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Wednesday, August 31, 2005

Little Progress in Textile Talks

American and Chinese negotiators have made little progress during two days of textile trade talks, despite efforts to reach an agreement before the Chinese president visits the United States next week.

Neither the US nor China had any progress to report Wednesday at the end of a second day of negotiations over US limits on surging Chinese textile imports.

US sources confirmed their negotiating team was due to return home as scheduled on Thursday.

Negotiators had hoped to reach an agreement ahead of Chinese President Hu Jintao's visit to the US next week.

The failure to reach a deal will be a setback for US-China trade relations. A continuining textile dispute could spill over into other areas of trade between the two countries.

Chinese textile exports rose sharply when global quotas ended on January 1. The US reacted by placing temporary import caps of 7.5 percent growth a year on some Chinese textiles in May.

Beijing wants to see those caps lifted or at least relaxed so more Chinese textiles reach the US. Chinese officials argue that American manufacturers had years to prepare for the end of the global trade quotas.

But US textile producers want even tighter restrictions on Chinese imports, which they say have cost American jobs and threaten their industry.

Trade is a defining element in the US-China relationship. It's also a sensitive issue. America's trade deficit with China last year hit $162 billion; and many politicians and voters want the government to reduce Chinese imports.

But China, eager to sustain economic growth, is dependent on maintaining export levels. The Chinese textile industry also provides 19 million jobs, which the government is under pressure to protect.

Tuesday, August 30, 2005

US, China Negotiating Textiles

American and Chinese trade negotiators are meeting in Beijing to try to resolve an ongoing textile dispute. European Union trade officials left Beijing on Monday after failing to resolve a similar dispute with China.

David Spooner, chief textile negotiator for the United States, met with China's Vice Minister of Commerce Gao Hucheng in Beijing for a fourth round of talks on China's textile exports to the United States.

US textile producers have made clear they want tighter restrictions on imports of Chinese-made shirts, pants, and other clothing, that have surged since global textile quotas ended on January 1.

In May, the US placed temporary caps of 7.5% growth a year on imports of some Chinese textiles. China's official Xinhua News Agency quoted official figures as saying almost all those caps have been reached.

Beijing wants to see the caps lifted or at least loosened up so more Chinese textiles can reach the United States. Chinese officials argue that American manufacturers had decades to prepare for the end of the global trade quotas.

China and the EU failed to reach an agreement over the weekend on a similar dispute, which has left tons of Chinese clothing stranded in European ports.

Chinese and US negotiators are apparently eager to reach a deal a week before China's President Hu Jintao meets with President Bush in Washington.

For three decades, quotas limited the volume of textiles and garments any country could export to another country. The idea was to protect the textile industries of higher-cost developed nations from low-cost competition in the developing economies.

While producers complain the end of the quotas has hurt them, many retailers in developed economies insist that restricting Chinese imports will hurt sales and force them to raise prices.

Monday, August 29, 2005

China Outlaws Sexual Harassment

China's national legislature has outlawed sexual harassment and vowed to work towards equality between men and women.

Traditional views towards women continue to slow progress towards equal rights between the sexes in China.

China's national legislature Sunday passed a measure that will for the first time outlaw sexual harassment of women. China's state media reported that the legislation, which goes into effect December 1, will give women the right to "lodge complaints" but was vague on penalties.

The official Xinhua news agency said a recent survey of 8,000 women showed that close to 80 percent said they had been sexually harassed. Meanwhile, Xinhua says there have only been 10 cases of sexual harassment that have gone to court since 2001.

Gu Xiulian, head of the official All China Women's Federation, says sexual discrimination is rampant in China and will take time to change.

"The traditional concept of valuing men while belittling women is still acting on people's minds," Gu says.

The national legislature also committed China's government to work towards greater equality between the sexes.

Women account for just a fifth of China's small business owners. Less than 19 percent of China's ruling Communist Party members are women, and even fewer are in the higher ranks of government.

Sunday, August 28, 2005

China and India Compete for Oil

India's biggest state-run oil firm recently lost out to a Chinese company in a bid to acquire PetroKazakhstan, a Canadian oil company with substantial reserves in Central Asia. The deal underlined the growing competition between the two populous and rapidly growing Asian countries for oil and gas assets in other countries.

India's Oil and Natural Gas Corporation had reportedly put in the highest bid for PetroKazakhstan in the first round. But the deal swung in favor of China's National Petroleum Corporation, when it improved its offer to nearly $4.2 billion.

Disappointed officials from the Indian oil company say their bankers are assessing their options to see if they will be allowed to revise their bid.

The fierce competition for PetroKazakhstan underlines the urgency with which the two Asian giants, India and China, are trying to secure energy supplies in other countries. The two need oil and other resources in ever-increasing amounts as their economies and populations surge.

Sukh Deo Muni, co-author of the recently-published book India's Energy Security, says Chinese companies have the upper hand because they can clinch a deal at any cost, whereas India's public sector firms are bound by rules to show a reasonable rate of return on investment. He says China is also freer to offer developing countries aid.

"China certainly has a much larger scope to maneuver itself into the market," he says. "Even in terms of granting financial assistance and developmental help, China has a greater flexibility because they are not governed by the kind of financial rules and democratic accountability which India has to undergo."

Recently however there have been calls for the two countries to cooperate rather than compete in their search for new energy assets.

After losing the PetroKazakhstan bid, India's oil minister, Mani Shankar Aiyer, said China and India needed to adopt a "collaborative approach" to prevent acquisition costs from climbing higher. He said he will visit Beijing in November to discuss the two countries mounting joint bids.

There have already been some signs of such cooperation. In Sudan, India and China have invested in the same hydrocarbon exploration fields, with the Indians holding a smaller stake than the Chinese.

But Muni feels that the prospects for such cooperation are limited.

"Collaboration cannot be a full answer because China is much ahead of India, and any country would like to have an independent access to energy, and, if China has a better control on energy in Asia, that gives China better influence on Asian affairs," he says.

India imports 70 percent of its crude oil needs, and is looking at larger requirements as its economy grows at about seven percent a year.

China Proposing Permanent NK Forum

China reportedly is suggesting that multinational talks on North Korea's nuclear program should evolve into a permanent regional security forum.

Japan's Asahi newspaper says Beijing included the regional-security forum in a proposal for a comprehensive settlement of the international dispute over North Korea's nuclear program, in particular, Pyongyang's efforts to assemble an arsenal of nuclear weapons.

China's proposal was widely discussed at the most recent round of negotiations with North Korea, but no joint statement was issued before the six-party talks adjourned without progress earlier this month. The talks are due to resume soon, but no date has been been set by the two Koreas, the United States, Japan, China and Russia.

Sunday's editions of the Asahi newspaper say Japan, the US and South Korea expressed support for China's position at the recent negotiations in Beijing. China's draft proposal called for a nuclear weapons-free Korean peninsula, for North Korea to normalize its diplomatic ties with the US and Japan, and for the North to receive energy assistance and security

EU Lifting Textile Blockade

A senior European Union official promises action Monday to resolve the customs dispute that has stranded millions of dollars' worth of Chinese textiles at European ports.

EU Trade Commissioner Peter Mandelson says all Chinese shipments that have been blocked from entering Europe could be released within a few weeks - by mid-September.

China's exports of low-priced textiles and garments to Europe, the United States and other nations surged early this year, after a global system of textile quotas ended on January 1. China agreed in June to a quota system limiting its shipments to Europe, but those quotas were filled so quickly that millions of items of Chinese clothing were left stranded at customs checkpoints.

EU textile producers say the imports are harming their business, but retailers say they have already paid for the Chinese clothing and want the imports released.

The European trade commissioner, who was speaking Sunday in Brussels, said EU member states' cooperation would be essential in resolving the trade dispute with China. Officials from both sides have been meeting in Beijing for the past four days.

Saturday, August 27, 2005

China-EU Textile Talks Fail to Resolve Dispute

Representatives of the European Union and China have failed to resolve a trade dispute over Chinese textiles during a third day of talks in Beijing Saturday.

Negotiators say they will continue their discussions on Sunday.

In June, China agreed to quotas in its textile exports to the EU. But millions of items of clothing manufactured in China have been blocked in European ports because China has already shipped its annual quota. The quotas are designed to protect European textile manufacturers from low-priced Chinese competition.

Chinese textile exports surged early this year when a global system of textile quotas ended.

Talks between China and the EU began on Thursday.

China Accused of Using Terror Angle to Persecute Ethnic Muslim Uighurs

Exile groups and human rights advocates say China may be preparing to crack down on ethnic Muslim Uighurs in the region of Xinjiang. Communist officials have repeated their warnings against what they say are terrorist groups operating in Xinjiang.

Human rights advocates have often accused Chinese Communist authorities of using anti-terrorism laws to persecute members of the largely Muslim Uighur ethnic group in Xinjiang. Xinjiang is home to most of China's Uighurs and a region some would like to see be independent from China under the name East Turkestan.

Exiled Uighur advocates say they have been getting reports from Xinjiang saying authorities have been rounding up suspected Uighur separatists over the past few weeks.

They say the arrests,coupled with warnings by Communist Party officials in recent days, signal a possible crackdown ahead of two anniversaries: September 11, and October 1, which will mark 50 years since the Chinese Communist government took over Xinjiang.

The Communist Party leader in Xinjiang, Wang Lequan, in recent days announced the government would clamp down on Xinjiang separatists, whom Beijing labels as terrorists.

"Those forces are engaging in activities aiming to split China and sabotage the unification of the motherland, jeopardizing national security, and endangering the interests of ethnic groups," Wang said. "I think any country in the world would firmly crack down on these serious crimes, and that is why we must take tough measures."

Some Uighur activists are pushing for greater autonomy for Xinjiang while others, especially those overseas, want complete independence for the region.

There is one militant Uighur independence group, the East Turkestan Islamic Movement, blamed for a number of bombings and violent protests in Xinjiang. It was declared a terrorist group by the US State Department in 2002 and has largely been dormant since then.

Ahmet Igamberdi, an Australian-based Uighur exile who identifies himself as the president of a government in exile that was proclaimed last ye, says he sees the arrests and warnings as examples of how the Beijing government is using anti-terrorism laws to persecute Uighurs and attack their culture.

"China's government calls some of our people terrorists, but Chinese government using this using this [as a] pretext," Igamberdi said. "Chinese government [is] implementing a genocide policy on Uighur people: cultural genocide; religious genocide; economic genocide."

Uighurs say China's national policy of assimilation is destroying their traditional culture. At issue is the government's movement of the ethnic Han majority into minority areas such as Xinjiang and the required instruction and usage of the national language, Mandarin.

On Friday, Xinjiang Communist Party chief Wang accused Uighur activist Rebiya Kadeer--now exiled in the US--of plotting with terrorist groups to disrupt the October 1 anniversary--a claim she has dismissed.

Kadeer spent more than five years in prison on charges of endangering state security after she sent newspaper clippings to her husband in the US. Following repeated requests from Washington, China released her in March of this year just before a visit to Beijing by US Secretary of State Condoleezza Rice.

Friday, August 26, 2005

China's President to Speak at Yale

President Hu Jintao of China will speak at Yale University--arguably America's most important and influential institution of higher learning--on September 8 as part of his first trip to the United States since taking office in 2003. The address will be broadcast live on Yale cable television and will be followed by a faculty panel discussion open to the entire campus community.

“We are pleased that President Hu will be coming to Yale during his visit,” said Yale President Richard C. Levin. “It will add a new chapter to the long history of Yale’s links to China and provide our community with an important perspective on China today.”

Yale, which is located in New Haven, Connecticut, has a long and deep connection with China. The first Chinese student, Yung Wing, to study in the US came to Yale, graduating in 1854. Today, there are more than 600 Chinese students and scholars at Yale--more than from any other foreign nation--and nearly 60 Yale faculty and scholars are engaged in research projects and educational programs across China, more than in any other country.

US President George Bush graduated from Yale, as did his Democratic Party opponent in the last presidential election, Massachusetts Senator John Kerry, and his principal rival for the Democratic nomination, former Vermont governor Howard Dean, who has since become party chairman.

Thursday, August 25, 2005

Pig-Borne Disease Worries WHO

A recent pig-borne disease outbreak in China that has killed dozens of people has highlighted concerns about what medical experts say is Asia's indiscriminate use of antibiotics. The outbreak is sparking fears that Asia could become a breeding ground for antibiotic resistant super-germs.

The Streptococcus suis bacteria responsible for the pig-borne disease outbreak in China rarely jumps to humans and is usually curable with the early use of antibiotics.

So doctors now are puzzled that the bacteria has killed at least 39 people in China in recent weeks, raising fears that it has become resistant to antibiotics and more virulent.

The outbreak was first detected in July in Sichuan province, but has since spread to other parts of China and infected more than 200 people, including at least 11 in Hong Kong.

Experts say Asia's indiscriminate use of antibiotics over the years complicates efforts to fight infections such as Streptococcus suis. The World Health Organization (WHO) recently said more than 90 percent of some types of bacteria in Asia no longer respond to so-called first-line antibiotics such as penicillin. Those are the drugs doctors usually turn to first when treating patients with bacterial infections.

Dr. Henk Bekedam, the WHO's representative in China, says this presents a serious threat if resistant bacteria spread.

"I think that's the part we are afraid of, the certain moment we have multiple strains of bacteria [that] don't respond to current available drugs," he says.

The WHO has been monitoring antibiotic resistance in Asia since 1991. Earlier this year, the agency said that resistance rates in several Asian countries for most of the world's common bacterial species are among the highest in the world.

Antibiotics are often available in Asia without prescription. Some doctors prescribe them unnecessarily for minor illnesses, and many patients in Asia demand antibiotics for every ailment.

Experts say this is dangerous.

China-EU Trade Talks Begin

European Union and Chinese trade officials have begun talks in Beijing to revise a trade agreement that has blocked tons of clothing from reaching European stores. The talks come just days before the United States and China hold similar discussions on the flow of Chinese textiles.

It has been only two months since EU and Chinese trade officials agreed in Beijing to limit soaring Chinese textile exports to Europe. Both sides hailed that negotiated solution as a breakthrough in trade relations, and the Chinese suggested it was an example for the United States to follow.

However, the quotas agreed to in June on Chinese sweaters, pants, bras and other textile categories have already been reached. European customs officials have therefore blocked the import of millions of dollars worth of these items, leaving some European retailers short of goods.

China would also like to see more of its exports on European shelves. An editorial Thursday in the official China Daily newspaper urged the European Union to honor the principles of fair trade.

The article went on to say that the EU experience is also useful for the US, where, it said, "protectionism is even more rampant, particularly in the textiles sector."

American and Chinese trade officials are scheduled to meet next week in Beijing for ongoing textile trade talks. Washington imposed emergency quotas on soaring Chinese clothing exports after global quotas ended at the beginning of this year.

Wednesday, August 24, 2005

Experts Debate War Games' Message

Nearly 10,000 Chinese and Russian troops are carrying out joint military exercises for a second week off eastern China's Shandong peninsula. The exercises are highlighting growing ties between the historic rivals (dating to Stalin's betrayal of the Chinese Communist Party in 1927, when Soviet Russia was complicit in the slaughter of Communists and Socialists at the hands of the Nationalist KMT).

Chinese officials eagerly showcased the exercises, with government newspapers heralding them as the start of a new strategic alliance between the two giant neighbors.

Some experts - both Chinese and Western - see the maneuvers as a message to the United States that Washington's influence in the East and Central Asia is not without rival.

One of these experts is June Dreyer, a political science professor at the University of Miami and a member of the US-China Economic and Security Review Commission, which met with Chinese officials in Beijing this week. Dreyer views the exercises as a sign of growing unease in Beijing as the US strengthens its ties with others in the region.

"I think they were designed to send a signal to the United States that the United States had better be careful," Dreyer says. And, I think that to some extent, Japan was another target. I think the Chinese have been very concerned with a Japan-United States alliance."

Russia and China did not invite the US to observe the maneuvers, which have included a simulated naval blockade, the firing of air-to-air missiles, and other exercises involving hardware including nuclear submarines, destroyers and helicopters.

Some of the drills are taking place not far from Taiwan. Analysts say Beijing wants to display its military might to the rival government of the island, which China claims as part of its territory and has threatened to take by force.

For Russia, the benefits of the joint maneuvers are largely economic. The exercise provided Moscow an opportunity to showcase the latest of the hardware it wants to sell to China. Beijing, which is rapidly expanding its military capabilities, is already the biggest buyer of Russian military equipment.

Yu Bin, a senior research associate for the Shanghai Institute of American Studies, says Russian leaders do not appear to want any part in the Taiwan dispute.

"They do not want to get too much involved in the Taiwan Strait. Though some low-level tensions may help them sell weapons to China. So the Russians have their own agenda, not completely overlapping with the Chinese," says Yu.

The exercises, while meant to show that an alliance is maturing between the two countries, do not change the years of conflict and suspicion that characterize their historical relationship.

Chinese and Soviet forces clashed along their border in 1969, and territorial disputes linger. Moreover, China's recent emergence as a major investor in Russia's Far East has caused unease among many Russians.

"Many Russian businessmen and politicians [who] still perceive China as a hypothetical threat now think [if] 'China invests in our assets, it could be dangerous for Russian security,'" says Vasily Mikheyev, a Sino-Russian relations specialist at the Russian Academy of Sciences in Moscow.

Some analysts say that a deep and lasting alliance does not appear likely at this stage, noting that Beijing and Moscow have - despite warming ties - failed to reach definite agreements on key issues such as the construction of an oil pipeline and long-running Chinese claims over Russian territory.

Professor Yu Bin at the Shanghai Institute of American Studies says economic interests of both sides and their growing trade ties to the United States may be what ultimately determine the future of Sino-Russian relations.

Proffessor Yu: "For both Moscow and Beijing, their fundamental interest is to have a normal working relationship with the United States. The problem is that if you look at the triangular [equation] both Russia and China actually need more from the American side than perhaps from each other."

The US has been monitoring the exercises off the Shandong Peninsula, but Washington has expressed little concern over their long-term significance.

US Defense Secretary Donald Rumsfeld said he did not find the joint exercises "notable" (see previous posting), adding that while US forces are observing what is taking place, he did not see anything in the drills that was threatening to "Taiwan or anyone else."

Tuesday, August 23, 2005

Rumsfeld to Media: Russia-China Military Exercises Not 'Notable'

US Defense Secretary Donald Rumsfeld says he is not concerned about the first bilateral Russia-China military exercises, which are now in their second week and include an amphibious landing in eastern China, not far from Taiwan. But Anerican experts on the region have differing views.

At a Pentagon news briefing Tuesday, Rumsfeld indicated he is not at all concerned about the two huge powers expanding their military cooperation through joint exercises.

"I don't find it notable," he said. "It is just a fact that countries get together and engage in various types of exercises. We are obviously observing what's taking place, but I didn't see anything in that that was threatening to Taiwan or anyone else."

Rumsfeld said the US frequently holds military exercises with a variety of countries, including Russia, and that the Russia-China exercises should not be seen as anything out of the ordinary.

But China expert Daniel Blumenthal of the conservative American Enterprise Institute, a Washington think tank, says the exercises are significant for several reasons.

"I think the exercises are quite notable," he explained. "There's a few points of context. One is the rapid growth in Chinese military power. The second is its refusal to renounce the use of force against Taiwan. The third is its statements with Russia recently about getting US forces out of Central Asia. So, I think, in that context, these exercises are quite notable."

Blumenthal says China is involved in a serious effort to counter American influence in Asia, and military exercises with Russia are part of that.

But at the more liberal Brookings Institution, Michael O'Hanlon agrees with Rumsfeld's conclusion that the China-Russia military exercises are not notable.

"I think he had it exactly right, both in terms of the politics and the substance," said O'Hanlon. "The politics of this are, don't get too excited because if you do you're going to make Russia and China feel even more desire to have these sorts of things because they're going to feel the United States is not giving them their sovereign right to maintain their militaries and work with their neighbors and friends the way we ourselves do here. So, it would have been an mistake, given that the exercise didn't harm anybody, it would have been a mistake for Mr. Rumsfeld to object to it too strenuously, or for that matter, even a little."

And on the substance, O'Hanlon says Russia is not likely to actually fight beside China in any future conflict, so the joint exercises are not relevant in that sense. But he is concerned about any further increase in Russian arms sales to China.

Daniel Blumenthal says the exercises are further evidence that Russia and China are finding that they have similar critical views of one of the key policies of the Bush administration.

"Russia and China are finding common cause in the sense that neither one very much likes the US strategy of spreading democracies, and so they're finding common cause here in countering what they see as too much US influence," said Blumenthal.

The Russia-China military exercises began last week in the Russian Far East, and continued this week along the east coast of China. The two countries say their armies, navies and air forces are building their capability to work together against "international terrorism, extremism and separatism." The mention of 'separatism' is an apparent reference to Taiwan, where there is growing support for formal independence. That statement, the inclusion of an amphibious assault in the exercises and the use of long-range bombers capable of carrying nuclear weapons have caused concern in Taiwan, and among some regional experts.

Rumsfeld doesn't see it that way. But he referred reporters to his department's annual report on China, issued last month, which said the country is working intensively to modernize its military, is changing the military balance in Asia, and is making preparations to expand its military reach beyond its home region.

HK Health Officials Investigate Safety of Chinese Food Exports

Hong Kong health officials are in Beijing to investigate the safety of China's food exports to the territory following a series of recent health scares. In a city heavily reliant on the mainland for its food supply, many Hong Kong residents are wondering what is safe to eat.

Hong Kong Health Secretary York Chow held talks with Chinese counterparts in Beijing Tuesday about the safety of the food China is exporting to the territory.

Speaking after the meetings, Chow says Hong Kong and Beijing have agreed to communicate better over health issues.

Chow made the trip after a rapid-fire series of food scares erupted over infected pork and tainted fish and eel from the mainland, where most of Hong Kong's supply of fresh food comes from.

A pig-borne bacterial disease has recently killed dozens of people in Sichuan Province and infected people in several other provinces. At least 11 cases of the disease have also been reported in Hong Kong, although there have been no deaths here so far. Sichuan pork was banned here after the outbreak was reported earlier this month.

Last week, eel and several varieties of freshwater fish from Southern and Eastern China were found to be contaminated by cancer-causing toxins. Hong Kong has not banned mainland fish, but exports have fallen, pushing fish prices up in the city.

This woman, shopping in a fresh food market, says the government should have acted sooner on the problem, because so many people eat pork and fish. She says she will eat more vegetables from now on.

The Chinese typically demand fresh ingredients for their food. Housewives, cooks and domestic helpers often shop at the fresh food markets at least once a day.

This butcher, who sells only pork from local farms, said the health scare has destroyed his business. He says the government should never have imported infected pigs. Now, he says, people are also afraid to buy local pork.

Chow, the health secretary, said Hong Kong will now resume imports of pork from Sichuan Province, where the swine disease first broke out. Beijing says the outbreak is under control.

But on Tuesday, three new infections and one death were reported in Guangdong province, just across the border from Hong Kong.

A lack of transparency from Beijing about the health scares has left many people in Hong Kong worried about a repeat of the Severe Acute Respiratory Syndrome (SARS)crisis in 2003. China covered up the origin of that new disease in Southern China until it began to spread worldwide, eventually killing 800 people.

Ending Income Tax for Poor Workers Signals Fear of Major Urban Unrest

China plans to eliminate income taxes for low-income workers. But experts say the measure will mainly benefit poor people in the cities rather than the majority of China's poor in the countryside--a reflection, perhaps, of increasing concern that the urban underclass could represent a more serious threat to social stability than the left-behind rural poor, despite recent violent protests in the countryside.

The government plans to help some of the country's poorest by nearly doubling the threshold for paying personal income tax.

State media reported on Tuesday that China's parliament agreed to raise the lowest taxable income to $185 a month, from the current $99.

The official Xinhua News Agency says the plan will "relieve the tax burden for the middle and low-income groups."

However, some economists and financial analysts say the measure will do little to help low-income earners in the countryside. A growing gap between the rich and poor, combined with land disputes and corruption, has contributed to thousands of incidents of unrest in the past few years in China's small towns and villages.

Average income levels in the countryside are already far below the taxable income level and the main reason for the tax adjustment is the rising national average income.

The Xinhua News Agency says the government instituted the current minimum taxable income level in 1980 when the average worker made less than $15 a month.

The official China Daily newspaper reported on Monday the average urban income is likely to reach one hundred dollars a month this year. Last year, incomes in the countryside were only a third of those in the city.

Monday, August 22, 2005

Villagers Fight Cops Over Pollution

Reports from China say protests broke out in the eastern province of Zhejiang at a factory suspected of pollution.

Witnesses are quoted Monday as saying several villagers were injured when they clashed with police Saturday outside the Tian Neng Battery Company in Meishan. The protesters are said to have burned several police cars and damaged factory and government buildings. There has been no official report of the violence.

Local residents say the battery factory is responsible for high levels of lead that have poisoned their children.

The protest over industrial pollution is the third this year in Zhejiang province.

China has been struck by violent protests in recent months as rural villagers vent anger over industrial pollution and allegations of corruption and unfair land distribution.

Government Report Says Rising Gap Between Rich and Poor Could Reach Dangerous Levels in Just Five Years

A government report in China says the gap in income between the country's rich and poor is growing steadily, increasing the risk of future social instability.

Unless the current trend is reversed, experts at the Ministry of Labor and Social Security say, China's income gap will broaden to a dangerous level within five years. Government researchers call this the national economy's "red-light scenario."

The gap between rich and poor also is largely an income gap between those who live in urban and rural areas of China.

The China Daily newspaper, reporting Monday on the government study, quotes a researcher, Su Hainan, president of the ministry's Income Research Institute, who says incomes in China's cities have been rising at a rate of 8 to 9 percent each year. This compares to 4 to 5 percent annual income growth in rural areas.

Official statistics indicated earlier this year that 45 percent of China's wealth is held by 10 percent of the people; conversely, the 10 percent of Chinese who are the country's poorest have only 1.4 percent of the national wealth.

China's wealth gap already has been blamed for a rise in protests, many of them violent, by citizens who are frustrated and angry about land disputes, officials' abuse of power and corruption.

Friday, August 19, 2005

Accused Spy is American Citizen

US Embassy officials in Beijing say Chinese authorities have held an American businessman under house arrest for more than two months, on accusations that he spied on behalf of Taiwan.

Chinese foreign ministry officials say New Jersey resident Xie Chunren, was detained back in May in Sichuan province on suspicion that he had engaged in what officials call "activities harmful to the security" of China.

The authorities, however, have yet to charge Xie, a Chinese-born American citizen.

A foreign ministry spokeswoman, who declined to give her name, says Xie was placed under house arrest on May 31.

She says he will be dealt with according to Chinese law.

A US embassy spokeswoman says Chinese authorities have allowed US consular officials to visit Xie three times since he was detained, adding that American diplomats are working to ensure that his rights are respected.

China often accuses Chinese-born foreigners of spying for rival Taiwan, which Beijing claims as a part of Chinese territory, as a way of limiting their activities in China. Among those arrested recently is Ching Cheong, a Hong Kong journalist who mainland authorities say has confessed to spying on behalf of Taipei.

Thursday, August 18, 2005

Christian Group Accuses China of Arresting and Torturing Believers

A Christian aid organization from the United States says that China has arrested five American church leaders and dozens of Chinese believers. China's Foreign Ministry is not commenting on the report.

China Aid Association says China arrested five American church leaders along with 27 Chinese pastors this week in the cities of Luoyang and Yichuan in central China's Henan province.

The group's statement did not give the names of the Americans or details of their arrest.

China only allows religious activity in state-approved churches, which it closely monitors.

A US Embassy spokeswoman said the embassy takes all cases involving American citizens seriously and is investigating the claims. She could not confirm the arrests had taken place.

Members of China's secret, or "underground" churches are often harassed and arrested. However, despite the risk of prison, experts say millions of Chinese worship in unofficial churches.

China Aid Association also reported that more than 40 Chinese Christians were tortured after being arrested in Hubei Province earlier this month.

The organization alleges that they were burned with cigarettes and that their wrists were punctured with needles.

Textile Talks Fail to Resolve Issue

China's Commerce Ministry says major differences remain between Beijing and Washington over textile exports after two days of talks on the issue in San Francisco, California earlier this week.

A statement Thursday on the ministry's website said Chinese officials are hopeful future talks will yield an agreement.

The meetings focused on US limits on Chinese imports intended to protect American clothing manufacturers from low-cost competition. Chinese products flooded the market this year after global trade quotas expired.

US textile manufacturers complain they have lost 26,000 jobs to cheap Chinese imports.

But American retailers argue that sharp limits on low-cost imports could cost US consumers $6 billion in higher clothing bills annually. That works out to about $20 a person in the US.

Fuel Shortages Plague South China

Parts of China, particularly in the South, have been experiencing serious fuel shortages in recent days as international crude oil prices reach record highs. Government gasoline price controls are a major cause of the problem.

Long lines of vehicles at gasoline stations have become a familiar sight in recent days in the major cities of Guangdong Province, China's manufacturing hub.

Earlier this month, gasoline and diesel rationing was imposed in the provincial capital of Guangzhou. Fuel shortages have also been reported in the city of Shanghai and Yunnan Province.

Reports say state-owned Chinese refiners are balking at increasing the supply, in a bid to put pressure on the government to lift its price controls on fuel.

The refiners want to pass on the rising cost of crude oil, which has passed $60 a barrel. But the government is keeping the retail price of gasoline at around 44 cents a liter, and therefore the price it pays the refiners is also kept low.

An expert on energy and transportation issues in China says Beijing's attempt to control inflation is at fault.

"The gap between the international price and local price in China has been very wide," said Elspeth Thomson. "The government sought to cushion inflation from galloping ahead. That is its greatest concern. So refiners in China have been buying crude oil at very, very high prices and absorbing the cost of this because they haven't been able to push the cost down to consumers."

On Thursday, the state-owned newspaper China Daily called for retail prices to rise, to restore the balance of supply and demand. The editorial said failing to address the problem now would only hurt the economy later.

But raising retail prices is a delicate issue. Thomson says China would have to do it gradually so as not to anger consumers.

The fuel shortage comes as China's roaring economy creates an ever-heavier demand for energy. There are more and more vehicles on the streets, exports are booming, and factories and heavy industries crucial to the Chinese economy consume huge amounts of power.

Wednesday, August 17, 2005

US, Israel Agree on China Arms Sales

The United States and Israel have announced an understanding on the need for consultations before Israel sells military technology to other nations. The accord appears to have defused a dispute that had arisen between Washington and Jerusalem over Israeli military sales to China.

But analysts say China's quest for greater military power will not be contained easily.

Americn and Israeli officials say the agreement is designed to ensure that their two governments see eye-to-eye on third-party military transfer issues, but does not give the United States veto power over Israeli dealings with other nations.

"It does not create a list of prohibited items that Israel cannot sell," said Pentagon spokesman Major Paul Swiergosz. "It does not threaten; it does not impose sanctions. What it does do is provide a consultative process that will allow the two countries to reach a common understanding with respect to technology security policy."

Swiergosz says the Defense Department has legitimate concerns about the transfer of military technology to China and elsewhere.

"We want to make sure that the technology over which we do have some control does not, ultimately, facilitate the creation of weapons systems that we might have to deal with, in some sense," he said.

Former State Department arms technology negotiator Jim Lewis is more blunt in describing American apprehensions.

"The primary concern is that the Chinese military is very clear about the fact that they see the United States as their principal enemy," he said.

Amerian anxieties over Israeli weapons sales to China are nothing new. In 2000, the US dissuaded Israel from completing a $1 billion deal to sell the Chinese an advanced airborne early warning system. Beginning last year, the US raised objections to Israel's planned servicing of spare parts for a Chinese fleet of unmanned anti-radar drones.

David Lampton, who is director of China studies at the Johns Hopkins School of Advanced International Studies, says that when it comes to Chinese military ambitions, all eyes are on Taiwan, an independently-governed island Beijing considers part of Chinese territory.

"The one area in which the United States could imagine coming into conflict with China, and where China could imagine coming into conflict with the United States, is the Taiwan Straits," he saysd. "Indeed, China's military modernization is focused around developing a military force that would be potent in the Taiwan Straits and deter the United States from intervening."

Lampton says China's largest military supplier is Russia, but that Beijing would like to diversify and eventually make purchases from nations like France, if and when an EU ban on sales to China is lifted. Should that happen, he says US officials would feel pressure to allow American companies to compete for lucrative Chinese contracts. Overall, Lampton says, containing China's appetite for advanced military technology will not be an easy task.

"As China's economy is growing, as China becomes more powerful, more and more of the traditional friends of the United States will have larger commercial and strategic interests with China," he says. "And, therefore, it will be increasingly difficult, over time, to have broad barriers to the sale of military and other technology to Chin. Also, China itself is restructuring its defense manufacturing industry. R&D [research and development] is going up. So, not only will China be more able to acquire technology abroad over time, China is going to become much more capable of producing its own, as well."

But former State Department negotiator Jim Lewis, now a senior fellow at the Washington-based Center for Strategic and International Studies, says it is vital that the US maintains a technological lead over China, and that agreements like the US-Israeli understanding are useful in that regard.

"The Chinese cannot catch up with us in military technology, that is not going to happen anytime in the next 20 years," Lewis says. "But they hope they can leapfrog [advance] by obtaining technology from foreign sources, like Europe or Israel or Russia. And they also hope they can acquire technology illegally from places like the United States. We [the US] are the place to go if you want the most advanced military technology. The Chinese know that, and it is in our interest to make sure, until relations between the two countries are better, that they do not get it."

Lewis adds that vigilance is required. He says, while governments in Washington and Jerusalem may agree on the need to control military technology, individual defense contractors may succumb to temptation and attempt covert transfers on their own.

IOC Impressed by Beijing Progress

International Olympic Committee representatives say they are impressed with the Chinese capital's preparations to host the 2008 Summer Games.

Members of the IOC Coordination Commission, including chairman Hein Verbruggen, spent three days touring Beijing's Olympic venues as well as the equestrian venue in Hong Kong.

Last month, the IOC decided to move the equestrian competition to the Hong Kong Jockey Club and Hong Kong Sports Institute because of difficulties in guaranteeing proper veterinary health conditions in Beijing.

The group also dealt with educational and ceremonial issues, such as organizing the Olympic Torch relay. The discussions included news media working conditions during the 2008 Games but no official mention was made of China's restrictions on freedom of the press.

Last week, the human rights group Reporters Without Borders delivered a petition to IOC President Jacques Rogge demanding that the Olympic Committee stop ignoring the lack of press freedom in China.

Tuesday, August 16, 2005

Population Growth Means Worsening Water Shortage for Cities and Towns

Everyday, small communities in much of China struggle to get the water they need for their homes and their farms. The country is confronting a water shortage that experts say will only get worse as the population grows.

Water shortages are not an easy problem to escape in China. Four hundred cities across the country do not have enough water to support their escalating populations. The Beijing Worker's Daily newspaper reports China's capital is short one billion tons of water every year. Some cities have resorted to rationing, at least for part of the year.

Liang Congjie, president and founder of Friends of Nature, one of China's first environmental groups, says water shortages have become one of the country's biggest challenges, because, he says, it is impossible to create new stores of clean water.

Liang says that if there is no water underground and no rain falling, there is no alternative but for the ground to be dry. Originally, places hit by drought were not suitable for human beings. But, he says, China has such a huge population so even places that are not suitable for human beings are now full of people.

The Chinese government is making some attempt to address the issue.

Apart from raising water prices in coastal cities and urging citizens to conserve, China is starting what could be the world's largest construction project: a complex network of canals that will carry water from the Yangtze river in southern China, where water supplies are greater, to parched areas in the north. The project is estimated to cost $60 billion and will take 60 years to complete.

Expensive construction projects seem a world away at the weekly market in Yuwang. Many of the people crouched here by the road selling food wear facemasks to protect themselves from the swirling dust.

One solution to the water problem here is for another pipeline and pump to be built to bring water from the mountains. However, only the provincial government can afford that project, and while there is talk of a new pump, so far there are no definite plans for one.

Experts predict that China's water shortage will peak when the population rises to an estimated 1.6 billion in the year 2030.

China Opening West to Foreign Airlines to Boost Development

China will soon allow foreign airline flights freer access to the western part of the country to help boost development.

The vice director of China's civil aviation administration, Yang Guoqing, says Beijing will end limits on overseas air carriers who apply to operate international flights in western areas.

The state-run China Daily newspaper says passenger traffic in western China increased 35 percent last year over the year before.

China's current economic boom has largely gone unnoticed in the country's thinly populated, landlocked western region.

Saturday, August 13, 2005

China: Taiwan UN Try "Doomed"

China has denounced Taiwan's latest attempt to rejoin the United Nations--an effort that Beijing says is "doomed."

Kong Quan, spokesman for the Chinese Foreign Ministry, said in a statement Saturday that Taiwan's request violates the UN Charter. Beijing says Taiwan's application is unlikely to gain any support, and is doomed to fail.

Representatives from Taiwan asked the United Nations Friday to restore the island's membership in the world body to help keep peace in the Taiwan straits. This was the 13th time Taiwan has tried to rejoin the United Nations since its membership was revoked 34 years ago.

The UN has recognized Beijing as China's sole representative in the world body since 1971, when Taiwan's seat was transferred to the mainland government. China sits as a permanent member of the UN Security Council, with veto power, and it has blocked Taiwan's 12 previous efforts to rejoin the General Assembly.

The United States recognizes the People's Republic of China as China's sole legal government, and it acknowledges Beijing's position that there is but one China and Taiwan is part of China. US policy supports other opportunities for Taiwan's voice to be heard in organizations where it's denied membership.

Thursday, August 11, 2005

Cambodian King Visiting China

Cambodian King Norodom Sihamoni is visiting China on his first official state visit since taking the throne last year. Cambodian leaders are trying to attract foreign investment.

The king arrived Wednesday evening and will meet with Chinese president Hu Jintao and other government leaders during his five-day visit.

Norodom Sihamoni replaced his ailing father as Cambodia's largely ceremonial monarch last October.

Chinese Prime Minister Wen Jiabo welcomed the new king to China. He says China will push to strengthen ties with Cambodia.

The visit comes at a critical juncture for Cambodia. After decades of civil war and political isolation, a degree of stability is taking hold.

And now a new coalition government is trying to attract foreign investment and strengthen the country's fragile economy.

"For a post-conflict country like Cambodia, one of the poorest countries in the world, it needs to have good friends everywhere and they've looked to other countries to see how to assist economic growth in their own country," explained Verghese Mathews, a researcher at the Singapore Institute for Southeast Asian Studies.

He says Cambodian leaders have been courting Chinese trade and funding for development projects.

The king is traveling with a 50-member delegation, including Cambodia's Minister of Foreign Affairs and other senior government officials.

King Sihamoni is also accompanied by his 82-year-old father.

The ailing Norodom Sihanouk has cancer and is expected to remain in Beijing for medical treatment.

Wednesday, August 10, 2005

Hope Fades for Trapped Miners

Rescuers in southern China have recovered the body of one of the 123 miners trapped in a flooded coal mine, and are holding out little chance any others will survive.

The miners have been trapped in the Daxing mine at Xingning in Guangdong province since Sunday. State media say that so far rescuers have been unable to find the source of the flooding.

Chinese police have arrested 11 people for their roles in the disaster, including the mine's owner, manager, board chairman and chief technician.

The government also has suspended the mayors of the cities of Xingning and Meizhou for failing to supervise coal mine production.

China has the most dangerous mines in the world. More than 2,700 miners have been killed in the first half of this year alone.

Monday, August 08, 2005

US Cares About Jailed HK Reporter

Unlike the American media, the American government seems to care about China's continuing media crackdown.

The United States Monday expressed concern about spy charges filed by China against a prominent Hong Kong journalist. The journalist, who works for the Straits Times newspaper of Singapore, is accused of spying for Taiwan.

The US State Department is voicing concern about the arrest of the journalist and its implications for press freedom in Hong Kong, and says it has raised the matter directly with the Chinese government.

Hong Kong journalist Ching Cheong, the lead China correspondent for the Straits Times, was detained in southern China in late April and formally charged with spying for Taiwan last Friday.

The 55-year-old journalist is regarded as one of the most knowledgeable reporters covering China, and is the first journalist from Hong Kong to be accused of espionage since the former British colony returned to Chinese rule in 1997.

At a news briefing, Deputy State Department Spokesman Adam Ereli said the US is following the case against Ching closely and has discussed it with Chinese authorities:

"Freedom of the press is a fundamental and internationally recognized right. We view any attempt to restrict this right with great concern," Ereli said. "We have spoken to the Chinese of our concerns about the treatment of journalists in general and the important roles they play in providing information to the public. We have also raised Mr. Ching's case and we intend to seek additional information from China."

Ching, who, like many Hong Kong residents, holds a British National Overseas passport, has been held incommunicado since his arrest.

Gone are the days when a British--or American, for that matter--passport can be counted on to protect anyone from a regime like that which runs China.

CHing's wife and editors say he was arrested while trying to obtain a manuscript from an author who had secretly interviewed Zhao Ziyang, the former Chinese communist leader who was purged for opposing the 1989 military crackdown on student protesters in Beijing's Tiananmen Square.

Zhao died in January of this year, with observances of his death tightly controlled by Chinese authorities.

The official Chinese news agency said Ching was accused of accepting hundreds of thousands of dollars in exchange for gathering economic, political and military information for Taiwan, some of it in classified documents.

A spokeswoman for the Straits Times in Singapore said Ching was an outstanding journalist, and that the company had no inkling or suggestion he could have been involved in spying.

She said neither the Straits Times nor lawyers it has hired to defend him have been allowed to contact him since his arrest.

Xhao Yan, a Chinese researcher for the New York Times bureau in Beijing, has been detained since last September on suspicion of passing state secrets. Formal charges have not been filed in that case, which has also drawn an expression of US concern.

Saturday, August 06, 2005

Bird Flu Could Cause Pandemic

Another thing to worry about....

Health experts say the avian flu that has so far largely affected birds in Asia has the potential to infect humans and cause a worldwide pandemic. Two worrying signs the disease is spreading include the recent discovery of avian flu-infected poultry in Russia and detection of the virus in migratory geese in western China.

Avian flu is an infectious disease of birds caused by strains of the influenza virus.

So far, the virus has been found mostly in birds in Asia. But the World Health Organization (WHO) says international health experts are concerned that the avian flu has the potential to become highly infectious and spread to humans around the globe.

"There's no reason to believe that there will not be another pandemic," one official said said. "What we don't know is, will this particular virus spark the next pandemic?"

Since 1997, more than 100 people have been infected with avian flu. The virus has claimed more than 60 lives in Hong Kong, Vietnam, Thailand, Cambodia and, most recently, in Indonesia. Authorities in those countries have destroyed millions of birds in an effort to eradicate the disease.

So far, the human death toll has been relatively low. But the director of the US National Institute for Allergy and Infectious Disease, Anthony Fauci, points to what has become a source of growing concern.

"The important thing, it has not yet evolved the efficiency of being able to readily jump from bird to human, and very, very inefficiently going from human to human," Fauci explained. "In fact, only two confirmed cases of spread from human to human. But something like a mutation or recombination of viruses or re-assortment of viral genes from one virus to another could lead to a greater efficiency of spread, such that the spread from human to human would be sustained."

There are examples in recent history of the worldwide havoc wrought by pandemic flu.

Said Fauci: "We saw that in 1918, with a catastrophic event with what they used to call the Spanish flu, even though that's a misnomer. But it really devastated the globe, in the sense that there were about 20 to 40 million deaths, and about half a million deaths in the United States."

He added that international health experts are more concerned about the avian flu now than they were even five years ago because "it's still around."

"It's still infecting chickens," Fauci said. "It hasn't been eradicated. And even though there are not a lot of cases in humans, as the weeks and months go on, [there is] another case here, another case there. So, it's going in the direction of more cases as opposed to just disappearing. You know, it might happen this year, it might happen next year. We just don't know. But the circumstances are such that invariably, sooner or later, it's going to happen."

Are countries ready to face what could be a catastrophic flu pandemic? WHO says no, the world is not ready for the next pandemic. And finding the virus in poultry in Russia and in migratory birds is worrisome because it shows that it is starting to spread geographically.

A vaccine has been developed in the US that has been proven effective against H5N1, the name of the strain that is currently found in Asia. But, says Fauci, although a vaccine does exist, there still will be a problem of producing a large enough amount of it, quickly enough, in order to meet what he anticipates could be overwhelming demand.

Friday, August 05, 2005

HK Journalist Charged with Spying

The media crackdown continues.

Following this week's announcement of new rules aimed at restricting and censoring foreign media--from Websites to TV programs to theatrical performances--and Chinese-foreign co-productions (see yesterday's posting), China has formally charged a Hong Kong reporter working for a Singapore newspaper with spying for Taiwan.

Journalist groups say the charges are unfounded and another example of China's restriction on press freedom.

China's state media announced Friday that Ching Cheong, a Hong Kong journalist under house arrest since April, has been formally charged with spying for Taiwan.

China's Xinhua News Agency says Ching, the chief China correspondent for the Singapore Straits Times newspaper, has confessed to being a spy and to purchasing top secret information about China's political, economic and military affairs.

Media rights groups deplore the arrest.

Shawn Crispin, an Asia consultant for the New York-based Committee to Protect Journalists, says the charges against Ching are false, and he should be released immediately.

"The state often times brings anti-state charges, or inciting subversion against state authorities charges against journalists," Crispin says. "And, this is obviously their heavy-handed attempt to control the flow of information, to make sure that no political dissent to the current regime rises up amongst the population."

Ching's wife, Mary Lau, insists her husband is innocent. She says he was arrested after attempting to get transcripts from an interview with former Communist Party chief Zhao Ziyang, a man who opposed China's military crackdown against pro-democracy demonstrators in Tiananmen Square in 1989.

China's state media say Taiwan authorities recruited the reporter in early 2000, and he sold top-secret information to Taipei for hundreds-of-thousands of dollars.

Ching was detained in April, interrogated, and held under house arrest. This is the first time Beijing has given any details of his case.

He is the second Chinese journalist working for a foreign newspaper in China to be arrested in the past year.

In October, a Chinese researcher at The New York Times' Beijing bureau was charged with "divulging state secrets." The researcher allegedly told The New York Times that former President Jiang Zemin would retire from China's Central Military Commission before his retirement was officially announced.

Thursday, August 04, 2005

China Rules Against Foreign Media

Again, China disappoints.

As China Confidential predicted some months ago (see April 26 posting), the appointed protectors of China's culture are continuing to crack down on the media in general and foreign media ventures in particular. And not surprisingly, the kowtowing foreign media conglomerates that have done their best to ballyhoo an all too-brief period of media liberalization have mainly ignored the story.

While Western pundits were wringing their hands over CNOOC's announcement that it had ended its controversial bid for US-based Unocal oil company, Beijing bureaucrats were making another and perhaps far more significant and telling announcement. China's media regulators, including the Propaganda Department and Ministry of Culture, revealed an array of new regulations designed to prevent additional foreign satellite channels from entering the Chinese market, while strictly controlling and seriously limiting the influx of foreign television programs, films, books, newspapers, magazines, Internet sites, video games, cartoons, and performing acts, including theatrical performances.

"We must strengthen censorship," say the new regulations, which were announced on Tuesday and published on Wednesday.

The regulations, which would also severely restrict Chinese-foreign co-production of films and TV programs for the foreign market, follow last month's ban on Chinese broadcasters and foreign investors jointly operating TV channels in China. A ban on Chinese-foreign co-production of TV programs for the Chinese market has been in place since early this year.

Fake and Pirated Potters Flood China

Harry Potter is alive and selling like hotcakes in China despite the local publisher's best efforts to keep him under wraps. Pirated copies of Harry Potter and the Half-Blood Prince are on sale throughout the country, including Chinese-language versions available more than two months before the authorized translation is scheduled for release.

In English or Chinese, the real thing or just a cheap knock-off, the latest Harry Potter saga is on display throughout the Chinese capital.

Official English-language versions of the new Harry Potter adventure are available at bookstores in Beijing for about $20.

But Chinese bootleggers have already rushed out illegal copies. The fakes look just like the real thing - at least at first glance - but they sell for one-tenth the cost.

But you do get what you pay for, and the pirated prince is suspiciously shorter than the official version. The book's spine also seems a bit too flimsy to survive more than a few late night readings.

Details like that don't seem to matter, though. Street vendors, like this one who declined to give her name, say the book is selling well.

She says the book is just as good as the version for sale in the stores. She even offers a money-back guarantee.

Her best customers, she says, are foreign tourists looking for a good deal.

For local fans she says she also has an - equally illegal - Chinese translation.

She says the translations are so good some people even give her their business cards to reserve advance copies.

The authorized Chinese-language version won't go on sale here until October.

And for those Chinese unhappy with the book's real, rather tragic ending, unauthorized alternatives are available.

Several university students are translating the book and posting their finished work to the Internet. One translator says he was so disturbed by author J.K. Rowling's final chapter, he is offering his own version. Now, he says, everyone can live happily ever after.

The book's official Chinese publisher, the People's Literature Publishing House, says it is not amused.

The last five Chinese-language installments of the Harry Potter series have sold more than six million copies in China.

But China is also considered a global leader in copyright violations, and Potter piracy has been a huge problem from the start. It has not only cut into profits, it has also created some unusual competition.

In 2002, Chinese fans rushed out to buy Harry Potter and Leopard Walk Up to Dragon - a totally fake Potter adventure. And one in a series, at that.

Wednesday, August 03, 2005

China Tries to Save North Korea Nuclear Weapons Negotiations

China is trying to salvage stalled six-party talks on North Korea's nuclear weapons programs. On Wednesday, Chinese officials circulated a fourth draft of a proposed joint statement. After reports of an impasse earlier in the day, negotiators were seen returning to the talks venue Wednesday night.

After nine days of negotiations, some delegates said they felt the talks were nearly finished.

All six chief negotiators had been expected to meet Wednesday afternoon to discuss a new Chinese proposal for a joint statement. That meeting did not happen, but late in the day, some delegates were seen returning to the guesthouse where the talks are being held.

Christopher Hill, the chief United States envoy to the talks, told reporters Wednesday evening that the US team had done nearly all it could.

"I think we're really getting to the end of the negotiating process," Hill said. "I'm not going to predict that it's over today or tomorrow, but certainly I think we are getting to the end."

Earlier, Hill said that if the impasse continues the negotiators should consider ending the present round of talks and heading home for consultation.

The negotiations, which include North and South Korea, the US, Russia, Japan and China, are aimed at persuading the Pyongyang government to give up its nuclear weapons program.

But delegates say the North Koreans seemed unwilling to compromise, and have actually presented a growing list of demands.

Hill said the latest joint statement prepared by the Chinese offers the North Koreans a good deal.

"They can look forward to a brighter future, a more secure future, a more prosperous future, but they can't do it with nuclear weapons," he said. "They have got to get off that."

The current fourth round of talks, which came after a break of more than a year, has been the longest since the six-party process began in 2003.

Tuesday, August 02, 2005

CNOOC Makes it Official

It's official: CNOOC has given up its $18.5 billion bid for Unocal.

It would have been the largest-ever Chinese acquisition of a US company.

With oil prices at record-high levels, the bid sparked opposition from members of the US Congress. Some politicians said losing control of some US-owned oil assets could harm the nation's economy and security.

The parent company of CNOOC is controlled by the Chinese government.

A statement on the company's Website said its interests are "purely commercial" and called the political opposition "unjustified" and harmful to Unocal shareholders and employees.

CNOOC's move leaves Chevron as the only bidder for Unocal.

US, Chinese Officials Meet to Ease Tensions Over Trade and Politics

Senior American and Chinese officials have met in Beijing for the first in what is being billed as a regular series of dialogues aimed at easing trade and political tensions.

Relations between the United States and China have been put under stress by ongoing disputes over textile trade, widespread product piracy in China, the revaluation of the Chinese currency, and Beijing's military modernization and build-up.

US Deputy Secretary of State Robert Zoellick has been in Beijing to meet senior Chinese leaders in Beijing, in the first of a series of regular, high-level consultations aimed at improving the sometimes-strained relations.

Meeting with reporters in Beijing, Zoellick said China had come a long way in its integration into the international community, and that the US and China must work together to improve relations.

"The United States and China, as common stakeholders in these systems, need to work together to try to pursue common interests, and maintain and strengthen these systems for cooperation of issues of today and those in the years ahead," Zoellick said.

On Sunday, Zoellick met with Chinese Prime Minister Wen Jiabao. He met with Vice Foreign Minister Dai Bingguo Monday for what China's state media called a "full day of discussions."

Zoellick said that during the talks, he and the Chinese officials discussed everything from trade to terrorism.

This first of what are expected to be bi-annual meetings came as the result of an agreement reached last year between President Bush and Chinese President Hu Jintao.

Zoellick said a second round would be held in Washington later this year.

Joint Chinese-Russian Military Exercises Set for Late August

China and Russia will hold their first joint military exercises later this month.

The Chinese Defense Ministry says the exercises, which have been dubbed "Peace Mission 2005," will take place August 18 through the August 25 in the Russian city of Vladivostok and on China's coastal province of Shandong.

More than 10,000 troops from both nations' armies, navies, marines and air forces will be involved.

The ministry says the goal of the exercises is to "deepen Sino-Russian trust" and improve their capability to fight international terrorism.

Japan Defense Agency Analyzes China's Military Modernization

Japan's defense agency is increasingly concerned about China's expansion of its military forces.

The agency's annual White Paper issued Tuesday noted Beijing's increasing use of its maritime military forces, citing an incident last November, when a Chinese submarine violated Japanese territorial waters.

The report says Tokyo will keep a close watch on China's current modernization efforts to determine if they go beyond Beijing's self-defense needs. The head of Japan Defense Agency, Yoshinori Ono, says he wants China to become more "transparent" about its military plans.

Relations between Japan and China are at their lowest in several decades, in part because of a feud over gas drilling in the East China Sea.

CNOOC Ending Fight for Unocal

The Reuters news agency reported Tuesday that the Chinese oil company CNOOC Ltd. is likely to drop its $18.5 billion offer for Unocal Corp. due to stiff US political opposition. The CNOOC move would end a 6-week takeover battle with Chevron Corp.

Citing anonymous sources, Reuters said the announcement by the state-run Chinese oil company is expected within the next 24 hours.