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E. Asia, S. America under tsunami warning after Japan quake

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NEWS - International Social

Friday, 11 March 2011 16:52


Biggest earthquake to hit Japan in 140 years triggers 10-meter tsunami, kills at least 6 people; 4 million homes without power; hotel collapses in city of Sendai, people feared buried in rubble; UN rescue teams on standby.

A tsunami warning has been issued for areas across East Asia and the western coast of South America following a huge earthquake that hit Japan on Friday, the Pacific Tsunami Warning Center said.

Among the countries for which a tsunami warning is in effect are: Russia, Taiwan, the Philippines, Indonesia, Papua New Guinea, Australia, New Zealand, Fiji, Mexico, Guatemala, El Salvador, Costa Rica, Nicaragua, Panama, Honduras, Chile, Ecuador, Colombia and Peru.

The biggest earthquake to hit Japan in 140 years struck the northeast coast on Friday, triggering a 10-meter tsunami that swept away everything in its path, including houses and cars.

At least six people were killed, five in Fukushima prefecture north of the capital, Tokyo, where four million homes were without power, and one in eastern Tochigi prefecture, media said. A hotel collapsed in the city of Sendai and people were feared buried in the rubble.

hirty international search and rescue teams stand ready to go to Japan to provide assistance following a major earthquake, the United Nations said on Friday.

"We stand ready to assist as usual in such cases," Elisabeth Byrs of the U.N. Office for the Coordination of Humanitarian Assistance (OCHA) told Reuters in Geneva. "Thirty international search and rescue teams are on alert and monitoring the situation and stand ready to assist if necessary."




China property prices rise more-than-estimated 12.4%

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NEWS - China Real Estate

Thursday, 10 June 2010 17:36

June 10 (Bloomberg) -- China’s property prices rose at the second-fastest pace on record in May, showing little sign yet that the government crackdown on speculation will work to avert an asset-price bubble.

The 12.4 percent gain compared with a record 12.8 percent increase in April from a year earlier, the National Bureau of Statistics said in a statement its website. The data series, covering 70 cities, began in 2005. The value of sales slid 25 percent.

“So far the property tightening measures are mainly cooling transactions” rather than prices, said Xiong Peng, a Shanghai-based analyst at Bank of Communications Co., the nation’s fourth-largest lender by market value. “A property tax is the other shoe that has yet to drop.”

Officials may introduce a trial property tax after already tightening sales rules for developers, raising some down payment requirements and restricting loans for multiple-home buyers, according to state media. China’s benchmark stock index is down 21 percent this year on concern a slowdown in property sales and construction, along with Europe’s debt crisis, will damp the nation’s growth.

First Slowdown

Sales in Beijing, Shanghai and Shenzhen, the nation’s wealthiest cities, fell as much as 70 percent in May from the previous month and land sales for residential development projects in 70 Chinese cities fell 14 percent, the official Shanghai Securities News reported earlier this month.

An index tracking 34 real-estate companies has plunged about 28 percent this year, the worst performer among five subgroups of Shanghai’s stock benchmark.

Sales by China Vanke Co., the nation’s biggest publically traded property developer, dropped 20 percent in May from a year ago, and Guangzhou R&F Properties Co.’s contracted sales last month shrank 48 percent on year, according to the developers’ stock exchange filings.

Bank Loans

“These exceptionally low transaction volumes are partly a result of banks’ unwillingness to lend and also the result of buyers taking a step back” to wait and see what the government’s next measures may be, Michael Klibaner, head of research for Jones Lang LaSalle in China, said earlier this week.

Besides industry-specific measures such as requirements for larger down-payments for some homes, the government on May 2 raised banks’ reserve requirements for the third time this year to contain overheating risks after first-quarter economy expanded at the fastest pace in almost 3 years.

China’s housing market is “prone” to a bubble because of immigration to the nation’s cities and high savings, according to economists at Barclays Capital. Chinese savers lack the breadth of investment and financial options available in developed countries, and U.S. policy makers have pushed their counterparts to help develop more options.

“The government’s recent measures to cool the housing market focus on limiting investment and increasing the supply of public and low-cost housing,” Barclays economists Peng Wensheng and Chang Jian wrote in a June 7 report. “This represents a regime shift in housing policy” and more measures are likely to come, they wrote.

Prices May Tumble

Prices may tumble between 20 percent and 30 percent in coming quarters, according to the Barclays analysts’ projections. The impact on the economy will be cushioned by rising public housing construction, they wrote.

Investment in real estate rose 38 percent to 1.39 trillion yuan ($203 billion) in the first five months of this year, after a 36.2 percent gain in the January-April period, according to the statistics bureau.

Property investment accounts for about 10 percent of gross domestic product and construction work consumes half of the nation’s output of steel and 36 percent of the aluminum produced, JPMorgan estimates.

Besides industry-specific measures such as requirements for larger down-payments for some homes, the government on May 2 raised banks’ reserve requirements for the third time this year to contain overheating risks after first-quarter economy expanded at the fastest pace in almost 3 years.

Property Construction

Property sales by area rose 22.5 percent in the first five months to 302 million square meters (3.25 billion square feet), the statistics bureau said today. The pace is compared with an increase of 32.8 percent between January and April. The area under construction rose 72.4 percent from a year earlier to 615 million square meters, the statistics bureau said.

For the full year, property sales may shrink 30 percent from 2009, Jing Ulrich, Hong Kong-based chairwoman of China equities and commodities at JPMorgan Chase & Co., said before today’s release.

“China’s property market is one of the top concerns of global investors as transactions have tumbled,” Jing said. “About 50 sectors in China, especially the steel, cement and aluminum industries, are closely tied with property-market growth.”


China not ready to end support for property, CBRC’s Li says

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NEWS - China Real Estate

Friday, 04 June 2010 17:00

June 4 (Bloomberg) -- It’s not yet time for China to reduce or stop policy support for the nation’s real estate industry, said Li Fuan, an official with the China Banking Regulatory Commission.

“Real estate in China is far from being at the end of its development and we are far from the point where we no longer need to support the industry, where we need to reduce or stop support,” Li, head of the commission’s banking innovation department, said at a forum in Beijing yesterday.

Concerns among investors that China will introduce a property tax and other policies to curb home prices fueled a 30 percent fall this year in an index tracking 34 real estate companies traded in Shanghai. China has already limited loans for third-home purchases and tightened down payment requirements, aiming to cool a market where growth in property prices topped 10 percent for three straight months.

Real estate “will be an important industry that continuously supports China’s economic growth for the next 10, 20, 30 and even 40 years,” Li said. The real estate industry needs as much as 60 more years of development before living standards nationwide can be brought to a “harmonious” and “well-off” level, he said.

Shanghai’s index of property stocks fell 0.12 percent as of the 11:30 a.m. mid-day break today, while China’s benchmark Shanghai Composite Index declined 0.2 percent. The benchmark has dropped 22 percent this year.

Property Prices

Property prices in 70 Chinese cities rose by a record 12.8 percent in April from a year earlier after climbing by 11.7 percent in March and 10.7 percent in February, according to government data. The price gains spurred concerns that a record $1.4 trillion of loans extended last year to combat the effects of the global financial crisis were causing asset bubbles.

Premier Wen Jiabao, in a speech to the country’s annual parliamentary meetings in March, pledged to crack down on property speculation.

China’s tax bureau yesterday announced minimum rates for pre-paid land taxes. The minimum rate for eastern China was set at 2 percent, the rate for western China was set at 1 percent and the rate for central and northeastern regions of the country was set at 1.5 percent, according to the State Administration of Taxation.


Google ‘Confident’ About Further Growth in China, Executive John Liu Says

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NEWS - China IT/Telecom

Wednesday, 27 April 2011 11:42

Google Inc. (GOOG), which pulled its Internet search engine out of China last year, said it’s “confident” of growing in the country under new Chief Executive Officer Larry Page.

The company sees more “upside” in China, John Liu, Google’s head of sales in the world’s biggest market for Internet, said at a conference in Beijing yesterday. Google founders Page and Sergey Brin know China “very well,” he said.

Google is aiming to boost revenue from Chinese customers in display advertising and export marketing as the Mountain View, California-based company has failed to keep pace with Baidu Inc. in China’s search-engine market. Page, who took on the CEO role April 4 and succeeds Eric Schmidt, is ramping up spending on hiring and marketing as he faces rising competition from rivals Apple Inc. (AAPL) and Facebook Inc.

Liu, in charge of local operations since 2009, is negotiating with the Chinese government about online map services, and is seeking to increase adoption of Google’s Android software for phones in the country.

Google last month said the Chinese government is disrupting its Gmail e-mail service and disguising the blockage as technical issues on Google’s part. China’s Foreign Ministry spokeswoman Jiang Yu called that claim “unacceptable.”

That friction followed Google’s decision to shutter its search-engine service in China last year to avoid complying with the government’s rules on Web censorship. Since the March 2010 move, Chinese users of Google search have been redirected to an unfiltered site in Hong Kong.

Censorship Rules
Google in July was able to renew its Internet-service license in China through 2012, even after shuttering its Google.cn site in China and redirecting users to a Hong Kong site. The company had said it was no longer willing to comply with online censorship rules on topics such as Tiananmen Square crackdown in 1989 and Tibet independence.

Google accounted for 19.2 percent of China’s search market by revenue in the first quarter, declining from 19.6 percent three months earlier, according to research company Analysys International. Baidu’s market share rose to 75.8 percent from 75.5 percent, according to Analysys.

A March 4 opinion piece in the official People’s Daily, the mouthpiece of China’s Communist Party, compared Google with the British East India Company, whose sales of opium in the country was the root of two 19th-century conflicts.

China’s tax authorities have begun investigating three local Google affiliates for alleged offenses, the Economic Daily reported on March 31. Google said that day that it’s in “full compliance” with Chinese tax law.


China's Hainan hopes to avoid property crash

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NEWS - China Real Estate

Wednesday, 05 May 2010 16:42

(Reuters) - With new home prices rising by almost 20 percent a month, Haikou would seem to be the dictionary definition of a property market bubble.

After China unveiled plans in late December to turn tropical Hainan island into an international tourist destination, tens of thousands of real-estate speculators headed for Haikou, the capital. Property prices predictably rocketed.

Whether the authorities succeed in deflating the bubble -- or preventing one, depending on your views -- will be a litmus test of Beijing's campaign to defuse public anger over fast-rising prices nationwide without doing serious damage to a sector that is critical for the economy.

That policymakers are facing one of their stiffest challenges in Hainan brings a sense of deja vu. After a property collapse in the province in 1993, it took more than a decade to clear up the bad loans and vacant lots that were left behind.

Feng Ke, head of the property research institute at Peking University, is confident that history will not repeat itself.

"Prices are a bit too high now, but it's unlikely to crash," Feng said.

Back then, developers were speculating with borrowed money to buy land in a game of pass the parcel. When prices peaked, the developers saddled with property -- and their bankers -- were left high and dry. This time round, the buyers are investors and many of them are paying cash, Feng explained.

Still, fully aware that an overheated property market could ultimately lead to a hard landing for the entire economy, policymakers have rolled out a series of tightening steps.

"You know, things are really nasty in places like Hainan," said one senior government official, who declined to be identified given the sensitivity of the subject.

The State Council, China's cabinet, has mandated higher down payments and mortgage rates and made it harder for investor-speculators to buy multiple homes.

The measures will moderately cool market sentiment, but demand from owner-occupiers will remain strong, particularly in second- and third-tier cities, underpinned by rising incomes and China's urbanization drive, Fitch Ratings says.

"This is consistent with the government's goal to deflate bubbles when necessary to ensure a healthy long-term trend in the real estate sector," the ratings agency said in a recent report.


Walking along a deserted street in Haikou, Cao Ying can hardly believe what she has just heard: all the flats in the surrounding blocks are sold out, even though no one seems to live there. Perhaps two apartments in 10 are actually occupied, local property agents say.

New flats will come onto the market this month, but they will be priced about 15,000 yuan ($2,200) per square meter, triple the level a year ago.

"That's outrageous," she said, after getting similar information from three real estate agents, all indifferent to her protestations. "I bet they'll offer a discount when we come next time around in June," she said, not sounding sure of herself.

Pan Shiyi, chairman of top property developer SOHO China (0410.HK), told a forum on April 24 that more than 70 percent of China's listed property firms had over 10 billion yuan of cash in hand and would not rush to cut prices.

And Fu Wenyan, a real estate agent in Haikou, said there was no sign of a decline in the price of the villas on her books despite the new tightening rules.

"Both sides will wait and see for a while," Fu said.

Cao, in her mid-30s, flew more than 1,700 km (1,100 miles) with two friends from Sichuan province to buy a flat so her son could enroll at a prestigious middle school in Haikou.

Hainan's warm weather, lush landscape and clear sea only add to the island's attractions as a holiday or retirement retreat.

Would-be buyers like Cao expect their properties to going up as the island executes its ambitious development blueprint.

But with memories of the U.S. subprime crisis and Dubai property crash still fresh, the Hainan authorities have taken various measures to clamp down on speculation.

In mid-January they suspended the approval of property construction and the allocation of land for development until the end of March to give investors time to think twice.

The tightening campaign by the central and local governments drove transactions down as some investors took to the sidelines.

Ma Xin, a client manager with China Everbright Bank's Haikou branch, has seen the number of mortgage applications he examines a week fall from over 100 in January at the peak of the frenzy to just several in April.

"In the medium- to long-term, property prices in Hainan will move upward, despite short-term uncertainties," he said.


Property prices nationwide fell briefly in late 2008 as the impact of an earlier round of tightening bit at the same time as the global credit crunch caused China's economy to pull back from its rapid growth rate.

The trend started to reverse by March 2009 in response to massive monetary stimulus and steps to help the property market.

By the second half of last year, prices had soared past their pre-crisis levels, driven by a shortage of flats on the market and rising demand as a hedge against inflation risks.

The question for global markets is whether the latest tightening will topple the market, crushing China's demand for materials such as steel, cement and copper, and whether Chinese banks will be lumbered with a new bundle of bad loans.

Andy Rothman, China macro strategist with brokers CLSA in Shanghai, judges that Beijing wants to cool, not kill, the residential property market.

"The impact of the new rules will not be dramatic in most cities," he said in an April 20 report.

A survey by CLSA in 60 cities in late March and early April showed about half of families in second- and third-tier cities had paid for their first and second homes entirely in cash.

The proportion was even higher in Haikou. Guo Zhenxi, a local real estate agent, said all his clients paid the full amount in cash, making it easier when they want to sell out.

To get a mortgage in Hainan, banks insist that the family liabilities of a borrower do not exceed half their income. Otherwise, they require a higher initial down payment.

Cash buyers, or those not borrowing much, will return to the market if prices fall because the new rules do not raise the cost of holding property once it has been purchased, analysts say.

Ren Zhiqiang, chairman of Huayuan Property, said prices might even stage a "revenge" rally later this year as developers slow their investment, exacerbating the shortage of new properties.

He said Beijing would turn supportive if the market overreacted.

"If property prices drop to the desired level or farther than expected -- if there's a panic fall -- the authorities will change policies," Ren said in a blog.


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