Writer’s attack on Forces defies Musharraf ban

June 1, 2007

Zahid Hussain in Islamabad

A new book that claims to expose the Pakistani military’s growing business and commercial interests was launched last night in defiance of an attempt by President Musharraf to suppress it.
As army commanders were preparing to hold a meeting to discuss the country’s growing unrest, speculation was rife that a state of emergency could be declared to bolster General Musharraf’s military-led Government, which is struggling to retain its grip on power.
The book Military Inc: Inside Pakistan’s Military Economy, was written by Ayesha Siddiqa, a defence analyst and a former director of research with the Pakistan Navy. It looks into the military’s business empire, estimated to be worth about £10 billion. This has previously been a taboo subject, and only recently General Musharraf cautioned against any criticism of the Armed Forces.
The Administration told a top club and hotels in the capital not to host the planned launch of the book yesterday. Oxford University Press, its publisher, said that the government-controlled Islamabad Club cancelled the booking of its auditorium for the event without reason. “It’s because the book has something against the military,” Ms Siddiqa said. She managed to launch the book later, at the office of a nongovernmental organisation.
In her book, Ms Siddiqa – who holds a doctorate from King’s College London – revealed that Pakistani Armed Forces have business interests that add up to one of the country’s largest corporate conglomerates. The military controls five “welfare foundations” that run banks, insurance companies and big industries, such as fertiliser and cement.Ms Siddiqa claims that the Pakistani military controls a third of all heavy manufacturing in the country and 7 percent of private assets. These enterprises thrive because of heavy state subsidies. She maintains that its control of politics allows these businesses tax breaks.
The publication of the book evoked instant reaction from the Government. The Associated Press of Pakistan, a government-controlled news agency, said that it was “a plethora of misleading and concocted stories” aimed at giving the military a bad name and creating a rift with the civil sector.
The military’s penetration of the economy has accelerated under General Musharraf’s rule. His military Government has placed some 1,200 active and retired officers in various ministries and state corporations. Analysts said that the President’s decision to hold on to his post as Chief of Staff of the Army had strengthened the military’s economic interests.
One of the spurs for today’s military meeting is the unrest triggered by the suspension of Iftikhar Muhammad Chaudhry, the Chief Justice, on March 9. Demonstrations against his suspension have been transformed into a powerful pro-democracy movement, presenting General Musharraf with the most serious challenge since he seized power in a bloodless coup in 1999.

Inquiry over Great Wall holes

Reuters

June 1, 2007

BEIJING China’s heritage bureau has begun an inquiry into mining companies alleged to have brought down part of the Great Wall to allow their lorries through to avoid paying road tolls, state media reported yesterday.
Coalmining companies operating near Hujiayao village, on the border between the northern province of Shanxi and Inner Mongolia, were also reported to have taken soil from parts of the Mingera (1368-1644) wall, listed a World Heritage Site in 1987, to build houses, Xinhua news agency reported, citing a local newspaper. “Big trucks carrying coal had even opened a big gap in the Great Wall to make a coal-shipping thoroughfare,” the paper said.
Last October China fined an investment company 500,000 yuan (£33,000) for building a highway through a section of the wall in Inner Mongolia (Reuters)

Desperate to be downwardly mobile

June 1, 2007Jeremy Page

For thousands of years India’s ethnic Gujjars have been looked down on by much of society, as they were traditionally pastoralists who raised sheep, goats and water buffalo.
Now, as India approaches the 60th anniversary of its independence, the Gujjars have had enough, and are demanding that their social status be changed. But in an unusual example of how caste works in modern India, they want to be downgraded to the lowest level so that they can benefit from an affirmative action scheme.
Tens of thousands of Gujjars have blocked roads and railway lines in the northwestern state of Rajasthan since Tuesday, accusing the local government of reneging on a promise to lower their status. At least 15 people, including two police officers, have been killed in rioting when the Gujjars repeatedly set alight police property and attacked government offices.
The Indian Army has even been called in to quell the violence, which has disrupted the tourist route between the Rajasthani cities of Jaipur, Udaipur and Jodhpur, and Agra, the site of the Taj Mahal. The violence has fuelled criticism of India’s affirmative action scheme under which lower castes are given preferential access to government jobs and education.
The Hindu caste system, which enforces a strict social hierarchy from brahmins at the top to dalits at the bottom, was outlawed after India became independent in 1947. But to correct its injustices the Government divides the lower levels of society into Scheduled Castes (SC), Scheduled Tribes (ST) and Other Backward Classes (OBC). SC includes untouchables and others at the bottom; ST consists of ethnic minorities and OBC comprises other people who were traditionally discriminated against.
The Gujjars, who represent about 10 per cent of Rajasthan’s population of 55 million, are classified as OBC. But they want to be downgraded to ST, on a par with another local tribe called the Meena, which they believe would give them greater access to government jobs and university places.
“What the Gujjars are hoping is that there will be less competition in the ST category,” said Suryakant Wadhmore, of the Tata Institute of Social Science, Bombay.
Head to toe
— Society is ranked according to four main varnas or groups:
Brahmins The highest varna, was believed to have emerged from the god Brahma’s mouth
Kshatriyas The warrior and ruling class, emerged from Brahma’s arms
Vaishyas The Merchant and artisan class, emerged from Brahma’s thighs
Shudras Unskilled labourers and servants came from Brahma’s feet
— Each varna is divided into sub-castes, or jatis, typically defined by traditional jobs in Hindu society
— Surnames often point to a particular jati and job. Gandhi, for example, means greengrocer
— The untouchables, or dalits, are considered too lowly for inclusion in the varna system. The name derives from the belief that their touch is contaminating, and they are traditionally consigned to the most menial tasks

Officials are forced to give up gambling, girls and gifts

June 1, 2007
Jane Macartney in Beijing

New regulations that specifically ban gambling, girls and gifts have been imposed on Chinese officials abroad by one provincial government, because previous rules were widely ignored.
The announcement, by the prosperous southeastern Zhejiang province, will dismay those officials who view a trip overseas as a reward for good behaviour at home and a chance to misbehave beyond the watchful eye of Communist Party discipline enforcers. It had been forced to issue the new rules, it said, because of the number of officials travelling abroad who violate standing regulations banning bad behaviour.
The notice stipulates that officials will not be allowed to extend their stay overseas, to change their itinerary for any reason or to take part in any activity or conference not related to the purpose of their trip. More specifically, they are banned from taking part in any form of gambling – whether using their own funds or public money. Nor are they allowed to use any pretext to accept an invitation to enter a place of gambling.
Gambling is something of an obsession among Chinese, who spend millions of dollars in a weekend at the Hong Kong races, for example. One mayor of a township in southern Guangdong province – a self-confessed gambling addict – lost £7 million during 257 visits to the gambling tables of Macau. He embezzled most of the funds to finance his addiction and was jailed for 20 years.
The Zhejiang government has also told officials that they must not enter any establishment offering sex shows or sex services, nor are they allowed to include “low-class” entertainments on their travel itineraries. Also strictly banned is the acceptance of gifts.
In addition, they are prohibited from using public funds to pay for extravagant eating and drinking for their personal consumption or to buy gifts.
If they wish to extend their trip overseas, they must pay with their own money. Those who violate these regulations could be criticised, called in for a talk by their leaders or even face disciplinary punishments. In the most egregious cases, they could face criminal proceedings.
The need for the new rules is a sign of the challenges faced by the Communist Party in instilling its traditional and long-prized principles of thrift and self-sacrifice in a generation of officials accustomed to the benefits of market reform.
The booming southern province of Guangdong announced this week that it was to ban a resurgent trend in the keeping of mistresses. The law would stop married people from setting up “love nests” to engage in extra-marital affairs. An official, said: “Adding this provision is aimed at preserving and enhancing marital stability.”
However, many Chinese businessman and government officials regard the keeping of a mistress as an almost essential status symbol to show off their success – whether in making money or making a career.

Captured on film: lawyers ‘who wanted to buy off key witness’

June 1, 2007
Jeremy Page in Delhi

The independence of India’s courts has once again been called into question by a television sting operation in the case of an arms dealer’s son accused of killing six people while drink-driving.
NDTV, a popular private television channel, broadcast footage yesterday of defence and prosecution lawyers apparently colluding with the key witness in the case to try to get the defendant cleared.
The witness was the only one who had not “turned hostile” by switching from the prosecution to the defence in the continuing trial of Sanjeev Nanda, whose father is a retired naval officer turned arms dealer.
Mr Nanda, whose grandfather was head of the Indian Navy, is accused of killing six people when he crashed his BMW through a police check-point while drink-driving through Delhi in 1999.
Until yesterday, the 29-year-old graduate of the Insead and Wharton business schools, was widely expected to be acquitted, because rich and powerful Indians routinely pay off lawyers, witnesses and even judges to escape justice.
Sanjeev is managing director of Claridges Hotel in Delhi, which his family owns. His family also owns Crown Corporation, the arms dealers, and other businesses.
The sting operation could now change the outcome of the trial in the latest illustration of the power of India’s independent and increasingly competitive media.
The scandal comes five months after a media campaign helped to overturn the acquittal of Manu Sharma, a politician’s son who shot dead Jessica Lall, a model, after she refused to serve him drink at a Delhi party. Sharma’s father is Venod Sharma, a senior member of the ruling Congress party and, until he was forced to resign in October, energy minister in the northern state of Haryana.
Jessica Lall’s sister, Sabrina, who led the campaign for a retrial, said that it was a victory of justice over the corruption and nepotism that is rife in Indian political circles. “It’s a vindication for all of us,” she said.
In that case, too, a string of witnesses turned hostile. Sharma was eventually sentenced to life in prison in December.
The media also played a decisive role in securing a retrial of Santosh Kumar Singh, a policeman’s son who was originally acquitted of raping and murdering a law student in Delhi in 1996. Singh was sentenced to death in October.
NDTV said that it set up its latest sting after being approached by the key witness, Sunil Kulkarni, who said that he was under pressure from the defence and the prosecution to change his testimony.
It wired him up with a hidden camera, which filmed him allegedly discussing changing his testimony in exchange for money in separate meetings with the lead prosecutor and the head of the defence team.
The prosecution later dropped Mr Kulkarni as a witness.
Delhi police responded yesterday by asking for I. U. Khan, the prosecutor caught in the sting, to be replaced. Mr Khan denied any wrongdoing. “I have not done anything wrong, morally, socially or legally, which will enable them to initiate any action against me,” the Press Trust of India quoted him as saying.
R. K. Anand, the defence lawyer caught in the sting, also denied the allegations against him, accusing NDTV of using the footage out of context.
He said that he had “bumped into” Mr Kulkarni at the airport and “spoke with him about the cash in a sarcastic manner just to ward him off”.
Many of Delhi’s legal fraternity are unconvinced and some are even calling for the lawyers to be disbarred.
“Disciplinary action should be taken against both, as what they’ve done is not just unethical, it’s illegal,” said Indira Jaisingh, a prominent Supreme Court lawyer and civil rights activist. “I have to say that I don’t find it suprising or shocking. The Indian legal system has suffered great neglect for many years and ithas reached a stage where people do this sort of thing with impunity.”

China's energy rush shatters village

WP
Updated: 2:13 a.m. ET June 1, 2007
DA ANTOU, China - Chen Xiao'e was home alone and fast asleep, she recalled, when the windows started to shatter for no apparent reason, like a scene out of a horror movie. "I was frightened out of my wits," Chen said.
That scary night was only the beginning. Pretty soon cracks appeared in the walls, some several inches wide. Then the floor buckled. Ultimately, Chen and her family had to move out and seek shelter elsewhere. Their three-year-old brick home became too dangerous to live in.
The house joined a growing list of buildings in Da Antou that have slumped to one side and split apart over the last several years because of what is happening beneath them. The mountain atop which the village was built has been so honeycombed with underground coal mining that the crust of the earth is giving way.
"The earth below us is hollow because of the coal mining," said Li Xiaozhi, the village paramedic, who has been forced to move his family out of three houses since 2003 and now stays in the local clinic. "Almost every house has cracks now. The only difference is how big they are."
Growling hunger for coalDa Antou, located in Shanxi province about 400 miles southwest of Beijing, has become another victim of China's energy rush. The country's booming economy, with growth of nearly 10 percent a year, has produced a growling hunger for coal, which fuels 70 percent of China's energy needs. To meet the demand, coal companies have become willing to go to almost any lengths -- and hamlets such as Da Antou are paying the price.
More than half the houses in Da Antou have developed cracks, and half the 400 residents have moved away.
Across Shanxi province, countless shafts have penetrated the hillsides where farmers live and plant their corn and wheat. The mines produce mountains of coal, and send truckload after truckload to market along roads covered in black dust. Government officials estimated that more than 7,700 square miles have been hollowed out by miners in Shanxi, leaving the earth riddled with empty caverns and causing the crust to sink in more than 1,800 places.
The underground work is dirty and dangerous, attracting migrant men from villages such as Da Antou and much farther afield. The government's Work Safety Administration reported that 4,746 miners were killed in Chinese coal mine accidents last year, an average of 13 a day. That tally marked a sharp improvement over 2005, when 5,986 were killed in coal shafts. But China's mines remain the world's deadliest.
Most of the explosions and floods that kill miners have occurred in small-scale operations, often run by unlicensed wildcat companies that bribe local officials to overlook safety violations. By cracking down on such mines and forcing them to close, officials said, they have reduced the number of miners killed and hope to push the toll lower still in the years ahead.
But the mining group that came to Kele Mountain in 2003, Sihe Coal, was a big, respectable outfit, with foreign technology and total output of 10 million tons a year across the country. Its arrival caused no consternation in Da Antou, farmers here said. They had long since grown used to seeing mines dug into the rugged Shanxi hillsides and loading machinery erected in the narrow ravines that become transport lanes for the coal truck convoys. Besides, they noted, the shafts entered the ground far below the terraced fields where people worked and the mountaintop brick and concrete homes where they lived.
Walls, water system destroyedFor a while, the farmers and the miners coexisted happily. But in late 2003, the cracks started to appear.
One by one, they left lizard tracks across the walls. Tiles tipped up on the floors. Vaulted ceilings rained bricks on the grain stored inside. Rooftops gaped open. At one home, an entire room fell in on itself. Farmers used tree trunks to prop up doorways and prevent them from collapsing.
Of the 200 houses that make up Da Antou, about half were cracked and more than a dozen had been declared unfit to live in by 2005, according to the village Communist Party secretary, Wang Xiaohui, and other residents.
"Now even the clinic is getting dangerous," said Li, the paramedic, as he pointed at cracks zigzagging down the wall.
The unsettled earth has destroyed not only walls but also the water system in Da Antou, forcing farmers and their wives to haul water from a communal pipe installed in the village square. Men and women gathered Monday afternoon with plastic buckets and, balancing two on either end of their yokelike shoulder poles, carried away what their family needed. Even the communal pipe, they complained, sometimes goes dry.
Chen Xiao'e, 41, said she waited alone on the roof until dawn after being awakened by the shattering windows that night when her home first began to sink. When light came, she sought out Wang, the party secretary, for advice on what to do. It was the mines under Kele Mountain, he told her; she should go to the mining company for compensation.
Since then, Wang said, the Sihe company has halted operations and given a total of $346,660 in three payments, in 2004, 2005 and 2006, to compensate the villagers for damage to their homes. So far, most expenditures have been rent subsidies for those forced to evacuate, he said. Small families get $40 a month, and large families, with four or more to house, get $95, he explained.
Relocation plansMore than $100,000 has been set aside to help villagers pay for new homes that are under construction in the nearly town of Runchen, Wang said. For most of them, their traditional life atop Kele Mountain has been written off, he said, and from now on they will have to commute to their fields. In any case, farmers here said, many of their terraced fields have been left unworkable because of sinkholes.
Despite the plans for relocation in Runchen, villagers complain that they are not getting properly compensated. What they want, they explained, is cash in hand for the value of the homes they can no longer live in.
"We want somebody to pay attention to this," said Wang Guozheng, 67, whose three-family home sits empty and forlorn with cracks yawning in almost every room.
Wang Xiaohui, the party secretary, said the villagers have vastly overestimated the value of their homes. The true market value was set by a team of experts sent out last year by the county government, he said, and by the time the villagers pay for new homes in Runchen, the compensation money by and large will have run out.
"Don't believe everything those villagers say," he advised.

China launches communications satellite

AP
Updated: 7:29 a.m. ET June 1, 2007

BEIJING - China launched a new communications satellite into orbit early Friday to provide broader radio and television signal coverage across the country, state media reported.
The Long March-3A rocket lifted off from the Xichang launching center in southwestern China eight minutes after midnight and separated from the SinoSat-3 satellite 24 minutes later, the Xinhua News Agency said.
The long-scheduled launch follows the failed deployment last October of another communications satellite, SinoSat-2, whose solar panels and communications antennae did not operate properly, Xinhua said.
China has spent decades building an indigenous space program and is trying to attract customers from abroad, after a series of failed launches in the 1990s dampened demand for Chinese launch services.
Both the rocket and the satellite used Friday were mainly developed and manufactured domestically, Xinhua said.
The satellite deployed Friday was not developed as a replacement for the inoperable SinoSat-2, Xinhua said, though Sino Satellite Communications Co., the satellite's operators, may use SinoSat-3 to replace part of the service the other satellite was to have provided.

Algae smother Chinese lake, millions panic

AP
Updated: 1:08 p.m. ET May 31, 2007

BEIJING - Fast-spreading, foul-smelling blue-green algae smothered a lake in eastern China, contaminating the drinking water for millions of people and sparking panic-buying of bottled water, state media said Thursday.
The algae bloom in Lake Tai, a famous but long-polluted tourist attraction in Jiangsu province, formed because water levels are at their lowest in 50 years, leading to excess nutrients in the water, Xinhua said.
Officials in Wuxi, a city along the banks of the lake, called an emergency meeting on Wednesday to discuss measures to deal with the situation and allay public fears, said a posting on the local government's Web site.
"The government calls for the residents facing the natural disaster to help each other to deal with the difficulties," the notice said, advising people to boil the water before drinking it.
"The situation has lasted three days already. It's so inconvenient," said Qin Yingxian, 53, a video store owner in Wuxi. "The smell of our tap water is just so awful. If you use the water to shower, the smell will stay on your body."
Algae blooms, which scientists say are actually plantlike bacteria, happen in fresh water the world over. Some types can produce dangerous toxins. Causes include chemical run-off and excess nutrients in the water.
The algae bloom adds to the notorious industrial pollution in Lake Tai, famed for centuries for its beauty. The fast-developing region lies 80 miles west of Shanghai.
$6.50 for 2 gallons of waterResidents swarmed stores in Wuxi, a city of 5 million, to buy bottled water Wednesday and prices skyrocketed from $1 to $6.50 for a two-gallon bottle, Xinhua said.
Wuxi has placed a ban on price hikes and threatened hefty fines to violators, the report said. A Wal-Mart store imposed rations of 24 bottles per person, Xinhua said.
"Now we depend on bottled water for all our daily uses," Qin said. "People form long queues in the supermarkets for bottled water. Nobody expected something like this to happen. We aren't prepared."
State television showed a yellowish trickle coming from taps and a restaurant worker said customers refused to eat there until they were assured that the water used was safe.
The Wuxi government said Thursday it was not authorized to give out information and referred all questions to provincial officials. A man who answered the telephone at the Jiangsu government office said authorities were "looking into the matter" and could not give any details.
Xinhua said the Wuxi government is planning to artificially induce rain in the next two days to dilute the lake water, and the provincial government has agreed to divert more water from the Yangtze River to the lake.
The local government is also using active carbon to filter the lake water and is importing bottled water from surrounding cities, China Central Television reported.
Health risksDrinking toxin-tainted water can cause vomiting, diarrhea, headache, muscle pain, paralysis, respiratory failure and, on rare occasions, even death. Pets and livestock are especially vulnerable.
The incident is the latest to hit China's troubled waterways, which are dangerously polluted after decades of rapid economic growth and the widespread flouting of environmental regulations. Millions of people lacking access to clean drinking water.
In 2005, an accident caused a Chinese chemical plant to spew tons of toxic nitrobenzene and other chemicals into the north China's Songhua River, forcing authorities to cut water to millions of residents.

Million text messages block chemical plant

AP
Updated: 1:11 p.m. ET May 31, 2007

BEIJING - A Chinese city has halted construction of a chemical plant after residents sent more than 1 million mobile phone text messages protesting possible pollution dangers, news reports said Thursday.
The $1.4 billion facility being built by Tenglong Aromatic PX (Xiamen) Co. Ltd to produce the petrochemical paraxylene was planned for the booming southeastern port of Xiamen, the Xinhua News Agency and newspapers said.
"The Xiamen city government has decided to suspend construction of the PX (paraxylene) plant in Haicang District," a deputy mayor, Ding Guoyan, was quoted as saying by Xinhua. "The city government has listened to the opinions expressed and has decided, after careful deliberation, that the project must be re-evaluated."
Paraxylene is used in production of plastics, polyester and film. Short-term exposure to paraxylene can cause eye, nose or throat irritation in humans, according to the U.S. Centers for Disease Control and Prevention. Chronic exposure can affect the central nervous system and may cause death.
The plant was due to be located 10 miles from the center of Xiamen, a center for Taiwanese and Hong Kong investment. The nearest homes were one mile away, according to news reports.
Demand for chemicals such as paraxylene is soaring as China's export-driven manufacturing industries expand.
The communist government, long indifferent to the environmental cost of China's economic boom, has become more sensitive to pollution complaints after accidents that polluted rivers, disrupting water supplies to major cities. Farmers in areas throughout the country have protested over pollution that has tainted water supplies and ruined farmland.
Xiamen residents sent more than 1 million text messages protesting plans to build the plant, Xinhua said.
The suspension of the Xiamen project coincides with government efforts to slow an investment boom in industries where supplies of factories and other assets exceed demand.
Last week, a state news agency quoted officials who cited public concerns about radiation exposure in announcing the suspension of work on a futuristic magnetic-levitation train line in Shanghai that critics said was too expensive and impractical.
Irving, Texas-based ExxonMobil Corp.; Saudi Aramco, the Saudi government oil company; and China's No. 2 oil company, China Petroleum & Chemical Co., better known as Sinopec, announced in March they were expanding a joint venture chemical plant in the southeastern city of Quanzhou to produce paraxylene and other chemicals.

Ambush Kills 16 Policemen on Highway in Afghanistan

By CARLOTTA GALL
Published: June 1, 2007
JALALABAD, Afghanistan, May 31 — Sixteen Afghan policemen were killed and six more wounded in an ambush Thursday morning on the main road that runs from the capital to the southern city of Kandahar.
The ambush took place amid reports of heavy fighting in several places in southern Afghanistan, in particular in Helmand Province, where a NATO helicopter crashed Wednesday night, possibly brought down by Taliban fire.
The policemen ambushed were driving from Zabul Province toward the capital, Kabul, when they came under fire at 9 a.m. at Shah Joy, a district known for robberies and ambushes, which lies on a route used by insurgents heading to the mountains. Taliban insurgents have frequently carried out attacks in Shah Joy, though improved security had reduced attacks in recent months.
The Afghan policemen fought back and killed 10 militants and wounded others, the Interior Ministry said in a statement.
The Defense Ministry reported killing dozens of Taliban insurgents in fighting in a new operation in the Sangin district of Helmand Province. Several locations were bombed and the operation was continuing, a statement from the ministry said.
The Taliban said Thursday that its fighters had shot down the helicopter that crashed in Helmand Province on Wednesday night, killing seven NATO soldiers on board. In a telephone call on Thursday, a Taliban spokesman, Qari Yousuf Ahmadi, claimed responsibility for the shooting and said the helicopter had gone down in the Kajaki district. He said the Taliban used new weapons against the helicopter.
The Taliban have in the past claimed to have acquired new weapons, including anti-aircraft weapons. But on the two occasions when they have shot down helicopters, the United States military has said they hit them with nothing more sophisticated than rocket-propelled grenades.
A spokeswoman for the NATO force in Afghanistan said the operation in Helmand was going ahead despite the loss of the helicopter, which had just dropped off soldiers for the operation before it went down. Five of the soldiers killed were Americans, and a Canadian and a Briton were also on board, news agencies reported.
“Initial reports are that enemy fire may have brought down the helicopter, although the incident is still being investigated,” said Lt. Col. Angela Billings, the spokeswoman.
NATO troops have made a concerted effort to open the route in Helmand up to the Kajaki dam this year to secure the area and allow engineers to move in and repair and upgrade the dam.

India and U.S. Try to Rekindle Stalled Talks on a Nuclear Pact

By AMELIA GENTLEMAN
Published: June 1, 2007
NEW DELHI, May 31 — Talks intended to restart stalled negotiations on a landmark nuclear pact between India and the United States began here on Thursday amid disagreement over India’s right to continue testing nuclear weapons and process spent fuel.
When the nuclear deal was first announced almost two years ago, it was seen as symbolic of a new strategic partnership between India and the United States. But negotiations over the details have made only slow progress as both countries have shied away from making politically delicate concessions.
R. Nicholas Burns, the United States under secretary of state for political affairs, arrived in New Delhi on Thursday and went directly into meetings with Foreign Secretary Shiv Shankar Menon in an attempt to broker a compromise before an expected meeting between President Bush and Prime Minister Manmohan Singh on the sidelines of the Group of 8 summit meeting in Germany next week.
Once finalized, the deal would overturn 30 years of American sanctions on the sale of civilian nuclear technology — fuel and reactors — to India. It would give India the status of a “responsible” nuclear power, even though it has refused to sign the Nuclear Nonproliferation Treaty.
Before the talks, American officials said they were optimistic that solutions could be found. “There is considerable work to be done on what is a very technical and detailed agreement,” David C. Mulford, the United States ambassador to India, said in a statement. “We want to finish as soon as we can and both sides are positive we can do this.”
Mr. Burns, who last month expressed frustration at the slow pace of the talks, said this week in Washington that the deal would “continue to require hard work and difficult compromises to reach completion.” But he added, “Despite some difficulties of late, I believe we will reach the mountaintop and realize the enormous promise of this breakthrough agreement.”
Supporters of the deal in the United States are concerned that the longer the negotiations continue, the less time there will be to push the deal through before the Bush administration draws to a close.
For Indian officials, the main obstacle to an agreement is an American requirement that a voluntary moratorium on testing nuclear weapons be converted into a legally binding commitment, meaning that the United States could withdraw nuclear fuel supplies if India decided to test another nuclear weapon.
India’s unilateral commitment not to test nuclear weapons is “obviously contingent on existing conditions continuing,” M. R. Srinivasan, a former chairman of India’s Atomic Energy Commission, wrote in the newspaper The Hindu on Thursday. If “China, Pakistan or another country were to test, then clearly India cannot be expected to continue its moratorium.”

China Says 2 of Its Companies Played a Role in Poisonings

By JAKE HOOKER and WALT BOGDANICH
Published: June 1, 2007

BEIJING, May 31 — Chinese regulators acknowledged for the first time Thursday that two Chinese companies had “engaged in some misconduct” in the way they labeled and sold a poisonous ingredient that ended up in cold medicine, killing at least 100 people in Panama last year.
But the regulators said primary responsibility for the deaths rested with traders in Spain and Panama who knew the product was not suitable for use in medicine but sold it for that purpose anyway. Both trading companies dispute that charge.
Chinese companies sold the ingredient as 99.5 percent pure glycerin, even though it contained about 24 percent diethylene glycol, a poison commonly used in antifreeze, according to the United States Food and Drug Administration.
Chinese authorities also said that Chinese-made toothpaste containing small amounts of diethylene glycol was safe, and that its manufacturer had broken no laws. But officials also said that new controls would be put on the use of the chemical in toothpaste, and that toothpaste sold for export would be tested.
Tens of thousands of tubes of tainted Chinese-made toothpaste were recently seized in Panama and at least three other Latin American countries. The F.D.A. is now testing samples of all toothpaste imported into the United States from China.
The Chinese government’s findings reflect its growing concern over the perception that the country’s safety regulations may not have kept up with its booming export economy.
American officials recently accused two Chinese companies of intentionally shipping pet food ingredients contaminated with an industrial chemical, melamine, to the United States, leading to one of the largest pet food recalls in history. After initial denials, Beijing officials banned the use of melamine and have promised to improve food safety regulations and export controls.
Chinese authorities reopened an investigation of the Panama poisonings in response to a report last month by The New York Times that traced 46 barrels of the mislabeled poison from the Panama port city of Colón through Barcelona, Spain, to a Beijing trading company and finally to its origin at the Taixing Glycerine Factory in the Yangtze Delta.
Wei Chuanzhong, the head of investigation and deputy director of the General Administration of Quality Supervision, Inspection and Quarantine, acknowledged that the factory had labeled the barrels as glycerin even though they contained significant amounts of diethylene glycol. An official confirmed that they had passed through Chinese customs as glycerin.
But Mr. Wei said the manufacturer and its exporter, CNSC Fortune Way in Beijing, had sold the barrels as “TD” glycerin — or substitute glycerin — for industrial, not medical, use. He further charged that a Panamanian import company, the Medicom Business Group, had altered the paperwork, describing the substance as pharmaceutical grade.
Mr. Wei did not explain why the Chinese companies had exported barrels with a false certificate of analysis, listing their content as 99.5 percent glycerin. Both companies remain under investigation, according to Chinese authorities.
The F.D.A. said China’s explanation sidestepped a critical fact: the deception had begun with the false certificate of analysis. “If the drums had been 99.5 percent glycerin, the deaths in Panama would never have occurred,” the agency said.
Ascensión Criado, manager of the Spanish trading company Rasfer International, said China was wrong to blame her company. “We ordered glycerin and they sent us something else,” she said.
Valentín Jaén, a lawyer for Medicom, the Panamanian importer, said, “The Chinese state has no reason or justification to blame Medicom for anything.”
On Thursday, Nicaragua announced the seizure of more than 40,000 tubes of Chinese-made toothpaste suspected of contamination and that as many as 80,000 tubes of the Excel and Mr. Cool brands might still be on the local market.

15 Killed in Attacks in Southern Thailand

By THE ASSOCIATED PRESS
Published: June 1, 2007
PATTANI, Thailand, May 31 (AP) — A roadside bomb killed 10 paramilitary troops in southern Thailand on Thursday, while in a separate attack gunmen fired into a mosque and killed five people, a Thai Army spokesman said.
The bomb went off as government-hired paramilitary rangers returned from negotiations with Muslim protesters, killing 10 of them, said the spokesman, Col. Akara Thiprote. Two rangers were slightly wounded.
The bombing took place in an area that has been under a military curfew after a mosque bombing and a grenade attack on a tea shop that killed 10 people and wounded more than 20 others on March 14.
After Thursday’s bombing, an unknown number of assailants opened fire on a group of Muslim villagers leaving a mosque after evening prayers in a nearby area, killing five people, Colonel Akara said.
Since a Muslim rebellion flared in the three southernmost provinces in early 2004, near-daily bombings, drive-by shootings and other attacks have killed more than 2,200 people.
Thailand is overwhelmingly Buddhist, but Muslims are a majority in the far south, where they have long complained of discrimination.

Ousted Premier’s Allies Protest Ban on Thai Party

By THE ASSOCIATED PRESS
Published: June 1, 2007
BANGKOK, May 31 — About 1,000 die-hard supporters of Thailand’s ousted prime minister demonstrated Thursday against a court ruling that banned his party and barred its entire leadership from politics for five years.
Some 150 policemen, bomb squads and police dogs were deployed in the area near the Royal Plaza, a large square in the heart of Bangkok. The plaza itself, where the demonstrators had initially hoped to rally, was blocked off by security officials.
Wearing yellow headbands that read “Coup leaders, get out,” the group shouted and cheered every time the name of the former prime minister, Thaksin Shinawatra, was mentioned.
“This is a fight by the people who are rejecting the judiciary’s power,” said Veera Musigapong, a former deputy leader of Mr. Thaksin’s Thai Rak Thai party and one of the 111 leading party members, including Mr. Thaksin, banned from politics by Wednesday’s ruling.
“As someone who was personally affected, I am not accepting the decision of the tribunal which was set up by the coup leaders and their illegitimate power,” he said.
The commander of the army, Gen. Sonthi Boonyaratglin, said security had been increased throughout the capital and would remain that way until it was clear that there would be no violent protests.
The Thai Rak Thai party was found guilty by the Constitutional Tribunal of financing obscure parties to oppose it in last year’s elections, in order to circumvent rules on minimum turnout.
The party’s leader, Chaturon Chaisaeng, said that a rebuilt Thai Rak Thai would try to register under the same name, while its banned executives would try to engage in political activities short of running for office.
He said that the group hoped to meet with Prime Minister Surayud Chulanont on Monday to ask him to revoke a ban on all political activities that was imposed after the bloodless coup last September that brought down Mr. Thaksin. Mr. Surayud had promised to lift the ban in September and to hold general elections in December.
The decision against Thai Rak Thai came hours after the Democrat Party, the country’s oldest and a bitter rival, was found not guilty of election law violations.
Mr. Thaksin, who now lives in London, sent a handwritten letter to his party and supporters, urging them to continue their political activities for the benefit of the country.

Nepal: Elections in November

By AGENCE FRANCE-PRESSE
Published: June 1, 2007
Nepal’s main political parties, which now include the Maoists, agreed to hold elections in November. The vote will be to choose a national assembly to rewrite the Constitution, which in turn will determine whether Nepal will retain its monarchy.

Japan ready to impose tuna quotas as pressure grows to stave off extinction

AP

May 31, 2007

Japan is considering imposing restrictions on bluefin fishing in its own waters, in an attempt to arrest the decline in numbers of the much-prized delicacy.
Its Fisheries Agency plans to form a committee next month that will make recommendations on restrictions. Japan currently has no limits on bluefin tuna fishing in its waters.
The move follows an agreement between the European Union and Japan this month to slash tuna quotas by more than 20 per cent in an effort to prevent the fish from being hunted to extinction. Environmentalists claim that 80 per cent of the bluefin tuna population has disappeared in the past 20 years.
In January, regulators meeting in Japan adopted a plan to rein-in illegal fishing, restrict the growth of fleets and share data on stock levels. The Japanese committee is expected to discuss imposing size restrictions to allow younger fish to mature.
Japan consumes about 12 per cent of the 2.06 million tonnes of tuna caught globally every year, and about a quarter of the world’s supply of the five big tuna species: bluefin, southern bluefin, bigeye, yellowfin and albacore.

American attempt to patent yoga puts Indians in a twist

May 31, 2007

Jeremy Page in Delhi

For millions around the world yoga is a source of relaxation and spiritual sustenance. Not so for the Indian Government, which has worked itself into a furious twist over efforts by American entrepreneurs – including an Indian-born celebrity “yogi” – to patent the ancient practice.
Indian officials announced yesterday that they would lodge official complaints with US authorities over hundreds of yoga-related patents, copyrights and trademarks that have been issued in recent years.
The Health Ministry said that it would take up the matter directly with the United States Patent and Trademark Office, while the Commerce Ministry said that it would write to the US Trade Representative.
“How can you patent yoga – something that has been in the public domain for thousands of years?” said Verghese Samuel, joint secretary of the Ministry of Health department for yoga and other traditional practices. “It’s a ridiculous decision,” he told The Times. “We’ll have to challenge it. We’ve already started the process.”
The dispute has exposed the differing attitudes towards yoga – and intellectual property rights over “traditional knowledge” – in India and the US.
In India, where yoga has been practised for 6,000 years, it is regarded as a Hindu exercise, involving philosophy as well as fitness, and beyond the control of government or private enterprise. In the United States, where yoga first became popular in the 1970s, it has been largely stripped of its cultural and religious overtones and turned into a $3 billion-a-year subset of the fitness industry.
As yoga has moved from marginal to mainstream, US authorities have issued 150 yoga-related copyrights, 134 patents on yoga accessories and 2,315 yoga-related trademarks.
Indian authorities appear to have been particularly upset by the copyright and trademark granted to Bikram Choudhury, the founder of “Hot Yoga”, for his brand of 26 yoga poses performed in a steam room.
Mr Choudhury, who is originally from Calcutta and opened his first yoga studio in California in the 1970s, copyrighted his yoga sequence in 1978 and obtained a trademark for Bikram Yoga in 2002. In 2005 he won a legal argument with a group of yoga teachers who disputed the copyright and trademark. He argues that his sequence of poses, combined with high temperatures – they should be done at above 105F (40.5C) and 50 per cent humidity – is unique.
“The analogy to music is perfect,” John Marcoux, his lawyer, said. “He’s not claiming ownership of individual notes, but of a particular selection of notes and the arrangement of those notes.”
“If you look at the number of yoga poses in the universe and at how many sequences you can create, the numbers are astronomical,” he added. “This doesn’t hurt yoga, it helps spread it around the world.”
The 61-year-old self-proclaimed “yogi to the stars”, who has about 900 studios around the world, plans to open his first Indian outlet in Bombay.
His plans have been overshadowed by a barrage of criticism in the Indian media from government officials and yoga experts. “One cannot patent yoga. It is an Indian treasure,” said Suneel Singh, who has been teaching yoga for 25 years.
Yoga is one of thousands of traditional Indian products – including basmati rice and turmeric – that the Indian Government has been fighting to protect from Western patents in recent years.
In 2002 it set up a task force to compile a Traditional Knowledge Digital Library with details of 4,500 medicinal plants, Ayurvedic remedies and thousands of yoga postures.
The library, which draws on texts in Sanskrit, Tamil and other ancient languages, is designed to provide a body of evidence to help to fight attempts to copyright Indian traditional knowledge.

History gets a later dateline to keep best of the past in country

May 31, 2007

Jane Macartney in Beijing

China is to curb a flood of antiquities coming on to the international market by banning the export of artefacts made before 1911. Shan Jixiang, the director-general of the State Administration of Cultural Heritage, announced that the law would come into effect at the end of the year.
For half a century China has allowed the export of artefacts and antiques dated after 1795.
“Many items in current circulation on the mainland will be stopped from flowing on to the overseas market,” Mr Shan said. It was not clear how China would stem a possible flood of antiques out of the country during the intervening months before the new date goes into effect.
China had selected the date 1795 because this was the year of the abdication of Qianlong, one of the greatest emperors of the Qing dynasty (1644-1911) and a great collector and renowned connoisseur of porcelain. The end of his reign marked the start of a rapid decline in the quality of porcelain because subsequent emperors began to lose control of tax collection. Accordingly, they lacked the means to lavish on ceramics production, for which previous dynasties and many individual emperors had been renowned.
As prices for Chinese porcelain have soared, fine imperial ceramics from before 1795 have become increasingly rare. This has resulted in a new interest in items of a later date.
William Hanbury-Tenison, a fine-art agent, said: “Say ten or fifteen years ago, these porcelains were pretty cheap. But now auction houses have very little else and items said to date from the Yongzheng, Kangxi and Qianlong emperors are mainly fakes.”
Currently, anyone wanting to export a Chinese antique must take the item to be verified by the authorities, who provide a certificate and stamp the item with a red wax seal. Some antiques have always been prohibited from export, most notably porcelain from the imperial kilns, stone carvings and metal cast figures, such as Buddhas.
The theft of relics has become rampant in recent years as people have become aware of the value of ancient artefacts from China on the international market. Mr Shan said: “The thieves and smugglers are organised and well equipped. They have networks around the globe, and these days tend to use violence much more than they did before.”
The smugglers also use the increasingly advanced technology available to plunder antiques from shipwrecks lying off the Chinese coast. Officials said that the robbers were financed by international black-market sales of the mostly blue and white porcelain.
Mr Shan said: “Many precious artworks, such as ancient rock carvings by ethnic minority groups, are bought for pennies and then smuggled abroad.”
Antique dealers in Beijing said that they expected the new ban to do little to deter smuggling, given the ease with which those in the trade can bribe Customs officers to turn a blind eye and the difficulty of tracking down small items in large shipments.

Panda that was released into wild dies

AP
Updated: 7:12 a.m. ET May 31, 2007
BEIJING - A 5-year-old panda who last year became the first to be released into the wild after being bred in captivity has died, China's state-run Xinhua News Agency said Thursday.
The body of Xiang Xiang was found Feb. 19 in the forests of Sichuan province in China's southwest, Xinhua said. He survived less than a year in the wild after nearly three years of training in survival techniques and defense tactics.
Xiang Xiang, who may have fallen from a high place while fighting with wild pandas, died of serious internal injuries, the report said, citing the Wolong Giant Panda Research Center in Sichuan.
No other details were given and it wasn't immediately clear why the bear's death was just reported. The 176-pound male panda was released from Wolong in April 2006.
Xiang Xiang, whose name means auspicious, had learned how to build a den, forage for food and mark his territory, experts at Wolong have said. He also developed defensive skills such as howling and biting.
State media last year said that Xiang Xiang hesitated for a second when the door of his cage was opened, then scampered off into a nearby bamboo forest where he was tracked by a global positioning device attached to his collar.
There are only about 1,600 wild pandas in the mountain forests of central China — the only place in the world they are found — and more than 180 live in captivity.
Pandas are threatened by loss of habitat, poaching and a low reproduction rate. Females in the wild typically have a cub once every two to three years.

Climber arrested after scaling Chinese building

REUTERS
Updated: 8:34 a.m. ET May 31, 2007
SHANGHAI - France’s Alain Robert, renowned for climbing the world’s tallest buildings, wasn’t going to let 15 days in a Chinese jail deter him from an attempt at scaling China’s tallest building.
Clad in a Spider-Man costume, the 44-year-old made a barehanded ascent and descent of the 88-story Jin Mao Tower on Thursday, achieving the feat in 90 minutes.
His feet had barely touched the ground when he was arrested by police.
Robert had decided to mount the iron-and-glass structure without permission after authorities turned down two requests.
“If you obey all the rules, you miss the fun,” Robert told Reuters in an interview ahead of his ascent of the 1,380 foot tower.
“I’ve scaled the three tallest buildings in the world, so I reckoned I should also climb the fourth-tallest building. It’s like there’s something missing.”
Robert had consulted lawyers and French diplomats before the attempt and said he expected to face 15 days in custody and a fine of up to 10,000 yuan ($1,300).
In 2001, Chinese shoe salesman Han Qizhi became the first person to scale the Jin Mao Tower. Han, who had happened to walk by the building and acted on a “rash impulse,” was detained for about two weeks.

Thai Court Disbands Former Prime Minister’s Political Party

By SETH MYDANS
Published: May 31, 2007

BANGKOK May 30 — A constitutional court on Wednesday banned the political party of former Prime Minister Thaksin Shinawatra after finding it guilty of election fraud in a ruling that could throw Thai politics into disarray.
The court barred Mr. Thaksin and 110 other executives of the party from participating in politics for five years, removing from the scene some of Thailand’s most powerful politicians.
The prospect of Mr. Thaksin’s return to power and the resurgence of his party has been one of the chief concerns of the country’s military leaders, who ousted him in a nonviolent coup on Sept. 19 while he was abroad.
The court ruled that the party, Thai Rak Thai, was guilty of paying small parties to run against it in an election in April 2006 in order to satisfy a requirement for minimum participation.
“The defendant is responsible for upholding democratic ways,” Judge Vichai Chuenchompoonuj said. “It used parliamentary elections only as a means to achieve totalitarian power.”
He added: “It goes to show that the defendant does not believe in the democratic system. It also shows no respect for the rule of law, which is key to the democratic system.”
More broadly, the nine-member court accused Mr. Thaksin of using the party for his own gain and said the party had no ideology beyond its leader’s ambitions.
The leader of Thai Rak Thai, Chaturon Chaisaeng, said his party would not dispute the ruling, which cannot be appealed. But he said, “The whole country is unlikely to accept this.”
He added: “We weren’t treated fairly. The ruling was made on the basis that those who seize power can decide what’s right and wrong even if that power comes from the barrel of a gun.”
The long-awaited rulings have been described here as one of three major hurdles for the government as it tries to steer the country back to democracy.
After seizing power, the military rulers promised a new constitution and a new round of parliamentary elections. Wednesday’s rulings could fire strong opposition from Mr. Thaksin’s supporters and make these other hurdles still more difficult to cross.
Security was tight in Bangkok as the verdicts were read, and the country’s military-appointed prime minister, Surayud Chulanont, said he was prepared to declare a state of emergency if violence erupted. But the atmosphere on Wednesday was much less tense than security officials had predicted.
The announcement was greeted with cries and tears at Thai Rak Thai headquarters.
Earlier in the day, in a message from London, Mr. Thaksin said: “We have to respect the rules of the game. That is, the rule of the law.”
The Thai Rak Thai party, formed by Mr. Thaksin as a political vehicle, is the most popular in Thai history. After taking power in 2001 it won re-election in 2005 by a huge margin, making it the first party ever to win an outright majority in Parliament.
Now, after the coup, its members have become a worrisome opposition to the military-led government.
The party leaders have said that if Thai Rak Thai were disbanded, they would come together in a new party. But the ban on participation of many of their executives was a serious blow to that plan.
In a round robin of readings of verdicts that lasted from noon well into the night, the nine members of the court acquitted the country’s other major party, the Democrat Party, of election violations.
The Democrats boycotted the election last year, making it difficult for the ballot to reach the minimum number of contesting candidates. Thai Rak Thai was convicted Wednesday of paying small parties to take part, and the Democrats were acquitted of conspiring to frame Thai Rak Thai for the payoffs.
The Democrat Party’s leader, Abhisit Vejjajiva, said: “This is the day many of us have been waiting for. I want it to be the day that we close the chapter of confusion, stress and strain in the country. From tomorrow on, we have much to do and our priority is to bring back democracy to the country and go forward with the elections.”

Malaysia Top Court Doesn’t Honor Muslim’s Conversion

By THOMAS FULLER
Published: May 31, 2007

PUTRAJAYA, Malaysia, May 30 — Malaysia’s highest court on Wednesday refused to recognize the conversion of a Muslim-born woman to Christianity, ruling that the matter was beyond the jurisdiction of the country’s civil courts and should be handled by religious authorities.
The Federal Court was divided 2 to 1, with the only non-Muslim judge, Richard Malanjum, dissenting forcefully and arguing that the Constitution must remain the supreme law of the land.
Muslims, who make up about 60 percent of Malaysia’s population of nearly 25 million, have coexisted with Buddhists, Christians, Hindus and Sikhs for decades in one of the world’s most progressive and modern Muslim democracies. But the ruling underlined the increasing separation of Muslims from others and reinforced the notion that Islamic law should have primacy over secular laws in certain aspects of Muslims’ lives.
The ruling exhausted the last appeal of Lina Joy, who after being baptized a Roman Catholic in May 1998 wanted to remove the word Islam from her identity card to marry her Catholic fiancé. Muslims in Malaysia are already subject to separate laws on inheritance and marriage and must marry within the faith.
Ms. Joy, who lost her job as a saleswoman last year because of the issue and whose family has reportedly been harassed, is seeking political asylum in Australia, said one of her advisers, who spoke on condition of anonymity because he was not authorized to speak for her.
Ms. Joy’s lawyer, Benjamin Dawson, was not available after the trial to comment on the verdict or asylum application, and Ms. Joy was not in the courtroom on Wednesday.
Malaysia’s chief justice, Ahmad Fairuz Abdul Halim, said in his majority opinion that the agency responsible for identity cards had acted reasonably when it refused to change Ms. Joy’s religious status. “She cannot at her own whim simply enter or leave her religion,” he said. “She must follow rules.”
Malaysia’s Constitution is in some ways contradictory, analysts say. It both defends freedom of religion and declares Islam the official religion. The abandonment of Islam, or apostasy, is strongly opposed by many Muslims and in some Malaysian states is punishable by fines and imprisonment. To change her religion officially, Chief Justice Ahmad said, Ms. Joy must offer proof from a special Muslim court that she has abandoned Islam.
Justice Malanjum said in his dissent that Ms. Joy’s “fundamental constitutional right of freedom of religion” had been violated.
Outside the courthouse here members of an Islamic youth organization cheered the decision.
But representatives of other religious groups were dismayed.
“People like Lina Joy should not be trapped in a legal cage, not being able to come out to practice their true conscience and religion,” said Leonard Teoh Hooi Leong, a lawyer representing the Malaysia Consultative Council of Buddhism, Christianity, Hinduism and Sikhism.
In practice, Mr. Teoh said, Ms. Joy, who was born Azlina Jailani, will have a very difficult time getting Islamic authorities to allow her to leave Islam. No one in recent years has done it in the federal territory of Kuala Lumpur, where Ms. Joy is registered, he said.
Ms. Joy’s case reflects the larger debate across the globe about the place of traditional Islamic beliefs in modern, multicultural democracies and highlights differences of opinion on the age-old question of the separation of religion and state.

7 NATO Soldiers Killed in Crash of a Helicopter in Afghanistan

By REUTERS
Published: May 31, 2007
KABUL, Afghanistan, May 30 (Reuters) — Seven NATO soldiers died when their Chinook helicopter crashed Wednesday in southern Afghanistan, the site of some of the heaviest recent fighting between Western forces and the Taliban, NATO said.
Troops responding to the crash were ambushed and called for an airstrike to eliminate the threat, NATO officials said.
The alliance would not say immediately if the big, twin-rotor military helicopter was directly involved in a battle with Taliban guerrillas or whether it was shot down. The cause of the crash was under investigation.
“Clearly, there were enemy fighters in the area,” said Maj. John Thomas, a spokesman for NATO’s International Security Assistance Force in Kabul. “It’s not impossible for small-arms fire to bring down a helicopter.”
[The Associated Press reported that it had received a call from a man who identified himself as Qari Yousuf Ahmadi, a Taliban spokesman, who said that militants had shot down the helicopter but did not provide proof for his claim.]
The helicopter went down in the southern province of Helmand, Afghanistan’s main opium poppy-growing region, where Western forces have clashed repeatedly with Taliban militants in recent months after a winter lull in fighting.
“The entire crew of five died in the incident,” the NATO force in Afghanistan said in a statement. “There were also two military passengers who died.” The statement said that one Afghan civilian was also wounded by small-arms fire after the crash.
[The Associated Press also reported that five American soldiers were killed in the crash, quoting an anonymous military official. But the NATO force does not release the nationalities of soldiers killed or wounded in Afghanistan.]
Chinook crashes in Afghanistan have killed at least 55 American soldiers in the last two years.
Taliban leaders have threatened in recent weeks to step up attacks on NATO and American-led coalition troops and said they had trained hundreds of suicide bombers to carry out attacks.

Tax Increase Batters Chinese Stocks, but There’s Little Wider Damage

SHANGHAI, Thursday, May 31 — Chinese stock markets plummeted Wednesday and continued their decline in early trading Thursday after the authorities in Beijing moved to impose higher taxes on trading activity.
The tax increase, which was announced early Wednesday, was the government’s latest attempt to rein in the world’s hottest stock market as a growing number of economists and analysts warn about the danger of a market bubble.
Investors reacted by selling shares and pushing the benchmark indexes on the two main stock exchanges sharply lower. The Shanghai composite index plunged 6.5 percent, to 4,053.09. The Shenzhen composite index dropped nearly 7.2 percent, to 1,199.45. At midday Thursday, the Shanghai exchange was down nearly 3 percent from Wednesday’s close and the Shenzhen 5 percent.
When Chinese shares fell sharply at the end of February, markets around the world tumbled in tandem on worries of broader trouble ahead for the nation’s economy. But on Wednesday, other Asian markets were down only modestly.
The benchmark Hang Seng index in Hong Kong declined 0.86 percent Wednesday, and in Tokyo the Nikkei index of 225 issues slid a little less than 0.5 percent.
In its move Wednesday, the Chinese finance ministry tripled the tax on stock transactions to 0.3 percent, which analysts said was probably not enough to destroy the bull market, though it could dampen the mood of speculators.
“The psychological impact on investors could be larger than the actual effect of the duty adjustment,” Shen Minggao, an economist at Citigroup, wrote in a research note.
Most analysts said they did not think that a sharp drop in stock prices would harm the Chinese economy, which continues to grow robustly. Some said they expected the markets to resume their climb quickly unless the government announced further measures.
“If the market expectation is that share prices are going to rise 50 percent in the next six months, then the transaction tax is affordable,” said Dong Tao, chief Asia economist at Credit Suisse.
The tax was increased at a time many Chinese seem to have gone mad for stocks. Professionals, retirees, shop owners, students — even watermelon hawkers — are said to be lining up to buy stocks in hopes of getting in on the rally. More than 300,000 accounts are being opened every day, regulators say. Brokerage houses are overrun with day traders and people who pack lunches to spend the day staring at stock price monitors.
One indication of the mood is a popular cellphone greeting that is being sent around Shanghai. The greeting replaces the national anthem with a call for all investors to rise up and buy, buy, buy stocks.
“Arise, ye who refuse to be slaves” from the national anthem has been replaced by: “Arise, ye who haven’t opened an account! Pour your gold and silver into the hot market.”
Chinese seem eager to buy stocks not only because they have watched prices soar in the last two years, but also because there are few other opportunities to get a good return on investments.
Until the past year, much of the speculative money in China was going into real estate, particularly in Shanghai and Beijing. Policy makers chilled real estate speculation with a series of tax and administrative measures, only to see the speculation move into stocks.
Many investors are betting almost everything on stocks. Some said that even the sell-off on Wednesday was unlikely to restrain optimism. “There are too many small investors in the market,” said Fan Ligen, a retired Shanghai clerk who has been investing in stocks since 1992. “They are like hundreds of ants swarming on pieces of meat on the ground.”
In the February sell-off, prices plummeted 8.8 percent after the Shanghai composite index surpassed the 3,000-point level for the first time. It was the biggest one-day drop in a decade. But with prices down, new investors rushed in, sensing an opportunity to buy on the cheap.
They were right. In mid-March, the Shanghai index retraced its losses, again exceeding 3,000. Early this month, it passed 4,000. This week, it was pushing toward 4,400 on record volume.
“Our market is different from the ones in the U.S. or Japan,” said Li Wenwei, a banker who was at a brokerage house in Shanghai. “Those markets obey the rules of the market, while ours doesn’t. There are bubbles in the market. The index is already too high, and there is a lot of risk in the market.”
In many ways, the stock market has come into line with China’s phenomenal economic growth, a bullish market to match a bullish economy that is growing close to 11 percent a year, creating worries about the possibility of hypergrowth and inflation, a stock market crash and, potentially, civil unrest.
The rise is extraordinary. Since July 2005, when a bearish market turned bullish, share prices have soared in Shanghai by more than 300 percent and 400 percent in Shenzhen, even with Wednesday’s drop.
That decline, though, was especially sharp — given regulations that no single stock rise or fall more than 10 percent in a trading day. Some stocks fell the limit Wednesday, and questions arose whether they might continue dropping Thursday.
“I think the market will still go down a bit tomorrow,” Mr. Li, the banker in Shanghai, said. “My two stocks fell today. But I won’t sell them yet. I’m not nervous about the fall since my investment is from my savings.”

David Barboza reported from Shanghai and Keith Bradsher from Hong Kong. Rujun Shen contributed reporting from Shanghai.

China: U.S. Envoy in Talks About North Korea

By DAVID LAGUE
Published: May 31, 2007

Assistant Secretary of State Christopher R. Hill arrived in Beijing to work with Vice Foreign Minister Wu Dawei on reviving the stalled agreement under which North Korea would begin to dismantle its nuclear program. Mr. Hill maintained that the impasse was a technical matter and that North Korea remained committed to the deal. He declined to give any details of the talks.

Pakistan: 3 Journalists Receive Bullet Threats

By SALMAN MASOOD
Published: May 31, 2007

Unaddressed envelopes, each containing a bullet, were left on or in the cars of three Pakistani journalists in Karachi working for Agence France-Presse and The Associated Press. Journalists groups reacted quickly, describing the act as an attempt to intimidate the press and linking it to a shady group with ties to the Muttahida Quami Movement, the party that controls Karachi and is allied with the president, Gen. Pervez Musharraf. According to news reports, the group recently issued a list naming a dozen journalists as “enemies,” including two who received the bullets.

Pakistan: 4 Arrested in Killing of Judge’s Aide

By SALMAN MASOOD
Published: May 31, 2007
The police arrested four men in the killing of Syed Hammad Raza, who worked as the chief of staff to Pakistan’s suspended chief justice. The interior minister, Aftab Ahmed Khan Sherpao, said the four belonged to a gang of robbers from Kashmir and shot Mr. Raza when they broke into his house in Islamabad on May 14. The police, who said they had recovered the gun used in the shooting and a stolen watch, maintained from the start that the killing was robbery-related. Mr. Raza’s wife denied there had been a robbery attempt and termed the shooting politically motivated because of Mr. Raza’s close association with the suspended justice, Iftikhar Mohammad Chaudhry.

Poisoned Toothpaste in Panama Is Believed to Be From China

Diethylene glycol, a poisonous ingredient in some antifreeze, has been found in 6,000 tubes of toothpaste in Panama, and customs officials there said yesterday that the product appeared to have originated in China.
“Our preliminary information is that it came from China, but we don’t know that with certainty yet,” said Daniel Delgado Diamante, Panama’s director of customs. “We are still checking all the possible imports to see if there could be other shipments.”
Some of the toothpaste, which arrived several months ago in the free trade zone next to the Panama Canal, was re-exported to the Dominican Republic in seven shipments, customs officials said. A newspaper in Australia reported yesterday that one brand of the toothpaste had been found on supermarket shelves there and had been recalled.
Diethylene glycol is the same poison that the Panamanian government inadvertently mixed into cold medicine last year, killing at least 100 people. Records show that in that episode the poison, falsely labeled as glycerin, a harmless syrup, also originated in China.
There is no evidence that the tainted toothpaste is in the United States, according to American government officials.
Panamanian health officials said diethylene glycol had been found in two brands of toothpaste, labeled in English as Excel and Mr. Cool. The tubes contained diethylene glycol concentrations of between 1.7 percent and 4.6 percent, said Luis Martínez, a prosecutor who is looking into the shipments.
Health officials say they do not believe the toothpaste is harmful, because users spit it out after brushing, but they nonetheless took it out of circulation.
Mr. Martínez said at a recent news conference that the toothpaste lacked the required health certificates and had entered the market mixed in with products intended for animal consumption.
He said laboratory tests had found up to 4.6 percent diethylene glycol in tubes of Mr. Cool toothpaste. The Excel brand had 2.5 percent.
Miriam Rodríguez, a spokeswoman for the Health Ministry, said she knew of no one who had become sick from using the toothpaste.
Doug Arbesfeld, a spokesman for the United States Food and Drug Administration, said diethylene glycol was not approved for use in toothpaste. Though the F.D.A. has no evidence that the tainted toothpaste slipped into the United States, he added, “We are looking into the situation in Panama.”
Mr. Delgado, the director of Panamanian customs, said the Dominican authorities had been notified to be on the lookout for the suspect toothpaste.
In Panama City, a consumer notified the pharmacy and drugs section of the Health Ministry after seeing that diethylene glycol was listed as an ingredient in toothpaste at a store.
The ministry fined the store $25,000 and ordered it closed for not following proper procedures in putting products up for sale.
The Northern Star, a newspaper in the southeastern Australian city of Lismore, reported yesterday on its Web site that the Excel brand of toothpaste had been found in a chain of supermarkets and taken off the shelves immediately.
Two weeks ago, The New York Times reported that a Chinese factory not certified to make pharmaceutical ingredients had sold 46 barrels of syrup containing diethylene glycol that had been falsely labeled as 99.5 percent pure glycerin. That syrup passed through several trading companies before ending up in Panama, where it was mixed into 260,000 bottles of cold medicine.
At least 100 people died as a direct result, according to Dimas Guevara, a Panamanian prosecutor who is leading the investigation into the deaths.
Over the years, counterfeiters have found it financially advantageous to substitute diethylene glycol, a sweet-tasting syrup, for its chemical cousin glycerin, which is usually much more expensive.

HYDERABAD, India, May 18 (AP) — A bomb ripped through a historic mosque in this southern Indian city on Friday, killing 11 people. Two more died in cl

BEIJING, May 18 — A young Chinese couple who have promoted a variety of delicate social and political causes were barred from leaving the country on Friday and placed under house arrest, the couple said.
The police barred Hu Jia, 33, and his wife, Zeng Jinyan, 23, from departing from Beijing on a trip to Hong Kong and several European countries, Mr. Hu said. The couple had planned to call attention to what they described as a neglect of AIDS patients and to defend other Chinese campaigners for human rights who had been prosecuted in recent months.
Mr. Hu said the police told him that he and Ms. Zeng were suspected of “endangering national security” and would be required to stay in their home under police watch for an indefinite period.
“Officials are worried that we would set off opposition to Beijing’s hosting of the Olympics,” Mr. Hu said. State security officials almost never offer any information about their activities, but the city is the venue for the 2008 Summer Games and intends to use the event to present China as a sophisticated, modern country that is open to the outside world.
In another indication of the sensitivity of the Games to China, Yang Jiechi, the country’s new foreign minister, on Friday denounced efforts in the United States to link support for Beijing’s serving as host of the Olympics to its policies in Sudan.
China has been criticized for giving strong financial and diplomatic backing to the government of Sudan, which the Bush administration and critics worldwide say has practiced genocide in its southern Darfur region while waging a war against secessionists there. “There is a handful of people who are trying to politicize the Olympic Games,” Mr. Yang told reporters. “This is against the spirit of the Games. It also runs counter to the aspirations of all the people in the world.”
A group of 108 members of the House of Representatives sent a letter to the Chinese government last week warning that China must use its influence with Sudan’s government to improve the situation in Darfur or face a possible backlash against its serving as host of the Games. Leading Hollywood personalities have also warned China that it could face a boycott of the Games unless it puts more pressure on Sudan.
In response to the criticism, China appointed its first special envoy for Darfur earlier this month. Beijing also sent military engineers to help reinforce the African Union’s peacekeeping force there.
But even as it seeks to head off international criticism over its Sudan policies, China has stepped up efforts to prevent domestic critics from voicing negative views. Lawyers, journalists and rights activists in many fields say the space to express opinions that the government considers unfavorable has sharply contracted in recent months.
Mr. Hu and Ms. Zeng have tirelessly advocated on behalf of a wide array of people involved in grass-roots organizing activities, human rights and delicate legal and medical work whom the Chinese authorities consider subversive. They often publicize details about police persecution of such people in e-mail communications and a popular blog.
Last year, Mr. Hu and Ms. Zeng spent more than six months confined to their home. They made a 30-minute film about the plainclothes security officers who surrounded their home and harassed and intimidated them.
Mr. Hu said he was invited by organizations in several European countries to speak about civil society and human rights in China. He said he planned to call attention to efforts to punish several of China’s most outspoken lawyers and AIDS workers if he had been allowed to travel.

Bombing and Clashes Kill 13 at India Mosque

HYDERABAD, India, May 18 (AP) — A bomb ripped through a historic mosque in this southern Indian city on Friday, killing 11 people. Two more died in clashes that followed between Muslim worshipers and security forces, the police said.
Minutes after the blast at the Mecca Masjid, which was built in the 17th century, worshipers who were angered by what they said had been a lack of police protection began chanting “God is great!” and hurling stones at the police.
Although the mosque violence was quickly brought under control, Muslims later clashed with security forces in at least three parts of Hyderabad, said Mohammed Abdul Basit, the police chief of Andhra Pradesh, whose capital is Hyderabad. The police fired live ammunition and tear gas to quell the riots, killing two people, he said.
The bombing, which also wounded 35 people, many of them seriously, and subsequent clashes raised fears of Hindu-Muslim violence in the city, which has long been plagued by communal tensions and occasional spasms of interreligious bloodletting.
Y. S. Rajasekhara Reddy, the chief minister of the state, appealed for calm between Hindus and Muslims. He called the bombing an act of “intentional sabotage on the peace and tranquillity in the country.”
Prime Minister Manmohan Singh echoed those sentiments in a statement released later.
“The prime minister has condemned the bomb blast in Hyderabad and has urged members of all communities to maintain peace and communal harmony,” his media adviser, Sanjaya Baru, said in the statement.
Mr. Reddy told reporters in New Delhi, where he was meeting with federal officials on unrelated business, that one bomb went off at around 1:30 p.m. and that the police found and defused two other bombs soon afterward.
About 10,000 people usually attend Friday Prayer at the mosque, which is located in a Muslim neighborhood.
“As soon as prayers ended, we were about to get up, and there was a huge, deafening blast sending bodies into the air,” said Abdul Quader, 30, who was slightly wounded in the legs. “People started running helter-skelter.”
The explosion immediately drew comparisons to the Sept. 8, 2006, bombing of a mosque during a Muslim festival in Malegaon, a city in western India, which killed 31 people.
India’s worst religious violence in recent years was in 2002, in western Gujarat state. More than 1,000 people, most of them Muslim, were killed by Hindu mobs in revenge attacks after a train fire killed 60 Hindus returning from a religious pilgrimage. Muslims were blamed for the train fire.
A series of terrorist bombings has hit India in the past year, including the July bombings of seven Mumbai commuter trains that killed more than 200 people. Most of the bombings have been blamed on Muslim militants based in neighboring Pakistan.

China Slightly Loosens the Reins on Its Currency’s Market Fluctuation

HONG KONG, May 18 — China’s central bank announced Friday that it would begin allowing the country’s currency to fluctuate more during each day’s foreign exchange trading, but again rebuffed demands from the United States and Europe for a sustained rise in the currency.
The central bank also raised interest rates and demanded that commercial banks set aside more of their assets as reserves that cannot be lent. Both of the moves are aimed at reducing the risk of overheating in an economy that is growing at more than 11 percent and at taming speculation in domestic stock markets that have more than tripled since the beginning of last year.
The announcement came as top American and Chinese economic policy makers prepared to meet next week in Washington in an effort to head off growing pressures from Congress to confront China over the widening American trade deficit.
But economists said that the latest policy moves, which take effect on Saturday, were unlikely to have any practical effect on China’s soaring exports, while the initial reaction from Washington was cautious.
The People’s Bank of China said in a statement posted on its Web site (http://www.pbc.gov.cn/english/detail.asp?col=6400&id=837) that it would allow the country’s currency, known as the yuan, to rise or fall up to 0.5 percent in each day’s trading. The current daily limit is 0.3 percent.
But the central bank gave a clear signal in its statement that the policy should not be interpreted as Chinese willingness to allow a run-up in the value of the yuan. The bank said it would continue to “keep the exchange rate basically stable at an adaptive and equilibrium level based on market supply and demand with reference to a basket of currencies.”
The bank issued a separate statement quoting an unidentified spokesman as saying that the decision did not mean that the exchange rate “will see large ups and downs, nor large appreciations.”
The People’s Bank has not allowed the yuan to move the maximum allowed percentage on any day since it broke the yuan’s peg to the dollar on July 21, 2005. The Chinese government allowed the yuan to rise 2.1 percent then, and has let it inch up by only another 5 percent over the nearly two years since.
In contrast, members of Congress from manufacturing states that have lost jobs during China’s export boom have been calling for China to revalue by 25 percent or more. If China did allow the yuan to rise more quickly, Chinese exports would become more expensive in foreign markets and foreign goods would be more competitive in China.
Liang Hong, an economist in the Hong Kong office of Goldman Sachs, said in a research note that the wider trading band represented “a symbolic but laudable development in China’s foreign exchange reform.”
The initial reaction from Congress was chilly. “To widen the band is well and good, but if they don’t use the band, nothing will happen,” said Senator Charles E. Schumer, the New York Democrat who has called for steep tariffs on goods from China unless Beijing lets the yuan rise.
The Bush administration was also cautious but a little more welcoming. “This is a useful step towards greater flexibility and an eventual float of the currency,” said Brookly McLaughlin, a Treasury spokeswoman. “It’s important now that Chinese authorities use the wider band and allow greater currency movement within each day and over time.”
Stephen Green, an economist in the Shanghai office of Standard Chartered Bank, said that China was likely to allow slightly faster appreciation in the next few days but that the long-term rate of appreciation would not change. There have been just two single-day rises of 0.16 percent and two single-day drops of 0.17 percent in two years, while the rest of the trading has fallen within an even narrower range, he added.
Widening the daily trading band is nonetheless the latest and most noticeable in a long series of steps by Chinese officials to gently awaken businesses to the risks that fluctuating currencies can pose. China pegged the yuan at 8.28 to the dollar from 1997 to 2005, lulling some businesses into ignoring currency risk.
In interviews last month at the Canton Fair, exporters from all over China said that they were paying closer attention to exchange rates. While Chinese export contracts are still denominated mainly in dollars, Chinese companies increasingly demand that their foreign customers agree to provisions requiring the buyer to pay extra if the dollar starts falling faster against the yuan.

Chinese officials acknowledge that there are arguments for faster appreciation of the yuan, but contend that this could threaten “social stability.” Chinese workers making goods like textiles that compete with exports from even lower-wage countries could protest if currency appreciation makes their products uncompetitive and costs them their jobs.
Two-thirds of China’s population still lives in rural areas and the agricultural sector is barely competitive with imports at current currency levels, raising the prospect of increased rural unemployment if the yuan rose sharply and food imports surged.
The People’s Bank of China also announced on Friday that it was raising the benchmark regulated rate for one-year bank deposits by 0.27 percentage point, to 3.06 percent, and increasing the benchmark rate for one-year bank loans by 0.18 percentage point, to 6.57 percent.
By raising deposit rates more than lending rates, the government showed confidence that the banks had put enough of their bad-loan problems behind them to survive on slightly narrower profit margins. Higher deposit rates also make it a little more attractive for Chinese families to put their savings in banks, instead of risking them in China’s feverish stock markets.
But raising domestic lending rates could make it harder for China to allow further appreciation of the yuan.
That is because the central bank is itself a borrower. It borrows yuan, by issuing bonds, to pay for its extensive interventions in currency markets, where it has accumulated $1.2 trillion in foreign exchange reserves, mainly dollars.
The central bank earns a higher interest rate on American Treasury securities than it pays on yuan-denominated bonds at home. The authorities use this profit from the difference in interest rates to cover losses on the foreign exchange reserves, which are worth less and less in yuan as the yuan appreciates.
The semiofficial China Business News newspaper reported on Friday that the government had entrusted $3 billion to the Blackstone Group, the private equity firm, to invest abroad. Blackstone declined to comment; the company is in a “quiet” period before a planned initial offering on the New York Stock Exchange.
The central bank also ordered banks to hold 11.5 percent of assets as reserves effective Saturday, up from 11 percent. Many banks already have even larger reserves, however, as they have been swamped with deposits from China’s brisk economic growth and large trade surplus, and have had trouble finding ways to lend this money.

Kazakhstan: President Voted In for Life if He Likes

Parliament voted to exempt President Nursultan Nazarbayev from a provision in the Constitution limiting presidents to serving two terms. The vote effectively clears the way for Mr. Nazarbayev, a former Communist Party official who has led Kazakhstan since its independence from the Soviet Union, to become president for life. Mr. Nazarbayev has never been elected by a poll judged free or fair by Western election monitors and has long been dogged by corruption allegations and complaints of crackdowns on the opposition and the news media. But Kazakhstan, which gave up its abandoned Soviet nuclear arsenal after independence, has been spared the wars, terrorism, personality cults and much of the disorder of other Central Asian states. Many of Mr. Nazarbayev’s critics say he has significant popular support.

Thailand: Thaksin Backers Held Radio Stations Shut

By AGENCE FRANCE-PRESSE

The military-backed government detained three supporters of Thaksin Shinawatra, the prime minister ousted in a coup in September, as it opened a nationwide crackdown on radio stations after closing three in Bangkok that broadcast his comments. The detentions were the first against backers of Mr. Thaksin since the coup. The police said the three were preparing an anti-junta rally in Chiang Mai, the home province of Mr. Thaksin, who now lives in London.

China lets currency rise faster

BEIJING - China took steps Friday to let its currency appreciate faster against the dollar and to cool its sizzling economy ahead of what are expected to contentious talks in Washington over Beijing’s soaring trade surplus.
American officials hope a stronger yuan will help to narrow the multibillion-dollar U.S. trade deficit with China by making Chinese goods more expensive. But the Chinese central bank cautioned that the latest change will not lead to “large appreciations” for the yuan.
As of Saturday, the band in which the yuan — also known as the renminbi, or “people’s money” — is allowed to fluctuate against the dollar each day will be widened from 0.3 percent to 0.5 percent above or below the previous day’s closing value, the bank announced.“It does not mean that the RMB exchange rate will see large ups and downs, nor large appreciations,” the bank said on its Web site. It said Beijing will “keep the exchange rate basically stable” and “safeguard stability of the overall economy.”
Also Friday, China raised interest rates for the second time in just over two months and tightened access to credit in a renewed effort to slow its economy.
The moves came ahead of a two-day meeting starting Wednesday of senior U.S. and Chinese officials that is meant to address complaints about China’s trade gap, product piracy and other issues.
Critics say Beijing keeps the yuan undervalued, giving its exporters an unfair price advantage and adding to its swelling trade surplus.
The United States reported a trade deficit of $232.5 billion last year with China, its biggest ever with any country. This year’s trade gap is expected to surpass that.
Beijing revalued the yuan against the dollar by 2.1 percent in July 2005. Since then, it has let it rise another 5.3 percent in tightly controlled trading.
But Washington has pressed for a faster rise, and some American lawmakers have called for punitive action against China if it fails to take swifter action on letting the yuan rise.
Economists say a stronger yuan by itself is unlikely to narrow the trade gap.
The Chinese central bank’s announcement made no mention of the trade disputes and described the latest change as the next stage in long-range reforms of Beijing’s exchange-rate mechanism.
“Substantive progress has been made,” the statement said. “Meanwhile, the Chinese economy is undergoing a steady and relatively fast growth; the financial reform is further deepened. All these factors have created a favorable condition for further improving the exchange rate regime.”
A stronger yuan and slower export growth also could help Beijing ease economic strains from the flood of money pouring into the economy from abroad.
Friday’s interest rate hike was the fourth in the last 12 months.
Economists had expected it after the government reported investment in real estate, factories and other urban assets was growing by double digits, indicating earlier interest rate rises were failing to moderate the boom.
The 0.18 percent increase takes effect Saturday and raises lending rates to 6.57 percent on a commercial one-year loan, the central bank said on its Web site.
The central bank has been forced to drain billions of dollars a month from the economy by selling bonds to reduce pressure for prices to rise. That has led to Beijing piling up more than $1.2 trillion in foreign reserves.
The government also ordered commercial banks to increase the amount of money they set aside as reserves to reduce the pool of credit for lending. The reserve increase takes effect June 5, the central bank said in a separate statement.
Chinese leaders worry that a construction and lending boom could ignite politically dangerous inflation or a debt crisis.
The government reported Thursday that investment in urban fixed assets jumped by 25.5 percent in the first four months of the year. That exceeded the 2006 full-year growth rate of 24.5 percent.
The government also has imposed investment curbs and banned some types of projects outright in the textile, auto and other industries where supply exceeds demand.
But the controls have had a limited impact in a system that is flush with money from booming exports and economic growth that is expected to top 10 percent this year for a fifth straight year.
The last rate hike was March 17.
Premier Wen Jiabao, China’s top economic official, said Wednesday the government will make interest rates more flexible and control the growth of the money supply to ensure economic stability.
“There are some problems. We face excessive liquidity, an imbalance in the balance of payments, and rapid accumulation of foreign exchange. But we are taking measures to deal with these issues,” Wen said in Shanghai at a meeting of the African Development Bank.