Washington seeks to extend hegemony to trade

(Global Times)

US President Barack Obama signed an order Tuesday to create an interdepartmental task force to enforce trade agreements. Some commented that it is directly targeting "unfair trade practices" by its major trade partner China. On the same day, the Information Technology & Innovation Foundation, a Washington think tank, issued a report entitled Enough is Enough: Confronting Chinese Innovation Mercantilism. 

It accused Beijing of using various tricks like subsidies or export restrictions to gain an "absolute advantage" for its companies and urged Washington to "build a global free-trade coalition" with allies to push back against China.

The US has not made such endeavors before. China is facing serious trade frictions. The US deemed that their manufacturing industry is most effective, and "unfair trade practices" are an easy target.

US politicians have repeatedly instilled voters with such information: China is challenging the global trade rule with "national capitalism," and the US must strike back.

Actually, the US is challenging and damaging the rule. Perhaps Washington feels the WTO has become less and less helpful and it has to create a new alternative. The US government now integrates resources and attempts to deal a severe blow to "unfair trade practices" at any time.

However, no matter how strong the US is, it cannot expand and impose its will to a world which will not accept a trade power overriding the WTO. If anyone can freely create an enforcement unit to pursue personal interests, where can world trade order be found?

The world's largest importer cannot seek limitless power, especially since China is only years away from becoming the top importer itself.

This year will see presidential elections in the US and politicians are scoring cheap points on the back of foreign countries. The Democratic Party and Republican Party can always find unity against China.

China has to be clear. China's annual exports to the US were $320 billion last year, but US sanctions against Chinese exports were at no more than $10 billion. The US will not risk a major showdown.

Due to strategic mistrust, mutual precautions are increasing and the risks of politicalizing future trade frictions are intensifying.

US politicians like to exaggerate matters. China should ignore this, stick to WTO rules in the trade lawsuit against the US and protect the interests of Chinese companies.

We should not be intimidated by this so-called enforcement office. The US is not in a position to assess China's trade system. Only the WTO is qualified to assess and WTO Director-general Pascal Lamy has given an A+ to China's performance since its accession.

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MAS shocker: RM2.5 billion biggest-ever loss in its history!

By B.K. SIDHU bksidhu@thestar.com.my

PETALING JAYA: National carrier Malaysia Airlines Bhd (MAS) posted a shocking RM2.52bil net loss for its financial year ended Dec 31, 2011 the biggest-ever loss in its corporate history led by higher expenses, despite revenue rising 2% to RM13.9bil.

In comparison, the airline reported a net profit of RM234mil for the whole of 2010 and chalked up sales of RM13.58bil.

The RM2.5bil figure for 2011 includes a RM1.09bil provision, essentially a non-cash item, to reflect the state of health at the airline.

“The company is in crisis. The accounts for 2011 recognises provisions and escalating operational costs which, although painful, gives us a holistic snapshot of the organisation,” group chief executive officer Ahmad Jauhari Yahya said at the briefing of its results yesterday.

Ahmad says MAS is in crisis and that the accounts for 2011 recognises provisions and escalating operational costs which gives a holistic snapshot of the organisation. On the right is Rashdan.

 

“With full knowledge of our actual position, we will be better prepared to move forward,'' he said.

The non-cash items include RM179mil of stock obsolescence (mostly spares for the B737 aircraft), RM602mil for re-delivery of aircraft (it will return 52 of its leased aircraft and will incur some cost in making sure they are in pre-delivery condition), and RM314mil impairment of freighter aircraft (adjusting the freighters to current market value).

For the full year, the airline's loss per share was 75.52 sen versus earnings per share of 7.25 sen in 2010.

For the fourth quarter, MAS reported a net loss of RM1.28bil and sales of RM3.67bil. But a year earlier, it had reported a net profit of RM225mil and sales of RM3.66bil.

“If you filter all the accounts off the non-cash items, it is a decent performance by MAS given the challenges it is facing,'' said an analyst with Maybank Investment Bank.

He believes that the numbers are slightly better than analysts' estimates.

By stripping out the RM1.09bil provisioning from the net loss of RM2.52bil, the actual loss incurred by the airline for 2011 is RM1.43bil. For the first three quarters of 2011, the airline incurred a net loss of RM1.24bil and with the stripping out of the RM1.09bil, the actual net loss for the fourth quarter is only RM184mil. However, when added with some additional items it should be a net loss of RM231mil for the quarter.

Ahmad said that group expenditure had gone up by 21% mainly due to higher fuel costs. MAS' fuel bill for 2011 swelled by 33%, or RM1.46bil, to RM5.85bil from RM4.38bil a year earlier. Jet fuel prices have risen from US$95 a barrel at the end of 2010 to US$133 at end-2011. Currently, it is hovering around the US$137US$138 per barrel range.

For 2011, MAS saw a 6% improvement in passenger revenue, while yields were up 4% to 24.7 sen per revenue passenger kilometre. But the improvement, according to Ahmad, was insufficient to offset the rising costs, especially fuel.

Bearing in mind that it only has RM1.1bil in cash reserves, and in view of the big number of aircraft deliveries it has to take, MAS is in dire need of more cash.

Ahmad said the next task was to strengthen the balance sheet or else it would be difficult for the airline to get financing for its new deliveries.

“The bottom-line group losses for 2011 underscore the need for MAS to adopt strong measures to stop the bleeding, and they include staff redeployment, increasing productivity and efficiency, relentless cost control and making further route review,'' he said, adding that thus far the airline had implemented 9% route cuts.

In order to strengthen the balance sheet to boost cash reserves and funding capacity, he needs another 60 days to come up with a plan.

“The plan includes, but not limited to, debt and/equity market options. Khazanah Nasional Bhd and Tune Air, the two largest shareholders, are supportive of these initiatives,'' he said.

His deputy Mohammed Rashdan Yusof did not rule out the possibility of a cash call and the selling of non-core assets to raise cash.

Ahmad also disclosed that talks with Qantas were under way but declined to reveal the scope of the talks. MAS will be joining the oneworld alliance by November this year.

Despite the huge losses and funding requirement, Ahmad remains positive on the outlook for the airline, saying “if we follow our business plan, we should be in the black (this year).''  

Selenium Supplements

Most in US Don't Need Selenium Supplements, Study Says

MyHealthNewsDaily Staff  CREDIT: Selenium photo via Shutterstock

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Selenium supplements may be harmful for people who already get enough of the mineral in their diets — which is most people in the U.S. — and could increase the risk for type 2 diabetes, according to a new review.

Use of selenium supplements has become widespread over the past 10 years, largely due to the belief that selenium can reduce the risk of cancer and other diseases. But "excessive zeal for increasing selenium intake has at times had adverse consequences," study author Margaret Rayman, a professor of nutritional medicine at the University of Surrey in England, wrote in her findings.

Those who get enough selenium in their diets should not take selenium supplements, Rayman concluded. People already get that mineral from grains, seafood and other common elements of the American diet.
The review will be published online Wednesday (Feb. 29) in the Lancet.

"Excessive zeal"

Though selenium supplements have been marketed for a multitude of conditions, this largely has been based on the results of observational studies, according to the paper. However, findings from clinical trials looking to confirm the supplements' effectiveness have been mixed.

Rayman reviewed selenium studies conducted since 1990. She said the mixed findings probably stem from the fact that supplements offer benefits only when the amount of selenium in a person's diet is inadequate.

Research has linked low selenium intake or levels in the blood with an increased risk of dying over a given period, poor immune function and cognitive decline. And higher selenium intake or blood levels have been linked to enhanced male fertility, antiviral effects, and protection against some cancers.

But the new review shows that levels that are too high can bring harmful effects.

Specifically, Rayman found people with high levels had an increased risk of type 2 diabetes. The link might be explained by the fact that selenium is incorporated into a protein, called GpX1, that affects the way insulin works in cells, she wrote.

Selenium in the diet

Selenium is a naturally occurring trace mineral found in soil and water and taken up by plants. The foods with the highest concentrations of selenium are organ meats and seafood, but the mineral is also found in cereals and grains, muscle meats and, to a lesser extent, dairy products, fruit and vegetables, according to the paper.

Recommendations for selenium intake average 60 micrograms per day for men, and 53 micrograms per day for women, according to the paper.

"The implications are clear: People whose serum or plasma selenium concentration is already 122 µg/L or higher — a large proportion of the U.S. population — should not supplement with selenium," Rayman wrote, pointing to data from blood samples taken as part of National Health and Nutrition Examination Survey, a large, ongoing study conducted by the Centers for Disease Control and Prevention.

Pass it on: Most Americans already get enough selenium from their diet, and supplements could raise their risk of diabetes.

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