
The CIA spokesman cited public comments about cooperation from the CIA made by the 9/11 Commission, which said "the CIA provided great assistance."
"The CIA has cooperated fully in making available both the documents and interviews that we have needed so far on this topic," it said.
"As Director (CIA Director Michael) Hayden pointed out in his December 6th statement, the tapes were destroyed only when it was determined they were no longer of intelligence value and not relevant to any internal, legislative, or judicial inquiries," Mansfield added.
A senior intelligence official speaking on condition of anonymity told AFP that news stories about interrogation techniques had already appeared when the commission made its final report.
"If the commission had wanted to make an issue of how the information was obtained from the detainees as opposed to what was learned from them, they had an opportunity to do so at the time," the official said. "They didn't do that."
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