Tag Archives: China

China issues order to implement U.N. sanctions on North Korea

A North Korean flag flies on a mast at the Permanent Mission of North Korea in Geneva

BEIJING (Reuters) – China’s Commerce Ministry issued a ban effective from Tuesday on several imports from North Korea, including coal, iron ore, lead concentrates and ore, lead and seafood, a move that is in line with U.N. sanctions announced this month.

Beijing issued the banning order on Monday.

U.N. sanctions must be implemented 30 days after the resolution was approved in a vote on Aug. 6.

The Chinese government said any cargoes already on their way to China would be cleared by customs as usual before the U.N. sanctions deadline.

 

(Reporting by Josephine Mason; Editing by Christian Schmollinger and Edmund Blair)

 

In call with Trump, China’s Xi urges restraint over North Korea

FILE PHOTO: Navy vessels are moored in port at the U.S. Naval Base Guam at Apra Harbor, Guam March 5, 2016. Major Jeff Landis,USMC (Ret.)/Naval Base Guam/Handout/File Photo via REUTERS

By James Oliphant and Ben Blanchard

BEDMINSTER, N.J./BEIJING (Reuters) – China’s President Xi Jinping said there needs to be a peaceful resolution to the North Korean nuclear issue, and in a telephone call with U.S. President Donald Trump he urged all sides to avoid words or action that raise tensions.

Xi’s comments came hours after Trump warned North Korea that the U.S. military was “locked and loaded” as Pyongyang accused the U.S. leader of driving the Korean peninsula to the brink of nuclear war.

The Pentagon said the United States and South Korea would proceed as planned with a joint military exercise in 10 days, an action sure to further antagonize North Korea.

In a statement, China’s foreign ministry said Xi told Trump that a peaceful resolution to the North Korean nuclear issue was essential, and urged calm.

“Concerned parties must exercise restraint and avoid remarks and actions that escalate tensions on the Korean peninsula,” it cited Xi as saying.

In their phone call, Trump and Xi “agreed North Korea must stop its provocative and escalatory behavior,” the White House said in a statement, and reiterated their mutual commitment to denuclearize the Korean peninsula. It added the relationship between Trump and Xi was “extremely close” and “will hopefully lead to a peaceful resolution of the North Korea problem.”

Trump, vacationing at his Bedminster, New Jersey, golf resort, earlier took to Twitter to warn North Korean leader Kim Jong Un that U.S. “military solutions are now fully in place, locked and loaded, should North Korea act unwisely”.

Again referring to Kim, Trump added, “If he utters one threat … or if he does anything with respect to Guam or any place else that’s an American territory or an American ally, he will truly regret it, and he will regret it fast.”

In remarks to reporters after a meeting with U.S. Secretary of State Rex Tillerson and U.S. Ambassador to the United Nations Nikki Haley, Trump said the situation with North Korea was “very dangerous and it will not continue”.

He added, “We will see what happens. We think that lots of good things could happen, and we could also have a bad solution.”

Despite the tough rhetoric, Trump insisted that “nobody loves a peaceful solution better than President Trump.”

South Korea’s presidential Blue House said in a statement on Saturday the United States and China were working to resolve the North Korea crisis, and it hoped the two leaders’ phone call “will be able to resolve the peak of tension and act as a catalyst for the situation to move on to a new dimension.”

(To view an interactive package on North Korea’s missile capabilities, click http://tmsnrt.rs/2t0oSv7)

TRUMP TO GUAM: “YOU’RE SAFE”

Guam, the Pacific island that is a U.S. territory and home to a U.S. air base, a Navy installation, a Coast Guard group and around 6,000 U.S. military personnel, posted emergency guidelines on Friday to help residents prepare for any potential nuclear attack.

North Korean state news agency KCNA said on Thursday the North Korean army would complete plans in mid-August to fire four intermediate-range missiles over Japan to land in the sea 18 to 25 miles (30 to 40 km) from Guam.

Japan’s government decided to deploy its Patriot missile defense system to four locations in the west of the country, media reported. No one at Japan’s defense ministry was available to comment on Saturday.

The governor of Guam, Eddie Baza Calvo, posted a video on Facebook of himself speaking with Trump. “We are with you a thousand percent. You are safe,” Trump told Calvo.

Washington wants to stop Pyongyang from developing nuclear missiles that could hit the United States. North Korea sees its nuclear arsenal as protection against the United States and its partners in Asia.

Trump said he was considering additional sanctions on North Korea, adding these would be “very strong.” He gave no details and did not make clear whether he meant unilateral or multilateral sanctions.

U.S. officials have said new U.S. steps that would target Chinese banks and firms doing business with Pyongyang are in the works, but these have appeared to be put on hold to give Beijing time to show it is serious about enforcing new U.N. sanctions.

BACK CHANNELS

Trump said he did not want to talk about diplomatic “back channels” with North Korea after U.S. media reports that Joseph Yun, the U.S. envoy for North Korea policy, had engaged in diplomacy for several months with Pak Song Il, a senior diplomat at Pyongyang’s U.N. mission, on the deteriorating ties and the issue of Americans imprisoned in North Korea.

But Daniel Russel, until April the top U.S. diplomat for East Asia, said this so-called New York channel had been a relatively commonplace means of communication with North Korea over the years, and was not a forum for negotiation.

“It’s never been a vehicle for negotiations and this doesn’t constitute substantive U.S.-DPRK dialogue,” he said, using the acronym for North Korea’s formal name, Democratic People’s Republic of Korea.

Both Moscow and Berlin expressed alarm over the rise in rhetoric over North Korea, and Russian Foreign Minister Sergei Lavrov urged Pyongyang and Washington to sign up to a joint Russian-Chinese plan by which North Korea would freeze missile tests and the United States and South Korea would impose a moratorium on large-scale military exercises. Neither the United States nor North Korea has embraced the plan.

German Chancellor Angela Merkel said there is no military solution, adding that “an escalation of the rhetoric is the wrong answer.”

The French presidency said North Korea was engaged in a “dangerous escalation” of tensions.

President Emmanuel Macron “calls for all parties to act responsibly and prevent any further escalation in tensions,” the Elysee palace said in a statement.

British Foreign Secretary Boris Johnson said blame for problems lay with North Korea, and that the international community was “shoulder to shoulder” in efforts to stop North Korean aggression.

“We are working with the US and our partners in the region to bring this crisis to a diplomatic end,” he tweeted.

As the rhetoric has ratcheted up, South Koreans are buying more ready-to-eat meals for emergency use, and the government aims to expand nationwide civil defense drills planned for Aug. 23. Hundreds of thousands of troops and huge arsenals are arrayed on both sides of the tense demilitarized zone between the two Koreas.

(Additional reporting by Doina Chiacu, David Brunnstrom and Idrees Ali in WASHINGTON, Dahee Kim, Haejin Choi and Christine Kim in SEOUL, Dustin Volz in SAN FRANCISCO, Tim Kelly in TOKYO, Martin Petty in GUAM, Michelle Nichols at the UNITED NATIONS, Dmitry Solovyov in MOSCOW, Joseph Nasr and Paul Carrel in BERLIN; Writing by Will Dunham, Eric Beech and Ian Geoghegan; Editing by Clarence Fernandez)

Exclusive: U.S. destroyer challenges China’s claims in South China Sea

FILE PHOTO - The guided-missile destroyer USS John S. McCain approaches the aircraft carrier USS George Washington for a fueling at sea in this December 5, 2010 handout photo courtesy of the U.S. Navy. REUTERS/U.S. Navy/Mass Communication Specialist Seaman Cheng S. Yang/Handout

By Idrees Ali

WASHINGTON (Reuters) – A U.S. Navy destroyer carried out a “freedom of navigation operation” on Thursday, coming within 12 nautical miles of an artificial island built up by China in the South China Sea, U.S. officials told Reuters.

The operation came as President Donald Trump’s administration seeks Chinese cooperation in dealing with North Korea’s missile and nuclear programs and could complicate efforts to secure a common stance.

The officials, speaking on condition of anonymity, said the USS John S. McCain traveled close to Mischief Reef in the Spratly Islands, among a string of islets, reefs and shoals. China has territorial disputes with its neighbors over the area.

It was the third “freedom of navigation operation” or “fonop” conducted during Trump’s presidency. Neither China’s defense ministry nor its foreign ministry immediately responded to a request for comment.

The operation was the latest attempt to counter what Washington sees as Beijing’s efforts to limit freedom of navigation in the strategic waters, and comes as Trump is seeking China’s cooperation to rein in North Korea.

Tensions have risen recently after North Korea carried out two nuclear tests last year and two ICBM tests last month, prompting a strong round of U.N. sanctions which angered Pyongyang who threatened to teach the United States a “severe lesson”.

Trump in turn responded by warning North Korea it would face “fire and fury” if it further threatened the United States.

U.S. Defense Secretary Jim Mattis issued a stark warning to North Korea on Wednesday, telling Pyongyang that it should stop any actions that would lead to the “end of its regime and the destruction of its people.”

The United States has criticized China’s construction of islands and build-up of military facilities in the sea, and is concerned they could be used to restrict free nautical movement.

The U.S. military has a long-standing position that its operations are carried out throughout the world, including in areas claimed by allies, and they are separate from political considerations.

The Trump administration has vowed to conduct more robust South China Sea operations.

In July, a U.S. warship sailed near a disputed island in the South China Sea claimed by China, Taiwan, Vietnam.

Experts and officials have criticized President Barack Obama for potentially reinforcing China’s claims by sticking to innocent passage, in which a warship effectively recognized a territorial sea by crossing it speedily without stopping.

China’s claims in the South China Sea, through which about $5 trillion in ship-borne trade passes each year are contested by Brunei, Malaysia, the Philippines, Taiwan and Vietnam.

(Additional reporting by Ben Blanchard in Beijing; Editing by Clarence Fernandez and Matthew Mpoke Bigg)

China seethes on sidelines amid latest North Korea crisis

China seethes on sidelines amid latest North Korea crisis

By Ben Blanchard and Michael Martina

BEIJING (Reuters) – Angered as the United States and its allies ignore Chinese calls to calm tensions over North Korea, and distracted by domestic concerns, China is largely sitting out the latest crisis with nuclear-armed Pyongyang.

While a conflict on the Korean peninsula would affect China, and in worst-case scenarios unleash a radioactive cloud or waves of refugees into its northeast, Beijing has kept a low profile as tension has escalated in recent days.

North Korea dismissed on Thursday warnings by U.S. President Donald Trump that it would face “fire and fury” if it threatened the United States as a “load of nonsense”, and outlined plans for a missile strike near the Pacific territory of Guam.

China, whose regular daily foreign ministry press briefings are suspended for a two week summer holiday, has said little in public about the situation this week, reiterating its usual calls for calm and restraint.

President Xi Jinping has been out of the public eye for more than a week, likely because he is at a secretive Communist Party conclave in the seaside resort of Beidaihe preparing for a key party congress in the autumn, diplomats say.

One Beijing-based Asian diplomat said China was also distracted by a protracted border dispute with India.

“China has different priorities and it’s clear what they are,” said the diplomat, speaking on condition of anonymity.

State media has as usual called for dialogue to end the crisis, but has also lambasted the United States and its allies for doing little to damp down the flames.

The official Xinhua news agency on Thursday accused Japan of “fishing in troubled waters”, using North Korea as an excuse for its own remilitarization. Japan issued a defense white paper this week that warned it was possible that North Korea had already developed nuclear warheads.

Also Thursday, the influential Chinese tabloid Global Times said Washington “only wants to heighten the sanctions and military threats against Pyongyang”.

MAD OVER THAAD

Seoul has fared little better, with China directing anger its way over South Korea’s deployment of the Terminal High Altitude Area Defense (THAAD) anti-missile system. Beijing says THAAD threatens its own security, fearing that its powerful radar will see far into China, and will do nothing to bring North Korea back to talks.

“China is not too worried that the United States might suddenly attack North Korea. It is worried about THAAD,” said Sun Zhe, co-director of the China Initiative of Columbia University’s School of International and Public Affairs.

China remains North Korea’s most important ally and trading partner, despite Beijing’s anger at Pyongyang’s missile and nuclear programs.

China has signed up for tough United Nations sanctions that were agreed on Saturday and says it is committed to enforcing them.

Yet Beijing has been upset by complaints from Washington and Tokyo it is not doing enough to rein in North Korea. The foreign ministry last month called for an end to what it termed the “China responsibility theory”.

China also believes its influence over North Korea, whose relationship China used to describe as “close as lips and teeth,” is limited.

“China has never ‘owned’ North Korea, and North Korea has never listened to China’s suggestions,” said Zhang Liangui, a North Korea expert at China’s Central Party School, which trains rising officials.

“Neither North Korea nor the United States listens to China. They’re too busy heading down the path to a military clash. There’s not much China can do. China can’t stop North Korea and it can’t stop the United States.”

China’s recent relationship with North Korea soured around 2013 as Pyongyang stepped up its missile and nuclear programs, rejecting Chinese efforts to engage the country economically and encourage it to open up.

Chinese officials have for years doubted the efficacy of sanctions, although Foreign Minister Wang Yi said this week that they were needed. However, he said the final aim should be to resolve the issue via talks as only that would ensure lasting peace and stability.

Wang Dong, associate professor of international studies at the elite Peking University, said China had tried hard to prevent the situation from getting out of control. He also said Trump’s domestic problems could play into the current crisis, referring to the U.S. investigation into possible Russian meddling in last year’s presidential election.

“When facing increasingly difficult domestic problems, Trump might have an increasing incentive to do something. Maybe he initially would want a limited military conflict,” Wang said. “So people are certainly worried about that.”

(Editing by Philip McClellan)

Earthquake in China’s Sichuan kills 19, including tourists; injures 247

Quake in China's Sichuan kills 19, including tourists; injures 247

By Christian Shepherd

JIUZHAIGOU, China (Reuters) – A 7.0-magnitude earthquake struck a remote, mountainous part of China’s southwestern province of Sichuan, killing 19 people, including eight tourists, and injuring 247, the provincial government and official media said on Wednesday.

The quake hit a sparsely populated area 200 km (120 miles) northwest of the city of Guangyuan late on Tuesday at a depth of 10 km (6 miles), the U.S. Geological Survey said. It was also close to the Jiuzhaigou nature reserve, a tourist destination.

Sichuan is frequently struck by tremors. A huge quake there in May 2008 killed almost 70,000 people.

A separate quake of magnitude 6.6 hit a remote part of China’s far northwestern region of Xinjiang, more than 2,000 km (1,240 miles) away, on Wednesday, the Chinese earthquake administration said. The People’s Daily said 32 people had been injured in the mostly rural area.

The Sichuan government said rescuers were gradually evacuating tourists and residents who had been cut off by landslides.

It added that 19 people had been killed, but most of those injured were not seriously hurt.

The dead included eight tourists, two residents and nine whose identities have yet to be confirmed, state television said.

In nearby Longnan in the neighboring province of Gansu, also jolted by the quake, eight people died in landslides caused by heavy rain, the People’s Daily said.

The Sichuan government added that 45,000 tourists had been evacuated from the quake zone with just 1,000 more still waiting to leave.

A few dozen tourists were camped out at Jiuzhaigou airport, waiting for flights. The airport was open and beginning to evacuate people by air, state media said.

A traveler with a young daughter who gave his family name as Li said he was in his hotel when the earthquake hit.

“The walls and floor shook. Some things fell off the table,” he said.

Some people were injured in the hotel but most were fine.

“The rescue services showed up quickly and gave us water and things to eat,” Li said, adding that he received priority in evacuation since he was accompanied by a small child.

“At first the road was blocked, but they had cleared a lane this morning for ambulances.”

A French man and a Canadian woman suffered light injuries, Xinhua reported.

All 341 Taiwan tourists in 19 tour groups were safe, the government of the self-ruled island said, however.

The Sichuan government dismissed as overblown earlier fears that part of a hotel had collapsed, saying damage proved minor and everyone was evacuated safely.

The Sichuan earthquake administration, which also assessed the quake magnitude at 7.0, said its epicenter was in Ngawa prefecture, populated chiefly by ethnic Tibetans, many of whom are nomadic herders.

The area was rattled by aftershocks on Wednesday.

Pictures on state-run social media sites showed some damage in Jiuzhaigou, with tiles having fallen off buildings and people gathering outdoors.

State television said electricity had largely been restored to affected areas and the military was also sending rescuers.

The Sichuan government said on one of its official social media sites that more than 38,000 tourists were now visiting Jiuzhaigou.

Shaking was felt in the provincial capital, Chengdu, and as far away as Xian, home of the famous terracotta warrior figures, according to the government.

The Xinjiang quake’s epicenter was in Jinghe county, about 100 km (60 miles) from the border with Kazakhstan, where about 140,000 people live, according to Xinhua.

Residents several hundred kilometers away in Urumqi, and the cities of Karamay and Yining, felt strong tremors, Xinhua said. The jolt lasted about 20 seconds, it said.

(This version of the story removes extraneous name in byline)

(Additional reporting by David Stanway in Shanghai, Michael Martina in Beijing and Faith Hung in Taipei; Writing by Ben Blanchard; Editing by Michael Perry and Clarence Fernandez)

China, Vietnam meeting canceled amid South China Sea tensions

Honour guards raise an Association of Southeast Asian Nations (ASEAN) flag at a flag-raising ceremony to mark the 50th anniversary of the regional group at Vietnam's Ministry of Foreign Affairs in Hanoi August 8, 2017. REUTERS/Kham

MANILA (Reuters) – A scheduled meeting between the foreign ministers of China and Vietnam was canceled on the sidelines of a regional gathering, Chinese embassy officials said, amid growing tension between the two countries over the South China Sea.

Vietnam had held out for language that noted concern about island-building and criticized militarization in South China Sea in the communique on Sunday from foreign ministers of the Association of South East Asian Nations (ASEAN).

Vietnam has emerged as the most vocal opponent of China’s claims in the waterway, where more than $3 trillion in cargo pass every year.

The Chinese embassy officials gave no reason for the cancellation of the meeting scheduled for Monday in Manila between China’s Wang Yi and Vietnam’s Pham Binh Minh.

A Chinese foreign ministry official said they had “already met”. Vietnam’s foreign ministry did not respond immediately to a request for comment.

State media in Vietnam said the ministers had held a “pull aside” meeting and exchanged views. It showed pictures of them shaking hands.

Although the language in the ASEAN communique reflected that in previous years, some countries pursuing deeper business ties with Beijing, such as Cambodia and the Philippines, had argued for dropping it.

Beijing is sensitive to even a veiled reference by ASEAN to its reclamation of seven reefs and its military installations in the South China Sea, which it claims in almost its entirety despite the competing claims of five other countries.

Tension has risen since June, when Vietnam infuriated China by drilling for oil and gas in an offshore block that Beijing disputes. The exploration was suspended after diplomatic protests from China.

After the ASEAN meeting, China’s foreign minister had called out “some countries” who voiced concern over island reclamation.

Wang said that China had not carried out reclamation for two years. “At this time, if you ask who is carrying out reclamation, it is definitely not China – perhaps it is the country that brings up the issue that is doing it,” he added.

Satellite images have shown that Vietnam has carried out reclamation work in two sites in the disputed seas in recent years.

On Tuesday, the state-run China Daily cited unnamed sources as saying Vietnam had tried to hype up the reclamation issue in the communique, pointing out that Vietnam has accelerated its land reclamation in the South China Sea.

“Undoubtedly, what Vietnam has done is the trick of a thief crying ‘stop thief,'” the paper quoted one of the sources as saying.

Australia, Japan and the United States on Monday urged Southeast Asia and China to ensure that a South China Sea code of conduct they have committed to draw up will be legally binding and said they strongly opposed “coercive unilateral actions”.

China has strongly opposed what it calls interference by countries outside the region in the South China Sea issue.

Meeting Japanese Foreign Minister Taro Kono on the sidelines of a regional security forum in Manila on Monday, Wang urged Japan to respect the efforts of China and ASEAN countries and play a more constructive role for regional peace and stability.

“Don’t always make trouble behind the backs of other countries and provoke quarrels,” the ministry cited Wang as saying.

(Reporting by Christian Shepherd; Additional reporting by Ben Blanchard in BEIJING; Editing by Michael Perry)

China says willing to pay the price for new North Korea sanctions

China says willing to pay the price for new North Korea sanctions

By Ben Blanchard

BEIJING (Reuters) – China will pay the biggest price from the new United Nations sanctions against North Korea because of its close economic relationship with the country, but will always enforce the resolutions, Chinese Foreign Minister Wang Yi said.

The United Nations Security Council unanimously imposed new sanctions on North Korea on Saturday that could slash its $3 billion annual export revenue by a third.

Speaking at a regional security forum in Manila on Monday, Wang said the new resolution showed China and the international community’s opposition to North Korea’s continued missile tests, the foreign ministry said in a statement on Tuesday.

“Owing to China’s traditional economic ties with North Korea, it will mainly be China paying the price for implementing the resolution,” the statement cited Wang as saying.

“But in order to protect the international non-proliferation system and regional peace and stability, China will as before fully and strictly properly implement the entire contents of the relevant resolution.”

China has repeatedly said it is committed to enforcing increasingly tough U.N. resolutions on North Korea, though it has also said what it terms “normal” trade and ordinary North Koreans should not be affected.

The latest U.N. resolution bans North Korean exports of coal, iron, iron ore, lead, lead ore and seafood. It also prohibits countries from increasing the numbers of North Korean laborers currently working abroad, bans new joint ventures with North Korea and any new investment in current joint ventures.

DOOR TO DISCUSSIONS?

Wang said that apart from the new sanctions, the resolution also made clear that the six party talks process, a stalled dialogue mechanism with North Korea that also includes Russia and Japan, should be restarted.

China appreciated comments earlier this month by U.S. Secretary of State Rex Tillerson that the United States does not seek to topple the North Korean government and would like dialogue with Pyongyang at some point, Wang added.

The United States does not seek regime change, the collapse of the regime, an accelerated reunification of the peninsula or an excuse to send the U.S. military into North Korea, Tillerson said.

Wang said Tillerson’s “Four Nos” promise was a positive signal.

China “hopes North Korea can echo this signal from the United States”, Wang added.

Speaking at the same forum on Monday, Tillerson held a door open for dialogue with North Korea saying Washington was willing to talk to Pyongyang if it halted a series of recent missile test launches.

North Korea said the latest sanctions infringed its sovereignty and it was ready to give Washington a “severe lesson” with its strategic nuclear force in response to any U.S. military action.

The successful testing of two intercontinental ballistic missiles (ICBMs) last month suggested the reclusive North was making technical progress, Japan’s annual Defence White Paper warned.

“Since last year, when it forcibly implemented two nuclear tests and more than 20 ballistic missile launches, the security threats have entered a new stage,” the Japanese Defence Ministry said in the 563-page document released on Tuesday.

“It is conceivable that North Korea’s nuclear weapons program has already considerably advanced and it is possible that North Korea has already achieved the miniaturization of nuclear weapons and has acquired nuclear warheads,” it said.

South Korea reiterated further resolutions against Pyongyang could follow if it did not pull back.

“North Korea should realise if it doesn’t stop its nuclear, missile provocations it will face even stronger pressure and sanctions,” Defence Ministry spokesman Moon Sang-gyun told a regular news briefing. “We warn North Korea not to test or misunderstand the will of the South Korea-U.S. alliance.”

(Additional reporting by Kiyoshi Takenaka in TOKYO and Christine Kim in SEOUL; Editing by Lincoln Feast and Michael Perry)

World stocks reach new peak in world full of surprises

Traders work in front of the German share price index, DAX board, at the stock exchange in Frankfurt, Germany, August 4, 2017.

By John Geddie

LONDON (Reuters) – World stocks breached record highs on Monday as better-than-expected company earnings and economic data from the United States stole the focus from rising geopolitical tension over North Korea’s nuclear program.

The U.S. dollar  dipped slightly but held on to most of Friday’s gains – its biggest daily rise this year – made after data showed the United States created more jobs than forecast last month.

For those watching second quarter corporate results in recent weeks, there have been many such surprises. Of the nearly 1000 companies in the MSCI world index that have reported, 67 percent have beaten expectations, according to Reuters data.

These two factors helped nudge the flagship share index above a peak breached late last month, setting a new all-time high of 480.09 on Monday.

The Dow Jones, which recorded its eighth consecutive record high on Friday, was set to open up slightly on Monday.

“Global equities remain the preferred asset class for investors and this can be clearly seen in the new highs hit by world indices today,” said Edward Park, investment director at Brooks Macdonald.

“Whilst the headline beat in non-farm payrolls was the primary positive for the market … equity prices are supported by a strong earnings season and relatively low event risk over the next few months.”

Aside from a slight weakening in the Korean won, there was little financial market reaction to the news over the weekend that the U.N. Security Council unanimously imposed new sanctions on North Korea aimed at pressuring Pyongyang to end its nuclear program.

South Korean President Moon Jae-in and his U.S. counterpart, Donald Trump, agreed in a telephone call on Monday to apply maximum pressure and sanctions on North Korea, while China expressed hope that North and South Korea could resume contact soon.

Yields on U.S. and German government bonds – seen as a safe haven in times of stress – held above one-month lows hit at the tail end of last week.

 

ASIAN GAINS

A strong rise in U.S. and Asian stocks propelled the world index to a new high, with the strength of the euro providing a bit of a headache for European markets.

Earlier in Asian trading, MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.5 percent while Japan’s Nikkei added 0.5 percent.

Chinese blue chips were bolstered by data showing the country’s foreign exchange reserves rose twice as much as expected in July.

A dramatic reduction in capital outflows – which are seen as one of China’s biggest risks – has helped boost confidence in the world’s second largest economy ahead of a key political leadership reshuffle in coming months.

The euro zone’s main stock index edged lower, however, as the single currency headed back towards 20-month high, a trend which appears to be denting profitability in certain sectors.

Of the MSCI Europe companies having reported, 61 percent have either met or beat expectations. But focusing on industrial firms – of which many depend on exports, and are sensitive to a stronger euro – the beat ratio is just 37 percent.

“The euro is likely to have an impact in the third quarter, with a 10 percent appreciation of the euro lowering earnings per share by around 5 percent,” said Valentin Bissat, senior strategist at Mirabaud Asset Management.

DOLLAR DOUBTS

The upbeat U.S. jobs data offers policymakers some assurance that inflation will gradually rise to the central bank’s 2 percent target, and likely clear the way for a plan to start shrinking its massive bond portfolio later this year.

But market pricing shows investors are still about evenly divided over whether the Fed will also opt to raise rates again in December.

For some analysts, Monday’s pull back in the dollar backs some views in markets that Friday’s rally may not have legs.

The dollar index, which tracks the greenback against a basket of six global peers, inched back 0.2 percent to 93.361. It rallied 0.76 percent on Friday, its biggest one-day gain this year.

The dollar slipped 0.2 percent against the euro to $1.1796 per euro, after surging 0.8 percent on Friday.

“The most logical view here is the moves on Friday were clearly just a sizeable covering of USD shorts, from what was one of the biggest net short positions held against the USD for many years,” Chris Weston, chief market strategist at IG in Melbourne, wrote in a note.

For the dollar rally to gain momentum, the market needs to change its interest rate pricing, Weston added.

In commodities, oil prices slid back from nine-week highs hit on Aug. 4 as worries lingered over high production from OPEC and the United States.

Global benchmark Brent crude futures were down 60 cents, or 1.14 percent, at $51.82 a barrel. They traded as low as $51.56 a barrel earlier in the day.

Gold  steadied as the dollar surrendered some of its gains, but remained under pressure. The precious metal was marginally lower at $1,257.41 an ounce, extending Friday’s 0.8 percent loss.

 

(Reporting by John Geddie in London and Nichola Saminather in Singapore Additional reporting by Helen Reid in London; Editing by Richard Balmforth)

 

China holds drill to shut down ‘harmful’ websites

Computer code is seen on a screen above a Chinese flag in this July 12, 2017 illustration photo. REUTERS/Thomas White/Illustration

By Sijia Jiang

HONG KONG (Reuters) – China held a drill on Thursday with internet service providers to practice taking down websites deemed harmful, as the country’s censors tighten control ahead of a sensitive five-yearly political reshuffle set to take place later this year.

Internet data centers (IDC) and cloud companies – which host website servers – were ordered to participate in a three-hour drill to hone their “emergency response” skills, according to at least four participants that included the operator of Microsoft’s cloud service in China.

China’s Ministry of Public Security called for the drill “in order to step up online security for the 19th Party Congress and tackle the problem of smaller websites illegally disseminating harmful information”, according to a document circulating online attributed to a cyber police unit in Guangzhou.

An officer who answered the phone in the Guangzhou public security bureau confirmed the drill but declined to elaborate.

President Xi Jinping has overseen a tightening of China’s cyberspace controls, including tough new data surveillance and censorship rules. This push is now ramping up ahead of an expected consolidation of power at the Communist Party Congress this autumn.

The drill asked internet data centers to practice shutting down target web pages speedily and report relevant details to the police, including the affected websites’ contact details, IP address and server location.

China’s cyberspace administration declined to comment, saying it was not the correct department to address the question to. China’s Ministry of Public Security did not respond to a faxed request for comment.

Several service providers, including 21Vianet Group and VeryCloud, issued notices to users, warning of possible temporary service disruptions on Thursday afternoon as a result of the drill, which were confirmed to Reuters by their customer service representatives.

Nasdaq-listed 21 Vianet Group is China’s largest carrier-neutral internet data center services provider according to its website, and counts many Western multinationals including Microsoft, IBM, Cisco and HP among its clients. It runs Microsoft’s Azure-based services in China.

21 Vianet Group did not immediately respond to an emailed request for comment.

China has been tightening its grip on the internet, including a recent drive to crack down on the usage of VPNs to bypass internet censorship, enlisting the help of state-owned telecommunication service providers to upgrade the so-called Great Firewall.

Apple last week removed VPN apps from its app store, while Amazon’s China partner warned users not to use VPNs.

(Reporting by Sijia Jiang; Additional reporting by Susan Gao and Jasper Ng in HONG KONG and Ben Blanchard in Beijing; Editing by Mark Potter)

U.S. may soon expand U.N. talks on North Korea sanctions, signaling China deal: diplomats

U.S. may soon expand U.N. talks on North Korea sanctions, signaling China deal: diplomats

By Michelle Nichols

UNITED NATIONS (Reuters) – The United States could shortly broaden talks on a push for stronger U.N. sanctions on North Korea to include all 15 Security Council members, signaling a likely deal with China on new measures, diplomats said on Thursday.

Since North Korea’s July 4 launch of an intercontinental ballistic missile (ICBM), the United States has been negotiating with Pyongyang ally China on a draft resolution to impose new sanctions on North Korea, which fired a second ICBM last Friday, in defiance of U.N. Security Council resolutions.

“We have been working very hard for some time and we certainly hope that this is going to be a consensus resolution,” China’s U.N. Ambassador Liu Jieyi told Reuters on Thursday.

Some diplomats said the United States could give the draft resolution to all 15 council members as early as Thursday.

Typically, the United States and China have agreed sanctions on North Korea before formally involving other council members. A resolution needs nine votes in favor and no vetoes by the United States, China, Russia, France or Britain to be adopted.

The United States has been informally keeping Britain and France in the loop on the negotiations, while U.S. Ambassador to the United Nations Nikki Haley said China had been sharing the draft and negotiating with Russia.

U.S. President Donald Trump’s administration has been frustrated that China has not done more to rein in North Korea and Washington has threatened to impose new sanctions on Chinese firms doing business with Pyongyang.

But Chinese Foreign Minister Wang Yi told his British counterpart, Boris Johnson, on Friday that China would continue to fully and strictly implement Security Council resolutions on North Korea, the ministry said.

Haley said on Sunday the United States was “done talking about North Korea” and China must decide if it is willing to back imposing stronger U.N. sanctions. But she has also acknowledged that Russia’s engagement on the draft resolution would be the “true test.”

Russia noted on Thursday that the permanent five (P5) veto powers had yet to formally discuss the draft. It was not immediately clear if poor relations between Russia and the United States, which imposed new unilateral sanctions on Russia on Wednesday, would hamper the negotiations.

“Even if there is an agreement between the U.S. and China, it doesn’t mean there is an agreement between the P5 members,” said Russia’s U.N. Ambassador Vassily Nebenzia, who met with Liu earlier on Thursday and discussed a possible resolution.

“Maybe there is a bilateral agreement (between Beijing and Washington), but that’s not a universal one,” he said, adding that while he was aware of what might be in the resolution he had not seen “the draft as it stands now.”

The U.S. mission to the United Nations declined to comment.

Moscow has disagreed with assessments by Western powers that Pyongyang has launched two long-range missiles, saying they were mid-range. Diplomats say China and Russia only view a test of a long-range missile or a nuclear weapon as a trigger for further possible U.N. sanctions.

North Korea has been under U.N. sanctions since 2006 over its ballistic missile and nuclear programs and the Security Council has ratcheted up the measures in response to five nuclear weapons tests and two long-range missile launches.

(Reporting by Michelle Nichols; Additional reporting by Ben Blanchard in BEIJING; Editing by James Dalgleish)