Gates had been hoping for months to visit Beijing this summer, a destination that took on added importance at the Pentagon after North Korea — which sees China as its closest ally and diplomatic protector — was accused last month of sinking a South Korean warship with a torpedo, killing 46 sailors.

Aides to Secretary of State Hillary Rodham Clinton had confidently predicted that Gates would be able to go to Beijing after meetings she held there last month. “I think you will see one of the take-aways over the course of the next couple of weeks, that suddenly Chinese friends might have time for Secretary Gates’s visit,” an official told reporters as Clinton flew back to Washington.

But Beijing declined to extend an invitation. Pentagon officials said no specific reason was given. But they said they assumed China was still annoyed by the Obama administration’s announcement in January that it would approve $6.4 billion in arms sales to Taiwan.

Although U.S. arms sales to Taiwan are hardly new, they are considered a long-standing policy irritant by Beijing, which considers Taiwan a breakaway province. Beijing suspended military-to-military exchanges with Washington in 2007 after the Bush administration approved a separate set of arms sales to Taiwan.

Pentagon press secretary Geoff Morrell said Gates was frustrated by the Chinese response in both cases. “He just doesn’t believe that a relationship of this importance can exist in fits and starts,” Morrell said. “It can’t be derailed by bumps in the road that will inevitably come up.”

China has cooled its military relationship with the Pentagon since January but has not cut ties entirely. Last month, Adm. Robert Willard, the commander of the U.S. Pacific Command, met Chinese counterparts in Beijing when he joined the delegation headed by Clinton.

The first stop on Gates’s trip will be Singapore, where he will attend a regional security conference. Then he will travel to Baku, Azerbaijan, to try to fortify U.S. military supply routes to Afghanistan, many of which cross Central Asia. He will visit London to meet with leaders in the new British government, then stop in Brussels for talks with NATO allies.

When contacted by Dawn on Wednesday, Brig (retired) Shiraz Baig, project director of Muzaffarabad City Development Project (MCDP), confirmed that he had sought explanation from the China International Water and Electric Corporation through a letter after receiving reports to this effect from some quarters.

“They have, however, denied the charge saying since they maintain record of (the movement of) all of their dumper trucks no such infringement has been committed by them,” he said.

However, an official of the AJK Environment Protection Agency (EPA) told Dawn that he had himself spotted several trucks unloading mounds of earth directly into the river near the Allama Iqbal Bridge in the dead of Monday night.

“I was taken aback by seeing a queue of trucks unloading mounds of earth and debris in the river and when I asked the drivers to stop they advised me to talk to their contractor,” assistant director Shafique Abbasi said.

“This is a criminal act, having serious repercussions for our environment as well as the life of Mangla Dam,” he said.

Ironically, sources told Dawn, the EPA high ups had not initiated any action against the violators reportedly because the dumping work had been sublet by the Chinese company to a local contractor linked with the ruling elite.

In response to question, Mr Baig told that the Muzaffarabad Development Authority had identified a dumping site along the Tahli Mandi Road and he wondered why the debris and earth was not being unloaded there.

“Indeed, it’s a serious issue and we will ensure its prevention,” he vowed.

Interestingly, the place from where earth was dumped into River Neelum bore visible signs of commission of unlawful act even after two days on Wednesday.

In reply to a question, Mr Abbasi disclosed that the Earthquake Reconstruction and Rehabilitation Authority (Erra) had not submitted the Environment Impact Assessment (EIA) report of the MCDP to the EPA – a prerequisite for the formal commencement of any project –notwithstanding a reminder in September 2009.

However, he said the EIA of Bagh City Development Project (BCDP) and Rawalakot City Development Project (RCDP) had lately been submitted by their heads concerned.

All the three projects are being executed by two Chinese companies under Erra’s Urban Development Programme at a cost of $353 million. Of this amount, $300 million are being provided by the Chinese government as a soft loan.

In June last year a road contractor and four of his workers were arrested by the police for dumping debris and excavated earth in River Jhelum in violation of a ban imposed by the EPA, though they had to be released shortly afterwards.

Around same time, similar complaints were reported from the Neelum valley road, being rebuilt by another Chinese company. http://www.dawn.com/wps/wcm/connect/dawn-content-library/dawn/the-newspaper/local/islamabad/chinese-company-dumping-waste-in-neelum-river-660

The cartoon shows a little boy’s drawing on a blackboard of a row of tanks moving towards a stick figure. The national flag, which flies every day in front of the portrait of Mao Zedong in Tiananmen Square, flutters below. Above the tanks the boy has drawn a torch, an apparent reference to the flame held by the plaster statue dubbed the Goddess of Democracy that student demonstrators raised in the square just days before the Army moved in to crush them.

A flurry of comments erupted on the Chinese internet once cybersurfers spotted the cartoon — published to mark Children’s Day on June 1 but clearly intended to commemorate the 21st anniversary on Friday of the crackdown of June 4, 1989.

Links to the cartoon were being passed around via Twitter, which is blocked in China but is nonetheless used by many younger and more tech-savvy “netizens” who have found ways to circumvent the Great Firewall.

One comment read: “The Southern Metropolis Daily has done a good thing.” Another wrote: “Make sure the next generation knows about the past, that they remember history. Do not forget! Do not forget!”

It is not clear what the date or the writing — “School Report” — on the blackboard might refer to.

Some reports said the drawing had been removed from the newspaper’s website, leaving a blank among the seven remaining anodyne cartoons. However, the image could still be found on page 16 of the PDF version of the newspaper.

The Communist Party has branded the 1989 demonstrations — when students took to the streets to protest against inflation and corruption and call for democracy — as a counter-revolutionary rebellion. Scant reference appears in history text books and the use of tanks and troops to crush the movement on the night of June 3-4, with the loss of hundreds of lives, is never mentioned.

Many young Chinese have never even heard of the events. They have never seen the image, famous around the world, of an unidentified man in a white shirt, holding a shopping bag, standing in front of a column of tanks as they moved out of the square on the morning of June 4.

It would not be the first time a Chinese newspaper has tried to slip a commemorative reference past the censors. In 2008, editions of the popular Beijing News were withdrawn from stands after running a photograph showing two wounded young men being carried away on a flatbed tricycle from Tiananmen Square. A year earlier, the authorities sacked three editors of a provincial newspaper from printing an advertisement that praised the mothers of the Tiananmen victims for their campaign for justice.

The Communist Party is acutely aware of the anniversary, filling Tiananamen Square with thousands of plainclothes police just in case anyone dares to attempt to remember publicly the hundreds killed or the thousands sent to jail.

So sensitive is the date that police in Hong Kong today deported a sculptor who recreated the Goddess of Democracy statue a day after he tried to enter the territory earlier in the week. Chen Weiming had arrived from Los Angeles. His statue had been seized a few days earlier when it was displayed on a city pavement along with a carving depicting the tragedy.

The attacker, named as Zhu Jun, the 46-year-old head of security at a district post office, broke into a fourth-floor office at the court building in Yongzhou, Hunan province.

He had allegedly told his co-worker at the post office that he was taking the automatic weapon and two pistols for inspection by the city authorities before diverting to the courthouse.

All three judges in the office were killed while three other court staff were wounded, said a spokesman for the local propaganda department.

According to the state media, Mr Zhu was taking revenge on the court for ruling against him in his divorce case three years ago.

Xinhua news agency said Mr Zhu lived with his parents and his son.

However, the judges who were killed on Tuesday were apparently unrelated to Mr Zhu’s case and reports suggested he fired blindly.

There was no response from the courthouse, and local police said they were still investigating the case.

Private gun ownership is virtually banned in China, but the country has seen a rise in violent crimes as it has modernised and loosened social controls. http://www.telegraph.co.uk/news/worldnews/asia/china/7792896/Man-kills-three-judges-in-Chinese-court.html

Expo 2010 is underway in Shanghai, and the luxury bars along the Huangpu River are filled with the delegations of Western companies drinking toasts to the new partnerships they have just formed with Chinese companies. In March, this was also where the Chinese adventure of M.C.M., a construction machinery dealer from the southwestern German city of Mannheim, got its start. But now, despite initial high hopes for the deal, the company is struggling to stay afloat.

The head of M.C.M. has spread out a number of photos on a table in his hotel. They are among the few certainties that Mohammad-Reza Mouazzen, 62, can still cling to. One photo depicts a beaming Mouazzen, an Iranian-born German citizen, at a banquet with Chinese businessmen. It was the day after Mouazzen’s Chinese business partners, as he believed at the time, had shipped a used mobile crane, for which he had paid €100,000 ($122,000), to Iran, as their contract had stipulated.

Mouazzen has gray hair, wears a dark suit and, as he points out, is not a “baby.” For the past 30 years, he has been buying used heavy equipment in countries like Poland and Russia, and then selling it at a profit, often in Iran. It is a tricky business, which is why Mouazzen was careful to cover his bases during his first deal in China. He and his son Omid, 23, documented every step of the process with both photos and videos. One cannot say he behaved naively or negligently in Shanghai.

Still in Disbelief

Nevertheless, the two businessmen were “shanghaied,” so to speak, unscrupulously duped in a way Mouazzen has never experienced anywhere else. In early May, after Mouazzen had returned to Mannheim, he received a furious phone call from his client in Iran. Instead of delivering what was expected, a well-maintained crane, made by the Japanese company Kato and freshly overhauled at Mouazzen’s behest, the Chinese had shipped a rusty Mitsubishi — a wreck without an engine or a loading arm, weighing 12,590 kilograms (27,700 lbs.) less than the original crane.

Mouazzen places the photos of both cranes next to each other. He is still in disbelief. The two machines were photographed standing on the same container, which was marked YMLU 700754 6. Mouazzen photographed this number and the crane when it was being loaded in Shanghai. At the time, he and his son remained with the truck carrying the container in the Shanghai customs port until 1 a.m. Only after the truck had taken its place in the long line of other trucks waiting at the harbor did they return to their hotel, satisfied that everything was legitimate.

The container number is listed in the bill of lading. “No one questions what’s in the bill of lading,” says Mouazzen. “That’s how I’ve worked my entire life.” But his Chinese partners, he assumes, must have replaced the heavy container cargo on that same night: a daring logistical feat that they could only have been performed with the help of two large hoisting cranes — and hardly without accomplices in the Shanghai customs office.

But the dealer from Mannheim noticed nothing that night. In fact, he was overjoyed as he raised a glass to his new business relationship with the Chinese. An enormous market seemed to be opening up for M.C.M., because the majority of used heavy equipment is offered for sale in China, primarily on the Internet. “We Chinese wish to learn from you,” the head of the company, which calls itself China Heavy Equipment, vowed solemnly. Mouazzen, who felt flattered at the time, says: “They treated me like a father.”

Serious Doubts

And because everything seemed to be going so perfectly in China, the visitors from Germany agreed to the next deal: the purchase of another used crane, this one made by the Japanese company Tadano, also for shipment to Iran. Mouazzen gave the Chinese a 60-percent down payment for the €110,000 crane, which he characterizes as “a wonderful machine.” For another €6,000, the Chinese promised to provide the crane with an air-conditioning system.

But when he returned to Germany, Mouazzen began receiving a flood of e-mails that raised serious doubts. China Heavy claimed that the crane’s entire electrical system had burned out during installation of the air-conditioning unit. As the customer, Mouazzen would be responsible for the added costs, China Heavy wrote. The Chinese partners demanded more than $40,000 for the repair and claimed it would take three months. When Mouazzen insisted on inspecting the machine in person, the e-mails became increasingly hostile.

China Heavy eventually sent its German customer a “letter of urgency,” in which it stated that if he did not react to the letter within eight hours, it would be “responsible for nothing.” But the flight to Shanghai alone would have taken Mouazzen about 11 hours, and besides, most European airports were shut down at the time because of the volcanic ash cloud. The Chinese apparently did not seriously expect that they would ever see their business partner again.

The small Mannheim business, which consists of Mouazzen, his son and three employees, is now struggling to survive. In addition to the money he had already paid for the cranes, Mouazzen owes his Iranian customers a 30 percent contractual penalty for the incorrect shipment. Even worse, says Mouazzen: “My reputation with business partners of many years is ruined.”

Now the Mouazzens are back in Shanghai. During their previous visits, they splurged on a suite, but now father and son are saving money by sharing a double bed. And instead of spending their time marveling at the glittering facades of this city of skyscrapers, they are struggling with the harsh realities of everyday business in China.

‘Why Don’t You Arrest These People?’

The Mouazzens have one of their first appointments with the police. The officers listen patiently to the foreigners’ story, but they do not seem surprised. In light of the overwhelming evidence — the photos of the cranes, the Chinese partners’ shipping container, the manifests, the contracts — the Chinese agree that a “crime” was committed. “Well, then why don’t you arrest these people?” Mouazzen asks. The officers reply that they will conduct a thorough investigation of the matter, because their aim is to crack the entire ring of swindlers later on, in one fell swoop.

The Mouazzens spend one day after the next in Shanghai, in much the same way, achieving nothing. Instead, they discover that the crane they had already paid for is apparently being offered for sale on the Internet again.

Every day they spend in Shanghai costs them a lot of money. Their Chinese attorney alone charges €250 an hour. And with each passing day in China, Mouazzen loses potential contracts that his company urgently needs.

In their desperation, the Mouazzens begin conducting their own investigations. They discover, for example, that the address of their Chinese “partners” listed in the contract is incorrect. Suddenly no one is answering any of the mobile phone numbers the Mouazzens were given, and the interpreter, who attended every meeting, is supposedly in the hospital. The shipping agent who transported the crane to the port starts shouting at the Mouazzens when he sees them approaching from a distance. He claims that neither the truck nor its driver belonged to his company.

Finally, on the fifth day of their stay, the Mouazzens are sitting across the table from a representative of China Heavy. The meeting, held in their lawyer’s office, is a perfect example of the Chinese art of wearing down negotiating partners. The head of China Heavy has sent an assistant, the same person who had signed the contracts. But the attorney for the Chinese company controls much of the conversation. His name is Tony Hang, he is wearing black glasses, and he behaves boldly, as if he were the prosecutor in this case.

‘Do Not Call Us Cheaters!’

When the Mouazzens present their photos, Hang pushes them aside, saying that they are not evidence. Nevertheless, he says he would like photocopies, a request the Mouazzens deny. Then Hang launches into a debate over the model name of one of the cranes, which is different in China than it is in Japan. Finally, he pulls out the “letter of urgency” and says that his client had demanded that Mouazzen appear in Shanghai within eight hours. “But you didn’t show up!” he shouts.

The air becomes more and more stifling in the conference room, and Mouazzen begins breathing heavily. When his son berates the opposing party as “cheaters,” Hang shouts: “You do not call us cheaters! You are cheaters!” The representative of China Heavy looks on silently.

Mouazzen silences his son with a wave of his hand. There are beads of sweat on his forehead, his eyes are moist, and he still hopes that he can appeal to the Chinese on a human level. “Why did you do this to me, after I had brought so much money to China?” he asks quietly. “And why do you defend such people?” he asks the attorney. “You only harm your country by doing so.”

The parties eventually go their separate ways. The Mouazzens’ attorney, a young man who said very little during the meeting, smiles encouragingly at his clients and says that the opposing party will undoubtedly get back to him soon. Mouazzen has already heard many variations on the same theme in Shanghai.

When the police fail to pursue his case, Mouazzen takes matters into his own hands and searches for his crane in Shanghai, which, as he has already discovered, is once again for sale online. He watches as the crane is loaded onto a truck. Then he instructs his attorney to ask the police to intervene. But the police refuse, claiming that the officer assigned to the case is now on vacation and that nothing can be done about the matter at the moment.

“What kind of a city is this,” Mouazzen asks, “where swindlers are simply allowed to go about their business?” www.spiegel.de/international/business/0,1518,698058,00.html

The woman struck at around 2am, slashing at passengers sleeping in the lower bunks of a carriage and causing widespread panic in the darkness, as the K7019 train from the northeastern city of Harbin to northern Hebei province chugged south.

One man, identified only as Mr Wang, said he was awoken when he felt a sudden pain in his leg. In the gloom he made out the plump figure of a short-haired woman moving towards the neighbouring lower bunk and holding a knife.

He heard screams and realised the woman was attacking other passengers. Many people were sleepy and confused and did not realize what was happening. When it became clear that an attacker was on the loose, several gathered together and rushed the woman, knocking the knife out of her hand.

Mr Wang said: “I leapt up to help people to capture the woman. Then I realised that one of my legs felt really cold and I looked down and saw that it was bleeding from a deep cut.”

When the conductor finally turned on the main lights, which are turned off at 11pm leaving travellers with a small bedhead lamp, it was found that nine people had been wounded.

Another traveller, Mr Song, said his 70-year-old sister had suddenly woken him up in the darkness saying that her shoulder hurt and that something must have dropped on her from an upper bunk. With the light from his mobile phone, Mr Song saw that nothing had fallen but that his sister was bleeding from a 2-cm-long cut to her shoulder.

Mr Wang said: “We didn’t have any medicines but other passengers brought out alcohol that they were carrying as well as cloths and we made makeshift bandages to stop the bleeding of the wounded people.”

The woman, who was described as being in her 40s but was otherwise not identified, was handcuffed by train security guards between two carriages.

The train stopped at the next station where the wounded passengers were transferred to hospital for treatment. Police took away the attacker.

Violent crime, long rare in tightly controlled Communist China, has surged in recent months. Just a day earlier, a bank guard opened fire with a rifle in a court building in central China, shooting dead three judges and wounding three people before turning a pistol on himself. Zhu Jun, 46, had been angered by a ruling by another court on the division of assets in his divorce three years earlier.

China has been rocked by a series of brutal attacks on young schoolchildren around the country since March that have left 17 people dead, 15 of them young pupils. Scores have been wounded.

The attacks have triggered intense debate about the motives of the assailants and the reasons for the violence. The Government recently announced it would set up state-run mental hospitals in all of its 31 provinces, from 22 currently, to try to meet the needs of those with psychological problems.

Ahmadis consider themselves Muslim and follow all Islamic rituals. But they were declared non-Muslims in Pakistan in 1974 and in 1984 they were legally barred from proselytising or identifying themselves as Muslims.

“Punjabi chapter” of the Pakistan Taliban, formally known as the Tehrik-e-Taliban, has claimed responsibility for the attacks.

The attacks on minority communities were expected as banners of hatred against minorities were displayed in several parts of Lahore on Thursday. One of the anonymous banners in Ghari Shahu area read: “Jews Christians and Ahmedis are the enemies of Islam.”

Police said gunmen made the brazen attack shortly after Friday prayers at the Ahmadi mosques at Model Town and Ghari Shahu areas. Most of the worshippers were still inside the mosques as militants armed with AK-47 rifles, shotguns, grenades and other explosive devices entered through main gates, clearing their way with gunfire and hurling grenades.

The number of terrorists involved in the Ghari Shahu mosque is not known. while some were holed up inside the building  others took up positions on the  rooftop and minarets, and fired at security officials trying to enter the building. Six blasts were heard inside the mosque.

Four attackers were involved in the Model Town attack; two of them managed to climb over the wall of the mosque and threw grenades, while the other two opened fire from outside.

Police and elite forces took control of the two buildings after battling with the gunmen for nearly three hours, according to reports.

Quick: Think of a Chinese brand name.

Japan has Sony. Mexico has Corona. Germany has BMW. South Korea? Samsung.

And China has . . . ?

If you’re stumped, you’re not alone. And for China, that is an enormous problem.

Last year, China overtook Germany to become the world’s largest exporter, and this year it could surpass Japan as the world’s No. 2 economy. But as China gains international heft, its lack of global brands threatens its dream of becoming a superpower.

No big marquee brands means China is stuck doing the global grunt work in factory cities while designers and engineers overseas reap the profits. Much of Apple’s iPhone, for example, is made in China. But if a high-end version costs $750, China is lucky to hold on to $25. For a pair of Nikes, it’s four pennies on the dollar.

“We’ve lost a bucketload of money to foreigners because they have brands and we don’t,” complained Fan Chunyong, the secretary general of the China Industrial Overseas Development and Planning Association. “Our clothes are Italian, French, German, so the profits are all leaving China. . . . We need to create brands, and fast.”

The problem is exacerbated by China’s lack of successful innovation and its reliance on stitching and welding together products that are imagined, invented and designed by others. A failure to innovate means China is trapped paying enormous amounts in patent royalties and licensing fees to foreigners who are.

China’s government has responded in typically lavish fashion, launching a multibillion-dollar effort to create brands, encourage innovation and protect its market from foreign domination.

Through tax breaks and subsidies, China has embraced what it calls “a going-out strategy,” backing firms seeking to buy foreign businesses, snap up natural resources or expand their footprint overseas.

Domestically, it has launched the “indigenous innovation” program to encourage its companies to manufacture high-tech goods by forcing foreign firms to hand over their trade secrets and patents if they want to sell their products there.

Since 2007, thousands of Chinese businessmen have attended government-sponsored seminars on “going out,” learning everything from how to do battle with domineering Americans and Britons during conference calls to why a Chinese boss should think twice about publicly humiliating his wayward foreign workers — as he’d do to his staff at home.

China has also moved to re-brand China itself. Late last year, when memories of China’s poisoned pet food and deadly milk were still fresh, the Ministry of Commerce contracted with the global advertising giant DDB for a $300,000 ad showing a series of high-tech products, from top-of-the-line running shoes to an iPod.

As a guitar wails, a voice intones: “When it says ‘Made in China,’ what it really means is made in China, made with the world.”
Remaining insular

In recent months, the Western media have hyperventilated with stories about China’s going-out strategy and about Chinese firms buying up the globe — Oil! Gas! Cars! — and even investing in the United States. In 2000, China had $28 billion in overseas investments; this year, it could break $200 billion.

But a little perspective: Even if China’s total foreign direct investment hits $200 billion, it still pales in comparison to smaller economies, such as Singapore’s, Russia’s and Brazil’s. And China has plunked down only about $17 billion in rich countries, equivalent to the overseas assets of a single medium-ranked Fortune 500 company.

The 34 Chinese companies on the Fortune 500 list basically operate in China only. The world’s three biggest banks are Chinese, but none is among the world’s top 50, ranked by the extent of their geographical spread.

“Moving forward another 10 years,” said Kenneth J. DeWoskin, chairman of Deloitte’s China Research and Insight Center, “it’s hard to see how viable Chinese companies will be if they just stay in China.”

China’s attempts to fight what it sees as the stranglehold of foreign patents and intellectual property rights have also had hiccups.

China is estimated to have paid foreign firms more than $100 billion in royalties to use mobile telephone technology developed in the West, according to executives of Western communications companies.

So in the late 1990s, it decided to develop its own. But after more than $30 billion in development costs, its unique technology still has fewer than 20 million users in a market of more than 500 million.

Handset makers have told China’s government that they won’t produce phones equipped with the new technology unless they are given subsidies. And China has resorted to giving away the technology to Romania and South Korea to encourage broader use.

“China is still stuck,” said Joerg Wuttke, former president of the European Union Chamber of Commerce in China and a 25-year veteran of doing business in China. “There is a huge disconnect between the money spent in universities and the lack of products.”

China also faces enormous challenges to creating globalized firms. Studies of Chinese executives show that they spend far more time with government officials — who in China are the key to their profits — than with customers, who are the key to international success.

“Chinese executives like me need to spend a generation outside China to learn how business is done around the world,” said Hua Dongyi, who chairs a massive Chinese mining company in Australia but has also built roads in Algeria and infrastructure in Sudan.

That’s definitely true for Hua. In April, he was forced to apologize to his Australian workers after he told Chinese media that the workers were money-grubbing and lacked the “loyalty and sense of responsibility existing in many Chinese enterprises.”
Lenovo’s lessons

The Chinese computer maker Lenovo, which bought IBM’s ThinkPad in 2004, wasn’t the first Chinese company to acquire a big foreign brand, but it’s still considered the pioneer.

That’s probably because China’s other forays into buying foreign brands have ended in disaster. An attempt by the Chinese electronics firm TCL to become the world’s biggest TV manufacturer in 2003 fizzled when its French subsidiary lost $250 million.

A move by a private Chinese company to take over a once-dominant U.S. lawn mower company, Murray Outdoor Power Equipment, ended in bankruptcy because, among other mistakes, the Chinese firm didn’t realize that Americans tend to buy mowers mostly in the spring.

Lenovo purchased IBM’s laptop division for $1.25 billion — a gutsy move considering that IBM’s renowned ThinkPad brand lost $1 billion from 2000-2004, twice Lenovo’s total profit during that time.

Although Lenovo’s move was portrayed by many in the West as a sign of China’s rise, Lenovo acted out of desperation, said Yang Yuanqing, who has been a senior executive at Lenovo since it was founded in the 1980s with government funds.

Lenovo was losing market share in China. Its technology was middling. It had no access to foreign markets. With one swoop, Lenovo internationalized, purchased a famous brand and got a warehouse of technology as well.

But from the start, things were tough.

Lenovo’s American competitors fanned anti-Chinese flames in Congress, insinuating that Lenovo could insert spyware into the computers it was selling to the U.S. government. The firm also faced enormous challenges bridging cultural divides among U.S. workers at its Raleigh, N.C., headquarters, the Japanese who made ThinkPads and the Chinese who made Lenovos.

William Amelio, the firm’s second chief executive who had been lured from a top job at Dell, remembers his first trip to Beijing as the new Lenovo boss in late 2005.

“I was greeted with rose petals and the red carpet treatment and company songs. In Raleigh, everyone’s armed were crossed. It was like, ‘Who died and left you the boss?’ ” he said. “You had the respect for power in the East and the disdain for authority in the West.”

Meanwhile, Lenovo’s competitors were moving. In 2007, Acer, the computer powerhouse from Taiwan, snapped up the European computer maker Gateway, effectively cutting Lenovo off from European customers. Lenovo slipped to fourth place worldwide behind HP, Dell and Acer.

Then the global financial crisis hit, and Lenovo, which sold a large percentage of computers to businesses, was hit hard.

Lenovo responded by following the lead of an increasing number of Chinese firms: returning to its roots. Yuan Yuanqing was reappointed its chief executive and refocused Lenovo on the company’s one bright spot: the China market. Sales skyrocketed, despite lackluster performance overseas.

Lenovo, according to Bob O’Donnell, a longtime expert on personal computers at IDC, “became a Chinese company again.”

Still, analysts said Lenovo’s rocky foreign adventure saved the company.

Lenovo might not have much of a brand overseas, but its association with a foreign firm has helped it in China. Lenovo’s computers routinely command twice the price in China that they do in the United States. Lenovo offers its top-of-the-line ThinkPad W700 to the Chinese government at $12,500; in the United States, it runs for $2,500.

Chinese officials pushing the going-out strategy have looked at Lenovo as a model for Chinese firms seeking to become known multinational brands. But for China’s companies, going out might be the secret to staying alive at home.

This year, the Chinese car company Geely bought Volvo from Ford. Pundits figured it was to expand China’s economic heft — and its brands — overseas. But as Geely’s founder, Li Shufu, put it, “Volvo will find a new home market in China.”

But the opening session instead laid bare a recurring theme between Beijing and Washington: the United States came with a long wish list for China on both economic and security issues, while China mostly wants to be left alone to pursue policies that are turning it into an economic superpower.

President Hu Jintao, welcoming the 200-strong American delegation in the Great Hall of the People, praised the “mutually beneficial and win-win cooperation” between the United States and China. Such coordination, he said, had helped speed the recovery from the 2008 financial crisis.

On the crucial issue of China revaluing its currency — something the Obama administration had pushed for — Mr. Hu repeated China’s past promises to make its effectively fixed exchange rate respond more to the market, but the fact that the country’s top leader mentioned reform at all suggested it is on the leadership’s agenda.

Still, Mr. Hu also repeated that Beijing would move “under the principle of independent decision-making, controllability, and gradual progress.” Translation: China alone will determine the timing of any such move.

Economists said the deepening debt crisis in Greece, which came up immediately in the discussions on Monday, would make Beijing more reluctant to allow its currency to appreciate in value in the immediate future.

Treasury Secretary Timothy F. Geithner did not mention China’s currency in his opening remarks, though he did allude to it in subsequent sessions. The administration has decided not to prod Beijing at this meeting, officials said, concluding that it would resist outside pressure.

The United States is hitting similar hurdles on security issues. Secretary of State Hillary Rodham Clinton pressed China to support measures against North Korea following the strong evidence that it torpedoed a South Korean warship in March. But China has been skeptical of North Korea’s role and is reluctant to punish the North, with which it has close ties.

And while China agreed to a watered-down United Nations resolution on Iran’s nuclear program, it has not signed off on amendments against specific Iranian citizens and companies. With big planned investments in Iran’s oil and gas industry, China may well be in business with some of them.

In her speech to the opening session, Mrs. Clinton cited Iran and North Korea as issues in which Beijing and Washington must find common cause. “Today, we face another serious challenge provoked by the sinking of the South Korean ship,” she said. “So we must work together, again, to address this challenge and advance our shared objectives of peace and stability.”

A spokesman for the Foreign Ministry, Ma Zhaoxu, was noncommittal, saying of the Korea crisis, “We hope all the relevant parties will exercise restraint and remain cool-headed.”

Some of this is cultural, to be sure. Chinese officials tend to speak far less directly than Americans. Mr. Hu did not mention Iran and North Korea, referring to regional “hot spots.” The fact that he frankly addressed the exchange rate of China’s currency, the renminbi, surprised some observers, and lent itself to varying interpretations.

For some experts, Mr. Hu’s pledge to “steadily advance the reform mechanism of the RMB exchange rate,” without repeating his previous references to the rate being “basically stable,” was a sign of conciliation. “It’s important, the fact they haven’t mentioned it,” said Ben Simpfendorfer, the China economist for the Royal Bank of Scotland.

But others interpreted it as a pre-emptive move to take the issue off the table. Eswar Prasad, an economist at Cornell University, noted that the crisis in Greece had rattled the Chinese on two levels. It was likely to curb their exports to Europe, and it had strengthened the renminbi relative to the swooning euro, which makes Chinese goods more costly in foreign markets.

“That double hit on China’s exports almost certainly means that they’re not going to move forward unless there is evidence of stabilization in the euro and stabilization in Europe’s recovery,” Mr. Prasad said.

A senior Chinese official said that Beijing would keep a “high alert and attention on the euro zone sovereign debt crisis.” He noted that it could affect not only Europe’s economic recovery but also Chinese exports. China exports more to the European Union than to the United States.

The United States needed a 48-vehicle motorcade to ferry its delegation to this second round of the so-called strategic and economic dialogue. Among the prominent names: the chairman of the Federal Reserve, Ben S. Bernanke, the commander of the military’s Pacific Command, Adm. Robert F. Willard, and the secretary of health and human services, Kathleen Sebelius.

Some of the topics under discussion veered far from economics and security. Mrs. Clinton singled out Melanne Verveer, the State Department’s ambassador at large for women’s issues, who is meeting with Chinese women’s groups to discuss their progress in women’s rights.

Mr. Geithner lobbied against Chinese government procurement rules giving preference to products with intellectual property developed in China. American businesses, particularly in technology, say this handicaps them and deprives China of state-of-the-art products. “Innovation flourishes best when markets are open, competition is fair, and strong protections exist for ideas and inventions,” he said.

The Chinese have their pet issues as well: Beijing is pushing Washington to loosen controls on exports of high-technology equipment with potential military applications. A raft of questions from reporters for state-run Chinese media organizations suggested a coordinated campaign.

If American officials seemed likely to leave China with many of their wishes unfulfilled, there was one notable difference in this year’s meeting compared to the one last year in Washington: the American economy is growing again, which gave Mr. Geithner a rare chance to crow a bit.

Rather than identify the United States with the troubled economies of Europe, Mr. Geithner said the United States was holding its own with emerging economies like Brazil, India, and China.

“Economic growth in the U.S. and China is broader and stronger than many had anticipated, even a few months ago,” he said.

Billionaire Huang Guangyu

The founder of China’s largest home appliance chain, who was once the country’s richest man, has been jailed for 14 years for bribery, insider trading and illegal business dealings.

Huang Guangyu was also fined 600 million yuan (£60.4 million) and he had another 200 million yuan (£20 million) worth of property confiscated, the official Xinhua News Agency said.

There was no information about the fate of Mr Huang’s wife, Du Juan, or the former chairman of a property development company that he controlled who were on trial with him.

A Chinese lawyer for a major commercial law firm in Beijing told The Times the verdict’s message was clear. “Lots of people were watching this case and it should have a strong influence on the challenge to corruption in China,” said the lawyer who declined to be named.

The 41-year-old former head of giant chain Gome Electronics was arrested in November 2008 — the year in which he topped the Hurun Rich List of China’s wealthiest for the third time with a fortune estimated at $6.3 billion (£4 billion).

He became the country’s richest man in 2004 after founding GOME with his brother in Beijing in 1987 with an initial investment of 30,000 yuan (£3,043 ). He still owns about one-third of the shares of publicly-listed GOME, a stake worth £1.3 billion considerable holdings for a man who rose from humble beginnings in South China’s Guangdong province.

It took prosecutors until February this year to finally to bring charges against him.

He was accused of manipulating trading in two companies listed on mainland stock exchanges, the Securities Regulatory Commission has said.

The son of poor devout Christian peasant farmers from southern China, Mr Huang built his nationwide chain of several hundred stores from a single street stall selling radios and watches in Beijing in the 1980s when the Communist Party allowed private entrepreneurs to do business.

He became known as the “Price Butcher” for his cut-price merchandise.

However, his high profile left him vulnerable in a system where the system continues to favour state-owned firms and the status of entrepreneurs remains uncertain.

A string of newly rich real estate developers and private businessmen have been snared in corruption cases after making their fortune in a country where bribing officials is often necessary to get ahead.

Mr Huang’s case has netted several senior officials, including the Mayor of the southern boomtown of Shenzhen, on the border with Hong Kong, as well as a deputy minister of police.

Since his arrest GOME has been trying to separate itself from Huang, changing its logo, appointing a new chairman and selling a nearly 25 percent stake to US private equity firm Bain Capital in a $418 million deal last June.
The Chinese Communist Party (CCP) does everything only for its own survival so somehow this man crossed a line somewhere. The CCP practices slavery, torture and even organ harvesting on its own people. All the governments of the world are aware of the brutality of the CCP but continue to do business because of corporate greed. To learn more facts about the cruel CCP, one may go on line and read The Nine Commentaries. Thank you for your consideration