Global News Journal

from Reuters Investigates:

No room at the Inn … but maybe a job in the Outback

By Rebekah Kebede

You wouldn't think you'd have to make hotel reservations months ahead of time in Karratha, a small, dusty town on the edge of the Outback  a 16-hour drive from  Perth, the nearest city. But with Australia’s commodities boom, Karratha is bursting at the seams and nowhere is it more apparent than when trying to find a place to stay.

(Above photo: A kangaroo stands atop iron ore rocks outside the remote outback town of Karattha in Western Australia. Reuters/Daniel Munoz)

About two weeks ahead of my trip up to Karratha, to do a special report on Australia's hunt for foreign labour, all hotel rooms within a 60-km radius were fully booked and after more than 20 calls, the travel agent was still coming up empty.

A few more desperate calls turned up a couple of rooms in a town called Roebourne, about 30 minutes away from Karratha at the Ieramugadu Inn, an old motel, which like many others in the area, had become worker accommodations as Karratha struggles to house the influx of labour into town. The bill came to over $200 a night—just shy of what it costs to book a room with a view of the Opera House in Sydney.  The amenities at the Ieramugadu were somewhat different: a complimentary can of bug repellent, tin-foil covered windows to keep out the light for those on night shift, and a view of a truck parking lot through a hole in the tin foil.

from Reuters Investigates:

China’s rebalancing act puts consumer to the fore

Wal-Mart, the world's largest retailer, now has 189 stories in China, according to its website. Soon it will have many more.  The U.S. chain has announced plans to open a series of "compact hypermarkets", using a bare-bones model developed in Latin America, the Financial Times said.

Wal-Mart stores are a bit different than the one's you might find in, say, Little Rock Arkansas. They sell live toads and turtles for one thing, The Economist reported. But they also sell the appliances, gadgets, and housewares that Wal-Mart stores merchandise everywhere.

And business is booming. Third-quarters sales in China soared 15.2 percent from a year earlier, according to the Financial Times story, compared with a paltry 1.4 percent inthe United States.

China's consumption has been growing. Quite fast, in fact. Yet it still acounts for just a third of GDP, compared with around 60 percent in Europe and about 70 percentin the United States. But that is starting to fundamentally change. A Reuters Special Report by Alan Wheatley, "The Chinese Consumer Awakens" notes that wages are rising fast. People are moving into new cities in China's vast interior, and manufacturers and retailers are following them. Call it China's great rebalancing act, as the government tries to promote more consumption and rely less on cheap exports from "the workshop of the world" for future growth.

Timothy Geithner certainly hopes to see this. The U.S. Treasury Secretary is counting on hundreds of millions of Chinese to spend more and save less. That way, Chinese factories would produce more for domestic consumption and less for export, helping to narrow the trade imbalances that are destabilizing the global economy.

Photo caption: Chinese vegetable vendor sleeping in open air market in Changzhi, Shanxi province. REUTERS/stringer

from Reuters Investigates:

Inside the Pirates’ Web

Reuters trade correspondent in Washington Doug Palmer had an unusual assignment: buy a fake Louis Vuitton handbag on the Internet, and take it to a LVMH store for a comparison test, before handing it over to U.S. authorities.

    What was startling was how easy it was to find websites selling a dazzling array of stuff online. This is the new face of piracy and its costing businesses billions.   No need to skulk around back alleys or some pirate's rental van to browse through footwear, watches, DVDs and whatnot. Just pick out your LV shoulder tote from a virtual catalog on a website based in China. It looks and feels like the real thing at a fraction of the price.

Counterfeit goods ranging from shoes to software seized by the U.S. government  on display at the National Intellectual Property Rights Coordination Center in northern Virginia, October 7, 2010.  REUTERS/Jason Reed  

    The bulk of these goods comes from China. The workshop of the world is also the sweatshop oif the world when it comes to making fake goods.

    Reuters Shanghai correspondent Melanie Lee and a photographer accompanied a private investigator to grubby neighbourhoods around Guangzhou to find the leather workshops that make these fake bags. She saw mothers and daughters through the windows working the leather, and young toughs outside serving as lookouts. Chinese authorities occasionally do raid these places, which are often run by triad gangs. Photographer Tyrone Siu stealthily took photos with his iPhone.

 Melanie and her PI then followed the trail of the fake handbags to an illegal market a few miles away. The Baiyun wholesale market, occupying a space equivalent to five football fields, is the biggest market for leather goods in the world. Much of the merchandise is counterfeit.

    The market is occasionally raided -- including the day they went. But the shopkeepers are used to it. It's like the Whack a Mole game. As fast as you can hammer down one operation, another one pops up somewhere else.

from Reuters Investigates:

In case you missed them

Just because it was summer, doesn't mean we weren't busy here at Reuters. Here are a few of our recent special reports that you might have missed.

Tracking Iran's nuclear money trail to Turkey. U.N. correspondent Lou Charbonneau -- who used to cover the IAEA for Reuters --  followed the money to Turkey where an Iranian bank under U.S. and EU sanctions is operating freely. Nice to see the New York Times follow up on this today, and the Washington Post also quizzed Turkey's president about it.

Blue-collar, unemployed and seeing red -- Chicago correspondent James Kelleher went on the road for this story about the long-term unemployed and what that means for Obama and the Democrats at November's midterm elections.

Even though he's been forced to move back in with his parents and has virtually no income, Stevenson opposes Obama's proposal to let some tax cuts for the wealthy, dating back to George W. Bush's presidency, expire at year's end in order to raise revenue and reduce the deficit. 

"How is more people, keeping more of the money they earn, bad for the economy?" he said. "The answer is -- it's not."   

Searching for silver in Greece’s storm clouds

Greece and the euro zone are still very much in the midst of a debt and deficit storm, with not just Athens but possibly Portugal and Spain at risk of being swept up in the maelstrom.

But that hasn’t stopped economists and political analysts looking for a silver lining in this unprecedented meltdown.

One positive is the impact the uncertainty is having on the euro, which has weakened sharply against the dollar and the British pound this year. That may not be very good for those in the United States or Britain holding euro-denominated assets, but it’s good for European exporters, whose goods become relatively less expensive for importers.

As Jennifer McKeown, a senior economist with Capital Economics, pointed out in a research note on Thursday, euro zone export orders are sharply up (by some counts they are now the highest in 10 years), while in April, euro zone manufacturing expanded at its fastest rate since November 2006, according to Markit.

That’s clearly a positive for the euro zone. The EU is the world’s largest trading bloc by value and exports are a key component of growth, particularly for the major economies such as Germany, France and Italy. Accountancy firm Ernst & Young said in a recent report that it expected net trade to contribute 0.7 percentage points to euro zone growth in 2010 — thereby accounting for three-quarters of the rise in overall GDP.

It is therefore perhaps not so surprising that economic and business sentiment in the euro zone rose strongly in April, despite the chaos in Greece and the volatility in financial markets across the region. 

But there is also a broader positive shakeout that could ensue from this crisis. It may take several years — at best — but economists and political analysts think it will force profound structural adjustments in several EU economies, including Greece, Portugal, Spain and possibly Italy.

from Maggie Fox:

Stimulus package does provide some jobs

WASHINGTON (Reuters) - More than 25 years into the AIDS pandemic, scientists finally have a vaccine that protects some people -- but instead of celebrating, they are going back to the drawing board.

The vaccine, a combination of two older vaccines, only lowered the infection rate by about a third after three years among 16,000 ordinary Thai volunteers. Vaccines need to be at least 50 percent effective, and usually 70 to 80 percent effective, to be useful.

Worse, no one knows why it worked.

"Additional studies are clearly needed to understand how this vaccine regimen reduced the risk of HIV infection," Dr. Eric Schoomaker, surgeon general of the U.S. Army, which helped pay for the study, told reporters.

Dr. Anthony Fauci, director of the U.S. National Institute of Allergy and Infectious Diseases, said, "We need to bring the best minds together and map the way forward."

The vaccine is a combination of Sanofi-Pasteur's ALVAC canarypox/HIV vaccine, which includes synthetic versions of three HIV genes, and the failed HIV vaccine AIDSVAX, made by a San Francisco company called VaxGen and now owned by the nonprofit Global Solutions for Infectious Diseases.

"It is likely that significant efforts will be needed to fully understand the study results and to appreciate how they will inform the next steps to develop and deliver a safe and effective HIV vaccine," Dr. Peter Kim, president of Merck Research Laboratories, said in a statement.