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
  15.1-19.1.07, No. 150  
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Foreign Policy

China, EU start talks on new pact
2007-01-18 China Daily
China and the EU yesterday announced the start of negotiations on a new agreement on expanding their strategic partnership. Foreign Minister Li Zhaoxing and visiting EU External Relations Commissioner Benita Ferrero-Waldner announced the initiative at a press briefing in Beijing. The Partnership and Cooperation Agreement (PCA) will include 22 sectors in which the EU and China are already holding a dialogue. They include energy, the environment, agriculture, transport, education, and science and technology. It will also cover such key issues as sustainable development, anti-terrorism and proliferation of weapons of mass destruction, Ferrero-Waldner told the briefing. In Helsinki last September, China and the EU agreed to launch talks on the PCA to update the 1985 Trade and Economic Cooperation Agreement, which currently constitutes the legal basis governing bilateral relations. In their meeting yesterday, Ferrero-Waldner proposed joining hands with China to tackle energy security, trade and climate change. Li said the two sides should work together to push forward negotiations and solve their disputes. He reiterated China's stance that the EU arms embargo be lifted and the nation recognized as a market economy. Michael Jennings, press officer of the European Commission delegation, said no deadline had been set for negotiations but added that two years would be a reasonable timeframe to finalize the pact. The agreement will essentially codify existing EU-China ties, and replace the 20-year-old pact that focused only on trade and economic cooperation. Ferrero-Waldner said a new agreement is needed because the existing one has not kept pace with "our rapidly expanding partnership". "Twenty years ago, we were only trade partners, but now we are strategic partners, which means broader and deeper cooperation," she told the briefing. China's rapid development and the EU's expansion offer a golden opportunity for strengthening relations, she said. "I agree with Ferrero-Waldner's comments that China and the EU are not only trade partners, but all-round strategic partners. We share broad common interests and common positions," said Li. Europe is China's biggest trading partner while China is the second-largest trade partner for the EU. Bilateral trade hit a record $260 billion last year. Ferrero-Waldner also signed three financing agreements with Vice-Minister of Commerce Yi Xiaozhun earlier yesterday. They were for the launch of a Europe-China School of Law, a joint project on the protection of intellectual property rights, and a business management training program. "A substantial impetus for this rapid development of bilateral ties stems from shared interests", said the EU Ambassador to China, Klaus Ebermann. […]

Sino-Philippine relation enters a golden period
2007-01-16 People’s Daily Online
Chinese premier Wen Jiabao has conducted a formal and friendly visit to the Philippines after attending East Asian cooperation meetings. This was an important visit aiming at strengthening friendship and deepening the strategic and cooperative relations devoting to peace and development. Since the two countries established their diplomatic relations 31 years ago, China and the Philippines have enjoyed a relatively smooth relationship. Bilateral political trust has been improved and cooperation in various fields has achieved obvious results. High level visits have been quite regular. In 1996, former Chinese President Jiang Zemin visited the Philippines and the two sides agreed to establish good-neighborly, trustworthy and cooperative relations towards the 21st century. In April 2005, President Hu Jintao visited the Philippines and the two sides issued a joint statement confirming to establish strategic and cooperative relations devoting to peace and development. In recent years, bilateral trade has developed rapidly. In 2005, bilateral trade volume reached 17.56 billion US dollar, 31.7% more than the previous year. In June 2006, the first Sino-Philippine Economic and Trade Cooperation Forum was held in Manila. The two sides signed a memorandum of understanding on establishing economic cooperation partnership. The two countries have also seen obvious progress in agricultural, infrastructure and mining cooperation. In addition, Sino-Philippine cooperation and exchange in culture, science and technology, judicial and tourism have also been deepened. As the Philippine President Gloria Macapagal Arroyo said, Sino-Philippine relation is in its golden period of development. Political trust is an important basis for bilateral relations. Maintaining peace and common development is the strategic direction for the development of Sino-Philippine relations while mutually beneficial cooperation becomes the engine driving the development of bilateral relations. In recent years, with the deepening of relations between China and ASEAN countries, China and the Philippines have seen great progress in bilateral economic and trade cooperation. After its entry of the WTO, China has made more efforts to establish free trade zones with ASEAN countries, thus, there are new opportunities for Sino-Philippine cooperation. The two sides can have more cooperation in urban infrastructure construction, agriculture, fishery and tourism. The Philippines has rich resources in mineral, fisheries and tropical fruits. For Chinese enterprises who like to invest abroad, the Philippines is no doubt an attractive area for investment. With the establishment of Sino-Philippine economic and trade cooperation partnership, bilateral trade and investment will increase to a new level. During Premier Wen Jiabao's visit, both sides will sign a series of cooperative agreements in trade, infrastructure construction and cultural relics protection to pave the way for further cooperation. Of course, China and the Philippines have also had some disputes in the process of developing bilateral relations. In 2002, China and ASEAN countries signed a Declaration on the Conduct of Parties in South China Sea. In November 2004, China and the Philippines signed an agreement on jointly exploring oil and natural gas resources in disputed areas. In March 2005, China, the Philippines and Vietnam signed a agreement on jointly conducting marine earthquake exploring work on the agreed South China Sea area. This has become a historic step towards developing the South China Sea area. South China Sea is hopeful to become 'a sea of friendship' and 'a sea of cooperation'. As an old Chinese saying goes, if you really understand each other, geographical distance is not an issue. China has implemented a foreign policy aiming at establishing good neighborly relations with the neighboring countries by taking them as partners and making them feel safe and rich. This policy has helped improve its relations with all the bordering countries. It's believed that the development of good friendly relations between China and ASEAN countries including the Philippines will surely play a positive role in guaranteeing East Asia's peace and stability.

Leaders seek energy security
2007-01-16 China Daily
Cebu, The Philippines - Premier Wen Jiabao yesterday called for East Asian collaboration on energy security to push forward "common development and prosperity". He made the remarks at the 2nd East Asia Summit, which concluded yesterday in Cebu with a Declaration on East Asian Energy Security signed by the leaders of the 10-member Association of Southeast Asian Nations (ASEAN) and six dialogue partners. With the cost of energy casting a shadow over the economies of the region, leaders of the ASEAN plus China, Japan, the Republic of Korea, India, Australia and New Zealand agreed to strengthen regional cooperation on energy security to ensure a stable and affordable supply over the long term. The declaration calls for moves to improve energy efficiency and reduce dependence on fossil fuels; and urges countries to expand renewable energy systems and biofuel production. It also calls for mitigating greenhouse gas emissions and ensuring a stable supply of energy "through investments in regional infrastructure such as the ASEAN power grid and the trans-ASEAN gas pipeline." "Dialogue and policy coordination should be strengthened between producers and consumers to guarantee a stable energy market in the region," Wen said. "We should also raise energy efficiency and develop clean, renewable and new energy." The East Asian leaders agreed that alternative sources of energy are needed to sustain economic expansion. They acknowledged "the worsening problems associated with the environment and health, and the urgent need to address global warming and climate change." Besides energy security, other topics on the summit agenda were finance, education, avian influenza and disaster reduction. Wen put forward three proposals at the summit: East Asia cooperation should enhance common development and prosperity of the region. The cooperation should lead to harmony among all countries in the region. Diversified development of social systems and cultures should be respected.

China, India agree to continue border talks
2007-01-19 China Daily
New Delhi - China and India on Thursday agreed to continue discussions aimed at resolving a border row at the centre of lingering mistrust between the two Asian giants at the end of two-day talks in the Indian capital. This was the ninth round of talks between special envoys of the two neighbours which India's Foreign Ministry said were conducted in a frank and positive atmosphere. "The two special representatives continued their discussions on a framework for the boundary settlement on the basis of the Agreement on Political Parameters and Guiding Principles," said an Indian foreign ministry statement. "The talks were held in an open, friendly, cooperative and constructive atmosphere," it added. The Asian powers, who fought a brief war in 1962, have made little progress in overcoming deep differences over their 3,500 km (2,200 mile) frontier, despite several rounds of talks over the past decade. India disputes Chinese rule over 38,000 square km (15,000 square miles) of barren, icy and uninhabited land on the Tibetan plateau. For its part, China does not recognise the remote, sparsely populated state of Arunachal Pradesh as part of India and claims its mountainous district of Tawang once belonged to Tibet. The two fastest growing economies of Asia have been pushing economic ties despite their border dispute. A visit by Chinese President Hu Jintao to India in November focused on boosting two-way trade, expected to double to US$40 billion by 2010. Both sides agreed to hold the next round of talks on the border in China, said the statement, adding that the date would be decided in the future.

On the road to increasing China-India tourism
2007-01-18 China Daily
Having successfully launched several new initiatives and achieved many more milestones, including a visit to India by President Hu Jintao in 2006 (designated the Year of China-India Friendship), the two sides have designated 2007 as the Year of China-India Friendship through Tourism. As is well-known worldwide, the boom in the tourism industry (including all the inflow and outflow of travellers and their spending power) remains a major driver and one of the most dependable indicators of high-level social development. A tourism boom comes only with sustained economic growth accompanied by infrastructure development and the creation of jobs in new sectors and regions. Especially in the case of China and India, the tourism boom is expected to facilitate peace and friendship by raising mutual awareness and enhancing mutual stakes. This also contributes to sustaining both countries' internal stability and long-run development. However, while Chinese and Indian tourists can be seen around the world, when it comes to visiting each others' countries, many opportunities remain as yet unexplored. Since 2004, China has been the world's fourth largest tourist destination. A report released last week, China Tourism Industry: New Opportunities for Growth 2007, projects that China will become the second largest tourism destination (next to the United States) within a decade. The World Tourism Organization (WTO) expects China to become the world's No 1 tourist destination by 2020, if not earlier. According to WTO, Chinese tourists now spend more than $21.8 billion in traveling abroad, already at par with, if not slightly higher than, that of the Japanese. As for tourism, in 2006 the Chinese mainland is estimated to have had more than 25 million foreign tourists and another 100 million visitors from Hong Kong, Macao and Taiwan. The Chinese mainland is estimated to have earned about $32 billion from these visitors. India, on the other hand, is estimated to have had more than 5 million foreign tourists in 2006 and earned more than $5 billion from tourism. These figures may seem small compared with China, but the Indian tourism industry has been picking up momentum, promising to grow much faster as the Chinese tourism growth rate stabilizes in coming years. […] Against this backdrop, the China-India Year of Friendship through Tourism can strengthen and accelerate India's tourism and herald a new era of people-to-people goodwill. It can enhance China-India friendship on a lasting basis. […]

President Hu Jintao plans another Africa visit
2007-01-19 China Daily
President Hu Jintao will visit Sudan and South Africa in the near future as part of an eight-nation trip to Africa to broaden the nation's reach and strengthen ties with the continent. Foreign Ministry spokesman Liu Jianchao said Thursday that dates and detailed arrangements for the trip were still being negotiated, but would be announced soon. The tour will possibly start at the end of the month. The South African Foreign Ministry has said the country will receive the president in early February. It will be Hu's third trip to the continent, following trips to three African countries in 2004 and another three in April last year. Foreign Minister Li Zhaoxing has just concluded a seven-nation African tour, mostly focusing on smaller countries. He returned on January 8. China's diplomatic drive in Africa culminated last November with Beijing hosting a China-Africa Summit that drew leaders from more than 40 African nations. Response to ministry upgrade: Liu yesterday also urged Japan to make further efforts to improve and develop bilateral ties instead of making trouble. Liu made the comments in response to Japan's recent upgrading of its defense agency to defense ministry as well as Japanese Prime Minister Abe Shinzo's recent talks with his British counterpart Tony Blair in which Abe asserted that the European Union lifting its arms embargo on China would impact security in Asia. Liu stressed that adhering to the road of peaceful development by Japan conforms to the fundamental interests of Japan itself and benefits regional peace, stability and development. He noted that Japan's concern over the EU's plan to lift its arms embargo on Beijing "is none of Japan's business and will not impose any threat to the country."

China, Australia to set up work panel on clean coal
2007-01-15 Xinhuanet
Cebu, the Philippines - Chinese Premier Wen Jiabao and Australian Prime Minister John Howard agreed here on Monday to set up a Sino-Australian clean coal work group in order to promote effective utilization of coal resources and tackle the global problem of climate changes. Wen and Howard held a meeting Monday morning in this resort city in central Philippines. The two sides exchanged views on the negotiations about the China-Australia Free Trade Zone. During the meeting, Howard said Australia and China share a solid foundation of trade and economic links. Australia is willing to work for further expansion of trade and economic cooperation between the two countries. Wen said China is ready to join effort with Australia to push bilateral relations to a new stage. He expressed the wish that the two countries should continue to push forward cooperation on energy and mineral resources development. In the mean time, Wen hoped that the two countries should make active moves in cooperation in scientific, technological and environmental areas. Facts prove that China and Australia are fully capable of setting an example in bilateral relations for countries of different social systems and cultural backgrounds, Wen said, adding that the two countries should seize the current opportunity to enhance political trust, strengthen communication on regional and international affairs and jointly safeguard peace and stability in the Asia-Pacific region. Howard said Australia and China have witnessed sound development of bilateral relations due to cooperation based on broad common interests. He expressed the wish to continue to maintain and expand friendly relations and step mutually beneficial cooperation between the two countries. […]

China, Tajikistan sign treaty
2007-01-15 Xinhuanet
Beijing - China and Tajikistan signed here Monday a treaty on good neighborly friendship and cooperation, agreeing to push bilateral relations to higher levels. Chinese President Hu Jintao and Tajik President Emomali Rakhmonov signed the treaty after their talks in the Great Hall of the People. The two presidents highly evaluated the achievements made by the two countries in the past 15 years in the development of their relations. Rakhmonov arrived in Beijing Monday morning for a seven-day state visit to China as Hu's guest. During the talks, Hu said the Chinese side will join hands with the Tajik side in advancing bilateral long-term, steady relations of good neighborly friendship and cooperation from the following five aspects. The first is to keep bilateral high-level exchanges and other contacts at various levels to further their political ties, continue mutual support on principled issues concerning their major interests, and conduct close cooperation in completing the demarkation work on time. The second is to expand reciprocal cooperation for common development with an improved trade structure, better cooperation in such key areas as communications, power, telecommunications, mineral resources development, agriculture and border trade, and lay a sound legal basis for bilateral trade and investment. The third is to strengthen security cooperation and jointly prevent and combat cross-border crimes and the "three forces", namely, terrorism, extremism and separatism. The fourth is to expand cultural and educational cooperation to enhance mutual understanding and traditional friendship. The fifth is to strengthen consultations and coordination on major international and regional issues including that within multi-lateral frameworks such as the United Nations and the Shanghai Cooperation Organization. Agreeing with Hu, Rakhmonov said the Tajik side is full of confidence in the future development of bilateral relations, and will further improve bilateral political relations, push forward bilateral cooperation in economy, trade, finance, mineral resources and power, and enhance bilateral exchanges in culture and education. He said the Tajik side will strengthen coordination and cooperation with the Chinese side in international and regional affairs and firmly fulfil its obligations to combat the "three forces". According to the treaty, Tajikistan reaffirms that there is only one China in the world, that the government of the People's Republic of China is the sole legal government representing the whole China and Taiwan is an integral part of Chinese territories. "Tajikistan government supports the efforts taken by the Chinese government to safeguard national sovereignty and territorial integrity, opposes any attempt aimed at creating 'two Chinas' or 'one China, one Taiwan', opposes 'Taiwan independence' in any form including 'Taiwan independence in legal principle' and opposes the participation of Taiwan into any international or regional organization joined only by sovereignty countries," said the treaty. Tajikistan affirms not to establish official relations in any form and have any official contacts with the Taiwan authorities and not to set up 'representative office' with the Taiwan authorities, said the treaty. The treaty said China supports the policies of Tajikistan in strengthening national independence and sovereignty and territorial integrity and safeguarding stability and developing economy. The treaty said the two countries are satisfied that the boundary questions left over by history between the two countries have been solved in an all-rounded way, which is of great significance, and the two countries are determined to make the boundary a boundary of peace forever and friendship for generations and generations. Any party to the treaty will not join any alliance or group that would hurt the other party and not take any action of such kind, including not conclude any treaty of such kind, according to the treaty. "Once international or regional complicated situation occurs or crisis breaks out, which may threat peace and security interests of any party, both parties will immediately coordinate with each other to make steps in preventing threats," said the treaty. […] Five other agreements were also singed during the Tajikistan president's visit here, covering many areas, such as bilateral cooperation of economy and technology, civil aviation transportation and education.

China, Canada sign Science and Technology co-op agreement
2007-01-17 Xinhuanet
Beijing - China and Canada signed a Science and Technology Cooperation Agreement here on Tuesday to boost research and development collaboration between the two countries. Xu Guanhua, China's Minister of Science and Technology, said at the signing ceremony that China will constantly increase input on international scientific and technological cooperation during the 11th Five-Year Plan period (2006-2010) and encourage Chinese scientists to actively participate in equal and mutually beneficial multilateral and bilateral cooperation programs. It was announced at the signing ceremony that China's Ministry of Science and Technology and Canada's Ministry of International Trade will establish a joint fund to support scientific and technological innovation and industrial cooperation conducted under the agreement. Canada's Minister of International Trade David Emerson said Canada will provide 5.25 million Canadian dollars for implementation of the cooperation agreement. "Now, more than ever before, the world economy is driven by innovation," said Emerson, adding the agreement will encourage researchers and businesses from our two countries to work together, share expertise and forge new partnerships. The agreement is expected to promote greater cooperation between Chinese and Canadian academics and both private and public sector innovators. The work conducted under the agreement will initially focus on four main areas: energy, the environment, health and life sciences and agricultural foods and bio-products. One of the key aims of the agreement is to help Canadian innovators and entrepreneurs to bring their work to the market more quickly. The agreement will also provide better intellectual property protection.

US concerned over satellite demolition
2007-01-19 China Daily
WASHINGTON: The United States, Australia and Canada have voiced concerns to China over the first known satellite-killing test in space in more than 20 years, the White House said on Thursday. "The US believes China's development and testing of such weapons is inconsistent with the spirit of cooperation that both countries aspire to in the civil space area," National Security Council spokesman Gordon Johndroe said. "We and other countries have expressed our concern regarding this action to the Chinese." Using a ground-based medium-range ballistic missile, the test knocked out an aging Chinese weather satellite about 537 miles above the earth on January 11 through "kinetic impact," or by slamming into it, Johndroe said. The last US anti-satellite test took place on September 13, 1985. Washington then halted such Cold War-era testing, concerned by debris that could harm civilian and military satellite operations on which the West increasingly relies for everything from pinpoint navigation to Internet access to automated teller machines. According to David Wright of the Cambridge, Massachusetts-based Union of Concerned Scientists, the satellite pulverized by China could have broken into nearly 40,000 fragments from 1 cm to 10 cms or up to four inches, roughly half of which would stay in orbit for more than a decade. On the day of the test, a US defense official said the United States was unable to communicate with an experimental spy satellite launched last year by the Pentagon's National Reconnaissance Office. But there was no immediate indication that this was a result of the Chinese test. […]

Canada to raise human rights in Beijing talks
2007-01-18 SCMP
Canadian Finance Minister Jim Flaherty, in Beijing to boost trade ties and mend fences amid a series of diplomatic spats with Beijing, says he will also raise human rights concerns during his talks with officials. Mr Flaherty said it was his "duty to be frank" about Canada's concerns and said he planned to raise the issue of Chinese-Canadian Huseyin Celil, a Uygur also known as Yu Sanjia, who is being held in a mainland jail for alleged terrorism links.

 

Domestic Policy

Int'l laws applied in local IPR cases
2007-01-19 China Daily
Wuxi, Jiangsu Province - International intellectual property rights (IPR) laws will take precedence whenever they are applied in domestic trials even if they differ from domestic laws, a senior judicial figure told a national conference on IPR-related trials. Chinese IPR laws are typically in tune with international IPR laws, so equal protection is accorded to both overseas and domestic IPR owners, Cao Jianming, vice-president of the Supreme People's Court (SPC), said yesterday. But when they are not, China will give priority to international conventions that are directly applicable to domestic IPR case trials, said Cao. As for regulations among documents that China signed on accession to the World Trade Organization, such as the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), the endeavor is to transform them into domestic laws. "And for those that have already been enshrined in domestic laws, their execution is bound by international treaties," he said. To further allay foreign concerns on IPR protection, the Standing Committee of the National People's Congress, the top legislature, recently approved China's entry into the WIPO Copyright Treaty and WIPO Performances and Phonograms Treaty. "IPR protection has become a constant strategic topic in China's external affairs," Cao said. "On the one hand, China has made remarkable progress; while on the other, some developed countries keep applying pressure as global IPR competition intensifies. "It is impossible to solve in a short time contradictions between China's economic and technical shortcomings as a developing country and the high IPR protection standards proposed by developed countries," Cao said. "The disputes will last for a long time." He reiterated China's stand in adhering to "national treatment" principles according to TRIPS agreements. "Favorable treatment will neither be offered to foreign parties because of their foreign sensitiveness, nor protectionism given to any local or industrial parties in the name of protecting national interests," Cao said. IPR-related court cases have been on a rapid rise in recent years. From 2002 to 2006, Chinese courts dealt with 931 IPR cases involving overseas parties, or a rise of 50 percent each year, according to Jiang Zhipei, chief justice of the SPC IPR Tribunal. During that period, the Beijing No 1 Intermediate People's Court alone ruled in favour of overseas parties in 60 percent of the 670 IPR cases.

China to impose stricter penalties for IPR violations
2007-01-16 Xinhuanet
Beijing - China's Supreme People's Court has issued a notice ordering stricter penalties on violators of intellectual property rights (IPR). All illegal gains and manufacturing tools of IPR violators should be confiscated and their pirated products shall be destroyed, according to the notice. Courts should also impose fines large enough to strip pirates of their ability to resume production of illegal copies, said the notice, without giving details about the value of the fines. Victims of piracy in China have long been complaining that punishments are not severe enough. But experts point out that it is a problem of enforcement rather than of the law. The Supreme People's Court and the Supreme People's Procuratorate jointly released a judicial interpretation at the end of 2004, decreeing that counterfeiters could be sentenced to up to seven years in prison. Criminal penalties will be imposed on people earning an illegal income of more than 30,000 yuan (3,700 U.S. dollars), or producing more than 1,000 pirated copies, according to the interpretation. Official statistics show that Chinese courts handled a total of 3,567 cases concerning the manufacture of fake products and illegal sales of pirated products in 2005, a rise of 28 percent over the previous year.

Meeting on financial reform path
2007-01-19 China Daily
China's top-level conference for the development of the financial sector, to be held today and tomorrow in Beijing, will chart the guidelines for the next stage reforms. Far-reaching decisions could be made at or shortly after the Central Financial Work Conference on some lingering issues that hold the key not only to the fate of the financial sector, but also to the nation's overall development prospects. The previous two meetings were held in 1997 and 2002, each generating substantial reforming steps. The remodelling of management mechanism for State interests in financial institutions is expected to be the issue that attract most attention at the 2007 conference because of profound implications from a remodelling. But it is also the most difficult one on which a final decision is made at the conference. Two major proposals were floated on this. The first one, which appeared to be the front-runner at the moment, is to invest the Central Huijin Investment Ltd Co, a financial holding company under the central bank, with a more independent role in administrating State assets in financial institutions. Huijin, created in 2003, holds controlling stakes at two major State banks, a 50 per cent share at the Industrial and Commercial Bank of China, and shares in many other financial institutions. The other proposal is to establish a new government agency based on the Ministry of Finance's Financial Department, which is currently also a major supervisor for State-owned financial institutions' financial affairs. Huijin was also tipped as the institution to be responsible for the management of the nation's hefty foreign exchange reserves, which is expected to be another key topic at the conference. Other major topics to be discussed at the conference include modification of the sector's regulatory framework, and the formula for the restructuring of the Agricultural Bank of China, the weakest one among major State banks and the last one to be revamped. The government has kept a low key about the conference, partly because of sensitivity of the issues to be discussed. Industrial insiders said about ten task forces, spearheaded by high-ranking financial officials, were formed to work on different issues and to provide policy recommendations to top decision makers. Management of State interests in major financial institutions was among issues that have been hotly discussed. The crux of the issue is how to strike the right balance between maintaining appropriate State control over these institutions and installing a market-oriented mechanism, which is crucial for the financial institutions' efficiency. The State-owned Assets Supervision and Administration Commission is now the sole representative for State ownership in major non-financial State companies. Financial institutions were not put under the umbrella of the commission to avoid the financial institutions being forced by the commission to support non-financial firms. But there has been no single body that is solely responsible for supervising the financial institutions. Both the Ministry of Finance and Huijin have some say. As for personnel, top executives are appointed by the central government. It is obvious that this fragmented supervisory mechanism is a hindrance in making the banks truly commercially viable institutions. Reform of financial sector is believed to an item high on China's unfinished agenda of economic reforms because an efficient allocation of financial resources is vital to an economy. Four asset management companies were set up after the 1997 conference to take over massive non-performing loans from the four State banks, which at the time were believed to be technically insolvent. The 2002 gathering led to establishment of the China Banking Regulatory Commission and restructuring schemes that eventually led to three major State banks' listings at international and domestic stock markets.

Beijing's debt burden above 20%
2007-01-16 China Daily
The Beijing government's debt burden has exceeded 20 percent, said a report recently issued by the Financial and Economic Committee of the Beijing Municipal People's Congress. The total debt had soared to several billions of US dollars by June 2006, the Beijing Times reported, without specifying the exact amount. The debts of district and township level governments accounted for nearly 70 percent of the total. Apart from the national debt and lending of enterprises in the city, most others originated from loans from foreign governments and domestic and international financial organizations. Most of the money that Beijing has borrowed has been used to construct infrastructure, protect the environment and spread education, the report said. The congress, however, advised the local government departments to take strict steps to restrict the amount of debts, and proposed adopting a plan to ensure the repayment of long-term loans. The committee suggested municipal departments conduct regular financial reviews and severely punish those misusing funds. A committee official said the government has been asked to take full responsibility for the management of debts, including effective auditing and supervision of the use and repayment of loans. He called for a system to be set up to identify and inform units and individuals to repay the loans on time. Lu Jun, an associate professor with the Government Management College of Peking University, however, ruled out a debt crisis. Lu was quoted by the Beijing Times as having said that the city's high financial revenues and income growth expected in the future, especially from the 2008 Olympic Games, would make ends meet.

Nuke power security a key concern
2007-01-17 China Daily
New efforts will be made to ensure nuclear and radioactive security now that nuclear power generation is growing and radioactive treatments are widely used in medical service. Zhou Shengxian, Minister of the State Environmental Protection Administration (SEPA), told a high-level conference yesterday that the central government had allocated a budget of 40 million yuan (US$5.12 million) to monitor possible nuclear and radioactive pollution. The significance of nuclear and radioactive security was underscored by Zhou's mention of China's emergency surveillance and evaluation following the nuclear test last October in neighbouring Democratic People's Republic of Korea. Nuclear and radioactive security is defined as regular inspection of nuclear use and operations, and effective response in emergencies. SEPA last year set up six nuclear and radioactive security-related monitoring centers based in Beijing and Shanghai, Guangdong and Sichuan provinces, and the northeast and northwest regions. But nuclear power generation is expected to grow in leaps and bounds in the next few years, Zhou noted. Nuclear power accounts for 2 percent of China's energy consumption, with a generation capacity of nearly 8 million kilowatts in 2006. But the targets are to reach 12 million kilowatts by 2010 and 40 million kilowatts by 2020. SEPA will strengthen supervision of nuclear power plants both under construction and in operation, Zhou said. In medical and other services, environmental officials admit that some radioactive materials are not properly disposed of, posing a potential threat to public health. Zhou said that 2007 will be the last year of a transition in which the handling of radioactive materials used by hospitals will be done by the environmental, rather than medical, authorities. In a related development, China Daily has learned that Li Ganjie, former director of the SEPA nuclear and radioactive security department, was promoted as the administration's youngest deputy minister at the end of 2006. Poor performance: In overall terms, however, the environmental picture is bleak. Instead of meeting the target of reducing pollution emissions by 2 per cent per year, chemical oxygen demand a key index of water quality and sulphur dioxide emissions actually grew 1.9 per cent and 2.4 per cent in 2005. Zhou blamed the failure on slow progress in industrial restructuring and local officials' wasteful investment projects.

'China may become scientific superpower'
2007-01-18 China Daily
London - China is on the way to becoming a scientific superpower, thanks to the massive increase in its spending on research and the return of an increasing number of its scientists from abroad, a leading British think tank has said. The report by London-based Demos, The Atlas of Ideas: Mapping the New Geography of Science, however, doesn't give a specific year when China would achieve that status. But according to China's plan, it will reshape itself as an innovative nation by 2020, and could become a scientific superpower by 2050. Nevertheless, the Demos report warns that China's long-term progress could be hampered by its rigid institutional system. The final report is based on a series of four reports after a 18-month study led by Demos. The reports focus on the dramatic growth and pace of scientific innovation in China, India and South Korea, with the fourth providing an overview of the international situation and outlining how the UK should respond to it. "China's Taiwan and South Korea made themselves centres for innovation over the past 20 years, and the Chinese mainland is catching up fast," the report's co-author James Wilsdon said yesterday. "In fact, in some growth areas, such as nanotechnology, it is moving even faster than Europe," Wilsdon, head of the Demos innovation team, said. One report forecast that the rise of China, India and South Korea would reshape the global innovation landscape. "The centre of gravity of innovation has started moving from the West to the East," the report says. The think tank even warned that US and European pre-eminence in scientific innovation could no longer be taken for granted. Investment into and funding of science and innovation projects in China is growing rapidly, and its impact on the international community is already significant, the report says. Since 1999, China's spending on research and development (R&D) has increased by more than 20 per cent a year. It has replaced Japan to become the world's highest spender on R&D after the US. The rising number of multinational R&D centers, steady return of the country's scientists from the US and Europe and the growing pool of graduates will help China realize its goal, Wilsdon said. "Beijing's university district alone has as many engineers as all of Western Europe, and you can imagine how dynamic the potential is."

Chinese scientists conduct more tests on thermonuclear fusion reactor
2007-01-15 People’s Daily Online
Chinese scientists have begun a new round of tests on the reliability of the experimental thermonuclear fusion reactor, nicknamed "the artificial sun". The Experimental Advanced Superconducting Tokamak (EAST) fusion reactor, which replicates the energy generating process of the sun, was tested at the Institute of Plasma Physics under the Chinese Academy of Sciences (CAS) in Hefei, capital of east China's Anhui Province. The reactor was first tested in September 2006. Since then scientists have made adjustments to improve results. "The new tests show the reactor is very reliable, and we can repeat the experiments," said Wu Songtao, deputy director of the institute. This new round of tests will continue till Feb. 10. During the experiment, deuterium and tritium atoms were forced together at a temperature of 100 million degrees Celsius. At that temperature, the super heated plasma, which is neither a gas, a liquid nor a solid, should begin to give off its own energy, scientists explained. The device is planned to eventually create a plasma lasting 1,000 consecutive seconds, the longest a fusion reactor has ever run. During the first round of experiments, the reactor created a plasma lasting nearly five seconds and generating an electrical current of 500 kiloamperes. "With more adjustments to the reactor and more experiments, we will get longer plasma at a higher temperature," Wu said. The EAST is an upgrade of China's first-generation Tokamak device and the first of its kind in operation in the world, said Chinese scientists. The Institute of Plasma Physics spent eight years and 200 million yuan (25 million U.S. dollars) on building the experimental reactor. Compared with similar devices in other countries, EAST cost the least money and time in construction and was the first in operation Some experts have cast doubt on whether it can produce more energy than it consumes, the main obstacle to making fusion commercially viable. Wan Yuanxi, general manager of EAST, said it had been proved that the energy input-output ratio of a fusion reactor could reach 1:1.25. With the development of the technology, the ratio was expected to increase to 1:50 in the future. The main purpose of EAST was to prove that the reactor can produce consecutive and stable plasma, Wan said. Unlike traditional nuclear fission reactors, which split atoms to create energy and produce dangerous radioactive waste, the EAST uses nuclear fusion to compress atoms at extremely high temperatures to generate energy that would produce very little pollution. Scientists theorize that a fully functional fusion reactor would provide cheaper, safer, cleaner and endless energy and reduce the world's dependence on fossil fuels. Minister of Science and Technology Xu Guanhua said earlier that as China was short of energy, global research into energy supply solutions met the strategic interests of the country. […] In 2003, China joined the 4.6-billion-euro ITER which was originally initiated by the United States and Russia. The first operation of ITER might be in 2016. Among the six partners involved in this ambitious plan, the European Union will cover 50 percent of the total budget. The remaining five, the United States, Japan, Russia, the Republic of Korea and China, will pay 10 percent each. "The EAST is the only prototype nearest to the ITER and, thus, it can serve ITER advanced research in terms of engineering technology and physics," said Wan. But the most optimistic estimation on first commercialization of the ITER said it needs at least half a century.

CPC outlines 2006-2010 cadre training plan
2007-01-15 People’s Daily Online
The Central Committee of the Communist Party of China (CPC) published its 2006-2010 national CPC cadre training plan on Sunday, which is a response to the social and economic development needs outlined in the Eleventh Five-Year Plan (2006-2010). "The CPC is paying great attention to its cadre training, which is a key task in Party construction," the plan says. Various local cadre training institutions have been set up nationwide, which, with the CPC central party school and the China National School of Administration at the central level, have created a comprehensive network of training, according to the plan. CPC cadres will study Marxism, Leninism, Mao Zedong Thought, Deng Xiaoping Theory and the "Three Represents" Important Thought of Jiang Zemin, with the latest achievements of the sinicization of Marxism as a main subject. CPC cadres will also be further trained on the Selected Works of Jiang Zemin, and on thinking related to the scientific view of development and the building of a harmonious socialist society, key points raised by the CPC Central Committee with Hu Jintao as General Secretary, it says. The plan stresses that training is to be linked to social realities so as to meet the demands of social and economic development.

Local Party committees in 14 provinces reshuffled
2007-01-15 Xinhuanet
Beijing - Fourteen of the 31 provinces, autonomous regions and municipalities on the Chinese mainland had reshuffled local Party committees following internal elections for Party officials by last December. The number of deputy Party chiefs in the local Party committees was cut by 38 to 33, a display of the Party's determination to improve efficiency and strengthen ruling capacity, according to the Organization Department of the Central Committee of the Communist Party of China (CPC). Positions in the standing committees of local Party committees were also reduced by eight to 186, with the average age of members down by half a year to 52.7-years-old. There are now 56 members aged below 50 and 21 members aged around 45 in the standing committees of local Party committees, and at least one woman cadre in most of the 14 provincial Party committees. In contrast to the general efforts to streamline Party organizations, posts in the Party's discipline inspection commissions were increased by 24.6 percent. "It will help discipline inspection sectors to perform their duties better," said an official with the Organization Department of the CPC Central Committee. Local Party leadership elections, which occur every five years, have been completed at the provincial, municipal, county and township levels, in Tibet, Xinjiang, Inner Mongolia, Liaoning, Henan, Anhui, Shanxi, Jiangsu, Hunan, Hebei, Yunnan, Guangxi, Fujian and Jiangxi. The election of Party officials in other regions and jurisdictions will be completed by the middle of this year.

Party should follow KMT path to reform, says Zhao Ziyang aide
2007-01-18 SCMP
A prominent aide to the late reform-minded Communist Party chief Zhao Ziyang yesterday marked the second anniversary of Zhao's death by calling on Beijing to embrace and learn from Taiwan's political reform. Bao Tong, 74, who has become a thorn in the government's side since being freed in 1996 after seven years in jail, said the party should learn from Taiwan's Kuomintang by ending its monopoly on power and allowing a multiparty system on the mainland. "Taiwan is a very good teacher," Mr Bao said. "It is good for the people to have a choice." The KMT once ruled the whole of China but fled the mainland for Taiwan in 1949 after being defeated by the communists, led by Mao Zedong. After decades of dictatorship, the KMT allowed multiparty elections in 1986, losing power to the Democratic Progressive Party's Chen Shui-bian in the 2000 presidential poll. But the Communist Party has maintained its rule with a tight grip on dissent and the media, and is obsessed with ensuring stability. "There's absolutely no rationale for [Beijing leaders] to fear chaos would ensue. China should let there be full and free elections," Mr Bao said. Mr Bao was purged along with Zhao for opposing the move to send in troops and tanks to crush the 1989 student-led pro-democracy protests in Tiananmen Square. The sharp-minded veteran has not stopped criticising the party since his release from prison. Early this month, overseas reporters were allowed a face-to-face interview with Mr Bao for the first time in eight years. The relaxation on foreign media interviews is part of an effort by Beijing to improve its image ahead of the 2008 Olympics. Zhao was ousted and replaced by Jiang Zemin, who retired in 2002, yielding his post to current party chief Hu Jintao. Zhao died on January 17, 2005, after more than 15 years under house arrest. Zong Fengming, a long-time associate of Zhao's family, said Zhao's 87-year-old widow, Liang Boqi, had not been told about her husband's death. "Her children do not want to upset her as she has been very sick - even before Zhao's death. And now she is paralysed and suffering from mild dementia," Mr Zong said. He said he and other mourners visited Zhao's home on Tuesday - the eve of the anniversary - to pay respects. "We wanted to avoid the anniversary because it would be too sensitive. Officials watched from outside and they didn't stop us, but reporters were not allowed in."

Party introduces new censorship rule - Media ordered to seek permission before covering sensitive topics in lead-up to 17th national congress
2006-01-16 SCMP
The Communist Party has further tightened its grip on the mainland's increasingly bold media by imposing a pre-censorship rule on coverage of politically sensitive topics, according to sources. In an internal document released to state-run media recently, the Publicity Department of the party's Central Committee said the media should seek permission to cover significant historic events or key anniversaries involving revolutionary or political figures that are seen as controversial or politically sensitive. The department also called a meeting of senior executives and editors from main state media outlets to brief them on the new rule, said a source who attended the briefing. Early last year, before the imposition of the new rule, the party's propaganda department ordered government-run media to refrain from playing up such topics. In an internal briefing, the department asked the media to limit its coverage of such topics to the official versions put out by Xinhua. A senior media executive said the convening of a crucial party congress this autumn was a key factor in the decision to further tighten controls because the leadership was keen to ensure a more harmonious political environment ahead of the meeting. The party's 17th national congress will see a major reshuffle of the leadership and set the agenda for the nation's development over the next five years. It will also be the first full session chaired by President Hu Jintao , who took over from Jiang Zemin as chief of the party, government and army between 2002 and early 2005. The imposition of the new rule followed a party reprimand of a top news magazine, sources said. In November, the Publicity Department of the Communist Party's Central Committee and the General Administration of Press and Publication reprimanded Lifeweek, a Beijing-based news weekly, for violating the party's directive not to play up politically sensitive topics that might cause social disturbances. "The Lifeweek incident is also another reason behind the party's latest decision," a senior state media editor said. The Communist Party and the government's media regulators ordered Lifeweek to tone down its coverage after it published a series of cover stories on politically sensitive historic events. In its October 30 issue, the weekly ran a cover story on the 30th anniversary of the end of the Cultural Revolution, with a front-page picture of late chairman Mao Zedong's wife, Jiang Qing, standing trial. Jiang was a member of the notorious "Gang of Four" that played a pivotal role in the turmoil between 1966 and 1976. In its September 11 issue, Lifeweek ran a lead story on the 30th anniversary of Mao's death. And in its August 30 issue, its cover story was on the 30th anniversary of the Tangshan earthquake, in which more than 200,000 people died. In recent decades, a number of activities marking historic events and revolutionary figures have turned into massive political campaigns against the government. The death of late Premier Zhou Enlai in 1976 became the source of a massive protest against the government led by the Gang of Four, and the death of party chief Hu Yaobang in 1989 turned into a nationwide student-led pro-democracy movement. Since last year, the central government has tightened restrictions on freedom of expression and reined in publications that have displayed signs of boldness. Officials have shaken up newspaper management and clamped down on internet blogs and campus chat forums amid a rising number of public disturbances. In the past year, party propagandists and government censors have dismissed the editors of three occasionally outspoken newspapers - the Beijing News, Southern Metropolis Daily and Public Interest Times. The government also temporarily shut down Bingdian Weekly, a four-page supplement of the state-run China Youth Daily previously known for its in-depth reporting on sensitive issues.

Eight books banned in crackdown on dissent - Publishers face severe penalties for 'overstepping the line'
2007-01-19 SCMP
Mainland press authorities have banned eight books by renowned writers and intellectuals in a new move to tighten control on dissent and stifle discussion of sensitive historical events. The General Administration of Press and Publications (Gapp) deputy director Wu Shulin told propaganda and publication officials at a meeting last week that the eight books were banned and vowed to impose severe punishment on their publishers. […] All eight books are reflections by intellectuals on historical and social events of the past six decades, events that have traditionally been subject to tight censorship. The ban and Mr Wu's criticism of the books' publishers were confirmed yesterday by an anonymous publication administration official. Another administration source said Gapp came up with the ban after the Central Propaganda Department included the books on its 2006 list of "publications that overstepped the line". A source said Mr Wu told the meeting that Yuan's book had leaked state secrets. But one person who attended the meeting said the ban on Zhang's work was a reflection on her position as the daughter of China's top rightist from the 1950s, Zhang Bojun, rather than on the book itself. "Ms Zhang's publisher, the Hunan Publishing House, is undergoing a big personnel reshuffle and will be hit by financial penalties and tougher restrictions on their future operation," the source said. It said Mr Wu addressed the meeting by saying: "How dare you publish the book by this writer [Zhang Yihe]." Zhang's two previous books - The Past is Not Like Smoke and A Memoir of Ma Lianliang - were also banned by mainland authorities for their uncomfortable recollections of political campaigns. In a rare interview yesterday, Zhang said the ban was unbearable. "I must voice my rage. They banned the book just because I wrote it, but they have to tell me why!" she said. "It's a terribly serious event. In the 50 years since the disaster visited on intellectuals, how little has the situation for intellectuals in China improved?" This year is the 50th anniversary of the start of the anti-rightist campaign, which resulted in the hounding of Zhang Bojun and his democrat friends by Maoist extremists. "In some party officials' eyes, I am still an active anti-revolutionist, and the only difference between my father and me was that they suppressed my father with extreme measures and a rightist label," she said." Chinese intellectuals have almost been deprived of our rights to free speech and publication. This is so serious that I have to stand up to appeal through open argument and reason for our basic rights. "If we keep silent today, tomorrow they can do the same thing to other writers and eventually the entire intellectual community will be muzzled. "I have no other way to express myself. Writing the books about my life and memories is the only way I can support myself in retirement." Zhang said she regretted the trouble the ban caused for the publishing house but vowed to write more articles to reveal the truth. Hu said the ban was "ridiculous and childish for its inefficient control of the free flow of information in the era of the internet". He said his book was well received and distributed online and offline. "It is a way of twisting history by erasing people's memories, but all the measures were taken under the table." Banned books: - Cang Sang by Xiao Jian tells the story of a man in northern Shaanxi from the 1911 Revolution to the Great Leap Forward. - I Object: The Road to Politics by a People's Congress Member by journalist Zhu Ling tells of the 12-year struggle of activist Yao Lifa to run for a seat in the local legislature. - Past Stories of Peking Opera Stars by Zhang Yihe is an account of the lives and deaths of seven Peking Opera artists. - The Family History of an Ordinary Chinese by Guo Ya describes the experiences of a normal Chinese family during the war of liberation, the Cultural Revolution and other eras: - The Other Stories of History: My Days at the Supplement Division of the People's Daily by Yuan Ying is a memoir of time working for the People's Daily. - Era of History edited by Kuang Chen is a historic series on major events from the 1950s to the 1980s. - This is How it Goes@sars.com by Hu Fayun tells the story of a woman who fell in love with the internet at the cost of her relationship with a vice-mayor during the Sars outbreak. - The Press by Zhu Huaxiang uses fictional characters to tell of the intrigues and behind-the-news stories of China's media industry.

Local governments required to enforce court rulings
2007-01-15 Xinhuanet
Beijing - China's central government wants local officials to ensure local court rulings are enforced and warns those who block their implementation will be punished, according to a circular issued on Sunday. "The implementation of court rulings has become an important element in assessing the performance of local governments," said the circular, which was jointly issued by the Supreme People's Court (SPC) and the Central Committee for Comprehensive Management of Public Security. Government departments that fail to enforce court rulings, or government staff who evade, disturb or refuse to assist in the enforcement, will face negative evaluation or administrative investigation, it said. The central government has evaluated the handling of court rulings by all provincial governments since the beginning of 2006. "The new requirements will address a longstanding enforcement problem in the country, safeguard the authority of law and maintain social stability," said a SPC spokesman, adding that the goal is to end local protectionism.

1,000 riot police deployed, protesters say
2007-01-19 SCMP
The city government in Foshan, Guangdong, sent more than 1,000 riot police yesterday to clear a demonstration site set up by villagers opposed to a land grab by local officials, protesters said. Local police officers and 600 armed police brought in dozens of vehicles and, equipped with rifles, shields and electric batons, raided a sit-in at Sanshan village in Foshan's Nanhai district yesterday morning, one of the protesters, Luo Jilun, said. He said more than 40 protesters at the site were taken away after being beaten. "They [policemen] beat everyone they saw, including elderly women," said Mr Luo, 50. "Officials finally released senior villagers in the afternoon, but are still keeping nine people under 50 years old." He said his wife, Liang Huantian, 44, had been detained by the police, along with another woman and seven men. Police withdrew after clearing protesters and their belongings from the site, another protester, Chen Huiying, said. However, dozens of plain-clothes officials kept watch nearby. The protest site, where hundreds of villages have taken turns to stage a protest since January 3, was once more than 26 hectares of farmland. The site was levelled and filled last year after it was sold to the US-based company ProLogis to become a warehouse complex, according to an official announcement issued by the Nanhai District People's Court on Wednesday. A decision by local officials to sell all the farmland they had in Sanshan - more than 1,200 hectares - to overseas investors in 2005 has sparked riots in the region. Villagers were paid compensation for the crops on the land in a one-off payment - 2,700 yuan for children and 4,170 yuan for each adult. Officials employed 4,000 armed policemen and local security officers to sweep crops from the fields on May 31, 2005, causing villagers to lose at least 8 million yuan. Yang Zaixin, an activist lawyer who has been helping villagers seek fair compensation since 2005, said the local government had never followed state land seizure laws in taking farmland from villagers. "The local government's land seizure wasn't approved by the provincial government and the State Council but they have cleared the land. It's illegal." Land disputes in rural areas are commonplace around the nation, especially in coastal provinces where rapid economic development has seen the value of land soar. Local governments often employ armed troops to crush protests. At least three villagers were shot dead by armed police in Shanwei on December 6, 2005.

Land-protection policy meaningless, says villager - Farmer left a cripple and penniless after fight for justice
2007-01-15 SCMP
Former village party boss Pang Shaohai says the agricultural polices announced by the central government over the past two years may sound appealing, but they mean nothing to him. Most of the 63-year-old's land was seized for an industrial zone in 2001 when he was party secretary of Pangzhuang village in Shandong's Heze city. "They said they wanted to lease our land and pay us rent, but I never received anything," he said. "In 2003, they sold the land for more than a million yuan per hectare." When the local township government initially told him about the plan to lease 53 hectares of farmland for development, Mr Pang tried to exercise his duty as village party boss by calling a meeting of villagers to review the proposal. However, he was detained with other members of the village committee for almost two weeks and forced to sign a lease contract. Later he was sent to a labour camp for about two months, where he was injured and left crippled. "While I was in the labour camp in Dongming county, the authorities changed the makeup of the village committee and sold the land," he said. Landless and crippled, Mr Pang started repairing bicycles by the roadside to earn a meagre income. His 18-year-old son is now the family's main breadwinner, earning about 500 yuan a month as a road worker. Mr Pang said he was furious when he saw further seizures of farmland and the industrial zone continuing to grow - even though it was half empty. "Some of the seized land has been left idle, while some now houses factories. They are still seizing farmland," he said. He said central government policies on protecting farmland and giving farmers a say in land acquisition were never implemented at the local level. "[Local officials] can do whatever they want." Land seizures have become the most prominent rural problem in China since the notorious agricultural tax was scrapped nationwide in January last year, according to rural analysts. While the scramble to seize farmland was cooled to a certain extent by Beijing's orders to raise the price of land acquisitions, the potential for profit continued to drive local officials to grab and sell land, said Chen Guidi , author of the award-winning book An Investigation of Chinese Peasants. Li Changping, an expert on rural issues at Hebei University, agreed that land was the biggest problem in the countryside as farmers were not able to profit from land sales amid rapid urbanisation. While more scholars are urging the government to give farmers the right to sell their land, Cao Jinqing, a Shanghai-based rural expert, believed any significant moves were unlikely because speeding up urbanisation remained the government's top priority. He said he believed the regulations to increase compensation for land acquisitions were aimed more at cooling the property boom in cities than protecting farmers. But rural experts are also warning that new problems in the countryside should not be overlooked. Mr Chen said the campaign to build a "new socialist countryside" had also led to a wave of projects in villages and increased the financial burden on farmers. But he said it was natural that the abolition of the agricultural tax had allowed more deep-rooted problems to surface, and these were not as easy to solve. But most rural analysts still agree that scrapping the tax has eased tensions in the countryside.

Beijing, HK to battle graft together
2007-01-15 Xinhuanet
Beijing - The Chinese mainland and the Hong Kong Special Administrative Region will strengthen cooperation in anti-corruption work, the head of Hong Kong's top anti-corruption watchdog said on Friday. Fanny Law Fan Chiu-fun, newly appointed commissioner of the Independent Commission Against Corruption (ICAC) of Hong Kong, wrapped up her four-day visit in Beijing yesterday during which she met senior officials of the mainland's anti-corruption authorities and other government bodies. Law told a press conference that she had called on the Supreme People's Procuratorate and the Ministry of Supervision to exchange anti-corruption knowledge and experience and discuss cooperation for 2007. "With growing social and economic ties and the frequent flow of people and capital between Hong Kong and the mainland, we reached agreements that both sides should strengthen cooperation in investigations and experience," Law said. Her visit coincided with the plenary meeting of the Central Commission for Discipline Inspection, the country's top anti-corruption body. "We see the central government's firm determination to rule out corruption and it was indeed a fruitful year for the mainland in the work of anti-corruption," Law said. She hoped the two sides would increase exchanges and visits in the future with ICAC members paying more visits to provinces on the mainland. Besides general routine communications, Law said a symposium on special subjects between the two sides would be held in the future. Law also said that her commission hoped to come up with a new guide for businessmen from Hong Kong on mainland business operations and anti-corruption laws with the help of mainland anti-corruption authorities. Law also hoped the two sides would reach a consensus on extradition soon. She said different laws and judicial systems of the two sides and the existence of the death penalty on the mainland are issues that need to be tackled. "But I think everything can be solved through negotiation," Law said. A case in point is that of Zhou Zhengyi, also known as Chau Ching-ngai, who is now in jail in Shanghai for manipulating stock prices and falsifying registered capital of subsidiaries. Zhou is also on the ICAC's list of most-wanted for economic crimes committed in Hong Kong. "Without an extradition agreement, we can't indict him unless he is brought to Hong Kong," Law said. She also said it was a "pity" that a Chinese mainland student was sentenced six months imprisonment after trying to bribe her teacher in Hong Kong but defended the verdict. "Hong Kong holds 'zero tolerance' for corruption," she said. To avoid the same thing from recurring, Law said the ICAC would contact all the universities in the special administrative region to lecture students from the mainland on anti-corruption policies as new semesters open in June.

Hong Kong curbs entry of pregnant mainlanders
2007-01-17 China Daily
Hongkong - The Hong Kong Special Administrative Region government will adopt new medical and immigration measures from February 1 to minimize the number of pregnant mainland women giving birth in the city. Under the new system, a mainland woman has to fix an appointment with a Hong Kong hospital in advance and undergo pre-delivery tests before she can avail of the maternity services. Also, the Hospital Authority (HA) will raise the minimum fee for a 3-day, 2-night labor package for non-local women to HK$39,000 from February 1. And those who don't make prior arrangements with the hospitals have to pay a surcharge of HK$9,000. And most important of all, all fees must be paid at the time of the booking, and will not be refunded under any circumstances. The HA will issue a certificate to non-local women after their bookings are confirmed. The Immigration Department, for its part, will closely monitor non-local women in an advanced stage of pregnancy, at the arrival points. To minimize disputes, women pregnant for seven months or 28 weeks or more will be considered to be in an advanced stage of pregnancy. The Hong Kong government departments announced the new measures at a joint press conference yesterday. Deputy Secretary for Health, Welfare and Food Patrick Nip said the government would ensure local pregnant women get proper and priority treatment. "We aim to restrict the number of non-local pregnant women giving birth in Hong Kong to a level that can be supported by the local healthcare system," he said. Director of HA's cluster services Cheung Wai-lun said a centralized booking system would be put in place to collect data and better prepare services. "There is no upper limit for the quota for local pregnant women, and they can use maternity services quite easily." "But as the medical service is highly subsidized in Hong Kong, non-local pregnant women will have to pay the fee in full even if their husbands are Hong Kong residents." The new booking system and priority treatment for local pregnant women have the full support of private hospitals in Hong Kong. From February 1, pregnant mainland women suspected of entering Hong Kong to give birth will be asked by immigration officers to furnish their booking confirmation certificates with local hospitals, Assistant Director of Immigration David Chiu said. And those who fail to do so would be denied entry.

China abolishes tuition fees in all rural schools
2007-01-16 Xinhuanet
Beijing - From the spring semester this year, tuition and miscellaneous fees in rural schools of China's central and eastern regions will also be abolished, according to a government circular. It means rural kids in all parts of China will enjoy a better chance to complete nine-year compulsory education. Tuition and miscellaneous fees in rural schools of the western region had already been scrapped from the spring semester of last year. The circular, issued by a national office of rural compulsory education, also pledged continuing to provide free textbooks and subsidies to students from poor families. It said rural schools shall not collect any charges from students other than those for textbooks, workbooks and lodging. It said charges for auxiliary teaching materials, stationery, school uniforms, insurance, regular physical examinations, quarantine, drinking water and other school service charges are also waived from the coming spring semester. The cost will be jointly shouldered by the central government and local governments, the circular said.

Cost of building greener cities put at 1.5 trillion yuan - Energy-efficient construction seen as key to a better future
2007-01-19 SCMP
The mainland will spend at least 1.5 trillion yuan in the next decade to make new buildings more energy-efficient as the government steps up efforts to cut soaring demand for power, the Ministry of Construction said yesterday. Deputy construction minister Qiu Baoxing said a new set of regulations on energy-efficient construction would be put in place later this year, while the government would roll out more initiatives to encourage greener buildings. Mr Qiu said construction consumed 27.5 per cent of the country's total energy demand and that share was likely to grow as living standards improved. New buildings in most cities would have to halve their energy use, while those on the drawing board in the country's four main municipalities would have to be 65 per cent more efficient, Mr Qiu said, without saying how those levels would be determined. Authorities would also improve energy use in existing buildings, with upgrades expected to cost 100 to 200 yuan per square metre, he said. "More than 1,500 billion yuan will be needed to modify the existing buildings. This is going to be a huge market," he said. […] China has become one of the biggest energy consumers in the world and has been criticised for using much more energy to produce one unit of gross domestic product than other countries. Mr Qiu said a huge amount of resources was wasted through poor construction practices, and almost none of the nation's buildings were environmentally friendly because of limited resources and a lack of skills in the past. For instance, he said 22.4kg of coal was needed to heat one square metre in Beijing each winter, compared with just 9kg in Germany. The coming 15 years would be crucial in implementing the green construction initiatives. "Half of the buildings [in China] will be built in the next 15 years. This is an opportunity we have to seize," he said. […]

Edict shifts focus to local architects - Foreign designs have attracted fierce criticism
2007-01-17 SCMP
The mainland has issued new rules for large public buildings and other structures - which appear to favour domestic designs - following an outcry over the use of foreign architects and "white elephant" projects. Five government bodies issued an "opinion" - effectively an edict - two weeks ago on strengthening the management of engineering and construction for large-scale public structures. […] Some projects designed by foreign architects have drawn fierce criticism. They include the National Theatre in Beijing, which has been called a "duck egg", and the National Stadium, also in the capital, which has been labelled a "bird's nest". Among the more controversial guidelines is one that encourages domestic tenders for construction and design plans, and urges construction units "to avoid blindly conducting international tenders". Architecture professor Peng Peigen of Tsinghua University, an outspoken critic of foreign architects, hailed the document as a victory. "This is a major event relating to the existence of our industry," he said. Last year, Professor Peng sent a letter to Premier Wen Jiabao criticising buildings which he described as "monsters of every description". The document set out principles for public buildings, saying the number, scale and standards of such projects must be in keeping with national and local levels of development. Buildings should be environmentally friendly and meet government requirements for quality and investment, it said. They must be in keeping with local history, culture and their surroundings.

Survey to help serve and supervise migrants better
2007-01-18 Xinhuanet
Beijing - China will conduct a nationwide survey of migrant people this year to better supervise and serve them, police authorities said on Tuesday. Hostels where migrants stay will have to submit check-in lists to police, Vice-Minister of Public Security Liu Jinguo said at a meeting of the Central Committee for Comprehensive Management of Public Security. Liu said the ministry would expedite household registration system reform to make migrant population management easier. […] The existing system divides the population into rural and non-rural households. Rural residents, who move to live and work in cities, have to register for temporary residency. But the system faces a great challenge as China experiences the largest movement of people in the world, putting pressure on urban infrastructure, public services and government administration. According to the 2005 National Population Sample Survey, the migrant population was about 150 million, 2.96 million more than 2000. Many are rural residents seeking jobs in cities. A National Population and Family Planning Commission report released on January 11 said rural areas still had a surplus labour force of 150- 170 million, and they would continue to shift to cities. Though migrant workers are an irreplaceable force in the country's modernization, they have also caused public security problems. "Crimes committed by migrants are serious in certain areas," Liu said. Ministry figures show 41.2 percent suspects held in criminal cases last year were migrants. Liu said police would join hands with other departments this year to raise legal awareness among migrants and offer them more protection and help them get jobs, houses, and education for their children to better integrate into cities. Ministry figures also show that the crime rate is down. From January to November 2006, police handled 4.19 million criminal cases, down 0.8 percent year on year. Violent crimes such as murder, arson, rape and kidnapping dropped 4.3 percent because of police crackdowns. That led to a 0.1 percentage point rise in the public sense of security, says a National Bureau of Statistics survey. Up to 92 percent of 102,448 respondents from 1,836 cities and counties said they felt society was safe or comparatively safe, the highest since the annual survey began in 2001. The 2001 and 2002 figures were 81 and 84 percent, and stayed around 91 percent from 2003 to 2005.

Green GDP to be expanded nationally
2007-01-18 China Daily
Reports that Green GDP accounting could be ditched because of local resistance are grossly exaggerated, a top official of the environmental watchdog said yesterday in fact, the project will be expanded to the entire Chinese mainland. Despite reports that some provinces were dropping out of the green accounting project to protect their own interests, the official told China Daily that the 2005 report will "actually expand to cover 31 provinces and municipalities," showing "a great leap forward for the concept of Green GDP". Officially called the Environmentally-Adjusted GDP Accounting Report, the Green GDP report is intended to drive home to the public and officials the waste created, and environmental damage done, in the process of economic growth. Simply put, Green GDP is calculated by deducting the cost of natural resources' depletion and environmental degradation from traditional GDP. The report for 2005 will be released next month, said Pan Yue, vice-minister of the State Environmental Protection Administration (SEPA). The first report, for 2004, was published in September last year. Officials told China Daily that the Green GDP report is a complex accounting project which takes around two years longer than the compilation of conventional GDP figures for a fiscal year. The 2004 report showed that the financial loss caused by environmental pollution totaled as much as 511.8 billion yuan ($64 billion), or 3.05 percent of the nation's economy, based on the traditional GDP accounting method. The new report will include two more indices to make the evaluation of environmental losses more accurate, Pan said. One will compute the cost caused by transportation pollution; and the other, the cost of pollution clean-up. The effort was launched in March 2004 by SEPA and the National Bureau of Statistics. In the last two years, an accounting analysis has been made of physical quantification of environmental pollution, imputed treatment cost and the environmental degradation cost for 42 industries. Pilot projects were launched in the three municipalities of Beijing, Tianjin and Chongqing, and the seven provinces of Hebei, Liaoning, Anhui, Zhejiang, Sichuan, Guangdong and Hainan. Pan admitted that initially, SEPA did meet with many difficulties ranging from technical ones to resistance from regional and industrial officials. But much to his relief, SEPA has managed to work with the 10 regional governments to stick through, Pan said. The general environmental situation remains bleak, as a result of what Pan called catering to immediate interests and reckless energy consumption. Last year, China flunked its target of cutting major pollutants by 2 percent, which instead witnessed a growth of 2 percent. Meanwhile, SEPA officials explained that the retirement last year of two vice-ministers senior to Pan, Zhu Guangyao and Wang Yuqing, did not mean Pan was promoted. SEPA does not have the position of a "first vice-minister" as some Chinese-language press had reported, they said.

Legal education scheme launched for police
2007-01-16 SCMP
The Ministry of Public Security has launched a nationwide campaign to enhance the legal education of police, Xinhua reported. The ministry ordered police officers to sit in on court hearings more frequently to improve their understanding of legal issues and judicial procedures, it said. Public security officials with judicial responsibilities would be required to attend court hearings at least twice a year, while local police heads at the city or township level should attend at least once a year. The ministry had published a directive that included more legal training for security officials, more court case group studies and a more rigorous recruitment system to attract qualified policemen, Xinhua said.

New regulation on military audit to take effect
2007-01-15 Xinhuanet
Beijing - A new version of the Audit Regulation of the People's Liberation Army (PLA) has been issued as ordered by Chinese President and Chairman of the Central Military Commission Hu Jintao. The eight-chapter regulation aims to strengthen supervision on auditing, maintain financial order, raise profits and boost the overall development of the PLA. It covers the principles, basic tasks, leadership, structure and personnel of audits and specifies the responsibilities, rights, process and management of audits in the PLA. It clearly states that auditing of the PLA is under the leadership of the Party committees of the PLA and is carried out in accordance with the law, including the Law on Auditing of the People's Republic of China. The regulation will take effect from March 1 and the current version promulgated in 1995 will cease at the same time.

Police investigate reporter's death in north China
2007-01-17 Xinhuanet
Taiyuang - Chinese police are tracking suspects that are believed to be responsible for beating to death a reporter who was investigating a coal mine in north China's Shanxi Province, local authorities reported on Wednesday. The Shanxi Provincial Security Bureau has dispatched more than 70 officers to investigate the case and they have made some breakthroughs, officials said, without elaborating. "Lan Chengzhang, who worked for the Beijing-based China Trade News, and a taxi driver he had hired, were attacked on Jan. 10 at a coal mine in Hunyuan county of Datong city," a local police official said. "The coal mine owner sent more than 20 thugs in their twenties, from Datong, to beat up the two men," he said. Lan died of a brain haemorrhage later in the hospital and his colleague is undergoing treatment for two broken legs. The incident has provoked online tirades from Chinese netizens at the treatment of the reporter and accusations of blackmail from local officials have also poured fuel on the fire by accusing Lan of posing as a journalist in order to blackmail the coal mine, which had no production license. "It is inappropriate to discuss whether or not Lan was a registered journalist now. The most important thing is to arrest the assailants and deal with them according to the law," said Da Li, a reporter with a local TV station. Datong city government spokesman Gu Shengming said Lan had no press card and his interview was not officially approved. However, he admitted that Lan had been hired by the newspaper. "Lan has been temporarily hired by the newspaper's branch in Shanxi for a short period. It is still not clear when he went to the coal mine or how the accident happened," Gu said. "A vice president of the newspaper has arrived in Datong to investigate the case," he added, without giving the official's name.

Activist gets jail sentence for breaking two lamps
2007-01-18 SCMP
Activist Mao Hengfeng has been sentenced to 2-1/2 years in jail in Shanghai for destroying property, an international human rights group said yesterday. Mao had complained she was unfairly dismissed from her factory job in 1988 for becoming pregnant with a second child, in violation of the mainland's family planning policies. She was also active in forced eviction protests. She and several other activists were detained ahead of last year's anniversary of the June 4, 1989, crackdown on pro-democracy activists, New York-based Human Rights in China said. While being detained in a government-designated guesthouse, Mao broke two table lamps in protest at her treatment. She was arrested last June for "intentionally destroying property" and sentenced last month.

Killer's widow files appeal
2007-01-17 SCMP
The widow of executed Shaanxi mass murderer Qiu Xinghua yesterday filed a request with the country's highest court for a review of his case, in the first appeal of its kind on the mainland. Qiu, 47, killed 11 people last year and was executed on December 28, just before an automatic Supreme People's Court review of death penalty cases came into effect. Public doubts about the case grew when experts suggested Qiu may have been mentally ill, but provincial courts rejected requests for psychiatric tests. Qiu's wife, He Ranfeng, applied for a retrospective assessment of Qiu's mental health and a fair sentence based on the results, according to her lawyer, Chen Zhihua. If the Supreme Court accepts Ms He's request, it could review the case itself or hand it back to the Shaanxi Higher People's Court, which upheld the execution order. If the verdict is overturned, Ms He will sue prosecutors and judges involved in the conviction.

Old-man politics dies with last 'immortal' - Passing of elder statesman lifts ideological weight from the new generation of mainland leaders
2007-01-17 SCMP
The death of elder statesman Bo Yibo marks the end of an era in which a handful of revolutionary old guards, the so-called "eight immortals", pulled the strings from behind the scenes. The passing of that era lifts an ideological weight from the shoulders of President Hu Jintao and the younger generation of leaders, analysts say. "They used to be the country's core. Their power didn't come from public office but from their revolutionary credentials," said one Beijing-based political scientist surnamed Zhou, who declined to give his full name. "That period was one of most opaque politics, a cult of personality pervaded." The "eight immortals" refers to paramount leader Deng Xiaoping and his political contemporaries, including former president Li Xiannian, former NPC chairman Peng Zhen, former economic boss Chen Yun, army general Song Renqiong, former president Yang Shangkun, former vice-president Wang Zhen and former vice-premier Bo. All were Long March veterans and all were victims of the Cultural Revolution. During the Tiananmen protests in 1989, the immortals were seen as influential in pushing for a crackdown on pro-democracy students. Bo was also said to have played a crucial role in ousting reformist party leaders Hu Yaobang and Zhao Ziyang during the late 1980s and the installation of a more conservative leadership headed by Jiang Zemin in the wake of the crackdown. Hu Yaobang was forced to resign after a nationwide wave of student protests in 1987 and his death in April 1989 sparked the democracy movement that led to the Tiananmen Square crackdown. Unconfirmed reports said Hu suffered a heart attack after a heated debate with Bo during a Politburo meeting. During the meeting, Bo harshly criticised Hu and his successor Zhao. Bo reportedly called the policies implemented by both leaders since 1979 as "the error of a decade". In that era of old-man politics, the immortals dictated mainland government and party policy even though they had formally retired from office and had little day-to-day role in government. All of them also seemed to have learned the secret to long life, although sometimes they had to be wheeled out to attend public activities. When Li, the youngest of the immortals, died in 1992, he was 83. The average life expectancy for a man on the mainland is 66. "In that era, the final say on all major questions of state was ultimately up to Deng. In the post-Deng political era, the influence of his old revolutionary comrades was still felt and their nod was essential for any policy to get through," Mr Zhou said. The ending of old-man politics opens the way for the younger generation to cement its control, analysts say. "For President Hu and his fourth-generation comrades, the timing could not have been better," Mr Zhou said, adding that Mr Hu was in the decisive phase of his campaign to put his own political ideology in place. "The era of senior leaders wielding power behind the scenes is gone, and this is a boon for the new leadership." Their passing also represents the slow but progressive institutionalisation of power succession within the Communist Party. "Although the process of political democratisation is quite slow and an institutionalised mechanism of power transfer is still not quite in place, it's safe to say policy decisions are no longer in the hands of the older generation and an institutionalised transfer of power is shaping up gradually," said Liu Xutao, professor of public policy at the National School of Administration. "When Jiang Zemin took the reins as party chief in 1989, the elders were still in charge. From the Hu generation onwards, power succession will be conducted in a much more formal and civil manner."

Reshaping the population problem as a human resources powerhouse
2007-01-16 People’s Daily Online
China's first National Population Development Strategy Research Report, released on January 11, has determined that the introduction of China's family planning policy has prevented the birth of over 400 million people over the last 30 years. The world's population will now reach 6 billion four years later than predicted. In the next 30 years, China is expected to witness a net population increase of about 200 million people, its population peaking at 1.5 billion after 2033. The report was compiled by the National Population Development Strategy Research Group led by Jiang Zhenghua, Xu Kuangdi and Song Jian, and includes more than 300 experts and scholars. The group spent two years, from February 2004 to April 2006, researching data for the report. China has now made a feature of having a low birthrate, a low mortality rate and high growth rate. How China can transform itself from a country with a large population to a human resources power is now a tough but pertinent question.

Record number of people travelling
2007-01-17 China Daily
The number of outbound travellers from the Chinese mainland reached a record 34.52 million last year, with Hong Kong, Macao and Japan as the three most popular destinations, a report said yesterday. The figure marks an 11 percent increase on the previous year. About 9.84 million travellers, or 29 percent of the total, were tourists, according to the report published on the website of the Ministry of Public Security. Businessmen and people visiting relatives and friends also accounted for a large part of the total. The top 10 destinations included Thailand, the Republic of Korea, Russia, the United States, Singapore, Vietnam and Malaysia. The report also showed that China welcomed some 22.21 million travellers from foreign countries last year, up 9.65 percent from the previous year. Among those, more than 11.33 million were tourists, accounting for 51 percent of the total. The top 10 source countries for travellers to the mainland were the Republic of Korea, Japan, Russia, the United States, Malaysia, Singapore, Mongolia, Thailand, Britain and Australia. The Luohu Checkpoint in Shenzhen and the Gongbei Checkpoint in Zhuhai, both in South China's Guangdong Province and adjacent to Hong Kong and Macao, saw larger numbers of travellers compared with other ports, the report says. The ministry said it had set up 130 self-service passenger-clearance channels at the two checkpoints to facilitate inbound travel. It takes only 10 seconds for a traveller to pass through the channels machine-readable documents. The report also showed that police last year detained 5,937 people who attempted to enter or leave the country illegally, down 13 percent year-on-year.

 

Taiwan

A key year for Taiwan situation
2007-01-18 China Daily
This year will be a crucial period for discouraging "Taiwan Independence" and maintaining peace and stability in the Taiwan Straits, officials in Beijing said yesterday. "With the Taiwan authority's pursuit of de jure 'independence' for Taiwan through 'constitutional' change entering a period of substantial implementation this year, cross-Straits relations face grave challenges," said Yang Yi, spokesman for the State Council's Taiwan Affairs Office. Yang, who is the deputy director of the office's press bureau, made his first appearance at the regular press conference yesterday, making him the third spokesman for the mainland office handling Taiwan affairs. Last November, Taiwan leader Chen Shui-bian advocated the establishment of a "second republic" by revising the island's current "constitution" and adopting a new one. The proposal was widely denounced as indicating the pursuit of de jure 'independence' for Taiwan. Chen also proposed to change the island's "territorial" definition in the new "constitution" last September. "We will show our utmost willingness and try our best to win peaceful unification prospects, but we shall never tolerate 'Taiwan Independence' or any attempt to make Taiwan secede from China," Yang said. Looking back on the developments of the past year, Yang said cross-Straits relations had gradually moved towards peace and stability thanks to the efforts of the people on both sides. Yang added that secessionist moves by Taiwan 'independence' forces had been the target of severe joint denunciations by people on both sides of the Straits. Travel ties also are booming. Tourists from Taiwan made more than 4.4 million visits to the mainland last year, while more than 200,000 mainland people visited Taiwan, Yang said. Yang urged the Taiwan authorities to allow two pandas to enter Taiwan. The mainland offered Taiwan a pair of giant pandas as gift in May 2005, but the Taiwan authorities have so far refused to let the pandas enter Taiwan, citing political reasons.

Trade between mainland, Taiwan hits 100b USD mark
2007-01-17 Xinhuanet
Beijing - Trade between the Chinese mainland and Taiwan hit a record 107.8 billion U.S. dollars in 2006, Taiwan Affairs Office of the State Council spokesman Yang Yi said here Wednesday. It was the first time trade had exceeded 100 billion U.S. dollars, Yang said, adding it had risen 18.2 percent on the previous year. Mainland exports to Taiwan reached 20.74 billion U.S. dollars, up 25.3 percent year-on-year, and imports totaled 87.11 billion U.S. dollars, up 16.6 percent, said Yang. According to Ministry of Commerce statistics, the mainland approved 3,752 Taiwan-funded projects in 2006 worth 11.34 billion U.S. dollars. The funds actually used reached 2.14 billion U.S. dollars. In 2006, cross-straits exchanges and cooperation were fruitful especially in the agriculture and information industries, Yang said. In April 2006, mainland officials and the Kuomintang party held an economic and trade forum at which the government issued 15 preferential policies for Taiwan exporters and in October, the two sides held a forum on agricultural cooperation with 20 preferential policies released. The two sides also held two forums on information technology, he said. Last year, breakthroughs were made in promoting the early realization of the three direct links -- mail, trade and transport services -- across the Taiwan Straits with regular chartered flights for holidays and special cargoes, he said. Meanwhile, Taiwan-funded companies enjoyed a better investment and finance climate and cross-straits exchanges and cooperation in financial circles also increased, Yang said. Yang said the mainland would continue to take effective measures to ensure implementation of those preferential policies this year. The mainland will make efforts to realize the regular chartered flights at weekends and more convenient chartered flights for cargoes, he said. The mainland will promote cross-straits communication to establish a finance supervision mechanism. Yang also said preparations for establishing a nationwide organization of Taiwan businessmen on the mainland were underway.

Top advisor stresses research into history of Taiwan
2007-01-17 Xinhuanet
Beijing - China's top political advisor Jia Qinglin on Wednesday called for historians to carry out more research to prove Taiwan is an inalienable part of China. "More historical research will assist the fight against Taiwan secessionists, and will promote mutual understanding and peace and stability across the Taiwan Straits," said Jia, chairman of the National Committee of the Chinese People's Political Consultative Conference (CPPCC). The Historical Archives of China and the Xiamen University have started a project to compile historical materials about Taiwan from the last 400 years. The historical materials include the imperial archives of the Ming and Qing dynasties (1368-1911), the documents during the period of the Republic of China (1912-1949) and archives collected from overseas. The project, aiming to publish 550 books of 300,000 pages in total, is expected to be completed in 2008.

 

Economy

Foreign investment in China rebounds
2007-01-16 China Daily
Foreign investment in China increased last year, picking up from a mild decline in 2005 amid optimism over an expanding economy and a stronger yuan. China received US$63 billion in foreign investment in 2006, up 4.47 percent from a year earlier, Minister of Commerce Bo Xilai told a conference in Beijing yesterday. In 2005, investment dipped 0.5 percent when the central government, concerned about an overheating economy and surplus production, imposed restrictions that dampened the inflow of overseas funds. Though FDI rose last year, the growth was still much lower than the average annual expansion of more than 10 percent from 2001 to 2004. "Despite the macro curbs, China remains attractive with its robust economic potential, higher-valued currency, low-cost labor and booming consumption," said Li Mingliang, an analyst at Haitong Securities Co. China's economy may have expanded 10.5 percent in 2006 and could grow another 9.8 percent this year, according to government estimates. Domestic spending climbed 13.6 percent year on year through November to 6.89 trillion yuan (US$884.1 billion), outpacing the 12.9 percent gain for all of 2005. Overseas giants including Best Buy Co and Carlyle Group made acquisitions to gain immediate access to major sectors and pocket profits in the world's fourth-largest economy. For 2007, Li predicted that FDI is likely to climb, but it will move in a narrow range because the government isn't eager to attract more overseas funds given its US$1 trillion in foreign exchange reserves, the most in the world. "Besides, the mix of cooling-off measures will more or less block the entry of overseas capital into sectors such as real estate," Li said. The central government in May began unveiling a string of new policies to restrict overseas property investment and ease pressure on surging housing prices. New rules require overseas institutional investors with total investment of more than US$10 million to have at least half of the money as registered capital in a Chinese mainland-incorporated enterprise. Foreigners must also remain in China for at least a year before they can buy homes or apartments in the country.

Sinopec calls for new oil pricing mechanism
2007-01-19 Xinhuanet
Beijing - Sinopec, Asia's top refiner, has called for a more market-oriented oil pricing mechanism in 2007 after struggling last year to refine more oil at higher cost for local consumption. "A more market-based fuel pricing system will certainly benefit our business by smoothing our operation," Huang Wensheng, spokesperson for Beijing-based Sinopec, told China Daily yesterday. "I do not believe timing is the priority in making the decision, but the determination of the authority is," he said. Because pricing is government-controlled rather than market-driven, Sinopec witnessed a huge refining deficit in 2006 due to a soaring crude import cost and the low price of refined oil sold domestically. As a result, the refiner recently received State compensation of 5 billion yuan as it continues shouldering responsibility for processing crude oil to meet robust local demand. In a public statement yesterday, Sinopec announced it processed 146.32 million tons of crude in 2006, up 4.56 percent over the previous year. Oil products Sinopec delivered to the market reached 111.68 million tons last year, growing 6.81 percent over 2005. "The output volume unveiled is in line with our original plan. Despite the heavy loss, we still manage to refine more oil and to source from third party suppliers for rising local consumption," Huang said. Sinopec's output is higher than many analysts expected given the huge deficit triggered by surging global oil prices last year, Liu Gu, a senior energy analyst with Shenzhen-based Guotai Jun'an Securities (Hong Kong) Ltd, told China Daily. He expects a positive market reaction to the listed refining giant's output announcement. Although the refining output is up, the 4.56 percent growth rate for Sinopec in 2006 is the lowest in four years. Processing volume rose 5.3 percent in 2005, compared to 14 percent in 2004 and 10 percent in 2003, according to Bloomberg statistics. "Under harsh market conditions, it is understandable for the refiner to slow down refining growth and even to import oil products from overseas to cover the deficit and to meet demand," Liu said. Sinopec supplies around 80 percent of the fuels sold in China […]. As global prices soared in 2006 and import costs jumped, the refiner saw its loss widen to 12.6 billion yuan in the third quarter of 2006, compared to a 6.6 billion yuan loss a year earlier. Sinopec imports about 70 percent of the crude oil it uses for refining. […]

China lowers gasoline price
2007-01-15 China Daily
Prices of domestic refined oil products may have been cut in line with lower global prices, but the era of real flexibility in the country's pricing system is still some way off. The National Development and Reform Commission (NDRC), the ministry-level body that plans the economy, announced on Saturday that it would cut the wholesale price of gasoline by 220 yuan ($28.21) per ton and the price of kerosene by 90 yuan ($11.54) per ton from yesterday. The move marked the first price-cut for refined oil products sold on the Chinese mainland since May 2005. The price of oil products had gone up 12 times since 2003, including twice last year, in line with soaring global oil prices, Xinhua News Agency reported. "The local price cut that took effect (on Sunday) was necessary and well-founded because crude prices have declined and the new oil-pricing mechanism is not yet available for public review," Han Wenke, director of the NDRC's Energy Research Institute, told China Daily yesterday. He said that because the wholesale market for oil products is still dominated by State-owned giants mainly the China National Petroleum Corporation (CNPC) and China Petroleum and Chemical Corporation (Sinopec) it is natural for the government to keep a tight grip on pricing. […] He added that the government would not adopt the new pricing system in the foreseeable future. "Although lower global oil prices will help pave the way for a new pricing system that is expected to track international crude prices more closely, the recent drop in (domestic) prices may not necessarily have been connected to that system," Han said. […] The government adjusts oil prices only when the international price changes by more than 8 per cent. For refiners, this can lead to major losses as they pay large export bills when international crude prices are high, but cannot raise prices of the products they produce, such as gasoline for automobiles. According to news reports, the NDRC had earlier been considering de-linking the price peg between local oil products and oil products sold in Singapore, Rotterdam and New York, which had been the standard for the past five years. Instead, the top economic planner was said to be weighing the possibility of linking the prices of local oil products to crude prices in Brent, Dubai and Minas, which would more accurately reflect prices in the global market. […] Lower fuel prices will benefit China's grass-roots consumers and oil-dependent industries like aviation and public transportation, said Lee Mei Leng, chief analyst at the Beijing office of Platts, a company that monitors the energy sector. Lee added that the recent price cut for local oil products could prove painful to major refiners, which have long had to contend with high import prices and low retail prices. […]

China's forex reserve reaches US$1.066 trillion
2007-01-16 China Daily
China's foreign exchange reserve reached US$1.0663 trillion at the end of 2006, announced the People's Bank of China on Monday, January 15, 2007. The figure rose 30.22 percent over that at the end of 2005. And it was the first time that China's foreign exchange reserve was confirmed to exceed US$1 trillion, according to the central bank. The bank's statistics show that the figure broke the one trillion U.S. dollar mark at the end of October 2006. China reported a fresh increase of US$247.3 billion of foreign exchange reserve in 2006. The increment was US$38.4 billion more than the growth figure in 2005. China became the world's largest foreign currency depositor in the first half of 2006. Figures from the State Administration of Foreign Exchange show that China's foreign exchange reserve stayed below US$1 billion before 1979. The huge reserve reflects China's economic achievements since the country started economic reforms in the late 1970s, but observers worry that an excessive and fast-growing reserve of foreign exchange will endanger currency stability and liquidity. The further rapid growth of the reserve will continue to fuel speculation on the appreciation of the Renminbi (RMB), said Tan Yaling, a research fellow with the China International Economic Relations Association, under the central bank. Being the product of foreign trade revenue and foreign investment, China's huge reserve has been a target of international critics, who argue that the RMB should be revalued and that the undervalued yuan gives Chinese products a price advantage in international markets and hurts manufacturers from other countries. The huge amount of foreign exchange reserve means China has economic power that can influence the world, said Zhao Xijun, a professor with the Renmin University of China. Zhang Yansheng, an official with the National Development and Reform Commission, said that China should increase imports and improve the quality of foreign investment, while maintaining a reasonable growth of exports and use of foreign investment.

Yuan overtakes HK dollar for first time
2007-01-15 Xinhuanet
Beijing - The value of the Renminbi (RMB) yuan overtook the HK dollar on Monday for the first time in history. The central parity rate was announced at 0.99945 yuan to one dollar by the Chinese Foreign Exchange Trading System. Chinese experts believe the yuan will remain superior for the time being as the yuan continues to appreciate. The value of the RMB against the U.S. dollar hit a new high on Monday, with a central parity rate of 7.7938 yuan to one U.S. dollar, breaking the 7.80 mark. So far, the RMB against the HK dollar has appreciated by six percent since China reformed its exchange rate system in July 2005. A stronger RMB will strengthen the economic exchanges between the Chinese mainland and Hong Kong, said Chinese experts. Hong Kong's tourism and retail sectors will be two of the greatest beneficiaries of an appreciated yuan, said Han Kui, vice general minister of the outbound tourism department of the China Youth Travel Service. Mainland tourists heading to Hong Kong for shopping will spend more as the yuan appreciates, said Han. Zhang Yansheng, a senior expert with the think tank of the National Development and Reform Commission, said a stronger yuan would make Hong Kong's high-end technology and services more attractive to the mainland companies, a boon to the service-led Hong Kong economy. "The high-end technology and services were too expensive before and mainland companies have found it hard to cooperate with Hong Kong providers," said Zhang. Official statistics showed that exports to the Chinese mainland accounted for about half of all Hong Kong exports in the first three quarters of 2006. Zhang said a more valuable yuan might lead to a slight rise in the amount of poultry and fish products imported into Hong Kong from the Chinese mainland. But Hong Kong residents' daily expenses would not increase much and the rise in prices of these essentials would be mild, he said.

Commerce Minister: Huge trade surplus to be reduced
2007-01-16 China Daily
China will encourage imports and restrict exports this year in a bid to balance trade and ease the concerns of trading partners. "Cutting the huge trade surplus is the priority task for 2007," Commerce Minister Bo Xilai said yesterday. He made the remarks as China's trade surplus widened to a record $177.5 billion in 2006, 74 percent higher than the $101.88 billion in 2005. If it grows at the same rate this year, the trade surplus will mount to $300 billion, which is "likely to transform an economic problem into a political one". "The yawning surplus with the United States and the European Union has strained China's foreign trade environment, triggering more frequent trade friction," he said. Bo said an overly-large trade surplus is not good for China's sustained economic growth; therefore, the government will "decisively" reduce exports of high-energy-consuming and low-value-added products to restructure the sector. Last year, a package of industrial and taxation policies were implemented to rein in exports of energy-consuming products, in particular exports of processing trade, which contributed around half of the trade surplus but yielded slim profits. To boost imports, the government will relax restrictions and announce taxation and financial incentives. "We will largely increase imports which have high demand in China," Bo said without giving details. Experts in Beijing said the imports to be encouraged should include energy, resources and key technologies and equipment. While trying to cut the surplus, governments will try to minimize the negative effects on trade, employment and the economy, Bo added. For example, exporters previously banned from the processing trade are encouraged to switch to manufacturing for the domestic market. Bo added, however, that the central government would continue to encourage exports from central and western China. China's widening trade surplus has been cited as a reason to press Beijing to revalue its currency, People's Bank of China Governor Zhou Xiaochuan was quoted as saying at a meeting in Switzerland last week. He added that China can further increase the flexibility of its exchange rate if trade surpluses continue to mount. Cutting the structural trade surplus will take at least two years despite the government's determination, said economist Fan Gang. He predicted that China's exports will continue to grow stronger than imports this year, which means the surplus is likely to increase but at a slower pace.

Foxconn forced to unionise its plant - Trade union group issues warning to other multinationals
2007-01-18 SCMP
A senior official of the All-China Federation of Trade Unions yesterday praised Shenzhen authorities for forcing Taiwanese company Foxconn to open a trade union at its plant. It also warned overseas companies they could not to expect any exemptions. Guo Wencai, a director of the federation, said all foreign-funded enterprises must abide by mainland laws and set up trade unions at their mainland branches, the China Youth Daily reported yesterday. He said the Shenzhen trade union's tough measures were innovative and legitimate. Earlier, the Shenzhen union had unilaterally set up a union at Foxconn's Shenzhen branch without informing company management. "When it comes to establishing a trade union, only two things matter - the approval of the superior level [of the trade union] and the free will of the workers," Mr Guo was quoted as saying by the Nanfang Daily. "The opposition of the management could not prevent this from happening," he said. Under mainland law, a trade union can be established in any enterprise in China with a minimum of 25 workers. Foxconn, which assembles iPod music players for Apple Inc, employs about 200,000 workers in Shenzhen and is considered one of the largest and best-managed joint-venture enterprises in the city. Its management had repeatedly defied an order to establish a trade union after years of negotiation with the government. Last month, the general trade union of Shenzhen lost patience with the company and dispatched staff to the Foxconn dormitory without notifying the management, asking employees to join a union. Mr Guo yesterday hailed the Shenzhen trade union's move and said it encouraged workers to form trade unions despite opposition from overseas employers. He said workers on the mainland would enjoy better protection if more cities followed Shenzhen's example. Under pressure from the ACFTU and local trade unions, the US chain Wal-Mart has also been forced to set up union branches in 30 cities on the mainland since August. However, few employees are willing to join these unions compared with the large membership enjoyed by other mainland trade unions. Labour groups have often criticised the Chinese government for failing to uphold its labour laws and protect workers' rights. They point to frequent reports of abuses by foreign and overseas employers who have set up factories and shops in the mainland to take advantage of China's relatively low wages but paid scant regard to worker safety and welfare. Some multinationals have defended their industrial relations policies, saying that while they respect Chinese laws, they believe they had already set up effective channels of communication for employees to voice their grievances and that government-backed trade unions were not needed.

 

North Korea

Hill on nuke talks mission
2007-01-17 China Daily
The US chief negotiator to the Six-Party Talks will visit Beijing this weekend, Foreign Ministry spokesman Liu Jianchao said yesterday. Liu described Christopher Hill as an important working partner with China in pushing the process of the Six-Party Talks, which also involves the DPRK, the Republic of Korea, Russia and Japan. Hill will meet Deputy Foreign Minister Wu Dawei, according to Liu. The last round of the Six-Party Talks, held in Beijing last month, failed to reach any agreement. The DPRK tested its first underground nuclear device in October. Hill, who is the US assistant secretary of state, will visit Seoul on January 19, Beijing on January 20 and Tokyo on January 21, according to the US State Department. Turning to Japan's ambition to become a permanent member of United Nations Security Council, Liu said that China's position on UN reform remained unchanged. He made the comments when asked whether there had been an exchange of views on UN reform between Premier Wen Jiabao and Japanese Prime Minister Shinzo Abe in the Philippines. "We support necessary and reasonable reform of the UN Security Council aimed at strengthening its authority and efficiency. Representation of developing countries, particularly the African countries, should be increased in the Security Council," Liu said. Border talks with India: Liu also announced that China and India would hold the ninth round of talks on the boundary issue tomorrow in New Delhi, to be attended by Chinese Deputy Foreign Minister Dai Bingguo. The two sides will continue to discuss a framework on solving the boundary issue according to consensus reached by leaders of the two neighboring countries, Liu said.

Leaders resume three-way talks
2007-01-15 China Daily
The leaders of China, Japan and the Republic of Korea (ROK) yesterday reaffirmed their commitment to peacefully resolve the nuclear issue on the Korean Peninsula and called for "effective steps" to end a standoff in the Six-Party Talks. The leaders issued the call in a joint statement released following a trilateral summit between Premier Wen Jiabao, Japanese Prime Minister Shinzo Abe and ROK President Roh Moo-hyun in Cebu on the sidelines of the 10+3 Summit (ASEAN plus China, Japan and the ROK). The leaders called for the full implementation of both United Nations sanctions against the Democratic People's Republic of Korea (DPRK) for testing a nuclear device last October and the measures included in the September 2005 joint statement, in which Pyongyang promised to give up its nuclear programs in exchange for economic aid and security guarantees, according to the statement. "As important countries in Asia, China, Japan and the ROK shoulder great responsibilities in maintaining peace, stability and prosperity in Asia," Wen said in his opening speech at the beginning of the trilateral meeting. The leaders of China, Japan and the ROK have held a trilateral summit every year since 1999 on the sidelines of ASEAN-related meetings, but did not meet in 2005 because of then Japanese Prime Minister Junichiro Koizumi's repeated visits to the Yasukuni Shrine in Tokyo, which China and the ROK consider a symbol of Japan's past militarism because it honors 14 class-A war criminals. China, Japan and ROK are all involved in the six-nation talks. The United States, the DPRK and Russia are the other three sides. US Assistant Secretary of State Christopher Hill, who is the top US negotiator in the talks, will return to the region late this week to meet other key parties, but there are no indications that negotiations with Pyongyang will resume any time soon, according to a US State Department official. In the joint statement, the three leaders also "expressed satisfaction with the recent development of relations", and said they had decided to create a consultative body composed of high-ranking diplomats to work together on regional and international issues and promote political understanding within the region. The statement said the three had agreed to improve "coordination on major political and diplomatic issues involving the three countries as well as international and regional issues".

 

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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