Illusive

How healthy – or otherwise – is China’s economy? Like the proverbial blind men grasping an elephant, the answer likely depends on where you’re standing.

That seemed to be the message Monday when China Real Time put a property developer, a private equity executive, a former ambassador and newly minted resource firm director, and a senior local financial journalist on a panel in Beijing.

‘The world is not coming to an end in China,’ said Wu Yibing, president of Citic Private Equity Funds Management Co., one of China’s biggest local funds. According to Mr. Wu, the weighted average revenue for companies that Citic PE’s U.S. dollar fund has invested in was up 70% in the first half of the year from a year earlier. Even as the world was losing faith in China, profit for those companies was up 90% over the same period, he said.

Similarly, Citic PE has found that its investments in Chinese city commercial banks were in better shape than it had anticipated, he added. That could indicate China’s financial sector is holding up well despite worries that banks hold too many low-quality local government loans.

Back in January Citic PE forecast the two banks in which it had invested would have a nonperforming loan ratio of about 3% by the end of the first half. Instead their levels were about 1.5%, Mr. Wu said.

Property mogul Zhang Xin saw things differently – and claimed Mr. Wu’s numbers would likely tell a different story in the three months since June.

‘In my 16 years as a developer this [has been] one of the most difficult times,’ said Ms. Zhang, chief executive of Soho China, singing a not unfamiliar tune.

With the government gradually reducing the supply of credit since early last year in an effort to bring inflation under control and bring down housing prices, property developers are feeling the strain. But for Ms. Zhang, the problems go deeper.

“State-owned enterprises are the ones who get the liquidity and they’re the ones who are growing,” she said when the debate turned to the plight of China’s private sector, which has loaded up on high-interest rate loans from informal lenders and has been subject to a spate of recent bankruptcies in the entrepreneurial hub of Wenzhou. State firms “are not the most efficient. They’re not the ones who will drive China through the twenty-first century.”

“The allocation of capital has huge consequences,” said Ms. Zhang.

Those were fears echoed by Wang Shuo, managing editor of business-news company Caixin Media.

“I get the feeling that in the last 12 years nothing has changed in China’s banking system,” said Mr. Wang. China’s banks historically operated as a branch of the government, funneling capital where the central planners thought it was most needed. In the late 1990s the government started relieving the banks of the mountains of bad debt they’d accumulated in the hope of making them commercial-oriented.

Mr. Wang also said that the corruption and safety issues arising from China’s breakneck development of a high speed rail network had rendered the project “meaningless and useless.”

Former Australian Ambassador to China and current board member of Australian miner Fortescue Metals Geoff Raby had a different take. A long-time China bull Mr. Raby agreed with the proposition that what equates to a marginal misallocation of capital doesn’t really matter to China’s overall growth prospects.

While he clearly felt the recent sell-off of stocks on fears that China’s economy was slowing was hugely overblown, he had more time for concerns about Chinese corporate disclosures.

He said he didn’t think corporate transparency was any worse now than before, but “I don’t know why people believed [the numbers] so much in the past.”

That the Shanghai Stock Exchange’s benchmark index is trading at a fraction its 2007 peak is a sign that “people are finally starting to work it out.”

Beijing’s war against pornography is infamous for producing an inordinate amount of collateral damage. For the most part, the casualties of the government’s efforts hermes kelly to crack down on porn, which is illegal in China, are non-pornographic websites that get swept up in periodic campaigns against ‘harmful’ online content.

Despite the sledge-hammer strategy, sex scholar Katrien Jacobs says in an interview published Tuesday by the Web magazine Danwei, China’s guardians of public morality are losing, badly:

There are several statistics that show the net-porn industries are surviving and flourishing despite the ban. It seems indeed that porn cannot be banned and that the PRC government is perhaps even secretly letting it into the country. But besides their bombastic cleanup campaigns, they also censor web communities that stand for sexual freedom or queer identity. It seems as if sexual minorities, hermes birkin sex artists and activists are much more vulnerable than those involved in mainstream commercial porn, especially at this moment when film festivals are being shut down and human rights activist are being tortured and detained. These are the dark times of China’s civil right and sexual creative outlet, but there is still so much porn and sex entertainment available that we can see it as safer outlet.

Ms. Jacobs, an associate professor in cultural studies at the Chinese University of Hong Kong, goes on to observe that porn has come to play a central role in the sexual education of young Chinese men a disturbing trend, but one that might make sense in light of this month’s Balenciaga bags recent scandal over a new sex-education textbook for students in Beijing.

Ms. Jacobs’s has her own book on the topic of sex and China,Balenciaga handbags ‘People’s Pornography: Sex and Surveillance on the Chinese Internet,’ scheduled to be released in November.

In their lust for the latest technology IPO, investors appear to have ditched some of their former tech darlings.

Amid the heavily hyped chatter on initial public offerings from Zynga, LinkedIn and Facebook, seemingly old-school tech companies such as Apple and Google were conspicuous laggards during the second quarter. The Nasdaq Composite index ended the quarter in negative territory, compared with gains for the rest of the market.

The buzz over the latest crop of tech newcomers has been palpable. LinkedIn ended its first trading day with a stock-market value of about $9 billion. On Friday, Zynga filed paperwork with regulators for a $1 billion IPO, although the final amount could be considerably different. Facebook is aiming for a stock-market value of more than $100 billion, placing ahead of the likes of Cisco Systems and Hewlett-Packard.

Still, some investors say the pummeling of tech stocks may have gotten out of hand.

Investors in LinkedIn are paying about $21 for each dollar of the social-networking website’s estimated 2011 revenue. Yet they are paying less than $6 for each $1 of expected revenue at Google and Apple.

‘The reality is Apple and Google are large-cap growth stocks, but they’re not trading like such at the moment,’ said Paul Bard, director of research at Renaissance Capital, an IPO investment-advisory firm. ‘Investors aren’t treating them as growth stocks. Instead, they’re placing their bets in this new wave of Internet companies.’ By one measure, tech stocks are at their cheapest compared with the rest of the market in almost 20 years.

For the past four months, the price-to-earnings ratio of the tech sector has been below that of the S&P 500, according to estimates compiled by UBS. That is the first time that has happened since 1992.

As of last week, the S&P 500 was trading around 12.4 times one-year forward earnings, and tech was fetching 12.1 times, UBS estimates. Apple stock is now fetching about 12 times earnings. Google is trading at about 13.8 times. Intel and Microsoft have P/Es of less than 10.

The turning point for tech came in March, as Japan’s earthquake and tsunami caused supply hitches and worries emerged about global economic growth, dragging tech stocks down more than most.

Jonathan Golub, chief U.S. equity strategist at UBS, thinks now is the time to jump into tech stocks, pointing to a number of tech names he calls ‘unusually cheap.’

Some say valuations have gotten so low that they are likely to rise should there be any stronger signs that the economy isn’t mired in a prolonged slump. A few glimmers of hope for those bulls came last week, and tech recovered along with the rest of the market.

Even if the economy does sputter, the valuable — but underappreciated — combination of cash flow, accumulated cash and decent dividends offered by companies such as Microsoft, Cisco, Intel and Hewlett-Packard could become attractive to conservative investors.

Mark Luschini, chief investment strategist at Janney Montgomery Scott, suggests there may be some early signs those attributes are gaining notice. He points out that Microsoft shares rose 2.4% during the second quarter, handily outpacing the S&P 500′s 0.4% decline.

‘They’ve been sort of unsponsored, if you will, almost orphaned in the marketplace,’ Mr. Luschini said of large-cap tech stocks. ‘I think people are looking at these things as if they’re some sort of old-world victim of some new-age technology that make these franchises no longer viable. But I think it’s just the opposite.’

Not everyone is so sanguine on the sector. Burt White, chief investment officer at LPL Financial in Boston, notes that the tech sector’s earnings and revenue growth have lagged that of the broader market in recent quarters.

‘That’s not what we expect from tech,’ Mr. White said. ‘The market is just concerned that it’s not going to get the growth rate from tech that we thought we would.’

The food production license held by a company accused of producing tainted steamed buns has been revoked and five suspects — including the company’s director — have been detained, according to local authorities.

Shanghai’s public security, industrial and commerce, and food safety supervision departments are working together to investigate the allegations against the company, which emerged in an investigative report by China Central Television (CCTV) on Monday.

CCTV claimed the company had produced steamed buns, or mantou in Chinese, from stale buns that had been returned from local retailers. The company allegedly added illegal chemicals to the expired buns to make them appear fresh.

The Shanghai quality and technical supervision bureau announced on Wednesday that it had revoked the food production license of Shanghai Shenglu Food Company after it found illegal chemicals in tested samples.

The bureau said it tested 19 batches of steamed buns from the company and found that four contained a yellow coloring that is forbidden in steamed food and confectionery. It said it also found sodium cyclamate, an artificial sweetener, in two batches in quantities that exceeded national standards.

Five detained in tainted bun probe

According to the Shanghai public security bureau, related evidence has been collected, including chemical additives and the company’s production and sales records.

The company’s director, Ye Weilu, its sales manager, Xu Jianming, and three staff members have been detained.

The bureau said the company, registered in Songjiang district’s Tianma Development Zone, mainly produced steamed buns and flour confectionery. The company had eight workers and an annual turnover of 1.8 million yuan ($275,000), of which steamed buns accounted for up to two-thirds.

The five suspects acknowledged that the company had produced 84,000 packs (with four buns to a pack) since January. The buns were shipped to 10 supermarket chains in the city, including Dia, Hualian and Lianhua.

The bureau said its investigation is continuing.

According to the Shanghai administration for industry and commerce, more than 32,000 steamed buns have been taken off the shelves at supermarkets and impounded by the administration.

The administration ordered local stores and supermarkets to check steamed buns from other manufacturers and stop selling them if they have any doubts about their quality.

Officials from the bureau said it will also carry out tests on other brands supplying steamed food as part of the investigation.

Li Yuanping, a spokesman for the General Administration of Quality Supervision, Inspection and Quarantine, China’s top quality watchdog, said it has ordered the quality supervision authority in Shanghai to thoroughly investigate the case and severely punish those responsible for any wrongdoing.

“We must gravely crack down on illegal activities and will never relent,” Li was quoted as saying by Xinhua News Agency.

It was hard to lose money if you were a billionaire last year.

Global stock markets rose more than 11%, money remained cheap and economic growth (outside the U.S.) remained fairly strong.

So how did 17 Americans fall off the Forbes list in 2010? According to Forbes, some related to legal investigations and others to what Forces said was new information, according to this Clare O’Connor blog post at Forbes.

Take Sam Wyly. Forbes said an ongoing SEC investigation and ‘closer scrutiny of his holdings’ led the magazine to take him off the list. The same holds true for Edgar Bronfman Jr., since ‘new evidence leads us to believe we’ve been overvaluing his assets for years.’ (Thus showing the inherently flawed nature of wealth lists.)

The U.S. had the largest number of drop-offs, but that is mainly a function of math, since the U.S. has about half the world’s billionaires. And most of those who fell off were right at $1 billion last year, so they wouldn’t have had to lose much to fall below that threshold.

Here, according to Forbes, are the 2010 Billionaire Drop-Outs. Unless noted, there was no reason given by Forbes for the drop.

Marc Rich The controversial commodities trader was listed as having a net worth of $1 billion last year, and Forbes said the estimate was ‘likely low.’

Dorrance Hamilton The Campbell’s soup heiress was listed with a net worth of $1 billion. Its stock rose last year, so it is unclear why she fell off.

Joyce Raley Teel The grocery-store heiress and manager was listed at $1 billion last year.

Carl Lindner The United Dairy founder, banana tycoon and baseball owner was listed at $1.7 billion last year.

Jon Huntsman The chemicals-company chief was listed at $1 billion last year.

Edgar Bronfman Sr. Forbes pegged Bronfman at $2.6 billion last fall. The former CEO of drinks-empire Seagram’s no doubt took a hit from his son’s music gambit. Forbes said the reason for his drop off was ‘new evidence.’

Robert Fisher The heir to the Gap fortune was listed at $1.1 billion last year.

Margaret Magerko The daughter of Joe Hardy, who founded 84 Lumber, was listed at $1 billion last year.

Samuel Wyly Forbes last year listed Mr. Wyly at $1 billion, with investments in tech, insurance restaurants and oil. Forbes says an SEC investigation into alleged tax shelters caused them to take a second look.

Jess Jackson The wine tycoon, founder of Kendall-Jackson and race-horse owner was listed at $1.9 billion.

Tamir Sapir Forbes listed the Russian immigrant-turned New York real-estate mogul at $1.9 billion. No reason was given for the drop-off, though last year Forbes cited legal troubles in Russia.

Hamilton ‘Tony’ James The Blackstone Group president was listed with a net worth of $1.1 billion last year. The drop-off is odd since Blackstone had a decent year last year and its shares are up.

Mario Gabelli The media-investing guru was listed at $1 billion last year.

Steven Schonfeld Forbes listed Mr. Schonfeld, who founded a trading outfit, at $1 billion last year. No reason was given for his drop-off, though his new $90 million house probably didn’t add to his wealth.

Dwight Schar Forbes listed the housing mogul and football owner at $1 billion last year. No reason was given for the drop-off.

Charles Zegar The co-founder of Bloomberg LP was listed at $1 billion last year and Bloomberg had a good year in 2010 and Mr. Zegar signed the giving pledge, so perhaps philanthropy played a role.

Patrick Bowlen The Denver Broncos owner was listed at $1 billion last year

The U.S. and its allies intensified air attacks against forces loyal to Col. Moammar Gadhafi on Sunday, saving anti-Gadhafi rebels from being immediately overrun and breathing renewed life into the increasingly desperate month-old pro-democracy uprising.

Allied jets and missiles pounded Libyan military targets over the weekend, including one of Col. Gadhafi’s armored columns seen charred on the road to Benghazi, the rebels’ de facto capital. Rebels emboldened by the international support renewed fighting in Ajdabiya, a strategic city they had lost last week, witnesses said.

National Security Adviser Thomas Donilon told reporters traveling with President Barack Obama in Brazil that ‘the efforts here have made a real difference in terms of the threat that was looming over Benghazi.’

Mr. Donilon said U.S. officials and Libyan rebel leaders believe the military actions ‘have prevented what could have been a catastrophe at Benghazi.’

The air assault, led by the U.S., France and Britain, provoked a confused response from the Libyan regime, with the colonel vowing to ‘exterminate’ his opponents and his men seizing─then releasing─an Italian ferry in Tripoli, while his military announced a cease-fire late in the day.

Libyan state media, quoting Libyan health officials, reported that at least 64 people have been killed and more than 150 wounded in airstrikes since Saturday, mostly civilians. Reporters were unable to verify the allegations. Western journalists escorted to what Libyan officials said were to be burials of two-dozen bombing victims were only able to confirm the burials of a 3-year-old girl and a man, who relatives said had died in the airstrikes.

Despite what appeared to be a just-in-time rescue for the rebellion, there were still concerns that regime ground forces could infiltrate Benghazi in a way that the coalition couldn’t counter from the air.

There were also hints of unease in the international coalition that had come together last week around a United Nations resolution authorizing military action to protect Libyan civilians from their leader.

The head of the Arab League, a group whose endorsement of a no-fly zone gave political cover for U.S. and European action in a Muslim country, criticized the airstrikes as outside of the U.N. mandate.

And U.S. Republicans, including House Speaker John Boehner of Ohio, both criticized Mr. Obama for moving too slowly and demanded the president clarify what the mission was intended to achieve and how it would do so.

China, meanwhile, ‘expressed regret’ over the use of military force even as it decided last week not to block authorization of the strikes at the U.N. China’s rare acquiescence moved it further away from its longstanding foreign policy based on nonintervention.

While Mr. Obama and European leaders have called on Col. Gadhafi to leave office, the U.N. authorized force only to protect civilians. U.S. commanders are counting on the air attacks and no-fly zone to spark an uprising in Col. Gadhafi’s inner circle.

Obama administration officials and military commanders haven’t explained what would happen if Col. Gadhafi instead consolidated power in areas he already holds.

U.S. Defense Secretary Robert Gates told reporters Sunday afternoon he wouldn’t want to see Libya permanently split into government and rebel zones.

‘Having states in the region begin to break up because of internal differences I think is a formula for real instability in the future,’ Mr. Gates said during a flight to Russia for security talks.

He said he was skeptical of suggestions that the coalition expand its goals from defending civilians against Col. Gadhafi to killing the Libyan leader. ‘This is a very diverse coalition and the one thing that there is common agreement on are the terms set forth in this Security Council resolution,’ Mr. Gates said. ‘If we start adding additional objectives, then I think we create a problem in that respect.’

The French government said that while on Saturday its jets had destroyed four Libyan armored vehicles, the 15 planes it had in Libyan airspace on Sunday had encountered no opposition.

‘He’s got his forces pretty well stretched from Tripoli all the way out to Benghazi, and we will endeavor to sever his logistics support in the next day or so,’ the top U.S. military officer, Adm. Mike Mullen, told CNN’s ‘State of the Union’ on Sunday.

In Tripoli, Col. Gadhafi vowed to arm civilians with machine guns, rifles, grenades and rocket launchers.

‘We will exterminate every traitor and collaborator with America, Britain, France and the crusader coalition,’ he said on state TV Sunday. ‘They shall be exterminated in Benghazi or any other place.’

At 9 p.m. in Tripoli, though, Col. Milad Hussein, a Libyan military spokesman, read a terse statement announcing an ‘immediate cease-fire,’ shortly after fighter jets were heard above the center of the capital, followed by several explosions and a barrage of antiaircraft fire.

A resident of Tripoli’s eastern suburb of Tajoura said it appeared the latest strikes hit military installations in the neighborhoods of Farnaj or Ain Zara. At 10 p.m. Libya time, explosions could be heard in the capital followed by salvos of antiaircraft fire and machine guns, this time close to Col. Gadhafi’s compound in Bab Aziziya.

Col. Hussein refused to take questions from reporters, but the credibility of the latest cease-fire was doubtful, given that the regime had flouted a previous one announced on Friday, nearly crushing the rebellion before the allies took action.

With the exception of Col. Gadhafi’s supporters in their cars honking their horns and waving banners and posters, the mood in Tripoli was subdued Sunday. Although Sunday is the first day of the work week here, most shops were shuttered and there were long lines outside bakeries and gasoline stations.

Officials bused reporters to the Shatt Hansheer cemetery on Tripoli’s seashore for what was supposed to be a burial ceremony for victims of the airstrikes. Hundreds of pro-Gadhafi supporters gathered at the cemetery gate waving posters of the leader while men fired their weapons in the air.

Inside a few dozen men formed a human chain around 24 freshly dug graves. There were six other graves dug up nearby.

Several of those in attendance, diehard Gadhafi supporters, said the graves were for soldiers killed in the airstrikes. Many of them were killed in airstrikes against a base for the 32nd Brigade in Tripoli’s sprawling al-Hadhba neighborhood, said Youssef Mohammed who lives nearby.

As the men waited, they recited verses from the Quran and chanted slogans against the rebels and Arab countries they said were conspiring against Libya.

By sunset, coffins of the dead soldiers hadn’t arrived. People started leaving the cemetery.

French fighter jets spearheaded the international military action Saturday, followed by a salvo of 124 cruise missiles fired from U.S. and U.K. warships. The cruise-missile attacks were aimed at radar, surface-to-air missile launchers and communications infrastructure so a broader no-fly zone could be enforced over Libyan airspace.

With air defenses damaged, the air war quickly expanded. On Saturday night, three U.S. B-2 stealth bombers, flying nonstop from an airbase in Missouri, bombed an airfield at Ghardabiya, not far from Misrata, Libya’s third-largest city.

Ghardabiya is both a military and civilian facility, and On Sunday, the Libyan government shelled Misrata, Libya’s third-largest city, witnesses said. A spokesman for the revolutionaries in Misrata said in a call to al-Jazeera television that government tanks have entered deep into that city’s center, hunting down besieged rebels.

U.S. Vice Adm. William Gortney told reporters in a Pentagon briefing Sunday that the bombers only targeted military portions of the airfield. Adm. Gortney said the strikes weren’t aimed at regime leadership. ‘We are not going after Gadhafi,’ he said.

Adm. Gortney pointed to poststrike images that indicated damage to hardened aircraft shelters.

In addition to the B-2 strikes, coalition aircraft launched attacks on loyalist ground forces about 10 miles south of Benghazi. U.S. Air Force and Marine Corps strike aircraft, along with warplanes from France and the United Kingdom, participated in the attacks. According to a Pentagon briefing, the targets included armor, rocket launchers and mechanized infantry.

On February 13, a large number of sea gulls flew to the dumping site on the outskirts of Dalian city, China, looking for food. These sea gulls used to find food in the Bohai Bay sea area off Dalian city which was covered by heavy ice because of the cold weather.

So-called fast-fashion retailers such as Spain’s Inditex SA, which is the world’s largest clothing retailer and operates the Zara chain, and louis vuitton bags & Mauritz AB are quickly expanding their empires around the globe as consumers move away from higher-priced clothing in favor of less-expensive options. fast Retailing, Asia’s leading clothing retailer by sales, said it aims to move ahead of Zara and H&M within a decade, as it ramps up store openings — in Asia.

Looking to become the world’s leading clothing retailer, Japan’s fast Retailing Co. designs to introduce its Uniqlo stores in the fast-growing Indian and Brazilian markets and to vastly expand its presence in China, where the number of stores are intended to leapfrog those in Japan by 2020.

fast Retailing’s fashion focus, however, is different from its competitors: It sells casual, affordable basics, such as fleece jackets, jeans and its Heat Tech line of thermal underwear. ‘We don’t make clothes that you throw away after one season,’ said Naoki Otoma, fast Retailing’s chief operating officer.

In its home market, where fast Retailing derives the bulk of its revenue, the company has caused a buzz by breaking with many of the conventions of Japanese businesses. fast has said English must be spoken at all business meetings where foreigners are present, that all electronic mail correspondence must be written in English by 2012 and that the number of its foreign employees will overtake Japanese workers by 2015.

The retailer quickly is becoming a template for the remainder of corporate Japan, faced with the twin obstacles of shrinking domestic demand as well as a dearth of Japanese leaders with the know-how and language skills needed to lead a push in to global markets.

‘Our advantage is that we are a Japanese brand, which is known for nice quality and design, and we are closer in nearness to the Asian countries,’ Mr. Otoma said in an interview. ‘In China, we will grow organically without alliances or collaborations. There are no Chinese companies that can do a better job there than us. . . .We won’t be striving to increase our store count in Japan by that much going forward.’

Mr. Otoma, 50 years elderly, said Uniqlo also aims to crack the Indian and Brazilian markets within two years. Although a foreign retailer currently can enter India only as a minority stake holder with a local partner, this restriction is likely to alter shortly. ‘Based on our research, these regulations will likely be dissolved within one year,’ Mr. Otoma said.

Uniqlo is forecast to have 844 stores in Japan and 76 in China by the finish of August. By 2020, Uniqlo aims to have 1,000 stores in China through organic growth alone. Zara had 60 stores in China as of Oct. 31.

In the crucial U.S. market, Uniqlo is rebuilding its brand following some earlier missteps. it’s retreated from suburban shopping malls and now has one store, in Manhattan’s SoHo neighborhood. The company aims to open an online shopping site shortly to reach more American consumers and designs to open a flagship store on New York’s Fifth Avenue next year.

The company has made no secret of the fact that it is scouring the marketplace for acquisitions in the U.S., following a botched bid for Barneys illinois in 2007.

‘We have received many proposals,’ Mr. Otoma said. ‘There are not that many nice options in the market right now. and for the companies that are doing well, the amount of money required to acquire them is tremendous. We must advance with e-commerce quickly. Our priority has been branding and raising our brand awareness in the U.S.’

As market sentiment toward the euro zone sharply deteriorates, European officials are planning a new round of bank ‘stress tests’ that they say will be more rigorous than the widely discredited exams conducted earlier this year.

Some European officials are pushing for next year’s tests of leading banks to take place months earlier than currently planned, according to people familiar with the matter. But that could be difficult because the new agency that will oversee the tests isn’t yet up and running, and its officials say they might opt not to publicly disclose the test results.

The planned European Union stress tests are a follow-up to last summer’s exams of 91 European lenders, whose results were published in an attempt to restore confidence in the health of the continent’s banks.

The exercise temporarily eased fears about European banks’ vulnerabilities to the burgeoning sovereign-debt crisis. But those jitters have been steadily building since late July. The tests were largely discredited by revelations that they lacked rigor, including a Wall Street Journal report in September that the tests understated some banks’ holdings of potentially risky sovereign bonds.

The eroding confidence is now accelerating thanks to events like the international bailout of Ireland– where two big Irish banks that passed the tests have encountered trouble and are likely to end up majority-owned by the Irish government. This week, the stress tests’ effectiveness– or lack thereof– was back in the spotlight as fears mount that financially shaky countries like Portugal, Spain and Italy may follow in Ireland and Greece’s footsteps and require foreign bailouts.

Europe’s banks, holding tens of billions of euros worth of bonds issued by those troubled governments, are caught in the crossfire. Investors are dumping the banks’ shares, and the banks are growing nervous about lending to each other. It is precisely the situation the stress tests were meant to avoid.

Cuban leader Raul Castro announced Monday that the Cuban Communist Party (PCC) will convene its sixth congress in April next year.

The event, the first of its kind in over a decade, will “redefine the direction of the local economy” and “make fundamental decisions to update the economic model,” Castro said alongside Venezuelan President Hugo Chavez at a ceremony here celebrating their countries’ bilateral cooperation.

Later next year, the PCC will hold a national conference “to discuss other matters of internal importance to the organization,” added Castro, second secretary of the PCC, which is chaired by Fidel Castro.

Initially, the PCC congress had taken place every five years to design economic and social strategies for the party and the nation. However, the last session was in October 1997, after which the ruling party decided to postpone the next congress without public explanation.

Cuba has suffered deep financial woes in recent years, and is trying various measures to “update” its economy, such as eliminating 50-year-old subsidies and gratuities, encouraging self-employment and small private businesses, and relocating part of its workforce for “better use.”