SCHWEIZER BOTSCHAFT IN BEIJING
EMBASSY OF SWITZERLAND IN BEIJING
AMBASSADE DE SUISSE EN CHINE

Der wöchentliche Presserückblick der Schweizer Botschaft in der VR China
The Weekly Press Review of the Swiss Embassy in the People's Republic of China
La revue de presse hebdomadaire de l'Ambassade de Suisse en RP de Chine
  25.12-29.12.06, No. 147  
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Foreign Policy

Japan visit date 'still to be fixed'
2006-12-29 China Daily
The Foreign Ministry said yesterday Chinese leaders would visit Japan at a convenient time next year, but stopped short of confirming a report which said Premier Wen Jiabao would visit Tokyo in April. "China and Japan have agreed in principle Chinese leaders will visit Japan at a time convenient for both sides," the ministry spokesman Qin Gang said at a regular news briefing yesterday. "But the specific date for the visit has yet to be set through diplomatic consultations." A Japanese newspaper Nihon Keizai Shimbun reported on Wednesday that Wen is set to visit Japan in April - the first such visit in more than six years. The Asian neighbours hope the visit will improve bilateral ties, which deteriorated to their worst level in decades over former Prime Minister Junichiro Koizumi's visits to a controversial Tokyo war shrine, the Nihon Keizai Shimbun said in its evening edition. "We have noticed the report," Qin said. "Related information will be released immediately we get it." Referring to a question about whether Israeli Prime Minister Ehud Olmert is set to visit China, Qin said he does not have any information. "China and Israel have exchanges and co-operation at various levels and in various fields," Qin said. "We have had no information about the Israeli leader's visit to China. If any, we will make it public at a proper time." At the news briefing, Qin also spoke highly of the efforts made by the Secretary-General of Shanghai Co-operation Organization (SCO) Zhang Deguang, who will conclude his three-year term at the end of this year. Bolat Nurgaliyev from Kazakhstan will succeed Zhang next year. "During Zhang's three-year term, the SCO secretariat worked in an efficient, orderly and co-ordinated manner," Qin said. Currently, political mutual trust has been intensified among the SCO members while pragmatic co-operation has been deepening, and the influence of the organization on the international community has been rising, he said.

FM spokesman: Nanjing Massacre can not be denied
2006-12-26 Xinhuanet
Beijing - The Japanese invasion of China and the Nanjing Massacre are historical facts that can not be denied, said Chinese Foreign Ministry spokesman Qin Gang here on Tuesday. "There is a mass of ironclad evidence for the Nanjing Massacre, and the international community has reached a final conclusion on it long ago," said Qin. He was responding to a journalist's question on whether the Nanjing Massacre would be discussed at the first joint China-Japan study of history which opened here Tuesday. Qin did not confirm whether Chinese and Japanese experts would discuss the Nanjing Massacre issue. Chinese President Hu Jintao and Japanese Prime Minister Shinzo Abe agreed in October to begin the history research of the two countries by the end of the year, and the two foreign ministers agreed to release the results by the end of 2008. Qin said he hoped the experts could conduct the study on the basis of principles of the three political documents signed between China and Japan and face history "correctly." "We hope the study of 2,000 years of history between China and Japan as well as modern and post-World War II history will enhance the objective understanding of historical facts," said Qin. "Positive momentum has been seen in the improvement and development of China-Japan relations, and we consider the joint study a correct decision as it will help both sides properly handle matters through dialogue and exchanges, and create the foundation for the future of bilateral relations," said Qin.

China aids 86 developing countries in 1st 11 months
2006-12-28 Xinhuanet
Beijing - China provided aid to 86 developing countries in the first 11 months this year, said the Commerce Ministry on Thursday. The major projects included a national theater in Senegal, an inner city road upgrade project in Kenya, a stadium in Mongolia and a government building project in Guinea-Bissau. Guided by the concept of "harmonious world" put forward by Chinese President Hu Jintao in the UN Assembly, China made progress in developing relations with world powers, neighbors, developing countries and in its multilateral diplomacy in 2006. "China's diplomacy has made great achievements in 2006," said Wu Jianmin, president of the China Foreign Affairs University. China saw frequent personnel exchanges with developing countries and offered training to 6,305 foreign officials and technicians in the first 11months, sending 78 young volunteers overseas.

 

Domestic Policy

Foreign journalists 'welcome in China'
2006-12-29 China Daily
The country's top information official yesterday said his office is a "constructive partner" to foreign journalists, whom he expects to report on China more objectively. The State Council Information Office has not only been pushing publicity-shy officials to talk to the media, but also promised to help implement new regulations that give foreign journalists unprecedented freedom in reporting China. "We cordially welcome international journalists to come and see China for themselves for interviews and exchanges," said Cai Wu. "Through your on-the-spot reporting and interviewing, I'm confident you will come to new conclusions on China." Cai was speaking at the last press conference organized by the information office of the State Council China's cabinet this year, when it invited 59 ministers and vice-ministers to meet the media on 58 occasions. Acknowledging "encouraging progress" made by the foreign media in covering China the volume of coverage rose by up to 40 per cent year-on-year Cai said the number of objective reports on the Chinese economy and society increased. But, he said: "As for overseas reports on China's situation, I think the proportion of positive or totally objective stories is still quite small." Some renowned press organizations have carried investigative reports and comments on China by those who had never been to the country or know little about it but base their reports on so-called material provided by some unreliable sources, he said. "I don't think this is responsible reporting." He said the outside world has a keen interest in understanding China in a deeper and more wide-ranging format; and his office would better furnish the international community with what is being said, thought and done in China. In facilitating more accurate and objective reporting, the information office and foreign media are in a "constructive partnership," Cai said. For one thing, Cai said his office would help non-Chinese reporters resolve problems they may run into in conducting interviews when the new regulations on foreign media take effect on Monday. China issued a set of regulations on December 1 saying that when foreign journalists interview a person in the run-up to, and during, the 2008 Olympic Games, they only need the consent of the interviewee. The statute removed some restrictions that have been in place since the Regulations on the Supervision of Foreign Journalists and Resident Foreign News Organs were issued in 1990. "Many changes have taken place since 1990; we needed to bring the regulations up to date," he said. "The Olympic Games provided us with a good opportunity to revise the regulations." Cai pointed out that the statute does not limit foreign journalists to sports the scope of coverage may include politics, the economy, society, culture and other fields. The new rules expire on October 17, 2008 but Cai hinted their validity might be extended. "If the new regulations prove beneficial to our development and to exchanges between us and foreign media... then I imagine there will be no need to change the policy." Cai, however, said it was his "personal view."

Conservation comes first, Hu warns local officials
2006-12-27 SCMP
Local authorities have been urged by President Hu Jintao to put energy and resources into conservation and shut polluting enterprises amid concerns that Beijing is losing the battle to cut pollution and energy use. Energy consumption and pollution control were connected to national and economic security, and must be given strategic significance in economic planning, Mr Hu said in Beijing yesterday, according to state television. His remarks, made at a Politburo study session, came after grim warnings by senior officials and experts that the government looked set to miss energy conservation and pollution control targets this year. Premier Wen Jiabao announced this year that by 2010, the central government planned to cut the amount of energy used per unit of gross domestic product by 20 per cent and reduce air pollution by 10 per cent. But Beijing has admitted that despite increased government spending and public attention, local governments had failed to rein in energy-hungry economic growth and total pollution emissions were still rising. "Development and conservation are equally important and conservation should be put first," Mr Hu said. It remained an urgent and difficult task to work out ways to increase the efficiency of energy and resources used during the 11th Five-Year Programme, he said. "We must strive to make marked progress at an early date," he added, vowing that energy-wasting and polluting enterprises must be closed. Meanwhile, the mainland's environmental watchdog is poised to act on the soaring number of petitions with a proposed review process designed to keep environmental disputes from the courts. The move by the State Environmental Protection Administration was a belated attempt to help Beijing quell widespread public dissatisfaction over rampant pollution disputes and widespread environmental degradation, mainland experts said. The forthcoming introduction of the administrative review process on environmental issues was also aimed at preventing the watchdog from the embarrassment of being involved in lawsuits and trials, according to Xinhua. "Environmental petitions are rising at an annual rate of 30 per cent," Yang Chaofei, director of the State Environmental Protection Administration's Policy, Law and Regulations Department, was quoted by Xinhua as saying. "In cases of unclear or mixed jurisdiction, we will take up the petitions first to give the public more opportunity and save the trouble of the petitioners [being involved in litigation again]," he said. The draft policy arose after the administration lost a lawsuit in June that was initiated by dozens of fish farmers in Wenzhou, Zhejiang province, Xinhua said. The 82 farmers had lost about 170 million yuan because of industrial pollution last year. They took the administration to a Beijing court after both the watchdog and its Zhejiang bureau ignored their request for government intervention and compensation.

China adheres to family planning policy: Premier Wen
2006-12-28 People's Daily Online
The Chinese government will adhere to the basic policy of family planning with improved services and stronger leadership, said Premier Wen Jiabao at a national conference. Family planning was crucial to China's modernization and the building of a harmonious society, Wen told the national conference on population and family planning held on Tuesday and Wednesday. The priority and the most difficult task of family planning was in the countryside, where maintaining a low birth rate was crucial, said Wen, calling for extended coverage of rewards and subsidies for rural people. The administration and service should be improved to grant subsidies and social insurance in encouraging birth control, and more needy families should be covered by social assistance schemes. Family planning among migrant workers needed to be strengthened as well, Wen added. He stressed that the Party committees and local governments must enhance leadership and improve the working and living conditions of the family planning personnel. State Councilor Hua Jianmin said local governments should give the same free birth control services to migrant workers as they give to local residents. Hua said gender identification for non-medical purposes would be severely punished and policies advocating the rights of girls and women as well as gender equality and birth control would be carried out. The prevention and intervention of birth defects would be strengthened too, he said.

Vote on labour contract law put off
2006-12-27 China Daily
The country's top legislature yesterday reviewed the second draft of the controversial labour contract law but decided not to vote on it. The eight-chapter draft that details the establishment, revocation, revision, and termination of labour contracts will be the first such law of its kind if passed by the Standing Committee of the National People's Congress (NPC). However, disagreements between representatives of employees and employers have slowed the legislative process, and lawmakers decided not to vote on the draft at this session pending more amendments. The current draft made key changes to the first draft submitted last December in clauses regarding probationary period, retrenchment and compensation for the termination of contracts. It requires the probation period to be no more than one month for a one-year contract; and not exceed six months for a contract for at least three years. Companies that lay off more than 20 employees at one time because of bankruptcy, production or management difficulties, or relocation for environmental protection, have to inform the trade union or the staff 30 days in advance. The draft leaves the terms of compensation for contract termination to be set by State Council regulations. Should there be an agreement between the employer and senior staff on the period the employee cannot work for competitors after leaving, it cannot be more than two years, the draft says. Tian Chengping, minister of labour and social security, said during the draft's first reading that the existing labour contract system, set up in line with the Labour Law enacted in 1994, requires an update following dramatic changes in the labour market. A lack of minimal labour protection and the imbalance between labour supply and demand have resulted in severe infringements of workers' rights. Millions of foreign and domestic employers arbitrarily set wages and working hours, as well as working and living conditions. The NPC received 191,849 public suggestions in one month after the draft was published in March for consultation. Only the Constitution, in 1954, received more. Some employers, fearing rising labour costs, strongly oppose the bill. However, Xin Chunying, deputy director of NPC's Law Committee, yesterday said members agree that it is urgent to have a contract law to protect workers' rights as it is a matter of public interest and social stability.

Beijing to make using public transportation fashionable
2006-12-28 China Daily
Beijing officials are trying to convince the city's 13 million residents to use public transportation, a step that should please 2008 Olympic planners troubled by the capital's snarled traffic. Without offering specific money figures, Liu Xiaoming, spokesman for Beijing's Transportation Commission, said Wednesday that spending on public transportation would be boosted in the 600 days remaining before the 2008 Olympics begin. Liu also said new bus and subway passes would be introduced early in 2007. "And before the Olympic Games we will try to introduce new cards and passes; new systems that will be more helpful to foreign visitors." The city's subway system is expected to grow from its present 192 kilometers (120 miles), reaching 300 kilometers (185 miles) by 2010 and 560 kilometers (350 miles) by 2015. Despite the optimism, Liu offered figures suggesting the city was losing ground in its battle with chronic traffic congestion which, together with nearby heavy industry, is the source of frequently choking air pollution. Beijing has 2.85 million vehicles, a figure expected to swell by 35 percent to 3.8 million in 2010. The number of commuters using public transportation has increased from 26.5 percent in 2000 to 29.6 percent in 2005. In the same span, the number of private cars used for commuting has grown even more quickly from 23.2 percent to 29.8 percent. "Our effort in alleviating congestion has been mitigated by the growth of urban construction and population," Liu said. Liu said city officials were encouraged by the fall in car usage during last month's China-Africa summit. Using mandatory and voluntary measures, about 30 percent of vehicles were removed from the roads during the six days of meetings between Chinese and African leaders. The measures may be a preview of the 2008 Olympics. "It was a very good experience for us for the 2008 Olympic Games," Liu said. "I think the China-Africa forum has accelerated our efforts in developing and reforming our public transportation." However, Liu said there was no plan to stem the soaring number of vehicle in the capital. "At present the government does not have any policy or intention to control the number of private cars," he said. "But that does not mean the number of private car can grow without limits."

Top court reviews all death sentences
2006-12-29 China Daily
The Supreme People's Court will now take a closer look at death sentences passed by the local courts. From January 1, it will review all death sentences in the country. Preparations have progressed smoothly, and the court is "basically ready" to exercise the right to review and make final decisions on all death sentence cases in the country, Supreme People's Court President Xiao Yang said yesterday. Three criminal tribunals have been set up as a supplement to the existing two, and the review team has been expanded, according to the court. New members have been selected from local courts, lawyers and law schools, and have finished a three-month training at the Supreme People's Court. They are currently on probation for a year before officially assuming office. The court also spelt out details of the review process. Each case will be reviewed by a team of three judges. They will be required to check the facts, laws applied and criminal procedures adopted. Any testimony extracted through illegal means will be declared invalid. During the review, judges must arraign the defendants face to face, and present their separate judgements and reasons in writing. If the case is very complicated or there are doubts over the facts, judges can visit the place where the alleged offence took place to check details. Xiao reiterated that courts at all levels must exercise extreme caution when passing the death sentence, and the penalty should be reserved for only an "extremely small number" of serious offenders. "Every judgement must stand the test of time," he said. Until 1983, the Supreme People's Court was responsible for reviewing all death penalty cases. Then, as part of a major crackdown on crime, provincial courts were given the authority to pass death sentences for serious crimes such as murder, rape, robbery and the criminal use of explosives. However, the practice has drawn sharp criticism in recent years in the wake of some highly publicized miscarriages of justice. Nie Shubin, a young farmer in North China's Hebei Province, was executed in 1995 after being convicted of raping and murdering a local woman. But early last year, a rape and murder suspect arrested by police confessed he had committed the crime. To exert stricter control over the penalty, the Standing Committee of the National People's Congress, the country's top legislature, adopted an amendment in October to the organic law on the people's court, ending the practice of allowing executions on the order of lower-level courts. Experts have hailed the change, saying it will better protect human rights. Zhao Bingzhi, president of China's Criminal Law Society and professor at the Renmin University of China, said the death sentence would be more carefully exercised after the change. "Generally speaking, the Supreme People's Court order means fewer immediate executions," he said. In China, capital punishment falls into two categories one in which the criminal is executed immediately after sentencing, and the other death with a two-year reprieve. The court also made it clear that judges should exercise caution in handling cases of civil disputes or in cases where vengeance is involved when applying immediate execution. On Tuesday, the country's top procurator also said prosecuting organs would step up supervision of the application of the death penalty next year. Jia Chunwang, procurator-general of the Supreme People's Procuratorate, said prosecuting departments would supervise appeal hearings in death penalty cases more carefully to ensure the sentence has been properly applied.

Mass murderer executed without psychiatric test
2006-12-29 SCMP
Convicted mass murderer Qiu Xinghua was shot dead in a public execution yesterday in Ankang, Shaanxi, just days before the Supreme People's Court starts reviewing all lower-level death penalty decisions. Qiu, a farmer from Shiquan county had been convicted of killing 11 people earlier this year, and was sentenced to death in October by the Ankang Intermediate People's Court even though some psychiatric experts argued that his behaviour and family history pointed to mental illness. He embarked on the murderous rampage because he believed his wife had been unfaithful, a claim Qiu's wife, He Ranfeng, has denied. The Shaanxi Higher People's Court yesterday refused to order a psychiatric test and upheld the Ankang court's verdict. The execution was carried out about 50 minutes after the court opened at 9am yesterday. Zhang Hua, Qiu's lawyer, said the result was disappointing, but had been expected. Under the mainland legal system, only the police, prosecutors and judges have the power to initiate a test. "They were afraid to offer a test because they feared the test would have shown that Qiu had psychiatric problems," Mr Zhang said, adding that if the court had reversed the verdict on grounds of mental illness, "it would be faced with great social pressure because many Chinese still believe that blood debts should be repaid with blood". "This is a shortfall in China's legal system. You can't accuse the local courts of doing anything wrong because they acted in line with the system," he said. Veteran psychiatrist Liu Xiwei was one of the first to suspect Qiu had mental problems. He said the court's ruling was a failure for the judicial system and hoped that Qiu's death would lead to changes in the mainland's psychiatric testing procedures. "We've paid so much. There are so many deaths of innocent [mentally ill] suspects," Dr Liu said. "I hope there is a change in 2007." Psychiatrist-turned-lawyer Chen Zhihua said the case was closed quickly to avoid a Supreme Court review of the case in the new year. Dr Liu and Mr Chen said Qiu's death did not mean the end of the case. They suggested that Qiu's family should claim the condemned prisoner's personal effects, including an autobiography he was writing and videotapes of his behaviour during detention, materials which could allow for a post-mortem psychiatric evaluation. "If they show he had mental problems, both the higher and intermediate courts will be in trouble because they will be shown to having made the wrong decision. His family could ask the Supreme Court to review the case," Mr Chen said. He Ranfeng was not able to see Qiu before his death because she had not been told about yesterday's court hearing. Ms He could not be contacted yesterday, but she had previously said that a psychiatric test was needed to save her husband and to restore her reputation.

Minimum fees set for industrial land
2006-12-28 China Daily
The fees to transfer the rights for land used for industrial purposes will have minimums in a scheme announced yesterday by the Ministry of Land and Resources (MLR). The minimum fee scheme will take effect from Monday. The move came after the State Council released a statement to strengthen the macro control of land management in August. The move was designed to curb investments involving too much land for a rights transfer fee that was too low. As a result, industries were acquiring rights to more land than they could immediately use. MLR Vice-Minister Wang Shiyuan said local governments were driving down the transfer fees, or even promising a "zero fee" to attract investment. "Low land rights transfer fees led to excessive expansion, fuelling a large amount of unnecessary, low-level construction," he said. "The vicious competition has ruined a fair market environment, resulting in a regional imbalance." Wang said that the practice also brought a huge loss of State assets and damaged the interests of farmers, who had been using the land. "The low land rights fees are often at the cost of higher compensation fees that farmers should have received," he said. Although the State Council ordered local governments to set up their own minimum use transfer fees in 2004, many did not carry out the order or set a very low standard to lure investment, Wang said. According to the new scheme, the country's land is divided into 15 classes that were divided according to socio-economic status, the land condition, and the average of the fees of the land around it, said Liao Yonglin, director of the ministry's land utilization department. For example, the minimum rate for first-class land, such as the Huangpu District in Shanghai, is 840 yuan (US$107) per square metre. Beijing's Chaoyang District is labelled second class at 720 yuan (US$92) per square metre. And land rated 15th class, such as land in the western provinces of Gansu and Yunnan is only 60 yuan (US$7.67) per square metre. Of course, each government is allowed to set a higher standard according to its own situation. "Through the rights transfer fee policy, we hope to promote a better industrial arrangement," Liao said. "For example, in some coastal areas where land is scarce, some industries would not be suitable to these areas." Liao said that some governments in the region already began to pick projects that benefit long-term development. "Facing increased transfer fees, enterprises will take their own choices, and governments will also readjust their investment introduction policies," he said. He said a gradual trend would result in some industries moving from the eastern part of the country to the central and western parts because the land prices are so low. Wang said that rather than leading to price increases, the new scheme will help stabilize housing prices. "The standard, which aims to curb the development of too much land for industrial use, will promote environmentally friendlier use of the land," he said. Wang also said the country was devising a plan to allot 30 per cent of the income from land-use fees to help farmers who had lost their land.

More farmers given bank loans
2006-12-27 China Daily
Two top banking officials promised yesterday to push rural financial reforms to provide more effective financing for the country's countryside. Zhou Xiaochuan, governor of the People's Bank of China, the central bank, said management of the rural credit co-operatives will be improved and the shareholding reform of the rural banks will be accelerated. "The property rights of the rural credit co-operatives will be further clarified and their corporate governance improved to make them community financial institutions to (better) serve farmers," he said when addressing the 26th meeting of the Standing Committee of the 10th National People's Congress. Zhou also urged that the establishment of the rural postal banks be accelerated to make postal deposits play a larger role in supporting rural development. He said agricultural insurance and farm produce futures should be developed to reduce the risks of farmers. Other rural financial innovations, including establishment of micro-credit organizations and legal private lending, should be encouraged, he added. Since Chinese farmers still resort to small-scale individual farming, many financial institutions have found it too costly to provide services for them, leaving many in need of development capital. The newly concluded central rural work conference and last month's central economic work conference called for more financial support for the rural areas. Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC), admitted that problems abound with the existing rural financial institutions. The small number of rural financial institutions, for example, cannot cover those farmers who need financing, Liu recently told the 2006 China Financial Forum in Beijing. Their low operational efficiency and lack of competition have added to the financial predicament of the farmers. Liu said the regulatory body has eased requirements for rural banks and other institutions willing to enter the rural areas to support local development. "We have relaxed conditions for industrial and private capital to establish new institutions or purchase and merge existing ones," he said. The CBRC released a new guideline last week that halves the registered capital requirement for rural co-operative banks to 10 million yuan (US$1.28 million). The new rule also encourages investors to try more financial products in accordance with rural realities. Liu said regulations would be strengthened in rural areas to reduce risks and ensure the healthy development of new financial establishments. [...]

Loan from pension fund linked to mall
2006-12-28 China Daily
Shanghai - Shanghai's largest shopping mall has been linked to a 2.7-billion-yuan (US$337 million) misappropriation of money from the city's pension fund, the Shanghai Securities News reported yesterday. According to the paper, the Bailian Zhonghuan Commerce Plaza, a 430,000-square-metre shopping centre in the city's Putuo District, is at the centre of a scandal involving a 2.7-billion-yuan (US$337.5 million) loan from the city's pension fund. A bank lent the funds to Shanghai Dehong Investment Co Ltd in December last year. The company used the money to buy a 70 per cent stake in the shopping centre from Shanghai Xinchangzheng Group for 1.8 billion yuan (US$225 million). The company then bought a majority stake in Shanghai Xinchangzheng Group. Shanghai Xinchangzheng had bought its stake for 300 million yuan (US$37.5 million) from Sichuan Xinglida Group. By buying out Shanghai Xinchangzheng Group, Shanghai Dehong Investment controlled both the property and the profit Shanghai Xinchangzheng Group made from the deal, according to the paper. Then, in March, Shanghai Dehong Investment sold off a 51 per cent stake in the shopping centre for 2.1 billion yuan (US$263 million) to the Shanghai Brilliance Group, the city's biggest retail group. It has been estimated that the shopping mall, which opened on December 21, is now worth about 6 billion yuan (US$750 million). Yan Liyan, an investor in Shanghai Dehong Investment, told the Shanghai Securities News that the company had re-paid the money it had borrowed from the city's pension fund. However, a search of the local property bureau's website found that the company's name was still on the shopping centre's mortgage contract. According to the contract, the loan is supposed to be re-paid by the end of 2008. In September, Shanghai's government found more than 3 billion yuan (US$370 million) from its pension fund, which covers a population of 12 million people, had been invested in highway construction and property deals. By law, pension funds can only be invested as bank deposits or in national bonds or securities. Several senior local officials and heads of large State-owned enterprises were sacked and investigated in connection with the case, among them the then-Shanghai Party chief Chen Liangyu. No details concerning who else was involved in the 2.7 billion yuan misappropriation were available. Changzheng Town in Putuo District and the town's Party secretary, Wang Miaoxing, hold shares in Shanghai Xinchangzheng Group.

White paper on defence out today
2006-12-29 China Daily
The government is expected today to issue a white paper reviewing China's national defence situation in 2006. The document will provide a comprehensive picture of China's national defence and the military modernization drive over the last two years. The fifth white paper on national defence since 1998 contains 10 chapters with three appendices, and focuses on the security situation, the national defence policy, development of the armed forces and industry and technology for national defence, the national defence budget and international security co-operation. The white paper is issued twice a year. Netizens can today log on to the China Daily website, www.chinadaily.com.cn, to read the full text of the white paper.

Nationwide plan for better care of orphans
2006-12-29 Xinhuanet
Beijing - The Ministry of Civil Affairs said yesterday more welfare institutions for orphans will be built in the next five years. Dou Yupei, vice-minister of civil affairs, said the ministry would allocate 200 million yuan (25 million U.S. dollars) annually between now and 2010 to build welfare institutions in each prefecture-level city across the country. The institutions will have multiple functions, such as better care, education and rehabilitation, Dou said at a donation ceremony yesterday. The plan, called the "Blue Sky Plan," means orphans will live under the same blue sky as normal children. This was advocated by President Hu Jintao during a visit to a children's welfare institution on June 1. China now has 66,000 orphans living in public welfare institutions and more than 570,000 living with families, according to the ministry. Half the orphans living in welfare institutions suffer from physical disabilities or congenital diseases. Dou said another children's welfare plan, the "Tomorrow Plan," has achieved fruitful results since it was launched in May 2004. The Tomorrow Plan, which provides rehabilitation to all handicapped orphans, has brought new life to more than 25,000 children, 10 per cent of whom have now been adopted by families. Orphans suffering from congenital diseases or physical disabilities receive free treatment or operations. Dou said the new plan, implemented by the China Centre of Adoption Affairs under the ministry, is expected to be completed by May next year and would be extended to children of poor families. "China is still a developing country with limited government funding for welfare," Dou said. "We are very grateful for the donations and support from home and other countries and hope more warm-hearted organizations and individuals will join our cause in the welfare of children."

China to extend compulsory education
2006-12-28 Xinhuanet
Beijing - The Chinese government will extend its nine-year compulsory education during the 11th five-year period for national economic and social development (2006-2010), according to a guideline approved in principle by the central government. The priorities of education development set out in the guideline include providing comprehensive education, extending compulsory education in central and western regions, boosting vocational education and improving the quality of higher education. More financial support will be given to underdeveloped, rural, border and ethnic regions, and the gap in education resources and funds between regions and urban and rural areas will be narrowed, an executive meeting of the State Council presided over by Premier Wen Jiabao decided. Measures will be taken to ensure the education of needy students and to solve education issues of public concern, while teacher training and school management will be improved. Wednesday's executive meeting also approved in principle a provisional regulation on the taxation of vehicles and ships, which unifies and simplifies taxes imposed on the use of vehicles and ships in China. The regulation will be made public by the State Council after further modification.

 

Taiwan

Son-in-law of Taiwan leader gets six years
2006-12-28 China Daily
Taipei - The son-in-law of Taiwan "president" Chen Shui-bian was sentenced to six years in prison for insider trading, a court spokesman said yesterday. Chao Chien-ming, a doctor suspended by the Taiwan University Hospital over the scandal, was also fined 30 million Taiwan dollars (US$917,000) following the verdict by a court in Taipei. He was convicted of making gains valued at 4.27 million Taiwan dollars (US$131,000) through the illegal deal, said Liu Shou-song of the Taipei district court. Chao's father Chao Yu-chu was sentenced to five and a half years in prison in the same case and was given a further three years in jail for embezzling 11 million Taiwan dollars (US$336,000) in private donations to a tennis association and some political funds donated to the "president." He was also fined 30 million Taiwan dollars, Liu said. The verdict is the latest blow to Chen Shui-bian, whose wife is on trial on corruption and forgery charges for allegedly embezzling 14.8 million Taiwan dollars (US$450,000) from "state" funds for personal use. Chao and his father did not show up at the court and are expected to appeal against the rulings. "Chao Chien-ming failed to behave decently... using his power and influence to seek personal gains," the verdict said. Prosecutors had originally sought a nine-year jail term for Chao and a 10-year prison sentence for his father for making illegal gains through insider trading. Five other defendants involved in the same scandal received jail terms ranging from 18 months to four years and three months. Both the opposition and Chen's ruling Democratic Progressive Party (DPP) said they respected the ruling. Lawmaker Lai Shyh-bao of the main opposition Kuomintang (KMT) said he applauded the court for giving a tough sentence. "This shows that the court is fair and just and is unaffected by those in power," he said. Chao was arrested in May on suspicion of insider trading and taking bribes and was later released on bail. Chen has apologized for the political turmoil caused by his son-in-law but he himself was later implicated in graft scandals centred on his wife. Chen's wheelchair-bound wife Wu Shu-chen was excused from the second hearing of her trial last week after doctors at the Taiwan University Hospital, where she is being treated, advised her not to go. The corruption charge against her carries a minimum jail term of seven years. Chen has also been accused of involvement in the case, but escaped immediate prosecution because of "presidential" immunity. He has pledged to resign if Wu is convicted. Last month, Chen survived a third "parliamentary" vote aimed at ousting him after the opposition failed to garner enough support.

Region rocked by Taiwanese quake
2006-12-27 SCMP
A powerful earthquake struck off southwestern Taiwan last night, triggering a brief tsunami alert on the second anniversary of the catastrophic Boxing Day waves of 2004, and sending tremors through Hong Kong strong enough to send some people running into the streets. The quake, centred under the sea off Taiwan's southern-most tip, was felt across the island, killing one person as a four-storey building collapsed and injuring at least 27, according to television reports. Rated 7.1 on the Richter scale by the US Geological Survey and 6.7 by Taiwan's Central Weather Bureau, the quake struck at 8.26pm, followed by two strong aftershocks eight and 14 minutes later, with magnitudes of 6.4 and 5.2 respectively. A fourth tremor occurred at 11.41pm with a magnitude of 5.5. The quake was centred 22km beneath the sea about 23km southwest of Hengchun, which is about 450km south of Taipei. It caused at least two homes to collapse in the south and objects to fall from shelves in the capital, Taipei. Japan's meteorological agency initially warned that the quake might have sent a potentially destructive metre-high tsunami heading for the Philippines but said two hours later the danger had passed. Police reported a 34-year-old man was killed and three injured in the southern city of Pingtung when the four-storey building in which they lived collapsed. Four other members of the family were trapped in the rubble. Firefighters pulled out one, but a mother and her twin sons were late last night yet to be freed, they said. Many streets in the city were cracked and a major bridge was damaged, police said. The quake also triggered gas leaks and fires, including one at a hypermarket that was apparently caused by downed power cables. The fire was brought under control after three hours, with no casualties reported. Hsin Tsai-chin, director of the Earthquake Centre under the Central Weather Bureau said it was the strongest quake in southwestern Taiwan in a century. Its force was equivalent to the destructive power of six atomic bombs, he added. In Hong Kong, it was the second tremor felt in three months and triggered a flood of calls to the Observatory. To Kwa Wan resident Oliver Tsang ran into the street because he feared the 40-year-old five-storey building he lives in would not stand up to the shaking. "Both I and my wife felt the tremors. We thought it was a bus passing by but we later saw water in a bottle was shaking. I knew it was an earthquake," said Tsang, a press photographer who covered the aftermath of a tsunami in Indonesia early this year. "The building is too old ... we feared it might collapse." [...]

Mainland eases restrictions on Taiwanese reporters
2006-12-28 SCMP
Taiwanese journalists will have more freedom to report on the mainland from next year under new rules issued yesterday by the State Council's Taiwan Affairs Office - which will also increase pressure on the island's authorities to lift restrictions on mainland reporters. Under the new regulations, reporters from Taiwan will no longer have to seek government approval to carry out interviews on Olympic-related events as long as the individual or group they are interested in agrees to talk. Taiwanese reporters will also be allowed to hire local staff to help with their reporting. The new rules, which will take effect from Monday and expire on October 17, 2008, are in line with similar provisions announced this month for journalists from overseas media outlets. They also offer a hint of what could be in store for reporters from Hong Kong and Macau. Wang Shuang, from the Hong Kong and Macau Affairs Office, said the office would issue specific regulations for journalists from the two cities "very soon". The new regulations could disappoint some because many news organisations in Hong Kong, Macau and Taiwan had been expecting the authorities to give more leeway to reporters from the regions. Taiwan Affairs Office spokesman Li Weiyi said yesterday the office had also temporarily lifted a restriction on Taiwanese reporters travelling to other regions. He again urged the Taiwanese authorities to reallocate media credentials to reporters from Xinhua and the People's Daily. The credentials were withdrawn in April last year. From 2001, five mainland media outlets including Xinhua and the People's Daily were allowed to post reporters in Taiwan on monthly rotations and, in a reciprocal gesture, seven Taiwan-based news organisations sent their reporters to work on the mainland. However, the Mainland Affairs Council, the Taiwan Affairs Office's counterpart in Taiwan, rescinded the press permits for the Xinhua and People's Daily reporters, citing "security risks". The move was widely interpreted as a reprisal against the passage of Beijing's anti-secession law a month earlier.

 

Economy

Beijing vows to keep yuan level 'reasonable'
2006-12-28 SCMP
Beijing plans to push forward with efforts to make its currency more flexible and to allow market forces to play a fundamental role in setting its value, central bank governor Zhou Xiaochuan said in remarks published yesterday. But just weeks after a high-level US delegation visited Beijing to press authorities on issues such as the value of the yuan, Mr Zhou also reiterated that the central bank was committed to keeping the currency at a "reasonable, balanced level". "We will take further steps to allow market supply and demand to play a fundamental role in the formation mechanism of the yuan's exchange rate, in order to gradually increase the yuan's flexibility," the China Securities Journal quoted Mr Zhou as telling the Standing Committee of the National People's Congress. Mr Zhou made it clear, however, that the central bank would continue to emphasise the principles of independence, controllability and gradualism in reforming the exchange rate regime, Xinhua and state-run newspapers reported. Mr Zhou added that the changes Beijing had made to its exchange rate regime so far had not had a negative impact on economic development or financial stability. The changes, which have centred on Beijing revaluing the currency by 2.1 per cent and decoupling it from a US dollar peg in July last year, would start to show a bigger positive impact in adjusting the country's economic and trade structure in the future, Mr Zhou was quoted as saying. The yuan has appreciated 3.7 per cent since last year's revaluation, but many critics, especially in the US, say it remains seriously undervalued, contributing to global trade imbalances and China's balance-of-payments surplus.

Unified 25% corporate tax proposed
2006-12-25 China Daily
After enjoying favourable tax policies for decades, overseas companies may have to pay the same as their Chinese counterparts a unified corporate income tax of 25 percent. The Standing Committee of the National People's Congress (NPC), China's top legislature, yesterday mulled a draft law that aims to unify income tax rates for domestic and foreign companies to ensure a "level playing field." The draft law, tabled at the 25th session of the 10th Standing Committee, suggests a tax rate of 25 per cent with a 5-year grace period for foreign businesses. The committee will vote on Friday on whether it should recommend the law to the full session of the NPC next March. Companies in China currently pay income tax at a nominal rate of 33 per cent. But because of various tax waivers and incentives some of which were initiated in the early 1980s to attract overseas capital foreign businesses actually pay about 15 per cent while most domestic enterprises pay 24 per cent. The generous incentives have fuelled foreign capital inflows. Figures from the Ministry of Commerce show that China has been one of the world's top destinations for foreign direct investment, hitting US$53.5 billion in 2003, US$60.6 billion in 2004, and US$72.4 billion last year in terms of the amount actually used. However, the tax gap has sparked great controversy in recent years. Domestic companies facing tough global competition after China's entry into the World Trade Organization in 2001 criticize the two-tier tax system for offering an unfair advantage to foreign counterparts, while the latter complain that local businesses are able to obtain preferential loans. Some domestic investors have even made use of the current policies by registering a company abroad and then come back as foreign investors for tax waivers. To create a taxation environment that favours fair competition among all ventures in China, Finance Minister Jin Renqing said yesterday that the reform of the tax system should not be delayed.

Sinopec given subsidy of US$639m
2006-12-28 China Daily
China Petroleum & Chemical Corporation (Sinopec) disclosed yesterday that it would get State subsidy of 5 billion yuan (US$639 million) to cover its losses from oil refining. Asia's top refiner announced in a statement that "the one-off compensation" from the government was to shore up its money-losing refining sector. The country's oil exploration and production business reaped high profits as a result of soaring oil prices in the international market this year. But the refining segment suffered huge losses because the current pricing mechanism does not reflect price fluctuations on the world market. About 70 per cent of Sinopec's crude oil for refineries comes from imports. It supplies oil products to the home market at government-fixed prices to fend off supply fluctuations and inflation. "The compensation will help reduce our losses stemming from the refining business. It also indicates the current pricing mechanism is not fair for refiners," a senior official surnamed Wu with Sinopec told China Daily. Strict controls over oil product prices have caused distortions in prices of refined and crude oil. "This has led to serious losses for many refinery enterprises", Sinopec said in a statement yesterday. Sinopec's loss from processing almost doubled to 12.6 billion yuan (US$1.6 billion) in the third quarter from 6.6 billion yuan (US$844 million) a year earlier, the company said in October. Cao Xiaoxi, chief engineer of Sinopec's Economic and Development Research Institute, agreed, saying the subsidy should not be dubbed as "protective." "The loss is caused by policy flaws, so it should be covered by the State. It has nothing to do with market protectionism," Cao said. The compensation to Sinopec's refinery business was 10 billion yuan (US$1.28 billion) last year. Han Xuegong, a senior consultant for China National Petroleum Corp, said the State financial support would decline as price-mechanism problems are fixed, noting that this year's subsidy is only half of last year. Although the government raised prices for major oil products twice this year, "it is not enough to make up for the deficit of Sinopec's refining business," Han said. The fundamental solution is to reform the current pricing system, he added. A fully market-oriented pricing mechanism, however, will take time, Han Wenke, director of the Energy Research Institute affiliated to the National Development and Reform Commission, told China Daily. "It will not happen overnight. It will depend on market circumstances and the ups and downs of the global oil prices," he said.

 

North Korea

Still hope to settle DPRK nuclear issue
2006-12-26 China Daily
The curtain went down on the latest round of the Six-Party Talks on December 22, having been restarted after a 13-month recess. In the intervening months, so many things had happened the United States imposed financial sanctions on the Democratic People's Republic of Korea (DPRK), the DPRK test-fired missiles and carried out a nuclear test. Looking back at the latest talks, one can draw the conclusion that there is still hope to settle the nuclear crisis on the Korean Peninsula, but it will be extremely difficult to achieve this goal. The talks ended without making any breakthroughs and the stances of the two primary players on the issue the United States and the DPRK remain tough. This signifies that the road ahead is full of bumps. At the closing ceremony, Chinese Vice-Foreign Minister Wu Dawei read out the chairman's statement, saying that all parties involved had reiterated their common goal to make the Korean Peninsula denuclearized through dialogue and peaceful means and made clear they would fulfil the pledges they made in a joint communique on September 19, 2005, when the last round of Six-Party Talks concluded. The fact that the six-party negotiations reopened, with all parties involved still sticking to their previously made promises, is itself an accomplishment, taking into account that things have got all the more complicated during the 13-month recess. This is why people still have confidence in resolving the Korean Peninsula nuclear issue. The chairman's statement also stated that all parties involved agreed to implement the September 19 joint communique phase by phase, based on the principle of "action to action." Although this process of fulfilling the commitments in the joint communique by way of "action-to-action" would be extremely difficult, Christopher Hill, head of the US delegation, indicated that the Six-Party Talks are still the best way to resolve the Korean Peninsula nuclear issue. Kim Kye-gwan, chief DPRK negotiator, appreciated very much the Herculean efforts made by China to get the talks restarted. The Republic of Korea also expressed its gratitude to China. Just two days after the September 19 joint communique was released, the US Treasury Department raised the financial question connected to the DPRK and Macao-based Banco Delta Asia froze the DPRK's account. Though a mere US$24 million was subject to the monetary sanction, the DPRK suffered a great deal given its limited financial windows to the outside world much of its international aid came via this channel and many of its monetary deals and transactions are conducted through this outlet. Things, however, did not stop here. The United States raised the monetary matter shortly after the September 19 joint communique was issued. In the eyes of the DPRK, therefore, this was a clear signal of hostility against it. The DPRK has since insisted that it would not return to the negotiation table under the pressure of US monetary sanctions and maintained that removal of the financial sanctions constituted a precondition for the DPRK to go back to the six-party negotiations. Chief negotiators of the six parties happened to be present at an East Asian security conference in Tokyo in the spring of this year. Kim Kye-gwan, DPRK head negotiator, told Christopher Hill, his US counterpart at the Six-Party Talks that he would return to the talks once Hill gave him the US$24 million. Hill, however, answered that monetary matters were beyond the remit of the US State Department and the matter was up to the US Treasury. The latter, however, responded that this was not a monetary sanction but law enforcement. The exchanges show clearly that the DPRK links financial sanctions to the Six-Party Talks but the United States is trying to remove the sanctions from the negotiations. The latest round of six-party negotiations was restarted because both the DPRK and the United States had made some concessions, showing a certain degree of flexibility. But Washington refused to discuss the financial sanctions in the six-party sessions, agreeing to US experts discussing the matter with DPRK representatives beyond the six-party negotiations. The DPRK did not insist that removal of the sanctions be a precondition for it to return to the negotiations. Following the talks, US and DPRK financial experts held two days of discussions on the monetary sanctions, one day at the US embassy in Beijing and the other day at the DPRK's Beijing embassy. Though the talks ended without outcome, both parties agreed to continue the financial-sanction talks in New York in January next year. DPRK chief negotiator Kim Kye-gwan, at the conclusion of the latest round of talks, told reporters that he could do nothing because the higher authorities in Pyongyang insisted that the central subject of the Six-Party Talks not be discussed before the question of financial sanctions is settled. Hill, the US negotiator, however, accused the DPRK of placing importance on minor issues, referring to the financial sanctions. But from the DPRK perspective, removal of the monetary sanctions would constitute a key turnaround from Washington in its hostility towards the DPRK. [...] During the latest round of talks, the US delegation put forward a four-step plan of freezing, reporting, inspection and denuclearization. In the first phase, the DPRK is supposed to freeze its nuclear reactor in Yongbyon. In return, the DPRK expects a written commitment from the United States that it will not attack the DPRK. In the second and third phases, the DPRK should report its nuclear arsenal and facilities to the Six-Party Talks and the International Atomic Energy Agency (IAEA). Then, IAEA teams will be sent to the DPRK for inspection. In return, the United States will provide the DPRK with food and economic aid. In the fourth phase, the DPRK is supposed to eventually give up its nuclear-weapons bidding and agree to be subjected to permanent IAEA monitoring. For this, the United States will provide more economic aid. The DPRK reporting its nuclear programme to the IAEA is what Washington cares most about. This is because freezing nuclear facilities is easy and, as a matter of fact, the DPRK used to freeze its nuclear reactors in the past. But the problem is it can restart its nuke facilities at any time. [...]

 

Chung Vay-Luy
Embassy of Switzerland
 

The Press review is a random selection of political and social related news gathered from various media and news services located in the PRC, edited or translated by the Embassy of Switzerland in Beijing and distributed among Swiss Government Offices. The Embassy does not accept responsibility for accuracy of quotes or truthfulness of content. Additionally the contents of the selected news mustn't correspond to the opinion of the Embassy.
 
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