Asia Week Focus

GEOPOLITICS - INDIA / PAKISTAN

A gradualist approach on Indo-Pakistan issues
India and Pakistan will strive to arrive at a "common understanding" on demilitarisation of the Siachen glacier before the next round of the composite dialogue in January.

A Joint Statement issued at the end of the two-day talks between External Affairs Minister K. Natwar Singh and his Pakistani counterpart, Khurshid Mahmud Kasuri, here on Tuesday suggested a forward movement on Siachen. It listed a number of steps contemplated by both sides to take bilateral ties to a new level.

Siachen, considered a possible confidence-building measure (CBM), is bogged down in differences over the conditions for withdrawal of troops from the glacier as per the 1989 understanding. India's insistence on the demarcation of areas under control by both sides is not acceptable to Pakistan. Islamabad's stand is that withdrawal has to be unconditional and it is not prepared to certify Indian "aggression."

Integrated approach
The latest understanding is to take an "integrated" approach. It involves six identified issues related to the glacier and working towards a common understanding before Siachen is taken up as one of the eight subjects under the third round of the composite dialogue. The six areas are: from where the troops are moving; where they will move to; how to define the areas of disengagement; a regime to monitor the implementation of disengagement; a verification mechanism on dos and don'ts on the glacier and what is to be done about NJ 9842.
According to a senior official privy to the two-day parleys, the decision to move forward on Siachen has been taken in the wake of a direction from the leadership of both countries to expedite a resolution. "We have understood each other's position better though there is no agreement yet," Mr. Kasuri, flanked by Mr. Singh, told a crowded press conference.

Concrete ideas exchanged
Earlier in the day, at a meeting between Pakistan President Pervez Musharraf and Mr. Singh, they welcomed the ongoing discussions on the "framework" to work out a mutually acceptable solution on Siachen. At the joint press conference with Mr. Singh, the Pakistani Minister said "concrete ideas" on Siachen had been exchanged and the two sides would continue discussions for reaching a common understanding.

That the bilateral relations are headed for a leap was also evident from the decision of the India-Pakistan Joint Commission, revived after a gap of 16 years, to take a close look at the possibilities of expanded cooperation in nine different areas. These include agriculture, health, science and technology, information and education.

Gen. Musharraf and Mr. Singh talked about the commitment of both sides to make a "sincere and purposeful" settlement of the Jammu and Kashmir issue as well. They reaffirmed that terrorism would not be allowed to impede a solution and maintained that possible options for a peaceful, negotiated settlement should be explored in a "sincere, purposeful and forward-looking manner."

Expressing satisfaction over the smooth operation of the Srinagar-Muzaffarabad bus service, the statement said experts from the two sides would meet for launching a truck service between the two points and a bus link between Poonch and Rawalakot in Pakistan-occupied Kashmir expeditiously. It was agreed that an expert-level meeting would be held by the year-end to finalise the modalities on the meeting points for the divided families across the LoC.

At the press briefing, the Minister said India had presented draft proposals on visa liberalisation, consular access and allowing more pilgrims to religious shrines on both sides.
Gas pipeline project

Setting at rest apprehensions about the fate of the $7.4-billion Iran-Pakistan-India gas pipeline, in the wake of New Delhi supporting the IAEA resolution against Iran's controversial nuclear programme, the two sides affirmed their commitment to the project, saying it would contribute significantly to the prosperity and development of the two countries. Before leaving for Karachi, Mr. Singh exchanged views with Pakistan Prime Minister Shaukat Aziz on the bilateral relationship.

On Sir Creek, without prejudice to each other's position, they agreed to undertake a joint survey in the marshy land of Rann of Kutch off the Gujarat coast and consider options for the delimitation of the maritime boundary. This will begin before the year-end and its report will be considered at the next round of the composite dialogue.

It was agreed that a meeting of experts would be held here on October 25 and 26 to start the Nankana Sahib-Amritsar bus service at an early date. A technical-level meeting would be held before the end of this year to discuss arrangements for operationalising the Rawalakot-Poonch bus link as early as possible.


WEB DEMOCRACY – CHINA

Beijing shuts down two Web sites in crackdown
Chinese authorities have shut down an online discussion forum that reported on anti-corruption protests in a village in the south as well as a Web site serving ethnic Mongolians, overseas monitors said yesterday.

China routinely shuts down or blocks Web sites that operate outside of government control, but the issue has received heightened international attention recently with the publication of new rules aimed at stifling online dissent.

Radio Free Asia, a US-based broadcaster, said an online forum that covered protests in the village of Taishi has been closed. It said the site had been popular among academics, journalists and rights activists. Residents of Taishi, which is near Guangzhou, have demanded their village chief be sacked and investigated for allegations of embezzlement and fraud.

Several people were reportedly injured in a clash with police last month when they tried to prevent police from seizing accounting ledgers that they said contained evidence of corruption.
The Taishi protest came amid a series of increasingly bold actions by villagers to bring attention to grievances ranging from pollution to illegal land seizures.

Meanwhile, the Paris-based group Reporters Without Borders said an online forum for Mongolian students, called www.ehoron.com, had been closed for allegedly hosting separatist content. Attempts yesterday to view the page called up a message that said: "You are not authorized to view this page."

The press group said Beijing's controls on ethnic minorities were more restrictive than for the rest of China's population. It said the government also temporarily closed the Web site of a law firm in Inner Mongolia, called www.monhgal.com. That site could be accessed yesterday.


LABOUR – JAPAN

Japan plans huge job cuts
Japan decided Tuesday to cut about 33,230 jobs, or 10 percent of its civilian work force, over the next five years.

The move comes after Prime Minister Junichiro Koizumi was voted back into office in a landslide victory last month after campaign promises to cut spending and the size of the government.

Koizumi's cabinet on Tuesday approved the plan to reduce the government work force of 331,000. But the plan, which would cut 5,549 civil servant jobs for fiscal year 2005 and 27,681 jobs from 2006 to 2009, does not factor in separate personnel increases.

Government ministries have asked for more than 5,000 extra employees in the budget for next year. The Japanese daily Yomiuri Shimbun predicted that these increases would mean that the net number of government employees would fall by less than 2 percent, far below the 5 percent net decrease recommended by the Japanese Council on Economic and Fiscal Policy last week. The departments most affected by the plan include the agriculture and health ministries. It does not affect the country's defense forces.

"It is a task politicians should tackle as it would be impossible for bureaucrats," the minister of internal affairs, Taro Aso, said of the job cuts. The reductions would be achieved by natural attrition or relocating employees, a ministry official said.


HUMAN RIGHTS – JAPAN

Japan strengthens controls against human trafficking
Japan's Cabinet yesterday approved legislation to tighten controls on human trafficking as part of its efforts to counter global criticism that Tokyo is lax on the sex trade.

Sex businesses would be fined up to US$8,800 under the legislation if they employ foreign women without the right to work.

Currently there is no penalty.
Prime Minister Junichiro Koizumi's Cabinet will soon send the bill to parliament, which is in session until Nov. 1, said a spokesman for the National Police Department.
Passage is virtually assured as Koizumi's coalition enjoys a strong majority after last month's election. The government could not pass the legislation in the last parliament before Koizumi dissolved it in August for the polls.

Japan has taken a series of measures against trafficking since the US last year put its close ally on a watch list of countries with serious problems.

Japan this year began tightening rules on "entertainer" visas often used to bring in sex slaves, despite protests from the Philippines which worried that legitimate workers would suffer.

In June parliament voted to make human trafficking a specific offense for the first time. The crime carries up to 10 years in prison for selling another person for sex, to take their organs or use them for other commercial purposes. The law also allows authorities to jail a buyer for up to five years and grants victims of trafficking special permits so they will not immediately be deported.


LABOUR – MALAYSIA

Working for Malaysia's workers
Volunteers at Tenaganita, a leading Malaysian-based rights group that works with migrant workers, cheer when grim-looking authorities pay them a visit. They see harassment by officials as an unmistakable sign that they are on the job.

This week though, Tenaganita volunteers were cheering for a different reason - the non-governmental organization's (NGO's) founder and director, Irene Fernandez, had just won the 2005 Right Livelihood Award that is also called the alternative Nobel Prize.

For Tenaganita (Women's Force) volunteers, the award that honors pioneers of "justice, fair trade and cultural renewal", was the best recognition yet of their work - protecting migrant workers and changing attitudes in this affluent country.

"The award recognizes our work and brings into focus the plight of hundreds and thousands of migrant workers who suffer constant abuse, harassment and exploitation," an elated Fernandez told IPS. "The recognition will spur us to work even harder."

Fernandez founded Tenaganita in 1991 and turned it into a premier NGO that helps battered maids, women with HIV/AIDS and Malaysia's plantation workers, sidelined by mainstream development. Though recognized abroad for its work, it is a different matter at home, and Fernandez and her volunteers often find themselves maligned for their commitment to giving a voice to the voiceless.

A one-year jail sentence hangs over Fernandez for publishing "false news". Her passport has been seized, and she needs to apply for temporary release of the document from authorities each time she travels abroad.

It was a report she published in 1995, detailing horrific living conditions, beatings and harassment meted out to migrant workers at detention camps that landed her in trouble. She was charged with maliciously publishing false news and sentenced in 2003 to one year in jail. She has appealed the sentence, but strangely, no date has been fixed for a hearing.

Malaysia's government-controlled media malign her and Tenaganita as "traitors and anti-nationals", but to the many migrant workers, whose cause she untiringly champions, she is a hero.

The prize of two million Swedish kronor (US$257,000) will be shared with Canadian anti free-trade and rights activists Maude Barlow and Tony Clarke as well as Roy Sesana, an advocate for the rights of the Kalahari indigenous people of Botswana, the Right Livelihood Award Foundation said in a statement.

More than 70 candidates from 39 countries were nominated for the award this year. The award, established in 1980, was announced in Stockholm on Thursday by its founder Jacob von Uexkull, a former member of the European parliament. The prizes will be awarded at the Swedish parliament December 9.

Jacob said in an e-mailed statement that Fernandez was honored for her "outstanding and courageous work to stop violence against women, to stop abuses of migrants and poor workers in Malaysia".

"For many people this is no longer an alternative [to the Nobel Prize], this is the new mainstream," he said emphasizing that the laureates do not just offer "hope and inspiration, but actual practical support and solutions".

"She is a very brave woman who has continued to work for poor workers even after she was sentenced to one year in prison," he said.

Fernandez has a three-decade record as a grassroots campaigner, which reads like the history of the NGO movement in Malaysia. She was in on every issue - consumerism, women's rights, education, freedom, democracy, migrant workers and HIV/AIDS. She is also a senior member of the National Justice Party of opposition icon, Anwar Ibrahim.

A visit to her 14th-floor office tells a lot about her ideals. Portraits of Ibrahim and Che Guevara adorn the walls as does a quote from the South American Marxist revolutionary that says: "To Resist is to Win".

"We only live once," she told IPS. "That is why life is precious for each one of us. Life is nurtured, protected, secured but for more and more people, life is being threatened. As globalization grips us, inequalities sharpen, and the divide between the north and south increases. Poverty is one major factor that threatens life.

"In Asia more than 600 million people go to bed hungry. Workers are treated as commodities and not human beings."

Over the past 14 years, Tenaganita has championed the causes of lowly migrant workers, young women trafficked into prostitution, undocumented workers arrested and held for months without trial in detention camps and domestic workers violently abused and raped. It has also brought out the horrors of working women in Malaysia's infamous rubber and oil palm plantations where working hours are long and life dangerous.

"I started as a teacher where I saw the effects of poverty on poor urban students - it was terrible," said Fernandez, mother of three grown children. "The students were hungry, lost, neglected and very depressed."

In 1976, she joined the Consumer Association of Penang (CAP), which then was the leading advocate of consumer issues and growing to be an influential grassroots organization.

"At CAP I had a well-rounded experience forming consumer clubs, organizing workers and farmers, and fighting big multinationals like the giants making infant food formula," she said.

From CAP she moved to another consumer association in 1985 and took up feminist causes, researched and organized women workers, opposed violence against women and raised issues such as domestic violence, exploitation of women in the media and gender bias.

The year 1987 was a turning point for Fernandez and many other activists in Malaysia. This was a time when the government came down hard on a democracy movement, arresting more than 100 opposition politicians, activists and reformists.

Although Fernandez was not arrested, her work was badly affected and fear gripped activists in grassroots organizations. The government-controlled media also portrayed NGOs as enemies of the people.

After a break of a few years, spent reading and soul-searching, she was back in the fray, founding Tenaganita in 1991 as her vehicle for change.

The 1990s was a time of sustained economic boom that saw some three million undocumented workers pouring into Malaysia to work in the factories, construction sites and plantations.

With abuse, maltreatment and exploitation at a high, Tenaganita set up telephone counseling and research and services providing legal aid and representations to the government on behalf of migrant workers.

When she was found guilty of publishing false news by saying that migrant workers' detention centers were overcrowded, food substandard and medical care negligible, activists and others were certain it was a case of the state getting back at her.

"To me, the trial and the conviction are a symbol of our victory and their defeat because it shows we have achieved success in our work and that is why the oppressor is angry and wielding the axe," Fernandez said. "We have to press on."
Write: by Baradan Kuppusamy, in Kuala Lumpur


GEOPOLITICAL – IRAN

Iran faces hard realities after the IAEA vote
Iran’s hardline political leadership is scrambling to find a way to ease growing international pressure related to Tehran’s nuclear program. Iran may even be probing for a way to open direct negotiations with the United States.

The International Atomic Energy Agency (IAEA) adopted a resolution September 24 that cleared the way for the UN Security Council to take up the issue of Iran’s nuclear program. Iran maintains that its nuclear research is designed solely for peaceful purposes, including increasing the country’s nuclear power-generating capacity. Western nations, in particular the United States, suspect that Tehran strives to produce nuclear weapons.

According to the IAEA resolution, Iran must immediately undertake verifiable measures to reassure that its nuclear program is peaceful in nature, including opening up facilities to broad inspections by IAEA experts. Iranian officials lambasted the resolution as “unjust and illogical.” At the same time, Tehran has given no indication that it will comply with the conditions for keeping the matter out of the UN Security Council.

The nuclear program enjoys wide support in Iran and it is unlikely that the country’s political leadership, led by new President Mahmoud Ahmadinejad, will significantly alter the existing research course. Indeed, most Iranian political leaders appear convinced that the issue is destined to land in the Security Council. Tehran’s diplomatic attention is now focusing on an effort to dilute an increasingly likely Security Council resolution on the matter. At a news briefing on October 4, Foreign Ministry spokesman Hamid-Reza Asefi said Iran would use all resources at its disposal to secure its interests, the IRNA news agency reported.

There are several indicators that Tehran is contemplating a radical diplomatic departure, namely an attempt to open up a direct channel of communication with Iran’s longtime nemesis, the United States.

In late September, following the adoption of the IAEA resolution, prominent Iranian political politician Hashemi Rafsanjani traveled to Saudi Arabia, accompanied by former foreign minister Ali Akbar Velayati, to convey a diplomatic message to members of the Saudi royal family. The Saudis have served in the past as a go-between for Iran and the United States. The precise content of the diplomatic message remains a tightly guarded secret. But it is known that Rafsanjani embarked on the mission with the apparent blessing of Iran’s Supreme Leader, Ayatollah Ali Khamenei.

Recent statements by influential experts and commentators with close ties to the hardliner leadership offer clues concerning the message delivered to the Saudis. In a September 28 speech, for example, Hassan Abbasi - a former Revolutionary Guards officer who now heads the National Security and Strategic Research Center, a far-right think tank – called for the normalization of relations with both the United States and Israel.

“It is self-defeating to talk with subservient or second-tier countries and stay away from the principal sources of power,” Abbasi said during his speech at Karaj College. “Why should people get upset with my words? It makes no sense not to have relations with the United States and Israel.”

Prior to the IAEA resolution, Iranian diplomacy had concentrated on trying to drive a wedge between the European Union – led by Britain, France and Germany – and the United States. After Ahmadinejad came to power in June, he reshuffled Iran’s diplomatic team and reoriented Iran’s international focus, trying to cultivate the backing of China, India and Russia. It was hoped that the expansion of Iran’s economic ties with all three countries, in particular in the energy sphere, would translate into increased political support for Tehran’s nuclear aspirations.
This so-called “Eastern turn” proved to be a diplomatic debacle, as China, India and Russia all were unwilling to support Iran in the vote on the IAEA resolution. China and Russia abstained in the voting, while India approved of the September 24 resolution. During his news conference, Asefi indicated that the IAEA resolution might prompt Iran to re-evaluate its economic ties with some countries. “Iran’s economic cooperation with other states depends on political decision, but we should not make any haste,” Asefi said.

Abbasi, the hardliner political scientist, characterized both Iran’s cultivation of the EU-3 and its “Eastern turn” as diplomatic dead-ends. Yet, while Iranian leaders may be sounding out Washington about the possibility of a nuclear deal, there is no sign that US officials are open to dialogue on the matter.

The United States is reportedly exerting pressure on Russia to suspend nuclear cooperation with Iran, including assistance in completing the Bushehr nuclear power facility. [For additional information see the Eurasia Insight archive]. Work on the plant is scheduled to be completed in 2006.

Iran announced October 4 that it is willing to re-open unconditional talks with the EU on the nuclear issue. Those talks broke down in August after Iran resumed the conversion of uranium in violation of a late 2004 agreement with the EU-3. EU officials have said Iran must again suspend the conversion of uranium before talks can begin anew. In addition, Iranian leaders have suggested that if the nuclear issue is referred to the Security Council, Iran might consider withdrawing from the nuclear Non-Proliferation Treaty.

As Iran enters a crucial phase of the diplomatic struggle over the nuclear program, Iranian policy-makers feel that they are operating from a position of relative strength. Iran’s regional geopolitical position is stronger today than it was when Iran’s secret nuclear program first came to light in 2003. In particular, Iran now wields considerable influence in neighboring Iraq, a fact that potentially complicates international efforts to intensify the pressure on Iran over its nuclear program. In addition, Ahmadinejad’s presidential election win has given conservatives control of the country’s entire political machinery.


CIVIL SOCIETY – UZBEKISTAN

Uzbek government exerting pressure on local NGOS to close “voluntarily”
Authorities in Uzbekistan are pressing a campaign to smother the country’s non-governmental sector, reportedly forcing local NGOs to apply for “voluntary” liquidation.

President Islam Karimov’s administration has come to link NGO activity with the so-called “color revolution” phenomenon, in which popular protests toppled entrenched leaders in Georgia, Ukraine and Kyrgyzstan. Uzbek authorities moved to contain international NGOs within months of Georgia’s Rose Revolution in 2003, targeting the Open Society Assistance Foundation (OSAF) office in Tashkent. The foundation’s closure occurred less than a month after Uzbekistan was hit by an abortive uprising carried out by Islamic militants.

The most recent high-profile NGO closure was that of the Internews Network, a California-based media-development organization. Less publicized, but with equally serious consequences for Uzbekistan’s civil society development, the Uzbek government has targeted local NGOs, especially those that operate in the Ferghana Valley, scene of the Andijan massacre in May. The NGO crackdown has significantly expanded in scope during the post-Andijan period, local human rights activists contend.

According to Uzbek sources, hundreds of NGOs, most of them operating with miniscule budgets and small staffs, have been forced to cease activities. In many cases, NGO activists have been forced to “voluntarily apply for self-liquidation.” Those who resist government pressure face “serious trouble,” including possible arrest and imprisonment. Those who comply with the government’s request have not been harassed, according to a source with knowledge of the NGO crackdown, speaking on condition of anonymity.

Abdusalom Ergashev, Ferghana-based human rights defender, said Uzbek authorities are particularly interested in closing down NGOs that have received funding from public or private entities in the United States and/or European Union. Even before NGOs faced pressure to cease operations, they were coming under scrutiny during the weeks and months prior to the Andijan events. The head of one NGO, an entity that offered legal advice to poor Uzbeks in Ferghana Province, reported that immediately following the March 24 revolution in neighboring Kyrgyzstan, Uzbek authorities began freezing NGO bank accounts and tracing wire transfers. Ultimately, the Ministry of Justice ordered the closure of the legal-aid NGO, claiming that its “activities did not fit its charter.” The NGO’s subsequent appeals were dismissed by Uzbek courts.

“Many NGOs’ closures have gone unnoticed,” Ergashev said. “Nobody can challenge their [officials’] decisions. No complaints will ever reach Tashkent. Even if they do, they will be merely returned to local authorities.”

Uzbek authorities have denied targeting local NGOs for closure. Akbar Nabirayev, an official with Justice Ministry’s Department for Public Organization Registration, maintained that the government has merely been fulfilling its regulatory responsibilities. Some NGOs existed only on paper, Nabirayev claimed, adding that the state had an obligation to close such NGOs down. Nabirayev also claimed that official statistics show that out of 4,825 registered non-governmental organizations, only 175 have ceased operations in recent months. Justice Ministry officials claim that many NGOs engage in improper financial practices.

NGO activists maintain that the actual number of NGOs closed down during the post-Andijan period approaches 3,000, including many of the largest and best-developed local non-governmental entities in Uzbekistan. In the Ferghana Valley alone, 1,600 registered NGOs have been forced to cease operations, they assert.


PUBLIC HEALTH – AUSTRALIA

Brisbane to host Asia-Pacific bird flu summit
Australia is bringing together a host of experts from the region to discuss the threat posed by avian influenza.

Foreign Affairs Minister Alexander Downer says a high-level meeting has been organised for the end of the month in Brisbane.
It will bring together pandemic and disaster experts from the Asia-Pacific economic group, APEC.

Mr Downer says the objective of the meeting is to make sure there is a swift and coordinated regional response to contain any outbreak of bird flu.

"We obviously want to make sure that APEC's role is taken further and in terms of coordinating an Asia Pacific response, APEC is by far the best vehicle to do that," he said.

The Federal Opposition says it is worried the regional summit may be too little, too late.
Labor has welcomed the move, but foreign affairs spokesman Kevin Rudd says such a conference should have been held much earlier to ensure countries were better prepared for the risks posed by the disease.

"It's better late than never, but we are concerned that there is so much more to be done, and there is very little time left and most of this year has been wasted," Mr Rudd said.

"My responsibility as the shadow foreign minister is to apply continued political pressure on Mr Downer to do the right thing by the region, we are desperately concerned about the amount of time that has been wasted."
More than 60 people are confirmed or are suspected to have died from bird flu throughout Asia since 2003.
Source: ABC Online, Australia


LEGAL AFFAIRS – SOUTH KOREA

2 executives convicted in Samsung swap
A court on Tuesday convicted two Samsung executives of arranging deals nearly a decade ago to transfer corporate control of the Samsung conglomerate from father to son.

The Seoul Central District Court convicted Hur Tae Hak - a former chief executive of Everland, a Samsung unit that runs the largest amusement park in South Korea - and the unit's current chief, Park Ro Bin, on charges of selling convertible bonds at prices lower than their market value. They sold the bonds to the children of Lee Kun Hee, chairman of Samsung, in 1996, and were indicted in 2003.

The sale is believed to have generated more than 97 billion won, or $93.2 million, in illegal profit for the chairman's four children. Lee's son, Lee Jae Yong, is an executive at Samsung Electronics.

Hur and Park "helped Lee Jae Yong and his sisters make profits, thus incurring losses for the company," Judge Lee Hye Kwang said in a ruling.

Hur was sentenced to three years in prison, suspended for five years, while Park was given a prison term of two years, suspended for three years. The suspended sentences mean that Hur and Park will not serve time in prison unless they commit a crime during the suspension period.

The two men were both on the board that approved the convertible bonds, which enabled Lee Kun Hee's children to acquire shares in Samsung Everland, the unlisted theme park operator, at a low price and paying little in taxes, the official verdict stated.

The theme park company is at the heart of a web-like chain of cross-shareholdings among affiliates of the country's largest business group, which includes the largest memory chip maker in the world, Samsung Electronics.

Samsung Group has 61 affiliates with combined sales amounting to 135.5 trillion won in 2004, equivalent to more than one-sixth of the South Korean annual gross domestic product. According to data from the country's antitrust agency, Samsung Everland owns a stake in Samsung Electronics through affiliates.

South Korean conglomerates have been accused for decades of dubious dealings to help controlling families evade taxes and transfer wealth to heirs.

Although Samsung is the most profitable South Korean conglomerate, it has been plagued by allegations of questionable accounting and business practices among its subsidiaries. The court in its official verdict also said that the two executives had been responsible for an unspecified amount of damages inflicted on Samsung Everland.


LEGAL AFFAIRS – CHINA

Corruption inquiry hits Beijing Media
Shares of Beijing Media, which sells advertising space in a Communist Party-controlled newspaper, slumped Tuesday after the company said six employees, including senior executives, were taken into custody in a corruption investigation.

The company "has suspended the duties of the six employees until further notice" and plans an internal investigation, Beijing Media said in a statement to the Hong Kong stock exchange. The stock was suspended Monday for one day after the business magazine Caijing, based in Beijing, reported the investigation.

Beijing Media, which raised $116 million in a December share sale arranged by HSBC Holdings, is the latest in a series of Chinese listed companies to be embroiled in corruption allegations. The company, which sells advertising in the Beijing Youth Daily newspaper, last month reported a 99.7 percent slump in first-half profit. Government of Singapore Investment Corp. holds an 8 percent stake in the company.

The incident "reflects poor company management," said Selina Sia, a Hong Kong-based analyst with UBS, who has a "reduce" recommendation on Beijing Media's shares. "The company didn't say anything until newspapers reported it. I think it's quite irresponsible."

Beijing Media shares had their biggest one-day fall, closing 19 percent down at 10.50 Hong Kong dollars, or $1.35, after earlier losing as much as 27 percent. The stock has dropped 53 percent this year.

Those taken into custody included two vice presidents and the head and deputy head of the advertising department, Beijing Media said. It said its president, Sun Wei, had taken on management of the advertising business and that it would hire independent advisers to conduct an internal investigation and assess the financial impact.

"With the implementation of the above measures, the board does not anticipate any significant disruption will be caused" to daily operations, it said.

In August, Beijing Media said falling advertising revenue, rising inventory costs and increased bad-debt provisions caused a 99.7 percent slump in first-half profit to 170,000 yuan, or $21,000. It also said it had sold fewer advertisements to developers, its main source of revenue, after the government acted to cool the real estate market in cities like Shanghai and Beijing.

The company's interim report said revenue from Beijing Youth Daily, the main source of its advertising sales, slid 50.2 percent from a year earlier.

Tuesday's statement said Beijing prosecutors had detained two vice presidents, Zheng Yijun and Niu Ming, for questioning, together with Yu Dagong, the head of the advertising department, his deputy Zhu Weijing, and two advertising department officers, Duan Tao and Lu Jianning.

"The board understands that allegations of bribery have been made against" Yu, Zhu and Duan, it said. The company said it had not been informed of the allegations against the other three.
Source: Bloomberg, Hong Kong


ECONOMY – CHINA

Eyewear firm in 290m yuan acquisition
Luxottica, the world's largest maker of eyeglasses, based in Italy, will buy optical retailer Ming Long Optical for 290 million yuan (HK$278.11 million) as part of an expansion into the 16 billion yuan China eyewear industry.

Ming Long Optical, the biggest eyewear chain in Guangdong with 133 stores, will have forecast sales of 115 million yuan this year, according to Luxottica, whose products sell under luxury brands such as Vogue and Chanel. Its second mainland foray brings Milan-based Luxottica's China portfolio to 278 outlets, including 68 in Hong Kong.
In July, the company said it will buy Beijing-based Xueliang Optical for 169 million yuan, according to local reports.

For Italian Luxotica China is the next big market for fashion and premium eyewear, hence is desire to quickly build critical mass to be the leaders on market.

Luxottica, which earned 287 million euros (HK$2.66 billion) last year on sales of 3.2 billion euros, also owns a frame-producing factory in Dongguan, in addition to six plants in Italy. Eyewear firms such as France's Essilor International and Japan's Nojiri Optical have set up factories in China, taking advantage of the country's comparatively cheap labor.

Mainland eyewear production rose 10 percent last year to 16 billion yuan, - with half for export, mainly to the United States, Hong Kong, Japan and Italy. China's large and increasingly well- off population is attracting investors to the domestic market. The investment arm of Netherlands-based HAL Holding in June bought 70 percent of Shanghai RedStar Optical. Eyewear imports to China increased 35 percent to US$1.1 billion (HK$8.58 billion) last year, with Japan, Italy and Hong Kong being the top exporters.


ART & CULTURE – VIETNAM

International photo contest opens in Vietnam
As many as 7,228 photos of 1,416 photographers from 45 countries and territories are being displayed at the third international photo exhibition and contest which is jointly held by the Vietnam Association of Photographic Artists (VAPA) and the International Federation of Photographic Artist (FIAP).

This year, VAP stipulated a new rule for photo rating, including two rounds: preliminary and final rounds. As assessed by the organising board, the quality of photos taken by Vietnamese photographic artists is not much different with those of world’s photographers in term of techniques. The content of photos of Vietnamese photographers also showed their progress in skills. However, photographers from other countries seem to carefully reflect their ideas and are well prepared for this contest. The topics seem to be repeated at this contest; meanwhile there are not many typical and impressive photos.

The good point of Vietnamese photographers is their respect for the reality and the typical features of their photos. However, there is a shortage of romance in Vietnamese photos. Technically accomplished photos catch the eyes of audiences. Poorly created photos are easy to spot compared to previous contests.

The selected photos partly show the real situation of Vietnam’s contemporary photographic art and ranks Vietnam’s photographic art as a contributor to the world’s photographic art. The special award, VAPA-NIKON cup, was given to the art work ‘Warm Stove’ (Bep Nong) of Huynh Minh Tri from Ho Chi Minh City. Two FIAP gold medals were presented to artwork ‘Worry’ (colour photo) of Hoang Trung Thuy and artwork ‘Breakfast’ (black and white) of Huynh Van Danh.

The success of the contest and exhibition is not only shown through awards and organisation. 227 selected photos for the exhibition are really works with high artistic and creative value. The success of the contest also marks a promising time of activities for the newly elect VAPA.