How Terrible China Detains Five Over Tiananmen Crash!

Tiananmen Square as smoke rises into the air. (Getty Images)

According to The Wall Street Journal, Chinese police said that terrorists were behind Monday’s deadly car crash in Tiananmen Square and that they had detained five suspects, as more details emerged to suggest the rare violent attack in China’s capital was rooted in ethnic grievances.

Authorities on Wednesday didn’t place blame on any group, but released information suggesting the attack was carried out by people from the western region of Xinjiang, which has seen protests against Chinese rule by some members of its mostly Muslim Uighur minority.

Authorities detained the suspects about 10 hours after Monday’s crash, the official Xinhua news agency said on Wednesday. It didn’t say where the suspects, two of whom are women, were detained. The occupants of the car were a man, his wife and his mother, who died after they ignited gasoline in the vehicle, according to the Xinhua report, which cited a spokesman with the Beijing Municipal Public Security Bureau.

The crash—which occurred in front of the Forbidden City in Beijing’s Tiananmen Square, just below the famous portrait of Mao Zedong —also killed two tourists and injured 40 others, according to authorities.

Police described the attack as “carefully planned, organized and premeditated,” Xinhua said. They recovered gasoline canisters, iron rods, two machetes and banners with “religious extremist” slogans from the vehicle used in the attack, Xinhua said. Police identified the vehicle used in the attack as a Jeep with a license plate from Xinjiang, Xinhua said.

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Philippine Hacks Develop Apps for Clean Government

Makati City (Associated Press)

According to The Wall Street Journal, MANILA – Once regarded as the “sickman of Asia,” the Philippines has recently undertaken a series of governance reforms that have helped improve its bill of health and convince investors and credit rating agencies to take a fresh look at one of the region’s fastest-growing economies.

President Benigno Aquino III and his economic managers are taking much of the credit for the Philippines current stellar economic performance. They point to efforts to run a clean government and stamp out corruption as the main factors behind the investment-grade ratings awarded to the country this year by all three major international rating agencies.

Last month, following a scandal that sparked widespread protests, three senators and five former lawmakers were charged with corruption for misusing more than $200 million from state coffers – a move seen as part of President Aquino’s battle against graft. Those charged all deny wrongdoing.

Former President Gloria Macapagal-Arroyo, installed after a popular uprising that removed president Joseph Estrada on corruption allegations, is also facing several graft charges and is now in detention.

Now, the government is planning to take its reforms a step further.

Early next month, it will host a two-day “hackathon” with information technology programmers and designers to help spur the development of mobile or computer applications that will improve public services, particularly in the handling of public funds.

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Investors Welcome Malaysia Reform Budget

Malaysian Prime Minister Najib Razak (Bloomberg News)

According to The Wall Street Journal, upcoming national elections seem likely to hinder sorely needed economic reforms in places like India and Indonesia. Not so in Malaysia, where Prime Minister Najib Razak’s resounding victory in general elections last May gives him the leeway to push a reform agenda.

Mr. Najib’s 2014 budget presentation last Friday centered on reforms he believes will help balance the nations’ books by 2020. Key among them is a 6% tax on goods and services that Mr. Najib has talked of for years but never had the political clearance to push through – until now.

He also scrapped a sugar subsidy for consumers and announced the government will move to a system of targeted subsidies where only the poorer members of society would benefit from cheaper food items, cooking oil and fuel.

The government says targeted payouts will lower the total subsidy bill – which makes up about 18% of government spending – by some 15.6% next year. Mr. Najib said next year’s subsidy bill will fall to 39.41 billion ringgit ($12.6 billion) from this year’s 46.70 billion ringgit ($14.9 billion).

Mr. Najib forecast a budget deficit of 3.5% next year, down from a projected 4.0% this year.

Opposition parties warned they would protest the new goods-and-services tax – which in any case will exempt basic food items and essential services — but analysts and ratings agencies generally welcomed the budget. So too did investors, who sent the ringgit to a four-month high of 3.1425 against the U.S. dollar Monday, while the yield on the benchmark 10-year government bond hit a three-month low of 3.59. Stocks were little changed.

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Is it Right: More Money Means More Health Problems in Asia?

Flavored juice drinks sit on a shelf in a grocery store in Manila. (Bloomberg)

According to The Wall Street Journal, MANILA — Economies in Southeast Asia are not the only things growing in the region. Waistlines are too – and that has doctors and health experts worried about the strains a clutch of new health problems could put on many countries still in the process of developing.

Rapid economic growth has created new and expanding middles classes in places like Indonesia, the Philippines and Vietnam. But new affluence is also driving up the rate of “life-style” diseases, including hypertension, cancer, diabetes and chronic respiratory illness, say doctors.

Together, those diseases account for 80% of the deaths in Asia, but health experts say it need not be that way – most could be addressed by people simply changing the way they eat and live.

“We must have behavior change,” Shin Young-soo, the World Health Organization’s regional director for the Western Pacific, said during a recent health summit in Manila.

As regional incomes improve, people have more money to spend on fast food and processed snacks. In recent years, demand for meat and dairy has also risen dramatically in many of Southeast Asia’s emerging economies.

But changes in diets combined with lack of exercise has made Asians more prone to diabetes than their counterparts in the West, said Dr. Shin, one of nearly 200 health and development experts attending a week-long gathering here aimed at discussing non-communicable diseases and finding way to combat them.

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Is it a Good Fit for the LG G Flex’s Face?

LG G Flex smartphone (LG Electronics)

According to The Wall Street Journal, LG Electronics Inc. has unveiled its new 6-inch curved-screen smartphone, two weeks after rival Samsung Electronics Co. launched a similar phone.

LG says its G Flex smartphone, which has a screen that is curved from top to bottom, will fit more snugly against users’ faces when they talk, while Samsung Electronics has promised a better handgrip with its Galaxy Round that is curved along the sides of the phone.

LG also says the curvature on the G Flex, if held horizontally,  offers a viewing experience akin to an IMAX theater, although one could argue that that effect would make more sense on a much bigger screen like a 55- or 60-inch curved-screen television set.

It is unlikely that potential buyers will be taken in by the marketing spiel for these phones or their hefty price tags. Apart from the fact that they have curved screens, both the Galaxy Round and the G Flex have specifications similar to those of a typicalhigh-end smartphone such as a 2.3 Gigahertz microprocessor and a 13-megapixel camera. The Galaxy Round has a price tag of over $1,000 while LG didn’t disclose the pricing details of the G Flex.

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Is it Really a Communication Problem for Japan’s Mizuho Bank Loans to Crime-Syndicate Members?

Mizuho Bank (The Wall Street Journal)

According to The Wall Street Journal, the 102-page report by an investigative panel of lawyers into why Mizuho Bank didn’t pull the plug on $2 million in loans to crime-syndicate members providessome answers about what went wrong. Among them: The panel said executives who initially started handling the problem didn’t fully brief their successors, following a management overhaul caused by a separate, unrelated computer-system breakdown in 2011.

To go back a step: The panel got its information by interviewing 85 officials from Mizuho and Orient Corp.8585.TO 0.00%, the consumer-loan affiliate that actually extended the loans with financing from Mizuho. It also screened email exchanges between employees. The details of the panel’s findings were confirmed by Mizuho, in a separate press conference on Monday.

The panel found that the questionable loans were initially discovered in 2010, when Mizuho Bank was led by an executive named Satoru Nishibori.

But amid the turmoil sparked by the March 2011 system failure, Mr. Nishibori resigned his post and didn’t give a full briefing on the issue to his successor, Takashi Tsukamoto, the panel found. In fact, most of the compliance-department officials who were involved in dealing with the loans left the department at that time, the panel found.

Meanwhile, the computer problems turned the attention of top executives toward solving systems issues, and the question of how to handle the loans to crime-syndicate members got less attention, the panel said. In materials handed out at several subsequent compliance and board meetings, for instance, reference to the loans was pared down to only a few sentences; all mention of the loans in such materials disappeared after January 2012, the panel found.

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What’s the Entry Ticket to Chinese Market?

Fast-fashion Brand ZARA in China (Bloomberg)

According to The Wall Street Journal, a growing number of Western brands in China are creating online stores to reach more consumers, adopting a formula that Chinese e-commerce company Alibaba Group Holding Ltd. has exploited with much success.

The promise of e-commerce in China has attracted foreign companies for years. Yet Western companies, such as eBay Inc., EBAY +0.22% Google Inc. GOOG +0.20% andGroupon Inc., GRPN -4.49% have struggled in China, partly because of competition from domestic giants. Western retailers also have had concerns about the difficulties of distribution in the country and its Web shoppers’ insistence on low prices.

But China’s e-commerce—which, by some measures, overtook the U.S. this year as the world’s largest online retail marketplace—has become too big to ignore. Online retail sales in China are expected to reach about $540 billion by 2015, compared with roughly $345 billion in the U.S., according to consulting firm Bain & Co. China’s online retail sales have increased more than 70% annually since 2009, compared with 13% in the U.S.

“If you’re going to be in China, e-commerce is going to be the first thing you consider, and if you’re already there, you’re scrambling to adapt,” says Duncan Clark, chairman of BDA China, an investment advisory firm in Beijing.

Inditex SA ITX.MC +0.51% ‘s Zara fast-fashion brand, high-end handbag makerCoach Inc. COH -0.27% and luxury-department-store chain Neiman Marcus Group Inc. began selling online in China late last year.

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How Asian Markets Down on Earnings?

Asian Stock Market (Asian News)

According to The Wall Street Journal, Asian stocks moved lower Friday, though Australia managed to rise, in a session heavy in corporate earnings.

South Korea’s Kospi slid 1.1%, with the index’s largest single constituent, Samsung Electronics 005930.SE 0.00% down 1% after it reported third-quarter net profit had risen 25.6% to another record. Before the results, the stock enjoyed a strong run-up, and remains 5% higher so far in October.

Also in Seoul, LG Electronics 066570.SE -3.42% dropped 3.7% after it reported a 34% decline in net profit over the same period.

In Hong Kong, shares of Chinese auto maker Great Wall Motor GWLLY -4.22% shed 5.8% after reporting weaker profit margins in the third quarter.

In Japan, Canon 7751.TO -1.60% fell 1.1% after it lowered its full-year net profit forecast to ¥240 billion ($2.46 billion) from a previous estimate of ¥260 billion set in July. Mitsubishi Motors 7211.TO +1.17% Corporation added 1.8% after the car company increased its profit outlook.

More broadly, the absence of fresh catalysts left regional markets to drift lower.

In Japan, the Nikkei remained under pressure from a yen that has firmed up in recent sessions. The Japanese currency maintained its strength, last at ¥97.21 to the dollar, helping to pull the Nikkei down 1.7%.

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Why China PBOC Unveils Prime Interest Rate for Commercial Bank Loans?

China PBOC (China Image)

China PBOC (China Image)

According to The Wall Street Journal, BEIJING–China’s central bank Friday said it has introduced a new prime lending rate, which it said would help push forward interest rate liberalization.

The new bank lending rate, officially known as the “loan prime rate,” would be the rate on loans extended to the best customers of Chinese commercial banks.

The rate is based on a weighted average of lending rates from nine commercial banks, the People’s Bank of China said in a statement on its website.

It said the rate would be calculated each working day and would be announced on the website of the key barometer of interbank lending, the Shanghai Interbank Offered Rate, or Shibor.

The central bank said that initially, it would calculate only a one-year rate. It gave Friday’s level as 5.71%.

In the past, the central bank has set guidelines for domestic interest rates, but it has been trying to give a greater role to the market. The PBOC’s existing benchmark interest rate for one-year loans is 6%.

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