A World of Pain and Abuse

How a UNICEF Photo Makes the West's Heart Ache

40-year-old groom sitting beside his 11-year-old future bride in Afghanistan, brought Stephanie Sinclair top honors in the annual Photo of the Year contest sponsored by the United Nations Children's Fund (UNICEF).

At Der Spiegle, Leon de Winter writes:

An 11-year-old child bride sits next to her 40-year-old fiance. For UNICEF, this was the Photo of the Year. Dutch writer Leon de Winter laments the perversity of this wedding picture and the frightening relativism of the West.

There are people who will look at this image and be able to continue with business as usual -- without disgust, nausea and rage. We are beholding the fiercest barbarism imaginable. But a carefree cultural relativism -- which this age has donned as its outward manifestation of decadent indifference -- allows many to simply look away. They turn away from the sight of an 11-year-old girl, who is about to be raped by the man sitting next to her.

The girl was sold by her parents, even if they probably wouldn't use that word. The caption that came with the photo quoted the parents as saying that they "needed the money."

The girl's soon-to-be husband promised to send his 11-year-old bride to school, but the women living there in the village of Damarda in Afghanistan's Ghor province don't believe this fairytale. They predict that the girl will bear children soon. "Our men don't need educated women," they point out.

A dowry was paid for the girl. The dowry is part of the cultural fabric of the clan-based society. As producers of newborns, women are valuable possessions. A woman can bear sons and fighters, who will defend the family and its honor. Men are only charged with protecting them against kidnappers and thieves, and women need only accept the power of the male members of the family -- "for their own benefit."
Love Is a Word from the Decadent West

It is likely that all of the female forebears of the girl in the photograph were likewise sold -- and the girl, no doubt, saw it as her fate. At the same time, she realizes that what is happening to her is not right. She might think it is "natural" for a young girl to be sold, but she also knows that it's neither good nor legitimate for her to spend the rest of her life as this man's slave. It is a type of knowledge that has little to do with experience. Rather, it is knowledge that is rooted in humanity, and in the hopes and dreams of a little girl.

The man in the image is oblivious of his wrongdoing. He's only doing what his forefathers did. Sticking to traditions increases the chances of survival. His seed will create a new person and strengthen the clan. He will impregnate this girl without love and without regret, since love is a word from far-off stories and songs, a word from the decadent West, where people have no comprehension of the harshness of life in the desert and of war without end, which is the essence of life in this part of the world.

What we witness in this photograph is an unadorned view of humanity's collective past, of the horror of our brutal nature. Love, tenderness, beauty, individuality and respect are all phenomena that we have imposed upon our nature. Since time immemorial, this nature has allowed only the strongest to survive. In our Western consciousness, we have suppressed this nature with conviction and success. This image shows a small, everyday moment that wouldn't surprise anyone in the Taliban -- but looks quite different to our eyes.

A Bold Statement in the Era of Political Correctness

Our eyes behold an abomination. Our eyes have learned to see the world from the perspective of a slowly acquired sense for humanity. And although more and more voices tell us that we -- the former colonialists and imperialists -- have lost the right to judge other cultures, we know just as well as this girl that this marriage is wrong.

I believe that there are regressive cultures. In an era of political correctness, this is a tricky statement. But there is no other statement that can be made about this image. We behold a regressive man, who is taking what he has purchased.
Many of us in the West are convinced that our presence in Afghanistan cannot be justified, that our troops should withdraw and that Afghanistan should be left to the Afghans. They ask themselves: Who are we to believe that it is inhumane to sell an 11-year-old girl? Who are we to impose our values so vehemently on the Afghans, on this man and on this girl?

I don't have a clue who we are. But I know that this universe is not only a universe of iPods, Disneylands, CO2 penalties, tax write-offs, and New Year's sales in our department stores. No, I know that this is also a universe of human rights. I know that this universe is deeply shaken -- right down to its core -- by the suffering of this lonely, lonely little girl.

Second-place honors went to GMB Akash, of Bangladesh, whose winning photo shows a 12-year-old boy toiling in a Bangladeshi brickyard. UNICEF studies conclude that 4.7 million children between five and 14 years of age are involved in child labor in that country.

"A Mother's Journey": The American photographer Renee C. Byer took this picture as part of a series about a single mother with five children and a son suffering from terminal cancer. He died in 2006.

Finbarr O'Reilly recieved an honorable mention for his photo "A House of Hope," an image of Lopez Vidal, right, and Aron Masahuka, both afflicted with polio, languishing in an ill-equipped hospital in Kinshasa, Democratic Republic of Congo.

Wolfram Hahn made a series of photos titled "A Disenchanted Playroom" to accompany a study about the television-viewing habits of German children.

The third-place photograph was taken by German photographer Hartmut Schwarzbach. His picture depicts a nine-year-old girl jumping in glee on her birthday in the midst of a smoldering garbage dump outside of Manila.

Hatem Moussa won an honorable mention for "Life in Gaza": Palestinian children were rushed from a car into a hospital after their homes were hit by Israeli shelling in the northern Gaza Strip town of Beit Lahiya in April, 2006. An eight-year-old child was killed in the attack and 13 other children were injured.

Musa Sadulayew made this photo as a part of a series called "Chechnya's Forgotten Children."

Boys hang from a bar for five minutes as part of a physical training exercise at the Gymnastics Hall of the Shanghai University of Sports. The photo was part of Nir Elias's series "Pain Threshold -- Sports Education in China."

"Sumo Boys in Japan": Steven Achiam took a series of pictures depicting life in the Hiragaya sumo club, where boys train until they have beaten a strong opponent 10 times.

Joseline Ingabire, 37, an HIV-positive Rwandan woman, is pictured with her daughter Leah Batamuliza, 11. This photo by Jonathon Torgovnik accompanied a story in Newsweek magazine about women who were raped during the Rwandan civil war and their children today.

Pollution From China's Coal-Fired Plants Take Only 5 To 10 Days To Reach U.S.

World's growing dependence on coal leaving a trail of environmental devastation

Chinese coal workers load coal unto trucks in Baotou, nestled in the sand-sculpted ravines of Inner Mongolia, China, Tuesday, May 8, 2007. (AP Photo/Elizabeth Dalziel)

The Associated Press reports:

It takes five to 10 days for the pollution from China's coal-fired plants to make its way to the United States, like a slow-moving storm.

It shows up as mercury in the bass and trout caught in the Willamette River in the western U.S. state of Oregon. It increases cloud cover and raises ozone levels. And along the way, it contributes to acid rain in Japan and South Korea and health problems everywhere from Taiyuan to the United States.

This is the dark side of the world's growing use of coal.

Cheap and abundant, coal has become the fuel of choice in much of the world, powering economic booms in China and India that have lifted millions of people out of poverty. Worldwide demand is projected to rise by about 60 percent through 2030 to 6.9 billion tons a year, most of it going to electrical power plants.

But the growth of coal-burning is also contributing to global warming, and is linked to environmental and health issues ranging from acid rain to asthma. Air pollution kills more than 2 million people prematurely, according to the World Health Organization.

"Hands down, coal is by far the dirtiest pollutant," said Dan Jaffe, an atmospheric scientist at the University of Washington who has detected pollutants from Asia at monitoring sites on Mount Bachelor in Oregon and Cheeka Peak in Washington state. "It is a pretty bad fuel on all scores."

To understand the conflict over coal, look at Taiyuan and the surrounding Shanxi Province, the country's top coal-producing region — and one of its most polluted.

Almost overnight, coal has turned poor farmers in this city of 3 million people into Mercedes-driving millionaires, known derisively as "baofahu" or the quick rich. Flashy hotels display chunks of coal in the lobby, and sprawling malls advertise designer goods from Versace and Karl Lagerfeld. Real estate prices have doubled, residents say, and construction cranes fill the skyline.

A museum in Taiyuan celebrates all things coal. Amid photos of smiling miners, coal is presented as the foundation of the country's economic development, credited with making possible everything from the railroad to skin care products.

"Today, coal has penetrated into every aspect of people's lives," the museum says in one of many cheery pronouncements. "We can't live comfortably without coal."

Yet the cornstalks lining a highway outside the city 410 kilometers (255 miles) southwest of Beijing are covered in soot. The same soot settles on vegetables sold at the roadside, and the thick, acrid smoke blots out the morning sun. At its worst, the haze forces highway closures and flight delays.

With pressure to clean up major cities such as Shanghai and Beijing, particularly in the run-up to next year's Beijing Olympics, the central government is turning increasingly to provinces such as Shanxi to meet the country's power demands.

"They look at polluted places like Taiyuan and say it's so polluted there so it doesn't matter if they have another five power plants," said Ramanan Laxminarayan, a senior fellow at Resources For the Future, an American think tank that found links between air pollution and rising hospital admissions in Taiyuan.

"I visited these power plants and there is no concept of pollution control," he said. "They sort of had a laugh and asked, 'Why would you expect us to install pollution control equipment?'"

China is home to 20 of the world's 30 most polluted cities, according to a World Bank report.

Health costs related to air pollution total US$68 billion (€47 billion) a year, nearly 4 percent of the country's economic output, the report said. And acid rain has contaminated a third of the country, Sheng Huaren, a senior Chinese parliamentary official, said last year. It is said to destroy some US$4 billion (€2.8 billion) worth of crops every year.

"What we are facing in China is enormous economic growth, and ... China is paying a price for it," said Henk Bekedam, the country representative for the World Health Organization. "Their growth is not sustainable from an environmental perspective. The good news is that they realize it. The bad news is they're dependent on coal as an energy source."

But the costs go far beyond China. The soot from power plants boosts global warming because coal emits almost twice as much carbon dioxide as natural gas. And researchers from Texas A&M University found that air pollution from China and India has increased in cloud cover and major Pacific Ocean storms by 20 percent to 50 percent over the past 20 years.

"We know dust from factories in China, India, Mexico and Africa does not simply disappear; the wind brings it here," said the U.S. Chamber of Commerce's Bill Kovacs.

Kovacs said overseas dust is adding to the number of counties that do not qualify for federal transportation funds because they are out of compliance with ozone standards. More than 100 counties do not meet the limit of 84 parts per billion. China alone contributes 3 to 5 parts per billion, estimates Daniel J. Jacob, professor of atmospheric chemistry and environmental engineering at Harvard University.

Mercury, a byproduct of some coal-mining, is another major concern. The potent toxin falls into waterways and shows up in fish. Asia's contribution to U.S. mercury levels has shot up over the past 20 years. Jacob estimated half of the mercury in the United States comes from overseas, especially China.

"It's a global problem and right now China is a source on the rise," he said. "If we want to bring down mercury levels in fish, then we have to go after emissions in East Asia."

A fifth of the mercury in the Willamette River came from China and other foreign sources, said Bruce K. Hope of the Oregon Department of Environmental Quality. Pregnant or nursing women who eat the fish put their babies at risk of neurological damage.

"It's frustrating to realize that part of your problem is someone else's behavior and you can't really go to them and say, 'Can you do something different?'" Hope said.

China has closed some polluting factories and says it will retire 50 gigawatts of inefficient power plants, or 8 percent of the total power grid, by 2010, according to the Pew Center for Global Climate Change. The government has also mandated that solar, wind, hydroelectric and other forms of renewable energy provide 10 percent of the nation's power by 2010, and ordered key industries to reduce energy consumption by 20 percent.

President Hu Jintao, in a speech to a key party congress last month, promised a cleanup. But China has fallen short of its national targets for using energy more efficiently, and coal remains a major energy source.

"Everyone knows coal is dirty, but there is no way that China can get rid of coal," the World Bank's Zhao Jianping said in Beijing. "It must rely on it for years to come, until humans can find a new magic solution."

Robert N. Schock, the director of studies for the World Energy Council, agreed that coal, cheap and abundant, will remain a crucial source of energy for many years and be crucial to improving living standards in developing countries.

"Twenty-five percent of the world's electric power is now generated by coal, and those plants are not likely to disappear overnight," Schock said.

In Shanxi province, authorities have pledged to close 900 coal mines and dozens of makeshift factories that process coal for the steel industry, according to the official Xinhua News Agency. The Asian Development Bank is providing more than US$200 million (€139 million) in loans to improve air quality in the province, through programs to shift to cleaner-burning natural gas for household heating and a demonstration project to capture methane, a greenhouse gas released in coal mining.

Taiyuan, dubbed the world's most polluted city in the 1990s, is no longer thought to be the worst, thanks to various efforts including phasing out coal-burning boilers. But the level of pollutants in the air remains five to 10 times higher than levels in New York or London. Residents say they see blue skies fewer than 120 days a year.

Australians Paul and Helen Douglas, who work for Evergreen in Taiyuan, an American social service agency, said their 21-month-old daughter Rose has been found in tests to have elevated lead levels. She has developed a chronic cough, Paul Douglas said, and the family will likely return to Australia before their contract ends if their daughter's toxin levels rise further.

"People say we are irresponsible and that we are making decisions that are injuring our children," he said of coming under fire from relatives and church members for staying in Taiyuan.

Taiyuan residents, though, shrug wearily when the talk turns to pollution, fearful that speaking out could get them in trouble. But when pressed, the complaints tumble forth and expose a community held hostage by the soot.

Residents seal their windows to keep out the dirty air. Parents are warned not to let their toddlers play outside, for fear of being covered in coal dust. Fruits and vegetables must be washed in detergent.

"I'm worried about my children," said a woman who lives in the shadow of a power plant and fertilizer factory. She would only give her surname, Zhang. "We worry about everything. If you get sick seriously, you will die."

Many complain of chronic sore throats, bronchitis, lung cancer and pulmonary fibrosis. One study, by researchers at Norway's Center for International Climate and Environmental Research, found Taiyuan's pollution increased death rates by 15 percent and chronic respiratory ailments by 40 to 50 percent.

"I feel terrible and I'm coughing all the time," said William Li, a retired engineer from Taiyuan. His father died of lung cancer and his son has tracheitis, an upper respiratory condition. "The coal, it produces electric power that we send to other provinces. But we are left with the pollution."

China Threatens 'Nuclear Option' of Dollar Sales

The Telegraph reports:

The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.

Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress.

Shifts in Chinese policy are often announced through key think tanks and academies.

Described as China's "nuclear option" in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels.

It would also cause a spike in US bond yields, hammering the US housing market and perhaps tipping the economy into recession. It is estimated that China holds over $900bn in a mix of US bonds.

Xia Bin, finance chief at the Development Research Centre (which has cabinet rank), kicked off what now appears to be government policy with a comment last week that Beijing's foreign reserves should be used as a "bargaining chip" in talks with the US.

"Of course, China doesn't want any undesirable phenomenon in the global financial order," he added.

He Fan, an official at the Chinese Academy of Social Sciences, went even further today, letting it be known that Beijing had the power to set off a dollar collapse if it choose to do so.

"China has accumulated a large sum of US dollars. Such a big sum, of which a considerable portion is in US treasury bonds, contributes a great deal to maintaining the position of the dollar as a reserve currency. Russia, Switzerland, and several other countries have reduced the their dollar holdings.

"China is unlikely to follow suit as long as the yuan's exchange rate is stable against the dollar. The Chinese central bank will be forced to sell dollars once the yuan appreciated dramatically, which might lead to a mass depreciation of the dollar," he told China Daily.

The threats play into the presidential electoral campaign of Hillary Clinton, who has called for restrictive legislation to prevent America being "held hostage to economic decicions being made in Beijing, Shanghai, or Tokyo".

She said foreign control over 44pc of the US national debt had left America acutely vulnerable.

Simon Derrick, a currency strategist at the Bank of New York Mellon, said the comments were a message to the US Senate as Capitol Hill prepares legislation for the Autumn session.

"The words are alarming and unambiguous. This carries a clear political threat and could have very serious consequences at a time when the credit markets are already afraid of contagion from the subprime troubles," he said.

A bill drafted by a group of US senators, and backed by the Senate Finance Committee, calls for trade tariffs against Chinese goods as retaliation for alleged currency manipulation.

The yuan has appreciated 9pc against the dollar over the last two years under a crawling peg but it has failed to halt the rise of China's trade surplus, which reached $26.9bn in June.

Henry Paulson, the US Tresury Secretary, said any such sanctions would undermine American authority and "could trigger a global cycle of protectionist legislation".

Mr Paulson is a China expert from his days as head of Goldman Sachs. He has opted for a softer form of diplomacy, but appeared to win few concession from Beijing on a unscheduled trip to China last week aimed at calming the waters.

Who's Guaranteeing The Safety Of China's Food For Import?

The NYTimes reports:


After weeks of insisting that food here is largely safe, regulators in China said Tuesday that they had recently closed 180 food plants and that inspectors had uncovered more than 23,000 food safety violations.

The nationwide crackdown, which the government said began last December, also found that many small food makers were using industrial chemicals, banned dyes and other illegal ingredients in things like candy and seafood.

The announcement came as part of an overhaul of food safety regulations after a series of international food scares involving Chinese exports.

The country’s exports of contaminated ingredients for animal feed earlier this year led to one of the largest pet food recalls in American history.

Tainted animal feed ingredients also leached into American meat and fish supplies, and problems with contaminated fish and other food have been reported in other parts of Asia and in Europe.

China has strongly denied that its food exports are hazardous and has seemingly retaliated against criticisms in recent weeks by seizing American and European imports.

This week, China said it had impounded two shipments, of orange pulp and apricots, from the United States because they contained “excessive amounts of bacteria and mold.”

Earlier this year, regulators blocked imports of Evian water from France, saying bacteria levels in the water exceeded national standards.

Still, the government has moved aggressively in recent months to enforce food safety regulations and to weed out fake or contaminated food products.

Tuesday’s announcement, which appeared on the Web site of the country’s top food-quality watchdog, the General Administration of Quality Supervision, Inspection and Quarantine, has intensified concerns about rampant fraud in the food industry here.

Regulators said an investigation involving 33,000 law enforcement officials found illegal food-production and meat-processing operations, fake soy sauce and the use of banned food additives.

“These are not isolated cases,” Han Yi, director of the administration’s quality control and inspection department, told the state-run media. China Daily, the nation’s English-language newspaper, said industrial chemicals not intended for use in foods had been found in products as diverse as candy, pickles and seafood. Among the substances were dyes, mineral oils, paraffin, formaldehyde and malachite green, a chemical primarily used as a dye but also used as a topical antiseptic or treatment for parasites and infections in fish.

Regulators said they also learned that the potentially toxic chemicals sodium hydroxide and hydrochloric acid were being used to process shark fin and ox tendon.

These industrial chemicals are often corrosive, and are used in drain cleaners, detergent, fertilizer and surfboard wax, among other products.

Such discoveries have become common in China. In 2005, officials in south China found a company repackaging food waste and shipping it to 10 other regions. And just last week, officials said a company in Anhui Province, not far from Shanghai, was selling a two-year-old rice dumpling mix as fresh, according to the state-controlled media.

Experts here say that the country’s food regulations are not being enforced and that small-business men are willing to go to extraordinary lengths to increase profit.

Corruption and bribery are also part of the food and drug industry here.

The former head of the food and drug watchdog agency was recently sentenced to death for accepting bribes and approving the licensing of substandard drugs. And now, a Ministry of Agriculture official is on trial in Beijing for accepting bribes in exchange for endorsing food products.

But not all the problems stem from corruption or malfeasance. A. T. Kearney, an international management consulting firm, issued a report this week saying that one cause of food safety problems in China was inadequate logistics systems and a lack of cold storage.

The firm said China needed to invest about $100 billion over the next 10 years to upgrade its logistics and refrigeration abilities and to put new standards into effect.

In China, the study said, there are only about 30,000 refrigerated trucks for transporting food; the United States has about 280,000.

“In the entire supply chain there’s no common standard or world-class standard,” said Zhang Bing, who helped prepare the study. “There are a lot of things contributing to the food safety problem. There are companies putting chemicals into food. But there’s also a lot of spoilage.”

Blackstone Shares Surge In Opening Trade

The Financial Times reports:

Blackstone Group shares on Friday jumped 14.8 per cent on the US private equity group's first day of trading in a strong performance that could encourage its arch-rival Kohlberg Kravis Roberts to follow suit within weeks.

After pricing the landmark offering at $31 a unit on Thursday night, Blackstone saw its share price soar to $35.58 and its market value increase to about $38bn by noon.

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Blackstone's sparkling debut on the New York Stock Exchange shows how investor demand for the most high-profile Wall Street listing in years remained strong in spite of doubts about the company's valuation and a political backlash against the industry.

KKR was closely watching the market reaction on Friday. Having considered a stock market debut for months and held advanced discussions with investment banks that would underwrite a possible listing, KKR could move within weeks towards a filing with US regulators, these people said. However, no decision had been made and Blackstone's market performance would have to be judged over a longer period, they warned.

Other US private equity groups, including Apollo Management, Carlyle and TPG Capital, have also been considering listings.

Steve Schwarzman, Blackstone's 60-year-old chief executive, owns a 23 per cent stake in the company, worth about $10bn after the share price jump.

Mr Schwarzman extracted $677m from the listing while Pete Peterson, the 81-year-old senior chairman, received a pay-out of about $1.88bn.

Blackstone benefited from high demand for its units in spite of significant doubts about the company's valuation.

In addition to concerns that the global private equity boom could be ending amid rising interest rates, a serious political challenge to the listing emerged last week when Max Baucus and Chuck Grassley, the most powerful members of the Senate finance committee, introduced legislation that would significantly raise Blackstone's tax bill in 2012.

Other US politicians kept up the pressure this week, with Jim Webb, the Democratic senator from Virginia, questioning the national security implications of Blackstone's sale of a $3bn stake to the Chinese government.

House Democrats on Friday introduced legislation to increase the tax on profits from private equity deals.

China to Revise Food and Drug Safety Rules

The NYT reports:

Responding to growing international concerns about tainted food and counterfeit drugs, China said late Tuesday that it was overhauling its food and drug safety regulations and would introduce nationwide inspections.

The announcement, from the State Council, the nation’s highest administrative body, is the strongest signal yet that Beijing is moving to crack down on the sale of dangerous food and medicine and also trying to calm fears that some of its exports pose health problems.

The move follows a series of embarrassing episodes this year involving China’s export of contaminated pet food ingredients and toothpaste. The shipments of tainted pet food ingredients set off one of the largest pet food recalls in United States history.

Last month, an article in The New York Times revealed that at least 100 people had died in Panama after taking medicine containing a toxic chemical called diethylene glycol that had been produced in China and exported as the harmless syrup glycerine.

And in recent weeks, several countries, including the United States, Panama and Nicaragua, recalled or issued warnings about toothpaste made in China because it contained diethylene glycol.

While Beijing has strongly defended the quality and safety of its food and drug exports, and even denied that toothpaste it exported was unsafe, government regulators at the same time have stepped up safety inspections and shut down companies accused of producing unsafe food or counterfeit drugs.

But with pressure growing from regulators in the United States, Europe and other parts of the world, and international food companies expressing concern about the risks of importing Chinese-made food and feed ingredients, Beijing is pushing for a more forceful response to the crisis.

In its announcement on Tuesday, which was posted on a government Web site, China said that the state council had approved a new food and drug safety guarantee system on April 17 and that an outline of the new program was being distributed to government agencies nationwide.

The government said in its announcement that it planned by 2010 to place new controls on food and drug imports and exports, to step up random testing on medicines and have inspection information on 90 percent of all food products.

It said it also planned safety checks on a large majority of food makers and said that regulators would crack down on the sale of counterfeit drugs and medical devices.

The government did not indicate whether it would provide more funds for the efforts or which agencies would carry out the bulk of the functions.

But in announcing the new measures, the government hinted at its weaknesses in enforcement, saying that after five years one goal was that “100 percent of the significant food safety accidents are investigated and dealt with” and that “80 percent of the food that needs to be recalled is recalled.”

A few weeks ago, the government had announced that it was planning to set up a food recall system.

On Tuesday, the General Administration of Quality Supervision, Inspection and Quarantine, which oversees food and drug exports, also posted statements on its Web site about the issue.

“Recently, our country has had a series of export food problems, and that has triggered a lot of overseas attention about China’s food safety,” said Wei Chuanzhong, deputy director of the agency. “This has put us on high alert, and led us to seriously look into the reasons for the problem.”

Food and drug safety experts have complained for years about an incredibly flawed system that has led to food scares or mass poisonings tied to counterfeit or substandard medicines on the market.

Much of the blame has centered on weak enforcement of the nation’s food and drug regulations, as well as corruption, bribery and a business culture where counterfeiting thrives.

China’s food and drug administration, which is supposed to safeguard the nation’s health, has also been implicated.

Last week, a Chinese court handed down a death sentence against Zheng Xiaoyu, the head of the Food and Drug Administration in China from 1998 to 2005, after he pleaded guilty to bribery and corruption. The government also said that he took bribes to approve drug production licenses and that it was reviewing production licenses the agency had issued.

Some experts say the new food and drug safety program suggests that the nation’s top leaders are taking up the call for reforms and new enforcement measures.

“There’s been concern for a while about food safety in this country, and now that there are growing concerns about China’s international image, the state council has decided to act,” said Russell Leigh Moses, an analyst of Chinese politics who is based in Beijing. “This may be a sign that everyone in the government ought to get in line.”

But the challenges facing China are enormous because its regulatory system is weak and enforcement is particularly difficult, partly because the economy is growing so fast and also because local officials accept bribes and sometimes allow small companies to flout regulations.

Also, regulators here say many exporters of food and medicines are mislabeling goods and shipping them illegally.

Two weeks ago, food and drug safety issues were even on the table in Washington during the strategic economic dialogue hosted by Treasury Secretary Henry M. Paulson Jr.

“These are issues China has to deal with over time,” says Rio D. Praaning, secretary general of the Public Advice International Foundation in Belgium, an advisory group that is working on food and drug safety issues around the world. “But we can’t wait. We have interim developments. We have patience, but frankly patience is out the window when people start dying.”

China Food Boss Sentenced To Death

Beijing has pledged tougher inspections amid growing domestic and international alarm over tainted products. Several countries have already imposed bans or voiced concerns about Chinese imports:

United States
Deaths of hundreds of pets blamed on Chinese pet food tainted with melamine, a chemical used in plastics, fertilisers and fireproofing
Mississippi and Alabama banned Chinese catfish after tests found they contained antibiotics

Europe and Japan
Excessive antibiotic or pesticide residues in Chinese shrimp, honey and other products

Hong Kong
Turbot found to contain traces of malachite green - a potential cancer-causing chemical used to treat fungal infections

China
Babies die after being fed fake baby formula
Cancer-causing dyes injected into eggs to make yolks redder
Children given saltwater passed off as rabies vaccine

Al Jazeera reports:
The former head of China's food and drug safety regulatory body has been sentenced to death for corruption.

Zheng Xiaoyu was convicted by a court in Beijing on charges of taking bribes and dereliction of duty, the official Xinhua news agency reported on Tuesday.
On the same day officials have announced a series of measures for recalling unsafe food products.

The news comes as China's leaders grapple with the fallout from a string of health alerts over toxins in food and other products.
Zheng, 62, headed the watchdog State Food and Drug Administration which sets standards for food and drug safety, from 1998 until he was sacked in 2005.

He was expelled from the ruling Communist party this year after investigators said he abused the administration's approval powers to obtain bribes and illegal profits from drug companies.

Zheng's powers increased substantially in 2002 when the government required all drugs be approved by the agency.

The change resulted in a massive backlog, giving companies a strong incentive to find ways to speed up approvals.

During his trial Zheng was accused of taking up to $780,000 in bribes to approve untested medicines, including an antibiotic that killed at least 10 patients.

His unusually harsh sentence may yet be reduced on appeal.

The last time China sentenced an official of Zheng's rank to death was in 2000, when Hu Changqing, a vice-governor of the eastern Jiangxi province, and Cheng Kejie, a vice-head of the National People's Congress, were executed for taking bribes.

In another case, local media reported that families of Chinese patients killed by a fake medical ingredient maker linked to widespread deaths in Panama have sued the southern Chinese hospital that administered the toxic injections.

They are seeking 20 million yuan ($2.6m) in compensation.

"These incidents have exposed serious problems in the production and distribution of medicines," the Information Times quoted one of the plaintiffs' lawyers as saying in the hearing that began on Monday.

Recall

Beijing has promised to subject all food and drugs to more rigorous inspections amid fears that tainted food scandals could lead to bans on Chinese food products.

Announcing new measures to tackle the problem on Tuesday, the govermment said it would be introducing a food recall system that will focus on "potentially dangerous and unapproved food products," the state-run China Daily newspaper said.

Earlier this month authorities announced the detention of managers from two Chinese firms linked to contaminated pet food sold in the US.

Ingredients used in the pet food had reportedly been tainted with melamine, a chemical used in plastics, fertilisers and flame retardants.

And in recent days the US government has stopped all imports of Chinese toothpaste after reports that some products sold in Australia, the Dominican Republic and Panama were tainted with diethylene glycol, a chemical commonly used in antifreeze and brake fluid.

China Spend $3 Billion To Buy Into U.S. Private Equity Firm

A new Chinese investment company charged with handling the nation's bulging reserves has agreed to invest three billion dollars in U.S. private equity company Blackstone

Financial Times reports:
Blackstone’s executives, led by founders Stephen Schwarzman and Pete Peterson, will receive up to $4.5bn from the buy-out group’s listing after a $3bn investment by the Chinese government prompted them to nearly double the size of the offering to $7.8bn.

The move will turn Blackstone’s initial public offering into the world’s second largest this year and enable its partners to cash in part of their stakes during an unprecedented boom for the private equity industry.

The hunger to share in private equity’s riches was underlined at the weekend by the Chinese government’s surprise decision to spend $3bn of its foreign exchange reserves on a stake of about 9.9 per cent in Blackstone.

In a regulatory filing on Monday, Blackstone said it would increase the size of the IPO from the planned $4bn to up to $7.8bn by selling a stake of about 10 per cent to the public and 9.9 per cent to China’s soon-to-be-formed foreign exchange agency.

Shares in the IPO, expected in the next few months, will be priced at between $29 and $31, valuing Blackstone at $33.6bn. “Our existing owners will receive $3.9bn of the proceeds . . . or approximately $4.47bn,” if, as likely, Blackstone’s advisers sold all the shares in the listing, the filing said.

The document did not reveal how much each of Blackstone’s founders and other dozen top executives would sell into the IPO. However, the buy-out group had previously said that Mr Peterson, 80, would retire at the end of 2008 and would be allowed to sell his stake in the listed vehicle immediately.

Blackstone also said in the filing that it would contribute $150m raised in the offering to the Blackstone Charitable Foundation, which is expected to give to educational, cultural, scientific and other organisations as well as to charities.

The news came as private equity executives and business and political leaders said the Chinese investment in Blackstone was more than just a financial coup for the buy-out group.

They said that the backing of a powerful Beijing agency would help Blackstone navigate China’s treacherous market for private equity deals, which have proven difficult to come by for rival buy-out groups such as Carlyle and Kohlberg Kravis Roberts.

“It is a double victory for Blackstone because you have to assume that the deal will be good for their expansion plans in China. Beijing now has a vested interest in the firm performing well,” a Hong Kong banker said.

The deal, which was clinched in just a few weeks and before the new agency had been set up, could also help the relationship between Washington and Beijing at a time of growing tensions over the level of the renminbi.

According to Mr Schwarzman, the deal signalled Beijing’s willingness to continue to invest part of its $1,200bn of foreign reserves in US assets, despite its stated policy of moving away from low-yielding US Treasuries. “From what I understand it should be, or will be, part of a trend,” he told Reuters by phone. “Blackstone is the first, but over time I would suspect there would be others.”

But the one-year exclusivity period secured by Blackstone could ensure that rival private equity groups considering a listing, such as KKR and Texas Pacific Group, may not be able to tap into Beijing’s funds.

Washington observers said the deal was unlikely to run into political opposition, particularly because Beijing had agreed to forego its voting rights.

Millions Of Chickens Fed Tainted Pet Food

At least 2.5 million broiler chickens from an Indiana producer were fed pet food scraps contaminated with the chemical melamine and subsequently sold for human consumption, federal health officials reported yesterday.

Hundreds of other producers may have similarly sold an unknown amount of contaminated poultry in recent months, they added, painting a picture of much broader consumption of contaminated feed and food than had previously been acknowledged in the widening pet food scandal.

The Washington Post reports:
Officials emphasized that they do not believe the tainted chickens -- or the smaller number of contaminated pigs that were reported to have entered the human food supply -- pose risks to people who ate them.

"We do not believe there is any significant threat of human illness from this," said David Acheson, the Food and Drug Administration's chief medical officer. FDA Commissioner Andrew von Eschenbach named Acheson yesterday the agency's new "food czar" -- officially, assistant commissioner for food protection.

None of the farm animals is known to have become sick from the food, and very little of the contaminant is suspected of having accumulated in their tissue. Thus, no recall of any products that may still be on store shelves or in people's freezers is planned, officials said.

Nonetheless, 100,000 Indiana chickens that ate the melamine-laced food and are still alive have been quarantined and will be destroyed as a precautionary measure -- as will any other animals that turn up as the investigation continues to expand.

The revelations are the latest in a rapidly widening scandal that started out with reports of a few deaths of pets. It has mushroomed into a major debacle that, even if no human injuries emerge, has exposed significant gaps in the nation's food-safety system.

In the first volley of what Hill watchers expect to be a series of proposed fixes, Sen. Richard J. Durbin (D-Ill.) and Rep. Rosa DeLauro (D-Conn.) yesterday introduced legislation that would give the FDA the power to order mandatory recalls of adulterated foods, establish an early warning and notification system for tainted human or pet food, and allow fines for companies that do not promptly report contaminated products.

Meanwhile, the FDA expanded the number of plant-based protein products from China on its "do not import" list, pending the completion of further tests on various kinds of glutens, protein concentrates and other products.

At the center of the problem are pet foods spiked with melamine, a mildly toxic chemical that can make food appear to have more protein than it does. Most of the food went to pets, but scraps were sold in February to the Indiana poultry producer, officials said. The contaminated material may have made up about 5 percent of the chickens' total food supply.

That small fraction, and the fact that people, unlike pets, do not eat the same thing day after day, suggests that consumers who ate contaminated pork or chicken would probably have ingested extremely small doses of melamine, well below the threshold for causing health effects, officials said. Experts conceded, however, that they know little about how the toxin interacts with other compounds in food.

Investigators are tracking streams of the contaminated food through several states.

"Our sense is that the investigation will lead to additional farms where contaminated feed may have been fed to either animals or poultry," said Kenneth Petersen of the Agriculture Department Food Safety and Inspection Service.

Officials said the FDA has received 17,000 reports of pets that owners believe were sickened or killed by contaminated food. About 8,000 reports, roughly half of them involving animals that died, have been formally entered into the FDA's tracking system for further analysis.

U.S. investigators have arrived in China, officials said, but inspections of production facilities there have been hampered by the start yesterday of a week-long national vacation.

"Essentially, all the officials are on holiday," said Walter Batts, part of the FDA's China team, adding that one Chinese official had stayed behind to help.

What The Chinese Are Putting In Our Food

As American food safety regulators head to China to investigate how a chemical made from coal found its way into pet food that killed dogs and cats in the United States, workers in this heavily polluted northern city openly admit that the substance is routinely added to animal feed as a fake protein.

The NYT reports:

Workers at the Shandong Mingshui Great Chemical Company say they commonly add the chemical melamine in the process of making animal feed. Melamine appears as protein but has no nutritional value.

For years, producers of animal feed all over China have secretly supplemented their feed with the substance, called melamine, a cheap additive that looks like protein in tests, even though it does not provide any nutritional benefits, according to melamine scrap traders and agricultural workers here.

“Many companies buy melamine scrap to make animal feed, such as fish feed,” said Ji Denghui, general manager of the Fujian Sanming Dinghui Chemical Company, which sells melamine. “I don’t know if there’s a regulation on it. Probably not. No law or regulation says ‘don’t do it,’ so everyone’s doing it. The laws in China are like that, aren’t they? If there’s no accident, there won’t be any regulation.”

Melamine is at the center of a recall of 60 million packages of pet food, after the chemical was found in wheat gluten linked this month to the deaths of at least 16 pets and the illness of possibly thousands of pets in the United States.

No one knows exactly how melamine (which is not believed to be particularly toxic) became so fatal in pet food, but its presence in any form of American food is illegal.

The link to China has set off concerns among critics of the Food and Drug Administration that ingredients in pet food as well as human food, which are increasingly coming from abroad, are not being adequately screened.

“They have fewer people inspecting product at the ports than ever before,” says Caroline Smith DeWaal, the director of food safety for the Center for Science in the Public Interest in Washington. “Until China gets programs in place to verify the safety of their products, they need to be inspected by U.S. inspectors. This open-door policy on food ingredients is an open invitation for an attack on the food supply, either intentional or unintentional.”

Now, with evidence mounting that the tainted wheat gluten came from China, American regulators have been granted permission to visit the region to conduct inspections of food treatment facilities.

The Food and Drug Administration has already banned imports of wheat gluten from China after it received more than 14,000 reports of pets believed to have been sickened by packaged food. And last week, the agency opened a criminal investigation in the case and searched the offices of at least one pet food supplier.

The Department of Agriculture has also stepped in. On Thursday, the agency ordered more than 6,000 hogs to be quarantined or slaughtered after some of the pet food ingredients laced with melamine were accidentally sent to hog farms in eight states, including California.

The pet food case is also putting China’s agricultural exports under greater scrutiny because the country has had a terrible food safety record.

In recent years, for instance, China’s food safety scandals have involved everything from fake baby milk formulas and soy sauce made from human hair to instances where cuttlefish were soaked in calligraphy ink to improve their color and eels were fed contraceptive pills to make them grow long and slim.

For their part, Chinese officials dispute any suggestion that melamine from the country could have killed pets. But regulators here on Friday banned the use of melamine in vegetable proteins made for export or for use in domestic food supplies.

Yet what is clear from visiting this region of northeast China is that for years melamine has been quietly mixed into Chinese animal feed and then sold to unsuspecting farmers as protein-rich pig, poultry and fish feed.

Many animal feed operators here advertise on the Internet, seeking to purchase melamine scrap. The Xuzhou Anying Biologic Technology Development Company, one of the companies that American regulators named as having shipped melamine-tainted wheat gluten to the United States, had posted such a notice on the Internet last March.

Here at the Shandong Mingshui Great Chemical Group factory, huge boiler vats are turning coal into melamine, which is then used to create plastics and fertilizer.
But the leftover melamine scrap, golf ball-size chunks of white rock, is sometimes being sold to local agricultural entrepreneurs, who say they mix a powdered form of the scrap into animal feed to deceive those who raise animals into thinking they are buying feed that is high in protein.

“It just saves money if you add melamine scrap,” said the manager of an animal feed factory here.

Last Friday here in Zhangqiu, a fast-growing industrial city southeast of Beijing, two animal feed producers explained in great detail how they purchase low-grade wheat, corn, soybean or other proteins and then mix in small portions of nitrogen-rich melamine scrap, whose chemical properties help the feed register an inflated protein level.

Melamine is the new scam of choice, they say, because urea — another nitrogen-rich chemical — is illegal for use in pig and poultry feed and can be easily detected in China as well as in the United States.

“People use melamine scrap to boost nitrogen levels for the tests,” said the manager of the animal feed factory. “If you add it in small quantities, it won’t hurt the animals.”

The manager, who works at a small animal feed operation here that consists of a handful of storage and mixing areas, said he has mixed melamine scrap into animal feed for years.

He said he was not currently using melamine. But he then pulled out a plastic bag containing what he said was melamine powder and said he could dye it any color to match the right feed stock.

He said that melamine used in pet food would probably not be harmful. “Pets are not like pigs or chickens,” he said casually, explaining that they can afford to eat less protein. “They don’t need to grow fast.”

The resulting melamine-tainted feed would be weak in protein, he acknowledged, which means the feed is less nutritious.

But, by using the melamine additive, the feed seller makes a heftier profit because melamine scrap is much cheaper than soy, wheat or corn protein.

“It’s true you can make a lot more profit by putting melamine in,” said another animal feed seller here in Zhangqiu. “Melamine will cost you about $1.20 for each protein count per ton whereas real protein costs you about $6, so you can see the difference.”

Feed producers who use melamine here say the tainted feed is often shipped to feed mills in the Yangtze River Delta, near Shanghai, or down to Guangdong Province, near Hong Kong. They also said they knew that some melamine-laced feed had been exported to other parts of Asia, including South Korea, North Korea, Indonesia and Thailand.

Evidence is mounting that Chinese protein exports have been tainted with melamine and that its use in agricultural regions like this one is widespread. But the government has issued no recall of any food or feed product here in China.

Indeed, few people outside the agriculture business know about the use of melamine scrap. The Chinese news media — which is strictly censored — has not reported much about the country’s ties to the pet food recall in the United States. And few in agriculture here do not see any harm in using melamine in small doses; they simply see it as cheating a little on protein, not harming animals or pets.

As for the sale of melamine scrap, it is increasingly popular as a fake ingredient in feed, traders and workers here say.

At the Hebei Haixing Insect Net Factory in nearby Hebei Province, which makes animal feed, a manager named Guo Qingyin said: “In the past melamine scrap was free, but the price has been going up in the past few years. Consumption of melamine scrap is probably bigger than that of urea in the animal feed industry now.”

And so melamine producers like the ones here in Zhangqiu are busy.

A man named Jing, who works in the sales department at the Shandong Mingshui Great Chemical Group factory here, said on Friday that prices have been rising, but he said that he had no idea how the company’s melamine scrap is used.

“We have an auction for melamine scrap every three months,” he said. “I haven’t heard of it being added to animal feed. It’s not for animal feed.”

Battling Over The World's Oil Reserves

Alistair Tice looks at the rivalry for access to the world's oil supplies and assesses the likely consequences for the world economy, and the continued dominance of US imperialism.

Alistair Tice reports:
George Bush invaded Iraq for power, prestige and oil. Whilst the catastrophe of the occupation has dealt a huge blow to the prestige of US imperialism around the world and its power in the Middle East has been severely undermined, US and British oil companies are still set to get their hands on Iraq's oil.

Iraq's pro-western cabinet has approved a Hydrocarbon Law that will hand over long-term control of the country's untapped energy fields to foreign multinationals, with profit rates of up to 75 per cent! Iraq has the world's second largest known oil reserves and the Middle East currently supplies two-thirds of the world's oil.
Bush's war for oil was driven by his administration's close links to the major oil companies and by the United States' oil import needs. US oil production peaked in 1970 at ten million barrels per day (bpd); today it is less than five million bpd and the US consumes 20 million bpd. That is 25% of the world's oil consumption, yet the US only has 5% of the world's reserves.

Imports have risen from 36% of its oil needs in 1970 to two-thirds today. A recent submission to the Senate Committee on Energy and Natural Resources stated "there is no economically plausible scenario for a strategically meaningful reduction in the dependence of the Unites States and its allies on imported hydrocarbons during the next quarter century."

The major oil companies, mostly US-owned, are collectively known as 'Big Oil'. Closely connected to the Bush regime, many were originally based in the key oil state of Texas and are an essential element in the 'military-industrial complex'. Their profit-driven objectives have played a decisive role in Bush's aggressive, interventionist policy in the Middle East and Central Asia. Big Oil makes huge profits. In 2005, ExxonMobil became the world's biggest company, overtaking Wal-Mart. Five of the world's top ten corporations are now oil majors.

However, they face long term problems. Last year, the private oil corporations only replaced 75% of their reserves and now they only control 10% of world oil reserves.

State ownership
Despite two decades of neo-liberalism, national oil companies (wholly or partly state owned) control 90% of world oil reserves. And that share is rising.

On 1 May 2006, Evo Morales, the recently elected leftist president, announced the nationalisation of Bolivia's gas industry. Whilst it ended up as only partial state ownership, it was hugely significant after two decades of privatisation and was referred to as "the first nationalisation of the 21st century." Hugo Chávez, the radical president of Venezuela, has announced that by 1 May 2007, PDVSA (the Venezuelan state oil company) will take a 60% majority stake in the extra-heavy oil fields in the Orinoco Basin.

Vladimir Putin, the Russian president, has taken state-capitalist measures against the oil multinationals to increase his government's revenues and standing internationally.

Shell was forced to accept reduced shares in joint ventures in the giant Sakhalin oilfield. And now BP is under pressure from Gazprom, the Russian state gas company, over a new gas field project in Eastern Siberia.

The oil companies are having to accept lesser shares in future profits or risk expropriation and miss out altogether.

Even in the central African country Chad, last year the government created a new national oil company and threatened to expel Chevron for not paying taxes. In less than three years of exploitation of Chad's recently discovered oil resources, in a deal brokered by the World Bank, the foreign consortium had earned $5 billion for a $3 billion investment and Chad only got $588 million!

Globalisation
This retrenchment from globalisation is likely to increase with more governments nationalising or at least taking majority state holdings in their energy resources. Russia is now the world's biggest oil exporter (it overtook Saudi Arabia last year) and Gazprom is now the highest valued company outside the US.

But the Big Oil companies, and through them US imperialism, still control the international oil market: trading, transportation (tankers and pipelines) and refining. So Russia and China are trying to challenge their domination, and their state-owned energy companies could even make hostile takeover bids for Big Oil companies.

These would not be successful for political reasons. Last year for example, the US Congress blocked an attempted take-over of US energy company Unocal by the Chinese state oil company.

However, Russia and China have made a number of bilateral energy agreements and are planning to open their own oil and gas market exchanges to rival the US.

The world oil price peaked at around $80 per barrel last year but has now fallen back to $50-$60, still way above the $20 per barrel before the Iraq war started four years ago.

In the coming world economic slowdown or recession, the oil price is likely to fall further as energy demand falls, although probably not back to $20. However, any significant fall in the oil price below $50 a barrel will cause big economic and social problems for producer countries. It would also lead to another slump (as in the 1990s) in oil exploration and production (the economic viability of reserves is very much conditioned by the oil price) - paving the way for further shortages of supply and refining capacity later.

Would the leftist governments in Bolivia and Venezuela cut back on their social programmes for the poor or would they be forced into more radical policies of expropriation of capitalist interests?

Similarly, would Putin threaten to cut off western energy supplies if the west did not pay more for its gas and oil?

70% of Iran's state revenues comes from its oil exports so any fall in price would undermine President Ahmadinejad's already failing social promises and popular support. Saudi Arabia and the Gulf states too would face big social upheavals.

Whilst these would be the likely consequences of a fall in oil prices in the short term, in the longer run the price is likely to increase and could jump dramatically in response to internal crises.

The four biggest oilfields in the world (which account for 14% of world supplies) are all over 30 years old and in decline.

Saudi Arabia's Ghawar field, the world's largest, is over 50 years old and over half depleted (some observers say 90% depleted but the Saudi oil industry is shrouded in secrecy).

Daqing is the largest oil field in China and its major source of domestic oil; its decline will only make China even more desperate for imports. China is now the world's second biggest oil importer after the US, hence its deals with Iran, Sudan and Venezuela.

Last year, two senior US senators initiated a computerised simulation exercise called ShockWave to study the effects on the US economy if the oil price rose to $100 a barrel. Their inescapable conclusion was that it would lead to recession.

Many analysts believe that due to 'Peak Oil', prices could rise as high as $125-$150 a barrel. The Peak Oil theory is that a time will come when half the discovered and produced oil in the world has been consumed and after then the oil supply will decline. Some oil experts believe that time has already come, others that it may not be for another 30 years.

Either way, the reaction against neo-liberalism already evident in Latin America will spread to other continents as workers and poor people demand action against the super-profits of Big Oil.

There will be pressure from the masses for more windfall taxes and outright nationalisation.

The intensified rivalry between the declining and desperate US empire and energy-rich Russia and energy-hungry China will intensify, most immediately over Iran, and in Central Asia and Africa, leading to trade wars and further military conflicts.

As a consequence oil prices will become increasingly volatile, with falls and big rises, each with the potential to cause economic crises and social upheaval.

Just before the invasion of Iraq, media magnate Rupert Murdoch expressed his support for war to maintain oil prices at $20 a barrel and help sustain world economic growth (and his profits!). Like most things in his media, Murdoch got that one wrong and Iraq and oil will prove to be sources of world economic and political instability for years to come.

WTO Group Agrees on Chinese Membership

Reuters reports:

World Trade Organization (WTO) officials said on Friday they had agreed terms for China's entry to the body -- clearing the way for Beijing to come in by the end of the year.

Agreement was sealed at a meeting of the WTO's special working party, which has been negotiating with China for the last 15 years.

"It has been done. The big breakthrough has been achieved," said spokesman Keith Rockwell.

The accord will be rubber-stamped by a formal meeting of the working party on Monday. It will then go through the formality of confirmation by the WTO's ruling General Council, essentially the same negotiators who form the working party, or by ministers of all 142 member countries set to meet in Qatar in November.

China's entry will bring the world's fifth largest trading power -- after the United States, the European Union, Japan and Canada -- into the WTO, and, analysts say, change the balance of forces in the body forever.

"It is only the end of the beginning. It is a long process for China to implement and enforce the agreement and to a good WTO member," chief Chinese negotiator Long Yongtu told reporters after the meeting.

MAJOR PLAYER

As a developing country, Beijing would be expected to add huge weight to the position of the poorer nations -- who already make up well over two thirds of the membership but complain that the current big four dictate the agenda to their own advantage.

"It was long and painful but in the end we have an agreement that will ensure the integration of China into the world trading system," said the European Union's chief negotiator, Karl Falkenberg.

For the big four, known in trade parlance as "The Quad," the lure of a market of one billion people -- one sixth of the world's population -- for goods and services outweighed concerns over the stance China might take in the trade body.

Western leaders also argue that bringing China into the WTO and opening up its economy to the outside world will also bring domestic political liberalization and make the long feared "Communist Dragon" a more predictable partner.

"All countries -- China and its partners -- would benefit. This should become a win-win game," said Falkenberg.

But many developing economies fear that Chinese goods will capture markets for items like clothing, textiles and footwear as well as for agricultural produce that they had hoped to win themselves in the richer countries of the North.

On Thursday, Mexico completed a side agreement with China allowing it to maintain restrictions on many Chinese consumer goods for six years in order to give its industries time to adjust.

INSURANCE AN ISSUE

Right up to the last, however, the deal had also been threatened by a dispute between the EU and the United States over terms for foreign insurance companies opening new offices in China once it has come under the umbrella of WTO rules.

The two powers, with China in the middle, had been at odds over insistence by the United States that the huge American International Group Inc (AIG) conglomerate would be able to hold 100 per cent ownership of any new Chinese operations.

The EU argued that this would mean the AIG getting better terms than insurers from its 15 member states -- which would be bound by Chinese rules giving newcomers onto its market the right to only 50 percent ownership.

Such an outcome, Brussels said, would violate the WTO's basic principle of most-favored-nation, or no discrimination between trading partners who are members of the trade body.

There were no immediate details on how the differences had been resolved.

"The last page in this process reflected close cooperation between the United States and the European Union," said Washington's top negotiator Jeffrey Bader.