SE Asia nations open charter talks

Workers set up a billboard on the eve of the start of the ASEAN Regional Forum
©AFP - Sam Yeh

MANILA (AFP) - Southeast Asian nations opened talks here Monday to thrash out the details of their first-ever charter, trying to smooth out deep differences that remain despite nearly two years of work so far.

With time running out before the 10-nation ASEAN bloc adopts the charter in November, as it looks to aim for full economic integration by 2015, foreign ministers began their annual meeting in Manila looking to finalise the document.

The 40-year-old Association of Southeast Asian Nations (ASEAN) is hoping to transform itself into a rules-based organisation roughly along the lines of the European Union, with norms that all countries adhere to.

The bloc formally committed to the charter at a summit in the Philippines earlier this year, and Philippine President Gloria Arroyo urged fellow members to strike a deal and make the charter a reality.

"Our collective desire to bring social justice, economic opportunity and integrated security to the region is our common ground," she told ASEAN foreign ministers to begin the meeting in the Philippine capital Monday.

"There are no short cuts or quick fixes," she said. "I commend to you the important task of following through on the commitments that we have made."

Graphic showing the ASEAN members.
©AFP/Graphic

But the group has been unable to agree on sanctions to punish member states who do not follow the rules, while opposition from Myanmar has scuppered a proposal for a regional human rights commission.

Member states have also battled over whether to abandon their policy of operating on consensus in favour of taking decisions by vote -- a move which would also amount to forcing individual countries to abide by group rules.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Volatility sweeps global markets

There are concerns that the drop in share prices could be severe

US stock markets have dropped sharply, extending a global share sell-off amid fears about the effect of higher interest rates on the world economy.

There are concerns that higher rates will hit corporate profits and takeover deals, and dent consumer spending.

European markets were also jittery, with London's share index closing down for a fourth day and ending at its lowest level since the middle of March.

Analysts have warned that markets could remain volatile for a number of weeks.

"I think you've got bargain hunters out there for sure and I think you've got some people who are still scared," said Randy Frederic of Charles Schwab & Co.

"We're seeing the convergence of a whole host of sort of unrelated or only slightly related issues," he explained.

Share fall

By the close of trading in New York, the Dow Jones Industrial Average of leading shares was 208.1 points, or 1.5%, lower at 13,265.47.

Since Monday the index has lost 4.2%, its worst weekly decline in almost five years.

The wider measure of the US stock market, the S&P 500, ended down 1.6%, while the Nasdaq index, which largely tracks technology stocks, was 1.4% lower.

The stock market as a whole may be set for some dismal days Robert Peston BBC Business Editor

Earlier, the FTSE 100 index of leading shares on the London market had closed 36 points, or 0.6%, lower at 6215.20. France's Cac-40 index of leading shares and Germany's Dax also declined.

In Asia, the Wall Street slump on Thursday led to Japan's Nikkei closing down 418.28 points, or 2.4%, at 17,283.81, while Hong Kong's index ended 2.7% lower.

Credit crunch

The main underlying problem is that many investors are worried about an impending credit crunch.

In past years, financial markets, companies and consumers have all benefited from low interest rates and easy access to money, helping fuel a boom in spending, house price inflation and corporate takeovers.

When there's uncertainty about financing, then private equity is not so quick to make deals Elliot Spar of Ryan Beck & Co Q&A: World stock market falls

Now, interest rates are rising and set to stay higher as central banks try to rein in inflation.

A large part of the rise in share prices in the past year has been driven by the takeover boom, with private equity bidders pushing up the value of the firms they are targeting.

Most of these deals are paid for with borrowed money and the banks who have loaned this cash have been laying off a large proportion of the loans by selling them to other investors.

However because investors are bruised by their losses in the US sub-prime mortgage market, they are now less keen now on buying the risky loans from the banks, taking away the credit needed for takeovers and prompting share prices to fall.

"When there's uncertainty about financing, then private equity is not so quick to make deals," said Elliot Spar of Ryan Beck & Co.

Fred Dickson of D.A Davidson & Co said that: "We've had this massive change in investor expectations in terms of new deal flow."

"The lifeguards have shouted, and investors are now starting to heed their warnings and head back to shore."

Downhill track

At the same time, oil prices have climbed, raising fears that inflation could also pick up again because of higher energy costs.

US markets bounced back slightly on Friday after figures showed that the US economy had grown more quickly in three months to June than analysts had first thought.

US Commerce department data showed that, on an annual basis, the US economy grew by a robust 3.4% in the second quarter of 2007.

However, the respite was short-lived as analysts fretted that the figures may increase the chances of further interest rate rises in the US.

Japan's PM vows to stay despite crushing defeat

Shinzo Abe
©AFP - Kazuhiro Nogi

TOKYO (AFP) - Japanese Prime Minister Shinzo Abe's government suffered a crushing election defeat Sunday but he vowed to stay in power and press ahead with his conservative agenda.

The election result raised fears of policy gridlock in the world's second largest economy, with the upper house of parliament set to be controlled by a left-of-centre opposition.

Exit polls said that Abe's Liberal Democratic Party, which has ruled Japan almost continuously since 1955, was set to suffer one of the worst drubbings in its history, meaning a rocky road ahead for the hawkish premier's agenda.

Abe assumed power last year on a mission to build a nation prouder of its past, but he has come under fire over a raft of scandals including a government agency's mismanagement of the pension system.

"When I became prime minister, I promised that I would continue reforms to build a new nation. So it is my responsibility to keep that promise," a sullen-looking Abe said in a television interview.

Some Japanese newspapers on Monday called for Abe to step down. Two left-leaning papers said Abe had to resign, while other dailies called on him to take other action such as reshuffling his scandal-plagued cabinet.

"Looking at this historic defeat, the answer by voters is clear," said the influential Asahi Shimbun, which has often sparred with Abe.

"The government failed to pass the test of credibility. This is a severe verdict worth the resignation of Prime Minister Abe," the liberal daily wrote in a frontpage column.

A man with his family casts a vote at a polling station in Tokyo.
©AFP - Yoshikazu Tsuno

Surveys and media attributed the loss to the appearance that he neglected bread-and-butter issues, particularly after the pension agency acknowledged mismanaging millions of payments.

"People said 'no' to Abe's agenda which is focused on ideology and not on their everyday lives," the Mainichi Shimbun said.

"The prime minister's responsibility is all too obvious. For him to stay in power does not reflect the people's will."

Abe said he would press ahead with his signature policy goals, including rewriting the US-imposed pacifist constitution, and would likely reshuffle his scandal-plagued cabinet.

"I still believe that many people showed understanding for the government's basic policies," Abe said. "But there was also a lot of criticism on how the party handled things, so we have to accept that humbly."

As of midnight (1500 GMT), Abe's Liberal Democratic Party and coalition partner New Komeito held 40 seats of the 76 they were defending, with 12 undecided, according to public broadcaster NHK's projections. They needed to hold 64 to preserve their majority.

Previous prime ministers have resigned following upper house defeats that were less severe.

Analysts said that while the Liberal Democrats were worried that they did not have anyone better than Abe, it would be impossible for him to govern effectively.

"Abe is finished," said Gerald Curtis, a Japan expert at New York's Columbia University. "I think if he's smart, he'll quit tonight."

The longer he stays, "it will just be more and more chaotic politically," Curtis said.

People listen to an election campaign speech by Shinzo Abe in Tokyo
©AFP - Kazuhiro Nogi

If Abe were to leave, it could stir memories of the revolving door politics of the 1990s, when Japan had a new prime minister nearly every year.

Foreign Minister Taro Aso has made it an open secret that he would like to succeed Abe, but critics say he shares much of the same agenda and is prone to gaffes.

Aso and other cabinet members quickly offered support for Abe. Hidenao Nakagawa, number two in the ruling party after Abe, suggested he would resign.

It would mark the first time that the main opposition Democratic Party -- formed in 1998 as an unwieldy alliance between Liberal Democrat dissidents and former socialists -- has been the largest party in one house.

But the opposition's chief Ichiro Ozawa, known as a strong-willed strategist, was not out to celebrate the victory. His party said the 65-year-old, who has a history of health problems, was suffering fatigue and would rest for a day or two.

"We realised how strong people's dissatisfaction has been," said Yukio Hatoyama, secretary general of the Democratic Party. "People have high expectations for us."

The opposition has seized on Abe's woes to try to win over traditional supporters of the Liberal Democrats, such as rural voters who feel left behind by free-market reforms.

But Abe's coalition can override any measure passed by the opposition-led upper house as it enjoys an overwhelming majority in the lower house inherited from Abe's popular predecessor Junichiro Koizumi.

Abe initially enjoyed much of the glow of Koizumi after he succeeded the veteran leader in September, but his approval ratings have since taken a nosedive.

Two ministers have quit and another committed suicide after allegations of financial wrongdoing, fuelling perceptions the young premier lacks authority.

Abe was also forced to revamp his campaign to pledge to fix the pension system after a government agency admitted it had bungled millions of payment records.

"I said 'no' to the Liberal Democratic Party. I said 'no' to Abe," Keiko Yutani, a 60-year-old language teacher, said as she cast her ballot near Tokyo's giant Tsukiji fish market.

"I'm extremely angry at Abe's cabinet," Yutani said. "I can't leave my pension funds to them."

Izuru Makihara, a professor of politics at Tohoku University, said Abe had stumbled by trying to address emotionally charged history-related issues close to his heart alongside bread-and-butter issues.

The end result was "a failure to convey a clear message to voters," he said.

Fears of fresh stock market falls

It could be another tough week on global stock markets

It is feared that Asian and European shares could fall further on Monday after New York's Dow Jones Industrial Average fell 208 points on Friday.

The Dow had its biggest weekly fall since March 2003 after banks involved in big buyouts failed to find buyers for $20bn (£9.8bn) worth of debt.

That made investors wonder whether the current acquisition-fuelled rally could be coming to an end.

There have also been more indications of problems in the US housing market.

Last Tuesday, the biggest US mortgage lender Countrywide Financial, reported a fall in quarterly results.

On Monday, HSBC will report its results, which are also expected to have been hit by the rising level of defaults in the sub-prime mortgage market.

The stock market as a whole may be set for some dismal days Robert Peston BBC Business Editor

Sub-prime mortgages are loans to house buyers with inferior credit records.

Along with the problems in the US housing market, the main problem is that many investors are worried about an impending credit crunch.

In past years, financial markets, companies and consumers have all benefited from low interest rates and easy access to money, helping fuel a boom in spending, house price inflation and corporate takeovers.

Now, interest rates are rising and set to stay higher as central banks try to rein in inflation.

A large part of the rise in share prices in the past year has been driven by the takeover boom, with private equity bidders pushing up the value of the firms they are targeting.

Interest rates

Most of these deals are paid for with borrowed money and the banks who have loaned this cash have been laying off a large proportion of the loans by selling them to other investors.

However, because investors are bruised by their losses in the US sub-prime mortgage market, they are now less keen on buying the loans from the banks, taking away the credit needed for takeovers and prompting share prices to fall.

According to the Sunday Times, bankers in America have taken on $200bn (£98.5bn) that they have not yet passed onto other investors, while in Europe the figure is about £40bn.

People worried about a credit crunch and the end of cheap money for acquisitions will at least be encouraged that the Bank of England and the European Central Bank are both expected to keep interest rates unchanged at their monthly meetings on Thursday.

Brown in US for first meeting with Bush

George W. Bush (R) and Gordon Brown (L)
©AFP - Saul Loeb

CAMP DAVID, United States (AFP) - US President George W. Bush greeted Britain's new Prime Minister, Gordon Brown, at his retreat Sunday for their first official meeting with Iraq, Darfur and stalled global trade talks expected to top the agenda.

Brown, who succeeded Tony Blair on June 27, landed earlier outside Washington and headed straight to Bush's Camp David, Maryland retreat for a private dinner.

Before arriving, Brown again moved to quash speculation that he was to distance London from Washington because of lingering resentment over Iraq.

Describing himself as an "Atlanticist" and a "great admirer of the American spirit of enterprise and national purpose," Brown said he wanted "to do more to strengthen even further our relationship with the US."

"It is firmly in the British national interest that we have a strong relationship with the United States, our single most important bilateral relationship," he said in a statement.

George W. Bush (R) and Gordon Brown (C)
©AFP - Saul Loeb

Brown said he intended to "affirm the historic partnership of shared purpose that unites our two countries."

His spokesman, Michael Ellam, said Darfur and the stalled World Trade Organization (WTO) talks would top the Brown-Bush agenda.

But he said Iraq, which controversially united Bush and Blair in launching military action in 2003, would still be on the table when the pair hold talks at Camp David on Sunday and Monday.

Ellam earlier rejected a report in The Sunday Times newspaper that Brown's foreign policy adviser, Simon McDonald, had sounded out the White House about a possible withdrawal of Britain's 5,500-strong force from southern Iraq.

"Simon McDonald made it clear at the meeting (with US advisers) that the British government's position has not changed," he said. Brown has ruled out any withdrawal until the security conditions are right.

George W. Bush (R) and Gordon Brown (L)
©AFP - Saul Loeb

On the WTO talks, Ellam said Brown wants world leaders to remain "fully engaged" on liberalizing trade and had talked with the leaders of Brazil, China, India and South Africa recently, urging them to give it "top priority."

Talks are in deadlock but chief negotiators have said they intend to raise the pressure for a compromise deal in September on removing trade barriers.

"We're actually quite close, in principle, to a deal," said Ellam.

On Darfur, which Brown last week described as "one of the great humanitarian disasters of our generation," the prime minister is keen to work with Bush to urge more action.

Official sources from London said Brown was coming with a five-point plan for the war-torn Sudanese region already agreed last week with French President Nicolas Sarkozy.

The points include support for a UN resolution for a hybrid UN-African Union force going into Darfur as soon as possible, an immediate ceasefire to reenergize the peace process, and a economic aid package for the region's short-term recovery.

George W. Bush (R) and Gordon Brown
©AFP - Saul Loeb

London sources said Brown had also discussed the plan with the leaders of Germany, South Africa and China, as well as Bush.

Brown is also supportive of Bush's recent move to impose unilateral restrictions on Sudan.

But his visit, just over a month since taking office, is being keenly watched for any signs of divergence from the close relationship between Bush and Blair.

Brown said Sunday the two countries' shared history, values and ideals "bind" them together -- and were ideal for facing modern challenges such as nuclear proliferation, poverty, climate change and global extremism.

"In this century, it has fallen to America to take center stage," he said.

"America has shown by the resilience and bravery of its people from (the attacks of) September 11 (2001) that while buildings can be destroyed, values are indestructible.

"And we should acknowledge the debt the world owes to the United States for its leadership in this fight against international terrorism."

Third of Iraqis 'need urgent aid'

Oxfam say basic services cannot meet the needs of the Iraqi people

Nearly a third of the population of Iraq is in need of immediate emergency aid, according to a new report from Oxfam and a coalition of Iraqi NGOs.

The report said the Iraqi government was failing to provide basic essentials such as water, sanitation, food, and shelter to up to eight million people.

It warned the continuing violence was masking a humanitarian crisis that had grown worse since the invasion in 2003.

It also found that four million Iraqis had been uprooted by the violence.

More than two million people have been displaced inside the country, while a further two million have fled to neighbouring countries, according to the report.

On Thursday, an international conference in Jordan pledged to help the refugees with their difficulties.

'Dire poverty'

The BBC's Nicholas Witchell in Baghdad says the report by the UK-based charity and the NGO Co-ordination Committee in Iraq (NCCI) makes alarming reading.

The survey recognises that armed conflict is the greatest problem facing Iraqis, but finds a population "increasingly threatened by disease and malnutrition".

It suggests that 70% of Iraq's 26.5m population are without adequate water supplies, compared to 50% percent prior to the invasion. Only 20% have access to effective sanitation.

Nearly 30% of children are malnourished, a sharp increase on the situation four years ago. Some 15% of Iraqis regularly cannot afford to eat.

The report also said 92% of Iraq's children suffered from learning problems.

Millions of Iraqis have been forced to flee the violence, either to another part of Iraq or abroad - many of those are living in dire poverty Jeremy Hobbs Director of Oxfam International

"Basic services, ruined by years of war and sanctions, cannot meet the needs of the Iraqi people," the director of Oxfam International, Jeremy Hobbs, said.

"Millions of Iraqis have been forced to flee the violence, either to another part of Iraq or abroad. Many of those are living in dire poverty."

Mr Hobbs said that despite the violence, the Iraqi government and the international community could do more to meet people's needs.

"The Iraqi government must commit to helping Iraq's poorest citizens, including the internally displaced, by extending food parcel distribution and cash payments to the vulnerable," he said.

"Western donors must work through Iraqi and international aid organisations and develop more flexible systems to ensure these organisations operate effectively and efficiently."

Oxfam has not operated in Iraq since 2003 for security reasons.

Green data withheld `to protect economy'

China has stopped the public release of an official study putting a cost to the nation's environmental damage, a government researcher said, blaming official reluctance to confront pollution.

The Beijing News reported yesterday that the release of a "green GDP" report computing the cost of pollution and ecological degradation in 2005 had been "indefinitely postponed."

Wang Jinnan, a senior expert at the Chinese Academy for Environmental Planning who was technical head of the project, said publicly spelling out the cost of bad air, water and soil had drawn fierce opposition from local officials eager to maintain growth.

"Taking out the costs of environmental damage would lead to a huge fall in the quality of economic growth in some areas," Wang said. "At present many areas still place GDP above all else, and when such thinking dominates, the size of resistance to a green GDP can well be imagined."

Wang said some provincial governments had lobbied the State Environmental Protection Administration and the National Bureau of Statistics not to publicly release the latest data.

A previous report for 2004 had calculated that environmental degradation that year cost 511.8 billion yuan (HK$528.7 billion) or 3.05 percent of gross domestic product - a figure one SEPA official said at the time was "shocking."

That earlier report was issued in September last year with official fanfare and wide domestic media attention.

The report for 2005 shows "losses from pollution and reduction in the GDP indicator even higher than the 2004 report," the paper said, citing a weekend seminar on the study.

The report would also have computed economic losses from pollution for each province - a sensitive step in a system where maintaining economic growth can be crucial to officials' promotion prospects.

The unusual revelation of official feuding is the latest sign that China's struggle to balance economic growth with environmental concerns has become a volatile political issue. REUTERS

Report says Barclays seeks billions for ABN

SINGAPORE (Reuters) - Britain's Barclays (BARC.L: Quote, Profile, Research) is in talks with the governments of China and Singapore to raise 10 billion pounds ($20.6 billion) to help fund its planned purchase of Dutch bank ABN AMRO (AAH.AS: Quote, Profile, Research), the BBC reported on Monday.

Citing unidentified banking sources, the BBC said on its Web site www.bbcnews.com that if the talks succeeded, China would hold a 7 percent stake in the merged bank, while Singapore would own 3 percent through its investment holding company, Temasek (TEM.UL: Quote, Profile, Research).

The Wall Street Journal, citing people familiar with the matter, said Barclays was close to an agreement to sell what it described as a large stake to Temasek and another investor to help back its bid for ABN.

The newspaper said on its www.wsj.com website that while the size of Temasek's potential stake in Barclays was not clear, a Barclays stake of 5 percent to 10 percent would be worth about $4.8 billion to $9.6 billion, based on Barclays's market value.

Spokesmen for Temasek and Barclays declined to comment.

Barclays said last week that it might add cash to sweeten its agreed 65 billion euro ($90 billion) offer for ABN as it battles against a higher bid from a rival consortium led by Royal Bank of Scotland (RBS.L: Quote, Profile, Research) and that also includes Belgian-Dutch group Fortis (FOR.BR: Quote, Profile, Research) and Spain's Santander (SAN.MC: Quote, Profile, Research).

The BBC said the two Asian governments would pay around 740 pence for each Barclays share, 3.7 percent above Friday's closing price of 713.5 pence.

If Barclays fails in its improved bid to buy ABN, the newly formed Chinese investment authority and Temasek would instead take smaller stakes in Barclays, the BBC said.

The deal is being arranged with the help of U.S. private equity firm Blackstone (BX.N: Quote, Profile, Research), which in May sold a $3 billion stake in itself to the Chinese state, it said. Blackstone shares have lost more than 16 percent of their value since the company's stock was listed in New York on June 22.

China is in the process of setting up a $200 billion fund to help it invest some of its $1.33 trillion in foreign exchange reserves.

($1=.4865 Pound)

($1=.7233 Euro)

Rail worker arrested over crash

Margaret Masson died in the crash

A 46-year-old rail worker has been arrested by officers investigating a train crash near Kendal in Cumbria, in which an elderly woman died.

British Transport Police (BTP) said the man was a Network Rail employee.

The London to Glasgow Virgin Pendolino train derailed on 23 February at Grayrigg, killing Margaret Masson, 84, from Glasgow and injuring 22 others.

A subsequent investigation blamed the incident on a faulty set of points near the site of the crash.

A BTP spokesman said the 46-year-old man was arrested on Wednesday in connection with the incident.

Missing bolts

He has been released on police bail until 31 October.

Network Rail refused to comment on the arrest.

The initial report into the derailment from the Rail Accident Investigation Branch (RAIB), said faults with the points meant the tilting train could not follow its intended path over the tracks and it derailed.

Investigators found one of three stretcher bars was not in position, two were fractured and bolts were missing.

The bars join the moving rails, keeping them a set distance apart.

The driver of the train, Iain Black, 46, who was hailed a hero after it emerged he stayed at the controls as it careered off the rails, suffered neck and shoulder injuries.

The (RAIB) investigation said there was no evidence to indicate the driving of the train or the condition of the train were contributory factors to the derailment.

Two access roads had to be built to deal with the removal of the nine derailed carriages.

Chinese product scares prompt US fears

By Laura Smith-Spark BBC News, Washington

Chinese toothpaste has been at the centre of contamination scares

More products are being imported to the US from China than ever before - but a series of scares has left some wondering whether they are safe.

From pet food to toothpaste, tyres to jewellery and seafood to toys, questions have been raised over the reliability of Chinese-made goods.

While there have been no human casualties to date in the US, the risks presented by unsafe goods are clear.

The deaths of some 51 people in Panama have been blamed on cough syrup tainted with Chinese-made diethylene glycol, commonly used in antifreeze. The same chemical has been found in toothpastes from China sold in the US and Canada.

Earlier this year, more than 100 brands of cat and dog food were pulled from the shelves in the US after pets died from eating food contaminated with the chemical melamine, traced back to wheat gluten from China.

With Chinese imports totalling $288bn last year - nearly triple the figure of five years ago - is enough being done to protect consumers?

'Time needed'

The execution for corruption on Tuesday of the former head of China's State Food and Drug Administration, Zheng Xiaoyu, suggests Beijing is keen to show it is taking the problem seriously.

But part of the problem is that the speed of China's expansion into the global export market has not been matched by the growth of a countrywide regulatory infrastructure.

The Chinese authorities say they are making efforts to improve supervision of safety standards, but that it will take time for them to catch up with the West.

American officials whose job it is to ensure the safety of imported products acknowledge there are problems - but say they are doing all they can to identify suspect goods.

For example, the US Food and Drug Administration (FDA) recently imposed a nationwide hold on the import of five types of farmed fish and seafood from China.

Some shipments were found to have traces of antibiotics and disinfectants that are banned in US fish production. Other inspections uncovered fish products described as "filthy" or tainted with salmonella and pesticides.

The US imports about a fifth of its seafood from China.

'Out of nowhere'

Another danger comes when contaminants which would not normally be tested for end up in the food chain - such as melamine, a chemical used in plastic products which caused kidney failure in pets.

The US has import controls on five types of Chinese fish and seafood

David Acheson, the FDA's assistant commissioner for food safety, said: "The bottom line message is to focus the testing on areas where we have identified problems. We cannot even begin to test on everything.

"There are certain things we can predict are going to be a problem because we've seen it before, other countries have had the problem... but sometimes things come out of nowhere, completely unexpected. The melamine was an example of that."

Meanwhile the FDA has to juggle the need to avoid inaccurate advice or over-reaction with the desire to warn people of a potential risk as quickly as possible.

"I would always like us to react faster. We react as quickly as we can on the information we have," Mr Acheson said.

The FDA does not have the resources to send lots of inspectors into China, Mr Acheson added, so is working with the Chinese authorities to address the issues.

'Very scary'

Of course, China is not the only country to experience food safety problems.

Some American pet owners have started to make their own pet food

US-grown spinach last year caused an E.coli outbreak that left one woman dead and some 200 others unwell. The FDA has previously halted imports of Mexican cantaloupes because of salmonella.

The difference, however, seems to be the frequency with which Chinese products are being pulled up.

Dietician Ruth Frechman, a California-based member of the American Dieticians' Association, says the recent run of scares has heightened people's anxieties.

While no clients have yet asked her for advice on avoiding Chinese products, she says, one has started making her own dog food following the pet food alert.

The chief problem is that food labels do not identify where all the ingredients have come from - and even restaurants and wholesalers may not know, Ms Frechman said.

"It's very scary for consumers and really as a consumer you have no idea that the product is even coming from China... so there's really not a lot the consumer can do," she said.

Toxic lead

The US Consumer Product Safety Commission (CPSC), which monitors the safety of imported non-food goods, says it has seen increased concern among consumers.

Its officials are seeking to co-operate with their Chinese counterparts, with CPSC inspectors travelling to factories in Beijing, Shanghai and big manufacturing regions.

"The first step for us is to educate all of those people who we are working with on US safety standards. Many of those standards have saved lives," CPSC spokesman Scott Wolfson said.

"Our goal is to see as much progress as we can - and what that might mean here for us in the US is fewer recalls of Chinese-made products."

Overall, at least 60% of recalls issued by the agency since last October have involved goods from China.

In the first week of July alone, they included hammock stands, children's toys and metal jewellery, all of which were potentially dangerous.

One of the biggest recalls, in June, involved some 1.5m Thomas and Friends toy trains containing lead paint, which can be toxic to young children if swallowed.

Mr Wolfson urges consumers, particularly worried parents, to subscribe to the CPSC's free e-mail alerts for the latest advice.

Success story

A lesson may lie in the approach taken by the fireworks industry, which has focused on education and stringent product testing within China.

Firework safety has improved with closer monitoring in China

In the late 1980s and early 1990s, standards for Chinese-made fireworks were so low that as many as 75% failed US safety tests.

To tackle the problem, US importers were encouraged to pay for a testing operation set up in China - the American Fireworks Standards Laboratory (AFSL) - to monitor production straight from the assembly line.

At least three-quarters of US fireworks importers are signed up to the scheme and the lab has about 50 technicians in China.

Since 1994, injury rates among US consumers have dropped by more than two-thirds and sales of fireworks have increased greatly. About 99% of the fireworks used in the US come from China.

John Rogers, executive director of the AFSL, said: "It's had a very positive impact for the American public, for the government that regulates fireworks and obviously for the companies."

He admits that initially Chinese factories "weren't happy" about the AFSL's checks but, as Chinese-language guidelines were produced to help them meet US requirements, attitudes changed.

"What the manufacturers understand is that safer, better quality fireworks translates into bigger sales, so now they like what we do," he said.

"I think that every industry that imports products from China could very well benefit from this kind of a programme."

Of course, the majority of goods imported from China are perfectly safe - but until standards improve across the board, US consumers must rely on officials to sift out potential hazards before they cause harm.