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China takes responsibility for trade scandal

Once bent on self-sufficiency, China has in recent years developed a voracious appetite for raw materials, becoming the world`s largest buyer of copper, iron ore and steel, as well as the second-largest purchaser of oil. A trader named Liu Qibing, working for the National Control Center of the State Reserve Board - a central government body that stockpiles commodities for the country`s industrialization - shorted copper on the London futures exchange, meaning he bet that prices would fall.

China has acknowledged that the since-detained government trader placed a series of disastrous bets on the price of copper in London this summer, leaving the state to cover hundreds of millions of dollars in losses, according to a report in official Chinese media. This month copper prices soared to record levels on the assumption that China will have to buy large quantities to square its accounts after the trading debacle.

As rumors of the scandal filtered out this month, China first denied the existence of the trader, and then branded him a rogue operator. Thursday`s report in an official newspaper suggests the Communist-led government has resolved to take responsibility for a scandal that has roiled commodity markets while renewing fundamental questions about the transparency of the fast-growing economy.