The Federal Deposit Insurance Corp yesterday said the banks earned US$35.3 billion from January to March. That's up from US$28.7 billion a year earlier and the highest level since the second quarter of 2007. About 67 percent of US banks reported improved earnings.

The number of banks on the FDIC's confidential "problem" list fell in the first quarter to 772, or 9.5 percent of all federally insured banks. That compares with 813 troubled banks in the previous quarter.

The surge in first-quarter earnings follows the industry's most profitable year since 2006, a sign that many banks have put the 2008 crisis behind them.

China's claim followed the US' move last week to impose anti-dumping tariffs ranging from 31 percent to more than 250 percent on Chinese exports of crystalline silicon solar panels.

"Preliminary investigations found that six supporting measures by the US government on its renewable energy industries violated WTO rules and can distort normal trade," the Ministry of Commerce said in a statement.

The ministry said the investigations were launched at the request of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products and the All-China Federation of Industry and Commerce in November.

The statement did not specify how the ministry will respond to the findings or any moves the country will take.

Last week, China denounced the US move to levy additional punitive duties on its solar products, saying the US was sending negative signals of trade protectionism to the world.

The ministry spokesman Shen Danyang said the US ruling was unfair and the tariffs would hurt both Chinese companies and American users.

The tariffs are on top of the anti-subsidy duties of up to 4.73 percent imposed by the US earlier this year on solar panels imported from China.

The city expects annual container turnover to reach 33 million TEUs (twenty-foot equivalent units) by 2015, up from last year's 31.74 million TEUs, already the world's highest, according to the city's first five-year plan for the shipping industry released yesterday.

The State Council, China's Cabinet, gave Shanghai guidelines in 2009 aimed at accelerating the city's development as a major financial and shipping center by 2020, and the new plan outlines some tasks for the city to complete by 2015.

For example, the city aims to become an international cruise base with 500 arrivals and departures by then and create a market for secondhand vessels with an annual turnover of 10 billion yuan (US$1.58 billion).

Chang Fuzhi, deputy director of the Shanghai Maritime Bureau, said authorities expect to make breakthroughs this year in developing a ship registration system in the Yangshan Deep-water Port, which will help Chinese liners better compete with international shippers.

Fewer than 5 percent of the ships entering or leaving the city's ports on international routes were under the Chinese flag in 2011, Chang said.

Zhang Lin, vice director of the Shanghai Transport and Port Authority, said one of the city's efforts in the period through 2015 was to enhance the capacity of inland waterways connecting Shanghai's ports and neighboring areas in the Yangtze River Delta region to reduce the use of road traffic.

"If you've been to Waigaoqiao (port area), you'd find the traffic congestion there is nothing better than that in downtown," he said, adding that the problem must be addressed to allow Shanghai's ports to develop.

About 42 percent of Shanghai port cargo is now shipped via waterways rather than by road or rail. The city aims to raise that to 45 percent by 2015.

More than 1,100 units at nine projects, eight of them located beyond the Outer Ring Road, will be introduced during the weekend, up from nearly 850 units released last weekend, according to research released yesterday by Soufun.com.

The new units will be sold at an average 19,000 yuan (US$3,011) per square meter, a weekly drop of 30 percent, mainly due to their outlying locations.

A China Overseas development in Putuo District will sell apartments of between 245 and 340 square meters for an average price of between 38,000 and 45,000 yuan per square meter, the most expensive homes released this weekend, Soufun data showed.

The land plot where the new homes are built cost China Overseas more than 7 billion yuan in 2009, the most expensive parcel sold that year.

Vale, the world's largest iron ore exporter, is building a fleet of 35 so-called "very larger ore carriers" (VLOCs) to save on costs of shipping ore to China. The VLOC is the world's biggest dry bulk vessel, with a cargo capacity of up to 400,000 tons.

The Chinese Shipowners' Association has spurned Vale's initiative, citing the potential impact on loss-making domestic shipping companies and safety problems. Lobbied by the association, the Ministry of Transport issued a ruling in January that bans dry bulk ships of more than 350,000 deadweight tons from docking at Chinese ports.

The ban was a major setback for Vale, which insists its plan is all about fuel efficiency and its competitive edge with Australian miners BHP Billiton and Rio Tinto in supplying China with raw materials. Vale's ore has to travel three times the distance as ore from Australia.

Shipping not core business

Struggling to seek China's permission to allow its VLOCs to call at Chinese ports, Vale insists that the company has no interest in controlling the shipping business.

"Vale's strategy is not about owning vessels," Gurinder Singh, Vale director for shipping and distribution, told the TradeWinds Shipping China conference in Shanghai. "We are a user of shipping capacity. Shipping is not our core business. Mining and iron ore are. Vale is looking to charter its vessels for long-term periods at prices that reflect the cost of investment."

Vale has reportedly stopped hiring ships from China's leading shipping company COSCO in retaliation for the Chinese ban, but Singh denied the allegation. He said Chinese ship owners have actually been increasing their share of Vale's exports to China, from 19 percent in 2009 to 31 percent last year.

Vale is trying to create monopolies in iron ore and shipping with its VLOC strategy and is working against the interests of China's ports, steel and shipping industries, Zhang Shouguo, secretary-general of the China Shipowners' Association, said in remarks published on the trade group's website earlier this month.

Zhang also urged Vale to downgrade the capacity of its vessels to less than 350,000 deadweight tons.

Vale appears to be sticking with its mega ship plan as it continues to take delivery of the VLOCs - which go under the name Valemax - from shipbuilders in China and South Korea.

On Sunday, China's top private shipbuilder, Rongsheng Heavy Industries Group Holdings, delivered its third VLOC, the Vale Dalian, to the Brazilian company, and a day later, christened another two of the vessels for Oman Shipping Co, which will also be chartered to Vale.

Ban forced hub in Philippines

Chen Qiang, chief executive of Rongsheng, said bigger ships make great sense in terms of reducing carbon emissions and Vale's mega ship plan hasn't been affected by the ban. There were earlier reports that Vale had declined to take deliveries from Rongsheng to protest against the Chinese ban, but Rongsheng has denied this.

But the Chinese ban did force Vale to open up a trans-shipment hub in the Philippines in February to feed deliveries to China, its largest market. Vale plans to open a second such facility in Asia, possibly in South Korea, Claudio Alves, Vale's global marketing director, said on Monday in the Jiangsu Province port of Nantong, where he attended the christening of the two Valemaxes built for Oman Shipping.

Some shipping industry executives say Vale's mega-ship plan makes sense, but there might be better solutions.

"Personally I think it is a fair play for Vale in terms of price and carbon footprint," said Wang Chunlin, executive director of Hong Kong-based Pacific Basin Shipping. "But I doubt whether Vale could be competitive in today's dry bulk market, which is a fully competitive market and where freights are so low."

'Misallocation of resources'

He said there are not many examples where cargo interests are successfully transformed into ship owning interests. He cited the example of Sinotrans Shipping, noting that many joint ventures between the shipping firm and clients like Baosteel and Shenhua Group are actually in a "very difficult situation" today.

He said Vale should form more partnerships, otherwise the shipping foray could be a "misallocation of resources." Vale should consider signing contracts of "affreightment" and forming joint ventures with Chinese shipping firms, he added.

"If you want to have bacon, it's not necessary for you to raise pigs yourselves," he noted wryly.

Vale's Singh told the recent conference that ship owners are welcome to participate in the VLOC initiative, but if they choose not to, then the company will proceed on its own.

Opponents argue that Vale's entry into the shipping industry could worsen the sector's current overcapacity.

Singh said it's wrong to infer that Vale is responsible for overcapacity in the dry bulk market, pointing to "reckless ordering" in the industry as the main culprit for depressed rates.

The Valemax delivered on Sunday is of 380,000 deadweight tons, though VLOCs technically have a capacity of up to 400,000 tons. The lesser capacity is believed to be an effort by the company to ease concerns in the Chinese shipping industry and among government officials.

The first and only Valemax to dock on the Chinese mainland arrived in Dalian last December, triggering protests from Chinese ship owners that eventually led to the ban.

Vale, the world's largest iron ore exporter, is building a fleet of 35 so-called "very larger ore carriers" (VLOCs) to save on costs of shipping ore to China. The VLOC is the world's biggest dry bulk vessel, with a cargo capacity of up to 400,000 tons.

The Chinese Shipowners' Association has spurned Vale's initiative, citing the potential impact on loss-making domestic shipping companies and safety problems. Lobbied by the association, the Ministry of Transport issued a ruling in January that bans dry bulk ships of more than 350,000 deadweight tons from docking at Chinese ports.

The ban was a major setback for Vale, which insists its plan is all about fuel efficiency and its competitive edge with Australian miners BHP Billiton and Rio Tinto in supplying China with raw materials. Vale's ore has to travel three times the distance as ore from Australia.

Shipping not core business

Struggling to seek China's permission to allow its VLOCs to call at Chinese ports, Vale insists that the company has no interest in controlling the shipping business.

"Vale's strategy is not about owning vessels," Gurinder Singh, Vale director for shipping and distribution, told the TradeWinds Shipping China conference in Shanghai. "We are a user of shipping capacity. Shipping is not our core business. Mining and iron ore are. Vale is looking to charter its vessels for long-term periods at prices that reflect the cost of investment."

Vale has reportedly stopped hiring ships from China's leading shipping company COSCO in retaliation for the Chinese ban, but Singh denied the allegation. He said Chinese ship owners have actually been increasing their share of Vale's exports to China, from 19 percent in 2009 to 31 percent last year.

Vale is trying to create monopolies in iron ore and shipping with its VLOC strategy and is working against the interests of China's ports, steel and shipping industries, Zhang Shouguo, secretary-general of the China Shipowners' Association, said in remarks published on the trade group's website earlier this month.

Zhang also urged Vale to downgrade the capacity of its vessels to less than 350,000 deadweight tons.

Vale appears to be sticking with its mega ship plan as it continues to take delivery of the VLOCs - which go under the name Valemax - from shipbuilders in China and South Korea.

On Sunday, China's top private shipbuilder, Rongsheng Heavy Industries Group Holdings, delivered its third VLOC, the Vale Dalian, to the Brazilian company, and a day later, christened another two of the vessels for Oman Shipping Co, which will also be chartered to Vale.

Ban forced hub in Philippines

Chen Qiang, chief executive of Rongsheng, said bigger ships make great sense in terms of reducing carbon emissions and Vale's mega ship plan hasn't been affected by the ban. There were earlier reports that Vale had declined to take deliveries from Rongsheng to protest against the Chinese ban, but Rongsheng has denied this.

But the Chinese ban did force Vale to open up a trans-shipment hub in the Philippines in February to feed deliveries to China, its largest market. Vale plans to open a second such facility in Asia, possibly in South Korea, Claudio Alves, Vale's global marketing director, said on Monday in the Jiangsu Province port of Nantong, where he attended the christening of the two Valemaxes built for Oman Shipping.

Some shipping industry executives say Vale's mega-ship plan makes sense, but there might be better solutions.

"Personally I think it is a fair play for Vale in terms of price and carbon footprint," said Wang Chunlin, executive director of Hong Kong-based Pacific Basin Shipping. "But I doubt whether Vale could be competitive in today's dry bulk market, which is a fully competitive market and where freights are so low."

'Misallocation of resources'

He said there are not many examples where cargo interests are successfully transformed into ship owning interests. He cited the example of Sinotrans Shipping, noting that many joint ventures between the shipping firm and clients like Baosteel and Shenhua Group are actually in a "very difficult situation" today.

He said Vale should form more partnerships, otherwise the shipping foray could be a "misallocation of resources." Vale should consider signing contracts of "affreightment" and forming joint ventures with Chinese shipping firms, he added.

"If you want to have bacon, it's not necessary for you to raise pigs yourselves," he noted wryly.

Vale's Singh told the recent conference that ship owners are welcome to participate in the VLOC initiative, but if they choose not to, then the company will proceed on its own.

Opponents argue that Vale's entry into the shipping industry could worsen the sector's current overcapacity.

Singh said it's wrong to infer that Vale is responsible for overcapacity in the dry bulk market, pointing to "reckless ordering" in the industry as the main culprit for depressed rates.

The Valemax delivered on Sunday is of 380,000 deadweight tons, though VLOCs technically have a capacity of up to 400,000 tons. The lesser capacity is believed to be an effort by the company to ease concerns in the Chinese shipping industry and among government officials.

The first and only Valemax to dock on the Chinese mainland arrived in Dalian last December, triggering protests from Chinese ship owners that eventually led to the ban.

An overall slack momentum will prevail in the country's property market with home prices extending a downward trend through the rest of the year, but no significant drops are likely, the annual paper forecast.

A wait-and-see sentiment among real estate developers is expected to dominate the market as the majority of the builders still feel unwilling to offer price cuts mainly due to their high property development costs, or expensive prices paid for the land in particular. A cautious attitude will remain the mainstream in the market until clearer signs on the economy as well as government policies show up, the paper said.

Purchases of new homes, excluding government-funded affordable housing, will remain flat. Affordable housing, meanwhile, will be released at an accelerated pace, a result of extensive construction conducted around the country over the past few years.

The overall profit-making capability by the real estate industry will continue to fall this year with small and medium-sized players more prone to bigger losses and higher risks of bankruptcies, the academy said.

The Shanghai Composite Index fell 0.53 percent to 2,350.97 points.

The HSBC flash PMI shed to 48.7 in May against a final reading of 49.3 for April. If the preliminary reading is confirmed on June 1, it will be the seventh consecutive month that the index fell below 50. A reading under 50 signals a contraction in production activities.

Li Xunlei, chief economist at Haitong Securities, said: "The data showed the economy continued to decline. The central bank may lower reserve requirement ratios as soon as in June, and reduce the interest rates after July."

During his recent visit to Jiangsu Province, Vice Premier Li Keqiang said that if the economic data showed a deterioration in May, "it's possible the central bank will lower the interest rates."

PetroChina Co, the nation's biggest oil firm, fell 0.5 percent to 9.51 yuan (US$1.50). Aluminum Corp of China Ltd, the listed unit of the nation's biggest maker of the metal, shed 0.4 percent to 6.78 yuan.

Haitong Securities dropped 1.8 percent to 10.18 yuan, China Merchants Securities lost 1.5 percent to 13.11 yuan and Sinolink Securities fell 2.7 percent to 14.94 yuan.

Poly Real Estate Group Co, China's second-biggest listed developer, lost 1.2 percent to finish at 13.45 yuan.

Also left unresolved was what Europe should do to spark economic growth and restore the confidence of investors, who have driven some countries' borrowing costs to unsustainable levels. The fiscal austerity agenda that Germany has promoted as the solution to Europe's problem of too much government debt has been met with rising skepticism in other euro countries.

The leaders of the 27 EU countries agreed to give institutions such as the European Investment Bank the task of drawing up proposals for growth in time for another summit in June. But there was discord over more aggressive actions promoted by some leaders heading into the summit, such as issuing bonds jointly as a way of reducing borrowing costs for heavily indebted nations among the 17 countries that use the euro.

The perception that European leaders lack the political will to tackle the continent's financial and economic problems has left markets on edge for weeks. Recession is spreading. Banks are under pressure. The biggest fear is that if Greece cannot be saved, other larger economies - like Spain or Portugal - might face the same fate.

The euro countries "have to consider all kinds of events," Luxembourg Prime Minister Jean-Claude Juncker said after the EU summit, but insisted that "the working assumption" was that Greece would remain part of the euro. Leaders gathered in Brussels recognized that Greece had endured significant hardships and promised to release funds to spur growth.

But the statement from Juncker, who also chairs meetings of eurozone finance ministers, was a frank admission that Greece could wind up abandoning the euro. The country's fringe political parties, which are threatening to renege on commitments made to secure bailout loans, saw their popularity surge in recent elections. No party has been able to form a government, and the country will vote again on June 17.

Many analysts have said that Greece, already in its fifth year of recession, has no hope of recovery if it sticks to the spending cuts and tax hikes it agreed to in order to secure bailout loans.

"We want Greece to remain in the euro area," German Chancellor Angela Merkel said after the meeting.

"This will allow us to deal with market challenges in a more flexible manner and better serve consumers' needs," said Wu Xiaoguang, chief executive of Tencent E-commerce Holding Co.

The investment followed Tencent's restructuring into six business groups last week to better adapt to market situation and focus on key sectors such as mobile Internet and social networking.

The newly set-up e-commerce unit runs Tencent's business-to-consumer and consumer-to-consumer sites.

Tencent has been trying to encourage its over 750 million instant chatting tool QQ users to use other web services such as online video and social networking.

Tencent's online business started in 2006 but is lagging behind market leader Taobao. Its B2C site is the fourth largest with a 2.3 percent market share, said Analysys International.

The Ifo index survey of business executives fell to 106.9 points in May from 109.9 points in April, the largest fall since last August. The decline was also steeper than analysts had been predicting.

The drop came even though Germany's own economy is doing relatively well. It grew by 0.5 percent in the first quarter from the previous three-month period. In contrast, seven euro countries are in recession, including Italy and Spain, while France posted flat growth.

However Ifo president Hans-Werner Sinn said the drop in his agency's headline index indicates that "the German economy is being influenced recently by the growing uncertainty in the eurozone."

The businesses' assessments of their current situation and hopes for the coming months both fell. The current assessment component fell to 113.3 points, its lowest level since July 2010, while the expectations component fell to 100.9 points.

The involvement of CIC, China's giant sovereign wealth fund which manages around US$410 billion in assets, underlines the significance of the deal Alibaba has struck with Yahoo, which returns voting control back to founder Jack Ma.

It also emphasizes the potential value of the company. Bankers said Alibaba Group could have a value of about US$100 billion over the next 3 to 4 years, and incentives in the deal encourage Alibaba to list by 2015. That IPO is attracting investors to the company.

Yahoo and Alibaba struck a deal last week whereby the Chinese company agreed to buy back up to half of the 40 percent stake in itself held by Yahoo for US$7.1 billion, valuing Alibaba at US$35 billion.

Alibaba is raising US$4.6 billion of that target via an issue of preferred shares, bank loans and the sale of a stake to existing shareholders - Singapore state investor Temasek Holdings Pvt Ltd and DST Global. Another US$2.5 billion in cash would allow Alibaba to fund the full US$7.1 billion purchase.

Sources with direct knowledge of the matter said CIC's US$2 billion purchase of the Alibaba stake would help the e-commerce firm complete its funding for the Yahoo buy.

Alibaba is also in talks with private equity firms that would help in funding the remaining US$500 million, sources said.

A slack momentum will prevail in the country's property market with home prices extending a downward trend in general through the rest of the year but no significant falls are likely, the annual paper forecast.

A wait-and-see sentiment among real estate developers is expected to dominate the market as the majority of the builders still feel unwilling to offer price cuts mainly due to their high property development costs, or high prices paid for the land in particular.

A cautious attitude will remain the mainstream in the market until clearer signs on the economy and government policies show up, the paper said.

In terms of property sales, purchases of new homes, excluding government-funded affordable housing, will remain flat as industry wide correction continues. Affordable housing, meanwhile, will be released at an accelerated pace, a result from extensive construction conducted around the country over the past few years, the paper said.

The benchmark Shanghai Composite Index lost 0.31 percent, or 7.39 points, to 2,356.05. Turnover stood at 42.5 billion yuan (US$6.7 billion) in the morning session.

The country needs to introduce proactive fiscal policies to expand demand and create a favorable environment for maintaining steady and relatively fast economic growth, the government said on its website last night.

The government's second pledge in four days spurred speculation that more stimulus measures are on the way. Premier Wen Jiabao said over the weekend that the government would give priority to economic growth.

Railway related stocks surged on the government's intention to accelerate construction of railways, as well as environmental protection and infrastructure projects.

Taiyuan Heavy Industry Co, a producer of railway parts, gained 5.1 percent to 6.23 yuan. China Railway Erju Co rose 4.7 percent to 6.71 yuan.

Cement producers also advanced on the news. Anhui Conch Cement Co, the country's biggest cement producer, rose 1.1 percent to 16.87 yuan. Ningxia Building Materials climbed 4.7 percent to 11.80 yuan.

Benchmark US crude fell by US$1.95 to end at US$89.90 per barrel. Oil has tumbled more than 15 percent this month and is at its lowest level since Oct. 21.

Brent crude, meanwhile, dropped to a new low for the year but remained above US$100 a barrel. It lost US$2.85 to end at US$105.56 per barrel in London.

Other commodities such as copper and cotton fell sharply as well in US trading.

Analysts say oil is in an extended slump that should lead to cheaper gasoline and other petroleum-based fuels this summer.

Concern about the strength of the global economy contributed to yesterday's decline. Europe's leaders gathered in Brussels amid questions on their willingness to take the steps necessary to spur economic growth. Some economists have warned of a "severe recession" in the 17 nations that use the euro currency. Elsewhere, China says its economy is cooling down, while the pace of growth has tailed off in the US after hitting 3 percent in the last three months of 2011.

The latest report on US crude supplies also depressed oil prices yesterday. The government said US supplies grew last week by 900,000 barrels to 382.5 million barrels, the highest level since 1990. Analysts expected supplies to grow by 750,000 barrels. The price of oil and other commodities tend to fall as more supplies become available.

Gasoline already has dropped by nearly 26 cents per gallon since early April. The US average is now US$3.68 per gallon; some experts say it could fall as low as US$3.50 by Independence Day. The average price of diesel fuel is below US$4 for the first time since February. It's good news for an economy that has slowed down since last year's fourth quarter.

In other futures trading, heating oil fell by 4.9 cents to end at US$2.812 per gallon while wholesale gasoline lost 6.5 cents to finish at US$2.872 per gallon. Natural gas added 3 cents to finish at US$2.737 per 1,000 cubic feet.

The Dow was down as much as 191 points earlier as the threat of a financial crisis spreading from Europe shook markets. The euro dropped to a nearly two-year low against the dollar, and oil prices sank to their lowest this year.

A late surge of buying erased nearly all of the Dow's deficit, leaving it down just 6.66 points at 12,496.15 by the end of the day. Other indexes ended slightly higher.

The Standard & Poor's 500 index rose 2.23 points to 1,318.86. The Nasdaq rose 11.04 points to 2,850.12.

In the last hour of trading, news crossed that the leaders of France and Italy favored using region-wide bonds to support Europe's economy. That gave traders hope that a summit of European leaders might produce concrete steps to tackle the economic morass there. The Organization for Economic Cooperation and Development warned Tuesday that the 17 countries that use the euro risk falling into a "severe recession."

Analysts and investors have turned increasingly skeptical this month that European leaders will prevent Greece from dropping the euro or agree on ways to jump-start the region's economy. The Dow has lost 5 percent this month, nearly wiping away its gains for the year. It has risen only three days in May.

Plenty of good ideas to buttress Europe's financial system have been floated in recent weeks, said Paul Zemsky, global head of asset allocation at ING Investment Management. Eurobonds could be sold by countries in the currency union to raise money for bailouts and banks. Some have proposed insuring bank deposits across countries that use the euro, a program modeled on the U.S. Federal Deposit Insurance Corp.

"There are all these great ideas," Zemsky said. "But there's nothing yet. There's a lot of talk and no follow through."

Benchmark stock indexes dropped more than 2 percent in Germany and France and 3 percent in Spain and Italy.

The euro continued to fall against the dollar, reaching US$1.25, the lowest since July 2010.

The dollar rose and yields on US government debt fell as traders shifted money into the protection of Treasurys. The yield on the 10-year note sank to 1.73 percent, close to a record low, from 1.77 percent late Tuesday.

The dollar and Treasurys often trade in tandem when anxiety hits markets. Traders from around the world sell foreign assets and then need to buy dollars before buying dollar-denominated US Treasurys.