Copper Trader Sentenced to Seven Years
The trader for China's State Reserve Bureau (SRB) whose practice caused the state a loss of US＄ 606 million was sentenced to seven years in prison last month. Liu Qibing, the once-famous rogue trader disappeared mysteriously in 2005, leaving massive short positions in copper on the London Metal Exchange.
The state regulation forbids futures speculation for reserve goods. Liu still forged fake documents to maneuver state copper funds and bet, wrongly, that copper price would fall. His illegal trading lasted six years, while the supervisor was long aware but kept the lid on it. With losses amounting, Liu vanished in August 2005. The shocked SRB soon formed a task force to close the hole. By auctioning reserve copper, spot trading and extending futures contracts, the team reduced Liu's loss down to 920 million yuan.

Caijing learned that the police found Liu at his home in Yunan in 2006. A Beijing court pronounced his jail term in March 2008, and his supervisor received six years for abuse of power. Both had appealed.
 
China's SAFE Extends Reach By Buying BP Stake
Caijing learned that the State Administration of Foreign Exchange, or SAFE, bought 1 percent of British Petroleum for about US＄ 2 billion through its Hong Kong-registered subsidiary SAFE Investment, a firm set up in the 1990s. Earlier in April, SAFE paid about US＄ 2.84 billion for a 1.6 percent stake in the French oil company Total. Reluctant to reveal SAFE's portfolio, officials initially denied the Total deal.

About 26 percent of SAFE's capital, or US＄ 405 billion, is in U.S. Treasury bonds. Another US＄ 280 billion has been spent on institutional bonds, and US＄ 65 billion on corporate bonds. As of April 1, China's foreign reserves climbed to US＄ 1.68 trillion, while the yuan-to-dollar exchange rate fell below 7-1.
 
China's Forest Industry Integration Hits a Knot
Paper products manufacturer APP China has been locked in disputes with villagers over forest property rights. The clashes reflect flaws in China's ongoing effort to manage forests and clarify forest property ownership. The government had considered the company a bellwether for pushing forward plans to integrate the paper industry launched in 2001. But business prospects for APP China are not promising.

To better meet the demand for wood products, as well as protect forests, the government launched industry integration reform by encouraging companies to vertically integrate, handling tasks from forest management to papermaking. However, the reform process fell short of expectations. Scholars are now calling for a comprehensive environmental assessment of China's forests to help the government make a scientific plan for the industry before further promoting reform.
 
FMG Slips from China's Hand
Five-year-old Australian iron ore supplier Fortescue Metals Group completed infrastructure construction in April and was expected to ship its first load to China's top steelmaker Baosteel in May. FMG has signed long-term contracts with 35 Chinese steelmakers and plans to sell 95 percent of its output to China.

Thanks to China's demand for iron, FMG's share value has risen 300 times in its short history. But the Chinese government missed opportunities to buy FMG stakes. A private Chinese steelmaker bought 7 million shares in 2004. But the next year, three state-owned companies rejected an infrastructure agreement because they sought a controlling stake in the fledgling mining company. Capital-hungry FMG invited Chinese investment again in 2006 but refused to sell a majority stake.
 
Ten Years Aged!
Caijing Magazine is celebrating its 10th birthday on April 18th.
From our very first story on a real estate company that lied about profits, Caijing has been tracking China's key economic and social changes. We never forget that economic reform is touching everybody's lives and we want to keep you informed of how. Our coverage of the SARS epidemic in the spring of 2003 lifted the deadly silence and warned the public. This is an example of how we're working for you. From the evolution of equity markets to the struggle for rule of law, Caijing has plenty to write on and will maintain the independent and quality reporting.

Hey, we hope you're as happy as we are!