The Star Online: World Updates
The Star Online: World Updates |
- North Korea fires missiles as U.S., Japan, South Korea leaders meet
- Probable death toll rises to 24 in Washington state mudslide
- Spooked by defaults, China banks begin retreat from risk
| North Korea fires missiles as U.S., Japan, South Korea leaders meet Posted: 25 Mar 2014 08:30 PM PDT SEOUL/THE HAGUE (Reuters) - North Korea fired missiles into the sea on Wednesday just as U.S. President Barack Obama brought together the leaders of South Korea and Japan to discuss how to deal with Pyongyang and to thaw chilly ties between Washington's two key Asian allies. The launch of the two medium-range Rodong ballistic missiles began at 2:35 a.m. Japan and Korea time (1735 GMT Tuesday), Japan and South Korea said - precisely when South Korean President Park Geun-hye and Japanese Prime Minister Shinzo Abe were sitting down with Obama in The Hague. The firing off North Korea's east coast toward Japan appeared to be a show of defiance by Pyongyang. It followed a series of short-range rocket launches over the past two months, and could help improve cooperation between Tokyo and Seoul in the wake of the first meeting between Abe and Park since the Japanese premier took office 15 months ago. Japan's relations with South Korea, as well as China, has been strained by what Seoul and Beijing say is Abe's refusal to properly atone for Japan's wartime past. North Korea's "provocations and threats" would be met by a united response, said Obama, who will visit Japan and South Korea in April. "It is the first time that the three of us have an opportunity to meet together (on) some serious challenges that we all face," Obama said after meeting both leaders on the sidelines of a nuclear security summit in The Hague South Korean Defence Ministry spokesman Kim Min-seok told reporters in Seoul that the launches were "a clear violation of U.N. Security Council resolutions and a grave provocation against South Korea and the international community". Japanese Foreign Minister Fumio Kishida told parliament that Tokyo had protested against the launches through its embassy in Beijing, while Abe ordered his government to confirm the safety of airplanes and ships in the area. Defence Minister Itsunori Onodera ordered the military to step up surveillance. U.S. officials also condemned the latest launches. But Japan's plans to resume high-level talks next week with Pyongyang, suspended since December 2012, would not be affected, Japan's Chief Cabinet Secretary Yoshihide Suga said. ANNIVERSARY The first Rodong launches in more than four years also come during annual South Korean-U.S. military drills and on the fourth anniversary of the sinking of the South Korean navy ship the Cheonan. Seoul blames North Korea for that attack, but Pyongyang on Wednesday again denied any role, saying in a commentary the accusation was "a farce". Wednesday's missiles fell into the sea after flying 650 km (400 miles), well short of their maximum range - thought to be some 1,300 km (800 miles) and enough to hit much of Japan - said an official at South Korea's office of the Joint Chiefs of Staff. The North was likely "mindful of neighbouring countries' reaction" in setting the trajectory, the official said, without elaborating. The three-way summit in the Hague focused on North Korea, leaving aside thorny issues between Japan and South Korea. The three leaders discussed specific steps to deepen coordination, including military cooperation that included joint exercises and missile defence, Obama said. Abe has visited all 10 Southeast Asian countries and met with their leaders and also met five times with Russian President Vladimir Putin, but had previously not held talks with Park since assuming office. Abe has also not met Chinese President Xi Jinping as premier. The Japanese leader's December visit to Tokyo's Yasukuni Shrine, seen by critics as a symbol of Japan's wartime militarism, upset not only China and South Korea but also the United States, which expressed "disappointment". After the meeting in the Hague, Abe said he wanted to deepen cooperation with South Korea, Japan's Foreign Ministry said. (Additional reporting by Ju-min Park in Seoul, Steve Holland in The Hague and Nobuhiro Kubo and Stanley White in Tokyo; Writing by William Mallard; Editing by Dean Yates) |
| Probable death toll rises to 24 in Washington state mudslide Posted: 25 Mar 2014 08:09 PM PDT ARLINGTON, Washington (Reuters) - The likely death toll from a devastating weekend landslide in Washington state rose to 24 on Tuesday after rescue workers recovered two bodies and believed they had located eight more, the local fire chief said. The discovery of additional victims came as crews searched under drizzly skies for survivors amid fading hopes that anyone could still be plucked alive from the massive pile of muck and debris. "Unfortunately we did not find any signs of life today, we didn't locate anybody alive, so that's the disappointing part," local fire chief Travis Hots told a media briefing. As many as 176 people remained listed as missing three days after a rain-soaked hillside collapsed on Saturday, tumbling over a river, across a state road and into a rural residential area where it swallowed dozens of homes near the town of Oso. Officials said they were hoping that number would decline as some of those listed as missing may have been double-counted or were slow to alert family and officials of their whereabouts. Eight people were injured. But the disaster already ranks as one of the deadliest landslides in recent U.S. history. In 2005, 10 people died when a hillside gave way and engulfed homes in La Conchita, California. Though authorities have said the chances were low of finding any more survivors in the cement-like mud blanketing the landscape, Hots said some 50 more searchers had been brought in to sift through the disaster zone in hopes of a miracle. "This makes up over 200 responders that are here on site working very hard to locate victims and hopefully find somebody that is still alive. That is still our number-one priority out there," he said. At one site in a square-mile zone of devastation that once contained a meandering river surrounded by rural homes, the landslide pushed a house onto the highway, leaving nothing intact but its cedar shake roof. Operators of excavators with clawed buckets dug through the debris, and chaplains stood by to comfort searchers and families of the missing. Hots said dogs also were being used to identify potential buried bodies, which were dug out in some cases with bulldozers or other heavy equipment. OBAMA HOPES FOR THE BEST President Barack Obama, who was in Europe for a meeting with world leaders, signed an emergency declaration ordering U.S. government assistance to supplement state and local relief efforts, the White House said. Speaking at The Hague, where he was attending a summit, Obama began a news conference on Tuesday by addressing the disaster in Washington state and asking Americans to "send their thoughts and prayers" to those affected by the disaster. "We hope for the best, but we recognize this is a tough situation," he said. The president also called Washington Governor Jay Inslee on Tuesday to discuss the mudslide, according to Inslee's office. Compounding the sense of urgency was a fear of flooding as water levels rose behind a crude dam of mud and rubble that was dumped into the North Fork of the Stillaguamish River by the slide. The river was rising with rain on Tuesday, but had cut a channel through fresh mud and debris, lessening the chance of flooding, officials said. Meanwhile, a 22-week-old baby who was hurt in the slide remained in critical condition at Harborview Medical Center in Seattle after being taken there by helicopter along with his mother, who was also hurt, the hospital said. The landslide was not the first to hit an inhabited area in Washington state. More than 100 houses were destroyed by a slow-moving landslide in the town of Kelso in the late 1990s. A report filed to the U.S. Army Corps of Engineers in 1999 highlighted "the potential for a large catastrophic failure," and was one of many warnings issued about the area where this weekend's disaster occurred, the Seattle Times reported. In Arlington, a town near Oso where authorities set up a command post, people's thoughts were clearly on the search and recovery efforts a dozen miles away. Local residents greeted each other with hugs, and in one supermarket they put non-perishable food into a steel tub to collect for anyone who might need assistance because of the disaster. "I was born and raised in this town, it's traumatic for us," said 45-year-old Julie Biringer, who offered hugs to customers at her drive-through coffee stand. "There's been a lot of tears I've shared with my customers today." (Additional reporting by Jonathan Kaminsky in Darrington, Wash., Steve Holland in The Hague and Susan Heavey in Washington, D.C.; Writing by Dan Whitcomb; Editing by Cynthia Johnston and Ken Wills) |
| Spooked by defaults, China banks begin retreat from risk Posted: 25 Mar 2014 08:05 PM PDT BEIJING (Reuters) - Some of China's struggling firms are finally getting the reception that regulators have been hoping for -- a cold shoulder from banks in the form of smaller and costlier loans. Reuters has contacted over 80 companies with elevated debt ratios or problems with overcapacity. Interviews with 15 that agreed to discuss their funding showed that more discriminate lending, long a missing ingredient of China's economic transformation, has become a reality. Up against a cooling Chinese economy and signs that authorities will not step in every time a loan goes bad, banks are becoming more hard-nosed and selective about whom they lend to. There are signs that even state-owned firms, in the past fawned over by lenders for their government connections, have to contend with higher rates, lower lending limits and more onerous checks by banks. "Interest rates are going up 10 percent for the entire industry," said Wang Lei, a finance department manager at PKU HealthCare Corp. "Obtaining loans is getting difficult and expensive." PKU HealthCare, which is controlled by Peking University and makes bulk pharmaceuticals, has struggled to remain profitable. Its debt-to-EBITDA (earnings before interest, tax, depreciation and amortization) ratio exceeded 60 at the end of September, four times the average for listed Chinese companies from the sector. To be sure, several companies with strong balance sheets and profits reported no significant changes in their funding conditions. That in itself is a welcome sign that banks are finally differentiating between the strong and the weak, more aware that they are on the hook for losses if businesses fail. China's first-ever domestic bond default earlier this month when solar equipment maker Chaori Solar missed its payment and regulators refused to step in, drove that message home. "It was a wake-up call for lenders," said Christopher Lee, managing director and the head of greater China corporate ratings at Standard & Poor's. "There is no such thing as a risk-free investment." That marks a painful, but necessary shift for the world's second biggest economy to fulfil Beijing's ambition to cut wasteful investment and secure more balanced long-term growth. For household goods maker Elec-Tech International Co Ltd, less credit is the new reality. Its bank cut its borrowing limit by 500 million yuan (48.85 million pounds) to no more than 2.5 billion yuan this year, said Zhang, an official at Elec-Tech's securities department. "Last year, the bank gave us a discount on our interest rates. This year, we probably won't get any discount," Zhang who declined to give his full name said. "It feels like banks are not lending and their checks are becoming more rigorous." "STRATOSPHERIC DEBT LEVELS" Some gauges of China's corporate debt are already flashing red. Non-financial firms' debt jumped to 134 percent of China's GDP in 2012 from 103 percent in 2007, according to Standard & Poor's. It predicted China's corporate debt will reach "stratospheric levels" and become the world's largest, overtaking the United States this year or next. Fearing a wave of defaults as China's economy cools after decades of rapid growth, regulators in the past two years told banks to cut off financing to sectors plagued by excess capacity such as steel and cement. Experts say banks were at first slow to respond, but in the past few months, banks have started turning down credit taps. "We have become more prudent in issuing loans," said a spokesman for Bank of Ningbo. He added that the bank has intensified communication with companies in troubled sectors or borrowers deep in debt. "Under normal circumstances, we would review company loans every quarter or every six months, but for the sensitive cases, we will step up channel checks and work closely with the companies." Another manager at a regional Chinese bank said it was overhauling its lending in cities identified as high-risk, such as Urdos and Wenzhou. Located in Inner Mongolia, Urdos is infamous for its clusters of empty apartment blocks that pessimists say is an emblem of China's housing bubble. Wenzhou, is China's entrepreneurial hotbed that recently lost its shine after local property boom went bust. THE BANK'S PROBLEM Companies spurned by banks find a way around it. At a cost. A listed supplier of building materials in southwestern China that declined to be identified said banks blacklisted it after two years of losses. The firm, which is undergoing restructuring, borrowed 10 million yuan in the underground market at an annual rate of about 15 percent this year. And as companies bend the rules, risks shift outside the banking system into the universe of networks of seemingly unrelated firms connected by murky financial deals. For example, trade loans subsidised by the government to help selected sectors are quietly re-directed by companies to other unrelated businesses, firms say. New financing methods also emerge as easy credit dries up. The latest plan hatched by a cash-strapped aluminium end-user involves having banks buy the metal and re-selling it to firms who pay out monthly loan plus interest. Others such as Xiamen C&D Inc, an import and export firm, are directly cashing in on firms' thirst for funds. Xiamen C&D, which borrows at less than 6 percent per year is offering loans of several hundred thousand yuan to smaller firms at 7-8 percent, said Lin Mao, the secretary of Xiamen's board of directors. For larger companies, typical loans amount to 20-30 million yuan, and are 90 percent insured by Chinese insurers, he said. Banks grow more aware of the risks. But rather than pull the plug on teetering firms, some bankers say they prefer a slow exit to keep them afloat for as long as possible to claw back their loans. "Few banks are able to retreat completely even if they should," said a banker at another regional Chinese bank who declined to be named. ($1 = 6.1888 Chinese Yuan) (Additional reporting by Polly Yam in Hong Kong and Beijing newsroom; Writing by Koh Gui Qing; Editing by Tomasz Janowski) |
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