China Economy Weekly: Rail Projects, Inflation, International Trade Links

China Clears Inter-city Rail Projects: The National Development and Reform Commission on Friday approved inter-city rail transit networks covering more than 2,000 kilometres to accelerate regional integration.‬

The network runs across central China, mainly in Henan province, and is expected to link nine cities with its 496 kilometres.‬ It also includes alterations to railways across the Pearl River Delta region, with a length of 1,478 kilometres, and to metro lines in Xi'an, the capital city of northwest China's Shaanxi province.

China This Week: Deadly Mudslides, Pollution Crackdown, Nuclear Weapons Promise

China, Switzerland to Ztart Free Trade Talks: China and Switzerland agreed on Friday to start discussions on a free trade agreement, as the two states celebrate their 60th anniversary of diplomatic ties.‬

‬ Chinese President Hu Jintao and his Swiss counterpart, Doris Leuthard, witnessed the signing of the memorandum of understanding. Switzerland has become China's major trade partner in Europe, and Leuthard said the two states should boost cooperation in finance, education, culture, environmental protection, tourism, and international affairs.

China's July Inflation: China's consumer price index (CPI), one of the main gauges of inflation, rose in July to its highest level since October 2008, boosted by rising food prices after widespread floods.

The CPI was up 3.3% in July from a year earlier, 0.4% higher than the rise in June. It has now exceeded the 3-percent full-year target ceiling the government set in March. However, economists said the acceleration in CPI growth was a temporary result of the floods.

The Producer Price Index, a major measure of inflation at the wholesale level, grew 4.8% year on year in July, 1.6% lower than June and 2.3% lower than May.

China's Consumer Confidence Edges Up : China's Consumer Confidence Index stood at 109 in the second quarter, up one point from the first quarter.The reading in the second quarter was the fifth consecutive quarterly rise.

China calls for more investment with ASEAN: Bilateral investment between China and the Association of Southeast Asian Nations (ASEAN) is low compared with trade, Yi Xiaozhun, vice minister of China's Ministry of Commerce, said Friday.

In 2009, bilateral investment between China and ASEAN nations totaled $10 billion, a sharp contrast with the $213 billion of bilateral trade, said Yi, attributing the low investment to the fragmented infrastructure within the China-ASEAN region.

Sri Lanka Co-operation China: Visiting Sri Lankan Foreign Minister G.L. Peiris, on his first official visit to China since taking office in April, pledged Thursday to boost economic and trade cooperation with China.

Sri Lanka appreciates China's support in constructing education and medical facilities, he said.

Sri Lanka's civil war ended in May 2009 after the the rebel Liberation Tigers of Tamil Eelam was defeated by government troops.

Zimbabwe Seeks Economic Links in East China: Zimbabwe hopes to further its economic and trade co-operation with east China's Anhui Province, said visiting Zimbabwean President Robert Mugabe on Thursday.

Zhang Baoshun, secretary of the Anhui Provincial Committee of the Communist Party of China, said that Anhui and Zimbabwe, which were economically complementary, had reached consensus on co-operation in agriculture, mining and infrastructure.

China Investment in Chile: China attaches great importance to economic cooperation with Chile and is committed to boosting mutual investment between the two countries, Lu Fan, the Chinese ambassador to Chile has said.

In the first half of this year, bilateral trade reached $10.9 billion, an increase of 58.9 percent compared with the same period of 2009, and Chilean exports amounted to $7.65 billion.

The Supplementary Agreement on Trade in Services of the Free Trade Agreement between China and Chile took effect on 1 August, and negotiations are underway on a supplementary agreement on investment.

Brazil Agricultural trade with China: Brazil wants to boost trade with China in agricultural products, and will export more pork to and import more fish from China in the next few years, Brazilian Agriculture Minister Wagner Rossi said Thursday.

Automobiles, Home Appliance Subsidies Spur Chinese Spending: Chinese government subsidies for purchases of automobiles and home appliances have boosted consumer spending and bolstered the national economy, the Ministry of Commerce said Thursday.

China rolled out the subsidy policies for rural consumers last year. In the first seven months of 2010, the government paid out 9.57 billion yuan ($1.41 billion), lifting sales in rural regions to 83.82 billion yuan (about $12.5 billion), up 240% from a year ago.

China State Enterprises Grow: The assets in China's centrally-administered state-owned enterprises (SOE) reached 2.01 trillion yuan ($297.40 billion) by the end of June, up 10.71% from 2008, China's state-owned assets regulator said on Thursday.

Nearly a quarter of the SOEs have state-owned assets over 10 billion yuan each, while six have state-owned assets over 100 billion yuan.

Housing Market Regulation to Continue: Chinese Vice Premier Li Keqiang said Friday that the government would continue to regulate the housing market and resolutely crack down on speculative property investment.

He said the government would continue to increase the supply of affordable housing for low-income families to consolidate the effects of the regulation over the past months.

Housing prices in major Chinese cities rose 10.3% year-on-year in July, slower than the 11.4% growth in June.

China This Week: Deadly Mudslides, Pollution Crackdown, Nuclear Weapons Promise

Death toll from China floods and mudslides: The death toll from the massive mudslide in northwest China's Gansu Province has risen to 1,156 as of 4 p.m. Friday, with 588 still missing, local authorities said.‬

Meanwhile, at least 38 people are missing after rain-triggered floods and landslides ravaged Wenchuan County in southwest China's Sichuan Province early Saturday.‬ No casualties had been reported, a spokesperson with the county government said.

An 8-magnitude earthquake claimed almost 70,000 lives in Wenchaun on 12 May 2008.‬

Chinese flags will be lowered to half-mast across the country and at overseas embassies and consulates on Sunday to mourn the victims of the mudslide. Public entertainment will be suspended on Sunday.

According to some Chinese traditions, the seventh day after a death is the height of the mourning period.‬

Industrial Polluters Given Two Months to Close: China's industry chiefs have warned more than 2,000 companies to close obsolete production facilities within two months or face cuts in credit and a suspension of government approvals.‬

The Ministry of Industry and Information Technology has set the deadline in a move to cut overcapacity and raise the level of economic growth.‬ The cement, paper-making and iron sectors are the most significantly affected.

Companies could also face power cuts from suppliers if they fail to cut pollution.

China's Nuclear Arsenal “Purely Defensive": China's nuclear weapons are for self-defense, a top commander in the army's strategic missile corps said.‬

"If no power presses for nuclear war with China, the Second Artillery Force will always keep silent," promised General Jing Zhiyuan. "We will firmly pursue a defensive nuclear strategy and resolutely implement the 'no first use' policy."

Premier Urges Greater Foreign Aid Efforts: Chinese Premier Wen Jiabao has declared, "China's aid should favor the least developed countries, inland and small island developing countries, and focus on livelihood projects that are urgently needed and welcomed by local people, such as hospitals, schools, water supplies and clean energy."

China's Railway Technology: China's high-speed railway technology is not inferior to any other country's in safety and sophistication, senior officials said on Wednesday, claiming that Bullet trains running from 250 to 350 km per hour have travelled 280 million km in the country so far.

The announcment came after criticism from a Japanese high-speed rail company, which is competing with China for overseas business.‬

Ministry Rejects Convict Labour Report: China's Ministry of Commerce rejected foreign media reports that Chinese companies had been sending convicted criminals abroad on work projects abroad to prevent overcrowding in prisons.‬

The reporting was "nonsense with no facts or evidence," said the ministry in an official statement on its website.‬ Sources in the ministry said the reports were featured in the Japan Times, The Guardian, The Washington Times, and Canada's Globe and Mail newspapers.

Government Urges Efforts in Grain Production: China's Ministry of Agriculture said Friday that autumn grain production has entered a critical period, as it pressed local authorities to step up efforts to ensure a good harvest.‬

The autumn grain harvest makes up 70 percent of China's annual total. annual grain harvest.

Summer grain output declined 0.3 percent to 123.1 million tonnes, the first fall in seven years, according to the National Bureau of Statistics‬ .

China, Africa Forge Farming Ties: China's agricultural cooperation with Africa requires more strategy than passion, an executive from a leading Chinese agribusiness company has said, as Beijing plans to strengthen the China-Africa new strategic partnership with more focus on agricultural links.‬

"The fragile political situation is still the biggest challenge for Chinese companies investing in Africa," Xu Jun, deputy general manager of China State Farms Agribusiness Corporation (CSFAC), said.

Last year, a cooperative program worth more than 70 million yuan ($10 million) between the CSFAC and Ghana's ruling party came to an abrupt halt when the opposition party took office, Xu said. "Now we prefer to talk with government administrations instead of party leaders when it comes to further cooperation."

China-Argentina Co-operation on Antarctic Expedition: China and Argentina will be more active in cooperation on Antarctic scientific expeditions, an official from the State Oceanic Administration of China has said.‬

"As a country closest to the South Pole in Latin America, Argentina provides ideal conditions for Chinese expedition teams to gather and rest before entering the pole," Wei Wenliang, head of the Polar Expedition Office, said.‬ "China is willing to launch more antarctic scientific expedition projects with Argentina and contribute to peace of the South Pole, especially after Argentine President Cristina Fernandez's successful visit to China in July this year."

China Launches New Remote-Sensing satellite: China on Tuesday successfully put into orbit another remote-sensing satellite, "Yaogan X", from the Taiyuan Satellite Launch Center in northern Shanxi Province.

The Latest from Iran (14 August): Returning to the Streets?

1800 GMT: Economy Watch. Kalemeh reports that the unemployment rate has risen across Iran by 3.5% since last spring. In 26 of the country's provinces, the average is now 14.6%.

1745 GMT: Political Prisoner Watch. Labour activist Pedram Nasrollahi has been sentenced to four months in prison for “acting against national security” and “propaganda against the system by joining the women’s council”.

Kurdish painter Mokhtar Houshmand, the secretary of the Marivan Society of Visual Arts, remains in prison after his detention order was renewed for a month. His family has reportedly been denied a meeting or talking with him on the phone. The family has also been prohibited from talking to the media.

1735 GMT: The Hunger Strike. Kalemeh reports that five political prisoners who recently ended a hunger strike were threatened by the director of Evin Prison to six months in solitary confinement. Those warned were journalists Ali Malihi, Bahman Ahmadi Amouie, Keyvan Samimi, and Kouhyar Goudarzi and Ashura protester Gholamhossein Arashi. 4 of them are journos, Arashi is a Ashura protester, severely beaten in prison.

1725 GMT: Spinning Bushehr. Washington has tried to convert the news that Russia will supply the fuel needed to make Iran's nuclear plant at Bushehr operational --- finally, after repeated delays --- into a case that Tehran does not need to carry out its own uranium enrichment.

White House spokesman Robert Gibbs said, "Russia is providing the fuel, and taking the fuel back out....(This) underscores that Iran does not need its own enrichment capability if its intentions, as it states, are for a peaceful nuclear program."

1510 GMT: The President's Right-Hand Man (cont.). How significant is the movement against Ahmadinejad's Chief of Staff Esfandiar Rahim-Mashai? An EA correspondent summarises:

*Javan News --- connected with the Islamic Revolution Guards Corps --- now quotes Hassan Firouzabadi, chief of the General Staff, Habibullah Asgarowladi, secretary of the "conservative" Front of the Followers of the Path of the Imam, Ayatollah Kaabi, a member of the Association of Teachers and Researchers of Qom, and Hojatoleslam Moe'tamed as condemning Rahim-Mashai's statements about "the school of Iran," which they call "nationalist" and a threat to the international and Islamist character of the Islamic Republic.

*Jomhouriye Eslami writes in an editorial that "support of higher authorities [Ahmadinejad] for Rahim-Mashai makes the situation worse".

*Ayatollah Mohammad Yazdi: "Once more Mr. Mashaei has involved himself in discussions not worthy of him and has made wrong and unsuitable statements....It is not to the benefit of the regime, the office of the Presidency and the person of the President --- who has always been in the line of the leader and a supporter of religious foundations --- that his chief-of-staff engages in expert discussions about issues about which he is ignorant and harms his own dignity and those related to him even more."

*Alef News accuses Rahim-Mashai of "eclecticism" and condemns his statements about "human beings having the capacity to become God".

* MP Ali-Reza Zakani warns of a "new discord", likening Mashaei's statements with statements of former Prime Minister Mehdi Bazargan "who confessed that his conflict with His Holiness the Imam [Khomeini] was that we want Islam for Iran, but the Imam wants Iran for Islam".

1420 GMT: Shutting Down Green Media. A week after it was launched, the website of the new Green channel, Rasa TV, has been filtered by the Ministry of Intelligence.

1410 GMT: Challenges to the President (cont.): MP Ahmad Tavakkoli has criticised Mahmoud Ahmadinejad for disregarding the laws ratified by the Parliament and the Expediency Council.

Tavakkoli accused the president of intransigence, and said, “I am sorry that the president values his personal interpretation too much.”

MP Parviz Sorouri also criticized the President, “Any law that is ratified should be implemented. The president is not in a position to say whether a particular law is correct or not."

1230 GMT: But Those Other Friday Prayers Might Be A Problem....

Away from Ayatollah Jannati's Tehran Friday Prayer, trying to deflect attention from problems for the regime, other sermons point to, well, problems for the regime.

In Qom, Mohammad Saeedi indirectly criticised the President while bolstering Ayatollah Khamenei, saying someone who manages the country has to follow the Supreme Leader as the representative of Prophets. Saeedi declared everyone has to abide to the laws ratified by Parliament and approved by the Guardian Council.

Elsewhere, alongside condemnation of US sanctions and praise of Lebanon's Sayyed Hassan Nasrullah for his stand against Israel, there were attacks on the President because of his aide Esfandiar Rahim-Mashai's "Iran principle", placing Tehran as a source of emulation ahead of Islam. In Mashhad, Ahmad Alamolhoda said any ruling against the Supreme Leader is obsolete. In Kashan, Abdolnabi Namazi directly said Rahim-Mashai's presence disturbed the Iranian clerics and people.

1200 GMT: International Front. Not sure what to make of this....

Alaeddin Boroujerdi, the head of Parliament's National Security Commission, claims that the Vienna group (US, France, Russia, International Atomic Energy Agency) has accepted the Iran-Brazil-Turkey statement on uranium enrichment, so there is no necessity for Brasilia and Ankara to join talks with the "5+1" powers of the US, Britain, France, Russia, China, and Germany.

1155 GMT: Put-Down of the Day? Khabar Online claims a large banner with President Ahmadinejad's picture was removed from the Qur'an exhibition at Tehran's Grand Mossalla.

1145 GMT: Oil Squeeze. Alireza Mir-Mohammad Sadeghi, the deputy to Minister of Oil Mirkazemi --- a target of Khabar Online for "wrong policies: --- has allegedly said that 12,000 oil managers are on the verge of retirement.

1045 GMT: Getting Jannati's Line Right. Press TV gives the proper spin to Friday's Friday Prayer by Ayatollah Ahmad Jannati, the head of the Guardian Council, after recent difficulties over his speeches. Jannati, without re-stating the "$51 billion" coup allegation, warned against the discussions with the US:

You have forgotten what they (Americans) have done, you think they have changed…. They are the same….When they flash a green light it is [always] chicanery and a scam.

Jannati continued:

They think the Iranian people will give in under sanctions and adversities.…but the West's problem is that they do not know the Iranian nation and do not know who they are dealing with.

1025 GMT: The President's Right-Hand Man. The conservative Resalat devotes its main article to the "unacceptable statements" of Ahmadinejad Chief of Staff Esfandiar Rahim-Mashai.

The newspaper says the comments provide a welcome excuse for conservatives to attack the Government and demands, "Mr Ahmadinejad, let the passengers without a ticket get off the (Government) train!"

Key MP and Government critic Ali Motahari goes farther and harsher, claiming that the thinking of the President and his followers about Islam is like the Forghan group who killed his father, Ayatollah Motahari, in 1979.

Motahari alleged that Ahmadinejad's and Rahim-Mashai's ideas do not comply with Islam. According to the MP, the President is neither a conservative nor a reformist, but because he is supported by the Supreme Leader, other clerics support him as well.

The Motahari's call for resistance: a MP must decide by himself, not according to the Supreme Leader's opinion. He strengthens the demand with the regret that MPs should have protested clearly against the Kahrizak abuse and the allegation that Ahmadinejad's refusal to implement laws is a sign of dictatorship.

1015 GMT: Three Islamic Revolution Guards Corps soldiers have been killed in clashes with members of the Kurdish separatist group PJAK.

1000 GMT: More on the "Jannati Line". Alongside Ayatollah Jannati's appearance at Friday Prayers, there is support for him from Esmail Kowsari, deputy head of the National Security Council, who claims the Majlis was informed about the documents for Jannati's claim of the $51 billion US-Saudi-opposition coup plan. Kowsari says the proof is in the Ministry of Intelligence.

MP Zohreh Elahian, a member of Parliament's National Security Commission, claims the documents will be given to prosecutors.

0915 GMT: Challenging Ahmadinejad. Khabar Online devotes its "headline" news to an analysis by Professor Pirouz Mojtahedzadeh, who criticises the President's foreign policy.

Mojtahedzadeh claims Iran's "turn to the East" led to damage to its nuclear energy programme, as Russia delayed completion of the Bushehr reactor, and to a quadrupline of imports from China.

(Last night, Voice of America claimed the cost to Iran of the Bushehr reactor was now close to $1 billion.)

The professor adds a significant comparison: during the Presidency of Hashemi Rafsanjani (1989-1997), the east-bound policy was advisable, but it has now led Iran "to this mess". Instead of battling with one set of foreign powers (US, Europen Union) and making advances to another (Russia, China), Tehran should follow a balanced policy towards all.

0455 GMT: Execution (Ashtiani) Watch. Human Rights Watch has condemned the treatment of Sakineh Mohammadi Ashtiani, sentenced to death for adultery and presented on national TV on Wednesday with her "confession".

HRW women's rights researcher Nadya Khalife said, “The men who run Iran apparently have no shame at all, first pronouncing the barbaric sentence of death by stoning and then resorting to a televised confession. Under the circumstances there is every reason to believe that this so-called confession was coerced."

0430 GMT: We begin this morning with a look to the future, provided by an EA correspondent:

Roughly 3 weeks to Qods Day and a lot of chatter, whether Mousavi and Karroubi will invite the people to protests.

Another idea is going to the streets on the 27th of every month in accordance with Article 27 of the Constitution, assuring freedom of assembly.

Qods (Jerusalem) Day is the annual commemoration of Palestine. Last September, opposition supporters used the occasion to press their demands publicly in one of the largest post-election rallies.

Meanwhile....

47 Baha’is Currently In Prison
Following the recnet sentencing of seven Baha’i leaders in Iran to 20 years in prison each, Diane Ala’i, the representative of the Baha’i International Community has said that there are currently 47 members of the Baha’i Faith are inside Iranian prisons.

According to Ala’i, the Baha’is are not facing charges of mohareb (enmity with God), which carry the death penalty. They are accused of “acting against national security”, “participating in illegal groups", and “propagating the Baha’i Faith”.

Ala'i added that the seven leaders have been moved from Evin Prison to Rajai Shahr Prison in Gohardasht, Karaj. Families have been able to visit the prisoners once every two weeks for 10 minutes. They are allowed to see male relatives one week and female relatives the next, so the entire family cannot meet at the same time.

Ala'I said the verdicts for the seven Baha’i leaders have not yet been served in writing.

Cyber-Challenge

The Persian 30mail site, which features news roundups, has launched a competition for IT specialists to write a programme feeding news from Green sites to e-mail accounts and mobiles in Iran. Programmers selected in the first round receive $1000, and the finalist wins another $4000.

The Latest from Iran (11 August): Coded Messages

1245 GMT: The President's Man. Definitely looks the battle within is escalating....

Ahmadinejad Chief of Staff Esfandiar Rahim-Mashai has hit back at the criticism of Iran's military chief, General Hassan Firouzabadi, that the aide's remarks on Iran and Islam "are a crime against national security" (see 0650 GMT).

Rahim-Mashai announced in a meeting with IRIB managers and editors of state broadcasting that he will file a suit against Firouzabadi to enlighten the public: "I'm forced to follow these ugly accusations by judicial means."

1235 GMT: The Human Rights Lawyer (cont.). Mohammad Mostafaei has rejected the allegation of financial fraud, made by the Tehran Prosecutor General (see 0900 GMT): "If they want to sue me because of the accounts of my clients, they have to do the same with all marjah (senior clerics) who have charity accounts."

1210 GMT: MediaWatch. Green Voice of Freedom has launched a Turkish edition.

1200 GMT: The Hunger Strike: A relative has said Keyvan Samimi will continue his hunger strike in Evin Prison until the 15 who have taken food are transferred to "general" Ward 350. Families have still not been allowed to visit the detainees.

1145 GMT: More on "Election Manipulation" Revolutionary Guard Audio. A follow-up to our feature on Tuesday....

In an interview with Rah-e-Sabz, Alireza Alavi-Tabar assesses the divisions between "pragmatic" and "radical" hard-liners in light of the audio.

0945 GMT: Calling the Broadcaster to Account. The International Campaign for Human Rights in Iran has launched a campaign against the head of Islamic Republic of Iran Broadcasting, accusing him of cooperation with Iran's intelligence service and violating human rights.

ICHRI's Hadi Ghaemi said Ezatollah Zarghami should be dismissed because he worked with Government interrogators in the production of televised confessions and trials and the "Fitna" (Sedition) series against leading opposition figures and activists, as well as the distortion of cases of post-election victims such as Neda Agha Soltan.

0925 GMT: Culture Corner. The Supreme Leader has reportedly cancelled conference on “Pursuit of Job Security and Social Welfare for Cinema Professionals”.



A prominent cinema director told Rooz, “Agents from the Intelligence Ministry have called for the cancellation of the gathering through threatening phone calls. Finally, they told us that the office of the Supreme Leader was against this gathering” and that, if the event went on as scheduled, it would be confronted harshly.

The Supreme Leader is not having much luck, however, with his recent proclamation against music.

Melody and Safoura Safavi, two sisters from the Iranian band Abjeez (Persian slang for sisters), have responded with less than enthusiasm. Safoura Safavi said, "I think it's -- I'm sorry to say this, to use this word -- but it's ridiculous. I mean, you can't prohibit something like music. And of course, it's a way to control because, in a way, saying that, it shows how strong the force of music is [in Iran]...."

0920 GMT: Political Prisoner Watch. Last week, there were reports that Farah Vazehan had been sentenced to 15 years in prison. However, a reliable source has told RAHANA that Vazehan has been sentenced to death for mohareb (war against God).

0900 GMT: The Human Rights Lawyer. Mohammad Mostafaei, the lawyer forced to flee Iran because of possible arrest, may be in Norway, but the Iranian authorities haven't forgotten him....

Tehran Prosecutor General Abbas Jafari Dowlatabadi has said that Mostafaei is accused of "financial fraud."

0830 GMT; Shortages and Violence. Rah-e-Sabz claims that people in Ahwaz in southern Iran are trying to stage protests in front of the Governor's office because of bad water, rising youth unemployment, and unpaid wages. A seven-member Government commission has been sent from Tehran to the port offices of Abadan and Khorramshahr amidst accusations of fraud and corruption.

Three days of clashes between security forces and residents in Dahdez in Khuzestan in southwestern Iran have allegedly killed seven people. The protests are over shortages and problems in basic services.

Turkey, despite claims of increasing supplies, reduced its gasoline exports to Iran by 73 percent in July, according to data from the Istanbul Exporters Association of Chemical Materials. Turkey supplied 2.5 percent of Iran's total gasoline needs during the month.

Japan's Toyota Motor Corporation has suspended auto exports to Iran indefinitely to avoid any potential repercussions in the US market. Toyota exported about 4,000 automobiles to Iran in 2008, but only 250 in 2009.

0840 GMT: Iran-US Talks? Set aside Ahmadinejad's rhetoric, and the interesting passage in his interview with The New Yorker is his renewed call for discussions with the US on regional issues in the Middle East and Central Asia.

Mixed, even confusing, signals continue from the Supreme Leader's office on the possibility. Former Foreign Minister Ali Akbar Velayati, the foreign policy advisor to Ayatollah Khamenei, has denied a report that he "welcomes" nuclear talks with the US. However, Iran has never rejected talks, and "negotiations with other countries such as P5+1 member states (the US, Russia, France, Britain, China, plus Germany) and the Vienna group (the US, Russia, France, and the International Atomic Energy Agency) -will be carried out while considering the Islamic Republic's rights".

0710 GMT: Washington's Human Rights Intervention. Secretary of State Hillary Clinton on Tuesday called on Iran to release all political prisoners, expressing alarm about the fate of several specific detainees who are "in danger of imminent execution". She specifically named Jafar Kazemi, Mohammad Haj Aghaei, and Javad Lari.

0820 GMT: The Regime's Backfiring Culture of Fear. Writing in The National, Michael Theodoulou considers how the regime efforts to quash the opposition through allegations of foreign-supported regime change --- recently through the statements of the head of the Guardian Council, Ayatollah Ahmad Jannati --- have run into difficulties.

0800 GMT: The Brazil Front. Brazil has accepted UN sanctions against Iran, despite concerns over measures and its proposal with Tehran and Turkey on talks over uranium enrichment.

Brasilia has also made a formal offer of asylum to Sakineh Mohammadi Ashtiani, the Iranian woman sentenced to death for adultery.

0730 GMT: Political Prisoner Watch. Agence France Presse has picked up on the claimed ending of the hunger strike by 16 detainees in Evin Prison.

A Revolutionary Court has sentenced reformist journalist Badrolsadat Mofidi to six years in prison and banned her for five years from journalism. Mofidi was convicted of "conspiring to commit crimes and propaganda against the regime".

Mofidi, the secretary of the Iran Journalists Association, was imprisoned for more than five months after the June 2009 election before being released on bail.

A website has described the abuse of Kurdish activist Ahmad Bab, who was detained last September.

0705 GMT: Opposition Messages. Former President Mohammad Khatami, marking Nationalist Journalists' Day, has said that the real sedition in Iran is spreading awkward lies. He compared the rigged election to the CIA-backed coup of 1953 and declared, "We should learn from this oppression."

Mehdi Karroubi has issued a message for the holy month of Ramadan, "Let us pray to God to save our valiant prisoners, held by the rule of oppressors."

0700 GMT: Talking Tough. Former Revolutionary Guard commander General Hossein Kan'ani Moghadam has said that Iran has dug mass graves to bury U.S. soldiers in preparation for an American attack.

0650 GMT: The President's Right-Hand Man. Hmm, this is getting interesting....

Khabar Online reports --- passing on news or making mischief? --- the alleged comment of Iran's head of armed forces, Brigadier General Hassan Firouzabadi that the remarks of Ahmadinejad Chief of Staff Esfandiar Rahim-Mashai "are a crime against national security".

0620 GMT: Ahmadinejad's Uncoded Message. Meanwhile, Press TV and Khabar Online has picked up on the President's interview with The New Yorker, featured in EA yesterday.

Press headlines Ahmadinejad's claim, "US Worst Suppressor of Media, People", but adds his offer to “help bring the US out of the crises” it has created in Iraq and Afghanistan: “Iran is ready to help them, based on justice and respect....I hope there is someone with an ear among US politicians to understand this and brings no more deaths to the people in Iraq and Afghanistan as well as US soldiers.”

Khabar --- Speaker of Parliament Ali Larijani's outlet --- features Ahmadinejad's claim that western politicians "have no idea about Iran" as "all my opponents are free". The President is also quoted as saying that Iran's people are friends of Jews, but Europe should take back its Jews, or give them a place in Alaska, the USA, or Canada.

0600 GMT: We begin this morning with several intriguing, if sometimes coded, messages.

The easiest to decipher is a letter from Mir Hossein Mousavi, issued last Thursday and now translated by Khordaad 88. Mousavi, referring to Iran's Constitutional Revolution in the early 20th century, makes clear that the "dictatorship" of authorities is not acceptable, even when it is carried out in the name of religion. We post the text in a separate entry.

We have also posted an analysis of a more mysterious intervention from former President Hashemi Rafsanjani. In a section of his memoirs which has "randomly" appeared on his website, Rafsanjani recalls how the first President of the Islamic Republic, Abolhassan Banisadr, was forced to step down. But could the passage also be a reference to Iran 30 years later?

And then an EA correspondent re-reads a statement by Tehran Mayor Mohammad-Baqer Qalibaf on the recent "I am the Rule of the Prophet" fatwa by the Supreme Leader. Earlier this week we noted this as a defence of Ayatollah Khamenei amidst the pressure on him.

Our correspondent, however, thinks that Qalibaf may have amore complex message, supporting the Supreme Leader but also pointing out limits on his authority. He notes these passages from Qalibaf's interview:

In my view, the Exalted Supreme Leader is not articulating authorities that go beyond the boundaries of religious jurisprudence, and the ceiling for these authorities is the limits of the religious law (canon), the expediencies and the preservation of the Islamic system and public interests....

The meaning of this fatwa is that, if a person obeys and follows the Supreme Leader's governmental rulings but based on his own reasoning and personal understanding questions the correctness of those rulings, according to the Supreme leader's own fatwa we cannot accuse that person of being against velayat-eb faqih. In fact, the Supreme Leader has emphasized that the standard is not to embrace every view expressed by the Supreme Leader. We can only call a person anti-velayat-e faqih when that person opposes the vali-ye faqih's (i.e., the Supreme Leader's) governmental rulings, not when he does not subscribe to every view that is articulated by the Leader. This fatwa guarantees the rights of the citizen under the Islamic system. Therefore, a person who follows another source of emulation should only follow those fatwas that have been issued by that source of emulation....

With this fatwa, the Supreme Leader has in fact expanded the insiders' geography and gave it a greater depth....We now understand what the Supreme Leader means when he talks about the people who fall inside the system. We now understand and have become more convinced that his approach is one that is geared toward attracting the maximum number of individuals.

And Qalibaf also may have also had a message for those who tried to use the Supreme Leader's words to go after political opponents, inside as well as outside the Iranian system:

The same people who until today would accuse anyone that they wanted of being anti-velayat-e faqih (clerical authority)...were using that label as a political tool to strengthen or weaken other actors or eliminate them from the political scene altogether.

China Economy Weekly: Monetary Policy; Manufacturing Shifts; Energy Use

China's Loose Monetary Policy: The People's Bank of China has said it will maintain its moderately loose monetary policy and enhance financial supports to boost the economy' s sustainable development.

The PBOC reiterated it would maintain continuity and stability in monetary policy while, at the same time, making the policy more specific and more flexible. It also vowed to improve the yuan's exchange rate mechanism and to increase financial support to promote the transformation of the economic growth pattern and adjustment of the economic structure.

Chinese Economy "To Fare Well": The Chinese economy is on track to fare well this year if recent natural disasters do not disrupt grain supply and thus fuel high inflation, said Zhao Xiaoyu, vice-president of the Asian Development Bank.

Despite the fall in July in the country's procurement managers' index (PMI), which measures economic expansion, policymakers will introduce new supportive measures if economic slowdown continues, making China still attractive for foreign investment, analysts said.

Mergers reduce China's Central Enterprises: The number of China's centrally-administered state-owned enterprises (SOEs) was reduced to 123 from 125, after two mergers were approved by the State Council, the country's Cabinet.

China National Real Estate Development Group Corporation was merged into China Communications Construction Company Limited, while Shanghai Ship and Shipping Research Institute became a wholly-owned subsidiary of China Shipping (Group) Company.

The Chinese government wants to reduce the number of SOEs to less than 100,focusing on the creation of 30-50 large groups with strong international competitiveness, by the end of 2010.

China Crackdown on Hot Money:China's foreign exchange regulator Wednesday pledged to continue efforts to manage illegal capital inflows in the second half of the year.

The State Administration of Foreign Exchange (SAFE) said it had investigated up to 3.5 million cases of international trade transactions, involving a total of $440 billion, during its hot money monitoring campaign, which began in February.

SAFE said last month that its investigations had found 190 cases, involving $7.35 billion, of hot money inflows.

The hot money campaign was launched amid concerns that speculators were betting on an appreciation of the Chinese currency and rising asset prices.

China "To Make Yuan Convertible": The ultimate goal of China's exchange rate reform is to make the yuan a fully convertible currency, Yi Gang, deputy governor of the People's Bank of China, said Friday, although he added, "There is no official timetable for a convertible yuan."

China can maintain a flexible exchange rate and make the currency stand at a basically reasonable and balanced level, Yi said.

Central Bank Pledges Support to Western Regions: Chinese central bank governor Zhou Xiaochuan said the bank will increase its financial support for the development of the country's western regions.

The central bank will offer more financial aid to the tourism industry and other service industries, according to remarks Zhou made during his visit to the provinces of Qinghai and Gansu.

Zhou also said the central bank will seek to make fundraising easier for small- and medium-sized businesses and farmers. Greater efforts will be made to boost financial innovation and to support urbanization in western China, he added.

China Cuts Tariffs for Civilian High-Tech Projects:China has scrapped tariffs and value-added taxes on core equipment, components, and raw materials imported and used in civilian high-tech projects since July 15, according to a circular of the Ministry of Finance.

The projects exempted from taxation include core electronics, high-end universal chips, basic software, integrated circuit-manufacturing equipment, new generation wireless mobile communication networks, and new drugs for prevention and treatment of infectious diseases such as AIDS and hepatitis.

China Automobile Sales Rise: China's annual production and sales of new autos will surpass 15 million vehicles this year, Dong Yang, secretary-general of the China Association of Automobile Manufactures, said Wednesday.

Auto sales in China continued to rise in July, though at a slower pace than in previous months. The growth rate slowed from 124 percent in January to 40 percent in April, to 17.18 percent in July.

Based upon June exports, China's total auto exports for the year will hit or even exceed the 2008 levels seen before the financial crisis, Dong added.

China Energy Use: Chinese energy consumption per unit of GDP rose 0.09 percent year on year from January to June, the National Bureau of Statistics said.

Some high-energy-consuming industries reported less energy consumption per unit of industrial value-added output: the construction materials industry's use dropped 7.61 percent; the chemicals industry's fell 4.28 percent; and the coal industry's declined 2.69 percent.

Conversely, the nonferrous metals industry consumed 8.11 percent more energy per unit while the oil and petrochemicals industry consumed 11.35 percent more.

China cut energy use per unit of GDP 14.38 percent between 2006 and 2009. It aims to reduce consumption 20 percent between 2005 and 2010.

China Stop Subsidy of Energy-Intensive Firms: Preferential electricity rates granted by 22 provincial governments for high energy-consuming businesses have been scrapped, China's top economic planner announced Friday.

All energy-intensive enterprises must be subject to the new power tariff surcharges introduced in May, said the National Development and Reform Commission.

Expansion in Non-Manufacturing Sector, Drop in Manufacturing: The Purchasing Managers' Index (PMI) for China's non-manufacturing sector rose to 60.1 percent in July, up 2.7 percentage points from the previous month, the China Federation of Logistics and Purchasing (CFLP) said Tuesday.

The non-manufacturing PMI includes a package of indices to measure the non-manufacturing sector's performance. A reading above 50 percent indicates economic expansion, while one below 50 percent indicates contraction.

The July rise in the index came after two successive monthly drops and was the fifth straight month the reading was above 50 percent.

The new orders index jumped to 55.8 percent in July, 2.9 percentage points higher than June, the CFLP said, reflecting robust demand in retail and catering services.

However, manufacturing slowed as the Government tried to
curb the risk of overheating and adjust the economic structure.

The PMI for manufacuring eased 0.9 percentage points from a month earlier to 51.2 percent in July

The index has stood above 50 points for 17 straight months. However, it is down for the third consecutive month and is at its lowest since February 2009, when it fell below 50.