China's vessels patrol Diaoyu Islands after Japan illegally purchases and nationalizes them

Move displays jurisdiction as tensions keep growing over sea dispute

China Marine Surveillance 15, one of six patrol ships sent by China, arrives at the waters off Diaoyu Island on Friday. Zhang Jiansong / Xinhua

Six Chinese surveillance ships patrolled the waters around China's Diaoyu Islands Friday morning, Xinhua News Agency reported, amid few signs that tensions over the territorial dispute were subsiding.

Television footage showed a Chinese Marine Surveillance officer aboard one of the ships radioing Japanese vessels to demand they leave.

"The actions of your ships violate China's sovereignty and rights," the officer was shown saying. "Any unilateral act from your side regarding the Diaoyu Islands and its affiliated islands is illegal and invalid. Please stop any infringing acts. Otherwise, your side will bear the consequences caused by your actions."

The patrols are aimed to demonstrate China's jurisdiction over the Diaoyu Islands and their affiliated waters and ensure the country's maritime interests, a government statement said. The government has vowed that more action will be taken if the Japanese government doesn't withdraw its deal to "purchase" and "nationalize" the islands.

It was the first surveillance mission by Chinese vessels in waters around the islands in the East China Sea since Beijing announced on Monday the base points and baselines of the territorial waters of the Diaoyu Islands and their affiliated islets, as well as the names and coordinates of the 17 base points.

"Announcing base points and baselines is the basis of establishing waters under national jurisdiction, on the basis of which the sea territory, exclusive economic zone and continental shelf can be established according to the provisions of the UN Convention on the Law of the Sea," Assistant Foreign Minister Le Yucheng said on Friday at a symposium.

Japanese Prime Minister Yoshihiko Noda's cabinet approved the plan to "nationalize" the Diaoyu Islands on Monday, and the next day the Japanese government signed a deal to buy three of the Diaoyu Islands from "private owners".

There is a "sinister tendency inside Japan that is taking Japan and China-Japan relations down an extremely dangerous road", Le said.

"China will in no way recognize Japan's illegal occupation of and so-called actual control over the Diaoyu Islands," Le said.

The Japanese government's "nationalization" of the Diaoyu Islands has sparked protests and countermeasures in China. The diplomatic standoff between Beijing and Tokyo has led to a series of canceled visits and exchanges.

A trip to Beijing later this month by a bipartisan group of incumbent and former Diet members was called off at the request of the Chinese host, according to Kyodo News.

China Comfort Travel Group stopped accepting reservations to Japan at its 220 affiliated travel agencies across China, according to Xinhua.

The company said the group will not resume Japan-bound tours unless the territorial issue is resolved.

China has a major holiday period from late September to the first week of October and if other agencies follow suit, Japan-bound tourism during the period could plummet.

The Japanese government's moves over the Diaoyu Islands have scuttled bilateral cultural events, further dimming prospects for any fanfare to fete the 40th anniversary of ties.

Chinese pop singer Sun Nan canceled a concert scheduled for Tokyo later this month, and Japanese singer-songwriter Shinji Tanimura will postpone a Sept 25 concert in Beijing.

Both concerts had been organized to mark the 40th anniversary of the normalization of China-Japan diplomatic ties.

Panetta visit

US Defense Secretary Leon Panetta departs this weekend on an Asian tour with stops in Japan, China and New Zealand. He has decided to stop in Japan prior to his China visit, given the escalating tensions between the two countries, according to Kyodo News.

Panetta is scheduled to meet Japanese Defense Minister Satoshi Morimoto and Foreign Minister Koichiro Gemba on Monday.

"The US government should stay neutral," said Gao Hong, deputy director of the Institute of Japanese Studies at the Chinese Academy of Social Sciences.

The US was directly involved in making the Diaoyu Islands a dispute.

In 1951, the Treaty of Peace with Japan was signed between Japan, the US and other countries, placing the Ryukyu Islands (known as Okinawa today) under the administration of the US. In 1953 the Civil Administration of the Ryukyu Islands under control of the US arbitrarily expanded its jurisdiction to include the Diaoyu Islands and its affiliated islets, which are Chinese territories. In 1971, Japan and the US signed the Okinawa Reversion Agreement, which included the Diaoyu Islands and other islets to be reverted to Japan.

China has firmly opposed and never recognized the backroom deals between Japan and the US.

By Cai Hong and Zhang Yunbi ( China Daily)

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Japan, the deputy sheriff in Asia?
China defense ministry acts as Japan buys its Diaoyu Islands
Purchase' of Diaoyu Island reflects weakened Japan 2012-09-14 19:44
Japan is trying to cover up Diaoyu's theft: official 2012-09-14 19:08
Chinese files Diaoyu Islands baseline announcement 2012-09-14 11:24
Diaoyu Islands 'Purchase' reflects weakened Japan: experts 2012-09-14 23:12
Surveillance ships start patrol around Diaoyu Islands 2012-09-14 09:12

Anti-American world-wide stirred up by US film 'Innocence of Muslims'

Tara Todras-Whitehill for The New York Times

Egyptian protesters threw stones at riot police officers during clashes near Tahrir Square in downtown Cairo on Friday.







Anti-American rage that began this week over a video insult to Islam spread to nearly 20 countries across the Middle East and beyond on Friday, with violent and sometimes deadly protests that convulsed the birthplaces of the Arab Spring revolutions, breached two more United States Embassies and targeted diplomatic properties of Germany and Britain.

The broadening of the protests appeared to reflect a pent-up resentment of Western powers in general, and defied pleas for restraint from world leaders, including the new Islamist president of Egypt, Mohamed Morsi, whose country was the instigator of the demonstrations that erupted three days earlier on the anniversary of the Sept. 11, 2001, attacks.

The anger stretched from North Africa to South Asia and Indonesia and in some cases was surprisingly destructive. In Tunis, an American-run school that was untouched during the revolution nearly two years ago was completely ransacked. In eastern Afghanistan, protesters burned an effigy of President Obama, who had made an outreach to Muslims a thematic pillar of his first year in office.

The State Department confirmed that protesters had penetrated the perimeters of the American Embassies in the Tunisian and Sudanese capitals, and said that 65 embassies or consulates around the world had issued emergency messages about threats of violence, and that those facilities in Islamic countries were curtailing diplomatic activity. The Pentagon said it sent Marines to protect embassies in Yemen and Sudan.

The wave of unrest not only increased concern in the West but raised new questions about political instability in Egypt, Tunisia and other Middle East countries where newfound freedoms, once suppressed by autocratic leaders, have given way to an absence of authority. The protests also seemed to highlight the unintended consequences of America’s support of movements to overthrow those autocrats, which have empowered Islamist groups that remain implacably hostile to the West.

“We have, throughout the Arab world, a young, unemployed, alienated and radicalized group of people, mainly men, who have found a vehicle to express themselves,” Rob Malley, the Middle East-North African program director for the International Crisis Group, a consulting firm, said in a telephone interview from Tripoli, Libya.

In a number of these countries, particularly Egypt and Tunisia, he said, “the state has lost a lot of its capacity to govern effectively. Paradoxically, that has made it more likely that events like the video will make people take to the streets and act in the way they did.

Some of the most serious violence targeted the compound housing the German and British Embassies in Khartoum, the Sudanese capital, causing minor damage to the British property but major fire damage to the German one. The foreign ministers of both countries strongly protested the assault, which The Associated Press said had been instigated by a prominent sheik exhorting protesters to storm the German Embassy to avenge what he called anti-Muslim graffiti on Berlin mosques.

The police fired tear gas to repulse attacks in Khartoum, where about 5,000 demonstrators had massed, news reports said, before they moved on to the United States Embassy on the outskirts of the capital.

In Tunis, the United States Embassy was assaulted at midday by protesters who smashed windows and set fires before security forces routed them in violent clashes that left at least 3 dead and 28 hurt. Witnesses and officials said no Americans were hurt and most had left earlier.

The worst damage was inflicted on the American Cooperative School of Tunis, a highly regarded institution that, despite its name, catered mostly to the children of non-American expatriates, nearly half of whom work for the African Development Bank. School officials, who had sent the 650 students home early, said a few protesters scaled the fence and dismantled monitoring cameras, followed by 300 to 400 others, some of them local residents, who looted everything including 700 laptop computers, musical instruments and the safe in the director’s office, and then set the building on fire.

“It’s ransacked,” the director, Allan Bredy, said in a telephone interview. “We were thinking it was something the Tunisia government would keep under control. We had no idea they would allow things to go as wildly as they did.”

The school’s director of security, David Santiago, said a group of staff members formed a posse armed with baseball bats to chase lingering looters away hours after the assault. “Our elementary school library is burning as we speak,” he said angrily as he and his colleagues sought to assess the damage. “It’s complete chaos.

Thousands of Palestinians joined demonstrations after Friday Prayer in the Gaza Strip. Since there is no American diplomatic representation in Gaza, the main gathering took place in Gaza City, outside the Parliament building, where American and Israeli flags were placed on the ground for the crowds to stomp. Palestinians also clashed with Israeli security forces in Jerusalem and held protests in the West Bank.

Witnesses in Cairo said protests that first flared Tuesday grew in scope on Friday, with demonstrators throwing rocks and gasoline bombs near the American Embassy and the police firing tear gas. The Egyptian news media said more than 220 people had been injured in clashes so far.

In the eastern Libyan city of Benghazi, where J. Christopher Stevens, the American ambassador, and three other Americans were killed Tuesday, militias fired rockets at what they thought were American drones overhead, prompting the government to temporarily close the airport as a precaution. The bodies of Mr. Stevens and the others killed in the Libya attack were returned to the United States on Friday.

In Lebanon, where Pope Benedict XVI was visiting, one person was killed and 25 were injured as protesters attacked restaurants. There was also turmoil in Yemen, Bangladesh, Qatar, Kuwait, Bahrain, India, Pakistan and Iraq, and demonstrations in Malaysia. In Nigeria, troops fired into the air to disperse protesters marching on the city of Jos, Reuters reported. In Syria, about 200 protesters chanted anti-American slogans outside the long-closed American Embassy in Damascus, news reports said.

In the Egyptian Sinai, a group of Bedouins stormed an international peacekeepers’ camp and set fire to an observation tower, according to Al Ahram Online, a state-owned, English-language Web site. Three people, two Colombians and one Egyptian, were injured in the ensuing clashes.

In Yemen, baton-wielding security forces backed by water cannons blocked streets near the American Embassy a day after protesters breached the outer security perimeter there, and officials said two people were killed in clashes with the police. Still, a group of several dozen protesters gathered near the diplomatic post, carrying placards and shouting slogans.

In Iraq, where the heavily fortified American Embassy sits on the banks of the Tigris River inside Baghdad’s Green Zone and is out of reach to most Iraqis, thousands protested after Friday Prayer in Sunni and Shiite cities alike.

Raising banners with Islamic slogans and denouncing the United States and Israel, Iraqis called for the expulsion of American diplomats from the country and demanded that the American government apologize for the incendiary film and take legal action against its creators.

In Egypt, in particular, leaders scrambled to repair deep strains with Washington provoked by their initial response to attacks on the American Embassy on Tuesday, tacitly acknowledging that they erred in their response by focusing far more on anti-American domestic opinion than on condemning the violence.

The attacks squeezed Mr. Morsi and the Muslim Brotherhood between conflicting pressures from Washington and their Islamic constituency at home, a senior Brotherhood official acknowledged. During a 20-minute phone call Wednesday night, Mr. Obama warned Mr. Morsi that relations would be jeopardized if the authorities in Cairo failed to protect American diplomats and stand more firmly against anti-American attacks

On Friday, Mr. Morsi, on a scheduled state visit to Rome, called attacks on foreign embassies “absolutely unacceptable.”

By RICK GLADSTONE

Banks to sue Dubai Group's US$10 billion loans in debt pile

DUBAI: Royal Bank of Scotland (RBS) and two other banks have begun legal proceedings against an investment vehicle owned by Dubai's ruler, an unprecedented move to secure repayment after two years of unsuccessful debt talks.

RBS, along with German lender Commerzbank and South Africa's Standard Bank, had threatened legal action after walking away from negotiations over Dubai Group's US$10bil debt pile, sources said in July.

The banks began legal proceedings in a London court on Sept 6, breaking with the precedent in previous restructuring cases involving Dubai state-linked entities because of the opaque and untested insolvency system in the United Arab Emirates (UAE).

Given the complexities of the case, in particular the lack of precedent, the London filing threatens to extend debt talks well into the future, having dragged on since Dubai Group missed interest payments on two facilities in late 2010.

“Arbitration could be two years and we don't want to see the destruction of shareholder value just because these banks have thrown their toys in the corner,” said a source.

In a statement, RBS said it was forced to take action after several concessions offered to the group failed to secure a solution.

“We do, however, want to make clear that our preference was always to conclude an agreement without formal legal proceedings and we therefore remain open to such an outcome if an acceptable commercial resolution is forthcoming,” it said.

Such sentiment adds fuel to the belief that the legal action is more likely a negotiating tactic on behalf of the three banks all of which are unsecured creditors to secure a better deal from Dubai Group.

“They are unsecured and have nothing so they are doing it out of desperation or because they expect the Dubai government will bail out the group,” said one UAE-based banker.

The government walked away from debt talks in January, dashing any hope creditors had of state support.

Dubai Group, a unit of Dubai Holding which is the investment arm of Sheikh Mohammed bin Rashid al-Maktoum, was hard hit by the global financial crisis in 2008 due to excessive use of leverage in its investments and a sharp decline in the value of its portfolio companies.

Like a number of other state-linked entities in the emirate, it embarked on talks with creditors to restructure debt and extend maturities.

The London filing comes at a time when others on the restructuring are considering a proposal, put to the group before the summer, which would see all lenders extend their obligations to allow for Dubai Group's asset values to recover before they are sold.

Debt extensions range from 3 years for secured creditors up to 12 years for unsecured creditors. The sheer length of time is the main concern for the three banks because of the cost it would impose on unsecured lenders to extend cash for so long.

“Over 35 banks are working towards an agreement and a global term sheet is now being considered by bank credit committees, a number of which have indicated their support,” Dubai Group said in a separate statement. “We believe that we can reach a consensual agreement with our creditors.” - Reuters