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
  4.12-8.12.2006, No. 144  
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Foreign Policy

Senior diplomat: 2006 a year of "harvest" in China's diplomacy
2006-12-06 Xinhuanet
Beijing - The year 2006 is a year of "harvest" in China's diplomacy, during which China has made all-round headway in developing relations with world powers, neighboring countries, developing countries and in its multilateral diplomacy, a senior Chinese diplomat said here Tuesday. Wu Jianmin, president of the Foreign Affairs College and former Chinese Ambassador to France, made the remarks when commenting on China's diplomacy in 2006. "We have seen progress this year in relations between China and major world powers including the United States, Japan and Russia," Wu said. The development of China-U.S. relations is a shining point and the upcoming bilateral economic strategic dialogue is the first of its kind to promote economy, Wu said. On Taiwan issue, the United States have sent clear signals of warning whenever the Taiwan secessionists appeared to make troubles this year, Wu said. "This shows that it is a consensus to maintain stability across Taiwan straits," he added. Japan's new Prime Minister Shinzo Abe's visit to China marked a turning point in bilateral ties and ended a five-year political stalemate between the two countries, Wu said. Major events in China's diplomacy with neighboring countries include the Shanghai Cooperation Organization summit and the China-ASEAN commemorative summit. Wu said the success of these two summits has demonstrated the important progress in China's relations with its neighboring countries. The China-Africa summit has aroused world attention that marks a new phase in the development of China-Africa relations, he noted. Multilateral diplomacy is a platform for enhancing a harmonious world, he said. As an outcome of China's multilateral diplomacy, Margaret Chan from China has been elected as World Health Organization chief, he added. Chinese President Hu Jintao has put forward a concept of "harmonious world" in UN Assembly in 2005. Guiding by this concept, China's diplomacy has scored a harvest and stepped onto a new stage in 2006, Wu said.

Ties with Japan at 'new starting point'
2006-12-04 China Daily
China and Japan stand at a "new starting point" in their relations following Japanese Prime Minister Shinzo Abe's visit to Beijing in October, Chinese State Councilor Tang Jiaxuan said in remarks published on Sunday. Both countries expressed optimism during Abe's visit that they could mend ties that had soured over visits by Abe's predecessor, Junichiro Koizumi, to a controversial war shrine, hampering progress on territorial, trade and energy disputes. "The two countries have already broken the five-year-long political stalemate and brought bilateral ties to the normal track of development," the official Xinhua news agency quoted Tang as telling visiting Japanese Minister of Land, Infrastructure and Transport Fuyushiba Tetsuzo. "Standing at a new starting point, the two sides should work closely to add momentum to the long-term and stable development of their relations," Tang said. In his meeting with Abe in October, Chinese President Hu Jintao had described Abe's visit as a "turning point" in China-Japan relations and said he hoped it would also serve as a new starting point for the improvement and development of ties. Xinhua cited Tang as saying the two should solidify the political and economic foundations of their relationship, and that Japan should "properly handle" its ties with Taiwan and "historical issues," ostensibly over Japan's past militarism. Tang added that Chinese Premier Wen Jiabao would meet with Abe during a regional summit to be held in the Philippines later this month.

Vice premier calls for closer environmental cooperation among China, Japan, ROK
2006-12-04 People's Daily Online
Chinese Vice Premier Zeng Peiyan on Sunday urged China, Japan and the Republic of Korea (ROK) to improve cooperation on environmental protection to promote sustainable development of the region. The Chinese government supports the three countries to cooperate on the environmental issues including curbing cross-border transfer of dangerous waste, sand storm early warning and air pollution control, Zeng said in a letter addressed to the three countries' environmental ministers, who are in Beijing for a regular meeting. Zeng said environmental protection and sustainable development of China, Japan and the ROK is of great importance to the future development of east Asia. He also expressed hope that the ongoing cooperation among the three countries on researches of northeast Asia environmental management will produce fruitful results. The ministerial meeting on the environmental protection started seven years ago with the purpose of implementing trilateral environmental cooperation, handling common environmental challenges and promoting regional sustainable development. Chinese Minister of Environmental Protection Zhou Shengxian, Japanese Environment Minister Wakabayashi Masatoshi and ROK Minister of Environment Lee Chi Beom attended the two-day meeting, which started Saturday.

China seeks direct talks with OPEC
2006-12-05 China Daily
DUBAI, United Arab Emirates: China wants to start direct negotiations with OPEC to secure a stable oil supply and an equitable share of the oil market, a top official said here Monday, in comments that underline the Chinese economy's rapidly growing energy needs. Zhai Jun, China's assistant minister of foreign affairs, told conference participants in Dubai that his country was trying to develop "a negotiating mechanism with OPEC." "Only through this can we maintain security and stability of our oil imports," Zhai said in a speech to the Arab Strategy Forum in Dubai. China is the world's third largest importer, behind Japan and the United States. China is an increasingly big consumer of raw materials and has been seeking a greater voice in pricing of several commodities. The country, which Zhai said imports six percent of the crude traded globally, has been setting up strategic oil reserves and seeking new suppliers in Africa and South America to help diversify its crude supply. He said the Asian giant was opening its energy sector to outside investment and looking to cooperate with foreign partners across its oil sector. Zhai said the country was looking for more formal ties with the Organization of Petroleum Exporting Countries, but didn't elaborate. "Currently we're making preparations to establish a dialogue mechanism with oil producers," the Chinese diplomat said. "We want to participate as much as possible in some of the big decision processes on the world stage." During a visit by OPEC president Sheik Ahmad Fahad Al Ahmad Al-Sabah to China last year, the two sides discussed "institutionalizing" a dialogue, acknowledging China's increasing importance as an importer of oil and gas. [...]

Russia-China-India pipeline being discussed
2006-12-07 China Daily
Shanghai - An oil pipeline running from Russia to India via China is under active consideration following an initiative put forward four years ago, an industry expert said Wednesday. "The project is very likely to succeed," said Xia Yishan, a senior research fellow with the China Institute of International Studies, at the Third Sino-Russo-Kazakh Oil and Gas Forum in Shanghai. Xia, who is an expert in the National Energy Leading Group and has been actively involved in big oil and gas projects in the country, said several options are under discussion about the contours of the pipeline. One is for it to run from Russia to Altay in the Xinjiang Uygur Autonomous Region in Northwest China, climb the Tianshan Mountain, and extend south to Kunlun Mountain till it reaches India. "India is the most active party in the project," Xia said. "China, as the country through which the pipeline will pass, will also benefit" by getting a financial return as a transit country and possibly securing cheaper oil. However, Vladimir Saenko, head of the State Energy Policy Department of the Ministry of Industry and Energy of Russia, said it was still too early to discuss the contours of the pipeline. "The talks will be arduous and prolonged," he said. "It may be simpler to ship the oil by sea."
China's first cross-border pipeline started pumping oil from Kazakhstan in May, carrying around 200,000 barrels of crude a day.

Energy chiefs of China, Japan to meet shortly
2006-12-05 Xinhuanet
Beijing - Energy chiefs of China and Japan will hold a dialogue soon, a Chinese Foreign Ministry spokesman said Tuesday. The first-ever dialogue was proposed by Japanese Prime Minister Shinzo Abe in November in Hanoi, where he met with Chinese President Hu Jintao on the sidelines of the 14th Economic Leaders' Meeting of the Asia-Pacific Economic Cooperation (APEC) forum. "China and Japan share common views on energy cooperation," Chinese Foreign Ministry Qin Gang told the regular briefing. "Both countries call for further communication on energy issues." "Now China and Japan are now working on schedules of energy chiefs' meeting," the spokesman said. Abe hoped the upcoming dialogue would help step up the cooperation on energy-saving and environmental protection.

Paulson reaching out to China
2006-12-04 China Daily
Hank Paulson, US treasury secretary, will on Monday begin a series of discussions with US industry leaders to hammer out the Bush administration's policy towards China ahead of a high-level delegation to Beijing next week. The former head of Goldman Sachs, an investment bank, will on Monday meet executives from manufacturing companies, including Procter & Gamble, before on Wednesday sitting down with financial services companies - including Citigroup - as well as those from other sectors. A Treasury official said Mr Paulson was "reaching out on his China agenda" before heading to Beijing for a "strategic economic dialogue" that will include top-ranking cabinet officials and Ben Bernanke, Federal Reserve chairman. The delegation will press for greater currency flexibility, but Mr Paulson also wants to cultivate an intimate discourse about long-term economic goals with the Beijing leadership, many of whom he knows personally from his time at Goldman. Mr Paulson's negotiating tactics will on Monday be questioned by impatient manufacturers, who blame China for a record US trade deficit of more than $200 billion by maintaining a cheap currency. [...]

China urges US to release export controls
2006-12-08 People's Daily Online
Chinese Foreign Ministry spokesman Qin Gang on Thursday urged the United States to ease its export controls on China, saying it would help balance bilateral trade. Qin made the remarks at a regular press conference when commenting a possible US policy change. Two dozen groups representing some of the biggest U.S. companies, including Boeing and Microsoft, urged the Commerce Department on Dec. 1 to scrap a proposal to tighten national security controls on exports to China. A new proposal by the U.S. Commerce Department in July may further tighten controls, but the proposal is still under discussion. Qin said China urged the U.S. to create favorable conditions for the sound development of bilateral trade relations, based on mutual respect and reciprocity. Easing the export controls would also benefit the U.S. by balancing trade, Qin said.

FM: China, ROK to hold talks on law of the sea issues
2006-12-05 Xinhuanet
Beijing - China and the Republic of Korea (ROK) are scheduled to hold talks on law of the sea issues on Wednesday in Beijing, a foreign ministry spokesman said here Tuesday. Qin Gang told a routine press conference that the two sides will discuss sea area demarcation, maritime scientific research, and other issues of common concern. "China has consistently advocated that sea area demarcation problems between China and other countries, including the ROK, be solved through negotiations and consultations in accordance with international law principles as well as the principle of impartiality," Qin said.

Cuba willing to strengthen military cooperation with China: Raul Castro
2006-12-05 People's Daily Online
Cuba is willing to strengthen military and other cooperation with China, the First Vice-President of the Council of the State of Cuba and Defense Minister Raul Castro said in Havana on Monday while meeting with a visiting Chinese military delegation. Raul expressed his satisfaction at the smooth development of exchanges and cooperation between the Cuban and Chinese armies in the areas of personnel and military trainings, and hoped the cooperation could be further strengthened. He also thanked the Chinese military delegation for attending the 50th anniversary commemorating the founding of Cuba's armed forces. Leader of the delegation, Gen. Zhao Keming conveyed the kind wishes from the Chinese people and military to the Cuban leader, Raul's brother Fidel Castro, hoping him a quick recovery from surgery. Before the meeting, Gen. Zhao also met with Alvaro Lopez Miera, Chief of the General Staff of Cuba's armed forces. The two generals discussed possible cooperation between the two armies in the future.

Macedonia sticks to one-China principle
2006-12-06 People's Daily Online
Macedonia sticks to its one-China principle unswervingly and recognizes the People's Republic of China as the only legitimate government of all China, Macedonian President Branko Crvenkovski said on Tuesday. Crvenkovski, meeting the newly appointed Chinese Ambassador to Macedonia Dong Chunfeng, admitted that Taiwan is an inalienable part of China, news reaching here from Skopje reported. Crvenkovski expressed his satisfaction with the smooth development of the friendly relationship between Macedonia and China, hoping to deepen the cooperation between the two countries at various levels in all fields. Dong, who presented his credentials to the Macedonian president, congratulated the president on the achievements that Macedonia has made in strengthening national solidarity, safeguarding social stability and developing national economy. Dong highly evaluated the president's contribution to the steady development of the relations between the two countries, expressing his belief that, in a concerted effort, the friendly cooperation can be raised to a new level.

China puts four-point proposal on furthering relations with Cyprus
2006-12-08 People's Daily Online
Chinese President Hu Jintao raised a four-point proposal to enhance relations with Cyprus during talks with Cyprus President Tassos Papadopoulos on Thursday. The proposal included improving high-level exchanges between the governments, parliaments and parties of the two countries; deepening economic and trade cooperation; expanding tourism, archeology and other cooperation; and closer coordination in international organizations. "We will take the opportunity of the 35th anniversary of the establishment of Sino-Cyprus ties to upgrade the relationship," Hu said. The Mediterranean island nation forged the diplomatic relations with China on Dec. 14, 1971. Hu said Sino-Cyprus relations had developed steadily and economic and trade cooperation expanded. The two countries had maintained coordination in international affairs. Hu expressed appreciation for the support of Cyprus on the Taiwan issue and on its efforts to improve relations between China and the European Union. He also expressed gratitude for Cyprus' help on the evacuation of overseas Chinese during the Lebanon-Israel conflict. "Developing long-term and stable relations with Cyprus has been our consistent policy, and this will never change," Hu said. Papadopoulos reaffirmed that Cyprus would adhere to the one-China policy and play an active role in improving Sino-EU relations. He was thankful for China's stance on the Cyprus issue, vowing to strengthen the cooperation in the United Nations and other international organizations. [...]

Chinese government provides 200,000 dollars in aid to Philippines
2006-12-06 People's Daily Online
Typhoon-ravaged Philippines is to receive 200,000 U.S. dollars in aid from the Chinese government, said Chinese Foreign Ministry spokesman Qin Gang on Tuesday. Qin said China is deeply concerned about the widespread damage caused by typhoon Durian. The Red Cross Society of China will also donate 50,000 U.S. dollars to its Philippine counterpart. Chinese Premier Wen Jiabao and Foreign Minister Li Zhaoxing have sent messages to Philippine President Gloria Macapagal-Arroyo and Secretary of Foreign Affairs Alberto Romulo, expressing sympathy and condolences. Typhoon Durian hit the Philippines on Dec. 1. The confirmed death toll stands at 425 with 599 still missing.


Domestic Policy

China's Central Economic Work Conference closes
2006-12-08 Xinhuanet
Beijing - China's 2006 Central Economic Work Conference closed here Thursday, with the drawing up of major economic strategies and policies for 2007. The conference made balancing international payments a major goal for next year. Chinese leaders pledged to redouble efforts to vigorously expand imports and overseas investment, while maintaining rational export growth and use of foreign investment. President Hu Jintao and Premier Wen Jiabao delivered speeches at the three-day conference. China's trade surplus reached 133.62 billion U.S. dollars in the first ten months this year, exceeding the 101.9 billion-U.S. dollars for the whole 2005. Having attracted more foreign investment than any other developing country for the 15th consecutive year, China is estimated to hold about one trillion U.S. dollars in foreign exchange reserves. The growing trade surplus has led to frequent trade friction, while the large international payments surplus has increased the pressure for appreciation of the Chinese currency, or Renminbi. Experts say too much foreign exchange has forced the central bank to issue more Renminbi, causing excessive fluidity in domestic financial markets. Conference delegates proposed the government should focus on bringing in advanced technologies, management and foreign expertise. The government would continue the strategy of "going global" by encouraging overseas investment, officials said. China's direct investment overseas neared 12.3 billion U.S. dollars last year, according to the 2006 World Investment Report by the United Nations. The report shows China's overseas investment only accounted for 0.59 percent of the global foreign investment last year, much less than the 4.4 percent share of global gross domestic product (GDP) value and the 6.5 percent of world trade. The government should increase export tax rates on primary resources like unprocessed steel, and encourage imports of technologies and resources, said Chen Dongqi, vice director of the Academy of Macroeconomic Research with the National Development and Reform Commission. Another focus of the conference was the country's low-income groups. The conference delegates proposed to boost the income levels and consumption of rural people and the urban poor, calling for greater attention to creating employment opportunities. At the same time, the proportion of middle-income groups should steadily increase, while excessively high earnings should be effectively adjusted through taxation, officials urged at the conference. Data show the total consumption by the Chinese government and public accounted for 51.1 percent of the country's GDP in the first three quarters, down from 62 percent in the 1980s. The proportion of public consumption in the GDP hit a record low last year, dropping to 38.2 percent from 48.8 percent in 1991. [...]

Mainland job seekers face tough competition - Think-tank sees up to 15 million being unable to find urban work
2006-12-08 SCMP
Competition in the mainland job market is expected to intensify next year, with projections that the number of job seekers in urban areas will exceed 25 million, according to analysis by a top think-tank. In its 2007 Economy Bluebook published yesterday in Beijing, the Chinese Academy of Social Sciences predicted that only 10 million job vacancies would be created in cities next year, leaving 15 million urban residents without a job. The grim projection of the market is largely in line with an earlier assessment by Labour and Social Security Minister Tian Chengping, who said last week that more than 24 million people would seek jobs annually over the next few years. Mr Tian said he expected 11 million jobs to be created if the economy grew by 8 per cent a year. The academy's report said the western and central regions would be hardest hit by the looming job scarcity despite the central government's "go west" campaign launched more than eight years ago to develop western backwaters. Shanghai University of Finance and Economics professor Ma Guo-xian said it took time for such initiatives to bear fruit, "but such artificially channelled efforts might not work well". Western and central regions are home to most of the mainland's under-developed cities and have largely agricultural economies. "The [go west] campaign could well put basic infrastructure in place, but the places might not have the human resources and other assets to attract investment," Professor Ma said. The country's resource-depleted regions such as the northeast were in no better position to cope with the expected influx of job seekers, the report added. Anshan and Benxi in Liaoning province had suffered an economic downturn as in coal and iron ore mines were exhausted. As a result, workers with state-owned companies had become redundant. The report said 5 million laid-off workers around the country had not been able to find employment, and another 3.6 million employees of state enterprises would lose their jobs in the next three years due to closures. Professor Ma said it was unrealistic to try creating more jobs in such old mining bases because they no longer had the infrastructure and resources to transform themselves. He said the government should help train the younger generation and encourage them to move to other places for job opportunities. The government and academics are pinning their hopes for more jobs on economic growth and the ability of affluent eastern regions to absorb more job seekers. Professor Ma said the government should also launch more industrial-processing industrial zones in less-developed regions and nurture competitive businesses to make the zones a success. According to the book, 2.6 million migrant workers will move to cities next year, adding to another 8.7 million school leavers joining the jobs queue.

Top legislator concludes Hong Kong visit
2006-12-04 Xinhuanet
HONG KONG: China's top legislator Wu Bangguo left here for Beijing Monday morning after officiated at the ITU (International Telecommunication Union) Telecom World 2006 and wrapped up his visit to Hong Kong. Wu, Chairman of the Standing Committee of the National People's Congress (NPC), told reporters at the Hong Kong International Airport that during the two-day visit, he was deeply impressed by Hong Kong's social stability, harmony and great energy as well as the successful hosting of the ITU Telecom World 2006. He hoped the Hong Kong Special Administrative Region (SAR) government and all walks of the society could continue to work hard, consolidating the good situation that has not been easily come by and developing a better Hong Kong. "I wish to see an even-better Hong Kong next time I visit here," Wu said. Vice chairman of the National Committee of the Chinese People's Political Consultative Conference and Director of Hong Kong and Macao Affairs Office of the State Council Liao Hui and other retinue also left for Beijing. HKSAR Chief Executive Donald Tsang, directors of Hong Kong administration and legislature, representatives of the Liaison Office of the Central People's Government in Hong Kong, and leading officials of related departments of the central government went to the airport to see Wu off.

Wen calls for better resettlement of migrants
2006-12-04 Xinhuanet
Beijing - Chinese Premier Wen Jiabao has called on the governments and departments around the country to help the people and local governments around the Three Gorges reservoir. Speaking at a national conference on the country's coordinated support of the Three Gorges area held here on Monday, Wen said other provinces and regions should do more to help resettle people who were displaced by the reservoir. More than a million people, who mainly lived in 20 counties of southwest China's Chongqing Municipality and central China's Hubei Province, were moved to make way for the Three Gorges Dam Project which submerged their lands. The conference was urged to provide stronger support to the reservoir area so it can develop its own agriculture, tourism and processing industries and create more jobs for those who had to move. More support is required for infrastructure construction, pollution control, environmental protection, and development of a recycling-based economy of the area. Thirty-eight agreements involving economic cooperation and investment worth 28.3 billion yuan were signed at the conference. Governments and departments outside the Three Gorges area started to provide support for the region in 1992, a year before construction of the world's largest hydropower project began. Since then, more than 27 billion yuan in aid from across the country has been offered to the area. At the conference Chinese Vice Premier Zeng Peiyan urged a stable fund that is strictly supervised be established. To better help the affected area the government should guide projects, funds, technologies and talents, and let the market, society and enterprises play their roles in boosting the self-development of the reservoir area, said officials. The water level in the reservoir reached the 156-meter mark on October 27 and will eventually reach 175 meters in 2009, when the Three Gorges project is finally completed. The Three Gorges Project, including a 2,309-meter-long and 185-meter-high dam and 26 generators, is built in three phases on the middle reaches of the Yangtze. The dam is now producing power and aiding flood-control and river navigation.

Gov't to focus on public transportation
2006-12-04 People's Daily Online
The government is gearing up to play a bigger role in developing public transportation, according to a document jointly released by four ministries on Saturday. The document, released by the National Development and Reform Commission and the ministries of construction, finance and labour and social security, describes the development of public transportation as a priority and calls for favourable policies to promote its expansion. Qiu Baoxing, vice-minister of construction, said at the National Conference of Public Transport Development on Saturday that public transportation is the surest way to ease traffic congestion, which has plagued China's major cities in recent years. The document says the government should be the main investor in construction projects in the public transportation sector. It calls on the government to set up investment, subsidy and compensation systems to promote its development. The central government is also looking to subsidize public transport enterprises to offset the burden of future increases in petroleum prices. The government will also do an annual audit and appraisal of public transport enterprises' operations and implement a performance-based subsidy system to reward those enterprises that do well in the appraisals. Qiu said the average speed of vehicles on Beijing's main roads had fallen by half in the past decade, and that 60 per cent of the city's main intersections suffer from serious traffic congestion. "The rapid increase in the number of automobiles on the roads has placed great pressure on Beijing's traffic conditions, resources and environment," said Ji Lin, vice-mayor of Beijing. "Treating the development of public transportation as a priority is one of the city's long-term strategies." Ji said the number of vehicles plying Beijing's streets has hit 2.82 million and is still increasing at the rapid rate of 1,000 new cars per day. "It is unrealistic to attempt to resolve the city's traffic jams simply by widening roads because any effort to widen the roads would lag behind the increase in automobiles," said Wang Fengwu, an official with the Ministry of Construction. Wang said the ministry wanted public transportation to account for a third of the transportation available in the country's main cities within the next five years. At present, public transportation accounts for only about 10 per cent. [...] In 2003, the economic losses caused by traffic congestion reached 250 billion yuan (US$31.25 billion), accounting for 2 per cent of the year's GDP.

Beijing acts to lower the cost of health care - One billion yuan earmarked to make services more affordable in poor areas
2006-12-07 SCMP
Beijing will earmark 1 billion yuan next year for a government-sponsored scheme designed to deliver more affordable health-care services to people in the country's underdeveloped central and western regions. Finance Ministry official Song Qichao was quoted by China Central Television on Tuesday as saying the central government would budget 3 to 4 yuan for each person in the central and western regions, including Henan and Shaanxi, in a bid to drive down the price of basic medical care. The scheme will, for the first time, tie the amount of funding for each medical facility to the amount and level of services they can provide, and fund the provision of basic care such as conventional medical check-ups and vaccinations for the disabled, the elderly and other disadvantaged groups. The new initiative follows growing public anger over spiralling medical costs in the two decades since the government opted out of a primitive, but free, medical care system in favour of a market-oriented reform package which forced mainland hospitals to stay afloat by over-prescribing medication. The changes also left cash-strapped low-level administrations in poor regions and vulnerable patients to foot most of their medical bills. Beijing cut its public health-care expenditure from 2.53 per cent of its overall budget during the Seventh Five-Year Plan (1986-1990) to 1.66 per cent in the 10th Five-Year Plan (2000-2005). [...] Analysts say the central government initiative is moving in the right direction in addressing regional discrepancies in medical care coverage, but the key to the success of the scheme is how fairly the funding will be allocated. [...]

Bank boss and 2.6m yuan vanish
2006-12-06 SCMP
Bank of China (BOC) officials are investigating the alleged theft of 2.6 million yuan in cash by a branch manager from the vault of his own bank. Xiao Kui, operations manager at BOC's Yicheng city sub-branch in Hubei, allegedly walked out of his bank with the cash stuffed in a large bag on November 26, according to mainland media reports. The theft was not uncovered until a week later. The manager had previously applied for annual leave and the robbery was not discovered until Sunday night, when he failed to show up at work to open the safe in preparation for business on Monday. When employees finally managed to open the safe they realised the money was missing. In two separate cases reported yesterday, a land administration official in Zhengzhou, Henan province, and a BOC official on Hainan Island were each sentenced to five years in prison for accepting bribes. Dong Jili was sentenced for taking "massive bribes" from a real estate developer in Zhengzhou in return for approving land sales, and Tang Xiaoping was convicted of taking a 100,000 yuan bribe in return for approving a loan to a real estate company, according to Xinhua.

Regulator urges banks to move into poor regions - Goal is to provide loans to peasants in overlooked areas
2006-12-05 SCMP
China's chief banking regulator has vowed to make it easier for banks to open outlets in poorer regions of the country in order to help residents get loans. The remarks by the China Banking Regulatory Commission's chairman, Liu Mingkang, come amid calls for the government to promote the development of financial services in rural areas after recent criticism by Nobel Peace Prize winner Muhammad Yunus. Cheng Siwei, a vice-chairman of the National People's Congress, yesterday urged the government to learn from the Bangladeshi economist and the Grameen Bank he founded to give small loans to needy peasants. Mr Liu over the weekend told a financial seminar that the government was implementing measures to improve financial services in poor regions of the country. One of the main steps is to lower the threshold for setting up branches of banks in poor and rural areas. The government would also introduce measures to encourage commercial banks and financial institutions to explore markets in these regions, yesterday's Shanghai Securities News quoted Mr Liu as saying. He said outstanding loans in rural areas had reached 1.33 trillion yuan by the end of September, up 19.87 per cent from the beginning of this year. "The [rural credit] growth is much higher than the average lending growth, which is expected to expand by 14 to 15 per cent this year," he said. In an interview with Financial News, a publication run by the central bank and other state banking and financial regulators, Mr Cheng, also a leading economist, said the mainland should learn from the experience of the Grameen Bank and extend small loans to help the poor in rural areas who were often ignored by state-run banks and often had to resort to underground banking or usury. Professor Yunus' recent criticism of the central government's rural credit policy has triggered widespread debate over the development of micro-credit projects in the country. During an international conference in Beijing in October, Professor Yunus criticised the half-hearted Chinese experiment as "cutting one leg off before it starts to run". He was referring to the government's policy of only giving newly established small-credit companies a mandate to extend loans while prohibiting them from taking deposits from local residents - a significant difference from the Grameen Bank model.

China developing law to recognize and boost volunteerism
2006-12-06 Xinhuanet
Beijing - China is drafting a law to clearly define the rights and obligations of volunteers in a move to encourage more people to donate their time and skills, said an official with the Ministry of Civil Affairs on Tuesday or the world's 21st International Volunteer Day. The draft law on the promotion of charity undertakings is expected to include one chapter on volunteer service that will stipulate the principles of the service, establish a volunteer registration system, set qualifications, rights and obligations of volunteers and volunteer organizations. "Volunteer service not only requires moral regulation, but legal criteria too," said Tang Jinsu, an official in charge of community construction work with the ministry. Since initiating community volunteer service in 1989, China has nearly 20 million registered volunteers and 120,000 community volunteer centers, official statistics show. Compared with developed countries, where 30 to 40 percent of their citizens have volunteer service records, China's volunteer service participation rate is only three percent. The government is working to raise the rate to eight percent in the run-up to the 2008 Olympic Games. According to the Beijing Olympic Games organizers, China needs 100,000 volunteers for the Olympic Games and the ensuing paralytic Games. Lack of regulations to safeguard volunteers' rights and interests has lead to low rates of participation, said Tang Jinsu. In June this year, a community volunteer registration system was activated, offering certificates to registered volunteers around the country. [...] Volunteerism in China is driven by large government-supported campaigns and numerous grass-roots organizations. The volunteer community service is officially defined to include responsibilities ranging from aiding the poor, helping the elderly and handicapped, conducting environmental protection activities to delivering classes and programs.

Beijing tightens controls on guns, dangerous goods
2006-12-05 Xinhuanet
Beijing - Beijing is tightening control on the storage and safe handling of guns, ammunition, explosives and radioactive materials in a bid to secure a safe Olympics in 2008, the capital's police chief said Tuesday. Beijing will no longer approve commercial shooting ranges and hunting ranges, and sports authorities are required to reduce the number of shooting ranges for training purposes and cut down the number of guns, said Ma Zhenchuan, director of the Beijing Municipal Public Security Bureau. Museums and exhibition halls that fail to safely display weapons must remove them, Ma said. Gun producers and sellers and professional storing agencies of guns should reduce their guns and ammunition, he said. Private ownership of guns is forbidden in China. Meanwhile, guns owned by organizations that are engaged in sport shooting should not be increased, he said. In the future, local police will only approve new state or municipal storehouses for high risk explosives in the eight districts of the city, and police will only approve explosive tests within the city that are attached to necessary scientific and teaching programs. All the districts and counties administered by Beijing are also ordered to cut down on the number of storehouses of explosives, toxic chemicals and radioactive material, he said. "If such dangerous articles (guns, ammunition, explosives and radioactive material) are lost or stolen due to a lack of management, the organizations and manager will prosecuted and their permits revoked," Ma said.

Shanghai plans to have watchdog for pension fund
2006-12-07 China Daily
Shanghai - Shanghai could be getting set to launch a commission to supervise its pension fund next month, according to local media reports. Insiders said a plan for forming such a commission had been submitted to the Shanghai Municipal Government for approval last month, while all the preparatory work is expected to be completed next month, according to a report yesterday in the Shanghai-based China Business News. The government news office refused to comment on the report, though a woman in the publicity department of the Shanghai Municipal Labour and Social Security Bureau did not deny it. No information is available on who might serve on the commission or how it will function. Insiders said the commission would be made up of members of the standing committees of the municipal people's congress and people's political consultative conference. Experts in the field will also likely be involved. The commission will likely be in charge of overseeing the pension fund's management, making sure that it is legitimate and transparent. Shanghai discovered in September that more than 3 billion yuan (US$370 million) from its pension fund, which covers a population of 12 million people, had been invested in highway construction and property deals. By law, pension funds can only be invested as bank deposits or in national bonds or securities. Several senior local officials and heads of large State-owned enterprises were sacked and investigated in connection with the case, among them the then-Shanghai Party chief Chen Liangyu. More scandals have emerged in recent months. Just last month a vice-mayor of Jinhua, in Zhejiang Province, was sacked for misappropriating hundreds of millions yuan from the city's pension fund. A report by the National Audit Office found that about 7.1 billion (US$887 million) of the 2 trillion yuan (US$250 billion) in the country's pension funds had been misappropriated. To date, more than 27 provinces have formed commissions to supervise their pension funds, and more are planning to follow suit. The State legislative body is drafting two laws to tighten oversight of the country's pension funds, according to a recent announcement by the Ministry of Labour and Social Security Bureau. Shanghai released guidelines for the management of its pension fund last month. The guidelines emphasise strict and transparent management. Any government department or company involved with the city's fund must release reports on its income and balance. The public also has the right to look into the fund's performance.

China moves to curb excessive SOE pay and to cut back the number of central SOEs
2006-12-04/06 Xinhuanet
Beijing - Rumors of excessive pay for staff in state-owned enterprises (SOEs), especially those in monopoly sectors, has prompted the Chinese government to take steps to claw back salaries. The Ministry of Labor and Social Security and the Ministry of Finance have jointly issued an order to strengthen controls on the total remuneration paid to SOE employees. Local governments are instructed to ensure SOE pay mechanisms are linked to economic performance. SOEs at which average salaries are more than double last year's local urban average should be reviewed strictly. Salaries at SOEs that experience a fall in profits should be reduced, according to the order. Some SOEs are able to earn big profits because of their monopoly status. Instead of handing over the excessive profits to the government, they have been paying their staff -- managers and ordinary workers -- very high wages. Sky-high pay at SOEs, especially those in monopoly sectors, has aroused public anger. Salaries in electricity, petroleum, finance and telecommunications enterprises are hotly debated on the internet. The Beijing News reported last Friday that public pressure had led to a 20 to 50 percent drop in salaries in the electricity sector this year. Non-state controlled enterprises should negotiate pay with employees according to company policy, says the circular. China will reduce the number of state-owned enterprises (SOEs) managed by the central government by almost half by 2010, said China's state-owned assets watchdog on Wednesday. Only 80 to 100 central government SOEs will remain by 2010 after restructuring of the current 161 SOEs, said Shao Ning, vice director of the State-owned Assets Supervision and Administration Commission (SASAC). "Internal restructuring and integration are effective ways to improve corporate control and cohesion," said Shao. Many of China's central SOEs were formed through administrative fiscal transfers from the government, the army or scientific institutions affiliated to government departments, or by industrial restructuring. The SOEs have been challenged by lack of internal controls, as parent companies that manage them had no investment in them, said Shao. The central SOEs have to turn themselves into competitive enterprises and better management and control systems have to be established after restructuring, said Shao. SASAC has been promoting restructuring of central SOEs which numbered 196 in 2003.

SOEs induct more outside directors
2006-12-08 China Daily
Major State-owned enterprises (SOEs) will continue to rope in outside directors to raise the level of corporate governance, a top official said yesterday as more companies seek to restructure and list on the stock market. "We have appointed 65 independent directors to 19 SOEs so far, and we hope to raise the figure substantially to improve management transparency and efficiency," said Shao Ning, vice-chairman of State-owned Assets Supervision and Administration Commission (SASAC). The latest to do so is China Metallurgical Group Corp (MCC) the nation's leading construction company which took on board five independent directors yesterday as a prelude to its listing plans. The structure and operation of the SOE's board of directors follow the model of State-owned Temasek Holdings of Singapore, an MCC spokesman said. In companies controlled by Temasek, the board of directors generally comprises civil servants and private entrepreneurs. "The move (to induct more outside directors) reflects China's on-going effort to improve the performance of major SOEs," said Hong Liang, an analyst with China Galaxy Securities. [...] The reconstituted boards are authorized to select managers, assess management's performance, determine managers' compensation packages, and decide on major investments as well as raising capital. This year, SASAC increased the number of enterprises for board restructuring to 19. At the end of 2005, SOEs under SASAC had assets of 10.6 trillion yuan (US$1.34 trillion).

Parade of prostitutes lands police in hot water
2006-12-07 China Daily
Shenzhen - Local police have come under strong criticism from the public and lawyers after parading a group of prostitutes and their clients up and down a crowded street. However, an anonymous police official was quoted by the Guangzhou-based newspaper New Express as saying the police had not broken any laws with the controversial move. "Only the Standing Committee of the National People's Congress has the right to respond in connection with the concerned legal clauses," the officer was quoted as saying. The spokesman of the Shenzhen Police Bureau told China Daily yesterday that the bureau would soon release an official response to the incident. The municipal government of this southern city declined to provide a formal response. "The police have submitted materials to the government, but we have no comment now," said a government spokesman. The controversy started last Wednesday when Shenzhen police arrested 100 prostitutes, pimps and their clients, including at least 10 Hong Kong residents, during an anti-vice raid. The officers dressed the alleged offenders in bright yellow T-shirts and masks and paraded them on the streets. Police also read their names, ages and places of origin out to the public. The parade attracted more than 1,000 spectators, who applauded. However, wide media coverage of the incident sparked widespread public concern over whether the police had violated the privacy and human rights of the people they had arrested. Shanghai lawyer Yao Jianguo published a petition to the Standing Committe of National People's Congress on an Internet forum on Sunday, claiming the action was illegal and would negatively affect the reputation of the Chinese Government within the international community. In his petition, Yao said the suspects could be punished only after being judged guilty in court. He noted that the arrested people had not yet been sent to court. [...]

Protesters gather to demand Three Gorges payments - Resettled Hubei residents accuse officials of embezzlement
2006-12-07 SCMP
Residents of Hubei province affected by the Three Gorges resettlement plan will gather at the Zigui county government building tomorrow to demand the distribution of compensation funds they claim have been embezzled by officials. One resident said at least "several hundred" residents from Zigui were expected to appear to express their dissatisfaction over delayed resettlement payments. Residents claim they should each get a one-off 38,000 yuan "settlement fee", in accordance with a central government document released in 1995. So far, they have received only 5,000 yuan. They are also entitled to an annual living expenses subsidy of 600 yuan, which, with the settlement fee, could add up to more than 50,000 yuan per person by 2026, when the annual payments will end. "Officers from the Public Security Bureau have been on alert and they have been following some of the ordinary citizens in this county," the resident said. "But still we need to have our voices heard because without this money, we have great problems making ends meet." A female resident said: "It's not as if we were doing anything illegal ... we are entitled to this money," adding that an old man was beaten up two days ago as he demanded his compensation outside the government building. For the past week, Zigui residents have been trying to vent their anger over what they say is embezzlement by county officials. Some residents claim officials siphoned off the money to fund their children's overseas education. Since last week, some residents have demanded and attended meetings with county officials, who told them the 600 yuan subsidies would "eventually" be released. The payments should have been made earlier this year. "The Three Gorges Project Construction Committee, which is directly under the State Council, has already told us that the money has been distributed to the county government," a resident said. The US$22.5 billion Three Gorges Dam on the Yangtze River, the world's biggest hydroelectric project, will have displaced more than 1.4 million people by the time it comes into full operation in 2008. State media reported in December last year that Du Jiang, an official who worked in the Chongqing Land Resources Bureau, was sentenced to death with a two-year reprieve for stealing 2.8 million yuan that was to be paid as compensation to resettled farmers. Last year, the China Daily reported that by the end of 2004, 327 cases of embezzlement of resettlement funds had been discovered, with 55.8 million yuan missing.

Demonstrator 'secretly executed'
2006-12-07 SCMP
A court in Sichuan province secretly executed a man who took part in an environmental protest which turned into a riot, a lawyer said yesterday. Three others were jailed, one of them for life, he said. The four had been among thousands of people who protested in 2004 against a hydropower project that would flood 100,000 people out of their homes. Chen Tao, who was accused of "deliberately killing" a riot policeman during the protest, had been executed, said Cai Dengming, whose son was Chen's co-defendant. "When I went to the Ya'an jail to visit my son this week, the officer there told me that Chen Tao had been executed," Mr Cai said. His son, Cai Zhao, was jailed for life in the same case. Ran Tong, Cai's defence lawyer, said he had only found out the verdict on Monday, when he received the sentence sheet containing the names and sentences of all the defendants. "The court had sentenced them in June, but all behind closed doors, and we only got the information almost half a year later," Mr Ran said. "We were not able to defend our clients, and I strongly oppose the court not respecting the spirit of law." Two other protesters had been sentenced to 12 and 15 years in jail, he said. A spokesman for the Sichuan Higher People's Court could not be reached for comment. The central government is grappling with an acknowledged rise in social unrest, sparked by anger at a growing rich-poor divide, official corruption, pollution and land grabs without proper compensation in the countryside. In 2004, the country had 74,000 "mass incidents" - the term used to describe large protests and riots - compared with 58,000 in 2003, Public Security Minister Zhou Yongkang said last year.

Vice Premier Wu pledges to fight AIDS
2007-12-07 China Daily
China will strive to limit the number of AIDS infections to less than 1.5 million by 2010, Vice-Premier Wu Yi told a visiting UN official Wednesday in Beijing. "The Chinese Government has always attached great importance to the prevention and control of HIV/AIDS," Wu said in a meeting with Nafis Sadik, special adviser to the UN secretary-general and special envoy for HIV/AIDS in Asia and the Pacific. "We have set up a work mechanism against HIV/AIDS with the government playing a leading role and active participation from all walks of society." Wu said the Chinese Government welcomes the UN and other international organizations giving more support to China's fight against AIDS. "China will strengthen exchanges and co-operation with international organizations to curb the spread of AIDS with a responsible, open and transparent attitude," Wu said. Sadik praised the remarkable achievements China had made in HIV/AIDS prevention and control and said the UN would continue to support China in fighting AIDS as before. At an AIDS prevention workshop held by the Ministry of Public Security on Tuesday, a senior police officer said the police would get tough on crimes committed by HIV/AIDS carriers. "We should never allow criminals to take advantage of AIDS and escape or receive less severe punishment just because they are infected," Beiijing News quoted the officer as saying. "Those who know they are infected with AIDS and deliberately infect others will be severely punished according to the law," he said.

China to raise farmers' awareness of legal rights
2006-12-04 Xinhuanet
Beijing - China's latest five-year program to raise people's awareness of laws and legal processes will for the first time focus on farmers. Village committees will provide an introduction to the country's legal framework to "every rural household", Dou Yupei, vice minister of civil affairs, said here Monday. Dou hopes the country's 800 million farmers will learn to better use their democratic rights, file complaints that more comprehensive and safeguard their legitimate interests. The ministry will also improve training for village and township officials to ensure that rural affairs are handled lawfully. China's first five-year program to improve the public's awareness of its legal rights started in 1985. Each five-year program focuses on a particular segment of society. In addition to farmers, government officials and employees, teenagers and private company management were also listed as key groups that will be provided with education on legal system.



China vows to help Tibetan herders increase income
2006-12-05 Xinhuanet
CHENGDU: The Chinese government will continue to offer assistance to southwestern Tibet Autonomous Region and help its herders and farmers raise their income by 80 percent over the 2005 level in the next four years. It is hoped that by 2010, Tibetan herders and farmers will have a per capita net annual income of 3,820 yuan (477.5 U.S. dollars), near the national average for farmers, said sources attending a meeting this week of officials who are working in Tibet to boost its development. Last year, farmers and herders posted a per capita net annual income of 2,078 yuan (260 U.S. dollars), about 63.8 percent of the national average. More than 370,000 Tibetans were making less than1, 300 yuan (162.5 U.S. dollars) a year, or 0.44 U.S. dollar a day. In the coming four years, the central government will continue to finance Tibet's farming and stock raising industries, help redundant farmers secure non-agricultural jobs and improve medical, housing and overall living conditions for the locals, said Wang Ercheng, an official with the Organization Department of the Communist Party of China Central Committee. Farmers and herders make up 80 percent of Tibet's population, said Zhang Qingli, a top official in Tibet. "The most pressing need in Tibet's development is to improve the working and living conditions of local farmers and herders and increase their income." He said the autonomous region will step up infrastructure construction in the coming four years and develop the education, health and cultural sectors. By 2010, Zhang said Tibet is expected to post 15,100 yuan (1,887.5 U.S. dollars) of per capita GDP, compared with 9,098 yuan(1,137 U.S. dollars) reported in 2005. The central government has provided at least 6.2 billion yuan (775 million U.S. dollars) of assistance to Tibet in the past decade. Nearly 3,000 government officials and business executives from leading state-owned firms have rotated to work in Tibet for a minimum of one year, according to the organization department.

Tibet cadre promoted to chief of youth league - Appointment shows president is cementing grip on power
2006-12-07 SCMP
A deputy party chief in restive Tibet has been appointed head of the influential Communist Youth League in another sign that President Hu Jintao has solidified his grip on power ahead of next year's crucial party congress. Hu Chunhua, who was working in Tibet when Mr Hu was party secretary in the Himalayan region, will take over from Zhou Qiang, who was appointed governor of the central province of Hunan in October. "The Central Committee of the Communist Party has recently decided to appoint comrade Hu Chunhua as first secretary of the Communist Youth League, and comrade Zhou Qiang has been relieved of his duty from the position," the party's decision-making body announced on the central government's website yesterday. Mr Hu built his power base as head of Tibet and the Communist Youth League before his promotion to the pinnacle of party leadership. Unrelated to the president, Hu Chunhua, 43, is a native of the central province of Hubei and first started working in Tibet in 1983. He worked as a manager of a state-run hotel in Lhasa, the Tibetan capital, from 1985 to 1987 and became one of Tibet's deputy party secretaries in 2003. As a graduate from the prestigious Peking University with grass roots experience, he appears to fit the pattern of promotion in Chinese officialdom. "Different from the past few years, when local governments had been given power, Hu Jintao is going back to [a policy] of centralising power in his own hands, so conflicts must ensue," Huang Jing, a senior fellow at the Brookings Institute, said in Hong Kong yesterday. Dr Huang, an associate professor of political science and co-director of Utah State University's Asian studies programme, was speaking on the recent political infighting and corruption scandals involving senior mainland officials. "Under Hu, policy changes have already happened. But these changes must be done gradually and he must have a consensus from the leadership within the party. That is why you have seen new party secretaries in Sichuan and Jilin provinces recently," Dr Huang said. Hu Chunhua's Communist Youth League appointment is the latest in a series of reshuffles among regional governments and central ministries. The moves are believed to have been initiated by the president amid the jockeying for positions in the run-up to the 17th Communist Party Congress next year. Since assuming power late in 2002, Mr Hu has filled key central and provincial government posts with his youth league allies. The pace of the transition has accelerated recently. He has named an ally, former agriculture minister Du Qinglin, as Sichuan Communist Party boss. Mr Du's post is to be filled by Sun Zhengcai, 43, the former secretary-general of the Beijing Communist Party Committee. On Tuesday, Han Changfu, a deputy director of the State Council's research office, was appointed as a deputy party secretary of Jilin province, a position expected to usher him into the provincial governorship. Dr Huang said the new leaders appointed by President Hu would not have to come from the Communist Youth League, but would have to share his views on the direction for the country. [...]



Bank regulator issues reform guidelines
2006-12-07 China Daily
China's banking regulator issued guidelines Wednesday to encourage financial innovation by commercial lenders, such as increasing earnings made from fees and giving out less risky loans. The guidelines will take effect next Monday, the day China will fully open its banking sector to foreign lenders in line with its commitment to the World Trade Organization. According to Tang Shuangning, vice-chairman of the China Banking Regulatory Commission (CBRC), China's banking industry urgently needs to speed up its financial reform to deal with rising competition after fully opening. "Chinese commercial banks lag far behind their international counterparts in terms of financial innovation," Tang said. He said non-interest income generally accounts for more than 50 per cent of the total income of big international banks. But the highest rate for Chinese commercial banks from fees is less than 30 per cent and most of banks earn less than 10 per cent. He said the guidelines are the first such document concerning financial innovation issued by the banking regulator, signalling a new stage of reform. According to the guidelines, the CBRC will set up a sound legal environment to encourage financial innovation. The regulator will further streamline approval procedures and strengthen supervision to facilitate financial innovation. The guidelines also emphasize the importance of risk control. They require commercial banks have a good knowledge of their businesses, risks, clients and competitors. In addition, the guidelines clarify commercial banks' obligations to consumers, such as correct disclosure of information, professional services, protection of assets, and offering effective complaint channels. Despite this need for reform, Tang said, commercial banks in China have made progress in financial innovation. The CBRC's statistics show the trading volume of major commercial banks reached 14 trillion yuan (US$1.77 trillion) last year. Nearly 30 Chinese banks offer renminbi wealth management services, with a total value of 130 billion yuan (US$16.46 billion). A total of 17 foreign and Chinese banks have been approved to invest clients' assets overseas under the qualified domestic institutional investor (QDII) programme. So far, they have launched nine QDII products, with sales of 2.3 billion yuan (US$291 million) in renminbi and US$87 million in US dollars. But more financial innovations need to be made, Tang said. In addition to financial reform, commercial banks are being asked to engage in public education, informing investors that they should be responsible for their own purchasing decisions. At yesterday's press conference Tang also said the Bank of Communications and China Construction Bank have applied to establish insurance companies.

Oil wholesale market to open to foreign investors
2006-12-07 China Daily
The oil product wholesale market will be open to domestic and foreign investors from next year, the Ministry of Commerce announced Wednesday. The opening of the wholesale business supplying gasoline and other oil products to filling stations will start on January 1, and fulfills commitments made by China on entry to the World Trade Organization (WTO) five years ago. The wholesale business has long been monopolized by two State-owned conglomerates China Petrochemical Corp (Sinopec) and China National Petroleum Corp (CNPC), parent of US-listed PetroChina Co. Under the new rules, multinational giants such as BP, Exxon Mobil or Total can invest in the sales of gasoline, diesel and kerosene to retailers. The opening-up will bring in new entities that include State-owned, multinational and private companies, said ministry spokesman Chong Quan. He said the two rules on processed and crude oil products would encourage market-oriented competition, enhance branding awareness and improve service quality. [...] But an industry insider, who did not want to be named, cautioned that it would not be easy for newcomers to start a wholesale business, "Since the wholesale licence is separate from import and export licences, it may be difficult for companies to enter the wholesale segment," he said, appealing to the authorities to further deregulate the market by easing the grip on oil product imports. According to the two new regulations, newcomers should have either an import licence or a refinery to engage in the oil product wholesale business. "For crude oil wholesale business, they have to own either an exploration licence or an import licence, plus storage facilities. If companies do not meet these requirements, they can only collaborate with partners such as Sinopec or CNPC," the insider said. The international trade division of the ministry was not available for comment on whether or when import and export controls of oil product would be lifted. In accordance with WTO commitments, the country has already opened up the oil retail business, allowing foreign companies to run a limited number of filling stations or to operate larger networks with Chinese partners.

Ethanol output has corn prices popping
2006-12-06 China Daily
For the first time in China's history, grain prices are rising not due to a poor harvest or increasing demand but because of soaring international oil prices. To feed the nation's increasing appetite for energy, a huge amount of capital including from overseas is chasing corn, soy and wheat for biofuel production; and pushing up prices to record highs. Wang Jinmin, a professor in agricultural products economics at the Chinese Academy of Agricultural Sciences, said: "The rise in corn prices is a strong factor driving up the prices of other food products. And with its increasing role as a crude-oil substitute and environmentally-friendly energy, prices are unlikely to drop in the long run." Analysts say that while industrial use only accounts for about a sixth of overall corn consumption, it is expanding at up to 15 per cent a year, fuelled by high crude oil prices. Official estimates are that annual corn consumption by processing industries would rise to 20 million tons from 16 million tons last year; and reach 40 million tons by 2010. Total consumption is expected to be 125 million tons this year. Ethanol is the main biofuel produced in China with output hitting 1.02 million tons in 2005 and corn accounted for 76 per cent of the raw material. The others are mainly wheat and sorghum. The country plans to produce about 6 million tons of ethanol by 2010 and 15 million tons by 2020 in addition to 5 million tons of biodiesel. In comparison, the United States produced an estimated 15.1 million tons last year, while Brazil the world leader had an output of 16.9 million tons. Ethanol can account for up to 10 per cent of refined products, whose total production was 48 million tons last year. But the gap between the potential demand of 4.8 million tons and actual output of about 1 million tons last year, is huge. The markets have been quick to take advantage. The price of corn in Shenyang, capital of Liaoning Province, stood at 1,400 yuan (US$175) per ton yesterday, a jump of 50 yuan (US$7.5) or 3.7 per cent, within a week. In the futures market, wheat and corn prices have also seen big boom. Sources at the Dalian Commodity Exchange said corn prices have jumped 19.5 per cent in the two months ending November, a 10-year high. In East China's Shandong Province, wheat prices have risen from below 1.4 yuan (US$17 cents) per kilogram in September to 1.6 yuan (US$19 cents). "We predict that agricultural products will be as hot as petroleum in the future," a futures agent surnamed Wang from the Dalian Commodity Exchange told China Daily. The National Development and Reform Commission said in June that biofuels would make up 10 per cent of all fuels by 2010, the figure rising to 16 per cent by 2020. [...]

3G licences to be issued "very soon"
2006-12-05 Xinhuanet
Beijing - China could "very soon" award domestic telecom operators licences to build 3G (third generation) mobile phone networks, the country's top telecom official said yesterday. "I cannot provide a specific timetable, but it could happen very soon," Wang Xudong, minister of information industry, told reporters at the ITU Telecom World 2006 being held in Hong Kong. Wang reiterated a commitment to enable operators to offer 3G services during the 2008 Olympic Games in Beijing, saying it is "well-founded and feasible." 3G services enable video calls, faster data downloading speed and mobile Internet access. Wang said operators would be given enough time to deploy 3G networks. "The build-out of networks and the following trial operations could take some time." Industry observers estimate that setting up networks and trial operations could take at least one year before operators can formally roll out services to consumers. As a result, some believe licences could be handed out in the first quarter next year; and China Netcom (Hong Kong) CEO Zuo Xunsheng said at the expo that it could be as early as February. The acceleration of the 3G licensing process could be a shot in the arm for major telecoms companies, especially equipment and handset makers, which have invested heavily in 3G-related research and development. The building of the 3G networks could unleash purchase orders worth tens of billions of dollars but Wang suggested the windfall might be smaller than many expect. "It might not be feasible (for operators) to build national 3G networks immediately," he said. Some analysts expect regulators to allow operators to first build networks in select cities such as Beijing and Shanghai. Wang would not specify how many 3G licences would be handed out. There are four major telecoms operators in the country and analysts believe four licences could result in excessive competition while fewer than three could curb competition. "Government bodies are studying how many licences, three or four, are needed (to be awarded)," said Wang. An industry restructuring has been looming in China's telecom sector, which might see the government consolidate the top four operators into three while awarding 3G licences. [...]

China's R&D spending rises to $136B
2006-12-04 China Daily
China has overtaken Japan to become the second biggest spender on research and development behind the US, a report from the Organisation for Economic Co-operation and Development revealed. The country is expected to invest $136bn in research and development this year after growing by more than 20 per cent in the past year, ahead of the the $130bn from Japan but still well behind the $330bn the US will invest, the OECD said. The report is the latest indication of the dramatic rise in research spending in China. Dirk Pilat, head of the OECD's science and technology division, said the surge in Chinese research was "stunning". He added: "Chinese investment has been growing rapidly for some time, but it is still a surprise that it has overtaken Japan so quickly." Mr Pilat said that the bulk of the spending in China was on development work, to alter products for the fast-growing Chinese market, rather than basic scientific research. The number of patents coming from China that were registered with the patent office in the US, Europe and Japan is still low and a string of recent scandals over academic fraud have also raised questions about how well the money is spent. But Mr Pilat added that some multinationals were beginning to move genuine research to China because of the high numbers of skilled scientists they could recruit in Shanghai or Beijing. "There are some signs that they are starting to do fundamental or breakthrough work in China," he said. As well as increasing spending on university science departments, the government has also been eager to attract multinational companies to open research centres in the country.

Chinese Vice Premier urges textile sector to sharpen competitiveness
2006-12-06 Xinhuanet
Beijing -Chinese Vice Premier Zeng Peiyan has called on the country's textile sector to sharpen its competitive edge. He urged the textile sector to speed up industrial upgrading and restructuring through scientific and technological progresses in a congratulatory message to a conference held here Wednesday to honour model textile workers and manufacturers. Redoubled efforts should be made to build homegrown textile brands, save energy and protect the environment in production, said Zeng. China's textile industry has played a significant role in creating jobs, expanding exports and improving people's living standard, he said. Last year, China's textile exports reached 117.5 billion U.S. dollars, accounting for 24 percent of the world's total textile exports. The industry also faces many challenges. Statistics show only 0.16 to 0.3 percent of the investment of textile and apparel enterprises were spent on research and development, compared with 5 percent on average in developed countries. China processed a third of the world's fibre products last year, with Chinese brands accounting for less than 10 percent of them. Over the next five years, the industry must change its growth mode from pursuit of scale and production capacity to improvement of efficiency, said Zeng.

China's monthly trade surplus slightly drops in November
2006-12-07 People's Daily Online
China's monthly trade surplus stood at 23.37 billion U.S. dollars in November, slightly dropping from October's 23.83 billion U.S. dollars, this year's fifth monthly record high, according to the latest Customs figures on Wednesday. The November figure has brought the aggregate surplus to a new high of 157 billion U.S. dollars in the first 11 months, a year-on-year increase of 66 billion U.S. dollars. Preliminary customs figures show that the country's foreign trade volume reached 1.593 trillion U.S. dollars in the first 11 months, an increase of 311 billion U.S. dollars, or 24.3 percent over the same period last year. Exports reached 875 billion U.S. dollars, up 27.5 percent, which was 2.2 percentage points lower than the rise in the same period last year. Imports amounted to 718 billion U.S. dollars, up 20.5 percent, which was 3.4 percentage points higher. China's exports have continued to surge this year because the world economy has maintained a steady growth and Chinese products have become more competitive on the international market. Sources with the General Administration of Customs attributed the accelerating imports to the country's rapid economic growth. The Chinese government has said it did not pursue a huge trade surplus and taken measures to secure a much healthier and sound foreign trade growth. The country's total trade volume is expected to jump 24 percent to hit 1.758 trillion U.S. dollars this year, with exports reaching 963 billion U.S. dollars, up 27 percent, and imports being 795 billion U.S. dollars, up 20 percent.


North Korea

Nuke talks on agenda of Cebu meeting
2006-12-07 China Daily
Leaders from China, Japan and the Republic of Korea (ROK) are likely to discuss the resumption of Six-Party Talks on the Korean Peninsula nuclear issue at a trilateral meeting in the Philippines next week, the Foreign Ministry said Wednesday. Premier Wen Jiabao, Japanese Prime Minister Shinzo Abe and ROK President Roh Moo-hyun will meet on the sidelines of the East Asia Summit, at which the leaders of the 10 members of the Association of Southeast Asian Nations (ASEAN) will meet leaders of China, Japan, the ROK, India, New Zealand and Australia in Cebu from December 11 to 13, Assistant Foreign Minister Cui Tiankai told a news briefing. The Democratic People's Republic of Korea (DPRK) agreed late last month to return to the six-nation talks, but no date has been set. "China believes the sooner the talks are resumed, the better," Cui said, adding that an early restart of the talks depends on the concerted efforts of all parties. Cui described the stalled talks aimed at denuclearizing the Korean Peninsula "a derailed train" that "must return to the right track and continue to go ahead." No such trilateral meeting took place during the first East Asia Summit last year in Kuala Lumpur, because Beijing and Seoul were in a standoff with Tokyo over then-Japanese Prime Minister Junichiro Koizumi's visits to the Yasukuni Shrine, a symbol of the country's past militarism. But relations between Beijing and Tokyo have taken a turn for the better after Abe took office in September and visited China the next month. China and Japan should seize the opportunity and work jointly to improve relations, Cui said, adding that Beijing was "making active efforts" for a bilateral meeting between Abe and Wen. During the summit between ASEAN and the six other nations on December 13, discussions are set to focus on energy security, officials said. The leaders will discuss calls, led by Manila, to require diesel and petrol used in the region to have a 20 per cent biofuel component by 2015, according to a senior Philippine energy official. "Now, everybody is concerned about energy issues," Cui said. "I'm confident that in energy security, the 16 participating countries have a lot of room for co-operation." He also said China would discuss East Asian co-operation at the ASEAN Plus Three (China, Japan and ROK), and exchange views on how to build up an East Asian community through the "10 plus 3" mechanism. Following the summit, Wen is expected to pay an official visit to the Philippines. A series of agreements on trade, infrastructure and cultural-relic protection will be signed, said Cui.



PM's China visit a success
2006-12-07 Ulaanbaatar
Deputy Foreign Minister O. Tsolmon at the press conference at the Foreign Affairs Ministry on November 28 stated that the Foreign Affairs Ministry of Mongolia consider the official visit by Prime Minister M. Enkhbold to China politically and economically significant. Prime Minister M. Enkhbold paid an official visit to China from November 22-27 at the invitation of Chinese Prime Minister of State Council, Wen Jiabao. During the visit, Prime Minister M. Enkhbold held official talks with his counterpart. During the talks, the prime minister raised bilateral relations issues particularly issues related to the development of trade and economic cooperation. The visit was a continuation of high level talks, which have become customary between the two countries. This was however the first visit of the Prime Minister of Mongolia, to China since 2002. The main event of the visit was official talks with Wen Jiabao, Chinese Prime Minister of the State Council. The Mongolian delegation put forward issues related to deepening trade and economic cooperation, including joint preparation of a mid-term programme for trade and economic relations, support initiatives for cooperation in implementing joint projects in the energy sector, collaboration in the infrastructure sector, the reduction of tariffs or non-tariff obstacles for trade, and cooperation in defense, education and other sectors. They also expressed their position on issues related to Chinese soft loans and grant aid to Mongolia. Wen Jiabao, Chinese Premier of the State Council agreed with his Mongolian counterpart of the importance of strengthening bilateral relations and cooperation. He mentioned that the government of China lends great significance to the relationship with Mongolia. He requested that Mongolia maintain its position on issues related to Taiwan and Dalai Lama and furthermore firmly support China on the issues. According to Deputy Foreign Minister, the visit was successful and the two sides reached in principle some agreement on many issues. The two sides agreed to prepare a mid-term programme of cooperation, which is a document to coordinate trade and economic relations. They also agreed to use Chinese soft loan of $300 million agreed in 2005 for the construction of the Eg river hydropower station. Both sides resolved to construct a sports complex in Ulaanbaatar with still unused grant aid that was given previously by China. China also pledged to render grant aid of an additional 50 million Chinese Yuan. Mongolia and China came to an agreement to carry out long term joint projects, which could give a push to bilateral relation and the economic development of both countries. For example the two governments pledged to support a proposed project initiative to construct a power station, based on coal deposits in Mongolia and export the energy to China. At the official meeting, Prime Minister M. Enkhbold requested the cancellation of a 28.3 million convertibleruble debt of Mongolia to China and a further debt of 5.6 million Swiss franks. Wen Jiaboa pledged to look into the issue carefully. M. Enkhbold also met the chairman of the Standing Committee of the Chinese National People's Congress Wu Bangguo and the chairman of the Chinese People's Political Consultative Conference Jia Qinlin. After the meeting, Prime Minister M. Enkhbold received Beijing City Mayor Wang Qishan. He also attended a forum of Mongolian-Chinese businessmen. At the meeting, attended by 200 businessmen, companies of the two countries signed cooperation agreements worth $100 million. Morit impex Company concluded a contract with Chinese Kamac International Company on constructing a water resource complex in Tuul-Songino region while the Sergen Mandalt group agreed to set up a joint venture to produce polymer pipe. Taij trade Company reached an agreement to construct a meat plant and Otgontenger University agreed to cooperate in the construction sector. Prime Minister M. Enkhbold visited Urumchi city of Xinjiang Uyghur Autonomous Region and Xian city of Shaanxi province. During the meeting with the authorities of Xinjiang region, the Prime Minister exchanged opinions on developing direct ties and cooperation between XUAR and neighbouring provinces in Mongolia such as Khovd Aimag, in energy, infrastructure, and educational sectors. They talked about cooperation in improving the infrastructure at border points, and improving the service for Mongolian citizens at border points including the cessation of illegal taxes. The Prime Minister said that Mongolia is interested in opening a Mongolian Consulate in Urumchi in order to protect its citizen's rights. During the visit, Prime Minister M. Enkhbold visited several economic entities including Huawei in Beijing and the New Energy Company in Xinjiang. Foreign Affairs Ministry, Mongolia believes that the visit could confirm a friendly partnership, fulfill the outcomes of talks held between the heads of state of the two countries in 2005 and give a push to cooperation and relations between local provinces. During the visit, the Mongolian and Chinese delegations signed several documents including an intergovernmental agreement on economic and technical cooperation to render Mongolia grant aid worth of 50 million Yuan; a memorandum of understanding between the Finance Ministry of Mongolia and the Export & Import Bank of China on the construction of a hydro-electric power station on the Eg river with previously promised soft loan of US$300 million; a document on the construction of sport complex with Chinese grant aid; a document on a gift of 2,000 tons of wheat from China to Mongolia; a document on setting up research group for the construction of a research station on steppe ecosystems with Chinese grant aid; a document on setting up a research group on the issue of establishing a quality control laboratory in Mongolia with Chinese grant aid; cooperation between the foreign ministries of both countries in 2007 and a cooperation agreement on creating a geological map of the border region of the two countries with scale of 1:1 000 000 between the Mineral Resource and Petroleum Authority, Mongolia and the Geological Survey Department of China.

Swiss Woman Dies in Fire in Mongolia
2006-12-06 Ulaanbaatar
Mongol Messenger reports that a Swiss woman was killed in a fire on the morning of December 4 in the building of the German Missionary Aid Organization 'Help International', located in the ger area of Bayanzurkh District. The deceased woman lived with over 10 homeless and vulnerable children in a 400sq.m two-storey wooden house. At about 7.10am on Monday morning the fire started on the west side of the building. It took fire fighters three hours to extinguish the fire. Two guards were still able to help all the children leave the house, but they were unable to locate and rescue the Swiss woman. The 28-year old woman called Isabel came to Mongolia 8 years ago and worked in the humanitarian sphere. According to the autopsy, she died of smoke inhalation. Experts are investigating the cause of the fire and her death.

No Agreement on New Railways Chairman
2006-12-07 UB Post
Mongolia Rejects Russian Names THE meeting of the General Committee of the Mongolian-Russian Ulaanbaatar Railway Joint Venture on December 1 failed to decide on a new chairman of the company, a post lying vacant since the death of Vasilie V. Magdei in October. The two sides could not agree on whether a Russian or a Mongolian should get the top job. The Russian side claimed that since Magdei had died before finishing his term, another Russian should succeed him. They also put forward the names of two individuals, but the Mongolian side rejected both as being without the requisite qualification and experience. The Mongolian Government did not support any specific candidate but G. Shiilegdamba, Deputy Minister of Road, Transportation and Tourism, told the daily Onoodor that there are .man qualified Mongolians in the railway sector.. The meeting discussed the recent accident between Khangai and Chuluut junctions that killed three railway workers. The Russians blamed the deaths on gross negligence and irresponsibility, and said. There was no justification at all for that crash. They called for punishment for those responsible and, accordingly, three deputy chairmen O. Suren, in charge of control and inspection, D. Batsaikhan, in charge of transportation, and L. Purevbaatar, in charge of mobile components were stripped of their designations and made to work in an acting capacity. According to the agreement of 1949 under which the railway company is run, if the head is Russian, the deputy head must be Mongolian, and vice versa. Magdei was appointed in December 2004 to a three-year term. The Mongolian side wants the 1949 agreement to be revised, but the Russians do not agree. The General Committee decided to hold a meeting again in January 2007. At least until then, this major player in Mongolia's transportation sector will have to do without a proper head.


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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