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Monday, October 31, 2005

Lackluster Start for Chinese Bank Listing

Shares of one of China's four major banks had a lackluster start on Hong Kong's stock exchange, while the country's leading Internet search engine reported higher third-quarter earnings.

China Construction Bank, the first of China's four big state-owned banks to sell shares publicly to overseas investors, made a meek trading debut on Hong Kong's stock exchange. On its first trading day on Thursday, its shares closed unchanged from the initial listing price of 30 cents, disappointing investors and analysts who had expected gains.

Still, it was China's biggest initial public offering, and the largest worldwide since 2001, raising more than $8 billion for the bank.

Many analysts have derided China's banking system as corrupt and backward. Kenny Tang, associate director of the Hong Kong financial services provider Tung Tai Securities, says taking banks public is an important step towards Chinese banking reform.

Says Tang: "Most of the mainland banks are government held. If they want to increase the transparency and improve public governance, then I think you should introduce some strategic investors, especially overseas investors, and also let the company go public."

Chinese search engine Baidu issued its first quarterly earnings report since going public in August, reporting net profit of $1.1 million for the third quarter of the year. That was nearly three times as high as earnings in the same period a year earlier. But due to higher-than-expected expenses, profit was still lower than investors were looking for, and the stock price fell 15 percent.

Baidu is the leader in China's fast growing Internet search market. It commands more than one-third of all traffic among China's more than 100 million Internet users.

Saturday, October 29, 2005

Hu: NK Will Negotiate Nuke Program

Chinese President Hu Jintao says he has received assurances that North Korea will participate in the next round of talks on its nuclear weapons program.

In Pyongyang for three days of meetings, Hu said Saturday he has held frank and sincere talks with North Korean leader Kim Jong-il. He told the official China Daily newspaper that Pyongyang pledged to honor its commitments and attend the six-party talks next month in Beijing.

Following a tour of a new Chinese-funded factory, the Tae-an Friendship Glass Factory along the banks of the Taedong River), Hu said Beijing will encourage Chinese companies to invest more in North Korea's isolated economy.

Experts say China wants North Korea to develop its economy to reduce the need for Chinese aid and to prevent a political collapse that could send a flood of refugees into China's northeast.

Hu is to depart Monday for a trip to Vietnam.

China Says It Has No Human Bird Flu

Chinese health officials say there are no cases of human infection from bird flu in the country. The officials also claim they are able to handle any outbreak of the disease.

Health officials in Beijing told journalists Friday that three recent outbreaks of avian flu among poultry have been stamped out, and that no human cases have been found in the country.

But Jia Youling, China's chief veterinary officer, says the country is still on high alert. Jia says the top priority is to prevent flu outbreaks among domesticated birds. He says that if officials fail to do that, sooner or later the disease will be transmitted from birds to humans.

Officials also ruled out bird flu as the cause of death of a girl in Hunan province recently, and say she died of pneumonia. The World Health Organization has asked for information on the tests performed on the girl.

The H5N1 strain of bird flu virus is lethal to birds, but is not easily passed to human beings. The WHO and other international health agencies fear the virus could turn into a form that is passed easily from one human to another. That could lead to a global flu pandemic, threatening millions of people.

Jia praised China's prevention system, but said the government still had problems to overcome. He noted that China has a large population of migrating birds, and that they could pass the virus on to domesticated poultry. He said another problem is that much of China's poultry is raised on small farms that are unregulated and unsanitary.

China is currently carrying out large-scale vaccinations of its poultry, but officials said there is still a possibility of flu outbreaks in some provinces.

In 2003 China covered up the original appearance of Severe Acute Respiratory Syndrome, or SARS, which spread to much of the world and killed about 800 people. But Chinese officials insist they will be forthcoming with any information about bird flu, and have threatened to punish anyone who tries to conceal an outbreak of the disease anywhere in the country.

Friday, October 28, 2005

Group Wants US Out of Central Asia

A top official from a regional security group dominated by Russia and China says the United States should set a deadline for withdrawing its forces from Central Asia.

Shanghai Cooperation Organization Executive Secretary Zhang Deguang says the group wants to know the timeline for a pullout from member states Uzbekistan and Kyrgyzstan, but said the request is not an ultimatum. He spoke in Moscow, following a meeting of the six-nation group.

The organization issued a similar call in July. But Kyrgyzstan rejected the demand that US forces leave its territory, saying they can remain as long as necessary to support operations in Afghanistan.

Uzbekistan told the US to get its troops out by January.

The Shanghai Cooperation Organization is made up of Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.

Thursday, October 27, 2005

China's 'Red Capitalist' Dies

Former Chinese Vice President Rong Yiren is dead at the age of 89. Rong was one of China's wealthiest officials, and one of the few high-ranking leaders who was not a member of the Communist Party. He helped usher in China's early economic reforms and bring investment into the country.

China's Xinhua news agency on Thursday announced Rong Yiren's death, saying he had died the night before, and called him a "superb" state leader and "great fighter" for communism.

Rong came from a wealthy background and ran his family's textile and flour empire. He was one of few business leaders who stayed in China after the Communist Party took power in 1949 but never became a member of the Communist Party.

David Zweig, an expert on Chinese politics at Hong Kong University of Science and Technology, says Rong played an important role as a conduit between the Communist Party and the business community.

Says Zweig: "He did not rebel in any major way when family businesses were nationalized and worked as a minister in the government in the 1950s. Would he be an ideological advocate of Communism? No, I don't think so."

Rong fell out of favor with the Communist Party during China's 10-year Cultural Revolution, when hundreds of thousands were persecuted as "capitalist roaders" from 1966-1976.

China's reformist leader Deng Xiaoping rehabilitated Rong in the late 1970s. He was later nicknamed China's "Red Capitalist" for supporting economic reforms and the Communist Party while never actually being a party member.

Deng chose him to establish China's first multinational corporation in 1979, the China International Trust and Investment Corporation. Citic, as it is known, has funneled billions of dollars of investments into the country and is one of the largest companies in China.

Rong was a major shareholder in the company.

Forbes magazine named him China's wealthiest man in 1999, estimating his worth at the time at $1 billion.

His son, Larry Yung, is chairman of Citic's Hong Kong arm and now has an estimated fortune of $1 billion.

Rong was named vice president in 1993, a largely ceremonial post that he left in 1998.

Wednesday, October 26, 2005

China Reports New Bird Flu Outbreak

China has reported its third outbreak of bird flu in eight days.

The latest outbreak was reported Wednesday, but detected Saturday. The agriculture ministry says the flu killed 545 chickens and ducks in the central province of Hunan.

The news follows Tuesday's discovery of bird flu in a flock of more than 2,000 chickens and geese in eastern China's Anhui province.

Also Wednesday, Japan announced it was sending more experts and medical equipment to help Indonesia battle the virus.

The virus has killed at least four people in Indonesia and more than 60 people in Asia.

Officials around the world are tightening agricultural controls and pledging cooperation to fight avian flu. Health officials from 30 nations concluded a meeting Tuesday in Ottawa, Canada to discuss the threat.

Tuesday, October 25, 2005

Bird Flu Researchers Criticize Beijing

As governments around the world worry about the possibility of a global epidemic of bird flu, one key player is China, where two new outbreaks have been reported within the last week. But while international organizations say China's management of the avian flu has become more transparent, scientists complain about restrictions in their research.

Doing research on avian flu in China is not an easy task. Few people know this better than Dr. Guan Yi, director of the Joint Influenza Research Center, a project between Hong Kong University and Shantou University in China's southern Guangdong province. He is one of the world's leading researchers on the H5N1 strain of avian influenza, which is potentially lethal to humans and has killed more than 60 people since it first appeared in 1997.

In July, Guan and his team published a groundbreaking article in an international scientific magazine. It said that infected migratory birds at a lake in western China appeared to have contracted the disease in southern China.

This meant that if the virus became established among migratory birds, it would raise the risk that it could spread across oceans and continents. Guan's thesis was validated by recent bird flu outbreaks in Europe.

But rather than supporting Guan's research, the Chinese Ministry of Agriculture criticized his findings through state-controlled news media, saying the paper had reached the wrong conclusions. Dr. Guan says authorities wanted to cover up the fact that the source of the infection was in southern China.

"They interpret this event that the source of the infection for birds in Qinghai Lake is from outside China, it looks like China is the victim not the source," Guan said.

Since then, the Chinese Ministry of Agriculture has introduced tightened control over research on infectious diseases. According to Guan, only three laboratories in China now are allowed to study H5N1. After the publication of Guan's article, his team's research on bird flu at Shantou University was severely restricted.

So far, almost all avian flu victims caught it from infected birds. But international health experts fear the H5N1 virus could change so that it spreads easily among humans, and once it does, it could sweep around the globe and kill millions.

Many experts think that China could be the epicenter of a bird-flu epidemic among humans. It is not only the most populous nation, but also the world's biggest poultry producer. Moreover, 70 million migrating wild waterfowl travel through China. It also is home to half the world's pigs, which can harbor human viruses that can combine with bird-flu bugs to form human pathogens.

Critics such are worried that the Chinese government has not learned from the SARS epidemic two years ago, when international health officials criticized Beijing for its slow response to the disease and secrecy about the outbreak.

SARS appeared in southern China but officials there said nothing about it for months, until it spread to Hong Kong and then traveled around the world, killing more than 800 people.

Several international organizations have complained about a lack of cooperation from China in dealing with the bird flu.

The Beijing office of the World Health Organization said this summer that authorities were slow in revealing vital information and in sharing virus samples of outbreaks in western China. They also initially did not respond when the organization asked to visit the site of a bird flu outbreak in China's northwest.

But Aphaluck Bhatiasevi, a WHO spokeswoman in Beijing, says the cooperation from Chinese authorities has improved - following visits by two senior WHO officials in August and September, who urged China to become more open.

"Recently we have seen a lot of development and commitment, and China is also in the process of providing information on the virus sequence to WHO," she said.

Joseph Domenech, the chief veterinary officer of the United Nation's Food and Agriculture Organization in Rome, also says that collaboration and communication with Chinese authorities has improved. But what worries him is the country's ability to spot outbreaks of avian flu and other diseases.

"We are not so much worried about the transparency of the information," he said. "We are more worried about the capacity of the Chinese system to get information from everywhere in such a huge country; it is rather decentralized."

International experts say China does not have enough people to quickly identify bird flu and report it to central authorities. That means outbreaks could spread rapidly before they are detected.

While China's surveillance system is a concern, international organizations such as the FAO say that authorities have responded swiftly whenever an outbreak of avian flu has been reported.

Last week, for example, China destroyed more than 90,000 birds and implemented quarantine measures to stop a bird flu outbreak in Inner Mongolia. And on Tuesday, the UN Food and Agriculture Organization said 45,000 birds had been culled in eastern Anhui province, after more than 2,000 geese and chickens became infected with the disease.

Taiwan President's Popularity Sinks

A bribery scandal involving a presidential aide appears to be taking its toll on Taiwan's president and his Democratic People's Party or DPP.

A poll conducted by the pro-opposition United Daily News and published Sunday finds President Chen Shui-bian's popularity falling to a record low of 25 percent, down nine points from last year.

Chen was narrowly re-elected last year for a second four-year term. He defeated a candidate fielded by the Kuomintang or KMT, which held power on the island from 1949, when Nationalist forces fled from mainland China at the end of the civil war until the 2000 election.

The KMT was traditionally viewed as vehemently anti-communist but authoritarian and corrupt. The DPP, an illegal group until 1987 when martial law ended, was seen as the clean party.

But recently, perceptions have changed, with the KMT more sympathetic to eventual reunification with mainland China, and accusing the DPP of advocating independence and being corrupt and ineffectual.

The latest crisis for the Chen administration involves a mass transit system under construction in Taiwan's second-largest city, Kaohsiung.

The scandal erupted nearly two months ago when a group of subway construction workers from Thailand rioted, alleging inhumane working conditions.

Prosecutors are investigating whether brokers paid bribes to government officials to employ the foreign laborers.

Further complicating matters for President Chen is that the mass transit project was begun when Taiwan's Premier Frank Hsieh, appointed by the president, was mayor of Kaohsiung.

Chen on Saturday told reporters he trusts Hsieh but he has consented to the formation of an independent panel to look into the allegations.

Monday, October 24, 2005

China's Economy Expanding Briskly

China's economy continues to expand briskly despite the government's attempts to control it. It was up 9.4 percent in the third quarter of this year compared with a year earlier, fueled by surging exports, strong investments in infrastructure and solid retail sales.

National Bureau of Statistics spokesman Zheng Jingping said he was confident the economy would meet the government's expectations of nine percent growth for the whole year. He also said specific problems continue to exist.

Zheng says problems include weak agriculture infrastructure, which has held back improvements in grain production and farmers' incomes, too much investment in fixed assets, and imbalances in foreign trade.

Two German banks - Deutsche Bank and Salomon Oppenheim Bank - are the latest foreign banks to buy into China. They announced they would buy a combined 14 percent stake in China's Huaxia Bank.

Huaxia said the deal would enable it to bring its commercial operations and products up to international standards. Foreign investment is providing Chinese banks with much-needed capital and expertise as they look to expand their services.

Foreign firms are currently limited to owning 25 percent of Chinese banks. But these restrictions will be relaxed at the end of next year, under commitments China made to the World Trade Organization to open its banking system to foreign competition.

In other news from China, Hainan Airlines, China's fourth-largest carrier, said it would combine with three smaller airlines to form a new company called Grand China Air.

The announcement said US financier George Soros, Hainan Airline's biggest overseas shareholder, will invest a further $25 million, for a four-percent stake in the new company. The investment is part of Hainan Airlines's plan to raise more than $1 billion, to buy planes and expand its route network ahead of the 2008 Beijing Olympics and the 2010 Shanghai World Expo.

North Korea says it is going to re-examine its relationship with its largest South Korean business partner, Hyundai. The threat was made after Hyundai Asan, Hyundai Group's North Korean business arm, fired its vice-chairman, Kim Yoon-Kyu, over alleged corruption.

Kim had developed close ties with North Korean officials, including leader Kim Jong Il. Kim Yoon-Kyu was credited with opening the Hyundai-operated Diamond Mountain tourist resort near the two countries' mutual border, a symbol of South Korea's Sunshine Policy of engagement with the North.

Kim was demoted by Hyundai in August. Pyongyang showed its displeasure then by halving the number of daily tourists allowed to visit the resort.

Sunday, October 23, 2005

Beijing: We'd Shut Borders to Stop Bird Flu

Health officials in Beijing say China will shut its borders if there is a single case of human-to-human transmission of bird flu in the country.

Official state media report that Beijing's main priority would be saving lives and preventing the spread of bird flu, despite the economic consequences that any border closing would trigger.

The Asian Development Bank has estimated that even a mild human outbreak of avian influenza would cost up to $100 billion in lost revenue.

Authorities in Hong Kong said last week they also would close border crossings with the mainland if any human-to-human transmission of the disease occurs in China.

But a published report in Britain Sunday in The Observer newspaper says such actions would only delay the spread of a dangerous virus by a matter of days or weeks.

Saturday, October 22, 2005

Rumsfeld Discusses Rising China, Says It Has Much To Lose If It Turns Threatening

According to US Defense Secretary Donald Rumsfeld, China has much to lose if its leaders decide to use the country's fast-growing military power in threatening ways. The secretary made the comment while assessing his just-concluded visit to Asia during a flight to Europe for meetings on other issues.

Rumsfeld said China's desire for economic growth has led to an openness that will cause a healthy tension with its political system, and that in the end the desire for more growth will be the winner.

He said China is on a path of very aggressive economic interaction with the rest of the world, and that interaction will expose more and more Chinese people to countries with free economic and political systems. In Rumsfeld's view, China's leaders will have to cope with that, along with inevitable domestic issues such as inefficient economic and government structures, disparities between economic growth in the cities and the countryside, and regional ethnic issues.

Rumsfeld seemed to be suggesting that those issues will prevent China from using its military capability in ways that would threaten US interests. But asked about that, he said only, "We'll see."

Said Rumsfeld: "Think of what they lose! Think of all they lose if they behave in a way that frightens their neighbors, that frightens the rest of the world."

Friday, October 21, 2005

Ex-Taiwan President Pushes Independence

Former Taiwanese President Lee Teng-hui is calling on the international community to recognize Taiwan as an independent country. His comments came in Washington Thursday, following a private visit in which he met with US lawmakers and members of the Taiwanese-American community.

When it comes to China, Lee Teng-hui, 82, is no stranger to controversy.

In 1995, Beijing was so angered by what US and Taiwanese officials described as a private trip the then-Taiwanese president made to the United States, that it fired missiles into the Taiwan Strait.

China considers the island part of Chinese territory and has vowed to use force, if necessary, to prevent it from becoming independent.

Lee is no longer Taiwan's president. He stepped down in 2000, after 12 years in office. On this trip, he saw no Bush administration officials, but did meet with US lawmakers.

In a speech Thursday, made entirely in Taiwanese, he said he had come to Washington in a private capacity, to learn more about the American democratic spirit.

He also indicated that his belief in Taiwan's independent sovereignty is stronger than ever. He pointed to what he called a totalitarian Chinese regime as the one of the greatest threats to Taiwan's democracy, saying Beijing has consistently sought to annex the island.

"For example, in the past, they launched missiles to threaten Taiwan, but the Taiwan people stood tall," he said. "Now, they adopt softer tactics such as economic profits to attract Taiwan people. However, the substance is still the same."

Lee said Taiwan should drop its official name, Republic of China, a title used by the Nationalist government that fled to the island after losing a civil war to the Communists in 1949. Nowadays, he said, the name leads to confusion.

"And also, for the name change to Taiwan, [it] is just so the international world can recognize us, and then recognizes us. Taiwan has long been an independent country," he aded. "There is no need to promote Taiwan independence."

Lee criticized unnamed Taiwanese political parties for working with China in trying to continue what he termed an authoritarian era. He said the maintenance of Taiwan's democracy is important for the world, and he called on support from other democratic countries.

In Beijing, the Chinese foreign ministry expressed opposition to Lee Teng-hui's visit to the United States. The Chinese government accused Lee of trying to spread his so-called "Taiwan independence" theory and to disrupt U.S.-Sino relations.

Meanwhile, Beijing's view that Taiwan is a part of China was echoed by about 60 protesters, who demonstrated against Mr. Lee outside the Washington venue where he was speaking. One Taiwanese-American woman called Lee a troublemaker.

"He wants to have a press conference and promote his idea of Taiwan independence," she said. "But most of the Taiwanese and the overseas Chinese, we don't like that idea. That will produce war with mainland China."

Before coming to Washington, Lee visited Alaska and New York. He goes to Los Angeles, before heading home to Taipei.

Thursday, October 20, 2005

China Objects to Google Map Move

China is objecting to a decision by Internet search engine Google to change maps referring to Taiwan as a province of China.

China's state media report that officials are worried the decision may mislead people and give the impression of an independent Taiwan.

A Google spokesman told Xinhua the change was part of a regular update of all the site's maps, rather than a deliberate effort to update the Taiwan page.

Earlier this month, Taiwan asked Google to stop listing it as a Chinese province on its maps. Now Google maps simply call the island Taiwan.

Taiwan calls itself the Republic of China. China views Taiwan as a breakaway province. The two split in a civil war that ended in 1949.

Rumsfeld Raises Missile Issue

American Defense Secretary Donald Rumsfeld ended his 48-hour visit to China, expressing concern about an expansion of the country's missile capability. He also restated his suspicions about Beijing's official defense budget, even though China's minister of defense tried to ease that concern.

At the Chinese Military Academy on Thursday, Rumsfeld told a gathering of senior officers that China should provide more information about its defense program; and he added a new item to the list of elements of that program that worry him.

"China, of course, is expanding its missile forces and enabling those forces to reach many areas of the world, well beyond the Pacific region," he said. "Those advances in China's strategic strike capability raise questions, particularly when there is an imperfect understanding about such developments on the part of others."

Rumsfeld expressed that concern the day after he became the first foreign official to visit the new headquarters of China's strategic missile command. There, a senior official sought to reassure him that China would not be the first to use nuclear weapons in any conflict.

The issue was the latest of several concerns Rumsfeld raised in meetings with Chinese officials. He repeatedly mentioned what he calls China's preference for regional organizations that exclude the United States, its refusal to allow the US to observe its military exercises with other countries and its effort to convince Central Asian nations to expel US forces that support operations in Afghanistan.

He also stressed discrepancies about China's defense spending. On Wednesday, Defense Minister Cao Gangchuan tried to ease Rumsfeld's concerns, saying China reports all of its military spending. Later that day, US officials indicated part of the discrepancy appears to be different accounting methods. But Rumsfeld mentioned the issue again Thursday at the military academy, which is a strategic research institute attached to China's powerful Central Military Commission.

"Under our law, the Department of Defense is required to issue a report about your military capabilities every year. It's prepared by experts from all kinds of information, including open source information, and consultation with experts around the world," explained Rumsfeld. "And as you may have read, it suggests the actual expenditures by your country are something like two or three times what the published figures suggest."

Asked about the secretary's decision to raise the budget issue again, his chief spokesman, Lawrence DiRita, said there is a benefit to repetition. Asked whether Rumsfeld was satisfied with what he heard in Beijing, DiRita said the secretary did not expect definitive conclusions to any issues, but rather wanted to express his concerns and gain a better understanding of Chinese thinking on the issues, and he accomplished those goals.

Rumsfeld had said he wanted more "transparency" on China's military programs, and DiRita said he achieved some of that on a personal level with Defense Minister Cao.

DiRita also reported that during a closed session Thursday, Secretary Rumsfeld stressed that military exchanges and other types of cooperation can be increased even as the two governments work through their differences. Rumsfeld and Cao promised to take a personal interest in increasing US-China military contacts.

The tone of the visit alternated between statements about common goals and expressions of a desire to work together, and less harmonious moments when Rumsfeld expressed his concerns and Chinese officials defended their policies and challenged his views.

Both sides used words like "candid" and "frank" to describe the talks, indicating it was, as US officials had predicted, a "non-euphoric" encounter. But as Rumsfeld flew out of Beijing, his spokesman called the visit time "extremely well spent."

Wednesday, October 19, 2005

Environmental Group Says China Buys Illegal Timber From Burma

A report by the British environment group, Global Witness says Chinese authorities have not halted the massive trade in illegal timber coming from Burma. There are fears over the rate of deforestation in Burma and its long-term effect on the country's people.

The Global Witness report accuses Chinese logging companies of illegally exporting millions of cubic meters of timber from northern Burma.

The report focuses on the northern regions, where the timber trade is often run by Chinese companies, using thousands of Chinese workers, operating with support from provincial governments in China.

The report accuses Burmese army commanders and ethnic groups of being involved in trade.

Using Chinese customs statistics, the report says that more than one million cubic meters of timber each year cross from Burma's Kachin, Wa, and Shan states into China. This is in contrast to Burma's official limit on timber exports of just 18,000 cubic meters.

Forestry product exports are the third most important source of legal foreign exchange for Burma's military government - last year totaling $370 million.

But the report warns that excessive logging would hurt Burma's environment and potentially harm China's own forest management along the border. It also says many of the Burmese ethnic communities, who often rely on forests for food and other needs, receive little benefit from the logging.

Excessive logging can lead to soil erosion, flooding, loss of wildlife and damage to crops. On a global scale, some scientists say that over-logging of the world's oldest forests contributes to climate changes

China's demand for imported timber has soared in recent years because of rapid economic growth and a ban on the felling of trees in much of China after over-logging contributed to flooding in much of the country.

Global Witness is a British charity that investigates how environmentally destructive trade can be linked to human-rights abuse, poverty and other problems.

Tuesday, October 18, 2005

China Cancels Japan Foreign Minister Visit

China has canceled a visit by Japan's foreign minister after a visit by the Japanese prime minister to a shrine where convicted war criminals are among those honored.

China's decision to cancel the visit later this month by Japanese Foreign Minister Nobutaka Machimura came after Beijing protested the Japanese leader's visit Monday to the Yasukuni Shrine in Tokyo.

The shrine is where many Japanese pay tribute to the country's war dead, including a number of war criminals convicted for atrocities committed during Japan's brutal occupation of China and other parts of Asia in the first half of the 20th century.

At a regular briefing, Chinese Foreign Ministry spokesman Kong Quan confirmed that Machimura's visit has been called off.

Kong says this is not the right time for a visit, and he said China is not in a position to receive the Japanese diplomat.

In Tokyo, Machimura says Japan will continue to try to convince the Chinese to allow the trip.

The Japanese foreign minister says it is important to continue talks at various levels and he said it is Japan's responsibility to continue making efforts to establish better relations with China.

The Chinese communist leadership has previously allowed citizens to protest against Japanese interests over Japan's military past. In April, some protests turned violent as the Chinese raged over what they said was Japanese history textbooks' whitewashing of Tokyo's aggression in China.

Meanwhile, authorities prepared for possible new protests. Chinese police deployed outside the Japanese Embassy in Beijing and consular officials of some nations warned their citizens to be wary of disturbances.

Rumsfeld Questions China's Intentions

American Secretary of Defense Donald Rumsfeld says he really does not know China's intentions as it sharply increases its defense budget. A report issued by the United States Defense Department in July said the official Chinese military budget has doubled in the past five years to $30 billion. But the report said China's real military budget could be three times that amount.

"I don't really know why they seem to be increasing," Rumsfeld said. "i think it's interesting that other countries wonder why they would be increasing their defense effort at the pace they are, and yet not acknowledging it. That is as interesting as the fact that it's increasing at the pace it is."

Rumsfeld said that what he knows about Chinese intentions is only what analysts in Washington have concluded based on China's buildup of forces in recent years. He says it will be interesting to hear from senior Chinese leaders directly what their plans are, but he also says they may not have exactly decided yet.

Said Rumsefld: "They will make decisions with respect to their national security, just like we do, and we then will know the direction they're going. But it's not something that one can predict. It'll be interesting to see what course they char."

Rumsfeld will meet with China's defense minister and president on Wednesday, and he will make the first visit by a senior US official to the headquarters of the country's missile command. He also will speak with up-and-coming Communist Party officials at the party's school.

Thedefense secretary declined to say what issues he will raise with Chinese leaders, but he indicated that he may go beyond military matters, to include Chinese domestic issues.

"They have been and will be making choices as they go along, and obviously those of us in the United States and in other countries around the world, free countries, hope that the choices they make are choices toward a more open society, a more transparent societ," Rumsfeld said.

He elaborated on that theme in an opinion column he wrote for Monday's Asian Wall Street Journal. In that article, he said China's leaders "likely will need to embrace more open and representative government if China is to fully achieve the political and economic benefits" its people want.

In the article, and in his comments on his plane, Rumsfeld said he wants to see US-China military relations continue to improve, as they have in recent years, and that he hopes China will become "a strong and peaceful partner in the international system."

But the July US Defense Department report warns that China's buildup has already changed the military balance in Asia, and improved its ability to use force against Taiwan, which the report says could make it more likely the country's leaders will decide to do so.

The US has pledged to defend Taiwan against unprovoked attack. Beijing considers the separately governed island its territory and has threatened to use force to recapture it should the Taipei government declare independence.

Sunday, October 16, 2005

US-China Economic Talks Begin

Economic talks between Chinese officials and a United States delegation headed by Treasury Secretary John Snow and Federal Reserve Chairman Alan Greenspan began Sunday at the close of a meeting of the G-20, a gathering of finance ministers and central bankers of major industrial and developing nations.

In a joint statement Sunday, the G-20 nations called for a new strategy to fight poverty, promote free trade, and protect world economic stability, which they say is threatened by rising oil prices.

Chinese Finance Minister Jin Renqing spoke at the conclusion of the G-20 meeting.

Jin said there were deep discussions on the potential risks brought by high oil prices, and possible countermeasures.

The Chinese finance minister then joined the governor of China's central bank, Zhou Xiaochuan, for separate bilateral meetings with the U.S. delegation.

US officials were expected to apply more pressure on the Chinese to further adjust their currency, the yuan. Beijing revalued the yuan by 2.1 percent in July, but Washington says more is necessary as US concerns mount over a trade imbalance that reached $162 billion last year.

Some American politicians, labor groups, and manufacturers blame China's currency policy for the trade deficit, saying an undervalued Chinese currency is hurting US competitiveness by making Chinese products artificially cheap.

China has thus far rejected demands for any sharp adjustments.

On Saturday, US officials said the talks with China, set to go through Monday, will cover a variety of issues, including the removal of caps and other restrictions on foreign ownership of Chinese banks and other financial institutions.

Friday, October 14, 2005

Rumsfeld to Visit China

Senior US defense officials confirmed on Friday that Defense Secretary Donald Rumsfeld will visit China next week, seeking some clarification of the country's intentions, as it rapidly builds its military. The US defense secretary will also visit South Korea, Mongolia, Kazakhstan and Lithuania on the week-long round-the-world trip.

Senior officials, who spoke on condition of anonymity, said they expect a "serious dialogue" between Secretary Rumsfeld and senior Chinese officials, including the defense minister and the president. They said the two countries each have their own "serious strategic interests," and that those interests do not always coincide.

They predicted a "non-euphoric" visit, with no particular breakthroughs or agreements. But they stressed that President Bush wants to pursue relations with China in what they called a "realistic, but constructive frame of mind."

One official also said Chinese leaders over-reacted to the China Military Power Report issued by Secretary Rumsfeld's office in June. The report, required every year by Congress, said China has an active, multi-faceted and secretive military modernization program, that is focused on Taiwan and has already changed the military balance in Asia.

Chinese leaders objected to the report, which they said characterized China as a threat. The US.officials said Friday the report was factual and analytical, and avoided specific characterizations

They said that, during this trip, Secretary Rumsfeld hopes to learn more about China's intentions for its enhanced military capability.

The officials said Secretary Rumsfeld's first visit to China in his current tenure, which began in 2001, is evidence that US-China military relations have come "full circle."

The relationship hit a low point shortly after the Bush administration came into office, when a Chinese fighter jet collided with a US navy surveillance plane. The plane was forced to land in China, and the crew was held for 11 days.

The officials say in a demonstration of how far US-China relations have come since then, the secretary will make an unprecedented visit the headquarters of China's missile defense command, but they say he was not allowed to visit the country's defense headquarters west of Beijing.

In addition to China's military intentions, the officials expect discussion on such issues as Taiwan's security, North Korea's nuclear program and the US proposal to establish a US-China "hotline" to prevent any misunderstandings from being created by military movements on either side.

They also said human rights will be on the agenda. In a speech in Singapore in June, Secretary Rumsfeld said China's closed political system will hurt its development in the long term.

Rumsfeld will also visit South Korea for an update on the reduction of US troop strength on the peninsula and talks about North Korea.

In Mongolia and Kazakhstan, the officials say, Secretary Rumsfeld will offer thanks for those countries' contributions to the wars in Iraq and Afghanistan, and the global war on terrorism, and will discuss increasing U.S. help in their military modernization programs.

The secretary will end his trip in Lithuania for bi-lateral talks and a special informal NATO meeting with Ukraine's defense minister about that country's effort to join the organization.

Wednesday, October 12, 2005

US Congress: No Human Rights Progress

A United States Congressional report says it finds no overall improvement in human rights conditions in China during the past year, and that citizens who challenge state controls continue to face severe repression.

In its annual report released Tuesday, the Congressional-Executive Commission on China says Beijing continues to pursue certain judicial and criminal justice reforms that have potential to improve human rights. But it says these steps are "clouded by new detentions and government policies designed to protect the Communist Party's rule."

The commission says China continues to harass, abuse and detain religious believers who practice their faith outside state-controlled religious venues, in particular the Muslim Uighur minority.

The report calls on President Bush and Congress to urge Chinese officials not to use the global war against terrorism as a pretext to suppress minorities' rights.

China Launches 2nd Manned Space Mission

China has launched its second manned space mission in what analysts see as a bid by the Communist government to boost its prestige.

Following a countdown, the Shenzhou 6 spacecraft lifted off from a desert in northwestern China's Gansu province on a mission that officials say may go for five days.

With President Hu Jintao watching from Beijing, astronauts Fei Junlong and Nie Haisheng started a journey that will have them orbiting 80 times around the world in their spacecraft, which is based largely on the design of the older Russian Soyuz models.

The launch reaffirms the Asian giant's place in space exploration. Only three nations have launched their own manned spacecraft. Chinese scientists conducted their first manned mission on October 23, 2003, when Colonel Yang Liwei circled the earth a few times - more than four decades after astronauts from the United States and the former Soviet Union had done so for the first time.

Observers see this as yet another effort by China's communist leaders to build their government's prestige. Independent space consultant James Oberg, a retired American space engineer, says this and other launches will have a profound commercial and political value for the Chinese leadership.

"It enhances the value of every item of high technology that the Chinese intend to sell overseas," he explained. " It enhances the psychological value of every weapons system that China possesses or intends to sell overseas. And, it enhances every statement or promise and - I'm afraid to say - every threat that Chinese diplomats make overseas."

Chinese Prime Minister Wen Jiabao, speaking at the launch site Wednesday, said his country intends to use its space program for peaceful purposes - a bid to ease international concerns that have arisen over China's rapid military buildup.

"China's space flight scientific experiments stem completely from the objective of peace, and are also a contribution to mankind's scientific study and the cause of peace," he said.

Analysts say the Chinese leadership hopes the space program will enhance the government's image at home, where the Communist party is struggling to remain relevant at a time when China is becoming more of a free market economy and less of a socialist society.

The launch of the Shenzhou 6 and its two astronauts came the morning after Communist Party leaders wrapped up a meeting in which they laid out a five-year plan for the development of China's economy.

Tuesday, October 04, 2005

Taiwan: We're Not Part of China!

Taiwan has asked internet search company Google to stop calling it a province of China on its maps.

A Taiwan foreign ministry spokesman said Tuesday that the ministry has asked Google to correct the description.

Taiwan says it is a sovereign, independent state officially called the Republic of China.

China views Taiwan as a breakaway province and has threatened to attack the island if it pushes for formal statehood. The two split in a civil war that ended in 1949.

Sunday, October 02, 2005

Typhoon Hits Fujian Province

Typhoon Longwang has hit mainland China after pounding Taiwan Sunday, where it left one person dead and disrupted flights and electricity.

Officials say it hit China's Fujian province with strong winds and heavy rains. More than 300,000 people were evacuated.

In Taiwan, a 60-year-old man died after he was hit by flying debris. A woman is missing and feared dead after being washed away by flash floods in the central town of Hoping. And 46 people were injured during the typhoon, most by flying debris.

Saturday, October 01, 2005

UN body Condemns Lama's Detention

The United Nations Committee on the Rights of the Chiild has condemned China for the continued detention of Gendun Choekyi Nyima, who is recognized by the Dalai Lama as the Panchen Lama, Tibetan Buddhism's second most prominent figure after the Dalai Lama.

The committee, which monitors compliance with the Convention on the Rights of the Child, is calling for an independent investigation into his situation. Gyaltsen Norbu, chosen by the Chinese government as the Panchen Lama, is not recognized by most Tibetans.

He has not been seen since he and his family were abducted by Chinese authorities in May 1995. Experts on the U.N. Committee on the Rights of the Child say they were flooded with requests for information and demands for the release of the missing boy.

Committee Chairman Jacob Doek said the UN watchdog group normally does not pay attention to individual cases. But, he said, the Committee believes the Panchen Lama is symbolic.

"It is an abducted child from Tibet," he said. "It has a particular religious role to play, at least according to the Tibetan Buddhists and he has been prevented from doing so. He has been kept somewhere in China. At least that is the information that we do have."

Doek said the Chinese government keeps repeating over and over again that the Panchen Lama is doing fine, that he is "getting all the education to which he is entitled and that his parents are fine."

"So, we recommended in our concluding observations and we have discussed it with the delegation, as a minimum to allow an independent expert to assess or at least to confirm what they were telling us,m" he said. "But, we do not know, of course, how they are going to respond to this."

The UN committee recently completed a three-week review of seven countries including China, Russia and Uganda.