Economic Calendar

Monday, April 30, 2012

Oil Slips From Near Four-Week High; Hedge Funds Cut Bullish Bets

By Ben Sharples - Apr 30, 2012 8:47 AM GMT+0700

Oil slid from the highest close in almost four weeks, trimming a monthly gain, as investors speculated that recent price gains may be unsustainable.

Futures fell as much as 0.3 percent after climbing for a second week. Oil’s advance halted after it failed to surpass its 50-day moving average, a technical resistance level at which traders typically sell. Hedge funds cut bullish crude bets last week, the Commodity Futures Trading Commission said. Output by the Organization of Petroleum Exporting Countries climbed to the highest level in more than three years in April. A report this week may show U.S. employment rose this month.

“The market has decided to get ahead of itself and that’s effectively what we’re seeing,” said Jonathan Barratt, chief executive of Barratt’s Bulletin, a commodity-markets newsletter in Sydney. “There are areas or pockets which are holding the price of crude up when oil should be a lot lower. Employment will be the key this week.”

Crude for June delivery fell as much as 27 cents to $104.66 a barrel on the New York Mercantile Exchange and was at $104.69 at 11:11 a.m. Sydney time. The contract advanced 38 cents, or 0.4 percent, to $104.93 on April 27, the highest close since April 2. Prices are 1.6 percent higher this month and up 6 percent this year.

Brent oil for June settlement was at $119.58 a barrel, down 25 cents, on the London-based ICE Futures Europe exchange. Prices are down 2.7 percent this month, heading for the first monthly decline since December. The European benchmark contract’s front month premium to West Texas Intermediate was at $14.89, from $14.90 on April 27.

Technical Resistance

Oil in New York has technical resistance along its 50-day moving average, at $105.17 a barrel today, according to data compiled by Bloomberg. Futures have closed below this indicator every day since April 4.

Crude’s trading range in April is the tightest for any month in 17 years as concern eased that supplies would be disrupted and reports showed slower U.S. economic growth. This month’s price has ranged from $100.68 to $105.49 a barrel, a difference of 4.8 percent. That’s the smallest since February 1995, when the price ranged from $18.13 to $18.98.

New York futures rose to $110.55 a barrel on March 1 as Western nations prepared sanctions against Iran, then slipped as tension eased. U.S. gross domestic product growth slowed to a 2.2 percent rate in the first quarter, according to the Commerce Department.

Hedge Funds

Money managers, including hedge funds, cut bullish oil wagers by 2,878, or 1.4 percent, to 196,426 futures and options combined in the seven days ended April 24, according to the Commodity Futures Trading Commission’s Commitments of Traders report on April 27.

OPEC production increased 305,000 barrels, or 1 percent, to an average 31.405 million barrels a day in April from a revised 31.1 million in March, according to a Bloomberg News survey of oil companies, producers and analysts. Output increased to the highest level since October 2008. The March total was revised 10,000 barrels a day lower.

Payrolls climbed by 165,000 workers after a 120,000 gain in March, according to the median forecast of 64 economists surveyed by Bloomberg News before Labor Department data due May 4. Manufacturing and services grew at a slower pace, other reports may show.

To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net




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Apple Uses Office Locations to Minimize Tax Burden, NYT Reports

By Dan Hart - Apr 29, 2012 8:47 PM GMT+0700

Apple Inc. (AAPL) uses offices in states other than California, where it’s headquartered, and countries outside the U.S. to help minimize its overall tax burden, the New York Times reported.

The company has an office in Reno, Nevada, to collect and invest its profits and avoid paying California’s 8.84 percent corporate tax rate on some of its gains, the newspaper said. Nevada’s tax rate is zero, the Times said. The method, which is legal, is one of many that enables the iPad and iPhone maker to reduce its tax bill by billions of dollars each year, the newspaper said in a story published today.

Former Treasury Department economist Martin Sullivan estimates Apple paid cash taxes of $3.3 billion worldwide on posted profit of $34.2 billion last year, and would have paid $2.4 billion more in U.S. taxes without the arrangement it has, the newspaper said.

Technology companies, due to a tax code skewed to an industrial age and not a digital one, are among the least-taxed businesses in the U.S., the Times said, citing government and corporate data.

Bloomberg News reported in October 2010 that Google Inc. (GOOG) cut its taxes by $3.1 billion in the three years prior using strategies known as the “Double Irish” and “Dutch Sandwich,” reducing its tax rate internationally to 2.4 percent.

Apple told the Times it “pays an enormous amount of taxes, which help our local, state and federal governments.” The company said its U.S. operations generated about $5 billion in federal and state income taxes in the first half of fiscal 2012, the newspaper reported.

The company also has subsidiaries in Luxembourg, Ireland and the British Virgin Islands that allow it to pay lower taxes on royalties or processed transactions, the newspaper said, citing former Apple executives. Apple declined to comment on its operations in Nevada or the other countries.

To contact the reporter on this story: Dan Hart in Washington at dahart@bloomberg.net

To contact the editor responsible for this story: Sylvia Wier at swier@bloomberg.net.




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Google Staff Said They Were Unaware of Data Gathering, FCC Says

By Brian Womack - Apr 29, 2012 1:36 PM GMT+0700

Google Inc. (GOOG) employees who worked on a mapping-service project told the U.S. Federal Communications Commission they didn’t initially know about software that would gather personal data, even though an engineer disclosed the program’s details, according to an agency report.

The unidentified engineer, who made the disclosure in an internal project document, also told at least two fellow workers about how the software program would access so-called payload data, which includes personal information such as e-mails, according to the FCC report, which was re-released yesterday by the company with fewer portions redacted.

Google Inc., based in Mountain View, California, has been facing rising scrutiny from federal regulators about how it handles private data. Photographer: Tony Avelar/Bloomberg

The FCC compiled the report as part of an investigation into whether Google’s collection of private data through its Street View map product was a violation of the Communications Act. The agency said in the April 13 document that it decided not to penalize Google for the data-gathering, though it assessed a $25,000 fine for not cooperating with the inquiry.


“Engineer Doe specifically told two engineers working on the project, including a senior manager, about collecting payload data,” the agency said in the report. “Nevertheless, managers of the Street View project and other Google employees who worked on Street View have uniformly asserted in declarations and interviews” that they didn’t know about the private-data gathering, which began in 2007, until April or May 2010.

Street View sends cars to photograph buildings and homes in neighborhoods. Google has said the data collection was a mistake, and last week said that it would pay the FCC’s penalty to conclude the inquiry.

Privacy Concerns

The Mountain View, California-based company has been facing rising scrutiny from federal regulators about how it handles private data. Last year, Google agreed to 20 years of independent privacy audits to settle claims with the Federal Trade Commission that it deceived users and violated its own privacy policies with the Buzz social network.

The report’s details were reported earlier by the Los Angeles Times. Google released the less-redacted version of the FCC report after saying earlier this week it had cooperated fully with the agency.

“We decided to voluntarily make the entire document available except for the names of individuals,” the company said in an e-mailed statement. “While we disagree with some of the statements made in the document, we agree with the FCC’s conclusion that we did not break the law. We hope that we can now put this matter behind us.”

‘Sensitive Information’

For three years starting in May 2007, Street View cars collected from wireless networks content that wasn’t needed for the project, according to the FCC’s April 13 findings. Google gathered e-mail and text messages, passwords, Internet-usage history and “other highly sensitive personal information,” the FCC said. Google “grounded” the cars after learning about the data gathering.

The agency didn’t penalize Google for the activities because communications and wiretap law were unclear and the engineer who said he told other workers, called “Engineer Doe” in the report, had declined to testify, the FCC said.

To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net



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‘Failing’ Syria Peace Plan Raises Question of What’s Next

By Nayla Razzouk and Nicole Gaouette - Apr 29, 2012 10:44 PM GMT+0700

At least seven people were killed in fighting throughout Syria as the U.S. said the United Nations-backed peace plan for the country was failing.

The casualties today included one soldier who defected from government forces and a child, according to the opposition Local Coordination Committees.

More than 500 people have been killed since the April 12 start of the cease-fire brokered by UN special envoy Kofi Annan, according to the website of the Local Coordination Committees. If violence continues, the U.S. and its allies anticipate putting further pressure on the regime by seeking a travel ban, additional financial sanctions and an arms embargo at the UN Security Council, U.S. State Department spokeswoman Victoria Nuland said last week in Washington.


Nuland blamed Syrian President Bashar al-Assad for the plan’s lack of success, citing attacks by government forces on civilians and the military’s failure to withdraw heavy weapons from population centers. She also said it is essential to deploy as many as 300 unarmed UN cease-fire observers in the effort to limit the violence.

Pentagon officials are drawing up plans in the event that President Barack Obama decides to pursue military options in Syria, Kathleen Hicks, an administration nominee to the Defense Department’s policy staff, told the Senate Committee on Armed Services April 26.

‘Significant Planning’

“We are doing a significant amount of planning for a wide range of scenarios, including our ability to assist allies and partners along the borders,” said Hicks, the nominee to be principal deputy undersecretary of defense for policy.

The U.S., Turkey and other allies have discussed creating a civilian aid corridor along the Turkish border with Syria as one option if the fighting continues.

The head of the UN monitoring force arrived in Damascus today, Al Arabiya reported without saying how it got the information. An advance team of 15 UN observers has reported heavy weapons in populated areas in violation of the UN agreement, Ban said.

Nuland estimated that it may take another three to four weeks to deploy the first 100 of the anticipated 300 monitors.

The head of the Arab League, Nabil el-Arabi, said Arab foreign ministers have asked him to convene a meeting of all the Syrian opposition factions on May 16, according to the Al Jazeera television channel.

To contact the reporters on this story: Nicole Gaouette in Washington at ngaouette@bloomberg.net; Nayla Razzouk in Dubai at nrazzouk2@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net; Andrew J. Barden at barden@bloomberg.net





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Obama Jokes About Romney, Second Term

By David Lerman - Apr 29, 2012 12:01 PM GMT+0700

President Barack Obama unveiled his “secret agenda” for a second term last night, vowing to “win the war on Christmas” and replace the former ban on gays serving openly in the military with a policy called “It’s Raining Men.”

Then the mock agenda was abruptly cut short.

U.S. President Barack Obama delivers remarks at the annual White House Correspondents' Association Dinner. Photographer: Kristoffer Tripplaar/Pool via Bloomberg

Late-night comic Jimmy Kimmel, the celebrity keynote speaker of the night, delivers remarks at the annual White House Correspondents' Association Dinner. Photographer: Kristoffer Tripplaar/Pool via Bloomberg

Actor George Clooney, left, and former U.S. Secretary of State Colin Powell attend the Bloomberg Vanity Fair White House Correspondents' Association Dinner afterparty in Washington, D.C. Photographer: Joshua Roberts/Bloomberg

Actress Lindsay Lohan arrives for the White House Correspondents' Association Dinner. Photographer: Joshua Roberts/Bloomberg

Actress Claire Danes, left, and Bob Schieffer of CBS News, arrive for the White House Correspondents' Association Dinner. Photographer: Joshua Roberts/Bloomberg

“I had a lot more material prepared, but I have to get the Secret Service home in time for their new curfew,” Obama deadpanned at the annual White House Correspondents’ Association Dinner.

The tuxedo-clad president, facing re-election this year, also went into campaign mode, taking aim at his likely Republican opponent in November, former Massachusetts Governor Mitt Romney.

Noting they both have degrees from Harvard University, Obama said, “I have one, he has two. What a snob.”

Turning toward former House Speaker Newt Gingrich, who has said he will announce his withdrawal from the Republican presidential primary race this week, Obama said, “Newt, there’s still time, man.”

Late-night comic Jimmy Kimmel, the celebrity keynote speaker of the night and host of ABC’s “Jimmy Kimmel Live,” returned some of the political fire on Obama.

“Remember when the country rallied around you in hopes of a better tomorrow?” Kimmel asked the president. “That was hilarious.”

Warning Obama that he might not approve of some of his jokes, Kimmel instructed: “Cover your ears, if that’s physically possible.”

Media Circus

The annual black-tie dinner is a Washington tradition dating to 1920. What was once a more modest, low-key affair for White House reporters and administration officials morphed decades ago into a televised media circus.

Hollywood celebrities now routinely flock to the event at the invitation of media organizations.

Among the big names who showed up last night were George Clooney, Steven Spielberg, Charlize Theron, Zooey Deschanel, Diane Keaton, Claire Danes, and Uggie, the dog from the Oscar- winning film “The Artist.”

Then there were the celebrities who are famous just for being famous -- and often go by a single name. There was Lindsay (Lohan). And there was Kim (Kardashian).

More than 2,000 of the elite from Washington and Hollywood crammed into a ballroom of the Washington Hilton Hotel to dine on Texas-rubbed petite filet with a Calvados sauce, along with red curry jumbo shrimp.

Dessert featured a chocolate truffle mousse layered with chocolate genoise and almond macaroon.

A-Listers

Washington A-listers included former Secretary of State Colin Powell, Defense Secretary Leon Panetta, House Majority Leader Eric Cantor and -- fresh off the presidential campaign trail-- former Pennsylvania Senator Rick Santorum.

“I guess it just wasn’t Rick’s year,” Kimmel said. “Rick’s year was 1954. It’s one thing to oppose gay marriage. It’s another thing to do it in a sweater vest.”

Obama was at times self-deprecating, at times a jokester, and at times a savvy campaigner.

“Some have said I blame too many problems on my predecessor,” Obama said. “But let’s not forget that’s a practice that was initiated by George W. Bush.”

Last year’s dinner occurred on the eve of what is arguably one of Obama’s biggest accomplishments: the killing of former al-Qaeda leader Osama bin Laden. Obama took note of the one-year anniversary, albeit with humor.

Delivered Justice

“Last year at this time, we finally delivered justice to one of the world’s most notorious individuals,” Obama said, as a photo of business tycoon Donald Trump appeared on a jumbo screen. Obama had mocked Trump at last year’s dinner.

In a friendly jab at former Alaska Governor Sarah Palin, the Republican vice-presidential nominee in 2008, Obama rewrote her now-famous joke from the 2008 Republican convention.

“What’s the difference between a hockey mom and a pit bull?” Obama asked the crowd. “A pit bull is delicious.”

The bipartisan gathering has long been a night of good humor and gentle ribbing among all of Washington’s power brokers, and Kimmel gave equal time in his monologue to mocking Republicans and Democrats.

He said Texas Representative Ron Paul, who is still a Republican presidential hopeful, looks like “the guy who gets unhooded at the end of every Scooby Doo episode.”

Welcoming Gingrich to the dinner, Kimmel said, “I guess the checks cleared,” in an apparent reference to the Georgia Republican’s mounting campaign debt.

Dog-Star

Kimmel praised Uggie, the dog-star of “The Artist,” for being able to roll over on command. “He’s a Democrat,” Kimmel said.

Still, he saved much of his ammunition for Obama, who laughed and smiled through most of the routine.

“President Obama wants everyone to have health care, whether they want it or not,” Kimmel said. “I think I figured it out. You’re not from Kenya. It’s even worse: You’re from Canada.”

Proceeds from the dinner go toward scholarships for aspiring journalists and awards for prize-winning reporting.

The first president to attend the dinner was Calvin Coolidge, in 1924.

Until 1962, the dinner was open only to men. Women were not permitted until former White House reporter Helen Thomas protested the policy and former President John Kennedy refused to attend the dinner unless the ban on women was lifted, according to the White House Correspondents Association’s website.

Observing a ballroom filled with politicians, journalists and Hollywood celebrities, Kimmel told the crowd, “Everything that is wrong with America is here tonight.”

To contact the reporter on this story: David Lerman in Washington at dlerman1@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net





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Muslim Brotherhood Says Saudi Protest Reflects Egypt’s Dignity

By Tarek El-Tablawy - Apr 29, 2012 3:05 PM GMT+0700

The Muslim Brotherhood’s political arm said the protests that prompted Saudi Arabia to temporarily close its Cairo embassy and consulates reflected Egyptians standing up for their rights.

The Freedom and Justice Party, which holds nearly half the seats in parliament’s lower house, said the demonstrators were “merely expressing the Egyptian people’s aspiration to preserve the dignity of their fellow citizens who visit, live or work in Arab countries,” according to a statement on the party website.

The protests that began on April 24 outside Saudi Arabia’s embassy in Cairo were in response to the detention of Ahmed el- Gizawy, a human rights activist and lawyer who was detained earlier this month in the kingdom after officials there said he tried to smuggle in anti-anxiety tablets. The detention fueled complaints by activists on social media about the treatment of Egyptians in Saudi Arabia. Egyptians have long complained that ousted President Hosni Mubarak remained silent about how Egyptians were treated in Gulf Arab states largely to not offend the oil-rich Arab states.

“The people are voicing their conviction that insulting the dignity of Egyptians abroad is no longer tolerated after the peaceful revolution which restored their will, their voice and their dignity,” the FJP said in the statement.

Egyptian officials have sought to smooth over the potential rift, with Field Marshal Mohamed Hussein Tantawi calling King Abdullah yesterday to reaffirm the strength of ties between the two nations, the state-run al-Ahram reported today.

‘Individual Actions’

Foreign Minister Mohamed Kamel Amr said the methods used by some of the protesters were “individual actions that do not represent” the views of Egyptians as a whole, the state-run Middle East News Agency said late yesterday.

The FJP said that Egyptian-Saudi relations are “far greater than any problems” and that “dialogue and transparency in these relations can solve any problems.” The party called on Egypt’s military rulers to “take concrete steps to solve the el-Gizawy issue in a manner which ensures Egyptians’ dignity, and at the same time preserves” the strong ties between both nations.

To contact the reporter on this story: Tarek El-Tablawy in Cairo at teltablawy@bloomberg.net.

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net




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Geithner, Clinton Don’t Plan to Cancel China Trip

By Bloomberg News - Apr 29, 2012 10:17 PM GMT+0700

U.S. Secretary of State Hillary Clinton and Treasury Secretary Timothy F. Geithner have no plans to cancel their trip to China, according to a State Department official who spoke on condition of anonymity, amid reports the U.S. is protecting a fugitive Chinese activist.

Last week, legal activist Chen Guangcheng escaped house arrest in Shandong province, where he had been held since his release from prison in September 2010, Midland, Texas-based ChinaAid, a U.S.-based human rights group, reported.

U.S. Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner attend the U.S delegation press conference following the China-U.S. Strategic and Economic Dialogue in Beijing on May 25, 2010. Photographer: Feng Li/Getty Images

Clinton and Geithner are due to arrive in Beijing for annual talks May 3-4. The trip will go forward, the State Department official said yesterday, speaking anonymously because of the sensitivity of the issue.

“This all looks to me like a brewing, perfect-storm test for relations,” said Chris Johnson, a senior adviser at the Center for Strategic and International Studies in Washington and former senior China analyst at the Central Intelligence Agency. The annual talks, which “substantively, probably would have been inconsequential, suddenly become the most important test for Sino-U.S. relations for the Obama administration thus far in its tenure.”

Chen, who is blind, is now under U.S. protection in Beijing, and talks are taking place between the U.S. and China about his status, ChinaAid’s founder Bob Fu said in an e-mail yesterday, citing people close to the situation.

‘No Information’

Chinese Vice Foreign Minister Cui Tiankai, speaking at a news conference in Beijing yesterday, said the talks would go ahead as scheduled and he had “no information” about Chen.

U.S. Assistant Secretary of State Kurt Campbell arrived in Beijing today, earlier than his scheduled arrival before the talks, the Associated Press reported. Richard Buangan, a spokesman for the U.S. embassy in the Chinese capital, declined to comment on the report when reached by Bloomberg News.

Asked about Chen on “Fox News Sunday,” Deputy National Security Adviser John Brennan said “we are working very closely with the individuals involved in this,” and declined further comment.

President Barack Obama has “faced similar situations” in which he’s had to balance human rights and diplomatic issues, and the U.S. government will “find the right way forward,” Brennan said.

Mitt Romney, the presumptive Republican presidential candidate to challenge Democrat Obama in the U.S. November elections, urged the U.S. to ensure the protection of Chen and his family. The U.S. “must play a strong role in urging reform in China and supporting those fighting for the freedoms we enjoy,” Romney said in a statement today.

Relations Tested

U.S.-Chinese relations have been tested this year by events including “the Chinese early support for the Assad regime in Syria, North Korea’s satellite launch and a presumed nuclear test, this guy running to the consulate -- it’s just one thing after another,” Johnson said.

Chinese political leaders were already trying to manage a scandal involving U.S. diplomats and a Chinese citizen, Johnson said. Chongqing party leader Bo Xilai lost his Politburo post earlier this month after his wife and an aide were put in custody for suspicion of murdering a British businessman.

The arrests came after Bo’s former police chief, Wang Lijun, had spent a night in February at the U.S. consulate in Chengdu, and then left, an event confirmed by both the U.S. and Chinese governments. China’s state-run news agency Xinhua reported that Wang disclosed the murder allegations.

Political Earthquake

“The political earthquake in Beijing this year has been the Bo Xilai affair,” said Ken Lieberthal, head of the Thornton Center for China at the Washington-based Brookings Institution. “There are some people in China who I’m sure feel that all of that was a set up by the U.S. government to embarrass the leaders.”

The U.S. government faces “no good solution,” Lieberthal said. “You want to do the right thing by the individual,” yet talking about Chinese abuses “will come across in China to most people as if you are interfering in domestic affairs, seeking to humiliate China, and therefore being folks that are not of goodwill and should not be listened to. So you end up being quite ineffective,” he said.

F-16s to Taiwan

Johnson, at the Center for Strategic and International Studies, went on to add the politics behind the consideration being given by the U.S. to selling Taiwan Lockheed Martin Corp. (LMT) F-16 fighter jets is another nuance to be navigated by the Obama administration.

“When you layer onto the cake as well that the White House sent a letter to Senator Cornyn of Texas noting that they would take a second look at possible new F-16 fighter aircraft sales to Taiwan in order to get Senator Cornyn to lift his hold on the appointment of Mark Lippert as the new assistant secretary of defense for East Asia,” the Geithner-Clinton trip becomes “a very tricky situation,” he said.

The sale of F-16s “warrants serious consideration, given the growing military threat to Taiwan,” Robert Nabors, the White House’s director of legislative affairs, said in a letter to Senator John Cornyn, a Texas Republican, on April 27.

China, which insists that Taiwan be reunited with the mainland, by force if necessary, has in the past cut military contacts with the U.S. over American arms sales to the island.

Johnson said the timing of Chen’s escape alone will encourage hardliners to see the event as a “conspiracy to stifle China’s rise” and to adopt the belief “that this was all planned by the U.S.” For the Chinese, that means “they have got to react probably a little more sternly,” he said.

‘Bilateral Mess’

“This could be the biggest bilateral mess that we’ve faced in a very long time,” Johnson said.

A Chinese dissident spent an extended period sheltered inside the U.S. embassy during the 1989 Tiananmen Square protests, when the Communist Party clashed with pro-democracy students. Fang Lizhi, a physics professor, was housed in the U.S. embassy for 13 months before he left the country for the U.S. He died earlier this month at the age of 76 in Tucson, Arizona.

‘Pivotal Moment’

“This is a pivotal moment for U.S. human rights diplomacy,” Fu said in the e-mail. “Because of Chen’s wide popularity, the Obama administration must stand firmly with him or risk losing credibility as a defender of freedom and the rule of law.”

The U.S. has taken up Chen’s case in the past. Clinton mentioned him in a speech in November, saying the U.S. was “alarmed” by his continued house arrest and calling on China to “embrace a different path.”

ChinaAid’s statement said Fu has been in touch with Chen’s friends and family and was told that Chen wanted to remain in China. He wants “a normal life as a Chinese citizen,” according to the statement.

Chen was jailed for more than four years after helping villagers resist forced abortions, rights groups including the New York-based Human Rights in China say. After his release in September 2010, he and his wife were confined to their home in the village of Dongshigu.

Chen is a self-taught lawyer who was blinded by a fever in infancy, the Associated Press reported. He Peirong, an activist who has led a campaign to free Chen, picked him up and drove him to a “relatively safe place,” the AP quoted her as saying.

Nephew, Brother Detained

Human Rights in China, citing a “knowledgeable source” that it didn’t identify, has said that Chen’s nephew, Chen Kegui, was taken from his home by more than 30 policemen April 27. Chen Guangfu, Chen Guangcheng’s older brother, was taken away a day earlier, the group said in an e-mailed statement.

“It’s a very political year in Beijing -- it is here too - - and they were very anxious to avoid things that would impact negatively on the relationship,” Brookings’ Lieberthal said. He recommended the U.S. “adopt a very low profile on this while trying quietly to negotiate” an exit to a safe haven for Chen and his family.

If the Chinese “can find a face-saving solution that works, that may be of interest to them because, just like the Bo Xilai scandal, they keep wanting to just move on and refocus on the succession,” Johnson said.

To contact Bloomberg News staff for this story: Michael Forsythe in Beijing at mforsythe@bloomberg.net; Indira A.R. Lakshmanan in Washington at ilakshmanan@bloomberg.net; Alexander Kowalski in New York at akowalski13@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net




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