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
  28.8-1.9.2006, No. 130  
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Foreign Policy

US makes fresh push for Six-Party Talks
2006-09-01 China Daily
Christopher Hill, US chief negotiator for the Six-Party Talks on the Korean Peninsula nuclear issue, will travel to Beijing next Tuesday, sources with the US embassy in China said yesterday. Although Hill's complete schedule is not available yet, reports quoted an unnamed official of the US State Department saying that he would meet with his six-party counterparts and hold discussions with senior government officials "on bilateral, regional and global issues of mutual interest." As well as Beijing, Hill will also travel to Chengdu, capital of Southwest China's Sichuan Province and the major industrial centres of Shanghai and Guangzhou. Hill, assistant secretary of state for East Asia and Pacific affairs, will leave Washington on Sunday and visit Tokyo on Monday. He will travel to Beijing on Tuesday and will stop in Seoul on September 11 before returning home the next day. Analysts said Hill apparently wants to meet his counterparts from the three nations to discuss how to deal with the long-stalled nuclear talks as well as measures to deal with Pyongyang's missile tests in line with a UN Security Council resolution. With the Six-Party Talks in a state of paralysis, Liu Jiangyong, a senior researcher with Tsinghua University, said Hill is attempting "to break the stalemate through a new round of shuttle diplomacy." He said recent news reports that the Democratic People's Republic of Korea (DPRK) may be preparing to conduct a nuclear test are also likely to be on the agenda. The nuclear talks have become more pressing after Pyongyang raised tensions in early July by test-firing seven missiles despite international objections. "The current situation is detrimental to dialogue in the East Asia region," Liu said. He said the missile launches have sparked the upgrading of US and Japanese military capabilities in the region, which will further disrupt the security balance. A peaceful solution to the nuclear issue on the Korean Peninsula still conforms to the interests of the United States and Japan, Liu said. And that is why Hill is hoping to reaffirm and improve commitment from China, Japan, the Republic of Korea to restart the talks, he said. Liu said Seoul is taking similar action, as President Roh Moo-hyun is reported to be about to visit the United States for the same purpose. The Six-Party Talks, which involve China, the United States, the DPRK, the Republic of Korea, Russia and Japan have been stalled since the fifth round last November, with Pyongyang refusing to return to the table unless Washington removes its financial sanctions.

Beijing urges diplomatic solution to Iran nuclear row
2006-08-31 SCMP
Beijing yesterday urged world powers not to abandon diplomacy to resolve the crisis over Iran's nuclear programme, as Tehran showed no sign of suspending uranium enrichment ahead of today's UN Security Council deadline. Foreign Minister Li Zhaoxing met Iranian Deputy Foreign Minister Abbas Araghchi in Beijing. "Both sides ... stressed that the nuclear issue should be properly resolved through diplomatic negotiations," the Foreign Ministry said. Iranian Deputy Foreign Minister Mehdi Safari said in New Delhi that his government remained open to talks on its nuclear programme and was willing to co-operate with the International Atomic Energy Agency, the UN's nuclear watchdog. The five permanent members of the UN Security Council - Britain, China, France, Russia and the United States - and Germany offered Iran a package of trade, technology and security incentives in June in exchange for freezing its uranium enrichment activities. The council set today as the deadline for Iran to suspend uranium enrichment and reprocessing or face possible sanctions. Chinese UN delegate Li Junhua said the six powers planned to discuss the sanctions issue next week. The Washington Post reported yesterday that nuclear specialists in Iran had started enriching a fresh batch of uranium. The Iranians were working slowly with small amounts of uranium, and they were enriching the material at a level so low it could not be used for nuclear weapons, the Post said, citing officials in Washington and Europe who are monitoring Iran's efforts. Nevertheless, western powers continued to express concern that Tehran may turn its nuclear programme towards building an atomic bomb.

Chinese Premier to attend China-EU Summit, ASEM, SCO P Ms Meeting, visits four nations
2006-08-31 People's Daily
Chinese Premier Wen Jiabao will visit Finland, the United Kingdom, Germany and Tajikistan from Sept. 9 to 16 at the invitation of Finnish Prime Minister Matti Vanhanen, British Prime Minister Tony Blair, German Chancellor Angela Merkel and Tajikistan Prime Minister Akil Akilov, Chinese Foreign Ministry spokesman Qin Gang announced Thursday. According to Qin, Wen will also attend the ninth China-EU Summit and the sixth Asia-Europe Meeting (ASEM) to be held in Helsinki, capital of Finland, and the Fifth Meeting of Prime Ministers of the Member States of the Shanghai Cooperation Organization (SCO) to be held in Tajikistan's capital of Dushanbe.

China's top legislator stresses peaceful reunification in resolving Taiwan issue
2006-08-31 Xinhuanet
China's top legislator Wu Bangguo said here Thursday that the Chinese government had been making unremitting efforts in promoting the development of relations across the Taiwan Straits and their peaceful reunification under the guidance of the policy of "Peaceful reunification" and "One Country, Two Systems", and would continue to adhere to that policy in resolving the Taiwan issue. While delivering a speech in Brazil's parliament, Wu Bangguo, chairman of China's National People's Congress (NPC) Standing Committee, said that the Chinese government's significant endeavors in line with that policy had broken the long-time isolation state between the Mainland and Taiwan at the end of 1987,and since then had boosted the peaceful and steady development of cross-Straits relations. Wu noted that the Chinese government had never thought that peaceful reunification involved one side knocking over the other. It meant the achievement of reunification through equal consultation. Through consultation, the Association for Relations Across the Taiwan Straits, from the Mainland, and the Straits Exchange Foundation from Taiwan, in November 1992 reached the 1992 Consensus which reflected the One-China Policy. In April 1993, the two organizations held the successful Wan-Koo Talks, a key and historical step in the development of relations across the Straits. In 2005, the Chinese government invited party leaders from Taiwan to visit the Chinese mainland. The two sides exchanged views on a wide range of issues concerning how to improve their relations and they reached consensus on many of them. Wu expressed his heartfelt thanks towards Latin American countries for their persistent support of China's national reunification aspirations and hoped they could continue to support the Chinese people's efforts to oppose and contain the separatist activities of "Taiwan Independence" groups in a bid to realize China's reunification. Wu arrived in the Brazilian capital on Tuesday for a four-day official visit. Brazil is the first leg of his three-nation Latin American tour, which will also take him to Uruguay and Chile.

Sino-Japanese summit tipped before year's end
2006-08-28 SCMP
A meeting between Tokyo and Beijing will likely be held before the end of the year regardless of who becomes the next Japanese prime minister, according to the Japanese foreign minister. "I think it is highly likely a summit with Chinese Premier Wen Jiabao will be held within this year," said Taro Aso, who is one of the candidates to succeed Prime Minister Junichiro Koizumi. "Japan's current relations with China are pretty good except that there has been no summit." Chinese leaders have refused to meet Mr Koizumi due to a row over history, including the Japanese prime minister's visits to the Yasukuni war shrine. Mutual visits by leaders of the two countries have been suspended for nearly five years. The last high-level meeting was between President Hu Jintao and Mr Koizumi on the sidelines of the Asia-Africa summit in April last year.

Zambian leader apologizes to Chinese gov't
2006-09-01 Xinhuanet
Zambian President Levy Mwanawasa has apologized to the Chinese government Thursday over the remarks made by the opposition Patriotic Front presidential candidate Michael Sata that he would chase away Chinese investors once he won the elections. Addressing a public rally in Lusaka, Mwanawasa said it was irresponsible for anyone to threaten to chase away Chinese investors who have massively contributed to the development of the country through construction of railways, roads and industries. He cited the Tanzania-Zambia Railway (TAZARA) and many roads in the country as some of the infrastructure put up by the Chinese. "Publicly, I apologize. We value the friendship of the Chinese people and we will continue to cherish their assistance," the president said. Mwanawasa disclosed that the Chinese investors had indicated that they would set up more development projects, including improvement of water reticulation in various parts of the country. He has since pleaded with the Chinese investors in Zambia not to suspend the ongoing development projects they are working on. The Association of Chinese Community in Zambia (ACCZ) have complained over Sata's statement and have disclosed that some investors were consider suspending their projects until after the September 28 general elections concerning Sata's hostility.

Bar on foreign press printing papers on mainland to remain
2006-08-31 SCMP
Foreign newspapers will not be allowed to print on the mainland, a senior official has said, stressing the issue was "complicated". Yu Yongzhan , deputy director of the General Administration of Press and Publication (Gapp), told the South China Morning Post that the administration had studied the possibility of allowing foreign newspapers to print on the mainland, but had decided against it at present. "This is a complicated matter, and can't be decided by our administration alone," he said. Under current regulations, foreign newspapers must be shipped into the mainland, where they are then subject to customs duties and censoring. Once approved for distribution, the newspapers can be sold at approved locations or delivered to foreign subscribers. There were foreign media reports last year that Gapp would allow foreign newspapers to print on the mainland on a contract basis, while retaining control of distribution. However, Gapp officials apparently later changed their minds. Mr Yu also refuted foreign reports that Founder Group unit Easiprint had established a partnership with NewspaperDirect of Canada to print and distribute English-language newspapers to individuals in China on a print-on-demand basis. Under the arrangement, reported in the western media, Easiprint was to print individual copies of foreign papers and deliver them to approved customers, which were said to be limited to foreign residents, hotels and embassies. "This report is false," Mr Yu said. "The Founder Group is a very influential company, and would not do anything to violate the law." Easiprint general manger Luo Yunfeng said yesterday: "The report is not accurate." However, a public relations spokesman for NewspaperDirect said in an e-mail yesterday that printing and distribution had already begun in Beijing and would begin next month in Shanghai. He said there was some confusion over government approvals. "This is the dilemma," he said. "I understand that approval has been received from one government department, but that another is contradicting this." Mr Yu said Gapp was considering allowing Hong Kong publishing companies to take a majority share in publishing ventures on the mainland - ahead of foreign companies - under the Closer Economic Partnership Arrangement [Cepa]. At present, only foreign companies involved in the printing of materials other than books and periodicals may set up wholly-owned ventures on the mainland, while foreign publishing companies involved in printing books and periodicals must operate as joint ventures, with a local partner, and cannot hold a majority stake in the venture. Hong Kong companies, who account for two-thirds of joint venture publishing companies on the mainland, have been lobbying hard to be able to hold the majority shares in such ventures. ()


Domestic Policy

China's top legislature expels three members
2006-08-28 Xinhuanet
The Standing Committee of the National People's Congress, or national legislature, expelled two members Sunday for economic crimes and another for his involvement in a hit-and-run car accident. The resignation of Zhu Junyi, Zhou Jinhuo and Huang Xuejiu as deputies to the National People's Congress (NPC) was approved by the NPC Standing Committee at the end of a six-day legislative session. Zhu Junyi, director of the Shanghai Municipal Labour and Social Security Bureau, is accused in an NPC notice of a "grave breach of discipline" in supervising the use of government pension funds. The 55-year-old labor official is the first Shanghai bureau chief to resign as a national legislator. He is under investigation on charges of receiving bribes and violating state financial rules, sources close to the city's legislature revealed. At the 12th Shanghai municipal people's congress on Aug. 11, city lawmakers also dismissed Zhu from his bureau post. More than 100 investigators from Beijing have arrived in Shanghai to probe the corruption case in which money was siphoned off from Shanghai's social security system, which manages over 10 billion yuan (1.25 billion dollars) in funds. Zhou Jinhuo, former director of Fujian's Bureau of Industry and Commerce, was accused of graft in the relatively wealthy coastal province. The 57-year-old official tried to flee overseas in June while being investigated for corruption by the CPC Central Commission for Discipline Inspection. He was caught in southwest border province Yunnan after police tracked a call he made to one of his three mistresses telling her his whereabouts. On Aug. 2, the Standing Committee of the Fujian Provincial People's Congress in East China decided to sack him. Huang Xuejiu, 55, secretary of the Mianyang municipal committee of CPC in southwest Sichuan Province, was lambasted for fleeing a road accident scene after colliding with an 18-year-old girl and killing her. Huang was inebriated at the time. A local property developer surnamed Qiu was made to take the blame when police began investigating the case. Huang was also charged with obstructing the investigation. The official has been ousted from his city post by the Sichuan provincial people's congress. They follow a string of senior officials sacked from national legislator posts over the past several months. Former publicity minister of the provincial committee of the Communist Party of China (CPC) of East China's Fujian Province, Jing Fusheng, had his membership of the National People's Congress terminated earlier this month for receiving bribes. In late June, the former vice naval commander, Wang Shouye, had his membership terminated for moral degeneracy and for extorting bribes. At the same time, two other legislators, Ge Zheng from Zhejiang Province and Luo Zeqin from Guangdong Province, resigned as national legislators. Ge was charged with illegal accumulation of funds, and Luo with tax evasion. Last year, China's procurators investigated 8,490 government officials, including eight at the ministerial level. China's courts convicted 1,932 government officials of graft, six of them were ministerial-level officials.

Trial of China's largest pornographic website begins
2006-09-01 Xinhuanet
A trial involving China's largest pornographic website, which boasts more than 600,000 registered members, began on Wednesday. Nine creators and organizers of the website, Qingseliuyuetian, meaning "pornographic summer", are being sued at the Taiyuan Intermediate People's Court, in north China's Shanxi Province. Apart from one who is over 50, the average age of the other eight suspects is just 23. A member of the public complained to city police on June 21 last year that a hospital website had changed to become the homepage of a porn website. The police then found the administrator of the website named Wang Jianfei and during the interrogation Wang admitted he was in charge of "Qingseliuyuetian" Taiyuan section. Three months later, police in the provinces of Fujian, Guangdong, Jilin, Liaoning, Anhui and Hubei arrested Chen Hui, creator of the website, and other organizers. Chen is alleged to have confessed that the site was opened in May 2004 and claimed to be "the largest Chinese adult community". All the servers of the website were based overseas and Chen regularly changed the website's domain name, servers and IP address, the police said. Chen and his partners are accused of renting ten servers in the United States in July last year and opening another three porn websites. At first the four websites accepted about 200,000 registered members free of charge, but demanded 199 to 266 yuan (25 to 33 U.S. dollars) in registration fees from people who joined later. Some people paid more for a life membership of the website. According to the police, a "top-level VIP membership" sold at 3,999 yuan (500 U.S. dollars). At the same time, commercial space on the website sold for 1,000 to 3,000 yuan (125 to 375 U.S. dollars) per month. On Oct. 3 last year, when the website was closed down, the registered members exceeded 600,000 around China. There were over nine million pornographic images and articles on the website and it had received more than 11 million clicks. The police said it was difficult to know the exact illegal profits of the website because most of the money was spent or saved in Chen and partners' foreign bank accounts. The police only found more than 200,000 yuan (25,000 U.S. dollars) in their accounts in China.

One third of nation hit by acid rain
2006-08-28 China Daily
One third of China's land mass was affected by acid rain last year, Sheng Huaren, vice-chairman of the National People's Congress (NPC) Standing Committee, said in a report to top legislators on Saturday. Sheng told NPC Standing Committee members that in some regions of the country all rainfall was acidic. His report was based on lawmakers' inspection of environmental protection efforts in 15 provinces, autonomous regions and municipalities from May to June. With 26 million tons of sulphur dioxide discharged last year 27 per cent more than in 2000 China has become the world's biggest sulphur dioxide polluter. Acid rain poses a major threat to soil and food safety, he said. Sheng said sulphur dioxide emissions were double the acceptable environmental limit, and coal-burning power stations and coking plants were the main culprits. According to the report, nearly 650 out of 680 coking plants in North China's Shanxi, the country's major coal mining province, discharged excessive sulphur dioxide. Environmental inspectors advised the central government to take decisive action to curb high energy consumption and high polluting industries, by restricting land and loan approvals and raising pollution control standards. "Small coking plants and coal-burning power stations should be shut down or restructured," Sheng said. Despite the gloomy statistics, chairman of the NPC Environmental and Resources Protection Committee Mao Rubai remained upbeat that Beijing would fulfil its environmental obligations for the 2008 Olympic Games. The municipal government will step up pollution control efforts in the next two years, according to Mao. "First of all, environmental protection investment will continue to rise on the current basis of 18 billion yuan (US$2.3 billion) per year," he told a press conference on the sidelines of the session of the NPC Standing Committee, which closed yesterday. Environmental investment in Beijing accounts for nearly 3 per cent of the city's gross domestic product. "The proportion is among the highest in China," he said. "Secondly, Beijing will continue to expand use of clean energy," Mao said. Clean energy such as natural gas counts for 57 per cent of the city's total energy consumption, sources said. "Third, the Beijing municipal government has decided to close and relocate polluting companies," he said. For example Beijing Shougang steelworks has been moved to Tangshan in North China's Hebei Province. Meanwhile, Beijing will further treat pollution caused by vehicle exhaust emissions. The Euro III environment standard has been adopted in the city. Environmental improvements have been witnessed in Beijing since 1998. Sixty-four per cent of days last year had good air quality, 36 per cent higher than 1998. The amount of sulphur dioxide dropped 29 per cent compared with seven years ago.

Beijing denies rumours of cholera outbreak
2006-08-28 China Daily
Beijing health authorities have fired off more than 1 million text messages to fight rumours of a cholera outbreak in the city. Text messages have been circulating recently, urging people "do not eat freshwater fish to prevent cholera," Xinhua News Agency reported. Beijing Health Bureau (BJHB) then decided to send messages of their own, offering reassurances that there were no cholera concerns in the city so residents should not panic. "Currently aquatic products in the capital's markets are under strict surveillance by food security and epidemic prevention departments," said Zhao Tao, director of the epidemic prevention and control department of BJHB. "Every week, these departments carry out random inspections of aquatic products, especially those that easily cause diarrhoea. If products are unqualified, they will be destroyed in a proper way. Up to now, no cholera bacteria have been found in Beijing." But Zhao also reminded Beijingers to pay attention to food safety during the hot summer months. According to Beijing's emergency plan for cholera, more than 300 major hospitals in Beijing have opened intestine and stomach departments. Patients suffering from diarrhoea all receive an examination for cholera bacteria.

Chemical spill threatens water supply for 100,000 residents in Shaanxi
2006-08-26 Xinhuanet
A chemical spill has left one person dead and another seriously burnt, and polluted a source of drinking water for 100,000 residents in northwest China's Shaanxi province, a local official said Saturday. A tank car loaded with 25 tons of liquid caustic soda fell into the upper reaches of the Xuefeng Reservoir in the Hancheng City, Weinan City of Shaanxi due to slippery road caused by rains at about 9 p.m. on Friday, said Duan Xuanmin, director of the Hancheng Environment Protection Bureau. One person in the car was killed on the spot and another was seriously burnt, Duan said. Local government has built a dam at the site where the car fell, about 5 km away from the reservoir, which is the source of drinking water for about 100,000 local residents, Duan said. Meanwhile, the government has transported 10 tons of hydrochloric acid from the provincial capital of Xi'an to neutralize the water contaminated by liquid caustic soda, he said. So far, a small amount of pollutants has flown into the reservoir, but that is not enough to constitute a threat to the water quality, which is now being closely watched by technical workers, the official said. Local government has ordered departments concerned, such as environmental protection, health, and water resources, to monitor the water quality of the riverway at several sites and report the result every hour, he said. In addition, the government has issued an urgent notice to the residents along the river, reminding them about the chemical spill and not to use the water. A spare well has been put into use to provide drinking water at intervals for about 100,000 residents, and so far, the water supply have not been affected much, Duan said.

Dengue cases in S. China province jump to 124
2006-08-31 Xinhuanet
The number of dengue cases in south China's Guangdong Province has risen by 36 since Tuesday to 124, said the provincial health bureau on Thursday. Thirty-eight news cases were reported over the past two days, but two earlier reported cases had been excluded, according to the bureau. Thirty-six new cases were reported in the provincial capital of Guangzhou, and one each in the cities of Foshan and Yangjiang. Sixty-three patients had recovered and the others were reported to be stable in hospital. Five cases involved people from Indonesia, Cambodia, Malaysia and Thailand, and the rest were all local residents, said the bureau. Dengue is a serious infectious disease transmitted by mosquitoes. It kills 25,000 people and infects more than 100 million each year in tropical and subtropical regions worldwide, according to China's Ministry of Health. Since the 1990s, dengue has broken out occasionally in Guangdong and neighboring Fujian province, mostly on a small scale. Large outbreaks took place in Fujian in 1999 and in east Zhejiang province in 2004. The local health bureau has called residents to clean up their environments to eradicate mosquitoes as there are no effective vaccines to prevent the disease. The ministry has announced a nationwide monitoring of dengue to gather details of epidemic conditions and analyze dissemination patterns so the disease can be detected rapidly and treated. Sixteen monitoring sites will be set up in the southern provinces of Guangdong, Fujian, Yunnan, Hainan and Guangxi Zhuang Autonomous Region.

400 volunteers needed for 2nd trial of bird flu vaccine
2006-08-31 Xinhuanet
China will need up to 400 volunteers for the second trial of a bird flu vaccine, after the first phase of clinical trials showed that it is safe for human use. The second phase of clinical trials, being considered by the State Food and Drug Administration (SFDA), would test how long the vaccine would protect the human body against the deadly H5N1 virus, said Lin Jiangtao, a leading doctor of the program at the Sino-Japanese Friendship Hospital where the first phase clinical trials took place. "The second phase will need 300 to 400 volunteers," said Lin, adding that the exact number would be decided by the SFDA. Results from the first round, which ended in June, showed the 120 people who were vaccinated had no serious adverse reactions. Lin said some individual cases of mild fever after inoculation were among normal reactions. he first phase trials indicated a 10-microgram dosage of the vaccine had the best result, stimulating 78.3 percent of protective antibodies, exceeding the European Union standard of 70 percent for a flu vaccine. The second phase would test similar dosages on volunteers to find out the best procedure to reach the most antibodies, which required a larger pool of volunteers, Lin said. Prospective volunteers should be aged 18 to 65, but children, people older than 65 or pregnant women will not be accepted. The vaccine must undergo three phases of clinical trials before being allowed on the market, researchers said. Sinovac Biotech Limited, which jointly developed the vaccine with the Ministry of Science and Technology and the Center for Disease Control and Prevention, announced earlier this week that it would expand production facilities to produce massive quantities of human bird flu vaccine once the drug passes two more rounds of clinical trials. Bird flu remains essentially an animal disease, but experts fear that the H5N1 virus could mutate into a form that could pass easily among humans. The virus has killed 14 people in China since 2003 and 21 Chinese have contracted the virus.



UNCTAD: China's RMB revaluation should continue gradually
2006-08-31 Xinhuanet
The UN Conference on Trade and Development (UNCTAD) said on Thursday that China's renminbi revaluation should continue gradually rather than abruptly so as to maintain economic stability. In its annual Trade and Development Report, the agency said China has played "a vital role" in helping the economic growth of other developing countries. "Since the beginning of the 1990s, China's domestic demand and its imports have grown very strongly indeed, and the country has played a vital role in spreading and sustaining growth momentum throughout the developing world," the report said. Such a process should not be derailed, and therefore, renminbi revaluation should continue gradually rather than abruptly, taking due account of regional implications, it noted. The UNCTAD also praised China's sharp economic growth in recent years, indicating China's characteristic growth, which highlights a government role in the market, could be a model for poor countries. The report said governments of developing countries should "take a pro-active stance in macroeconomic and industrial policies to accelerate private investment and technological upgrading and to stimulate the creative forces of markets." The hands-off policy and total reliance on market forces, as promoted by international financial organizations and lenders in the 1980s and 1990s, has proved to be a failure for many developing nations, it said. According to the report, developing countries could post a high economic growth rate of 6.2 percent in 2006. While wealthy nations, including the United States, European Union and Japan, should achieve a growth rate of 2.7 percent this year. The global average growth should be 3.6 percent this year, the same with last. Excluding China's booming economy, the fastest growth rates this year should be posted seven percent in Asia and 5.9 percent in Africa, where growth has accelerated consistently since 2002. The report highlighted the role of China and India, the two most populous countries in the world, in boosting the global economic growth.

Last year's GDP growth revised upward to 10.2%
2006-08-31 China Daily
China's economy grew 10.2 per cent last year, instead of the previously announced 9.9 per cent, the National Bureau of Statistics (NBS) announced yesterday with the difference in monetary terms amounting to nearly US$10 billion. The bureau revised the 2005 gross domestic product from 18.2321 trillion yuan (US$2.279 trillion), as announced in January, to 18.3085 trillion yuan (US$2.289 trillion). The difference was mainly contributed by manufacturing, mining and agriculture while growth in the services, or tertiary, industry was smaller than previously thought. The service industry totalled some 7.339 trillion yuan (US$917.37 billion) in NBS' January report, but was revised to 7.296 trillion yuan (US$912 billion). It made up nearly 39.9 per cent of the economy, instead of some 40 per cent as indicated by the January data. In a similar revision of growth in 2004, announced at the end of last year, GDP was 16.8 per cent higher than earlier estimates, to notch up about US$2 trillion. But the difference then was that services made up a whopping 93 per cent of the expanded growth. The nation relies on the services industry to create jobs, especially in urban areas where the government wants to keep the jobless rate below 4.5 per cent. Last year, the economy appeared more dependent on manufacturing, which made up 47.5 per cent of GDP with farming and affiliated operations contributing 12.6 per cent. According to NBS' January data, in 2005, value-added output of the primary industry, which combines agriculture, forestry, animal husbandry and fisheries, was 2.2718 trillion yuan (US$284 billion). The figure is now revised to 2.307 trillion yuan (US$288 billion). The value-added output of the secondary industry, which includes mining, manufacturing, generation and supply of electricity, gas and water, and construction, was 8.6208 trillion yuan (US$1.078 trillion). The figure has risen to 8.7047 trillion yuan (US$1.088 trillion). While announcing the revision of some of the general figures, the NBS did not mention when a final report of 2005 economic data would be published. According to a new practice of measuring the economy, the NBS releases three reports each year the first, called preliminary account, the second, called preliminary confirmation, and the last, final account. Yesterday's report was preliminary confirmation. From time to time, the central government's economic statistics can be markedly lower compared with the aggregate of figures released by regional governments. However, according to Qiu Xiaohua, director of the NBS, the differences between the central government's data and those from the regional governments are not only caused by the latter's attempts to inflate their growth. The differences, he said earlier, may also be caused by cross-region investments and supply-chain movements, by region-to-region price differentiations, by the weight of certain types of production in one region which may be insignificant at the national level.

RMB exchange rate hits record high
2006-08-31 China Daily
The renminbi yesterday reached a post-revaluation high against the US dollar, closing at 7.9587 and breaking the record set a day earlier. The reference rate of the renminbi, or yuan, was fixed at 7.9598 against the greenback yesterday. The rate is set by the central bank each day as the central parity for foreign exchange trade. The closing price was also the lowest since China allowed the renminbi to appreciate by 2 per cent against the US dollar to 8.11 last July, and linked the currency to a basket of currencies instead of the greenback alone. On May 15, the reference rate fell below 8 to 7.9982 for the first time in 12 years. Traders have high expectations of further appreciation of the renminbi, said Ma Qing, an analyst with CITIC Securities in Beijing. Ma said there is still room for the yuan to climb during the rest of the year, probably reaching 7.8 against the US dollar a view that many analysts share. The expectation of a stronger yuan has pulled in more international capital over the past year, as reflected in the increasing keenness of qualified foreign institutional investors (QFIIs) to invest in the country. By the end of July, China had approved 45 QFIIs with total investment quota of US$7.5 billion and they have already remitted capital worth 55.1 billion yuan (US$6.9 billion), according to official figures. More QFIIs are expected to enter the country with the authorities recently lowering the entry threshold and relaxing controls over management of investment quotas and trading accounts. Overseas financial institutions such as HSBC and Goldman Sachs expect the central bank to take further steps for greater flexibility of the exchange rate during the rest of the year, such as increasing the currency's daily volatility by making better use of the 0.3 per cent upward and downward trading band or further widening the band. Also, senior US officials have recently been pushing for greater appreciation of the renminbi to reduce their country's trade deficit with China. However, Fan Gang, a Chinese economist who has been newly elected as a member of the monetary policy committee of the central bank, said on Tuesday that renminbi revaluation would not solve the problem of US deficits because the root of the problem does not lie in China. "The current problem is not renminbi revaluation, but dollar devaluation," Fan told a conference at the Australian National University, "This is the major cause of the current imbalance."


Julie Kong
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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