Sino-US relations stable as they move forward
2006-12-20 People's Daily Online
With the launch of the first round of Sino-US strategic economic dialogue and the restoration of a new round of Six-party Talks, 2006 has been a stable and cooperative year in Sino-US relations. "Stability" is currently the key word in Sino-US relations. Sino-US relations have stabilized and moved forward, which has been reflected in the following areas: Firstly, summit interaction has achieved notable results. Frequent interaction between the leaders of the two countries following Chinese President Hu Jintao's successful visit to the United States early in the year and culminating in US President Bush's meeting with Hu at the APEC meeting towards the end of 2006, has helped deepen understanding and friendship. This has not only laid a solid foundation for bilateral relations, but also made clear the direction bilateral relations will take on a series of specific issues. Secondly, the two countries have opened a new platform for cooperation. Following the conclusion of Sino-US strategic dialogue and the establishment of the Joint Committee on Commerce and Trade (JCCT), leaders of the two countries initiated a new mechanism for strategic and economic dialogue. [...] Thirdly, Sino-US military exchanges have fully resumed. Examples include Rumsfeld's visit to China, Guo Boxiong's visit to the United States, the first joint maritime maneuvers and rescue exercises by the Chinese and US navies, as well as more frequent military personnel exchanges. [...] Finally, the two countries have cooperated more closely and effectively on important international issues, the most notable of which is the North Korean nuclear crisis. [...] China has remained committed to the development of constructive and cooperative relations with the United States (its outlook on Sino-US has always been strategic and long-term); the United States has been equally committed to its new active China policy, at the core of which is "responsible stakeholders". Some experts on China such as Henry Paulson have inherited and developed the active China policy, a legacy of Robert Zoellick, which has received the support of President Bush. This is an important indicator of the maturation of Sino-US relations. However, behind the smooth development of Sino-US relations, there still many secret worries, which, if not handled carefully, may interfere with constructive and cooperative relations. Therefore both China and the US must be prepared to work hard to eliminate these concerns. One of the most worrisome is the economic and trade disputes that have escalated in the last few years. The two sides have not yet found a way to resolve these problems. The United States has in fact been interfering more at all levels in some of China's major structural issues such as financial liberalization and its economic growth model, which has affected the smooth development of Sino-US economic and trade relations. Friction is rising over some third party issues such as relations with Sudan, Venezuela, Africa, and others. Some of the conflict is closely related to the fundamental interests of the two countries, such as energy and geo-strategic interests; some result from different judgment calls. If not handled properly, these problems might hinder the development of relations. With the Democratic Party's victory in the US mid-term elections, the United States is redrawing its political map. The Democratic Party has harassed China endlessly about human rights and repeatedly been critical of economic and trade issues and this is likely to have a negative impact on the Bush Administration's current China policy. The new domestic political situation will undoubtedly trigger uncertainty in Sino-US relations. It must also be considered how the US's global strategies will impact the development of Sino-US relations. How to ensure the healthy development of Sino-U.S. relations will be a question for the decision-makers of both countries to answer.

Sino-Japanese ties expected to warm up in 2007
2006-12-21 People's Daily Online
The outgoing 2006 has been a year to retrieve the situation in Sino-Japanese relations. New Prime Minister Shinzo Abe's recent trip to China has broken a layer of floe in bilateral ties, which had been frozen by former Prime Minister Junichiro Koizumi's mulish, repeated visits to Yusukuni Shrine. So his handshake with Chinese President Hu Jintao in Beijing has been the most significant and joyous event in Sino-Japanese relations in the year. The incoming 2007 will possibly be a year of opportunity for the continuous improvement of Sino-Japanese ties, in which the people of both nations are looking forward to for the further development of bilateral relations with the arrival of the 35th anniversary of the normalization of diplomatic ties between the two neighboring nations. First of all, leaders of both China and Japan will enhance their contacts. Shortly after Abe's China trip in October, President Hu Jintao met him again in Hanoi during the 14th Economic Leaders' Informal Meeting of the Asia-Pacific Economic Cooperation (APEC) in November. At the start of the incoming year, Premier Wan Jiabao will also possibly meet and confer with him during the imminent meeting of the ASEAN member nations plus China, Japan and the Republic of Korea. Moreover, Japan has so far invited Chinese leaders and minister of defense to visit Japan. And an upsurge will likely emerge in an exchange of visits and contracts between the two nations, including an exchange of high-level visits between their leaders. Secondly, China and Japan are seeking to build up and increase their strategic mutual trust. China's road for peaceful development and ideas for "a harmonious society" and "a harmonious world" will win the understanding and recognition of all strata in Japan, whose aspiration to take the road for a peaceful nation in the post-World War II era and to continue taking such as a road in the years ahead has also received the positive appraisal from the Chinese side. China and Japan will deepen their mutual trust in the security area through security dialogue and exchanges in defense affairs; nurture the people-to-people friendly sentiments via bilateral cultural exchanges, and goodwill contacts between youngsters and children in particular; and launch joint history researches in the academic circles of both nations, so as to pay way for the correct awareness and treatment toward history; and work harder for the joint development via dialogues and consultations, so as to turn the East China Sea into a sea of peace and cooperation. Thirdly, China and Japan will seek to forge the ties of mutual benefit to both sides with an objective of realizing peaceful co-existence, friendship from generation to generation, mutual benefit and cooperation, as well as joint development. Both sides will open up a new situation of mutual benefit and multi-layer cooperation in all directions and with wider spheres, and carry out in-depth cooperation with focuses to be placed in such fields as energy, environmental protection, banking, information and telecommunication technology, and intellectual property right protection. In the economic sphere, dialogues at the ministerial level, consultations between the relevant government departments and dialogue between officials and ordinary people of the two nations will be inspired and advanced, so as to "uplift the Sino-Japanese ties up to a still higher level with the intensified turning of the twin wheels, politics and economics." Meanwhile, various contractions accumulated in Sino-Japanese relations over recent years are expected to resolved gradually, and some sensitive problems existing between the two nations, including the issue relating to history, the Taiwan issue, and the dispute on the sovereignty of Tiaoyu Islands are still around, and the bilateral ties still face new challenges, and all these problems have to be settle properly by both sides. [...]

Japan and China pledge energy dialogue
2006-12-18 China Daily
Japan and China have agreed to hold annual ministerial-level talks on energy as they seek to repair relations strained by territorial disputes over oil and gas fields, a senior Japanese official said Sunday. "Cooperation between Asia's two largest energy consumers will contribute to market stability," the Japanese minister of economy, trade and industry, Akira Amari, said in Beijing after talks with Ma Kai, the minister who oversees the National Development and Reform Commission. The talks came a day after the two countries took part in an energy meeting in which Beijing announced that it was awarding a multibillion-dollar nuclear reactor contract to Westinghouse Electric, which is part of Toshiba Corp. The meeting included ministers from the United States, India, Japan and South Korea, countries that together consume nearly half the world's oil. "Cooperation between the two countries is much preferable to competition that gives suppliers the upper hand and increases uncertainty," Amari said. Seeking to take a leadership role on global energy issues, China on Saturday urged major oil consumers to forge a common energy policy to respond to resurgent producer power and sought to smooth over differences on how best to achieve energy security. "We want to send out an important, positive message, which is, the world's key energy- consuming countries plan to strengthen mutual cooperation," Ma said. There will also be an effort to promote conservation of oil, improve energy efficiency, stress development of oil alternatives and reduce reliance on oil, he added in prepared remarks for the meeting. The call to action echoed a concern over what have been seen as increasingly nationalistic policies by major oil and gas producing countries that some major consumers fear could stifle investment and limit supplies. The Indian minister of petroleum and natural gas, Murli Deora, said after the meeting that this was the first time an energy conference had been organized to look at the interest of consumers. "Otherwise it is all OPEC and the oil producers' interests," he added. The five consumer nations will focus on diversifying energy sources and increasing efficiency to reduce oil dependency, cooperating on strategic oil reserves and encouraging more investment in the industry to aid market stability, a ministerial statement said. Japan and China agreed to start a program that will promote business exchanges between companies on energy conservation, putting companies in the two countries in contact with each other, Amari, the Japanese minister, said. Tokyo and Beijing disagree over their sea border: China says its territory extends to the end of the continental shelf, while Japan regards the border as the halfway point between the countries' shores.

Pakistan, China joint anti-terror military exercise concludes
2006-12-18 Xinhuanet
Islamabad - China and Pakistan have traditional friendship ties and their armies are also friends of all weather, said a Chinese military chief Monday at the conclusion of the eight-day Pakistan-China Joint Exercise Friendship-2006. "For many years Pakistan and China have focused on economic development and regional stability. At the same time, we are confronting the three evil forces, terrorism, extremism and separatism. China is ready to conduct anti-terrorism with Pakistan to construct the area of lasting peace and mutual prosperity," said Lieutenant General Lu Dengming, Chief of Staff of the Chengdu military region of the Chinese People's Liberation Army (PLA). The Pakistani army is highly professional outfit and he and other members of his entourage and the participating troops are highly impressed with the professionalism, dedication and commitment of the Pakistani troops during conduct of joint exercise friendship 2006, Lu told a group of journalists in Rawalpindi, some 30 kms south from Islamabad. Speaking on the occasion, Lieutenant General Tariq Majid, Corps Commander Rawalpindi said that Pakistan-China Joint Exercise, Friendship-2006, "is a manifestation of our resolve that Pakistan and China stand united to fight and eliminate the menace of terrorism, which is affecting the entire fabric of human society". Majid said that the joint exercise epitomized high standards of professionalism and helped refine the combat skills earning great respect and admiration for each other's skills and competence. The mutual rapport and personal understanding that has been developed during the course of this exercise would go a long way in cementing long lasting friendly relationship between Pakistan and China, he said. "Both Pakistan and China are playing very important role in international efforts to make the globe more secure, so that our future generations may live in peace and prosperity," he said. Majid said that first ever exercise conducted by the PLA in Pakistan "is a mark of distinction in our bilateral relations and both armies and countries wish to continue with such exercises in future as well". The two sides have expressed their complete satisfaction on the successful completion of the eight-day joint exercise, which is likely to expand in level and scope in future and would definitely help combat terrorism more effectively. [...]

China, Kazakhstan ink 13 cooperation deals, pledge to develop strategic partnership
2006-12-21 People's Daily Online
China and Kazakhstan issued their bilateral cooperation strategy for the 21st century and a blueprint for economic cooperation in Beijing on Wednesday afternoon. The two sides also signed 11 cooperation agreements covering trade, energy, science and technology, culture and education. The documents were signed after Chinese president Hu Jintao held talks with his visiting Kazakh counterpart Nursultan Nazarbayev. The two leaders agreed that China-Kazakhstan cooperation has developed to a "very high level". Bilateral relations are a priority in the respective foreign policies of the two nations, they said. China appreciates Kazakhstan's support on the Taiwan issue and in the fight against terrorism and will back Kazakhstan's efforts to promote economic development, social stability and national unity, Hu noted. In a 13-page document "China-Kazakhstan Cooperation Strategy for the 21st Century", the two sides highlighted bilateral cooperation in politics, the economy, international cooperation, security, culture and international affairs. The 11 agreements include an outline agreement on oil pipeline construction and a framework agreement for Chinese funding worth 292.8 million U.S. dollars. Acknowledging that bilateral cooperation has progressed rapidly since the two countries forged diplomatic relations 15 years ago, the two presidents expressed their willingness to further enhance the strategic partnership. Kazakhstan is willing to work closely with China in the fields of trade, energy, infrastructure construction, high technology and culture, Nazarbayev said, vowing to crack down harder on the three evil forces of terrorism, extremism and separatism. Nazarbayev also reiterated Kazakhstan's continued adherence to the one-China policy. Nazarbayev, who arrived in China on Tuesday as Hu's guest, will give a speech at the Chinese Academy of Social Sciences (CASS), a Chinese government think-tank. It is Nazarbayev's first visit to China since he won re-election last December.

China firmly supports the UN, says Li
2006-12-20 China Daily
"Thousands of beautiful silk rolls have been unrolled in the year of Dog; hundreds of steps will be climbed in the Year of Pig." Quoting the Chinese New Year couplet, Chinese Foreign Minister Li Zhaoxing aroused laughter yesterday at the China-UN New Year Party at Diaoyutai State Guesthouse in Beijing. But China's pledge supporting the United Nations in its efforts to maintain peace and security and promote international human rights was taken seriously. "China supports the United Nations in playing the leading role in upholding global peace and security and its advocacy of dialogue and co-operation and opposition to wilful resort to pressure or force," Li told representatives and staff of the United Nations and other international organizations in China. While China shores up the world organization in "playing its due role in promoting international human rights," Li also emphasized that China hoped the UN's new Human Rights Council will endeavour to enhance constructive co-operation and steer clear of the old path of political confrontation." He said China was a "staunch supporter of the multilateral system with the UN at the core," which shoulders the task "to realize the goal of human society to achieve enduring peace and common prosperity." The task is all the more important as "mankind faces rare opportunities for development, but is also confronted with many threats and challenges," Li said, adding that "more than ever before, the world needs a strong United Nations in the new era." And China believed in "strengthening the UN's authority and role, and improving its capacity to respond to threats and challenges through necessary and proper reform," he said. Highlighting China's confidence in the future of the UN and of multilateralism, Li also stressed that development should take priority in the UN's reform. "China supports the UN in making a greater contribution to promoting common development, and in its efforts to strengthen development mechanisms, and ensuring development resources," Li said. The Chinese foreign minister also offered "a big thank you" to the UN and its agencies for their work in China. "As a developing country, China still faces many challenges in development," he said. "I am sure we can continue to count on the support and assistance from the UN agencies represented here today and the international community." [...] Ban Ki-moon, UN secretary-general designate, said last Friday that he would co-operate with China to promote peace, security and development and enhance human rights, according to a report by Xinhua. In an interview with reporters from Asian media organizations, Ban said he was very pleased to see that China, as one of the permanent members of the UN Security Council and one of the most important member states of the United Nations, had played an increasing role in international affairs, not only in Northeast Asia, but also in world affairs. China has also been playing a very constructive role in many regional issues, including the Six-Party Talks to resolve the nuclear issue on the Korean Peninsula. With rapid development in the political, economic and social fields, China has been gaining the respect of the international community, Ban said. [...]

China firmly supports Mideast peace process, says Foreign Minister
2006-12-17 People's Daily Online
China firmly supports Mideast peace process and will go on contributing to the realization of peace between Palestine and Israel, said Foreign Minister Li Zhaoxing Saturday. Li made the remarks at a meeting with former Minister of State of the Palestinian National Authority Abdel Kader I.F. Hamed and former Minister of Justice of Israel Yossi Beilin, who were here for a non-governmental seminar opened Friday. Peace-promoting personages from Palestine and Israel have reached a series of consensus at the Israeli-Palestinian Seminar on Peace Process in the Middle East, providing constructive opinions to bring the two sides back on the track of negotiation, said Li. They also voiced out the hope for peace of the two peoples to the international community, which is of special importance under the current situation, Li added. Li said the ultimate resolution to the Palestine-Israel issue is to build an independent Palestinian State. The peace can last long only when it bases on the rapprochement between the two countries. Beilin and Hamed highly appreciated China's positive role in advancing Mideast peace process. They expressed their hope that China, as a permanent member of UN Security Council and an impartial force, could play a bigger role in Mideast peace process.

Migrations in Russia's Far East alarm Moscow
2006-12-22 SCMP
Russia is alarmed at the flow of illegal immigrants from China into its far east region as the native population there drops sharply. "The problem is a very serious one," Kamil Iskhakov, presidential ambassador to the Far East Federal Region, said after talks with President Vladimir Putin. Of 350,000 illegal immigrants, 150,000 were from China, while the native population fell 20 per cent over the past 15 years.

China establishes national industrial association for oil circulation
2006-12-18 People's Daily Online
Upon the wholly opening of China's oil market, China established on Sunday an industrial association for oil circulation. The Petroleum Circulation Committee under the China General Chamber of Commerce (CGCC) is a national organization for petroleum enterprises of private, state-owned or foreign ownership, said He Jihai, chairman of the CGCC. The committee will be endeavored to give suggestions for policy formulation and legislation of the government, establishing industrial standard, offering services including information, consultation and training for members and assisting in market order establishment and maintenance, said Zhao Youshan, director of the committee. According to regulations of the CGCC, any legal enterprises, institutions and individuals doing petroleum business in China could apply for membership of the committee. The government promised to open the market of crude oil and refined oil to foreign capital on Dec. 11 under its commitments to the World Trade Organization (WTO). The Ministry of Commerce (MOC) recently issued two regulations on the management of the crude oil and refined oil market respectively. By clearly defining the qualifications of enterprises, the regulations would promote the establishment of a competitive pattern of SOEs, foreign companies and private enterprises in both sectors, said Chong Quan, spokesman of the MOC. The establishment of the oil circulation committee will offer a commercial platform for cooperation and communication of enterprises in the oil sector and will be helpful for the healthy development of the market, said experts. According to statistics, China has over 7000 oil wholesale enterprises with private firms accounting for one-third of the total.

China names key industries for absolute state control
2006-12-19 China Daily
What are the key sectors critical to national security and the economic lifeline of China? The answer, given yesterday, is: armaments, power generation and distribution, oil and petrochemicals, telecommunications, coal, aviation and shipping industries where the State must have "absolute control," according to a senior official. It was the first time an explicit list was released of "strategically important sectors," whose definition has been vague since the late 1990s. "State capital must play a leading role in these sectors, which are the vital arteries of the national economy and essential to national security," State Assets Supervision and Administration Commission (SASAC) Chairman Li Rongrong said yesterday. "In these sectors, State-owned assets should expand in volume and optimize in structure, and some key enterprises should grow into leading world businesses." Li is today scheduled to address a press conference arranged by the State Council Information Office to explain SASAC's progress and reform of State-owned enterprises (SOEs). SASAC anticipates that between 30 and 50 large business groups capable of competing globally would emerge from the country's State businesses by 2010, according to earlier reports. The commission was set up by the State Council three years ago to preserve, and enhance, the value of central SOEs. Explaining the new guidelines on SOE reform published yesterday, Li said that the State should solely own, or have a majority share in, enterprises engaged in power generation and distribution, oil, petrochemicals and natural gas, telecommunications and armaments. The State must also have a controlling stake in the coal, aviation and shipping industries, he said. Reform and restructuring should be accelerated in SOEs engaged in the downstream petrochemical sector and in value-added telecom services, to allow injection of private or foreign capital, Li said. Central SOEs should also become heavyweights in sectors including machinery, automobiles, IT, construction, iron and steel, and non-ferrous metals, he added. Li said the government will strive to enhance the "vitality and competitiveness" of State firms by diversifying their ownership through share-holding reform, strategic investors, restructuring or listing. In the next few years, the number of central SOEs would be whittled to 80-100 from the current 161 through mergers, and all struggling SOEs would exit the market by 2008, Li said. The 161 enterprises under SASAC raked in sales of 3.7 trillion yuan (US$473.8 billion) in the first half of the year, a year-on-year increase of 20.6 per cent. Of them, at least 40 are engaged in the seven key sectors listed yesterday and their total assets represent three quarters of all central SOEs. Li Zhaoxi, deputy chief of the Enterprise Research Institute affiliated to the State Council Development Research Centre, yesterday said that by explicitly publishing the "key sectors," State capital can be channelled to priority industries and retreat from non-essential areas. This will facilitate the opening of those areas and speed up the reform of SOEs, he said. [...]

China to continue prudent fiscal policies next year
2006-12-17 Xinhuanet
Beijing - China will continue the prudent fiscal policies that it has taken since 2005, according to sources with the Ministry of Finance (MOF). Zhang Tong, spokesman of the MOF, told Xinhua before the holding of the MOF work conference that in contrast to outspreading or austerity fiscal policies, prudent fiscal policies are more moderate and are generally taken when the total supply and demand are balanced but there are some structural imbalances. China saw rising inflation threats, excessive rapid growth of investment in some regions or industries and bottlenecks of coal, electricity, petroleum and transportation supply in 2003. Since 2005, the Chinese government began to take prudent fiscal policies that are different from the pro-active policies it has taken since 1998 to avoid the overheating of the economy, said Zhang Tong. The prudent fiscal policies of the Chinese government focus on controlling deficit, improving economic structure, promoting reform, increasing revenue and decreasing expenditure, he said. The Chinese government began to transfer the direction of the fiscal policies by adjusting the scale of the long-term treasury bonds for development and optimizing use of treasury bonds in investing projects. According to statistics of the MOF, the deficit in the central budget decrease by 19.23 billion yuan (2.47 billion US dollars) last year with a year-on-year decline of 0.4 percentage points. Zhang said China has been expanding its fiscal expenditure in sectors of agriculture, education, public health and social security in recent years. The MOF appropriated 14.2 billion yuan as direct subsidies to over 600 million grain planters this year. As part of the prudent fiscal policies, the MOF has been endeavored to minimize the income gap by improving income distribution policies and support the construction of an energy-efficient and environment-friendly society by taxation adjustment, said Zhang. China's GDP grew by 10.7 percent in the first three quarters. During that period, 9.32 million people finding jobs in the urban areas, accounting for 104 percent of the annual target. By the end of September, 182.4 million people have had basic old-age insurance, 150 million had basic medical insurance, 110 million had unemployment insurance, 94.47 million had work-related injury insurance and 22.3 million urban poor have got subsistence allowances in China, according to statistics of the MOF.

Mine deaths down; corruption hurting safety efforts
2006-12-21 China Daily
The death toll is down in China's accident-plagued coal industry, but local officials who collude with bosses of dangerous mines are hurting safety efforts, government officials said in Beijing Thursday. Dozens of officials have been punished for corruption or negligence in fatal accidents in the past year, said Li Yizhong, minister of the State Administration of Work Safety. "There is corruption involved in the accidents," Li said at a news conference. Li said the death toll in coal mine accidents so far this year is down 21 percent, though he didn't give a number of deaths. Some 6,000 Chinese miners were killed last year in fires, floods, cave-ins and other disasters despite repeated official promises to improve safety. Many deaths were blamed on managers' indifference to safety rules or lack of required equipment. Investigations of the deadliest mine accidents last year found that many were due to the failure of officials to enforce safety standards, Li said. He said some took bribes or illegally owned shares in mines they were supposed to regulate. "Some government officials colluded with owners," he said. "Also, some local governments developed countermeasures against policies from higher levels and acted as protectors of illegal activities." China is such a large country and a developing one at that, with 1.3 billion people and is in a rapid pace of industrialisation, so accidents happen easily and cannot be avoided," he added. "In the next 10 or 20 years, it will be a development opportunity period as well as a time for very obvious contradictions," said Li, who admitted he felt a heavy burden in dealing with China's horrendous safety issues. "The situation is generally stable and improving, but still serious. I have to say both of these sentences," he said. "We will not be successful overnight." In a report on China's seven deadliest mining accidents and four other industrial disasters since late 2005, Li said 45 officials were fired and 117 prosecuted for corruption, dereliction or other offenses. Those punishments, many of them reported earlier, included the firing of two deputy provincial governors. The deadliest accident in the report was a November 2005 mine explosion in the northeastern town of Qitaihe that killed 171 miners after coal dust caught fire. Li's report Thursday said six managers of the Qitaihe mine and two local officials were prosecuted but did not give details.

HK tightens rules for mainland mums
2006-12-22 China Daily
Hongkong - The Hospital Authority (HA) will double fees for mainland mothers giving birth in Hong Kong and withhold birth information until all fees are paid in a bid to cut down on the delinquent medical bills that have been straining the special administrative region's healthcare system. The measures, part of a collection of new rules released yesterday, were aimed at combating problems arising from the large number of mainland mothers who default on payments after giving birth in public hospitals. Many mothers from the mainland travel to Hong Kong to give birth in order to secure a Hong Kong identity card for their children. The HA's board yesterday endorsed a package of measures proposed by its Administration and Operations Committee (AOM) to deal with the growing problem, which has not only caused huge financial losses, but also increased the workload of hospital workers and deprived local mothers of services. The HA board has approved a fee-increase for the three-days-two-nights package for obstetric patients to HK$39,000 (US$5,000) from HK$20,000 (US$2,564). The package includes a pre-natal examination. The authority also encouraged expecting mothers from the mainland to have pre-natal examinations prior to coming to Hong Kong. Those who fail to do so will be subject to a surcharge of HK$9,000 (US$1,153). Also, HA Chairman Anthony Wu said the administration would not turn over information on babies born to mainland mothers to the Birth Registry before the mothers had paid their hospital bills in full. By law, such information must be passed to the Birth Registry within 42 days, meaning the HA will have to release the birth information after the 43rd day. "We hope this will be a little bit of a deterrent. If mainland mothers do not settle their bills, they will have to stay in the hospitals longer and will not be allowed to leave Hong Kong," said Wu. In addition, defaulting mainland mothers will be denied other services, with the exception of emergency services, when they return to Hong Kong. They will also be subject to administrative fees on top of their original bills. The AOM has also discussed the possibility of hiring international debt-collection companies to recover their money from delinquent mainland mothers. "We will invite tenders in the first quarter of 2007 to cover debt collection before deciding whether to take the matter forward," he said. "In the opinion of some board members, the chance of getting the money back from the mainland is very slim, and they are also concerned that the administrative fee involved will be very high." [...]

Quality, safety of food products improving in China
2006-12-19 China Daily
Food quality and safety in China has been much improved as the country completes the establishment of market access systems for food products. By the end of the year, China will have completed the market access systems for a total of 525 kinds of food products in 28 categories, according to the annual conference of the General Administration of Quality Supervision, Inspection and Quarantine yesterday. The establishment of the systems started in 2002 with five categories grain, salt, sauce, vinegar and edible oil. It was followed by 10 categories consisting mainly of meat and dairy products, and 13 categories consisting of tea, wine, and egg products. To date, more than 80,000 food enterprises have acquired market access permit certificates. Next year the administration will further set up access systems for cosmetics and food-related products such as packaging and cooking utensils. "With the completion of the systems, the quality of food products in China has been much improved, and food processing industries have been effectively regulated," Li said. The administration cancels the production qualifications of between 10 and 20 enterprises every month for various quality defects. In another development, an archives record system for additives applied by food processing enterprises, will be put into effect early next year. "Enterprises will have to make it public what additives they are using and what they are not," according to Wu Jianping, director of food production and supervision of the administration. "The archives will upgrade food production safety from the source," he said. This year, China has been confronted with food safety problems, especially in areas of poisonous additives. Recent cases include carcinogenic mandarin and turbot fish, and ducks and hens that were fed cancer-causing Sudan Red dye to make their yolks red.

Beijing bus system set for big injection of funds
2006-12-19 Xinhuanet
Beijing - Beijing will spend almost half of its transportation infrastructure budget to improve its bus system ahead of the 2008 Olympic Games in an ambitious bid to avoid becoming a giant parking lot during the event. As construction crews race against time to build more underground arteries to ease traffic pressure, the Chinese capital is planning to boost its bus system by pouring in billions of yuan. Chen Nan, a section chief of the Beijing Finance Bureau, said the municipal government would earmark 71.5 billion yuan (9.1 billion U.S. dollars) for public transportation during the 11th Five-Year Plan period (2006-10), accounting for 45 percent of the entire transportation infrastructure budget. The amount is 47.7 billion yuan (6.1 billion dollars), or 18 percent more than that provided in the 10th Five-Year Plan period (2000-05), said Li Jianguo, deputy director of the Beijing Municipal Committee of Communications. "That shows the government's determination to give priority to public transportation," Li said. The move follows a statement from the Ministry of Construction earlier this month, urging the government to promote the development of public transportation and increase financial support. The statement called on local governments to consider public transportation as a part of social welfare and not to ignore social interests in the pursuit of economic gain. It also called for more financial support and subsidies for bus companies. Li also released a plan aimed at optimizing bus routes and reducing fares. According to the plan, 110 overlapping lines within the third ring road will be scrapped, and the 1,500 buses currently plying those routes will be relocated to connect the more than 300 communities outside the city proper. Every community that has a population of more than 7,000 people should have access to at least one bus route, Li said. Li said the goal was to better distribute the city's transportation capability to benefit the "biggest majority." [...] The city's 593 bus lines currently carry 3.78 million people a day. [...] Low-fee parking lots will be constructed around the Third Ring Road to encourage people who drive cars to switch to buses to the inner city. "This is just the first step of our reform. We will make adjustments as we implement the plan," Li said. By 2010, the utilization rate of public transportation will be raised to 40 percent in the capital, Li said.

China tops in greenhouse gas cuts
2006-12-19 Xinhuanet
Beijing - China has been one of most effective nations in reducing greenhouse gas emissions as outlined in the Tokyo Protocol, a senior environmental official said yesterday. Since the beginning of this year, China's reduction has been more than 40 percent of the total reduction of the 40 countries involved in the Clean Development Mechanism of the Tokyo Protocol, according to Lu Xuedu, deputy director-general of the office of global environmental affairs at the Ministry of Science and Technology. Through the Clean Development Mechanism, the total reduction in the world at the end of this year is expected to reach about 106 million Certified Emission Reductions (CERs). China is expected to reach more than 46 million CERs. The mechanism is run on cooperative projects between developing and developed nations. As a developing country, China has 164 projects in existence or in the planning stages, with help from around the globe, according to Lu. Of these projects, 18 are in cooperation with Japan. In a bid to better carry out the projects, a training course started yesterday for more than 50 environmental scientists and officials from 17 Chinese cities. Leading environmental scientists from China and Japan will lecture on the guidelines of the Clean Development System, laws governing greenhouse gas emissions, and the preparation of paperwork in related projects. The training is sponsored by the Japan International Co-operation Agency and hosted by the China 21st Century Agenda Center under the Ministry of Science and Technology. "The training will greatly improve the ability of local governments and their scientists to implement the international Clean Development Mechanism," said Huang Jing, deputy director of the center.

China's largest urban tunnel project burrows onwards
2006-12-18 Xinhuanet
Chongqing - Chongqing, the largest city in southwest China, is burrowing forward with what is believed to be the country's largest urban tunnel project. On completion, the Daping urban tunnel project will boast two 1,435-meter-long tunnels connecting to a 4.35-km bridge that spans the Jialing, a tributary of the Yangtze River. It will be the widest tunnel in Asia. Tunnelers struck through on the left part of the tunnel on Saturday after more than a year of effort. The right tunnel, just 30 meters from completion, is expected to be finished on Christmas Day, according to Fan Jianguo, deputy secretary of the Party committee of the No.1 Company with China Railways No.8 Bureau, the builder. As for the bridge, construction workers have so far completed four fifths of the work, and will now spend more time on tasks such as road surface improvement, illumination and erection of road signs and fire control devices, according to Fan. The Daping urban project starts from a mountain side near the Daping water tower, traverses Daping Mountain, connects to the Jiahua Bridge and ends at Xindongfu Garden in Huangshaxi. The dual tunnels are sandwiched in between existing tunnel tracks for urban light track rail and a separate railway tunnel connecting Chongqing and Xiangfan, a city in western Hubei Province. The three-lane tunnels will restrict cars to speeds of 80 km per hour. They will connect Jiangbei District with downtown Yuzhong and Yangjiaping districts, cutting travel time by half an hour. The 2.2 billion yuan (about 275 million U.S. dollars) tunnel project will go into service next June. Chongqing, whose urban districts are divided into three major parts by the mighty Yangtze and its tributary Jialing, is well-known for its mountainous terrain. Travel around the mountainous city used to be very difficult but improved transport infrastructure has made commuting much easier.

Shenzhen police get tough on IPR
2006-12-20 People's Daily Online
Local police detained 94 suspects in the first 11 months of this year for violating intellectual property rights in cases representing economic losses of 100.3 million yuan (US$12.8 million). "We will spare no effort to protect intellectual property rights, whether the intellectual property belongs to domestic or foreign companies," Li Honglang, deputy director of the Shenzhen Public Security Bureau, said at a press briefing yesterday. The bureau has set up a special team to pursue cases involving intellectual property infringement. The team is composed of 14 policemen selected for their experience in the field. The team is expected to grow by 22 new officers in the coming year, said Li. In the latest case, a man surnamed Huang was arrested on November 2 for making vehicle-use DVD players bearing the trademarks of Pioneer and JVC. The case represented about 110,000 yuan (US$14,048) worth of economic losses for those companies. On the same day, police raided an illegal factory where workers were making bottle tops for shampoo bearing the logos of several trademarked brands, including Proctor and Gamble (P&G), Slek and Clairol. They found about 100,000 bottle tops and a variety of manufacturing equipment. The raid represented economic losses of 1.36 million yuan (US$173,691) for P&G China, said Li. In July and September, the police broke up two illegal counterfeiting rings producing fake bluetooth earphones and computer processors bearing the trademarks of AMD and Intel, respectively. The raid netted goods representing economic losses of 8 million yuan (US$1.02 million) for the two companies. The police were having greater success in arresting counterfeiters, said Li, adding that the situation is improving. "We accepted 109 intellectual property-related cases in 2004, with about 670 million yuan (US$85.6 million) involved. But the number of cases dropped to 74 last year," Li said.

China, UNDP sign on project to solve land rights problems
2006-12-21 China Daily
A new project that aims to find solutions to problems over land rights, governance and public services in rural China was signed between the United Nations Development Programme (UNDP) and the Chinese Government yesterday. The Chinese side involved the Ministry of Land and Resources (MLR), China Institute for Reform and Development (CIRD), and the China International Centre for Economic and Technical Exchanges under the Ministry of Commerce. Entitled "Revitalizing Rural China through Land Policy Reform and Innovation in Rural Governance and Public Service Delivery," the four-year project is designed to propose strategic policies and legislative reforms to revitalize the country's rural areas, with particular emphasis on issues related to land rights, access to public service and local governance. By enhancing growth, efficiency and equity in rural areas, the project aims to modernize development of the countryside and reduce rural-urban inequalities, said Khalid Malik, UN Resident Co-ordinator and UNDP Resident Representative in China. "Securing rural land rights, stronger bargaining power for farmers, and sufficient compensation for land use have been identified as keys to rural reform in China," Malik said. With the country's rapid urbanization and industrialization, the demand for land has led to rampant illegal expropriation at local level. "As the pressure for urban expansion mounts around the country, stories abound of farmers being forced off their land with little compensation and no means of recourse," Malik said. "Farmers who have lost their land come to cities and cause new problems." [...]

Slowdown to be tackled for Games
2006-12-21 SCMP
Beijing will immediately loosen economic policies, if necessary, to sustain economic growth in the run-up to the 2008 Olympic Games, a prominent economist said yesterday. Wang Jian, secretary-general of the China Society of Macroeconomics, an arm of the country's main economic planning agency, the National Development and Reform Commission, said he saw a chance of an economic slowdown next year that could drag on until late 2008 or 2009 if not addressed. "But given the Beijing Olympics, would the Chinese government allow such a slowdown?" Mr Wang asked rhetorically. "I've heard a lot of debates about this at the State Council, and the central government leaders have decided that if there's too great a slowdown, they will loosen controls immediately." Mr Wang said slowing loan growth in recent months was evidence that a raft of credit and administrative curbs aimed at cooling an investment, frenzy were starting to bite. The economy could also catch a chill next year from the spillover of a housing-induced US slowdown, he added. "If there is a slowdown under way, then we should see fixed-asset investment growth of less than 15 per cent by next June," Mr Wang said.

Workplace and road accidents kill 300 a day - Death toll this year is over 109,000, but mine fatalities fall 20pc
2006-12-22 SCMP
Some 300 people died in traffic- and work-related accidents every day on the mainland despite a 10 per cent drop in the death toll over the past year, officials said yesterday. Minister of State Administration of Work Safety, Li Yizhong, said that 109,143 people had died so far this year in traffic- and work-related accidents, a 10.3 per cent fall from the same period last year. There have been 618,632 accidents this year, representing a 9.9 per cent drop over the same period. "Last year 127,000 people died in [traffic- and] work-related accidents; the figure will be substantially lower this year," Mr Li said. But Mr Li warned that there was no room for complacency, as it would take more than a decade for China to come out of the shadow of high workplace fatalities during its rapid industrialization. The death toll in coal mine accidents dropped by 21 per cent in the first 10 months this year, but Mr Li warned of rampant corruption which was hampering efforts to improve the industry's notorious safety standards. [...]

Child abuse on the rise in Guangdong
2006-12-21 China Daily
Guangzhou - The mental and physical abuse of minors is widespread and growing in South China's Guangdong Province, a recent survey suggested. More than half of the children in Guangdong had suffered physical abuse at the hands of their parents and 44 per cent had been insulted mentally by teachers, according to the survey by the Children's Department of the Guangdong Provincial Women's Federation. "We have found that a growing number of children has been subjected to physical violence at home and insulted mentally by teachers," Zhang Liling, the department's director, told China Daily yesterday. "The increasing level of child abuse will, by all means, have a lasting and damaging impact on children's mental health," she added. Zhang said parents were responsible for most of the physical violence directed at minors, while teachers were behind the mental abuse. "Many parents and teachers seem to think that abuse, either physical or mental, is helpful for children's future development," Zhang said. The survey of more than 1,200 children and 274 parents indicated that more than half of the parents interviewed were of this view. In addition, more than 45 per cent of parents said it was appropriate for teachers to use "moderate" insults to get children to behave, Zhang said. "The survey shows there is a clear association between maltreatment during childhood and mental health," Zhang said. Zhang said young people who had been subjected to regular abuse performed significantly worse academically than their peers. They also had higher levels of depression and suicidal tendencies, compared with other children. The survey coincided with the Campaign of Prevention of Violence Against Children, which was launched in June by the United Nations Children Fund (UNICEF) in Guangdong, Zhejiang and Shanxi provinces. Under the campaign, which lasts for the next five years, a series of studies on children's development will be carried out. The authorities are also expected to draw up measures to prevent child abuse. "Its goal is to establish a professional system to help abused children," Zhang said. Citing the survey, Zhang said the increasing level of child abuse had much to do with traditional views of childhood development. "Many parents and teachers care more about children's future development than their dignity and rights," Zhang said. Li Liping, an associate professor at the Guangdong-based Shantou University, yesterday called on schools and families to be more aware of children's rights. "There is an urgent need to promote research and study programmes to raise community awareness and prevent violence against children," Li said. Schools and homes can become dangerous places for children. [...] Teachers and parents should care more about children's psychological development, Li said, adding that government institutions should also play an "active and responsible" role in protecting children's rights.

Macao celebrates 7th anniversary of return to China
2006-12-20 Xinhuanet
Macao - Macao celebrated the seventh anniversary of its return to China Wednesday with fireworks brightening up the deep blue evening sky. The 15-minute huge fireworks display was launched at the Macao Tower, the highest building in the city, by the Macao Government Tourist Office, which was presented with synchronized music. Thousands of people gathered at the Tower and the neighboring areas to watch the display while enjoying the traditional Chinese music. Early in the morning, a flag-raising ceremony was held to mark the anniversary. Red five-star Chinese national flag and emerald green lotus-featured Macao regional flag were hoisted in the music of the Chinese national anthem at the Golden Lotus Square downtown Macao. Edmund Ho Hau Wah, chief executive of Macao Special Administrative Region (MSAR), led the ceremony. Those witnessed the flag-hoist included officials from the central government's liaison office and foreign affairs commission in Macao as well as the MSAR government and hundreds of local residents. [...]He noted that the region has been in a period of progress since it returned to the motherland in 1999 and has witnessed its gradual integration into the regional and international communities. The MSAR owes much of its success to the capability to maintain harmony amid the rapid social changes, with the full support of the central government, he stressed. "In a harmonious environment, we should mitigate conflicts to promote the self-improvement," he said. Ho also vowed to improve public services to meet society's needs in the coming years.

Police pay family after man dies in cell - Officials close book on farmer's death amid torture suspicions
2006-12-20 SCMP
Hebei police have paid 300,000 yuan to the family of a farmer who died in custody last month on the condition that his relatives do not take legal action against officers. A legal analyst said such payoffs were part of judicial practice on the mainland but added that such matters should not be settled in private. Cangzhou farmer and driver He Yujiang was taken to the Xiaowangzhuang police station for questioning on November 22 over an unspecified theft and two days later the 47-year-old was found dead at the station. Police would only say that he died suddenly and would not explain his death. The family suspects He was tortured and his wife had to spend two weeks under sedation in hospital after seeing her husband's body. The family last week signed an agreement with the Xiaowangzhuang police station and the Cangzhou Public Security Bureau's Yunhe branch not to take the matter further or hold police officers accountable for their relative's death in return for 300,000 yuan. The money was paid into a family account. The dead man's brother, He Yushu, said the family had to accept the deal. "The person is dead. We would not win the case if we lodged a lawsuit," he said. Mr He said the family had wanted a bigger payout, but did not think they could get any more money. "If we ask for more, they won't give it to us. It has been such a long time and it is OK that we finally have the money." Concerning the lack of explanation for his brother's death, Mr He said: "We have no way out. We have to continue with our lives." He also said the family had refused to allow a postmortem examination of his brother's body, even though local prosecutors advised them to request one. "We did not want to do it. What if [the authorities] cheated us?" According to village tradition, the dead man was buried in farmland near his home after the compensation was settled. China Lawyers' Watch Centre director Zhao Guojun said police should explain how a man could die in custody. "We must be clear over whether anyone is responsible for his death, and if police were at fault," Mr Zhao said. "If anyone is found to have inflicted fatal injuries on other people, it means he has committed a crime and a crime against the public should not be settled in private. If settled privately, there is no chance of social justice."

Farmer sentenced to die for fatal tractor attack
2006-12-21 SCMP
A farmer from Zhejiang province has been sentenced to death for using his tractor to run down and kill three people, including a government official, over a minor land dispute, Beijing's The First newspaper reported. In August, Wu Guangde drove into a crowd of about 20 people who were working on a road project that included a new concrete embankment adjacent to his home. Wu was angered that the local government refused to compensate him for the project, which he opposed, it said. He killed a low-ranking local government official, as well as two security guards. Nine other people were injured.

Repatriated drugs boss gets death sentence
2006-12-20 SCMP
A court in Guangzhou has sentenced to death a drugs boss repatriated from Thailand, Xinhua reported yesterday. Chen Bingxi, 50, planned to appeal against his conviction for selling and trafficking more than 100 kg of heroin. The drugs were said to be worth US$5.5 billion if sold in the US. Chen, his wife Chen Baoyu and five alleged accomplices denied charges of illegally manufacturing methamphetamine, or ice, and selling it on the mainland between 1999 and 2002. Two members of Chen's drugs ring received death sentences, suspended for two years, and two were jailed for life, Xinhua said. Chen's wife was jailed for 11 years and six months for manufacturing drugs and illegally leaving the country.

China's first step forward in its "harmonious world-oriented" diplomacy
2006-12-19 People's Daily Online
The outgoing 2006 has been the first year for the Chinese government to implement its "harmonious world-oriented" diplomacy. When Chinese President Hu Jintao set forth the foreign policy goal for a harmonious world in October 2005, world public opinion was in favor of it but with a sense of perplexity, not knowing how to put it into practice. China's diplomatic practice in 2006, however, indicates that China, by taking into account of both its national interests and the interests of other countries, can do it to the best of its ability. With qualitative changes having occurred in its economic strength since the turn of the 21st century, China became the third global trade power in 2004, the No. 1 foreign exchange reserve nation in 2006, and one of the twin engines that drive the world economy forward. In term of three essential factors for the national strength, namely, economy, military and politics, only China's economic strength reached the top global criteria. Hence, China assumed its most eminent responsibility economically in 2006. At the Beijing Summit & Third Conference of the Forum on China-Africa Cooperation (FOCAC), the Chinese government undertook eight major measures to support African nations, and various aid initiatives to Africa in three years exceeded 10 billion US dollars. In 2006, the number of aid items and the total sum of the money the Chinese government had provided for natural disaster-ridden countries have far exceeded that in the past, and also provided emergency aid to disaster victims in a few developed nations. Meanwhile, China and the United States held their first-ever strategic economic dialogue to stem the economic friction between them from being politicalized and to ensure the stability and sustained growth of the global economy. [...] For Central Asia, China hosted the Summit of the member nations of the Shanghai Cooperation Organization (SCO), and started up the drafting of cooperation codes in various spheres within the SCO framework so as to lay a legal guarantee for long-term good-neighbourly and friendly cooperation. For Southeast Asia, China presided over the China-ASEAN Memorial Summit and raised an all-round cooperation proposal in the strategic, economic, security and culture spheres, which were subsequently accepted by leaders of those countries attending the meeting. Toward Northeast Asia, China has striven to mediate between the U.S. and the Democratic People's Republic of Korea (DPRK), and enables the six-party talks on the Korean Peninsular nuclear issue to resume after one-year hiatus. With regard to South Asia, President Hu Jintao reached consensus for strategic cooperation with India during his India trip and decided to institutionalize a high-level bilateral dialogue mechanism. For the overall stability of the East Asia region, the Chinese government received the visit by Japanese new Prime Minister Shinzo Abe, and availed the sliding Sino-Japanese ties which have been deteriorating for years, of a renewed opportunity for improvement. The impact of China's military strength still underplays its economic and political strength, though it has been developed to some extent in recent years. Due to its relatively weak military strength, China assumes less responsibility militarily than its economic and political responsibilities. But this does not imply China's apathy or unwillingness to share more responsibilities. This year, China has sent more peacekeepers to join the United Nations Peacekeeping Forces, and a military observer it dispatched sacrificed his life at his post; it conducted anti-terrorist joint military drills or exercises with other member nations of the SCO organization, and held joint maritime search and rescue operations with the U.S. and India; the Chinese navy paid goodwill visits to a number of nations; and China conducted more military exchanges with other nations. And China shall take up more international security obligations along with the growth of its military strength. [...]

Experts warn about "de jure independence" moves in Taiwan
2006-12-20 People's Daily Online
Chinese mainland experts have called for vigilance regarding the possibility that Taiwan authorities, as an election gambit, increase efforts to push "de jure Taiwan independence" in 2007. "We should not lower our guard. In fact, we should step up preparations for opposing and countering 'Taiwan independence'," said Xu Shiquan, executive vice-president of the National Taiwan Research Society, at a symposium here on Tuesday. Election of members of Taiwan's "legislature" will be held in 2007. It is also an important year in the "constitutional reform" scheme of Taiwan leader Chen Shui-bian and other forces pushing "Taiwan independence". Xu said "Taiwan independence" forces may impact relations across the Taiwan Strait for a short period by pushing "de jure Taiwan independence", but fundamentally it is difficult for them to roll back the momentum for peace and stability in cross-Strait relations. He said cross-Strait relations have developed in the direction of peace and stability over the past year thanks to increasing exchanges in many fields and effective mainland policies which have been welcomed in Taiwan. "Whether in Taiwan, on the mainland or in the international community, there is no space and no possibility for realizing 'Taiwan independence'", he said. He said there are both risks and opportunities in cross-Strait relations. "The mainland should adhere to the policy of pinning its hopes on the Taiwan people, maximize positive factors favoring peace and stability in cross-Strait relations, minimize negative factors and continue to restrain 'Taiwan independence' secessionist activities," he said. Scores of mainland experts and scholars on the Taiwan issue, including vice-president of the Association for Relations Across the Taiwan Strait Wang Zaixi, attended the year-end symposium of the research society.

Economy expected to grow by 9.8% in 2007
2006-12-22 China Daily
China's sizzling economy will slow slightly next year but still should grow by a robust 9.8 percent even as Beijing extends controls to cool off an investment boom, the Central Bank said in a report published Friday. The forecast was in line with outside estimates but well above the 8 percent target for 2007 set by a government strategy report released this month. It would be by far the highest growth rate for any of the world's major economies. Growth this year should be 10.5 percent, said the Central Bank report, which was carried on the Web site of the official China Securities Journal newspaper. That was in line with earlier official forecasts. Chinese leaders want rapid growth to reduce poverty. But they are trying to stop an investment boom in real estate and other industries where they worry that overspending on unneeded factories and other assets could ignite inflation or a debt crisis. Beijing has raised interest rates twice this year, tightened controls on credit and imposed curbs on new construction. Despite the controls, the government says investment in factories and other fixed assets in the first 11 months of this year soared by 26.6 percent over the same period last year. In comments to state media, Ma Kai, chairman of China's main planning agency, the National Development and Reform Commission, said this month that the "relentless expansion has yet to be stopped." Ma said in an interview Friday on the Web site of the People's Daily that economic controls will be extended into next year to prevent runaway investment. Inflation should be 1.4 percent this year and 2 percent in 2007, the Central Bank report said. The government reported economic growth of 10.7 percent for the first nine months of the year. But official indicators show the expansion has slowed slightly since then. The planning report, released this month following a meeting led by President Hu Jintao, said Beijing would focus next year on trying to shift the basis of China's economic growth from investment and exports to domestic consumption.

Stricter rules on ethanol production
2006-12-21 China Daily
The central government is taking further action to control the growth in grain-based ethanol processing. The move follows an increase in general food prices due to grain being used as a raw material in biofuel processing. An official paper was issued by the National Development and Reform Commission (NDRC), to cool down what it called "the overheated and blind" trend of development in ethanol processing. China produced 1 million tons of ethanol last year. It ranked after Brazil and the United States, as one of the world's major producers. More than 10 million tons has been produced or is being produced since the beginning of this year. The demand for ethanol has led to a rise in grain prices which in turn has trigged price rises in other food items. The NDRC pledged to rein in the development of the ethanol industry by centralizing the approval procedure for all new projects, grain-based or not. One "fundamental principle" in China's biofuel development, the NDRC said, is to support its production based on non-food vegetation, rather than on such grain items as corn. Items of non-food vegetation, as defined by the NDRC, are primarily cassava (a plant with starchy roots), sweet sorghum, and other plants with high fibre content. The NDRC paper will remain the official guideline for the ethanol industry as the central government is still evaluating the nation's pilot projects, and the ethanol development strategy for China's 11th Five-Year Plan (2006-2010). [...] Last year, ethanol production used 16 million tons of corn, a growth of 84 per cent from 2001, while the nation's corn output only grew by 21.9 per cent over the same period. China is expected to produce about 15 million tons of ethanol by 2020. But if it is entirely, or for the main part, obtained from corn, the industrial demand will threaten the nation's annual supply. Corn production was only about 128 million tons last year. According to the China National Grain and Oil Information Centre, corn prices in Dalian increased a further 30 yuan (US$3.75) per ton this week, after rising from 1,330 yuan (US$166) to 1,530 yuan (US$191) from late October to earlier November. But as a result of the government's attempt to cool down the market, "the investment craze will soon be over," said Han Xiaoping, CEO of online energy information website www.china5e.com. [...]

U.S. says China does not manipulate its currency
2006-12-20 People's Daily Online
China does not manipulate its currency to gain unfair trade advantage, the U.S. Treasury Department said Tuesday. The Treasury "concluded that no major trading partner of the United States met the technical requirements for designation" of a country that is manipulating its currency to gain unfair trade advantages, said the department in its report to Congress on international economic and exchange rate policies. In the first half of 2006, China had taken further steps to strengthen and reform its financial sector to accommodate currency and interest rate fluctuations, said the report. During the six months, China took further steps to reform the currency market and RMB flexibility increased compared to the last six months of 2005, the report said. This increased flexibility, however, is considerably less than is needed, it added. The report, which the Treasury is required to deliver to Congress every six months, also said "China's economy needs a more balanced pattern of growth that is more consumption-based with a flexible exchange rate regime and a modernized financial sector."

SOEs focus on domestic stock market
2006-12-20 China Daily
The stock market's bull run has certainly not gone unnoticed by large State-owned enterprises (SOEs) which for the first time in more than a decade will focus on raising capital domestically rather than overseas. SOEs now have a wider choice of listing markets; and more SOEs listed overseas will return to the mainland market, Li Rongrong, chairman of the State-owned Assets Supervision and Administration Commission (SASAC), said yesterday. At the same time, SASAC will try its best to make sure that listed SOEs will live up to the expectations of investors at home and abroad. Li did not specify how many large SOEs will launch domestic initial public offerings (IPOs) this year but said he was "certain" that some overseas-listed SOEs will accelerate the pace of going public back home. China Life Insurance, which is listed on the New York and Hong Kong stock exchanges, has won the approval of the securities regulator to issue shares on the Shanghai Stock Exchange next month. The country's biggest life insurer is planning to raise as much as 25.5 billion yuan (US$3.23 billion), the second-largest public offering in the A-share market after Industrial and Commercial Bank of China (ICBC), the country's biggest lender. In October, ICBC raised about US$21 billion in a dual listing in Hong Kong and Shanghai, where the offer was oversubscribed 25 times. China's benchmark stock index rose 0.99 per cent to an all-time high last Thursday, following reforms in the capital market and inflows of funds from local and foreign investors. The situation has prompted many to think that for the first time in a decade, the stock market is able to reflect the booming economy. "The central SOEs will contribute to the healthy development of China's capital market," Li said. "We'll strive to improve the performance of the central SOEs, which I believe would continue to provide good returns to investors." Li Yongsen, a researcher at the Finance and Securities Research Institute affiliated to Renmin University of China in Beijing, yesterday said the shift of larger SOEs to domestic bourses will, in turn, offer more choices for investors. China has 161 central SOEs under SASAC's supervision, which are expected to generate a record 720 billion yuan (US$92.3 billion) in profits this year, according to the latest projections by the commission. [...] The annual investment of the central SOEs totals 1 trillion yuan (US$126.6 billion), 97.6 per cent of which is channelled to core business operations, he said.

China Coal Energy Co. lists in Hong Kong
2006-12-19 Xinhuanet
Beijing - The China Coal Energy Company Limited, China's second largest coal company, went public on the Hong Kong Stock Exchange on Tuesday, with its shares opening at 4.50 Hong Kong dollars, up 11.1 percent on its initial public offer price. About 1.38 billion shares were traded for an aggregate turnover of 6.23 billion Hong Kong dollars. The shares closed at 4.56 Hong Kong dollars after hitting a high of 4.60 Hong Kong dollars. The company raised 15.12 billion Hong Kong dollars from an initial public offering of 3.246 billion shares. Boasting the fifth largest coal reserves of listed coal companies worldwide, the firm produced 50.12 million tons of raw coal last year and raked in 30.1 billion yuan in sales revenue, posting 3.3 billion yuan in net profits. The company said its raw coal output will reach 92.3 million tons by 2008. The China National Coal Group holds a majority stake in China Coal Energy Co.

Prospect of six-party talks remains misty though talks to end Friday
2006-12-22 People's Daily Online
The prospect of the ongoing six-party on the Korean Peninsular nuke issue remained hazy although the talks are said to end on Friday. The chief negotiators of the Democratic People's Republic of Korea (DPRK) and the United States held two rounds of one-on-one meetings on Thursday, the Chinese press center said, without releasing details of their talks. The top U.S. envoy Christopher Hill, after a third straight day of one-on-one talks with his DPRK counterpart, said he had a "long and difficult" day. "Today was a not a day when we registered much progress..the talks are expected to end on Friday," he said. Clearly dissatisfied with the DPRK's emphasis on the financial issue,Hill stressed that "it's time to talk the denuclearization and discuss the implementation of the joint statement" in September 2005. Under the joint statement, the DPRK agreed to abandon its nuclear program in exchange for economic aid and security guarantees. Formally known as the second phase of the fifth round since 2003, the talks resumed on Monday after a 13-month suspension and involved China, the DPRK, the United States, the Republic of Korea, Japan and Russia. As the talks entered the fourth day on Thursday, a flurry of one-on-one negotiations were held in the Diaoyutai State Guesthouse. Host China also stepped up its diplomatic efforts on Thursday by holding direct meetings with the other five parties, aiming at narrowing down their differences. Yet some envoys said there is little chance of breakthrough this week. "The situation of the talks remains severe, and there is no prospect of breakthrough up to now," Japan's top negotiator Kenichiro Sasae told reporters in the hotel Thursday evening. The DPRK "holds a very strong position on the financial issue, which is currently the biggest difficulty in the talks," Sasae said. Financial sanction imposed on the DPRK was one of the key stumbling blocks that had stalled the six-party talks for the past 13 months. On Thursday morning, U.S. treasury officials headed back to Washington after they held two rounds of talks with their DPRK counterparts on Tuesday and Wednesday. Daniel Glaser, who was leading the U.S. treasury delegation, said the meetings were business-like and useful, but hinted that no progress came out of the financial talks. Glaser said he might meet with the DPRK counterpart next month in New York. "There is no point getting too pessimistic or optimistic each day," Hill said. On Friday, Hill will meet again with the chief DPRK negotiator Kim Kye-gwan. "We have to see whether tomorrow will be a better day," Hill said, adding he will leave Beijing Saturday morning.

Chung Vay-Luy
Embassy of Switzerland