Der wöchentliche Presserückblick der Schweizer Botschaft in der VR China
The Weekly Press Review of the Swiss Embassy in the People's Republic of China
La revue de presse hebdomadaire de l'Ambassade de Suisse en RP de Chine
  28.12-31.12.2009, No. 300  
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DPRK and South Korea

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Foreign Policy

As US battles the Taliban, China fights for Afghan trade (SCMP)
Behind an electric fence, blast-resistant sandbags and 53 National Police outposts, the Afghan surge is well under way. But the foot soldiers in this bowl-shaped valley about 30 kilometres southeast of Kabul are not fighting the Taliban, or even carrying guns. They are preparing to extract copper from one of the richest untapped deposits on earth. They are Chinese, undertaking by far the largest foreign investment project in war-torn Afghanistan. Two years ago, the China Metallurgical Group Corp, a Chinese state-owned conglomerate, bid US$3.4 billion - US$1 billion more than any of its competitors from Canada, Europe, Russia, the United States and Kazakhstan - for the rights to mine deposits near the village of Aynak. Over the next 25 years, it plans to extract about 11 million tonnes of copper - an amount equal to one-third of the known copper reserves in China. While America spends hundreds of billions of dollars fighting the Taliban and al-Qaeda, China is securing raw material for its voracious economy. The world's superpower is focused on security. Its fastest rising rival concentrates on commerce. S. Frederick Starr, the chairman of the Central Asia-Caucasus Institute, an independent research body, said sceptics might wonder whether Washington and NATO had conducted "an unacknowledged preparatory phase for the Chinese economic penetration of Afghanistan". "We do the heavy lifting," he said. "And they pick the fruit." The reality is more complicated. The Chinese bid far more for the mining rights to the Aynak project and promised to invest hundreds of millions more in associated infrastructure projects than other bidders. It is a risky venture that has not yet proved to be economical, and it has already been dogged by allegations of bribery. But the Aynak investment underscores how China's leaders, flush with money and in control of both the government and major industries, meld strategy, business and statecraft into a seamless whole. In a single move, Beijing strengthened its hold on a vital resource, engineered the single largest investment in Afghan history, promised to create thousands of new Afghan jobs and established itself as the Afghan government's pre-eminent business partner and single largest source of tax payments. Afghanistan is not the only place where the US and China find themselves so oddly juxtaposed in the post-9/11 world. China is investing more in extracting Iraqi oil than American companies are. It has reached long-term arrangements to buy gas from Iran, even as Tehran comes under the threat of Western sanctions for its nuclear programme. China has become a dominant investor in Pakistan and volatile parts of Africa as well. But it is in Afghanistan where China's willingness to take big risks for commercial and diplomatic gain are most striking. China Metallurgical Group, or MCC, will build a 400-megawatt generating plant to power both the copper mine and blackout-prone Kabul. MCC will dig a new coal mine to feed the plant's generators. It will build a smelter to refine copper ore, and a railroad to carry coal to the power plant and copper back to China. If the terms of its contract are to be believed, MCC will also build schools, roads, even mosques for the Afghans. The sweeping nature of the agreement has some experts rubbing their eyes in disbelief. "It's almost as if the Chinese promised too much," said one international expert […] But even if elements of the agreement fall through, the Chinese have already positioned themselves as generous, eager partners of the Afghan government and long-term players in the country's future. All without firing a shot […] The Afghan National Police, which does protect the mine, was largely built and trained with American money. The 1,500 guards the police have posted in and around Aynak are special recruits not drawn from the main force […] But the conclusion is inescapable: US troops have helped make Afghanistan safe for Chinese investment. And there is no sense that either government objects to that reality. As diplomats and soldiers alike stress, the war in Afghanistan was never motivated by commercial prospects. Had an American company won Aynak, some Afghans noted wryly, critics inevitably would have accused the United States of waging war to seize the country's mineral wealth. Moreover, if China succeeds in developing Aynak and generating revenue for the Kabul government, that helps achieve a US goal.

"To the extent that the Chinese bring Afghanistan up to speed and start paying a billion dollars a year in royalties," a Western government official […] said, "that would mean that Afghanistan is on a firmer ground to start paying for its own security.". ^ top ^

Busy time for China at UN Security Council (People's Daily Online)
China will perform its duty in an objective and fair manner and work with other members to maintain international peace and security when it assumes the rotating presidency of the UN Security Council next month, the Chinese envoy to the UN said on Tuesday. Zhang Yesui, China's permanent representative to the United Nations, said in an interview that assuming the council presidency was an important task for China in the field of multilateral diplomacy in 2010. The 15 council members are now discussing the agenda for next month, which includes a series of talks on global and regional hot-button issues, open debates and consultations, said Zhang. "According to what I have got till now, it will be a busy schedule," he said, adding China would do its utmost to make sure the Security Council works smoothly and efficiently. The presidency of the Security Council rotates among its members in the alphabetical order of their names in English. Each president holds office for one calendar month. China previously assumed the presidency in October 2008. Touching on the international situation in 2009, Zhang said the year had witnessed complex and profound changes in world affairs. He said the multilateral diplomatic situation this year had three basic features: First, global crises assumed unprecedented complexity while international summits became the principal platform to address these pressing issues. Second, the reform of the international system was high on the agenda, and initial efforts in global economic governance paid off. Third, emerging countries grew rapidly and exerted increasing influence on multilateral affairs. The year also saw dynamic diplomatic efforts by China in the international arena, Zhang said. President Hu Jintao, Premier Wen Jiabao and other Chinese leaders took an active part in international summits, making significant contributions to the international community's efforts to address global and regional issues, Zhang said […]. ^ top ^

China-UK ties marred by execution (Global Times)
Britain's accusation of China's zero-tolerance policy toward a British drug smuggler has caused discord in bilateral ties. "Drug trafficking is a grave crime worldwide. In China, given the bitter memory of history and the current situation, the public has a particular and strong resentment toward it," an official statement from the Chinese embassy in London said. "The legal structures of China and UK may be different, but that should not stand in the way of enhancing our bilateral relations on the basis of mutual respect." Jonathan Fenby, the author of The Penguin History of Modern China, told the Daily Telegraph newspaper that the statement was referring to the Opium Wars fought between the two countries in the middle of the 19th century, when attempts by the Chinese government to disrupt opium trade were met with force and Britain twice started a war to protect its stranglehold on the opium market and expand its reach into China. British merchants forced the Chinese to grant them access to Chinese ports and won the right for their citizens to be exempt from Chinese law. "How much your average Chinese person would think about it I'm not sure but it would be taught in Chinese schools for instance," Fenby said. "If you spoke to the average 20 or 30-something Chinese person they would say the British forced us to take opium. It is established as part of the historical story." In a recent web survey on, 97 percent of netizens who responded supported the execution of Akmal Shaikh, who was arrested for entering China carrying 4 kilograms of heroin in 2007. Some netizens described it as "the modern Opium War." "The execution of Shaikh is to some degree like the burning of opium stocks in Humen (Beach) in 1840 during the Opium Wars," said Zhou Ning, director of the Department of Chinese Language and Literature at Xiamen University. "But this time, the 'gunboat diplomacy' could not work." Shaikh's execution has provoked strong criticism from British Prime Minister Gordon Brown, who condemned it in the strongest terms. The EU was also furious about China's decision. "It is possible that the EU vents their anger against China accumulated in the Copenhagen summit and the devaluation of the Chinese currency," said Jin Canrong, vice dean of the School of International Studies at Renmin University of China. "The EU is beginning a new anti-China wave." There are also supporters of the execution back in the UK. "It is the height of hypocrisy for the Labour government, the human-rights brigade and celebrity loudmouths to lecture China when Britain's own strategy has failed so disastrously," a report entitled "Sorry not to join the liberal wailing: heroin traffickers deserve to die," published in tabloid Daily Mail [...]. ^ top ^

China, Nepal to boost political, trade ties (Xinhua)
China pledged to bolster political and trade ties with Nepal in a joint statement issued Wednesday. China offered tariff reductions, training of agricultural experts and other assistance in the statement issued during Nepalese Prime Minister Madhav Kumar Nepal's first visit to China since he took office in May. The two states also agreed to improve land and aviation links, and to exchange expertise in poverty relief. "The Chinese side will provide necessary support and assistance to the Nepalese side in hydropower construction, infrastructure development, health, education, human resources development and other fields," it said. The two states expressed satisfaction with the implementation of Chinese assistance projects for Nepal's socio-economic development. "The continued and enhanced level of Chinese cooperation extended in the current transitional phase would be of additional significance to the people of Nepal," the Nepalese side said in the statement. China and Nepal, which established diplomatic ties in 1955, decided to lift bilateral relations to a Comprehensive Partnership of Cooperation featuring ever-lasting friendship. The two states also pledged to promote trade, investment and economic cooperation, especially in information technology, transport, agriculture, infrastructure construction and poverty relief. Nepal welcomed Chinese companies participating in hydropower projects and infrastructure development, and voiced willingness to establish special economic zones to attract Chinese investment. The two countries also agreed to build more border trading points between Nepal and neighboring Tibet Autonomous Region of China in a bid to further traditional friendship and mutually beneficial cooperation. Nepal reiterated that both Taiwan and Tibet were inalienable parts of the Chinese territory and pledged it "will not allow any forces to use its territory to engage in any anti-China or separatist activities.". ^ top ^

International appeals fail to save Briton from execution in Urumqi (SCMP)
British national Akmal Shaikh yesterday became the first European to be executed in China in half a century when the Supreme Court upheld the sentence despite intensive international appeals on the grounds that he was mentally unstable. The execution prompted condemnation "in the strongest terms" from British Prime Minister Gordon Brown and disappointment from Shaikh's family. While many critics said the case would not affect the bilateral relationship between China and Britain, Kerry Brown, a senior fellow from international analytical institute Chatham House said the execution was part of a worrying pattern of China's increasing assertiveness. Shaikh, 53, was put to death by injection yesterday morning in Urumqi, Xinjiang, where he was arrested in 2007 for carrying a suitcase with almost four kilograms of heroin from Tajikistan, Xinhua reported. His case had drawn attention from the British authorities and some human rights groups partly because his family said that he had bipolar disorder and was lured into carrying the drugs into China. The Xinhua report yesterday said that evidence provided by the British embassy in China and Reprieve, a London-based legal action group, was insufficient to prove Shaikh's mental problems and that his family has a history of such illness. But Katherine O'Shea, Reprieve's communications director, said yesterday the Chinese government had ignored the group's attempt to provide information about Shaikh's mental problems. With help from the British government, the mainland had agreed to a meeting between Shaikh and a British psychiatrist for mental evaluation arranged by Reprieve earlier this year. But the meeting was cancelled after the psychiatrist flew to Xinjiang, O'Shea said. She added that the group's repeated requests that China arrange its own evaluation, were also ignored. "In the past three days, 10 witnesses came forward, saying they knew him. We packaged this into signed statements and sent them to the authorities and to the court by a number of different means. There was no acknowledgement and no reply. It seems the authorities did not want to look at the information we provided at all," she said. The British government had made several representations to the central government at a number of levels on Shaikh's case, O'Shea said. In a meeting with Premier Wen Jiabao at the Copenhagen climate change summit this month, Brown reportedly brought up this issue again. Yesterday, Brown said in a statement that he was "appalled and disappointed that our persistent requests for clemency have not been granted". He added: "I am particularly concerned that no mental health assessment was undertaken." One report said China's ambassador to Britain, Fu Ying, was summoned to the Foreign Office in London as Britain protested against the execution. Shaikh's two cousins, who flew to Urumqi over the weekend to make a last-ditch appeal, said in a statement they were "deeply saddened, stunned and disappointed" at the execution. "We are astonished at suggestions that Akmal himself should have provided evidence of his own fragile state of mind. We find it ludicrous that any mentally ill person should be expected to provide this," they said […] In Beijing, the Foreign Ministry defended the execution, with spokeswoman Jiang Yu calling on Britain not to create any obstacles in the bilateral relationship. "We express our strong dissatisfaction and opposition to the British accusation [on the execution]," she said. China urged Britain to respect the sovereignty of its judiciary and "immediately correct its mistake to avoid creating damage to the bilateral relationship" […]. ^ top ^

China to see large rise of contributions to UN budget in new year (Xinhua)
China will see a large increase of its contributions to the UN budget next year, and China, as the largest developing country in the world, is ready to carry out its international obligations under the UN Charter, a senior Chinese diplomat said here Tuesday. Liu Zhenmin, the deputy Chinese permanent representative to the United Nations, told reporters here that according to the budget for the UN 2010-2011 biennium, the Chinese contributions will increase considerably next year. Starting from Jan. 1, 2010, the Chinese contributions to the UN regular budget will rise from 2.667 percent to 3.189 percent, an increase of 0.522 percentage points over the current level, Liu said, adding that the Chinese contributions to the peacekeeping budget will increase from 3.147 percent to 3.9390 percent […] According to the just-adopted scale of assessments, the Chinese contributions to the regular budget will cap 80 million U.S. dollars and the contributions to the peacekeeping budget will reach 300 million U.S. dollars, he said, adding that all Chinese contributions to the world body will total some 400 million dollars. "China will be the eighth largest contributor to the UN regular budget, just following the seven industrialized countries," he said. "We will overtake Canada in contributions to the UN peacekeeping budget, simply to be preceded by the United States, Japan, Germany, Britain, France and Italy." "The increased Chinese assessment originates from the economic growth in our country, rather than the change of calculating method," Liu said. "In fact, the calculating method remains unchanged." Last Thursday, the UN General Assembly (GA) adopted a 5.16-billion-U.S. dollar budget for the United Nations 2010-2011 biennium, maintaining current scale of assessment for regular budget and peacekeeping budget. The 64th General Assembly session concluded the main part of its substantive session with the adoption of the budget in the small hours on Dec. 24, after three months of negotiations, at which representatives were locked in the most difficult part of the talks night and day in the last three days, he noted. The budget covers the costs of United Nations programs in areas such as political affairs, international justice and law, international cooperation for development, public information, human rights and humanitarian affairs. The main source of funds for the budget is the contributions of member states. In addition to the regular budget, member states are assessed for the costs of the international tribunals and, in accordance with a modified version of the basic scale, for the costs of peacekeeping operations. China has increased its assessment for three times over the past nine years, Liu said, adding that this will be the fourth increase for the Chinese assessment. "As the most important, most universal and most authoritative inter-governmental organization in the world, the United Nations needs a very strong financial support for all its activities under the UN Charter," Liu said […] The regular budget of the United Nations is approved by the General Assembly for a two-year period. Peacekeeping budgets are approved by the General Assembly for a one-year period beginning on July 1. "With the development of the Chinese economy, the Chinese assessment will surely increase, and this means increased Chinese share in the world economy," he said. ^ top ^

Call for China to set up naval bases abroad (SCMP)
China's anti-piracy mission in the Gulf of Aden has presented Beijing with a strong case to set up naval bases abroad, according to a PLA rear admiral interviewed on a government website. Calls for foreign bases have been growing in China, but they have been limited to internet chat rooms and media columns. This time, the comments were on the Ministry of National Defence's official website. The report by the Broadcasting Corporation of China carries an interview with Yin Zhuo, a senior researcher at the People's Liberation Army Navy Equipment Research Centre in Beijing. It explains in detail why the PLA needs the bases and why now is a good time. While the report does not represent the official view, it is normal practice for the authorities to test outside responses and garner support by posting articles on its own website. Yin, a PLA rear admiral who has taken part in the anti-piracy mission off Somalia, said the experience showed the navy needed the bases to provide logistical support to its fleet. He said the first escort fleet Beijing sent to Somalia had spent 124 days at sea without docking, which added challenges to the operation. "We didn't want to arouse unnecessary suspicion from some Western countries. So we did not ask for any docking permit [from other naval bases] in the beginning. Gradually, everyone saw we are there to carry out legitimate international duties and we are helping ships from other countries as well. Foreign [naval bases] have started to welcome us," […] He said it was time for the Central Military Commission to consider building PLA naval bases in foreign countries - such as in the waters off Somalia - to support its naval operation. "The Americans, the French and European countries all have naval bases in the Persian Gulf. Japan also applied for a base in Djibouti. I think a permanent, stable base is good for our operation. I think such a request is reasonable and foreign countries will understand China's need to have a long-term supply base." Many military experts said the call for the bases was expected and was in line with PLA navy's aspirations to transform itself from a costal defense force into a "blue-water navy force". Dr Arthur Ding, a PLA expert at National Chengchi University in Taiwan, said the report was clearly a step for Beijing to complete its so-called "String of Pearls" defence strategy. The strategy refers to a document circulated in military circles several years ago. It stated that China should gradually establish military footholds in Bangladesh, Myanmar, Thailand, Cambodia, the South China Sea and Pakistan to build up a protection network for its oil lifeline. China is now the world's largest crude oil importer. Many Western military experts say it is a question of when, rather than if, China has foreign military bases. "There is no doubt that China has blue-water naval ambitions," said one veteran Western defence attaché […] "And those ambitions will carry a practical price... A China with aircraft carriers will need bases and good friendly ports to use them effectively." One of the most closely watched questions is how Beijing will reconcile the need for bases and its more traditional doctrines of non-alignment with other nations and non-interference in their internal affairs […]. ^ top ^

China-ASEAN FTA sets stage for broader economic integration (Xinhua)
A free trade agreement (FTA) between China and the bloc of ten Southeast Asian countries, the first of its kind, will serve as a stepping stone for the diverse Asian community to further integrate and might give birth to a broader multilateralized trading pact across the region, said a senior economist of the Philippines-based Asian Development Bank. "There is a lot of expectation of this FTA," Jayant Menon, principal economist of ADB's Office of Regional Economic Integration, told Xinhua in an interview on the eve of the establishment of the China-ASEAN (the Association of Southeast Asian Nations) free trade area on Jan. 1, 2010. "Big bang" effects can't be expected because China and the ASEAN have come a long way in the past eight years and they are quite open economies already, Menon said. "But this FTA can be seen as a stepping-stone towards a broader agreement, and eventually, hopefully, a multilateralized trading arrangement whereby the achievements are offered to non-members in a non-discriminate manner," he added. Menon said other regional economic powers such as Japan, South Korea and the United States are expected to join once this FTA expands. The China-ASEAN free trade area covered a population of 1.9 billion and a combined gross domestic product close to 6 trillion U.S. dollars. It is the world's largest trading bloc in terms of population covered and the third largest in terms of trading volume. Trade between China and ASEAN countries have picked up rapidly in the past decade. Official statistics indicated that trade between China and the ASEAN bloc expanded to a total worth of 231.1 billion U.S. dollars in 2008, from 19.5 billion U.S. dollars in 1995. Trade has especially doubled in the past four years. Agreements on the trade of goods and services and a pact to encourage inter-regional investment have been separately signed. The slash of duties has begun since 2005 and more than 7,000 trading items covered by the agreements will be tariff-free products by Jan. 1, 2010. But Menon said more substantial changes would come from investment liberalization. "The real benefits would come from investment more so than trade," he said. "If negotiators can complete the investment agreement rather quickly and make it clean, open agreements, there could be quite significant benefits. We could improve the investment inflow from outside as well as within the region." […] Menon said people can't expect profits coming from this FTA too soon and actually in the short run, there might a little bit of pain of adjustment costs for some countries joining the FTA and there will also be some resistance. The economist cited the recent example of Indonesian industries proposing the government to delay the implementation of the FTA, a move to protect the country's fragile textile, farming, steel sectors […] But Menon said gains will come in the long run and for instance a lot of farming communities could benefit by specializing in different commodities and doing two-way trade of commodities within agriculture. He said such gains have shown in the mutually beneficial farm trade between China and Thailand covered by the free trade agreement. Menon said it might take at least three generations before an integrated Asia moving close to a European Union style economic union […] “the situation in Asia is quite different and as there is too much diversity to easily form a sort of deep integration agreement like an economic union," he added. Countries like Indonesia and Singapore and China are totally different economies in terms of population basis, economic structures, Menon said, adding that for example, labor mobility -- an important ingredient to any sort of economic union -- is a complicated issue in Asia and it is very hard to see it been addressed in any time soon. He said moving towards the EU-style arrangement also has to do with the competitiveness of member countries. And unlike the EU where complementarities exist, Asian countries have similar capital and labor prices and it would take a long time for this to be changed. Menon said that explains why the trade of intermediate goods, rather than final goods, dominates China-ASEAN trade despite the sharp increase in figures over the past few years. An ADB study shows that 60 percent of the manufactured goods in the region eventually entered the Western market and China's role as an assembling hub for the region's goods has not changed. Menon said as ASEAN countries developed and as China gets richer, there is still enough room for the increase of regional demand to sustain some of the growth, but substantive changes won't take place too soon. He said China can not move up the product value chain overnight to manufacturing hi-tech final goods that will meet the region's demands […]. ^ top ^

Sailors seized by pirates may be freed today (SCMP)
Some 25 Chinese sailors held aboard a mainland ship off Somalia could be freed as early as today after an airdrop of up to US$4 million to the pirates who hijacked the vessel more than two months ago. Amid cheers and celebrations, the pirates were last night seen counting bundles of cash on the deck of the De Xin Hai, which has been anchored off the pirate stronghold of Hobyo on Somalia's east coast since the middle of October. "This is always a delicate stage, but if things go well we would expect the pirates to leave the ship once the counting has finished," said Commander John Harbour, a spokesman for European Union naval forces off the Horn of Africa. "We are expecting the ship to be released within 12 hours." That release will end weeks of tense secret negotiations between representatives of the mainland owners, Qingdao Ocean Shipping, and the pirates, who have at times publicly threatened to kill the crew if attacked by Chinese warships now patrolling the area. The Foreign Ministry has said previously that the government was doing all it could to free the ship and its crew. Harbour said the EU had its own confirmation of news agency reports quoting pirates as saying the ransom had been paid. A pirate named Hassan said yesterday: "A helicopter dropped the ransom money onto the ship. We have received US$4 million. We hope to disembark in a few hours […] The crew is safe and - although they will not have their freedom for a few more days - they are all happy now." One report said the pirates' collected a ransom of US$3.5 million. Qingdao Ocean representatives could not be reached last night. Shipping industry officials said ransoms typically average between US$1 million to US$3 million, handed over in airdrops arranged by private security companies hired by owners' lawyers. Fatal disputes have erupted among some pirates during the counting stage, while others have demanded additional payments before releasing the crew […] Once released, ships are escorted by international navy patrols to safer ports in the Middle East. The exact location of the three Chinese warships deployed to the area is not known. Shipping industry officials said the payment to free the De Xin Hai appeared to be one of the larger paid to Somali pirates, who have terrorised the shipping lanes that link Asia to Europe and the Middle East for more than 18 months […] The De Xin Hai was carrying 76,000 tonnes of coal from South Africa to India when it was attacked on October 18 northeast of the Seychelles in the Indian Ocean. It was the first mainland vessel to be successfully hijacked since Beijing deployed three warships to join international anti-piracy patrols off Somalia in December last year. The historic deployment marked the first time in centuries China had sent warships into potential conflict beyond its territorial waters. Since the October attack, Beijing has raised the profile of its anti-piracy involvement, seeking to jointly head monthly international meetings to co-ordinate Indian Ocean patrols along with EU and US-led flotillas. ^ top ^

China won't yield to yuan appreciation pressure: Premier (Global Times)
China would not yield to pressure for the appreciation of its currency yuan, or renminbi, in any form, Chinese Premier Wen Jiabao said in an interview with Xinhua on Sunday. "A stable Chinese currency is conducive to the international community," […] Some countries demanded the yuan appreciation while practicing trade protectionism against China, said Wen, adding that this in essence was aimed at checking China's development. "China will work together with other countries to curb trade protectionism and push forward with the Doha Round trade negotiations," Wen said. He said that the global economy could not make progress without trade between different economies. "We all know this, but what we need now is the willingness to take action," […] Chinese exporters were under great pressure due to trade protectionism, he said. ^ top ^


Domestic Policy

Princelings no longer confined to the party (SCMP)
Reshuffles in the ranks of the People's Liberation Army have given rise to a new phenomenon - the "princeling generals" - with the latest to be promoted a son of a former head of the military. General Zhang Haiyang has been made the political commissar of the Second Artillery Corps - China's strategic missile force - the People's Daily reported yesterday. The promotion, five months after Zhang was raised to full general from lieutenant general, makes him a possible candidate for a seat on the Central Military Commission - China's supreme command - in the next party leadership reshuffle in 2012. Zhang's promotion is not the first for a so-called princeling general. President Hu Jintao has promoted three officers, including Zhang, to full general this year. All are the children of former party leaders. Observers have noted Hu's apparent penchant for picking the next generation's leaders from the powerful clique of "princelings" - the offspring of prominent party leaders. But until recently the phenomenon has been most notable in civilian power circles. Zhang is the third son of retired general Zhang Zhen, who, under then president Jiang Zemin, was a vice-chairman of the Central Military Commission between 1992 and 1997. His father-in-law, Sun Keji, was formerly deputy political commissar of the Nanjing military region. His father played a key role in helping Jiang secure absolute control of the army in the early days of the former president's rise to power. Until his promotion Zhang Haiyang had been the political commissar of the Chengdu military region. The Second Artillery Corps controls China's nuclear and conventional strategic missiles and is considered the most powerful and professional unit in the PLA […] The promotion was widely reported by state media, which highlighted his father's prominent place in the army. The People's Daily website said Zhang and his father "are the PLA's first father and son generals". "You cannot ignore his own contributions just because of his princeling background, but there is a trend that future important military roles will be taken over by the second or third generation [offspring of prominent officials]," said Macau-based military commentator Antony Wong. The others raised to full general are Liu Yuan - the son of former party chairman Liu Shaoqi, and Ma Xiaotian, the son of a deputy chief of general staff headquarters. Liu Shaoqi was a founding father of the People's Republic and a one-time heir to Mao Zedong. Ma's father-in-law was also a senior PLA official in the military's disciplinary department […]. ^ top ^

Doubts raised over string of cadre 'suicides' (SCMP)
A string of suspicious deaths of senior officials this year has raised questions about their links with corruption and prompted calls for greater transparency during the investigation of such cases. According to the official Guangzhou Daily, at least 10 senior cadres have killed themselves since February, while three others died in suspicious circumstances. However, authorities have refused to announce the results of the investigations. Yesterday's report said six of the 13 died this month. On December 21, Zhao Xianchun, 48, vice-director of the organisation department in Ningxia, was found dead in a Beijing hotel during a business trip. The official reportedly committed suicide by using broken glass to slit his wrists. On December 23, Sun Qiming, director of Haian county's People's Congress standing committee, jumped to his death at his home in Jiangsu province. On November 28, former senior Chongqing judge Wu Xiaoqing, 57, committed suicide in his cell during the city's crackdown on triads, while Yang Kuansheng, a 47-year-old deputy mayor from Wugang city in Hunan, was found dead outside a government dormitory building on November 26. Authorities said Wu killed himself while "dreading the punishment for his crimes", and Yang committed suicide because of depression. The families of Wu and Yang have questioned the explanation. Yang's wife has appealed to the Ministry of Public Security for a re-investigation, saying the facts suggested her husband was murdered. Hunan police said on December 25 that they seized more than 210,000 yuan from Yang's dormitory and believed the deputy mayor was linked with corruption. Police said the cash had been put into 48 red envelopes. However, his widow, a surgeon in a neighbouring city, highlighted 19 suspicious aspects of the police investigation, which she described as "full of contradictions". She said her husband denied he was involved in corruption in a letter written before his death and expressed worries that his life was being threatened. State media reported rumours circulating among the public linking the cadres' deaths with corruption scandals and power struggles. The Guangzhou Daily said the public had a right to know what had happened. Commentators said detailed investigation would discover potential accomplices or even criminal links […] Professor Lin Zhe from the Central Party School said the government was obligated to announce the truth behind the deaths. "Officials who hold power in their hands are different from common people," Lin was quoted as saying by the Guangzhou Daily. "Taxpayers have the right to know information that concerns their interests.". ^ top ^

More than 13,000 pornographic websites halted (China Daily)
Chinese authorities have removed 13,175 websites as part of a national campaign against pornography on the Internet, reported Tuesday. The China Internet Network Information Center (CNNIC) said that since Dec. 9, 3,015 websites were turned in by reports and 10,160 others were caught by the screening of the register agencies. The Internet center is screening the 13 million CN domains, of which 2618 were removed for being pornographic. The illegal application rate of CN domains has narrowed down from 25 percent to 15 percent, said an Internet center official. ^ top ^

Migrant workers allowed to take along more pension funds (SCMP)
The mainland has taken a significant step towards building a standardised pension fund system as concerns rise over its ageing population. For the first time, workers will not only be able to transfer their own pension contribution when they move across provinces, but they can also take up to 60 per cent of the contribution paid by their employers, according to rules unveiled by Xinhua yesterday. The portability rule will take effect from tomorrow. Yin Weimin, minister of human resources and social security, said migrant workers were expected to benefit most from the rule, which removed hurdles of transferring pension funds. "The brightest spot of the rule is that it tackles the problem of how to protect rural workers' rights to social security when they move to work in a different place" […] In the past, when migrant workers left their jobs for another province or region, they could withdraw only their pension contributions, while employers' contributions were frozen by the local government of their original work places. Yin's deputy, Hu Xiaoyi, said the rule was expected to put an end to queues of workers waiting to withdraw their pension funds before migrating. Many do not even bother to join pension schemes […] Under the new rule, the processing of the account transfer should take no more than 45 working days. A participant of a pension scheme can no longer opt to shut down their accounts when they move. A key focus of the new rule was "how to make it more convenient for migrant workers to shift funds in and out of their pension accounts", the vice-minister said. By last year, only about 10 per cent of the estimated 230 million migrant workers on the mainland were enrolled in a pension scheme. Beijing has accelerated its reform on pension schemes because of rising labour disputes over social security funds and a fast-growing elderly population, according to analysts. "It is a necessary step to offer incentives to various local governments involved in the issue, especially those who set up pension funds for migrant workers in the first place," said Professor Hu Xingdou, a Beijing-based economist. He and Tang Jun, a scholar at the Chinese Academy of Social Sciences, say the rule has many apparent flaws. "It looks set to be a transitional arrangement that a significant part of the pension funds is still not transferable," Tang said, referring to the 40 per cent of employers' contribution not yet made portable. There is still a long way for the country to go to meet public expectations over a standardised national pension system, both say. "The economic and income gaps among different provinces and regions are widening and pension funds paid by workers and their employers in big cities can be three or four times those in smaller cities," Hu Xingdou said. ^ top ^

Google to meet with Chinese authors (People's Daily Online)
There have been three rounds of talks between Google and Chinese writers whose works were copied by the Internet giant without authorization. The fourth round of talks is expected to begin soon. Discussions are likely to touch upon more essential points of the issue. The book list provided by Google is the latest achievement from the first three rounds of negotiations. The talks fell into stalemate earlier, as the company refused to admit having "infringed" upon copyright laws. But Chinese authors did not give up on efforts to protect their copyrights. Zhang Hongbo, Director-General of China Written Work Copyright Society, said, "We invited patent experts and lawyers who are familiar with both Chinese and American law to analyze the issue. They say Google's stance is unstable.". ^ top ^

Four pedicab drivers kill themselves in protest (SCMP)
Nine Tianjin tricycle drivers lay in front of an express train, in a suicide protest against a county government's decision to ban unemployed workers from making a living from tricycles as pedicabs. Four died and five were seriously injured when they were hit by a train travelling on the line between Beijing and Shanghai at about 8pm on Monday night […] Hundreds of angry tricycle drivers from Jinghai county blockaded the government building on Monday in response to two bans, one prohibiting making a living by using the vehicles commercially and the other banning tricycles on most roads. Witnesses said the nine protesters lay down on the Beijing-Shanghai railway line after cadres had turned a cold shoulder to their petition. The suicide protest caused shock in Tianjin, which oversees the county […] Many mainland cities, including Beijing, limit battery-powered and petrol motorbikes and tricycles. Jinghai county said tricycle drivers did not have licences or insurance, and were a hazard to car drivers. The county government started a campaign to crack down on tricycles in July. Many drivers complained their livelihoods were affected. Last month, the county banned tricycles on most roads between 7am and 10pm. In October, law enforcers vowed to seize all rental tricycles and imposed fines of up to 30,000 yuan on drivers. Farmers from the county believed the two notices incensed pedicab drivers who did not have any other way to make a living. "Most drivers are struggling laid-off workers who don't get any financial aid from the government," said a witness who declined to be named. "The hire fees, sometimes only two or three yuan, are the main income for the whole family. Protesters complained that county cadres were totally unconcerned about the plight of the laid-off workers." The witness believed the cheap tricycles had shrunk the profits of taxi companies, which was the main reason for the clampdown. Mainland media have widely reported that taxi operators have colluded with local governments to eliminate cheap services offered by motorbikes and tricycle drivers. Official figures show that more than 10 million migrant workers lost their jobs across the nation during the global economic downturn. The central government has warned of resulting social unrest, but suicide protests are rare. ^ top ^

Gang leaders get death penalty, jail terms (China Daily)
Chongqing - Three local courts yesterday handed out sentences ranging from the death penalty to several years in prison to four gang leaders found guilty of operating three separate mafia-style mobs in the city. The No 2 Intermediate People's Court ordered death for 43-year-old Chen Zhiyi and life term for the 45-year-old Deng Yuping yesterday. The No 5 Intermediate People's Court convicted 51-year-old Li Qiang while 40-year-old Wang Xingqiang was found guilty by the No 1 Intermediate People's Court. They both received 20-year jail sentences. The three courts also imposed fines ranging from 2.2 million yuan ($324,000) to 31.9 million yuan on the four gang leaders and ordered their illegal gains confiscated. In addition, the three courts also convicted 54 gang members for multiple crimes. Five government officials and policemen were sentenced to between three and 11 years in jail for colluding with and accepting bribes from the mafia-style gangs […] Li Qiang, who was also the former deputy of the Chongqing People's Congress, was fined 5.2 million yuan for seven crimes including operating illegal businesses and disturbing social order, according to the No 5 Intermediate People's Court. "The seven crimes Li committed count for 37 years in jail, but the court sentenced him to 20 years in prison, the maximum term of limited imprisonment according to Chinese law," judge Hong said […] Li did not ask for a re-trial. The Chongqing No 2 Intermediate People's Court yesterday also fined Chen Zhiyi and Deng Yuping 30.61 million yuan and 31.9 million yuan, respectively. Chen's lawyer, Liu Xiangshun, from the local Xiangshun Law Firm, called the punishment "extreme" […] "What's more, requests by 19 defendants to examine their wounds after the police tortured them for confessions, were not considered by the court," […] Chen has decided to appeal, Liu said. Wang Xingqiang was fined 2.2 million yuan for crimes including abetting prostitution, racketeering and intentional injury to others […]. ^ top ^

Senior Chinese leaders call for greater anti-graft effort in 2010 (People's Daily Online)
Senior Chinese leaders met in Beijing Tuesday to discuss China's anti-corruption drive in 2009, and to plan next year's battle against graft. The meeting, attended by members of the Political Bureau of the Communist Party of China (CPC) Central Committee, heard a report by the Central Commission for Discipline Inspection (CCDI). Although obvious achievements had been made in the anti-corruption drive this year, the situation was still grim with many new problems, said a statement issued after the meeting presided over by Hu Jintao, General Secretary of the CPC Central Committee. "Members of the CPC should realize that the campaign against corruption will be long-term, complex and hard," read the statement, which called for greater and constant efforts to build a clean government. The statement said Party committees, government departments and discipline inspection authorities should combine punishment and prevention, with emphasis on the latter. They should resolutely investigate and deal with corruption and severely punish those involved, and should devise new ways to improve education and supervision and reform the system to prevent graft more effectively. "Clean conduct of CPC cadres is key to strengthening of the Party's governance capability,...and should be promoted by strengthened education and an improved anti-graft system, by self-discipline together with supervision by others," the statement said. The CCDI would convene a plenary session in January […]. ^ top ^

China to lift ban on hepatitis B carriers in study, work (Xinhua)
China is set to issue regulations to remove hepatitis B check from physical examination for school entrance and work, according to the Ministry of Health. Mao Qunan, a spokesman with the ministry, said here Tuesday that the move was based on related organizations' thorough demonstration in regard to whether hepatitis B carriers will affect other people's health. However, Mao said restrictions will still exist in jobs that may induce hepatitis B virus transmission such as blood sampling. "The list of these special professions that need restriction will have to go through a series of legal procedures for approval," said Mao […] In addition, the results of hepatitis B tests for other medical purposes should be protected as part of examinees' privacy, and such tests should not be carried out by force. "As we know more about the hepatitis B virus, our prevention and treatment measures become more specific," said Xie Rao, a senior liver disease physician with the Beijing Ditan Hospital […] Zhuang Hui, a professor with the Peking University Health Science Center, said that hepatitis B virus can be transmitted through blood, sex and mother to baby transmission while daily contact in study and work will not lead to infection. According to the Chinese Center for Disease Control and Prevention, mother to baby transmission is the main channel for hepatitis B virus transmission in the country. Currently, China provides free hepatitis B vaccine for new born babies and children under the age of 15. Statistics show that in 2006, the hepatitis B virus infection rate among Chinese children under the age of one is below one percent. Zhuang Hui added that the country is currently working on a new plan on hepatitis B prevention and control. ^ top ^

Official crackdown the new poison for Shaanxi peasants (SCMP)
They were desperate to have their voices heard when lead poisoning destroyed their health and families, but now they have fallen prey to another source of suffering - a government crackdown. At least seven people from Shaanxi's Fengxiang county are in jail more than four months after protests against lead pollution which left hundreds of children sick. The demonstrations erupted in early August as the scale of the public health emergency caused by the Dongling Lead and Zinc Smelting Plant became clear. One of those who remains behind bars for the August 17 unrest is Ma Weibo, a 26-year-old worker at a nearby power plant. "In the evening, exactly a week after the demonstration, five policemen from different levels of public security bureaus including Baoji city, Fengxiang county and Changqing township came over and detained my eldest son," said his father, Ma Changxiong, a peasant in Madaokou village. "The police told me that they had identified him as one of the leading figures of the riot, with the help of closed-circuit television." Ma said eight people, including his son, were held in the aftermath of the protest […] "Now, 100 days have gone, and all remain in detention, except one guy who was released as a result of... Madaokou's party secretary." Another villager from Madaokou said more than 100 people were initially detained over the protests. The villager, who would not give his name, said he took part without hesitation when he learned his three-year-old daughter's blood contained 300 milligrams of lead per litre, three times the acceptable standard. "I was taken away and questioned for the part I played in the demonstration," said the man, who was released the next day. The biggest protest took place on August 17, after a 17-year-old girl attempted suicide after learning she had four times the acceptable amount of lead in her blood. Because she was over 14, she was not entitled to compensation or medical aid. Hundreds of people from Madaokou, Gaozuitou and Sunjianantou villages surrounded the factory and smashed a 300-metre length of its outside wall. Armed police were needed to break up the riot and a dozen vehicles were damaged. An environmental assessment concluded that nobody should have been living within a kilometre of the plant, and more than 600 children were confirmed to have lead poisoning. However, tests were denied to many people over the age of 14, which suggests the total number poisoned could be higher. Residents had demanded the smelter be shut, but despite a promise from the local government it remained open. "In a stark contrast to our expectations, what we peasants saw was the factory carrying on the following day," Ma said. "I've got no way to air my grievances and bitterness […] I was told that my son could face a jail term ranging from six months to three years, once he was convicted of disturbing social order. So far, hardly anyone over 14 has been allowed to be tested for lead poisoning. All of the confirmed victims are children. My son has not married and, of course, he does not have a child. Everything he did was for his fellow villagers." […] Ma insisted his son was innocent, saying: "I'm 100 per cent sure my son has nothing to do with either smashing or looting the factory or its office. All he did was protest strongly." Under detention, Ma Weibo reportedly has been beaten and was constantly hungry. "I have spent more than 1,000 yuan to have the warders bring him some food and clothes. Instead of seeing him face-to-face, I was only allowed to see him on a surveillance camera twice since his detention. The only thing he asked me to do was spend some money and get him out," his father said. However, Ma has no money to do this. His second son is in the army and does not remit money, while his daughter makes 1,000 yuan a month in a Guangzhou factory. "Weibo makes around 2,300 yuan per month. He is the economic pillar of the family," he said. "All I've been able to do is go to the Communist Party's village committee for help, but officials there said they could not do anything. "It's like the old saying `Killing the chicken to frighten the monkeys' - my son is being sacrificed for over-actively committing himself in the anti-pollution protest." A peasant in Gaozuitou village, who is in his 50s, said keeping people behind bars was a trick to silence the public. He said he could not risk speaking out publicly even though he knew all about the lead poisoning. ^ top ^

China launches national Internet television (Xinhua)
China on Monday launched its national Internet TV station, China Network Television (CNTV). The online station currently includes three major channels of news, sports and entertainment and an online community where users can upload self-made video content and communicate with each other. With five overseas mirror sites, CNTV now covers countries and regions including Europe, North America, Southeast Asia, Middle West and Russia. Mainstream media must actively expand themselves to new media area to improve their capacity of communication, said Li Changchun, a member of the Standing Committee of the Political Bureau of the Communist Party of China Central Committee, at the opening ceremony. Li said that establishment of the station is a major landmark event for China's traditional media in their effort to advance into online media. It will help to promote the construction of a modern communication system of wide coverage and advanced technology in the country. The online station is wholly owned by China Central Television. ^ top ^

Audit unearths huge graft (Global Times)
The National Audit Office (NAO) has found over 234 billion yuan ($34.5 billion) of public finances was misused in its annual audits of almost 100,000 government departments and State-owned enter-prises (SOEs), China's chief auditor said Monday. The NAO transferred the cases of 67 officials and senior managers of SOEs to discipline-inspection and judicial organizations for investigation for their alleged involvement in the massive embezzlement, Liu Jiayi, head of the NAO, said Monday […] The office did not disclose the amount of public funds its audits covered. The NAO said it audited over 20,000 officials, including 14 provincial governors and ministerial-level officials, as well as the directors of 12 SOEs across the country from January to November this year. Liu attributed 10.69 billion yuan of the misused funds to officials and directors, with senior management accounting for 4.5 percent of the total amount embezzled. Another 164 people were punished according to administrative and disciplinary procedures. The audit authority provided 863 cases to the justice, discipline-inspection and supervisory organs in 2009. The cases, involving 1,068 people, referred to bank loans, discounted notes, securities transactions, land and mining rights sales, the transfer of state-owned assets and other issues. Liu said criminals are now more intelligent and covert […] The need to restrain corruption in the public sector alongside the nation's booming economy has been repeatedly underscored by the authorities, which say corruption erodes the credibility of the ruling party and causes huge economic losses. In 2008, a total of 10,315 cases of commercial bribery were committed by government workers, involving more than 2.1 billion yuan ($300 million), Cao Jianming, the country's prosecutor-general, said earlier this year. To secretly allocate an amount of public finance for personal or department use is a common form of misuse of public funds, as the country's anti-graft watchdog found the practice appears to remain rampant. As of November, 22,884 such cases of illegal allocation of central finances, worth 10.16 billion yuan ($1.49 billion), had been uncovered since June, according to the Central Commission for Discipline Inspection of the Communist Party of China. A total of 270 officials have received administrative punishment for illegally holding "small coffers" for personal use, and 81 have been prosecuted. Lei Jiaxiao, a scholar of economic security at Tsinghua University, told the Global Times that the final allocations of funds always show discrepancies with the budgeting, but the problem unearthed by auditing may not necessarily be related to corruption. "Some local governments, besieged by the money shortage, chose to divert some funds to projects they consider urgent," Lei said. Through auditing, the central government can gain more accurate information for decision-making, and the misuse of funds by local governments could be prevented, Lei said […] A report sent to the NPC Standing Committee last week by the State Council stated that the National Audit Office will try to make all the budgets of central departments open to the public in two or three years. ^ top ^

China to spur rural demand, raise farmer's living standard (Xinhua)
China's government will step up efforts to stimulate rural consumption and raise rural living standards to promote economic growth and ensure social stability, said a statement released Monday at the conclusion of the Central Conference on Rural Work […] The government would continue to improve farmers' lives as a crucial plank in its efforts to rebalance income distribution, said the statement. It would keep stimulating rural consumption, which was significant to drive domestic demand, according to the two-day meeting which laid out work for next year's agricultural and rural development […] Grain yield this year was expected to hit a record 530.8 billion kilograms, which would be the sixth consecutive year of output growth, it said. The per capita annual net income of Chinese farmers rose to a high of 5,000 yuan (735 US dollars), up more than 6 percent from a year ago. The statement also described the situation for the agriculture and rural development as grim, as new problems continued to emerge, and some were unpredictable, adding the work for 2010 would rather be "complicated" and "difficult". Great efforts should be made to better coordinate urban and rural development, and guide more resources to the vast countryside, as well as agriculture, the foundation of the national economy, the statement said. The government would continue to push forward the urbanization to allow rural residents to enjoy equal public service with urban dwellers. Although rural residents comprise more than 70 percent of China's population, public resources conventionally lean to the better-developed urban areas. That leaves a widening gap between the two, a perennial matter the government has vowed to solve. The government will slack no efforts to stabilize grain production, and keep prices of farm produce at reasonable level. Technology should play a bigger role in expanding grain output, said the statement. It is also agreed that efforts would be made to help rural residents find jobs and step up rural infrastructure construction. Investment for rural development has been rising steadily in China. The central budget earmarked 716.1 billion yuan (104.8 billion US dollars) this year to beef up water conservation facilities, rural education and health care service, the Ministry of Finance said last Friday. The figure was 120.59 billion yuan more than that in 2008. This year, the government also offered 123.08 billion yuan in subsidies for farmers to buy farming material, seeds, agricultural machinery and tools, up 20 percent from 2008. The annual conference is the highest-level meeting on rural work at which the government maps out policies and measures for next year's development of agriculture and rural regions. ^ top ^

Dissident Liu Xiaobo jailed for 11 years (SCMP)
China's most prominent dissident, Liu Xiaobo, was jailed on Friday for 11 years for campaigning for political freedoms, with the stiff sentence on subversion condemned by rights groups and Washington. Liu, who turns 54 on Monday, helped organise the “Charter 08” petition which called for sweeping political reforms, and before that was prominent in the 1989 pro-democracy protests centred on Tiananmen Square that were crushed by armed troops. He stood in a Beijing courtroom facing a judge who declared he was guilty of “inciting subversion of state power” for his involvement in the petition and for essays critical of the ruling Communist Party published online, defence lawyer Shang Baojun said. Liu was not allowed to respond in court to the sentence. “I felt calm when the judge read out the sentence, because all the signs were they wanted to hand out a long sentence,” said Liu's wife, Liu Xia, who was allowed in to hear the verdict. She was excluded from the trial on Wednesday. “Later we were allowed 10 minutes together, and he told me he would appeal, even if the chances of success are low,” she added. China's party-controlled courts rarely find in favour of defendants, especially in politically sensitive cases. Liu has been among the most prominent and combative critics of China's one-Party rule. His case has attracted an outcry from human rights activists at home and abroad, as well as Western governments. The long sentence drew a fresh outcry. China “sees Liu Xiaobo as a representative figure, and think they can scare the others into silence with such a harsh sentence”, said dissident Christian activist Yu Jie. “President Hu Jintao believes that with the West weakened and human rights taking a back seat, he can ignore pressure over attacks on freedom of expression”. Standing outside the Beijing No 1 Intermediate People's Court, a US diplomat said Washington was “deeply concerned”. “We continue to call on the government of China to release him immediately and to respect the rights of all Chinese citizens to peacefully express their political views in favour of universally recognised fundamental freedoms,” said the diplomat, Gregory May, reading from a prepared statement. China, emboldened by its strong economy and the woes of Western powers, appears to have little patience with pressure over its strict controls on citizens' political activities. “The court had strictly followed the legal procedures in this case and fully protected Liu's litigation rights,” read a court statement […] China had criticised Western diplomats, who sought to attend the trial. The envoys were also excluded from the verdict hearing, as were reporters who gathered outside. Amnesty International and other rights groups decried the verdict. Phelim Kine, Asia researcher for the New York-based Human Rights Watch, said it was a “travesty of justice”. China stifled Charter 08, pressuring many signatories. Now Liu's sentence may galvanise fresh domestic activism. One supporter, Yang Licai, evaded dozens of police guarding the courthouse and condemned the verdict as “reprehensible.” The verdict was not reported by local Chinese-language media, but word was swiftly spread by Liu's supporters on Twitter, which is blocked in the mainland but can be accessed by by-passing Internet controls. Many showed yellow ribbons in solidarity. “If Liu can be sentenced for his writings, then many more of us can also be sentenced,” said Yu, the dissident. “But I think his case will embolden, not scare, others.” Liu has been a thorn in the government's side since joining a hunger strike in support of Tiananmen student protesters. He had been jailed for 20 months after 1989, spent three years at a labour camp in the 1990s and months under virtual house arrest. Liu also helped found the Independent Chinese PEN group, which has campaigned against censorship and political controls. ^ top ^

Long-awaited civil rights law gets nod (China Daily)
A long-awaited law designed to ensure people get compensation when their civil rights are infringed finally got the green light from China's legislators at the weekend, seven years after its first reading. The 92-provision Tort Law covers a range of liabilities, including traffic and medical accidents, work-related injuries, pollution, harm caused by pets and mental distress. It also covers infringements of personal rights, such as reputation and privacy. The National People's Congress (NPC) Standing Committee on Saturday endorsed the law, which will take effect in July and have equal importance with the Property Law. Wu Bangguo, chairman of the NPC Standing Committee, said the law was significant in "protecting civil rights and people's interests, preventing and punishing infringement acts, reducing conflicts and promoting social stability". The Tort Law stipulates that people can ask for compensation if serious mental damage is caused to their health or reputation. "That's a breakthrough. It's the first time Chinese laws have such clear stipulations on mental damage compensation," said Wang Shengming, deputy director of the legislative affairs commission of the NPC Standing Committee. Victims of major traffic accidents and mine disasters can also get the same payouts, regardless of whether they are from urban or rural areas. People can now demand more than their actual losses if companies continue to make products they know are defective, another first for Chinese legislation, legal experts said. Yang Lixin, a professor at Renmin University of China in Beijing who helped draft the law, said the rule could be applied for victims of the Sanlu baby formula scandal […] The number of civil rights infringements has grown in recent years. Courts across China handled about 870,000 cases in 2007, said the NPC law committee, although there was no law to ensure compensation at the time. The five-day bimonthly session of the NPC on Saturday also approved new regulations to better promote development and protection of the nation's islands. According to the law, China will strengthen protection of eco-systems, rational utilization of natural resources and sustainable development on its sea islands. Legislators also voted to ratify a United Nations protocol combating human trafficking. ^ top ^

Alarm at increase in blackmail cases over coal-mine murders (SCMP)
The central government is alarmed by a rise in the number of cases in which mentally retarded people are murdered in mines by those who claim later to be relatives to demand compensation. Nearly 20 people were murdered in nine provinces in such scams in the past two years, according to the media. The culprits blackmailed mine owners, many of whom feared that safety issues at their mines might be exposed, for hundreds of thousands of yuan.

In a case in November in Daye city, Hubei province, a miner, using the name Huang Suoge, died after falling into a pit only two days after he was hired. Five days later, three "relatives" arrived and reached a deal with the mine operators for compensation of 200,000 yuan […] The scam only came to light after the police found that Huang had committed suicide two years ago and his identity had been borrowed by the victim who died in the shaft. Three men claiming to be Huang's relatives fled the city soon after sensing that the police were on to them, according to Wuhan-based Chutian Metropolis Daily […] The police decided to travel to Huang's home in Leibo, Sichuan province. They were shocked to find that officers from nine other provinces had sought help from Leibo police in 17 similar cases over the last two years. Leibo police said the scheme had been "invented" by some residents in the nearby Meigu county two years ago. The culprits took mentally retarded people to work in a mine in Fujian and successfully blackmailed the mine operators to pay up for the death of the victims after faking mine accidents. They said the method was soon adopted by other residents and many unusual mine accidents had taken place in Fujian, Hebei, Sichuan, Shandong and Yunnan. The number of cases has been rising over the past six months […] Poverty was one incentive. Leibo has an annual per capita income of around 2,600 yuan, the report said. In an operation in June last year, Leibo police rescued 40 mentally retarded people from their kidnappers, while another seven were released earlier this year. The Ministry of Public Security called a meeting in Fujian in April. Last Friday, a court in Yunnan province handed down suspended death sentences to two convicts who coaxed a mentally retarded person to work in a coal mine and asked for 800,000 yuan after killing him. ^ top ^

Official sacked over toxic milk gets new post (SCMP)
A disgraced official stripped of his position over the Sanlu tainted-milk scandal has been picked to help head a national anti-pornography commission, mainland media reported yesterday. Li Changjiang's return to party politics comes just 15 months after he resigned as head of the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) over his role in the toxic baby-formula scandal. Six infants died and nearly 300,000 fell ill after consuming toxic milk products. News of Li's appointment as deputy chairman of the working group on combatting online pornography came after he made a two-day visit to Jiangsu […] At 65, Li is at the normal retirement age for officials, making his selection for the semi-official post all the more unusual. Li, the highest-ranking cadre brought down by the tainted-milk saga, is not the first official punished to have been quietly brought back into the fold, a common practice in mainland politics. There was public outcry in May when the AQSIQ said that Bao Junkai, the former deputy director of food-production supervision who lost his job over the milk affair, had been appointed deputy head of its science and technology department. Bao had previously been given a key post in Anhui. The tainted-milk affair was the mainland's biggest food-safety scandal in recent memory. Two people were executed in Hebei last month for trading in the milk, while former Sanlu chairwoman Tian Wenhua was given a life sentence in January. Three other high-ranking executives are spending five to 15 years behind bars for their roles. At least 22 mainland dairy companies, including Sanlu, Yili and Mengniu, were confirmed to have been adding melamine to their products for many years […] However, parents seeking retribution from Sanlu over the loss of their children were dismayed last month when a Hebei court completed bankruptcy proceedings for the company - meaning it will not make compensation payments. Xinhua reported that an official statement released when Li resigned said: "Since products from numerous dairy companies are found to have contained melamine, [it is obvious] AQSIQ has negligence in supervision. As the leader of the administration, Li Changjiang should take the chief responsibility.". ^ top ^



Shanghai bridge found stuffed with foam (SCMP)
First it was "tofu" schools, now foam bridges. Shanghai engineers have become the subject of ridicule from internet users after a supposedly concrete bridge was found stuffed with rubbish and plastic foam. Repairmen found that the piers of the crossing over Suzhou Creek in Putuo district had been stuffed with sacks, foam and waste from landfills, Xinhua reported. Authorities were alerted when residents saw a square-metre concrete cover fall to the ground on Monday. The bridge was renovated and reopened in January, but residents from nearby communities complained they had seen huge holes in the piers in the past few months. The building contractor, the Shanghai Construction Group, denied any safety hazard after an initial investigation, saying the fallen boards and holes were decorative features that would not affect the structure […] The Shanghai Urban Construction and Communications Commission also confirmed that the bridge was safe for commuters and drivers. Officials said the bridge underwent an inspection by engineers, who concluded the main structure was not affected. "Shanghai people have difficult lives," respected blogger Hecaitou wrote on Twitter. "Buildings collapse during construction, subways collide and now they even use rubbish to build bridges. You need to be brave to live in such a place." It is not the first time that Shanghai authorities have been criticised for construction defects. In June, an unfinished 13-storey apartment building collapsed, killing a worker. Police detained at least seven people. Last month, authorities in nearby Nanjing used glue to make repairs on a new bridge after cracks were found in more than 30 handrails of the 50 million yuan construction. The bridge was completed in June. Shoddy building work is common on the mainland as developers and officials embezzle construction funds. More than 7,000 poorly built classrooms in Sichuan province collapsed in an earthquake last year. More than 5,000 children were killed in the buildings, which became known as "tofu" schools. ^ top ^



More children to be checked for lead poisoning (China Daily)
The local government has pledged to check more children living near an industrial park in Qingyuan, Guangdong province, after 25 children were confirmed to have lead poisoning. Fifty-four children have been rechecked, with five within the healthy range, 24 having high blood-lead levels, 21 mildly poisoned by lead and four seriously poisoned, vice-mayor Wang Dekun said late on Monday. One of the children, the most seriously poisoned, showed a blood-lead level more than six times the permissible limit. The case broke out last Friday, with media reporting at least 44 children living in the Guangjin apartment buildings in the Yinyuan Industrial Park of the Qingyuan Economic Development Zone had been diagnosed with excessive lead levels in their blood. A few adults have also been diagnosed with abnormally high lead levels. The actual number of lead poisoning victims has yet to be determined. Preliminary investigations by the government have pointed to production at the nearby Zeliang Storage Battery Co, as the likely cause of lead poisoning. It has been ordered to shut down. The PH scale and lead in the sewage, as well as the lead dust in the waste gas discharged by the factory, were tested last Friday and both were higher than provincial standards […] The city's center for disease control and prevention tested five samples of drinking water from the affected community and found the lead levels in the healthy range. "We will check more children in the area and provide effective treatment for those with blood-lead levels higher than the national standard," said Shi Fangfei, another vice-mayor. The government will continue to investigate the source of pollution, he said. Only children with lead six times the permissible level or higher need medical treatment, while for lighter cases food therapy is suggested, said Yang Aichu, a professor with the Guangdong Prevention and Treatment Center for Occupational Diseases. Yang said lead enters a body through food, inhalation or contact with skin. A person covered with lead at work, if not properly washed, could bring the substance home and affect his family. Excessive lead harms the human digestive system, disturbs the blood system and damages the nerve system in serious cases. Construction of the Guangjin apartment building started in 2004 and residents, mostly migrant workers, said they have suffered smells from factories less than 100 m away. ^ top ^



Spreading ethnically sensitive views now a crime in Xinjiang (SCMP)
A new law in Xinjiang makes it a criminal offence to produce or spread information that could jeopardise ethnic solidarity. The law, which was ratified by the region's top legislative body yesterday and is the first regional-level law of its kind, comes nearly six months after clashes between Uygur and Han Chinese in Urumqi left at least 197 people dead and nearly 2,000 injured. Highlighting separatism as the major threat to stability in the region, the law says intensifying ethnic unity and safeguarding national solidarity is the "sacred duty and glorious obligation for each citizen in Xinjiang", the China News Service reported. The law bans organisations or individuals from disseminating opinion and information that are unfavourable to stability, as well as any other action that might endanger ethnic unity or promote separatism. Professor Ong Yew-kim, a Hong Kong-based professor at the China University of Political Science and Law, said the law was too vague to be enforced. "The definition of 'unfavourable to' or 'jeopardising' ethnic unity is far from clear for the law to be enforced properly," he said. "The regional legislature has to introduce a legal interpretation before its implementation, or it may be interpreted differently from one law enforcer to another." Ong suggested political concerns might have spurred the drafting and adoption of the law. "So far, the Xinjiang regional authority has brought no effective measure to settle the ethnic conflicts and narrow the discrepancy - on an economic, social and cultural basis - between the Uygur minority and Han majority," he said. "This kind of law may largely be aimed at silencing the voicing of disappointment." Meanwhile, Xinhua reported that three men were detained last Tuesday by police in Guangzhou for fabricating an online article saying several Uygurs were beaten up by local people and security guards on suspicion of stealing. The central government and Xinjiang authorities have dismissed suggestions that ethnic policies played a part in the unrest. An uneasy calm has returned to Urumqi after July's riots and a wave of syringe attacks in August and September. But tensions between the Hans and Uygurs remain. ^ top ^

Xinjiang to restore Internet gradually (Global Times)
Six months of Internet blackout in the Xinjiang Uygur Autonomous Region will soon come to an end due to a decision by the local government to gradually restore Internet access, long-distance telephone service and text messaging. Limited Web browsing access will first be available on websites of the People's Daily and Xinhuanet. Access to other websites and services, including text messaging and long distance calls will come later, according to a statement by the local press office. Restrictions on Internet and telephone services were imposed in the region after the July 5 riots that left more than 200 people dead. Local authorities said the measures proved to be effective in maintaining stability, but also conceded it brought inconvenience to local people. The statement said certain services would not be immediately available because the regional government will restore communication services step by step. Zhang Jing, a 27-year-old office worker who worked in the capital city of Urumqi, told the Global Times via mobile phone Tuesday that the Internet was available to some degree. "We only have access to the official Xinhuanet, People's Daily Online and the local Tianshannet, but we can't open Web links on them," she said. "Since the Internet was cut off this July, our routine office work was severely affected. It was like going back to the primitive age," complained Zhang. In recent few months, they used "real time exchange," a software program for inner-region communication. A girl surnamed Gong who operates an online shop in Taobao had to move out of Xinjiang to continue her online business. Gong, 26, now lives in East China's Jiangsu Province. "It's a big trouble doing business now, since I have to fax the information to my partner in Urumqi every day for delivery," she said, adding it cost her much more than it did to live in Urumqi. "I could make about 2,000 yuan ($292) each month but now I can hardly make ends meet because I have to pay rent, travel and telephone fees," she said. She said self-employed individuals were exempted from taxation for three to six months, if they experienced damage during the riots. "Most people wish a stable and peaceful environment," she said. Xinjiang authorities were not available for comment Tuesday. ^ top ^



Hu issues directive to Tsang on reform (SCMP)
President Hu Jintao has asked Chief Executive Donald Tsang Yam-kuen to handle Hong Kong's constitutional reforms "in an appropriate manner". It was the first time a state leader has commented directly on the controversial issue, which the president wants to be tackled properly to ensure social harmony and stability in the city is maintained. Tsang met Hu yesterday during a duty visit in Beijing. Earlier in the day he met Premier Wen Jiabao who, in what some analysts viewed as a public rebuke, asked the chief executive to resolve "some deep-rooted conflicts" in Hong Kong society. Wen also urged Tsang to study "macro-issues" and to plan for the future. The two top leaders' comments come as the Tsang administration faces strong opposition as it tries to push through reforms for the 2012 elections, which the pan-democratic camp says do not go far enough. The issue has overshadowed Tsang's three-day visit, and Wen's remarks were considered the most critical since 2005 […] It also contrasted sharply with the praise Tsang received during last year's duty visit, when both leaders publicly hailed the chief executive for his measures to counter the global economic downturn. But in a move widely viewed as concrete support for the city, Beijing is considering allowing mainlanders to make foreign direct investments in yuan in Hong Kong as part of the city's growing role as a testing ground for yuan-denominated services […] Political analyst Dr James Sung Lap-kung, of City University, said: "[Hu's] remarks are a clear sign that he is not very happy with Mr Tsang." Sung compared the comments with Hu's recent praise of Macau's political stability and implementation of a national security law. (Hong Kong shelved its bill in 2003 because of public opposition.) "It is an indirect criticism of Mr Tsang's failure to unite the community." Tsang, at a press briefing after meetings with state leaders, said the leaders had conveyed to him the central government's genuine wish to enhance democracy in Hong Kong. "The state leaders said the central government genuinely hoped to promote democratic development in Hong Kong," he said, adding that he would spare no effort to work with the legislature and the people to press for progress. But he sidestepped questions on whether the issue of the Article 23 security law issue had been mentioned. Last night, a senior Hong Kong government official said Beijing was satisfied with the progress so far of the consultation exercise on the 2012 electoral arrangements. The official, speaking to reporters in Beijing, said Tsang had briefed the state leaders on the possible mass resignation of some pro-democracy legislators over the issue. The state leaders realised that not many Hong Kong people seemed to know the government proposals well and urged the government to step up promotion and public engagement on the issue, said the official […] Earlier in the day, Tsang was also told by Wen to "lift people's hopes for the future". Wen warned: "The international financial crisis has not yet ended and there are still a lot of uncertainties. At the same time, [Hong Kong] should start to study major macro-issues relating to holistic developments and plan for the future. It should better resolve some deep-rooted conflicts in Hong Kong, make good uses of Hong Kong's advantages, sharpen Hong Kong's competitiveness and pay more attention to social services and people's livelihood, in order to boost Hong Kong people's hopes for the future." To Tsang, it was a case of deja vu. In his 2005 duty visit, Wen also called on him to be more effective in solving "deep-rooted conflicts". The Chinese authorities did not offer explanation of Wen's comments at the time, but Tsang later said the conflicts were meant to be economic problems such as high wages and high prices and rents […] "The premier was talking in a context of economic development," he said. "As you know, we have been developing our economy in a diversified manner... the premier supported our thinking. He thought it was the right approach." Tsang also said Beijing fully supported Hong Kong as a financial centre and that Shanghai would not take over its role. A local deputy to the National People's Congress, Professor Priscilla Lau Pui-king, said Wen's remarks on "macro-issues" were unusual and should not be taken lightly. "The premier was obviously complaining about Hong Kong's lack of study of China's macro-development when he urged more study of macro-issues," Lau said. Citing the delay in building the cross-border high-speed railway, she said: "Hong Kong is not catching up with the nation's development. If this trend continues, Hong Kong can easily be left behind" […]. ^ top ^



More terminals, flights across Taiwan Straits at Spring Festival (Xinhua)
The Chinese mainland and Taiwan will add more terminals and flights to cope with increasing demand of travelers during the Chinese New Year, said a mainland official in Beijing Wednesday. Taiyuan, Chuangchun, Nanning and Yantai would be added as regular cross-Straits terminals in the mainland, said Fan Liqing, spokesperson for the State Council Taiwan Affairs Office […] This would increase the number of mainland terminals to 31, she said. The number of flights would also increase from 270 weekly. From Jan. 31 to Feb. 28, at least 44 flights would be added weekly between the four mainland terminals of Beijing, Shanghai, Guangzhou, Shenzhen and Taiwan terminals, she said. "At the other terminals, the airline companies can decide how many to be added," Fan said. But at most 12 flights would be added at SonShan Airport in Taipei, she said. Since July, 2008, the two sides have raised the regularity of aviation services from weekend charters to daily flights. They also opened three direct air routes across the Taiwan Straits, ending the situation that prevailed since 1949 that flights had to transfer through a third place. Fan said cross-Straits flights carried about 2.6 million passengers and 46,000 tonnes of cargo from July last year to October this year […]. ^ top ^



'Hot money' blowing bubbles (China Daily)
The rising inflow of speculative capital, or "hot money", into China could lead to "asset bubbles", said Fan Gang, member of the central bank's monetary policy committee. The latest foreign exchange reserves figures released by the People's Bank of China reveal that inflows increased by about $37.2 billion - the second highest monthly rise this year - to $2.78 trillion by the end of November. The $37.2 billion gap, indicating increased inflows, is about $16 billion more than the cumulative figures for the country's trade surplus and foreign direct investment (FDI) in November. Economists have warned that the additional $16 billion could well be "hot money" inflows intended to gain from the rising value of the yuan or realty. "But such calculations are rough," said Sun Lijian, an economist with Fudan University in Shanghai. He said the calculations omit factors like the inflow of investment returns by Chinese companies or the fact that part of the FDI could be actually "hot money". The real figure could be much larger than $16 billion in November […] Some of the FDI inflows are not used for real economy investments, but rather in the stock or real estate markets […] "I think there must be some speculative capital that has not been accounted for," said Sun. The calculation of "hot money" has always been controversial in China. Last year, a Chinese Academy of Social Sciences scholar said such money could have amounted to 1.75 trillion yuan, triggering hot debates among Chinese economists and officials as to how much "hot money" has actually entered the country. But with domestic asset prices rising sharply, economists concur that while there is "hot money", it is difficult to guesstimate the actual quantity. The nation's main stock market index, for example, has risen by more than 75 percent compared with November 2008. Prices of many apartments in Beijing have also nearly doubled within a year. According to a recent study conducted by the Guangdong provincial academy of social sciences, "hot money" has been flowing into the country since June. Li Youhuan, a member of the research team, said the inflows have gathered pace since then. Many economists have warned in recent weeks that the US Federal Reserve's low-interest policy is encouraging global liquidity to move towards emerging markets. Russia said it plans to adjust regulations to limit the inflow of hot money into the country while encouraging long-term investments […]. ^ top ^

China to enhance financial support to foreign-funded businesses (Xinhua)
The Chinese government said on Wednesday financial institutions would be encouraged to step up credit support to foreign-funded businesses as they have become an important part of the world's third largest economy. Foreign-funded companies should have more access to financing and would be encouraged to take part in the mergers, acquisitions and reshuffling of Chinese enterprises, according to a statement issued after an executive meeting of the State Council, or the Cabinet, chaired by Premier Wen Jiabao. The government would do its utmost to simplify the approval procedures and strengthen administrative transparency, said the statement. As the global economy is gradually recovering, foreign direct investment (FDI) in China rose for the fourth consecutive month in November after months of declines. The statement said the government also encouraged overseas investors to become involved in new energy development, environmental protection, high-tech and modern service industries, as well as the advanced manufacturing sector. Policy and funding support will also be given to overseas investment in under-developed western and central region. The government approved the establishment of 20,600 overseas-funded enterprises in the first 11 months this year, down17.44 percent from the same period a year ago. Some 53 percent of the total FDI went to the manufacturing sector, a spokesman of the Ministry of Commerce Yao Jian said on Dec. 16. The statement also urged relevant government bodies and local governments to continue their efforts to bring the vulnerable-to-flooding Huaihe River under control. It called for the practice of a strict water resource management system to guarantee safe drinking water for the people and vowed to provide Chinese rural residents with access to safe drinking water by 2013. The meeting passed a draft decision to amend the rules for the implementation of China's patent law. The draft will be announced later by the State Council after further amendment. ^ top ^

U.S. slaps punitive penalties on Chinese oil tubular goods (People's Daily Online)
The U.S. International Trade Commission (ITC) on Wednesday slapped punitive penalties to imports of some 2.6 billion dollar oil country tubular goods (OCTG) from China, a move that might escalate trade disputes between the two countries. The ITC "has made affirmative determination in its final phase countervailing duty (CVD) investigation" concerning the oil pipes from China, said the ITC in a statement. The trade agency has determined that "a U.S. industry is materially injured or threatened with material injury by reason of imports of certain oil country tubular goods from China that the U.S. Department Commerce has determined are subsidized," […] The U.S. Commerce Department made a final determination last month to impose duties between 10.36 percent and 15.78 percent on the pipes, which are mostly used in the oil and gas industries. The ITC ruling paved the way for the imposition of duties. The Commerce Department made its preliminary determination of CVD in September. On Nov. 4, the Commerce also set preliminary antidumping (AD) duties on such imports from China, which is the biggest U.S. trade action against China. Under that preliminary determination, Commerce set a 36.53 percent antidumping levy on OCTG from 37 Chinese companies, while some other Chinese companies will receive a preliminary dumping rate of 99.14 percent. Commerce will make its final determination of antidumping duties early next year […] From 2006 to 2008, imports of OCTG from China increased 203 percent by value and amounted to an estimated 2.7 billion dollars in 2008, said the U.S. Commerce Department. China strongly opposed the U.S. decision, saying that it is a protectionist move […] In another steel dispute, the U.S. Commerce Department said on Tuesday that it will impose antidumping tariffs of 14 percent to 145 percent on imports of 91 million dollar steel grating from China. A final determination will be made by the department in April 2010. ^ top ^

China becomes world's biggest gold buyer in 2009 (People's Daily Online)
World Gold Council (WGC) data reveals that for the first time in 21 years the world's central banks have been net buyers of gold and China has been the biggest buyer this year, adding 454 tones to bring its central bank reserves to 1,054 tones. Amid growing concern over the weakness of the dollar, about 28 billion U.S. dollars worth of bullion was bought by central banks this year, based on an average price of 978 U.S. dollars an ounce, according to the WGC. The biggest buyers have been the emerging economies of China, Russia and India, but smaller countries such as the Philippines, Kazakhstan, Sri Lanka and Mexico have also been shifting their reserves into gold. The value of the dollar, the default reserve currency for most countries, has fallen as investors have grown cautious about America's huge debt burden and possible inflationary trends. Meanwhile, a handful of developed countries have taken advantage of record gold prices to reduce the size of their vaults. The metal hit a peak of more than 1,200 U.S. dollars an ounce this year, according to Goldman Sachs. However, Dylan Grice, an analyst at Société Générale, believes that the continued weakness of the dollar, concern about inflation and fiscal policy will continue to drive the gold price. A spate of gold-buying in the 1960s, led by France, resulted in the collapse of the Bretton-Woods system in 1971 when the link between the value of the dollar and gold was abolished. ^ top ^

Chinese government cracks down on illegal forexes (Global Times)
As the government strives to cool China's excessive asset prices, foreign exchange regulators have stepped up measures to curb the cross-border flow of capital through illegal foreign exchange transactions. As of November 31, the State Administration of Foreign Exchange (SAFE), in alliance with other departments, had cracked down on 10 illegal private banks this year, some of which had a maximum daily turnover of over 10 million yuan ($1.5 million), the Xinhua News Agency reported Sunday. The regulators also destroyed 17 online and offline illegal foreign exchanges, in addition to the destruction of the "underground" banks, involving a total of $3.5 billion, according to SAFE […] Li Youhuan, a researcher at the Guangdong Academy of Social Sciences, told the Shenyang-based Chinese Business Morning View Monday that the inflow of hot money has surged since June, and the increasing speed has been the highest since 2002 […] According to a survey of the irregular flow of overseas fund to the mainland by Li and his colleagues in August, over $300 billion in foreign money slipped into the country through the illegal private banks, and a considerable amount was invested in the red-hot property market. The survey polled over 30 "underground" bankers. According to data released by the Shenzhen municipal department of land and resources, average housing prices rose nearly 100 percent from 11,000 yuan ($1,611) per square meter in January to 21,661 yuan ($3,171) in October. If the hot money flow is unchecked, the loose monetary and fiscal policies adopted by governments around the world could lead to another major financial crisis in five to seven years, and the impact will be felt most severely in emerging markets, Li said. SAFE said that it will take more stringent measures to check the authenticity of foreign currency exchanges and payment and will organize ad hoc strikes in the regions where "underground" banks and online foreign exchange speculations are rampant. ^ top ^

MOFCOM: China likely to become the world's largest exporter in 2009 (People's Daily Online)
This year, China is very likely to surpass Germany as the world's largest exporter, China's Vice Minister of Commerce Zhong Shan said at 2009 China Open Economy High Level Forum […] on December 27. Zhong said that although China faces an extremely difficult foreign trade situation this year, it still successfully achieved the goals of "solid external demand, capital markets, and share capital". Zhong also pointed out that this year China experienced the most trade frictions ever with the number of cases surpassing 100, with a case value of about 12 billion U.S. dollars, both more than doubled last year. The momentum of the current international trade protectionism is still spreading, and the global economic recovery will be a long and tortuous process. Last year, China's exports accounted for 8.86 percent share of the international market. This year, it would be over 9 percent. It is expected that this years decline in exports will be more than 16 percent with imports falling by less than 15 percent. ^ top ^

Wen: stimulus package effective, room for improvement (People's Daily Online)
Premier Wen Jiabao said Sunday Chinese people should be proud of their country's economic performance and the basket of economic stimulus measures had proven effective, but he readily admitted the economy had problems. In an exclusive interview with Xinhua, Wen said China would stick to the pro-growth economic policies, while taking more measures to curb property speculation and maintain consumer prices at a reasonable range. He acknowledged the Chinese economy could have been better "if our bank lending had been more balanced, better structured and not on such a large scale." […] "The past year has been a breathtaking period," Wen said, recalling his inspection tours to places outside Beijing over last winter. In Shenzhen and Dongguan, two major cities in south China's export heartland of Guangdong, many enterprises faced big difficulties after the financial crisis, he said. Sluggish overseas demand had led to a wave of factory closures and layoffs in coastal manufacturing regions, including Guangdong, Zhejiang and Jiangsu, which caused a sudden slowing of growth of China's export-oriented economy. More than 20 million migrant workers had returned home late last year. In the last quarter of 2008, GDP growth slid to 6.8 percent year-on-year, sharply down from 9 percent in the previous quarter. "Our mood was very heavy. We didn't know how much this disaster (the financial crisis) could hurt the Chinese economy or how long it would last," said Wen. Under such circumstances, the government adopted decisive policies and measures, he said, referring to the basket of economic stimulus measures, featuring the 4-trillion-yuan (585.6 billion U.S. dollars) investment plan, which was adopted on Nov. 5 last year. "We have stabilized the economy and employment and maintained social stability over the past one year, which is a comfort to me," he said. GDP grew 8.9 percent year on year in the third quarter this year, accelerating from 7.9 percent in the second quarter and 6.1 percent in the first. For the first three quarters, GDP grew at an annualized rate of 7.7 percent. Other recent key economic indicators, such as industrial output and electricity consumption, showed China's economic recovery was accelerating and broadening. According to the National Bureau of Statistics, industrial output, which measures the activities of almost 430,000 large industrial enterprises (those with an annual revenue exceeding 5 million yuan, or 732,000 U.S. dollars) nationwide, jumped 19.2 percent year on year In November. In the first 11 months, the growth rate was 10.3 percent. "The financial crisis is not yet over..., but our work so far indicates that our (measures) are effective. People across the country should be proud of it," Wen said. While China's economy began to recover, Wen said it was too early to grade economic performance as the financial crisis was not over yet and much more work was required. Citing credit growth as an example, Wen admitted China might need to "pay some price and run into some unexpected difficulties" In tackling the global financial crisis […] The moderately loose monetary policy, which the government adopted in November last year, spurred the surge in new lending. In the first 11 months of this year, new loans hit 9.21 trillion yuan, an increase of 5.06 trillion yuan year on year, far exceeding the full year target of 5 trillion yuan the government set in March. Wen said the State Council had noticed the problem in the middle of the year and moved to correct it. "It has been improving in the second half." Credit expansion was one of the "unexpected difficulties" China had encountered in dealing with the worst crisis in decades, Wen said […] He admitted the State Council had time in the second half of the year to calmly reflect on the problems arising from the emergency response to the economic crisis. ^ top ^

China predicts 10 bln tonnes of iron ore reserves in Hebei Province (Xinhua)
Exploration work in the eastern region of north China's Hebei Province shows potential iron ore reserves in this area is estimated to top 10 billion tonnes, the China Metallurgical Geology Bureau (CMGB) said Saturday. A total of 3.44 billion tonnes of iron ore has been verified in five mines in the province, said Yan Xueyi, director with the CMGB. The discovery of this deposit would largely ease the shortfall in China's domestic iron ore supplies and contribute to a sound and sustainable development of the country's steel industry, according to Yan. China imported 443.56 million tonnes of iron ore in 2008, bringing the country's reliance on imported iron ore to around 50 percent. The country's steel mills suffered an unfavorable position during the annual iron ore pricing talks as overseas miners allied to ask for a higher price. ^ top ^


DPRK and South Korea

N.Korea pilfering reactor site: report (Global Times)
North Korea has been taking equipment left at a nuclear reactor site that was mothballed when an international consortium halted work on the grounds Pyongyang was breaking an agreement, a news report said Wednesday. If the report is true, the looting would be in defiance of a deal the North reached in the 1990s with regional powers and could cloud a recent push to restart international disarmament-for-aid discussions. Billions of dollars were poured into the project to build two relatively proliferation-resistant light-water reactors for the North in return for a promise to freeze its nuclear plant that produces arms-grade plutonium. The deal was halted in 2002 with a third of the work finished. North Korea may have used some of the more than 200 pieces of heavy equipment taken from the site in the country's northeast to stage a nuclear test in May, South Korea's JoongAng Ilbo newspaper said, quoting government officials. "The removal of equipment without taking steps to settle financial issues is a clear violation of the agreement and can be construed as theft," one official was quoted as saying. South Korea bore the majority of the costs spent on the project arising from a deal called the Agreed Framework, signed in 1994 by the US and North Korea. A consortium called KEDO to build the nuclear plants also grew out of the deal. Equipment left behind at the site is valued at 45.5 billion won ($39 million), including cranes and bulldozers and nearly 200 trucks and other vehicles, the JoongAng Ilbo said. Most of the 6,500 tons of steel and 32 tons of cement left behind has also been taken from the site by the North. South Korea's foreign ministry could not confirm the report but said it has asked the North every year for confirmation of KEDO's rights to the equipment. The North has said nothing would be allowed to be shipped out until the project is restarted and complete. ^ top ^

NK slams South's war memorial plan (Global Times)
North Korea Tuesday criticized South Korea for its planned commemoration in 2010 of the outbreak of the 1950-53 Korean War, calling it an "unpardonable provocation." Seoul this month announced plans for a series of events, including the re-enactment of major battles such as the 1950 Incheon landing by US-led UN forces, which turned the tide of the conflict. It plans to invite a total of 2,400 people, including veterans and their relatives from 21 countries, between April and November. "This is an unpardonable provocation to the DPRK (North Korea) and an intolerable criminal act of escalating the inter- Korean confrontation and tensions," Rodong Sinmun, the official daily of the Pyongyang administration said. "Through these farces the South Korean rulers seek to extol the US, which ignited the Korean War," it said, referring to the mock battles. The newspaper also took issue with what it said were new defense guidelines to be agreed by South Korea and its US ally next year. It said such guidelines were a scenario for aggression under the pretext of defense. ^ top ^

Pakistani nuke scientist alleges assisting N.Korea (Global Times)
North Korea has allegedly established a plant to produce gas for uranium enrichment, The Washington Post reported late Sunday, citing the founder of Pakistan's nuclear program. Abdul Qadeer Khan, widely lauded as the "Father of the Pakistani Bomb," disclosed in his formerly secret account that North Korea may have been involved in a small-scale uranium enrichment scheme by 2002 with "maybe 3,000 or even more" centrifuges to tap an alternative approach of making nuclear bombs in addition to its plutonium-based project, the report said. Pakistan assisted North Korea in providing critical machinery, drawings and technical advice for at least six years. The pilot plant, according to Khan, illustrates the exceptionally close ties between the two countries' scientists for nearly a decade, the report added. A tacit agreement was reached between the two governments, said Khan, in which his laboratory, accordingly, "would advise and guide them with the centrifuge program and the North Koreans would help Pakistan in fitting a nuclear warhead into the Ghauri missile." North Korea, in return for the vital technology offered by Pakistan, "taught us how to make Krytrons" – extremely fast electrical switches used in nuclear detonations […] Khan, who nevertheless insisted that his technical aid was approved by Pakistani top-tier political and army officials, is reportedly under house arrest in Islamabad. He has issued threats that a home detention would provoke him to leak confidential information. Pakistani officials in Washington dismissed Khan's assertions as baseless. "Pakistan, as a nuclear armed state, has always acted with full responsibility and never engaged itself in any activity in violation of the non-proliferation norms," the paper quoted the Pakistani embassy as saying in a statement. Song Ryol Han, the North Korean ambassador to the UN, also denied that his country ever discussed the issue "with Dr Khan in Pakistan." A US intelligence official and a US diplomat said Khan's depiction, if credible, further solidifies their suspicions that Pyongyang has long pursued the enrichment of uranium apart from developing plutonium for bombs […] North Korea claimed in September to have enriched uranium, after which the US' special envoy, Stephen Bosworth, stated in December that discussion of the uranium issue must be incorporated into future talks. ^ top ^

North Korea's Kim almost doubled visits this year (Global Times)
North Korean leader Kim Jong-il almost doubled the number of his trademark "field guidance" trips this year, a think tank said in a report seen Thursday. According to the North's media, Kim had made 156 inspection trips as of mid-December compared to only 90 in 2008, said South Korea's Institute for Far Eastern Studies. Kim uses such field trips to military units, factories, farms and other places to demonstrate his absolute leadership or indicate his policy priorities. The institute said Kim focused on the economy this year, with 64 visits to economic facilities, 43 to military units, 13 to foreign affairs-related sites, and 36 to other places. North Korea this year launched two major economic campaigns aimed at helping build a "strong and prosperous nation" by 2012, the centenary of the birth of its late founder Kim Il-sung, the current leader's father. Last year Kim Jong-il's field trips were mostly devoted to defense with 50 visits to military units and only 24 to economic facilities, it said. ^ top ^


Manuel Muehlebach
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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