China Daily, a state owned newspaper, published an editorial today entitled "Don't Twist Facts" which states that Turkish Prime Minister Recep Tayyip Erdogan would be "well advised" to withdraw his statement saying that the events in Xinjiang amount to "a kind of genocide." The piece notes that China's one child policy applies only to Han Chinese and not to ethnic minorities, arguing that the immigration policy in the region cannot, therefore, be seen as colonization or a drowning out of the ethnic Uighurs in a sea of Han. It concludes:
"Mr Erdogan's remarks, which constitute interference in China's internal affairs, are the last thing the Uighur and Han Chinese would find helpful when they are looking forward to lasting peace."Josef Federman at the Associated Press reports that much of the Arab Muslim world has remained mute on the question of the Uighurs, but that senior official in (Persian) Iran criticized Beijing openly:
"Iran has been one of the few Muslim countries to speak out on the crackdown. On Sunday, the official IRNA news agency reported that Foreign Minister Manouchehr Mottaki had discussed the ethnic clashes in a phone conversation with his Chinese counterpart and 'reflected concerns among Islamic countries.'Iran has a very close relationship with Beijing, it's original oil sales to the country were conducted with a military organization solely incorporated to conduct the exchanges.
High-ranking clerics also condemned the crackdown and urged the government to complain to China.
'Silence and indifference toward such oppressions on the people is an unforgivable vice,' said Grand Ayatollah Youssef Saanei, a major religious figure who has criticized his own government's violent response to mass protests over the disputed June 12 election."
2. CHINA'S PROPERTY INDEX CLIMBS 0.61%
Xinhua reports that China's national property climate index rose 0.61% to 96.55 last month per an announcement by the National Bureau of Statistics.
"Real estate investment nationwide rose by 9.9% in the first half from the same period last year, and the growth rate was 3.1 percentage points higher than the January-May level, said NBS."3. CHINA SURPASSES US AS WORLD'S LARGEST MARKET FOR WIND POWER
Keith Bradsher at the New York Times reports that China surpasses the US this year as the world's largest market for wind energy,
"now building 6 wind farms with a capacity of 10,000 to 20,000 megawatts apiece, using extensive low-interest loans from state-owned banks."In May, Joerg Wuttke, president of the European Union Chamber of Commerce in China, accused Beijing of deliberately locking out foreign corporations from stimulus-related projects, specifically addressing a package of wind turbine orders worth €5 billion (~ $6.98 billion)--see Daily Sources 5/28 #3.
4. MÜNCHAU'S ANALYSIS OF THE GERMAN HIGH COURT'S RULING ON THE LISBON TREATY--THOSE IN MONETARY UNION SHOULD BE AFRAID
Wolfgang Münchau had an opinion piece in yesterday's Financial Times which examines the consequences of Germany's recent high court ruling on the Lisbon Treaty--see Daily Sources 6/30 #2. He makes three main points about the ruling:
"First, Germany’s constitutional court takes a clear stance on sovereignty. Ultimate authority always has to rest in a single place--and that is the member state for now. If you wanted to transfer sovereignty to the EU, you would have to dump your national constitution and adopt a European version in its place. As this is not going to happen, the court, in effect, ruled that all sovereignty in the EU is national. Power may be shared, but sovereignty may not."
"Second, the court does not recognize the European parliament as a genuine legislature, representing the will of a single European people, but as a representative body of member states. ... As a result, Germany will be able to ratify the Lisbon treaty only after a change in a domestic power-sharing law."
"Third, and perhaps most important, the court has given an explicit opinion on the question of European integration. Where does it end? The answer is: right here. The court said member states must have sovereignty in the following areas: criminal law, police, military operations, fiscal policy, social policy, education, culture, media, and relations with religious groups. In other words, European integration ends with the Lisbon treaty."He concludes that anyone in a monetary union with Germany ought, therefore, to be worried. Well worth reading.
5. ITALY CALLS FOR EUROPEAN OIL FUTURES MARKET & GLOBAL REGS
Lorenzo Totaro at Bloomberg reports that the Italian Electricity and Gas Authority Chairman Alessandro Ortis said in a presentation in Rome today that a European oil market should be established in order to quell price volatility. He argued that the situation requires "A real, regulated European oil bourse open to selected operators" which would trade "long or very long term products, with delivery within Europe and guaranteed by a reliable central European counterpart." Ortis also joined the chorus of politicos who blame "speculation" for the price volatility, calling for global "governance agreements and international rules."
6. RELIANCE WANTS TO SELL DIRECTLY INTO US AS PROSPECTS OF LIFTING SUBSIDIES ON GASOLINE IN INDIA GET BETTER
Rakteem Katakey at Bloomberg reports that Reliance is seeking to sell petroleum products directly into the US--minus an intermediary.
"Reliance is currently selling fuel through Hess Corp. ... . Mumbai-based Reliance has leased storage space from Hess, [an anonymous company executive] said, without giving capacity details."In April, Platts reported that in March Reliance had taken 1.3 million barrels of clean storage from Hess in the New York Harbor area--see Daily Sources 4/13. (The reason given for Reliance exporting in the story is extremely misleading--the Jamnagar refinery was always slated to be an export refinery--excess refining capacity is a strategy endorsed by New Delhi, though Reliance is private, and based on precedents set in Singapore and South Korea.) In June, Reliance halted exports of gasoline to Iran under pressure from the US, perhaps this (odd) story is more about that--see Daily Sources 6/4 #8--and the following. Vandana Hari at The Barrel reports that the Congress Party, having won a larger share of the vote in the recent elections, may press ahead with the liberalization of gasoline prices. Diesel is unlikely to be fully de-subsidized because of its role in agriculture and power generation, but it appears there is some likelihood that gasoline prices will become completely deregulated and unsubsidized.
"LPG and kerosene subsidies look likely to be left undisturbed for now. While kerosene is used by the poorest for cooking and home lighting, the consumers of LPG do not necessarily need state help to pay the market price of a cylinder. LPG could be taken down the same route as gasoil, with government help kicking in when prices cross a pain threshold.There have been several stories recently about how Chinese state corporations have been making successful bids for overseas resources, often beating out competing Indian bids.
As fuel price liberalization eases the subsidy burden of state-owned refiners and marketers Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp., as well as their upstream peers Oil and Natural Gas Corp. and GAIL, it would free up cash for their business growth and expansion."
7. PAKISTAN LIFTS RESTRICTIONS ON PEOPLE RETURNING TO THE SWAT VALLEY
Izaz Mohmand at Reuters reports that Pakistan has lifted restriction on displaced people returning to the Swat Valley.
8. PHOTOS OF A DRY EUPHRATES, SECURITY TIGHTENED AROUND CHRISTIAN CHURCHES ON LAST WEEK'S SPREE OF ATTACKS
The New York Times carries a photo essay by Moises Saman of the ongoing agricultural crisis in Iraq as the country watches its rivers go dry as Turkey and Syria withhold water via dam projects at their source--see Daily Sources 6/8 #10. The accompanying story has the following anecdote:
"The Sunni areas upriver seem to have enough water, Mr Joda [a man who resides near Karbala] observed, a comment heavy with implication."That said,
"Recently, the Water Ministry announced that Turkey had doubled the water flow into the Euphrates, salvaging the planting phase of the rice season in some areas."Meanwhile, Nada Bakri at the Washington Post reports that security has been tightened around Christian churches in Baghdad and the northern province of Nineveh after a string of attacks last week.
"Iraq's Christians were the target of Islamist extremists after the U.S.-led invasion of Iraq in 2003 that toppled Saddam Hussein. Many have fled the country despite improved security. But fears of renewed attacks have mounted. In past weeks, devastating bombings also have struck Iraq's Turkmen and Shabak minorities in the north, which remains one of Iraq's most diverse regions."9. RAFSANJANI TO MAKE FRIDAY'S WEEKLY KEYNOTE SERMON
Borzou Daragahi at the LA Times reports that Ayatollah Ali Akbar Hashemi Rafsanjani will deliver the nation's weekly keynote religious sermon, after having stayed away--for reasons which are the source of much speculation--for two months. Mousavi and Khatami will reportedly also attend the sermon.
"News of the return of reformists and moderates to the official Friday prayer ceremony could serve as a challenge to hard-liners, led by supreme leader Ali Khamenei, on their home turf. Alternately, it could be a sign that the two sides have brokered a truce in their continuing political conflict."Iason Athanasiadis at the Christian Science Monitor reports that reformists are organizing to flood the prayer hall. (For some reason the CSM site appears to be down for me completely, here is an abstract at Iranian.com.) (h/t Juan Cole at informed comment.)
10. OPEC SAYS FUNDAMENTALS UNLIKELY TO PUT UPWARD PRESSURE ON PRICE IN 2010
OPEC published its monthly report today, which I have not had time to read, but which Platts reports it forecasts that fundamentals are unlikely to push oil prices up significantly in 2010.
"Although OPEC sees world oil demand growing by 500 kb/d in 2010, it expects this to be satisfied by non-OPEC producers and sees demand for its own crude falling by 400 kb/d next year on top of the 2.3 mb/d drop in demand between 2008 and 2009.11. BRAZILIAN RETAIL SALES CLIMB FOR SECOND STRAIGHT MONTH, UNEMPLOYMENT DECLINES
With current crude production--estimated at 28.44 mb/d in June--more than 300 kb/d than the 28.1 mb/d projected 2010 call on OPEC crude, the cartel will have food for thought at its next meeting, scheduled for September 9 in Vienna."
Joshua Goodman and Andre Soliani at Bloomberg report that Brazil's retail sales rose by 0.8% in May from April and 4% from a year previous, according to the national statistics agency. April's year on year sales increase was revised upward to 7.1%.
"Unemployment fell for the second straight month in May, to 8.8%, while companies added jobs for the fourth month, cementing expectations that the economic recovery gained pace in the second quarter."(Apparently in this case unemployment is not a lagging indicator.) Analysts see the rebound in sales as evidence that consumer demand is driving the Brazilian recovery.
12. US RETAIL SALES UP 0.6% IN JUNE FROM MAY, MOSTLY ON GASOLINE PRICES, THOUGH SALES OF AUTOS AND PARTS UP TOO; ZUCKERMAN PESSIMISTIC ON ECONOMY GIVEN UNEMPLOYMENT PICTURE
Shobhana Chandra at Bloomberg reports that retail sales rose 0.6% in June from May, the largest gain since January.
"Excluding autos and gas, purchases dropped for a fourth consecutive month. The Labor Department’s producer-price index gained 1.8%, twice as much as anticipated."Sales at auto dealers and parts shops grew by 2.3%. Gasoline and diesel prices represent the largest share of the gain. However, the EIA yesterday reported that the average price of gasoline nationally fell 8¢ to $2.528/gallon in the week ended July 13 per Platts, just inside the price range ($2.50-3.00/gallon where driving starts to fall off). On the other hand, Mortimer Zuckerman has an opinion piece in the Wall Street Journal today where he argues that the economy is worse than we think, mostly because the average length of unemployment has grown sharply.
"Unemployment has doubled to 9.5% from 4.8% in only 16 months, a rate so fast it may influence future economic behavior and outlook."Worth reading in full.