Monday, June 26, 2006

Intelligence Items: Cartel, Corruption, Crackdown

AN IRON HEEL: China is determined to break the cartel that controls over 70 percent of the world's supply of iron ore--the key component in the production of steel. Having been forced this year to accept a 19 percent iron ore price rise, following last year's punishing 71.5 percent price hike, Beijing will accelerate and intensify efforts to acquire its own iron ore reserves--for example, in Gabon--while trying to drive a wedge between Brazil's CVRD and Australia's BHP Billiton, which, together with multinational Rio Tinto, are the Big Three mining companies comprising the cartel. While boosting domestic iron ore output, China is investing in new Australian projects, including a 250 million ton deposit in Western Australia, where 95 percent of the country's iron ore deposits occur. Australia is the world's largest producer and exporter of iron ore. As the world's largest producer and consumer of steel, China relies heavily on iron ore imports. And imports have been steadily rising--to roughly 276 million tons in 2005 from 208 million tons in 2004 and 140 million tons in 2003, according to Chinese state media reports....

CONGO CORRUPTION: A shadowy Congolese opposition group calling itself the Coalition for Congo Democracy has been selectively circulating a "Dossier of Corruption" among European and American journalists. The document describes a number of allegedly corrupt transactions between Chinese companies and well-placed officials and relatives of Republic of Congo President Denis Sassou-Nguesso, a former Marxist. China buys oil from the Central African country, which is home to some of the planet's poorest people. The average life expectancy is 48 years. AIDS, malaria and other dread diseases are rampant; and the government shows almost no interest in improving conditions for the masses. While Congo exports an estimated $4 billion of oil annually, per capita income for its 3.8 million people is less than $700, according to the World Bank. The bank, which is now headed by former US deputy defense secretary Paul Wolfowitz, who is a leading Congo critic, ranks the country as one of the most corrupt on earth--right below Albania....

MEDIA CRACKDOWN: Chinese media outlets that report on disasters and social unrest without government permission will soon be subject to stiff fines. State-owned newspapers say a proposed law--practically certain to pass--means that Chinese media that dare to report on "sudden incidents" affecting "social safety" could be fined up to $12,000. The law is clearly aimed at suppressing news of China's rising rural unrest. Around 800 million of China's total 1.3 billion people live in the countryside, and the growing wealth gap between the depressed rural areas and the booming cities is fueling discontent. The earnings of peasants have either stayed put or plummeted during decades of capitalist-style reform. Corrupt land deals--land grabs, really, by crooked officials and greedy developers--have left many farmers propertyless and penniless. And a fragile social safety net has basically been dismantled. Beijing admitted to 87,000 uprisings and protests in 2005, most of them in rural areas. Three years ago, the official number was 58,000 incidents, involving three million people.

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