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
  7.5-11.5.2007, No. 164  
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Foreign Policy

Chinese president congratulates French president-elect Sarkozy
2007-05-07 Xinhuanet
Chinese President Hu Jintao on Monday extended his congratulations to Nicolas Sarkozy on his victory in the French presidential election on Sunday. In a congratulatory message, President Hu said that China and France have witnessed in-depth development in their comprehensive strategic partnership in recent years. And the two sides have made substantial progress in cooperation in areas of politics, economy and trade, science and technology, education and judiciary, and have conducted close coordination on major issues of respective concerns, Hu added. […]

Japan 'should respect' neighbors' sentiments
2007-05-09 China Daily Online
China yesterday urged Japan to strictly abide by the consensus reached between the two countries on overcoming political barriers in bilateral relations. Responding to a question at a press briefing on Japanese Prime Minister Shinto Abe's offering to the Yasukuni Shrine, Foreign Ministry spokeswoman Jiang Yu said Japan should respect its neighbors' sentiments. Abe didn't visit the shrine, which honors 14 Class-A World War II criminals and other Japanese, in person but sent a masakaki plant for the annual spring festival in late April under the name of prime minister, Kyodo News Agency said. This is his first direct show of respect at Yasukuni since taking office last year. Abe has adopted a strategy of staying ambiguous on paying respects to the Japan's war dead since September, when he took over office from Junichiro Koizumi whose repeated visits to the shrine soured China-Japan ties and angered the Republic of Korea (ROK). The ROK's Foreign Ministry called the move "very regrettable" and "running counter to establishing a correct perception of history, which serves as the basis of regional peace and stability". "The Yasukuni Shrine issue is a grave problem affecting national sentiment and the political foundation of bilateral relations," Jin Xide, a researcher with the Institute of Japan Studies, under the Chinese Academy of Social Sciences, said. Japanese media reports said Abe paid 50,000 yen ($420) for the plant, considered divine in Shintoreligion, out of his own pocket. Asked by reporters about angering countries that suffered under Japanese invasion, Abe declined to either confirm or deny he making the offering. "As I've said before, I want to continue to have the feeling of paying respect to and praying for the souls of those who died fighting for their country," he said.

Chinese, U.S. presidents talk on phone bilateral relations, international issues
2007-05-10 People's Daily Online
Chinese President Hu Jintao and his U.S. counterpart George W. Bush Thursday exchanged views in a telephone conversation on bilateral relations and the upcoming second round of strategic economic dialogue between the two countries. On bilateral relations, both Hu and Bush considered that China-U.S. relations have been kept in a momentum of favorable development and that the two sides should beef up dialogue and cooperation, to promote healthy and stable progress of the constructive and cooperative relations between the two countries. President Hu appreciated the U.S. government's active attitude toward the development of China-U.S. economic and trade cooperation. He stressed that the successful holding of the first round of China-U.S. strategic economic dialogue, which was launched in Beijing last September, shows that under the backdrop of rapid development of economic globalization, China and the U.S. can enhance mutual understanding and trust through frank and sincere dialogue, properly settle problems arising from bilateral economic and trade cooperation, promote steady development of bilateral economic and trade relations, and play active roles in global economic development and prosperity. Talking about the upcoming second round of strategic economic dialogue between the two countries, Hu said he believes that with concerted efforts by both sides, positive achievements will be scored in this round of dialogue, which will contribute to giving fresh impetus to China-U.S. economic and trade cooperation. For his part, Bush said that U.S.-China strategic economic dialogue is of great significance, which indicates that the two countries are willing to settle the relevant problems through high-level dialogue. The U.S. side is grateful that the Chinese government has attached great importance to this round of U.S.-China strategic economic dialogue and hopes that great achievements will be made in this round of dialogue, Bush said. The two presidents also exchanged views on climate changes and the nuclear issue on the Korean peninsula.

China-ASEAN military ties no threat
2007-05-11 China Daily Online
PATTAYA, Thailand - China's bid for closer military ties with Southeast Asia is a "positive overture" and does not pose a threat to US interests in the region, a top US military commander said on Thursday. "Our reaction to it is, we are going to reach out to China and engage with them. If they want to exercise together, I'm prepared to exercise right now," said Lieutenant-General John Goodman, commander of US Marine Corps Forces in the Pacific. […] Nearly 5,000 military personnel, including 1,900 from the United States and smaller contingents from Singapore, Japan and Indonesia, are taking part in the largest multilateral exercise for US forces in the region. However, Washington's allies fear it has been distracted by Iraq, Iran, the war on terror and North Korea, allowing China to raise its profile in the region quietly and be more assertive. […] "Sources told Jane's that the Chinese proposal, which is still in an early stage, involves a joint naval drill," wrote Robert Karniol, Jane's Asia-Pacific editor. Discussions began in early 2007 with an aim to hold the exercise in mid-2008, the report said. "I think it's a positive overture. It helps move toward avoiding miscalculation," Goodman said, adding he would like to see US forces take part in a China-ASEAN exercise. […]Commander-in-Chief of the US Pacific Command Timothy Keating arrived in Beijing yesterday on his first China visit since taking office. […]

China, EU vow to seek early completion of PCA
2007-05-11 People's Daily Online
Senior officials from China and the European Commission pledged here on Thursday they will try to complete their talks on the Partnership and Cooperation Agreement (PCA) as soon as possible. On Thursday, a Chinese delegation headed by Kong Quan, China's assistant foreign minister, held the first steering meeting on PCA talks together with their European colleague headed by EC external relations Director General Eneko Landaburu. According to Chinese diplomats, the two sides have exchanged views on the guidance, principles, framework, structure of the PCA talks, and they have reached consensus. […] In September 2006, China and the EU agreed to launch the talks on the PCA. Earlier this year, EU external relations commissioner Benita Ferrero-Waldner visited China and formally launched the PCA talks.

Chinese Premier meets Greek FM
2007-05-11 People's Daily Online
Chinese Premier Wen Jiabao on Thursday met with the visiting Greek Foreign Minister Dora Bakoyannis. State Councilor Chen Zhili and Foreign Minister Yang Jiechi also met with Bakoyannis. Bakoyannis's visit coincides with the 35th anniversary of the establishment of China-Greece diplomatic ties. […] With about 30 entrepreneurs among her entourage, Bakoyannis chose China's economic hub Shanghai as her first leg of tour before visiting Beijing. […]

China urges keeping alert against splittism of Dalai Lama
2007-05-11 Xinhua
China on Thursday asked relevant countries to be on high alert against attempts of the Dalai Lama clique to undermine their relations with China and split the country. "We hope relevant countries will keep on high alert against remarks and deeds of the Dalai Lama clique aiming to undermine China's relations with them and split the motherland," Chinese Foreign Ministry spokeswoman Jiang Yu told a regular news conference. Jiang made the remarks when commenting on the Dalai Lama's cancellation of a visit to Brussels a day before. The Dalai Lama represents a political force of "Tibet Independence", which is firmly opposed to by the central government, Jiang said. "The Dalai Lama's words and actions in the past decades have fully proved that he is by no means a purely religious figure, but a political exile who has conducted motherland-splitting activities under the camouflage of religion for years," Jiang said. No matter what activities he attends in whatever names and in whatever places, it's neither a purely religious issue nor an individual's act, Jiang said. Jiang said China and Belgium have maintained good relations on various levels in recent years. China appreciates Belgium's long-term adherence to the one-China policy

Envoy to Africa will focus on Darfur - US lawmakers urge intervention in Sudan
2007-05-11 SCMP
Beijing has appointed a seasoned diplomat as its special African envoy, with a brief to focus on Darfur, the government said yesterday amid growing criticism of its role in Sudan. "The Chinese government has decided to name ambassador Liu Guijin as a special representative for African affairs," said Foreign Ministry spokeswoman Jiang Yu . "The Darfur issue raises a lot of concerns in the international community. The first task of the special representative will focus on the Darfur issue," she said. The announcement came after more than 100 US lawmakers signed a letter calling on President Hu Jintao to take immediate action to stop bloodshed in Darfur. "Unless China does its part to ensure that the government of Sudan accepts the best and most reasonable path to peace, history will judge your government as having bankrolled a genocide," the letter read. Ms Jiang did not respond directly to questions about the letter, but said Beijing would send a team of 275 engineers to join a UN-led peacekeeping force in Darfur. "On the Darfur issue, China and the US have the same goal, to resolve the issue by political means, so we are ready to make joint efforts with the international community." She described Mr Liu, former ambassador to South Africa and Zimbabwe, as "an experienced diplomat who knows African affairs well". The Darfur conflict has caused 200,000 deaths and led to 2 million people being displaced, according to the UN. Sudan contests the figures, saying only 9,000 have died. Beijing has been criticised for not using its clout as a member of the UN Security Council and a top investor in Sudan to force Khartoum to end the violence in Darfur. Beijing is also the leading customer for Sudanese oil and a key supplier of military equipment to the country. It is in the process of stepping up its relations in Africa as part of efforts to secure energy and other resources. On Tuesday, Beijing dismissed a claim by rights group Amnesty International that it was supplying arms to Sudan and to rebel forces in Darfur in violation of a UN embargo. Citing 2005 data, the group said Sudan imported millions of dollars of mainland military equipment. It said AviChina Industry and Technology "recently delivered six K-8S military training/attack aircraft to the Sudanese Air Force, and a further six will follow soon". "[We] are concerned that the Sudan Air Force has transferred these jet bombers to Darfur without authority from the UN Sanctions Committee," the report said.


Domestic Policy

Atomic energy has much room to play
2007-05-05 China Daily Online
The successful commissioning nearly 16 years ago of a 300 MW nuclear reactor in Qinshan, east China's Zhejiang Province marked the birth of the country's nuclear power industry. Development of the technology began actually earlier, dating back to the late 1970s. In the period between 1995 and 2005, China's nuclear power generation outpaced all other forms of energy in growth, by an annual average of 15.3 percent against the average 9.5 percent for total energy. In spite of that, the existing nine reactors in commercial operation, totaling 6,990 MW in capacity, account for only 1.6 percent of China's total power generating capacity. Nuclear power production stood at 54.3 billion KWH last year, 1.92 percent of the total electricity output. At an international energy forum held in May 2006 in Beijing, Zhang Guobao, a high-ranking energy official, said China would rely on domestic supply to meet its steadily growing energy demand. Commenting on the small share of nuclear power, he said, "there's much room for development." The official document for China's 11th Five-Year Development Program (2006-2010) uses the word "actively" to describe expected development of nuclear power in the period. […] A number of China's nuclear projects adopted foreign technologies. The Dayawan nuclear power plant in south China's Guangdong Province has two 1,000 MW pressurized water reactors introduced from France. Qinshan phase-3 project imported two Canadian 700 MW heavy water reactors. Tianwan in east China's Jiangsu Province is constructing two 1,060 MW AES-91 pressurized water reactors supplied by Russia. In December 2006 China announced the purchase of four 3G AP1000 reactors from US-based Westinghouse Electric Company. Work was kicked off in late 2006 for the construction of a 200 MW high temperature gas-cooled reactor in Shidaowan, Shandong.

Beijing sees political and commercial pay-offs with global navigation system
2007-05-07 SCMP
In the darkest hour before sunrise on April 14, a Long March rocket lifted off from the Xichang space centre in Sichuan , carrying Beijing's ambitions for its rapidly developing space-based navigation system. On board was the first satellite in its ambitious Compass global positioning system, designed to beam times, positions and navigation signals from an orbit altitude of 21,000km. When it is complete, before 2017, the 35-satellite constellation will offer military and civilian users real-time services that, at the moment, are dominated by the Global Positioning System (GPS) controlled by the US Department of Defence. Compass will become the world's fourth global navigation satellite system after GPS, Russia's Glonass and the European Union's Galileo operations. Apart from delivering political, commercial and technological payoffs for the mainland, it is believed the project could be an answer to the kinds of problems that occurred last year when the United States shut down GPS signals during a mainland military exercise, paralysing many guided weapons. The mainland has been developing satellite positioning expertise since 2000 from a trial network that consists of four geostationary orbit satellites that hover above the nation and its neighbouring countries. It also has been taking part in the EU's Galileo project since 2004, contributing not only €200 million (HK$2.12 billion) but also research and development of some key technology. For Beijing, Galileo offers the chance to gain valuable experience and expertise in space technology as it tries to pursue its independent satellite programme. China Research Institute of Radiowave Propagation researcher Cao Chong said the Europeans were outraged in late 2006 when they heard the mainland planned to send up 35 global positioning satellites of its own. The Europeans offered to share Galileo's military-grade guiding and positioning services if Beijing cancelled the launch, "but China refused". "Today big nations in the world are eager to establish their own navigation guiding systems," he said. "And the game's rules change each time a new player comes in." […] "We are living in an age where more than 60 per cent of information is about time and location. Having your own timing and positioning system is not only a matter of independence; it is also a matter of influence and dominance." He estimates there are 49 functioning global navigation satellites aloft today - 30 GPS, 17 Glonass, one Galileo and one Compass. Within a decade, there will be more than 100 such satellites circling above. […] Professor Cao said it was unlikely that a fifth system would join in because the frequency resources allocated by the International Telecommunication Union for satellite positioning communications already had been taken up by the four players. "It is part of the reason why China has worked with haste," he said. "The world will live with the four systems for the foreseeable future." […] Professor Chen, the Peking University Institute of Quantum Electrics professor in charge of the Key Laboratory of Quantum Information and Measurement, said the atomic clock was the heart of a navigation satellite. […] He said his team received 25 million yuan in 2005 to develop atomic clocks for the Compass satellites. The clocks used in Compass are capable of guiding a missile to hit an office desk anywhere in the world and, with more funding coming, a project is under way to increase that precision by more than 1,000 times. […] Some argue the commercial benefits will justify the cost of developing an indigenous system because the mainland has the largest potential satellite guiding and timing market in the world. But Zhang Feizhou says Compass may not be able to compete with GPS in the short term. The deputy director of the Laboratory of Geo-Spatial Information System at Peking University estimates 99 per cent of the forecast US$22 billion global civilian market this year will be dominated by GPS, and the situation will not change in the next five years. […] But it will be provide big leverage in trade negotiations. "Each time China acquires a core technology, overseas sellers in those fields immediately lower their voices, extend their supply lists and cut their prices."

Chaos takes lustre off 'golden week'
2007-05-08 SCMP
Millions of returning holiday-makers jammed mainland train stations and airports on the final day of the Labour Day break yesterday criticism again arose of a government policy that puts more than 1.3 billion people on holiday for a week at exactly the same time. Originally conceived in the 1990s as a way to boost economic growth, some argue that crowding, exorbitant prices in tourist areas and traffic accidents have taken the lustre off the "golden week". Passenger volume for rail travel has shattered records this year. On May 1, 5.2 million people took the train, setting a record for a single day during the holiday, state media said yesterday. On Sunday, 4.9 million people travelled by rail, up 17 per cent from the same day of the holiday last year. The total for yesterday was expected to exceed that level. […]

Wen calls for more efforts to save energy, cut pollution
2007-05-08 People's Daily Online
Chinese Premier Wen Jiabao has urged more curbs on industries that consume more energy and release more pollutants in a bid to ensure a healthy and fast economic growth. Wen said that the economy could hardly be sustainable if China failed to adjust the economic structure, transform the (extensive)growth mode, and reduce energy consumption. "We are left with no choice but to develop in an economical, clean and safe way," the premier said in a speech addressed to the national working teleconference on energy saving and pollutants reduction late April. […] Wen noted the nation will tighten land use and credit supply and set stricter market access and environmental standards for new projects amid efforts to rein in the rapid expansion of energy-gorging industries including power, steel, oil refinery, chemicals, construction materials, and metals. The premier said the six sectors that consume 70 percent of energy for industry and release the same percentage of sulfur dioxide grew 20.6 percent in the first quarter, 6.6 percentage points higher than the same period last year. "We will continue to curb the energy-guzzlers by further adjusting exports rebates, levying more exports tariff, and reducing exports quotas," he said. Wen said China will cancel preferential policies on the industries like lower tax, electricity and land costs. "Outmoded production facilities must be eliminated at a faster pace and how this policy is implemented by local governments and companies will be open to the public and subject to social supervision," he said. Wen added that China will push forward reforms in the pricing of natural gas, water and other resources, raise the tax levied on pollutant discharge, establish a "polluter pays" system and severely punish those who violate the environmental protection laws. "The ten nationwide energy saving programs, such as developing oil alternatives, upgrading coal-fired boilers and saving energy indoors, will save China 240 million tons of coal equivalent during the 2006-10 period, including 50 million tons this year," he said. He said the government will also introduce more incentives to encourage companies to use more energy efficient production facilities and techniques. "This year is crucial for China in its efforts to meet the energy saving and pollutants emission reduction target set for the2006-10 period," said Wen. The Chinese government has set a goal of reducing energy consumption per unit of gross domestic product by 20 percent by 2010, while pollutant discharge should drop by 10 percent. Energy consumption, however, fell only 1.23 percent last year, well short of the annual goal of four percent. Wen also said to meet the target is an urgent demand of global climate change and the coal-dependant China should bear the responsibility to reduce pollutant emission

The balance of power to shift with Huang's fate
2007-05-10 SCMP
Ailing Politburo Standing Committee member Huang Ju, arguably one of the mainland's most mysterious politicians, is likely to trigger an overdue shift in the balance of power before passing quietly into history. Speculation about the 69-year-old core member of the "Shanghai gang" has been gathering pace since September, when former Shanghai party chief Chen Liangyu was sacked because of his involvement in a massive pension funds scandal. Mr Huang, who spent almost all of his political career in Shanghai before being promoted to Beijing in 2002, was said to have been embroiled in the Chen case and was singled out as a likely next victim in President Hu Jintao's anti-corruption drive. His declining health, which has confined him to hospital and kept him out of public sight for most of the past 12 months, certainly helped stoke the rumour mill inside and outside Beijing. […]Another report, hinting at the unlikelihood of Mr Huang's recovery, said the party leadership had decided that Vice-Premier Wu Yi should now act as executive vice-premier, a post previously held by Mr Huang. This meant Ms Wu would preside over the State Council when Premier Wen Jiabao was away on foreign visits. Mr Wen has reportedly taken over Mr Huang's portfolio in the Politburo Standing Committee responsible for the financial sector. The Communist Party had been silent about Mr Huang's illness until the National People's Congress in March, when a frail and haggard Mr Huang managed to make only the opening ceremony and the Shanghai delegates' session. Nevertheless, the official media continue to publish his speeches and instructions regularly, in an attempt to dispel rumours that his removal from office was imminent. Analysts say the departure of Mr Huang from the top leadership, despite its limited political impact due to his dwindling political influence, will nevertheless be a significant political boost for Mr Hu, who is keen to appoint a close ally to fill Mr Huang's seat on the Politburo Standing Committee at this autumn's party congress. "It's going to reduce a certain amount of messy political bargaining at the top level," said Beijing-based political scientist Hu Xingdou . "It would spare President Hu Jintao a bit of political risk." Mr Huang's departure also would help head off any direct conflict between Mr Hu's camp and former party chief Jiang Zemin's "Shanghai Gang", Professor Hu said, because it would remove one "Shanghai Gang" vote from the decision-making process. As one of the most partisan of politicians, Mr Huang is set to go down in history as a controversial figure and one affected by the rise and fall of the "Shanghai Gang", City University of Hong Kong political science professor Joseph Cheng Yu-shek said. "He was one of those provincial leaders who was engaging in reform experiments and made his contribution to Shanghai's economic take-off," said Professor Cheng. "But his legacy is going to be tainted by his association with corruption scandals."

Hu's youth league ally heads overseas office
2007-05-10 SCMP
The State Council has named Li Haifeng, an official with a Communist Youth League background, as director of the Overseas Chinese Affairs Office, state media said yesterday. Ms Li, 58, one of the office's deputies over the past 13 years, has replaced Chen Yujie as its director. Ms Chen, 66, stepped down this year because she has passed 65, the retirement age for ministers on the mainland. The report failed to say when Ms Li was promoted, but an article posted on the office's website noted that she had met a visiting mission of the US Chinese Chamber of Commerce in her new capacity on April 26. Ms Li became President Hu Jintao's colleague when he was named a party secretary of the Communist Youth League's central committee in 1982. Between 1978 and 1986, Ms Li served as a youth league party secretary and vice-chairwoman of the All-China Youth Federation. In 1986, when she was only 37, Ms Li was named a member of the Hebei party standing committee. She was later promoted to party secretary of Shijiazhuang and deputy governor of the province before joining the office in 1994. "There is great potential in overseas affairs because of the long history and the huge room [for development]," Ms Li was quoted by the China News Service as telling colleagues in her inauguration ceremony. The office co-ordinates central government relations with overseas Chinese groups. Ms Li has a similar political background to Mr Hu. Both were mentored by former liberal-minded party chief Hu Yaobang.

Shame campaign targets officials
2007-05-10 SCMP
Beijing will start a month-long campaign from today to shame publicly officials who neglect their duties and abuse their powers, Xinhua said. The campaign would involve co-operation with the media, it said. "We will use the campaign as an opportunity to strengthen ties with the media to fight negligence and power abuse by officials," Supreme People's Procuratorate spokesman Tong Jianming was quoted as saying.

China issues draft rules for pig slaughterhouses
2007-05-10 China Daily Online
China issued draft rules for pig slaughterhouses to protect people's health and pork products' quality, the Ministry of Commerce said on its Web site on Wednesday. The rules come the same day China pledged to clean up its food industry, after worldwide concerns about possible contamination of food exports following the death of some animals in the United States from pet food. Slaughterhouses must be licensed and approved by local governments and environmental bureaux, and must be located away from drinking water supplies, residential districts and public areas. […]Concerns have been growing about China's food industry, where the temptation to cut corners by unregulated companies operating on thin margins has outpaced the ability of regulatory agencies to enforce standards. In the latest case, 16 pet deaths in the United States have been linked to two Chinese firms' exports of wheat gluten and rice protein that contained melamine scrap, a chemical product that artificially raises the protein level of feed.

Vaccine found for epidemic in pigs
2007-05-11 SCMP
The Ministry of Agriculture has unveiled vaccines that it believes could put an end to a viral epidemic killing pigs in Guangdong, Xinhua reported. Health authorities in the province will start giving the new vaccine to all pigs and could complete the programme before summer - when high temperatures and humidity will help spread the disease, the report said. The announcement came after Guangdong reported a mysterious pig epidemic that broke out in Yunfu city at the end of last month. Epidemiologists later identified the condition as "blue ear disease", or porcine reproductive and respiratory syndrome. Although it is not a threat to humans, health authorities have been eager to bring it under control for fear the virus could mutate and become more difficult to contain. The new vaccine was developed by the Chinese Centre of Animal Disease Control and Prevention and the China Institute of Veterinary Drug Control. "We will speed up the production and distribution of vaccines and tighten quality supervision," Xinhua quoted the ministry as saying. The ministry has asked all veterinary departments to be on the alert for the disease. "Once the virus mutates, it will become more pathogenic and more difficult to treat," it warned. Meanwhile, Xinhua said Beijing had sent reports on the outbreak to the World Organisation for Animal Health and the UN Food and Agriculture Organisation. Some critics have accused Beijing of not keeping the international community informed about such outbreaks.

India seeks final settlement
2007-05-11 SCMP
India said it was seeking a "final settlement" of a dragging border dispute with Beijing that sparked a brief but bloody war between the two neighbours 45 years ago. "India and China are exploring the framework of a final package settlement covering all sectors of the India-China boundary," External Affairs Minister Pranab Mukherjee told Parliament in New Delhi.



All smiles as candidates put aside their rivalries - Taiwan's DPP re-establishes unity after bitter fight for presidential nomination
2007-05-08 SCMP
The three defeated presidential hopefuls in Taiwan's ruling Democratic Progressive Party yesterday met former premier Frank Hsieh Chang-ting in a show of support after a bitter battle dominated by backstabbing and mudslinging. "After the primary, the entire nation is watching how we can patch up," said Mr Hsieh, who beat his three opponents - Premier Su Tseng-chang, Vice-President Annette Lu Hsiu-lien and DPP chairman Yu Shyi-kun - in Sunday's poll. He made the comment during a news conference at the party's Taipei headquarters yesterday, calling for unity in the race for the presidency in March against the nominee of the main opposition Kuomintang, Ma Ying-jeou. The first stage of the primary, won by Mr Hsieh, saw the four DPP contenders mercilessly attack one another, with media describing the bloodletting as unprecedented in the party's 21-year history. Even party officials had expressed doubts about how the contenders would be able to mend fences and heal the wounds. […]

Expert backs Taiwan's missile deployment plan
2007-05-10 SCMP
Taiwan's planned deployment of missiles that could strike the mainland will act as a good deterrent and boost the island's negotiating position, a Taiwanese military expert says. Last month, Taiwan's defence ministry said for the first time it would retaliate against any mainland attack with surface-to-surface missiles, and demonstrated their use through a computer simulation, sparking a rebuke from the United States, Taiwan's key ally. While unlikely to pose a serious threat to the mainland, the presence of the missiles and their potential to cause damage would be factored into any mainland decision to attack the island, Lin Chong-pin, a top expert on cross-strait security affairs, said. "By having these missiles, Taipei will have more confidence to engage and interact with Beijing politically, by not fearing that they will be dictated to by Beijing at the negotiating table," Mr Lin said. "I would never say the missiles we have pose a serious threat to them. It only provides some kind of inconvenience, because quantitatively, there's no comparison." Mr Lin, who was deputy defence minister from February 2003 to May 2004, now serves as president of the Taipei-based Foundation on International and Cross-strait Studies. Taipei says Beijing has 988 short-range missiles aimed at the island. Taiwan has batteries of US-supplied Patriot missiles for defence, but has not yet deployed surface-to-surface missiles capable of striking the mainland. The top US representative in Taipei, Stephen Young, said Washington opposed the development of offensive missiles, and suggested the island focus on deploying "defensive" weapons.


Beijing Olympics 2008

Race is on to clean waterways by Olympic Games deadline
2007-05-11 SCMP
Qing River Management Department director Fu Pingyin says he's getting more tired by the day as next year's Beijing Olympics draw closer. Standing beside a riverbank lined with trees and flowers, Mr Fu says his orders are to make sure that the 23.7km of the waterway under his jurisdiction in northern Beijing, near the city's Olympic Park, is "crystal clear" when the Games open in August 2008. His job is part of a campaign to ensure the city has water that is safe to drink, pleasant to look at and deep enough for canoeing. It's a campaign on an unprecedented scale, supported by a generous budget. For most mainland cities, industrial pollution, inadequate water processing facilities and insufficient cleanup funds are common concerns. But this is not the case in Beijing today. According to Zhang Yanyou , a member of the Beijing Development and Reform Commission, industrial plants tainting the municipality's rivers have been disappearing with a speed no other mainland city can match. […]

Beijing invites Bush to Olympic Games opening
2007-05-11 SCMP
US President George W. Bush may visit the mainland next summer and attend the opening of the Beijing Olympic Games at the invitation of President Hu Jintao, according to diplomatic sources. […] Although the visit may be ceremonial, the central government hopes a summit between the two leaders could be arranged if Mr Bush accepts the invitation. "Beijing has sought a state visit by the leader of the world's only superpower to coincide with the Games, which would give a great boost to the staging of the most important global event ever hosted by China," said a diplomat who requested anonymity. Sources said that although the US side had not given an official response to the invitation, Mr Bush had said he was glad to receive the invitation and would consider it. Mr Bush also expressed his gratitude to Mr Hu through diplomatic channels. […]



GDP grows annual average of 9.67% from 1978 to 2006
2007-05-07 China Daily Online
China's gross domestic product (GDP) grew an annual average of 9.67 percent from 1978 to 2006, said Ma Kai, the minister of the National Development and Reform Commission."The annual growth rate was much higher than that of the world economy, which was about 3.3 percent on average in the same period", said Ma. "During the period, China has beefed up its comprehensive national strength and elevated its international status", said Ma, adding that "the country has become the world's fourth largest economy and third largest trader". "The per capita disposable income of urban residents rose from 343 yuan (44 U.S. dollars) in 1978 to 11,759 yuan in 2006, while the per capita net income of farmers grew from 134 yuan to 3,587 yuan", Ma said. "Meanwhile, China's budgetary revenues rose from 113.23 billion yuan to 3.93 trillion yuan". "As it opens wider to the outside world, China has received more foreign direct investment than any other developing country for 14 straight years and by the end of 2006 there were 590,000 foreign-invested firms in China", said Ma. "But we must be aware that as a large developing country, China still faces a number of difficulties and challenges in economic development, including the increasing environmental restraints, the arduous industrial restructuring and the growing gap between urban and rural areas", said Ma.

China's trade surplus large but slowing in '07
2007-05-08 People's Daily Online
China's trade surplus will hit $254 billion in 2007, a 42.8 percent year-on-year increase, but the rate of growth will begin to slow, according to a recent report. The gap between imports and exports should narrow this year, according to a study by the Center for Forecasting Science of the Chinese Academy of Sciences. Export volume is expected to reach $1.2 trillion, up 23.7 percent from last year, while imports rise to $945.6 billion, an increase of 19.5 percent. The research center made the forecast based on analysis of world and domestic economies, as well as custom data released at the end of March. The trade surplus between China and the United States will surge 23.5 percent, according to the report. Total exports to the US will reach $263.6 billion, a 29.8 percent increase. China will import $71 billion from the US, up 18.9 percent from 2006. The trade surplus between China and EU will increase nearly 45 percent to a total volume of $128.7 billion. Exports to the European market will increase 33.1 percent to $239.3 billion, while imports to China rise 22 percent to $110.6 billion. The trade surplus in the hi-tech sector is expected to double in 2007 to $66.9 billion, the report said. Hi-tech exports will increase 29.2 percent to $363.6 billion, and China will import $296.7 billion of hi-tech products, up 20 percent. The report estimates China will export $736.7 billion worth of machinery and electronic products, up 34.1 percent, and import $510 billion, an increase of 19.2 percent. Clothing exports will reach $107.9 billion, up 15.8 percent, while the total textile export volume will increase 13.3 percent to $55.3 billion. In the energy sector, the rate of increase of crude and refined oil imports is expected to slow, while imports of iron ore will increase at a faster pace. China is expected to import $69.6 billion of crude oil in 2007, up 4.8 percent, while imports of refined oil reach $15.8 billion, up 1.6 percent. Iron ore imports will reach $30.7 billion, up 47 percent.

China's GDP to grow 10.8% in Q2 - agency
2007-05-08 China Daily Online
China's gross domestic product is forecast to rise 10.8 percent in the second quarter of 2007, while the consumer price index is expected to gain 3 percent over the period, the State Information Center has said. This would bring the GDP growth rate for the first half of this year to 11 percent, the center said in a report published by the China Securities Journal. The CPI growth rate for the first half would be 2.9 percent, the report said. The centre is a research body under the National Development and Reform Commission, China's top economic planning agency.

Yuan gains as Beijing acts to soak up liquidity
2007-05-09 SCMP
The yuan closed above 7.70 to the US dollar yesterday for the first time since the changes to the exchange rate controls in July 2005 on speculation that Beijing will allow currency appreciation to cool the economy. The yuan gained 0.1 per cent to 7.6960 against the US dollar at 5.30pm, according to the China Foreign Exchange Trade System. The central bank has allowed the currency to rise by 7.5 per cent since the exchange rate moves in 2005. Mainland financial markets reopened yesterday after a week-long holiday. The currency rose 0.34 per cent last month after a 0.13 per cent gain in March. Next week, the People's Bank of China will raise the amount of foreign currencies that lenders must keep as reserves and has instructed them to strengthen management of such holdings, according to a notice issued by the central bank. The mainland's record trade surplus has flooded the economy with cash, fuelling excessive lending by banks, and central bank governor Zhou Xiaochuan said on Sunday there was room to raise commercial lenders' reserve requirements further to curb investment. Lenders will have to keep 5 per cent of their foreign currency deposits as reserves, up from 4 per cent, according to a central bank circular. The increase, to take effect on Tuesday, is expected to remove about US$1.7 billion from the economy. "The central bank probably wants to curb excess liquidity and indirectly ease the pressure on the yuan to rise," said Guo Zhaoyang, a foreign-exchange analyst at China Everbright Bank in Guangzhou. "Too many people may have converted their foreign currencies blindly into the yuan." The mainland's currency reserves surged by a record US$136 billion in the first quarter to US$1.2 trillion. Lenders would also have to put aside 11 per cent of deposits from Tuesday, up from 10.5 per cent, the People's Bank of China said on April 29. It will be the seventh increase in 11 months to drain excess cash from the banking system.

China's competitiveness keeps rising, says IMD report
2007-05-10 People's Daily Online
China's overall competitiveness keeps rising, with its world ranking jumpimg from 18th in 2006 to 15th this year, IMD, one of the world's top business schools, said in a latest report on Thursday. One of the major factors behind China's competitiveness rising is its strong economic performance, which is ranked only second to the United States among a total of 55 economies, the Lausanne- based business school said in the 2007 edition of its World Competitiveness Yearbook. China's government efficiency and infrastructure score also shows dramatic increase in IMD's annual competitiveness report. IMD experts believe that China's overall competitiveness ranking could keeping on going up in future, but China needs to tackle a series domestic problems, including environment protection, imbalance of development, etc., if it wants to enter the top 10 list of most competitive economies.[…]Emerging nations such as China, India and Russia are quickly catching up in competitiveness. They now contest the long-standing competitive supremacy of industrialized nations, it said. "This could lead to an increase in protectionist measures in Europe and the U.S.," said Professor Stephane Garelli, director of IMD's World Competitiveness Center. In 2007 and beyond, economic relations will be more tense than ever as emerging markets turn into emerging powers and challenge the established order for competitiveness, Garelli said.

China inflation grows 3.1% in April- survey
2007-05-11 China Daily Online
Inflation in China, the world's fastest-growing major economy, probably breached the central bank's target ceiling for a second month as food costs soared, adding pressure on the central bank to raise interest rates. Consumer prices gained 3.1 percent in April from a year earlier, according to the median estimate of 17 economists in a Bloomberg News survey, after jumping 3.3 percent in March. The statistics bureau will release the figures at 10 a.m. on May 14. The central bank, seeking to cap price gains under 3 percent, may also be concerned that interest rates below the inflation rate will fuel stock-market speculation that propelled the CSI 300 stock index up 82 percent this year. With the benchmark one-year deposit rate in China at 2.79 percent, Chinese households are losing money on savings held at banks. "Negative real interest rates are fueling excessive exuberance" in the stock market, said Liang Hong, an economist at Goldman Sachs Group in Hong Kong. "If left unchecked, asset inflation may soon advance into treacherous territory." Liang expects the central bank to raise interest rates three more times this year. […]

Stock-buying fever grips China
2007-05-11 China Daily
[…] A total of 4.79 million new A-share trading accounts were opened in April, 853,500 more than the combined total for the previous two years, according to statistics from the China Securities Depository and Clearing Corporation. On Tuesday, the first trading session after the week-long May Day holiday, nearly 370,000 A-share accounts were added, almost half of the number for the whole year of 2005. Figures for the new accounts are considered a rough indicator for the number of new individual investors entering the market although there have been cases in the past where individual traders have opened thousands of accounts using fake identification. […]Experts estimate there are at least 30 million individual investors in the country. Suppose each investor is in a family of three, then that means at least 90 million Chinese are directly or indirectly involved in the stock market. Given the fact that nearly 800 million of China's 1.3 billion people live in the rural areas and do not have easy access to stock investment, the percentage of people investing in stocks is high.

The wave of new money has consistently pushed the Shanghai and Shenzhen markets to new highs. The benchmark Shanghai Composite Index broke the psychologically important barrier of 4,000 points on Wednesday, less than two months after surpassing the 3000-point mark. The sharp gains are once again raising worries about stock overvaluations. The stocks in the Shanghai and Shenzhen markets are trading at more than 40 times of listed companies' earnings per share on average, much higher than developed markets overseas. The growing bubble in the country's stock market is a concern, said central bank governor Zhou Xiaochuan last week, adding he would closely monitor asset prices, the consumer price index and producer price index. […]"China's equity market is starting to show signs of getting out of control," said Zuo Xiaolei, chief economist of China Galaxy Securities in China Securities Journal on Wednesday. The market rose even after the interest rate rose in March, and the bank reserve ratio increased in April, said Zuo. "The neglect of government policy and blindly pushing up the equity market fosters a big market risk," he claimed. When the bubble bursts, the pain will be much more painful as the losers are those that can least afford to lose their money, analysts said. Unlike developed markets overseas, individual investors make up a majority of China's stock market, including a lot of retirees who risk losing their hard-earned savings. […]

$4.3b deal to narrow trade gap
2007-05-11 China Daily Online
A Chinese business delegation has signed deals worth $4.3-billion with US enterprises in a move to narrow the trade gap between the two countries and as a preparation for the upcoming Sino-US Strategic Economic Dialogue. The Chinese delegation, headed by Vice-Minister of Commerce Ma Xiuhong, signed 27 contracts in San Francisco, California, on Wednesday (local time) for US high-tech and information products. […] The procurement reflects China's determination to cut its trade surplus with the US that totalled more than $144 billion last year. The deals were struck only a couple of weeks before the second round of Sino-US Strategic Economic Dialogue, the highest-level economic and trade consultation platform, in Washington. At the dialogue, to be co-chaired by Vice-Premier Wu Yi and US Treasury Secretary Henry Paulson, the two sides will discuss a wide range of subjects, from trade disputes to finance and aviation issues. The deals signed in San Francisco were just the first part of procurement agreements between Chinese and US enterprises. […]

Rising yuan threat to millions of jobs
2007-05-11 SCMP
The Ministry of Labour and Social Security has released a report that predicts a further appreciation of the yuan will result in millions of lost jobs, China News Service reported. Around 3.5 million workers will become unemployed and at least 10 million farmers will be affected if the yuan were to appreciate another 5 to 10 per cent, according to The Assessment of RMB's Appreciation on Employment released by the ministry yesterday.The workers hit hardest by a rising yuan are in the textile, apparel, shoe-making, toy and motorcycle industries, the report said. […] Analysts say that the mainland's exports, which accounted for around 36 per cent of its gross domestic product last year, would likely take a beating on a rapidly rising yuan. In addition, the mainland's domestic industries which compete with foreign imports are likely to suffer. The yuan's appreciation would stimulate the inflow of foreign goods, causing the decline of these import-competitive industries. […] Also, an abrupt appreciation of yuan would discourage foreign direct investment in the mainland.



A thousand herders raise voices for their future
2007-05-09 Mongol Messenger
A forum of a ‘Thousand Herders' will be organized with Presidential patronage, from June 13 to 14 in Ulaanbaatar. The forum has evolved from food and agriculture sector state policy; the presidential policy and action programme for 2007; a government resolution and NGO suggestions and herders and animal husbandry specialists. At the forum, issues to determine future purposes of the sector such as grassland management; improving breeding and productivity and irrigation, will be discussed. It is planned to determine the development status of the sector and make suggestions on how to develop the sector in the future. A total of 1000 herders and 100 representatives from projects and programmes will participate in the forum. On one of the days, an event ‘Modern cooperatives and farming development' will be held in Sukhbaatar Square to show how products are made from cashmere, wool, leather, meat and milk. Mongolian livestock numbers have reached 34.8 million, while herder families' number nearly 170,500. There are more than 2230 families, with more than 1000 animals. Food and Agriculture Minister, D. Terbishdagva said on May 3: “The fundamental sector of the Mongolian economy is animal husbandry which produces more than 20 percent of the GDP. Thanks to the state policy; a pleasant climate and herders' efforts, the number of livestock increases each year. The national economy depends on industrialization in animal husbandry but herders pay attention to the number, not quality and breeding of animals.” […]

FI support sustainability in mining
2007-05-09 Mongol Messenger
The Government of Mongolia and the World Bank Group - the International Bank for Reconstruction and Development and the International Finance Corporation; the Asian Development Bank and the European Bank for Reconstruction and Development - with International Financial Institutions, signed a memorandum of understanding in Ulaanbaatar, April 30 2007. The MoU aims to assist the Mongolian Government reform the legal, regulatory and fiscal framework for the sector and through implementation promote stability and encourage private investment; assist the Government to identify and assess options available for supporting medium and long term development of the mining sector by the private sector; assist the Government in its participation in ‘Strategic Deposits' under the new mining law; establish a transparent valuation process and a range of financial structure options for sustainable development of these projects and support the Government in concluding the transactions for the initial developments and assist the Government in the preparation of an overall sector development strategy, including an ‘Integrated Master plan for the Sustainable Development of the Coal sector' in Mongolia. It is anticipated that the International Financial Institutions would help the Mongolian Government achieve its strategic objectives and address key issues through focused technical assistance and financial and advisory services. The assistance is planned to comprise a policy framework, sector reform and capacity building. IFIs would assist in strengthening the legal, regulatory and fiscal framework and assess the Mongolian Government's equity ownership options to ensure a fair sharing of the projects' risks and rewards. They would provide technical assistance to the Government to establish a framework for ‘Strategic Deposits' valuation; provide technical assistance relating to a holding company structure for the Government's shareholdings in the mining sector; assist in promoting widespread local participation; facilitate future private investment in mining and associated infrastructure and provide current international best practice to ensure the highest possible levels of environmental safeguards and sound regional economic development. The Government acknowledged the IFIs could play a unique role as ‘neutral and honest brokers' to facilitate communications between Government and potential strategic investors and could be involved in pre-and post-development of the Strategic Deposits. Within two weeks from the date of signing the MoU, the IFIs and the Government would create a joint working group to draft the detailed terms of reference for specific IFI Assistance. The working group will aim to complete the terms of reference within two weeks of its establishment and start implementation immediately.

Millionth Citizens Welcomed
2007-05-10 UB Post
Ulaanbaatar, capital city of Mongolia, formally identified its one millionth citizens on May 8 at a welcoming ceremony at the Central Cultural Center. The honors were shared by two boys and a girl, B.Togoldor, E.Temuulen, and N.Sanjinkhand, who were born on April 11 between 12:25 pm and 12:40 pm. All three were given keys . too big for their little fists to single- bedroom apartments by the city Mayor, Ts.Batbayar. Forty-four other babies born on the same day were given children.s savings books, each with Tg1 million in it, by 44 well-known business companies. […] In 1883, Ulaanbaatar, then called Orgoo (or Urge) had a population of only 30,000,. said the President of Mongolia, N.Enkhbayar, at the celebration. He said that the population of the city, with a history of over 360 years, has increased 33 times in the last 124 years. In terms of population, Ulaanbaatar is now the 107th city in the world, and the 17th in Asia. According to a present estimates, Mongolia will have three million people in 2015.


Irene Frei
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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