China Watch Blog

China Watch Blog has learnt that Stuxnet, a computer virus designed to attack servers isolated from the Internet, such as at power plants, has been confirmed on 63 personal computers in Japan since July, according to major security firm Symantec Corp.

The virus does not cause any damage online, but once it enters an industrial system, it can send a certain program out of control, Japan Times reported, citing Symantec which said that the virus reaches the servers via USB memory sticks, and warns against the careless use of such devices.

Systems at power plants, gas stations and water facilities are not connected to the Internet to protect them from cyber-attacks.

A Symantec engineer who has analyzed the virus said it was made using advanced technology, and it is highly likely a well-funded organization, not an individual, produced it. The virus has spread throughout the globe via the Internet.

After Stuxnet finds its way onto an ordinary computer via the Internet, it hides there, waiting for a USB memory stick to be connected to the computer, when it transfers itself to the memory stick. When the USB device is then connected to a computer linked to an isolated server, it can enter the system and take control of it.

As computers that harbor Stuxnet do not operate strangely, the virus can be transferred to a memory stick inadvertently.

According to the security company, the virus is designed to target a German-made program often used in systems managing water, gas and oil pipelines. The program is used at public utilities around the world, including in Japan.

The virus could cause such systems to act erratically, and it could take months to restore them to normal. The 63 infected computers found in Japan were likely infected sometime after June.

China Watch Blog has learnt that Mainland China will be able to exert greater influence in international affairs if more countries adopt the yuan as a reserve currency, the head of the Hong Kong bourse said.

“China is becoming the world’s second-largest economy, and in order for it to play that role, the currency needs to be a reserve currency,” said Charles Li, chief executive of Hong Kong Exchanges and Clearing Ltd.

Speaking at a meeting of the Foreign Correspondents Club in Hong Kong, Li said China does not have “proportional” say and influence in international economics and finance, largely due to its currency’s lack of international standing.

“If the mainland China’s trading partners accept the yuan as a settlement currency, it will expand China’s influence in international trade, and increase the autonomy and flexibility of the yuan policy,” he said.

China, whose economic size has surpassed that of Japan this year, has been seeking to reduce its reliance on the U.S. dollar and promote the yuan as a global currency.

As part of such a scheme, the Chinese central bank started to allow exporters and importers in 20 cities and provinces across China to settle cross-border trade deals in its currency.

To further boost the use of yuan, the China authorities said it will allow overseas financial institutions to invest in the country’s interbank bond market on a trial basis.

Li was confident that Hong Kong has a competitive edge over other Chinese cities to become a hub for trading the yuan, making it the ideal place for the Chinese government to start expanding the use of the Chinese currency.

“Hong Kong has been serving as the mainland’s gateway of trade for decades and it is already a leading international financial center,” he said.

“Thus, it provides China’s trading partners the political, economic and legal infrastructure and credibility to experiment with the use of the yuan offshore.”

The chief executive of HKEx expected that the yuan will steadily undergo three stages of adjustment before getting fully accepted internationally — becoming a currency of trade in 5 to 10 years, a currency of investment after 10 years and ultimately a reserve currency in 20 or more years.

China Watch Blog has learnt that the Asian Development Bank (ADB) has turned down its forecast on China’s inflation rate to 3.2 percent from the 3.6 percent forecasted in April.

According to a Shanghai Securities News report, the bank insists its forecast on China’s economic growth is right, saying China’s GDP would grow 9.6 percent year-on-year in 2010, and 9.1 percent year-on-year in 2011, the paper said.

China’s GDP growth rate would be around nine percent year-on-year in the third quarter of this year, and that in the fourth quarter would fall to eight percent, ADB said in the Asian Development Outlook (ADO) 2010.

ADB warned China’s economy may be confronted with slight difficulties next year, and the country is facing risks such as a sluggish overseas demand, the EU debt crisis, and the falling euro.

In the long run, sustainability in China’s economic growth would be affected if it does not change its economic structure soon, said Jong-Wha Lee, ADB’s chief Economist.

China Watch Blog has learnt that on September 29, 2010, Practice Day at The Celtic Manor Resort in Newport, Wales, Emirates Airlines cabin crew members Claire Connell and Cashmere, Washington native Naila Morneau were given a warm welcome from Royal Highness, the Prince of Wales, when he attended the Emirates Ryder Cup Challenge – where fans took a “virtual” crack at some of the most challenging holes of the course at The Celtic Manor Resort.

During his visit to the event’s Practice Day, Prince Charles also met the America and Europe Team Captains, Corey Pavin and Colin Montgomerie, who is an Official Emirates’ Ambassador. Emirates is the Official Airline and 2010 Ryder Cup Partner, which completed competition yesterday, October 3.