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Tuesday, January 31, 2006

Japan Ends Probe of Diplomat's Death in Shanghai

Japan's foreign ministry has ended its investigation of an incident involving an official at its consulate in Shanghai who committed suicide in 2004, allegedly after being intimidated by a Chinese intelligence operative.

Instead of continuing to probe the affair--which has further inflamed relations with China--the ministry is reportedly improving its overseas security measures, including revamping its cryptographic system for coded messages. The official in the Shanghai incident was in charge of encrypting and decrypting confidential messages between the consulate and Tokyo.

The ministry has been under fire for failing to make public the suicide of the official and report it to the prime minister's office before the case was reported by the press in December--more than a year-and-a-half after the man killed himself.

He committed suicide in the diplomatic mission building of the consulate, leaving a note stating he had been pressured by a Chinese man to divulge diplomatic secrets.

The note, part of which was leaked to the press last December by a foreign ministry source, said that the official, formerly an employee of the defunct Japanese National Railways, had been intimidated by the Chinese in connection with his "improper relationship" with a Chinese woman.

Beijing, however, has repeatedly refuted this claim, saying the official must have killed himself "because of the heavy pressure of his duties" that had nothing to do with China's intelligence-gathering activities.

Sunday, January 29, 2006

Japanese Official Urges Emperor to Visit War Shrine

Japanese Foreign Minister Taro Aso has urged Emperor Akihito to pay his respects at the controversial Yasukuni war shrine, calling Chinese and South Korean criticism of visits there by Japan's prime minister counterproductive.

Aso is known for his hawkish views. His latest controversial remarks in a speech in Nagoya on Saturday are likely to further provoke Japan's neighbors.

The foreign minister called for a resumption of imperial visits to the Tokyo religious site, where the souls of 2.5 million war dead are enshrined.

Recalling that Japan's soldiers died with shouts of "Banzai" (long life) for the emperor and not for the prime minister, Aso says it would be best for the current emperor to pray for their souls.

Emperor Akihito has not visited the shrine since ascending to the Chrysanthemum Throne. His late father, Hirohito, now known as Emperor Showa, made his final visit in 1975.

The foreign minister also suggested the Beijing government's criticism of visits by Japanese prime ministers to the Yasukuni Shrine is likely to make them even more committed to visiting the Shinto war shrine.

Aso, in his speech, said it is like telling someone "'Don't smoke cigarettes'; it actually makes you want to smoke." Thus, he added, it would be better for China and other critics of the visits to keep quiet.

Japanese Prime Minister Junichiro Koizumi says he visits Yasukuni to pray for world peace and honor the souls of those who died for Japan.

Some of Japan's neighbors, especially China and the two Koreas, regard the shrine as a symbol of Japan's 20th Century militarism because convicted war criminals are among those honored there and, they say, the shrine's museum glorifies Japan's colonialism.

There has been no immediate reaction from neighboring countries, most of which are currently celebrating the Lunar New Year.

Aso, appointed foreign minister three months ago, is seen as one of the leading contenders to succeed Prime Minister Koizumi in September.

On Thursday, Chief Cabinet Secretary Shinzo Abe, another oft-mentioned candidate to be the next prime minister, criticized China and South Korea for refusing to hold summits with Japan because of the issue of Koizumi's annual visits to Yasukuni Shrine.

Saturday, January 28, 2006

Spring Festival is Time of Renewal

People in China, Korea, Vietnam and elsewhere are preparing to celebrate the lunar new year, which begins on Sunday with the first new moon.

The 15-day holiday, also known as the Spring Festival, is the single most important holiday for Chinese people. It's a time of renewal, family gatherings, eating rich foods and paying respect to your ancestors and elders.

Each lunar new year is named for one of the 12 signs of the Chinese zodiac. This will be the Year of the Dog, celebrated with decorations, gifts and meals that feature foods with symbolic meanings.

Families prepare by doing a ritual housecleaning, which includes certain traditions meant to ward off bad luck. Houses are decorated with flower blossoms and messages of good luck.

The new year is then welcomed in with fireworks, street celebrations and gifts of money in red envelopes. Also this year, dogs are expected to be popular gifts. Chinese tradition views the dog as the most honest and trustworthy animal; and In Hong Kong and other Chinese cities, puppies are certain to be especially popular gifts for the Year of the Dog. But animal welfare advocates warn that many of those buying and receiving puppies are not prepared to properly raise and care for them on a longterm basis. So increased puppy sales are unfortunately also certain to result in greater numbers of abused and abandoned dogs.

In Vietnam, the new year is known as "Tet." This year, the official media reported a 30-percent increase in the number of foreign tourists arriving in Vietnam just before the holiday.

Friday, January 27, 2006

China Launches Nairobi Radio Station

State-run China Radio International Friday launched an FM station in Nairobi, Kenya. The move is seen as a way for China to have a greater influence in Africa.

The station is transmitting 19 hours of programming in English, Kiswahili (the language widely spoken in East Africa) and standard Chinese.

China Radio International director Wang Gengnian said in a statement the station will broadcast the latest news from China and around the world and "the latest on friendly exchanges between China and Kenya."

China has been steadily increasing its influence and economic activity in Africa over the past years. The Trade Law Center for Southern Africa estimates trade volume between China and African countries in 2005 at over $37 billion, a record high and a sharp increase over the previous year's less than $30 billion. Much of this was due to increased exports of oil to China, particularly from Sudan.

The Trade Law center adds that in the period, China imported more goods and services from African countries than it exported to them and that Chinese investment in Africa is also expanding rapidly. Official statistics show that in the first 10 months of 2005, Chinese companies invested a total of $175 million in African countries. Investments went into a wide range of areas, including trade, resource development, transport, agriculture and processing of farm products.

Kenya and China signed a number of agreements during Kenyan President Mwai Kibaki's trip to China in August last year.

Beijing Backing Moscow's Iran Proposal

China is backing a proposal to allow Iran to enrich uranium on Russian territory--a compromise meant to defuse a dispute with Western nations over Iran's recent moves to restart its nuclear program.

Russia proposed the compromise on the grounds that the enrichment work could be closely monitored in its territory.

Chinese Foreign Ministry spokesman Kong Quan said China welcomes Moscow's proposal.

"We think the Russian proposal is a pretty good attempt to break this stalemate," he said. "We also hope all sides can step up their exertion of wisdom to put forward new suggestions in order to create the conditions to revive negotiations."

The United States, France, Britain and Germany have called for Iran's nuclear activity to be taken before the UN Security Council for possible sanctions. China and Russia, as permanent members, have the power to veto sanctions.

Iran has raised concerns among Western nations since January 10, when it removed seals that the International Atomic Energy Agency had installed on some of its nuclear equipment. The US and its European allies fear that restarting the nuclear program may allow Iran to develop nuclear weapons.

Thursday, January 26, 2006

Year of the Dog Starts Sunday; Optimism Abounds

Many Asian countries, including China, Korea, Vietnam and Singapore, will celebrate the beginning of the Lunar New Year starting Sunday (January 29th). Chinese soothsayers expect the coming year of the dog to be mainly positive and peaceful, but warn natural disasters could be in store.

In Chinese astrology, the dog is the most likeable, honest and straightforward of all animals. Its influence is expected to bring a year of justice and harmony.

Each year of the Chinese 12-year zodiac is dominated by an animal. And each year also comes under the influence of one of the five elements--fire, water, wind, earth and wood. This year is a fire year.

Practitioners of Chinese geomancy, or feng shui, predict that in the so-called fire-dog year, world leaders will be more likely to solve long-running conflicts.

The outlook for the economy is mostly rosy, too. Raymond Lo, a well-known feng shui master in Hong Kong, says the year of the dog will be good for all industries related to the elements of fire and wood.

"Wood element is actually related to a lot of consumer products such as fashion, textiles, books and magazines, wooden furniture - this area is the most beneficial in the year of the dog," Lo says. "The other area is the fire industry, like the stock market, energy, oil price."

Lo predicts the sectors that will do less well in 2006 are those related to the element earth, such as the property market, metal industries and mining.

He says the most negative aspect of the dog year will be the increased likelihood of natural disasters, such as earthquakes, landslides and volcanic eruptions.

But Lo says it will also be a year of increased spirituality across the globe.

"In cultural things, in entertainment you will see more ghost stories, more spiritual things, more religious things, issues comings up," he predicts.

Chinese astrologers predict those born under the signs of the dragon, the dog, the ox and the goat are likely to find this year challenging, but rabbits, tigers and horses are more likely to find peace and harmony over the next 12 months.

Wednesday, January 25, 2006

China Confirms 7th Human Death From Bird Flu

China's health ministry has confirmed its seventh human fatality from bird flu--a 29-year-old woman in southwestern Sichuan province.

And Indonesian health officials said Wednesday that local tests confirmed that a chicken seller in Jakarta has the deadly strain of the virus.

World Health Organization officials in Indonesia say they are focusing on the need to improve hygiene at markets to reduce exposure to the disease.

Health workers from refugee camps and migrant communities on Burma's border are scheduled to meet Friday with local officials and donors in Thailand to prepare for possible bird flu outbreaks.

Bird flu has killed at least 81 people in East Asia and Turkey since 2003.

China Replaces France as Fifth Largest Economy

China's National Bureau of Statistics announced on Wednesday that the country's economy grew 9.9 percent last year. Gross domestic product totaled almost $2.3 trillion in 2005.

Analysts say the GDP figures indicate China has overtaken France to become the world's fifth largest economy. Some say it may even have pushed Britain from fourth place.

The 2005 growth was mainly driven by investment and exports. Exports increased by more than 28 percent to $762 billion last year, generating a record trade surplus of more than $100 billion.

The statistics bureau said investment, mainly in urban construction and infrastructure, accounted for nearly half of last year's economic expansion.

Qu Hongbin, a China economist in Hong Kong for the British bank HSBC, says China will only be able to sustain its economic growth if it gradually shifts its focus away from infrastructure investment. Qu believes the government needs to step up efforts to increase consumer spending, which is still very low compared with more developed economies.

"One reason the growth has been relying too much on the investment is that the government itself has put a lot of money in the construction project, but not enough in the social infrastructure, such as education, public health," Qu said. "I think the government needs to correct, to readjust its old spending pattern, and that will have impact on the consumer spending and similar behavior over time."

Chinese officials acknowledge that economic planners still have to overcome many problems, especially in less developed rural areas, where two thirds of China's population lives.

And while its GDP has surpassed some of the world's largest economies, Qu points out that given China's 1.3 billion people, the country still remains poor.

China's economy has grown by more than nine percent a year for the past several years. Many economists fear that pace may be too rapid, and could lead to inflation or to the building of excess capacity in factories and property development. Both situations could lead to economic problems that could destabilize China's banks or cause a recession.

While the central government has tried to curb excess development and reckless bank lending, China's leaders are reluctant to cool off the economy very much. The country has tens of millions of unemployed people, and hundreds of millions of Chinese scrape along on less than $1 a day. Beijing leaders have made it clear they want to cut unemployment and poverty, to avoid causing social instability.

Tuesday, January 24, 2006

China: US Counterfeiting Claim Delaying NK Talks

The Chinese government said today that a dispute about alleged North Korean counterfeiting of US dollars and other illegal financial activities is delaying negotiations to end North Korea's nuclear programs.

The Chinese government said it supports an investigation into American allegations that North Korea is counterfeiting dollars and has also used a bank based in Macau, a special administrative region of China, as a front for illicit financial deals.

But at a regular briefing, Chinese Foreign Ministry spokesman, Kong Quan, said the charges are preventing a resumption of six-nation talks aimed at ending North Korea's nuclear programs.

"This issue has already become interference or an element of obstruction to the six-party talks process," Kong said. "China, as host, has continuously and actively mediated to urge North Korea and the U.S. to consult to find an appropriate solution."

The US in September accused North Korea of counterfeiting and said the Banco Delta Asia bank in Macau was being used by Pyongyang for money laundering.

Washington has since imposed financial sanctions on the bank and several North Korean companies. Pyongyang says it will not return to six-nation negotiations aimed at ending its nuclear programs until the sanctions are lifted.

The US is also urging South Korea to step up efforts to counter alleged illegal financial activities by North Korea.

South Korea has only said it will cooperate with international efforts against all financial crimes, but did not respond specifically to US allegations about North Korea.

But the South Korean government has urged Pyongyang to return to talks on its nuclear program in February without preconditions.

The six-nation negotiations have been stalled since November. In addition to China, the two Koreas and the US, the talks include Japan and Russia.

US Asks China to Help Africa

United States Deputy Secretary of State Robert Zoellick today called on China to use its expanding role in world trade and politics to help ease the problems of Africa, especially in Sudan. The US diplomat met with Chinese officials on Tuesday in Beijing.

Zoellick said he came to China to suggest ways the country can play a positive role while integrating itself into the international system.

China has been on a worldwide search for new sources of oil to fuel its rapidly expanding economy, something Zoellick said the United States understands.

"It's natural that as China becomes a larger economy, that it engages in the global system," Zoellick said.

China has come in for international criticism for dealing with governments with poor human rights records, for the sake of gaining access to oil.

Zoellick said he sees the energy deals as a chance for Beijing to help resolve problems in places like Africa. He said a current example is the case of Sudan, which is struggling to implement a peace accord signed last year to end a decades-old conflict between the Arab-led government in the North and non-Arab rebels in the South.

"I believe that as China develops its relationship with Sudan, it also gives it an opportunity to help it deal with some of the problems like the North-South accord," he said. "Because in this case, there's also energy reserves in the south that could help China develop good relationships with the SPLM [Sudan People's Liberation Movement] in the south. Similarly, there's a possibility for China to work with the African Union, the European Union, and others dealing with the problems in Darfur."

Zoellick's remarks follow his calls last September for China to view itself as a "stakeholder" in global affairs as its profile in the world rises.

On the matter of Iran's nuclear program, the State Department official told reporters the US is trying to avoid any confrontation with Tehran. He said that is why Washington is working with Russia and others on the UN Security Council to make it clear to Iran that developing a nuclear weapons program would not be "a positive development."

Also on Zoellick's agenda in Beijing were discussions on an upcoming visit by Chinese President Hu Jintao to the US (scroll down for the story).

Chinese President to Visit US in April

Chinese President Hu Jintao plans to visit the United States in April, US officials in Beijing announced today.

Details of Hu's visit have not been released.

The news came as US Deputy Secretary of State Robert Zoellick arrived in Beijing for talks with top Chinese officials on bilateral relations, security and proliferation issues.

Zoellick met with Chinese Premier Wen Jiabao Tuesday, and is expected to meet with Foreign Minister Li Zhaoxing.

As part of his three-day trip, Zoellick will also travel to the southwestern city of Chengdu.

Monday, January 23, 2006

China-Saudi Energy Agreements Announced

China has signed an agreement with Saudi Arabia that may boost Beijing's purchases of Saudi oil. The deal came during a visit by Saudi King Abdullah to the Chinese capital.

King Abdullah's three-day visit is the first to China by a Saudi ruler since the two countries established diplomatic relations in 1990.

At the top of the agenda is, of course, oil. Saudi Arabia is one of the world's leading oil producers, and China, with its booming economy, has become one of the major purchasers.

The Saudi leader met with Chinese President Hu Jintao before signing a memorandum of understanding, which broadly outlines the two countries intentions to increase cooperation on energy. China, the world's number-two petroleum consumer, is eager to diversify its sources as its energy demands continue to soar.

James Brock, an independent consultant in Beijing who advises China's energy sector, says Saudi Arabia is an attractive resource, because it is more dependable than some of the other places where China has been looking for oil.

"They [Saudis] are not as volatile places as Nigeria or Russia, where the supply has been highly variable," Brock says. "They are not as subject, or at least so far they have not been subject, to political upheaval like Iran and Iraq. So, they are a good, dependable supplier, and China would like to have as many of those as they can."

Saudi Arabia already accounts for about 17 percent of China's oil imports.

Officials gave few details on the five agreements, saying only that they had to do with cooperation on oil, gas, and minerals; expanding trade, and avoiding dual taxation. There was also an agreement on a Saudi loan to fund a development project in China's largely Muslim region of Xinjiang.

The Saudi King's visit to Beijing follows a visit by Chinese Foreign Minister Li Zhaoxing last week to several West African nations, including oil-rich Nigeria. China announced this month it is bidding for a major stake in a Nigerian oil field.

Yamaha Charged with Illegal China Exports

Japanese Police and government officials on Monday accused Yamaha Motor of illegally exporting unmanned crop-dusting helicopters, which could be converted to military use, to a Chinese company. The police raided Yamaha Motor's headquarters and numerous other company locations.

Japan's chief cabinet secretary Shinzo Abe said authorities will conduct a thorough investigation. He said it is regrettable that the helicopters, which he sid could be used to transport weapons of mass destruction, were illegally exported.

Yamaha on Monday acknowledged exporting nine of its RMAX remote-controlled helicopters to China since 2001, through a Chinese company called Beijing BVE Technology.

Japanese media quoted police as saying that Beijing BVE Technology is believed to be linked to the Chinese military.

Yamaha Motor director Toyoo Otsubo told a news conference that the company was surprised by the allegation. Otsubo said the company thought it had followed proper export procedures, and said the Trade Ministry gave no indication that the helicopters could not be sold to China.

Otsubo said Yamaha Motor does not believe that it has broken any laws, but will cooperate fully with the investigators.

Only a year ago, Japan strengthened export controls on civilian unmanned aircraft that can carry more than 20 liters of liquids. The controls came amid rising global concern that terrorists might use such aircraft to spray chemical or biological weapons.

Yamaha Motor, a subsidiary of the leading musical instrument maker Yamaha Corporation, is one of the two major manufacturers in Japan of unmanned helicopters.

Sunday, January 22, 2006

South Korean Official Optimistic About NK Nuclear Negotiations Following Kim's Mysterious China Visit

A top South Korean official said he thinks the recent visit of North Korean leader Kim Jong-Il to China will have a positive effect on multi-lateral talks aimed at persuading Pyongyang to abandon its nuclear-weapons programs.

South Korean Foreign Minister Ban Ki-Moon said he has several reasons for being optimistic about the North Korean leader's trip to China.

"First of all, North Korean leader Kim Jong-Il said to Chinese leaders that he is committed to the denuclearization of the Korean peninsula," Ban said. "And he also said that he would like to resolve the North Korean nuclear issue peacefully, through dialogue, participating in six-party talks. Therefore, we believe that his visit will have a positive impact to have six party talks move forward."

In an interview broadcast Sunday on the CNN program Late Edition, Ban added that he hopes Kim's visit to several southern Chinese economic powerhouses will have a positive effect on efforts to reform and open North Korea's society.

Said Ban: "He (Kim) was accompanied by many senior government officials of North Korea, including economic advisers. And he visited several Chinese cities, the modern cities of economic development like Shenzhen and Guangzhou. Those are the cities known for their success stories of economic development of China."

United States officials are in Seoul to discuss allegations that North Korea is engaging in illicit financial activities, including counterfeiting US currency.

Ban said Seoul also has conveyed its deep concern about illegal North Korean financial activities to authorities in Pyongyang. He said although the US actions have, what he described as, an understandable law-enforcement dimension, he worried about the negative effects they can also have to ongoing nuclear disarmament efforts.

"And at the same time, we hope that this kind of counterfeiting or illicit activities by North Korea, will not be standing in the way of six-party talks," he said.

The US has imposed sanctions on companies it suspects of aiding North Korea in counterfeiting, money laundering, and the drug trade. US officials also have blacklisted eight North Korean companies in connection with weapons proliferation.

North Korea has vowed to boycott the six-party nuclear talks until the US sanctions are lifted.

The talks have been stalled since November, although there has been a recent flurry of high-level activity aimed at restarting them as early as next month.

Police Put Activist in Psychiatric Hospital

A rights group has accused Chinese police of forcing a woman into a psychiatric hospital after she attempted to petition the government over land seizures.

Human Rights in China, which is based in the United States, says Liu Xinjuan was one of several people detained last Monday in Shanghai as they prepared to take their grievances to the local legislature.

The group said in a statement Friday that three Public Security officers forced Liu into a police vehicle and transported her to a local police station.

The press release says Liu was taken later that night, bound and gagged, to a psychiatric hospital. The groups says that when her son visited her, he found Liu covered in bruises and wounds.

Liu has petitioned the government several times over improper land seizures.

Friday, January 20, 2006

China's Geely Steals Detroit Auto Show

This is a story about the little car that could--maybe.

Against all odds, an emerging Chinese car company, Geely, has generated the biggest buzz at this year's North American Auto Show in Detroit, Michigan, which is expected to draw more than 750,000 people before it closes on January 22.

It's the biggest show of its kind in the United States and one of the biggest auto shows in the world, giving America's big three (GM, Ford and Chrysler) and other automakers from around the world a chance to show off their new car line-ups.

While the big US companies--General Motors, Ford and Chrysler--are spending millions on flashy exhibits with dozens of new cars, Geely is stealing the show with one of the smallest displays. Its decidedly bare-bones display isn't even on the show floor at Detroit's Cobo Center; it's in the lobby. And it features just one small car, the four-door C-K sedan, with one very low price. Company founder, Shufu Li, hopes to be selling cars in the US by 2008.

"When we first enter the American market our targeted consumers will be lower and middle income families," he said. "Our car will be sold at less than $10,000."

Geely has been in the car business for less than 10 years and the company sold just 150,000 cars last year. They expect to sell only 25,000 cars in the US their first year. That might not be seem as much more than an annoyance to Detroit's car- building juggernaut. But Geely isn't the only automotive company that wants to enter the American market.

Another Chinese company, Chery, has also announced plans to sell cars in the US.

Rebecca Lindland, chief automotive analyst with the market research firm, Global Insight, says that while Detroit shouldn't write off companies like Geely, it shouldn't necessarily expect a smooth ride.

"I think it's foolish to say that it's not a serious threat. But I think that they may be slightly underestimating how difficult it is to penetrate the US market," she says. "Even long-term, established brands here, like GM and Ford, have trouble understanding the consumer. So it's not as easy to just pop into the (United) States and sell, you know, 50,000 vehicles."

But initial reviews of the Geely car are have been pretty good. On the last of the industry preview days, when auto company employees come to check out the competition before the show opens to the general public, Geely's exhibit was mobbed with everyone from executives to engineers to parts suppliers, all of them giving the C-K a thorough once looking over. And many of them, like Aaron Drexel, who works for Daimler-Chrysler, liked what they saw.

"It's actually pretty impressive," he says. "You can tell it's an inexpensive, kind of a starter car, but it's pretty nice. It's a big difference between a $20,000 or $30,000 Toyota or Chrysler, but for an entry-level car it's, it's very nice." Drexel adds that he would consider buying a C-K if he didn't work for Daimler- Chrysler.

After looking at the Geely--which, roughly translated, means good luck in Chinese--Chrysler engineer Dennis Pasco concluded that Detroit should be worried.

"At $10,000, if they can bring their quality up, if the crash test ratings are there, yeah, we got a problem," he said. "We're going to have a lot more competition, for sure."

Temporary Taiwan-Mainland Nonstop Flights Begin

Direct charter flights from Taiwan to mainland China have begun for the Lunar New Year holiday season, under an agreement between the diplomatic rivals to temporarily allow nonstop air travel.

A plane with Taiwan's biggest carrier, China Airlines, arrived in Shanghai Friday from Taipei.

Six airlines from each side will operate 72 flights across the Taiwan Strait. The service will connect the mainland Chinese cities of Beijing, Shanghai, Guangzhou and Xiamen with Taipei and Kaohsiung on Taiwan until February 7.

This is the second year that Beijing and Taipei have allowed the holiday flights. Last year, flights were limited to Taiwan business people living on the mainland. This year, the flights include Taiwan tourists.

At other times of year, travelers must connect through other airports, usually Hong Kong.

Thursday, January 19, 2006

Rising Discontent Causing More Mass Disturbances

Chinese officials concede the number of mass disturbances in the country is growing. Analysts say the discontent that is fueling many of these incidents stems largely from the disparities emerging as millions fail to reap the benefits of China's rapid economic growth.

In fact, for many Chinese, the country's much admired and publicized economic miracle is a nightmare. Rural residents, for example, have seen their health care deteriorate dramatically with the dismantling of socialized medicine.

But worsening health care is only part of the story. The vast majority of public disturbances that have made it into the domestic and foreign press in the past few years have been sparked by anger over expropriation of land by local officials, pollution, and corruption.

China's Public Security Ministry on Thursday said the number of incidents including public order disturbances, obstructions of justice and mob gatherings reached 87,000 in 2005--up more than six percent from the previous year. Ministry spokesman Wu Heping told reporters in Beijing that this is cause for concern among the communist leadership.

"Demands by masses have emerged due to rapid economic and social development," he said. "Communist Party committees and governments at all levels attach a high degree of importance to this problem."

Following decades of chaos during Mao Zedong's rule over China, public stability has been among the top priorities of the communist leadership.

In 1989, then-Paramount Leader Deng Xiaoping put down pro-democracy demonstrations in Beijing's Tiananmen Square with brutal force. Deng was later quoted as saying he feared that the demonstrations would lead to widespread disorder.

President Hu Jintao took office in 2003 with a pledge to work for a more harmonious society; but the latest figures suggest that vision has been slow to appear.

Analysts say the tally of 87,000 disturbances is probably understated. Chinese authorities continue to suppress coverage of most protests, especially ones that have involved the use of force by authorities or their proxies to smash uprisings.

Among the incidents gaining wide international attention was a crackdown last month by police at Dongzhou village in southern China's Guangdong province. Agents there fired into a crowd of demonstrators and killed a number of people. The demonstrators had been protesting the authorities' failure to compensate them for land that was taken to build a power facility.

There have been a number of other incidents in recent years in which police--or in some cases thugs hired by the authorities--have used lethal force to crush public demonstrations.

Taiwan President Appoints New Prime Minister

Taiwan's President Chen Shui-bian has appointed a former party chief as the island's new prime minister, as he tries to rebuild support for his Democratic Progressive Party.

The appointment of Su Tseng-chang as premier on Thursday had been widely expected.

The 59-year-old former chairman of the ruling Democratic Progressive Party (DPP) will replace Frank Hsieh. He stepped down Tuesday to take responsibility for the party's overwhelming defeat in local elections last month.

The party's popularity has fallen as it has grappled with a rising unemployment rate and corruption scandals.

According to Emile Sheng, a political scientist at Soochow University in Taiwan's capital Taipei, Chen picked Su because he is the DPP's most popular politician and could help put the party back on its feet.

"Both the party and the president himself need a fresh start with the public," he said. "So I think he is really forced to chose the most popular politician within the party in order to give people a fresh look at the party and try to re-establish the trust people have with the government."

Sheng believes, however, that major policy changes will be unlikely under Su, as the prime minister does not have much decision-making power.

One of the thorny issues Su will face is Taiwan's relationship with China. Chen is known for his tough stance toward the mainland. In a controversial New Year's speech he made it clear he will continue to take steps to demonstrate Taiwan's autonomy. Su has been more moderate in his public statements on China.

Sheng says future relations with the mainland depend on Su's decisions on cabinet positions related to cross-straits issues.

China considers Taiwan its territory, although the island has been self-governing since 1949, when Nationalist forces fled there at the end of a civil war with the communists.

China has threatened to retake the island by force if the Taipei government moves toward full independence. The United States has called on both sides to avoid taking unilateral steps to change the status quo.

Su also is likely to face obstruction from the pro-China opposition Nationalist party, which controls the parliament. In recent months, the opposition had blocked many of the government's policy initiatives.

In his acceptance speech Thursday, the new premier acknowledged he will be in for a rough ride. He says he is willing to shoulder the responsibility and face the challenges, and promises to strive to be down to earth and honest.

Su is the fifth prime minister Chen has appointed in the five years he has been in office. He is the most likely DPP candidate in the next presidential elections in 2008. Chen is barred by law from serving another term.

Wednesday, January 18, 2006

North Korea Confirms Leader's China Visit

North Korea's official news agency announced Wednesday that the country's leader, Kim Jong Il, has completed a trip to China--the first official confirmation of the visit. Chinese state media also report that Kim met with top Chinese officials.

The evening news broadcast on North Korean state-run television confirmed what diplomats and correspondents in the Chinese capital had been speculating about for days.

The announcer said that Kim paid an unofficial visit to China from January 10 to the 18 at the invitation of Chinese President Hu Jintao.

Japanese television has shown grainy video images of a person believed to be the North Korean leader, as well as glimpses of motorcades said to be transporting Kim to various meetings in southern Guangdong province and Beijing.

China's state-owned Xinhua news agency reported that Hu accompanied Kim to a crop research institute and that the North Korean leader met with other top Chinese officials.

The official North Korean central news agency says Kim and Hu agreed that their countries would "contribute to the peaceful resolution of the Korean Peninsula's nuclear issue by continually pursuing the six-way talks process."

The news service report also said Kim called for the Chinese leader to join him "to overcome the difficulties in the six-way talks and to find a way to move forward."

In September, in the first joint statement to be issued during the six-nation nuclear talks, North Korea agreed to abandon its nuclear programs in exchange for aid and security guarantees.

But the November meeting of the six parties--both Koreas, host China, the United States, Japan and Russia--failed to make further progress.

North Korea last month announced it would boycott the negotiations until Washington lifts sanctions imposed for alleged counterfeiting and money laundering.

China Announces Sixth Death From Human Bird Flu

China on Wednesday announced its sixth human bird flu death.

Chinese health officials said a 35-year-old woman from Sichuan province died last week from the H5N1 strain.

Meanwhile, Turkish officials say bird flu killed an 11-year-old girl on her way to a hospital Wednesday. And Iraqi health officials have sent samples to a lab, suspecting bird flu in the death of 14-year-old girl in the Kurdish city of Suleimaniya.

The news of the deaths came as international donors pledged nearly $2 billion at a bird flu conference in Beijing, exceeding expectations.

The money will be used by poor countries to set up prevention programs.

United Nations officials say the virus, which has spread from southeast Asia and China into Turkey, could soon move into Africa and Europe with devastating effects.

Bird flu has killed more than 80 people since 2003.

Davos Forum to Focus on China and India

The emergence of China and India as global economic and political powerhouses will figure prominently on the agenda of this year's World Economic Forum, which begins next week in Davos, Switzerland. As in previous years, this small Alpine village will act as a magnet for many of the world's leading business, political, cultural and religious personalities to meet and debate some of the most pressing issues of the day.

More than 2,300 participants from 89 countries will make their way to Davos. They include 15 heads of state or government, 60 cabinet ministers, and many religious, cultural, union and humanitarian leaders. More than half of the participants are business leaders, including 70 percent who figure on Forbes magazine's list of top 100 executives.

The Conference will be opened by speeches given by Germany's new Chancellor, Angela Merkel and China's Vice Premier, Kim Hyun Chong.

Presiding over this group will be Klaus Schwab, the founder and executive chairman of the World Economic Forum. He says the key issue for him will be the shift of power from the West to the East.

"The rise of China and India," Schwab said. "Not as a threat, but as an opportunity. And, all the consequences it has geo-economically and geo-politically. We see the first consequences in increased competition for natural resources. We probably will see the integration of those powers into a much more multi-polar global governance system."

Forum Managing Director Ged Davis said the race between China and India is creating a structural shift in the global economy. He says other changes in the economic landscape also will be debated at Davos.

"In particular, current concerns, for example, about oil prices, the economic imbalances that we see, significant deficits in the US, surpluses in Asia," Davis said. "How this will unwind is a matter of real concern. There are a very positive set of views about the global economy for the coming year. But, nevertheless, there are risks there. And this shapes in some way significantly the political debate."

Politics is likely to play a role at Davos. The annual meeting will take place before the Israeli elections. Forum organizers note the issues of Iran and Iraq will come up and terrorism is expected to be a recurring theme.

Olympic Games to Create 1.8 Million Jobs

The state-run China Daily newspaper has reported the 2008 Olympic games will create more than 1.8 million jobs in Beijing and boost the Chinese capital's overall economic growth.

The newspaper cited a new economic outlook by two statisticians for the city government that says Beijing's economy will grow 9.8 percent annually between now and 2008. That is an increase of almost one percentage point (0.8) from the annual average between 2001 and 2005.

The report says more than 50 sectors of the economy will benefit from the Games, with construction leading the way with more than 20 percent of the growth.

The 2008 Games have spurred Beijing to launch numerous infrastructure development projects, including expanded highway and subway systems, an Olympic sports and culture zone and 17 new gymnasiums.

Tuesday, January 17, 2006

China Proclaims Nigeria a Strategic Partner

China and Nigeria explored ways of boosting political and economic relations during talks in Abuja Monday. Both countries are hoping to benefit substantially from the new partnership.

Chinese foreign minister Li Zhaoxing said he recognizes Nigeria as a strategic partner in Africa. The Chinese official who was in Abuja late Monday night, left a few hours later, canceling the rest of his African tour. He left for Kuwait following the death of the Kuwaiti monarch.

Li held discussions with his Nigerian counterpart Olu Adeniji at the Abuja airport. Both men signed a number of protocols covering several aspects of bilateral relations, including a memorandum of understanding on the establishment of a strategic partnership. The Chinese foreign minister described the brief visit as a success.

Officials say Chinese firms have found Nigeria a very attractive destination in the last few years. The oil, power, telecommunications and manufacturing sectors have become some of the targets of Chinese investment. Nigerian oil is a major attraction for China, which is keen to enhance the supply of oil to its rapidly expanding economy.

China National Overseas Oil Company announced last week that it had paid more than $2 billion for a stake in a Nigerian oil block. Joe Anichebe, spokesman for BPE, Nigeria's agency for the privatization of state-owned enterprises, said Chinese investors have shown tremendous interest in acquiring previously state-owned enterprises.

"They understand our environment and that's why they are pushing to invest," he said. "And we are also holding investment fora with various Chinese agencies to come and invest and they've been taking advantage of it, particularly in the privatization program. And we will continue to appeal to them to come and invest."

China's foreign minister also announced a grant of about $400,000 to Nigeria to fund poverty reduction projects. He also promised Chinese assistance to the West African nation in the construction and launch of a $200 million communications satellite.

Abuja has responded with equal enthusiasm to the growing ties with Beijing. Nigeria's non-oil exports to China in the last year were about $500 million. The figure is set to double in 2006.

China Hosts World Bird Flu Conference

International health experts warned that more money is needed to track and prevent the spread of bird flu, which many fear could become a human pandemic. At a meeting in China, the World Bank and the World Health Organization hope to raise more than $1 billion to contain the H5N1 virus.

With the confirmed number of deaths steadily rising and new fatalities reported in Turkey this month, experts say the risk of a bird flu pandemic is growing.

Margaret Chan, a top pandemic expert for the World Health Organization, told delegates at a meeting in Beijing Tuesday that time is of the essence in fighting the H5N1 virus, which is beginning to appear outside of Asia.

"We must understand that when one country is not safe, the world is not safe," she said. "Pandemic influenza by nature would go around the world. So it is important for us to work as an international community to get a better handle on the issue."

Counting the latest four fatalities in Turkey this month, there have been at least 79 confirmed deaths from H5N1 bird flu since 2003. The cases in Turkey were the first human infections reported outside of East Asia.

The two-day meeting, sponsored by the Chinese government and the World Bank, aims to raise $1.2 billion from donor nations. Organizers say the money will fund improvements in health and veterinary services in developing countries where outbreaks have occurred. They also hope to boost surveillance in nations where the disease has yet to appear.

The United States is expected to announce its pledge on Wednesday.

Chan said the Swiss drug maker Roche pledged to donate two million more courses of its anti-flu drug Tamiflu to help poor countries prevent outbreaks of bird flu in humans. The company previously donated enough to treat three million people.

Most, if not all, confirmed human cases of H5N1 so far have involved animal-to-human infection. Health experts, however, fear that as the virus spreads among birds and as more people come in contact with it, H5N1 will mutate and become easily passable from human to human. That raises the potential for a global pandemic that could kill millions of people.

China, the host of the two-day meeting, wants to take a leading role in the fight against bird flu. However, Beijing has faced criticism over its failure to quickly share with the WHO virus samples from animals infected with H5N1. More than 30 outbreaks of the virus in poultry have been found in China.

China is not bound by international regulations to share virus samples. However, scientists outside China say it is necessary to have the samples to track mutations in the virus.

International animal health experts have accused the Chinese of being slow to hand over some animal samples to gain a commercial advantage from having exclusive access to forms of the virus, which can be used to develop vaccines and remedies or to further scientific findings. China denies the allegation.

World Health Organization officials on Tuesday said the Chinese government had indicated it was preparing to release some samples in the coming days.

Monday, January 16, 2006

Ford Reports Record Sales in China

The Ford Motor Company says sales of its products in China are booming.

In a statement Monday Ford says sales rose 46 percent last year to more than 82,000 vehicles--a record.

If Ford's affiliated brands--like Mazda--are added to the total, the company sold 220,000 vehicles in China last year.

Ford is the second largest American automaker, and number three in the world after General Motors and Toyota. In China, Ford is outsold by both GM and Volkswagen.

Official Chinese Media Downplay Rural Protests

Foreign media are paying more attention to the plight of riising China's left-behind rural poor. Inside China, however, it's business as usual for the powerful state-owned media, as Chinese authorities striuggle to keep a tight lid on the growing number of increasingly violent rural protests.

Thus, it should come as no surprise that China's Xinhua News Agency is downplaying the latest clash between villagers and police in the southern province of Guangdong over land compensation. A four-day protest in Zhongshan City's Sanjiao Township left several police and villagers injured in confrontations over protesters blocking a highway.

The protesters were demanding more compensation for land the government seized to be used for factories.

Villagers accuse the police of using electric batons and beatings to disperse thousands of demonstrators on Saturday. But local officials deny the accusations.

The state-owned news agency quotes a Zhongshan city government spokesman as blaming protesters for the injuries, saying they threw rocks and fireworks at police, causing "chaos." It also puts the number of protesters at about a hundred.

Local public security officials said they could offer no details about the incident.

Such protests--an estimated 200 occur on any given day-- clearly have the Communist government worried about the threat from rural discontent.

Protests over land compensation are on the rise in China as local governments seek to build their economies by confiscating farmland for industry. This is contributing to the income gap and people in the countryside are becoming more desperate.

Says one human rights activist: "On top of being left behind by economic growth and being left behind by this new wealth that is being reported in the mainstream media, then you have the situation where their land is being taken away and they're not getting adequately compensated."

A similar clash in December over land compensation in nearby Dongzhou left at least three protesters dead when police fired on demonstrators. Villagers there also question official accounts, saying up to 20 people may have been killed.

Taiwan Governing Party Elects New Leader

Taiwan's governing party, the Democratic Progressive Party, has elected a new leader, Yu Shyi-kun, a former close aide to president Chen Shui-bian.

Yu won 54 percent of the vote on Sunday to beat M.P. Chai Trong-rong and former legislator Wong Chin-chu.

The previous party president, Su Tseng-chang, resigned to take responsibility for the DPP's crushing defeat in last month's local elections.

The DPP suffered from a corruption scandal involving the president's former deputy chief of staff.

Yu said he appreciated the support of those who helped him win the leadership position. He said his election shows support for his plan to push for a clean party and government.

The DPP and the opposition party Nationalist party are positioning themselves for a presidential election in 2008.

Friday, January 13, 2006

China Cautions Against Referring Iran to UN

China's ambassador to the United Nations, Wang Guangya, said Friday that referring Iran to the Security Council might toughen Tehran's position on its nuclear program.

"Our concern is that to refer it to the Council, we want a solution, but to refer it might complicate the issue," Wang said. "This is our concern. This might make the position of some parties more tough on this issue."

Leading European nations joined the United States Thursday in calling for the matter to be referred to the Security Council. The foreign ministers of Germany, France and Britain said the referral was needed because efforts to negotiate with the Tehran government had failed.

Permanent Security Council member Russia also renewed its call for Iran to resume its moratorium on nuclear activities.

China and India Ink Energy Agreements

China and India have agreed to cooperate more in their efforts to find new worldwide sources of oil to fuel their booming economies. The two nations, which together have about 40 percent of the world's population, signed a series of energy agreements this week during a visit to China by India's oil minister.

India and China have both had to scour the globe in recent years to find new sources of oil to meet their rising energy demands.

That search has sometimes put the two nations in competition with each other when bidding for oil in places such as Africa and South America. It's a situation that India's Minister of Petroleum and Natural Gas Mani Shankar Aiyar says has driven up prices for both.

"I don't think it is necessary for either India or China to purchase its own energy security at the expense of the other," he said.

The Indian official spoke to reporters in Beijing this week after signing five agreements on energy cooperation with China, including the sharing of information. China and India have agreed to tell each other how much they are paying on bids for oil and gas.

In order to implement the deal, the two sides said they would set up a joint committee to monitor compliance and facilitate information sharing.

The Indian oil minister said it would take one year to see how the agreement worked in practice.

Chinese state media on Friday said the other agreements called for the two countries to collaborate more on research, exploration and refining, and pipeline construction.

The Chinese Xinhua state news agency said China and India also pledged to work jointly on developing alternative fuels.

Thursday, January 12, 2006

North Korean Leader's Location a Mystery

Where in the world is Kim Jong Il?

North Korea's reclusive, lunatic leader is apparently on the road again; but whether or not he is in China or en route to Russia is a mystery. Neither the North Korean government nor the Chinese government is talking.

Since Tuesday, journalists and diplomats in the Chinese capital have played a sort of guessing game on the whereabouts of Kim Jong Il. Some reports had him in Shanghai, while others put him in the southern city of Guangzhou. Still others said he was headed for Moscow.

When Kim last came to China in 2004, the Chinese government did not confirm his visit until after he had returned home. Chinese Foreign Ministry spokesman Kong Quan laughed when reporters pressed him to disclose Kim Jong Il's travel plans in China.

Kong says he can only repeat that he cannot provide any information on the matter. The Chinese spokesman begged reporters to understand that North Korea, like every country, has "its own way" of handling things.

Some unconfirmed news reports said Kim had traveled to Shanghai by air, which would be unusual. North Korean propaganda materials tout the man as one of the world's greatest fighter pilots--despite accounts that he is deeply afraid of flying. He usually prefers to take his personal armored train instead, even when it adds days to a journey.

Kim has been characterized as paranoid, but analysts say he might have good reason for not disclosing his whereabouts during his infrequent foreign travels. On his return from China in 2004, a huge explosion destroyed a part of a railway station his train had passed through only a few hours earlier. There was speculation at the time that the blast had been an assassination attempt.

Wednesday, January 11, 2006

Will China and India Wreck the World?

The Worldwatch Institute, an organization that focuses on environmental, social and economic trends, says the current rate of global demand for resources is unsustainable. The statement came in the group's annual report, which this year focused on the growing importance of China and India.

Worldwatch President Christopher Flavin said this year's report looks at what he called the "ecological footprint" of various countries.

"And this is translating the total resource and pollution requirements of a country, into the number of global hectares, that is, hectares around the world, that are being required, land area, to actually support that way of life," he explained. "Whether it is in terms of providing wood or paper or food or land to absorb all the carbon dioxide that's being produced."

Flavin said the overall demand on global ecology has been growing dramatically.

"And, in fact, within the last 20 years for the first time, the total ecological impact has begun to exceed the total biological capacity of the earth, which is basically a definition of unsustainability, which means at some point, these resource-use levels and pollution levels are going to have to come down to a level that is sustainable," he added.

After more than two decades of compiling annual reports, Worldwatch this year focused on two rapidly growing countries, China and India. Combined, the two countries include 40 percent of the world's population. Flavin said as both nations continue to develop, they have been hungrily gobbling up the world's resources, such as steel and cement. He also projected future global competition over oil, another limited resource.

"If you look at the fact that if China and India were to demand as much of the resources in this ecological footprint term as even Japan does today, you would have to literally find an additional planet earth just to support their needs--again, without supporting the rest of the world at all," he noted.

The Worldwatch president said if these two countries continue to follow a conventional development path, he anticipates problems in the future.

"Whether they will be ecological, mainly security, mainly economic, is hard to know, but that there are crises coming if we follow this path, I think, is unquestionable," he said.

At the same time, though, Flavin said, China and India have the leverage to make changes and find new energy systems. He added that the choices these two countries make could have a huge impact on the overall quality of life for the rest of the world.

"If China and India were to choose to go in a new direction, their scale, in terms of economies, technologies, human ingenuities, [they] are now graduating a large number of scientists and engineers, truly could push the world in a new direction," he added.

China Exporting Environmental Problems

Increasingly, even as it becomes one of the world's leading exporters of manufactured goods, China is also becoming a major exporter of pollution, affecting countries in the region--and beyond.

Last November's explosion at a chemical plant in Northeast China poisoned a river that provides drinking water for millions of Chinese--and sent a poisonous slick flowing across the border into Russia.

Internally, China is paying a high price for its rapid economic growth. An estimated 70 percent of the country's rivers are polluted; the air quality in its cities is among the worst in the world; and its deserts are expanding rapidly due to land abuse, industrialization and urbanization.

The country trails only the United States in its emission of carbon dioxide, the main greenhouse gas thought to be contributing to global climate change.

May Ng, director of the environmental organization Friends of the Earth in Hong Kong, puts the situation in graphic terms: "First of all, [in] the recent years, the sand storms due to desertification from Mongolia has been affecting not only the capital Beijing, it has also blown all the way over to Japan and Korea, and there has been some real concerns from the other countries. Secondly, most of the rivers are connected - for example [the] Nu Jiang from Yunnan flows down to Burma, Laos and Cambodia, and this Songhuajiang River flows from Harbin to Russia. So through rivers, upstream, downstream, there is definite impact."

Air pollution does not respect national boundaries, either. One of the region's most pressing cross-border concerns is acid rain, caused by emissions from China's coal fired power plants.

Hong Kong residents were still able to enjoy clear skies in the 1990s. Now, thanks to filthy air drifting across the border from China, the city's skyscrapers can often be seen only through a veil of smog.

China's ferocious appetite for natural resources is having a more indirect but still serious environmental effect in other parts of Asia. In the past few years, for example, the country has become the world's second largest importer of forest products.

Beijing banned most of its own logging in the late 1990s, believing growing deforestation was a key factor behind large-scale flooding in the country. At the same time, domestic demand for wood products grew as Chinese became wealthier, and sought high quality decorations for their homes and offices.

China buys most of its wood from Russia, but also buys from such countries as Burma, Thailand, Malaysia and Indonesia.

May Ng of Friends of the Earth asserts environmental issues are a time bomb that could lead to conflicts between China and its neighbors. She says Beijing has not yet sufficiently realized how important environmental conflict can be in international relations.

"I think China is now so bad that it is more worried about cross-provincial or cross-township pollution, without even sparing time to look [at] cross-border neighborhood countries' pollution."

Ng contends that political stability in the region is dependent on ecological stability. She says Asian governments need to join forces to prevent environmental hazards--similar to the joint efforts being used to combat bird flu.

China's Trade Surplus Again Hits Record High

China's trade surplus reached a record high last year, putting new strains on trade relations between Beijing and Washington.

China says its trade surplus surged to more than $100 billion last year. A report released Wednesday says the surplus was more than three times that of 2004.

Exports increased by more than 28 percent, to $762 billion, while imports rose less than 18 percent, to $660 billion.

The report, released by China's customs administration, says there was strong growth in the export of high-technology and electronics products.

It says China is now the world's third-largest trading nation. The country's biggest trading partner is the European Union, followed by the U and Japan.

China's trade surplus with the US also reached a record high in 2005. It is estimated to have risen above $200 billion last year, up 25 percent from 2004.

The trade imbalance is a major irritant in US-China relations. There is increasing speculation the US Congress might pass legislation imposing punitive tariffs on Chinese goods if Beijing takes no steps to balance its trade with the US.

Tuesday, January 10, 2006

North Korean Leader Visiting China

South Korean intelligence officials say they are "100 percent certain" North Korea's secretive leader, Kim Jong Il, is visiting China. The visit takes place as North Korea and the United States are in dispute over Pyongyang's alleged counterfeiting of US dollars.

Kim's train reportedly crossed into the Chinese border town of Dandong before dawn.

The North Korean leader is believed to dislike flying, and rarely leaves the country over which he exerts absolute control.

His last known visit to China was in 2004.

Chinese Foreign Ministry spokesman Kong Quan told reporters in Beijing he was not authorized to release any information regarding a possible visit. But he did not deny the visit was under way.

North Korea experts can only speculate at this point about why Kim may be making a trip. But there is agreement that any discussions will cover Washington's accusations that Pyongyang has been issuing counterfeit dollars on a large scale.

China is facing intense pressure over the counterfeiting allegations because Chinese banks are North Korea's main point of financial contact with the world.

The US claims to have substantial evidence of Pyongyang's counterfeiting, and has already put financial sanctions on several North Korean companies. North Korea says it will not return to talks aimed at ending its nuclear weapons programs unless Washington withdraws those sanctions.

Shin Sang-jin, an international relations professor at Seoul's Gwangwoon University, points out China's political agenda makes this an opportune time for a visit by Kim.

He says Chinese leaders are about to embark on a new five-year plan for the economy, and the two countries may need to discuss terms for future economic cooperation.

North Korea is heavily dependent on China, its only major ally, for financial and energy support.

Kim has visited China four times since 2000.

Oil-Thirsty China Faces Challenge in Nigeria

As reported yesterday, the giant Chinese state-owned China National Offshore Oil Corporation (CNOOC) has reached a deal to buy a 45 percent stake in a Nigerian oil field for more than $2 billion. If approved by both governments, the deal would be China's first major venture into oil-rich Nigeria; and it would also be an impressive comeback of sorts following CNOOC's failed bid last year to buy the major American oil company Unocal.

Or would it?

On the one hand, the Nigerian deal is part of China's global quest for foreign energy sources to quench a mounting thirst for oil caused by its rapidly expanding economy. On the other hand, analysts say, the Nigerian bid will not be easy for CNOOC, which has no experience in dealing with Nigeria--a country rated as a difficult place to do business, to put it mildly. The international anti-corruption group Transparency International ranks Nigeria as the sixth most corrupt nation in the world.

James Brock, an independent energy consultant based in Beijing, points out that western oil corporations with much more experience than CNOOC have faced serious challenges in Nigeria--and he expects CNOOC's experience to be no different.

"The western companies such as Shell and Chevron did not bid on this block and that would imply they didn't believe the values were there," Brock says. "So this is certainly a hurdle which CNOOC will have to overcome."

Brock notes that India last month blocked a bid for the same Nigerian stake by its state-owned Oil and Natural Gas Corporation, saying it was not commercially viable.

Despite the pitfalls, the consensus among energy analysts worldwide is that China essentially has no choice but to take substantial risks as its energy needs continue to mount. Alternative fuels may have significant longterm potential for Rising China; but Beijing's immediate need is to lock in preferred access to overseas oil and gas fields.

China's need for new oil sources is also driving the country to strengthen ties with the left-leaning, populist president-elect of Bolivia, Evo Morales, whose country has vast gas reserves. Morales, who has pledged to nationalize the Bolivian gas industry, visited Beijing this week and received Chinese assurances of aid and trade deals.

Monday, January 09, 2006

China Trims Military to Meet High-Tech Aims

China has reportedly cut the size of its military by 200,000 soldiers to make it a leaner, more high-tech fighting force.

The People's Liberation Army newspaper said Monday the military had been reduced to 2.3 million troops as part of a three-year modernization program that ended last year.

The program involved shutting down Chinese military farms and schools not involved in combat, and removing layers of military bureaucracy.

China has been trimming the size of its military since the mid-1980s, when it had about 4.2 million soldiers. However, Beijing continued a sizable increase in military spending last year. It has spent heavily on high-tech weapons in recent years to back up threats against Taiwan.

Japan, South Korea and the United States have repeatedly expressed about China's military build-up, and have accused Beijing of underreporting its defense spending.

China Confirms 8th Case of Human Bird Flu

China's health ministry has confirmed the country's eighth human infection of bird flu.

The official Xinhua news agency reports officials said a six-year-old boy in central Hunan province first showed symptoms of the disease on December 24 and is now being treated for the deadly H5N1 strain of the virus.

Also today, Indonesia's Health Ministry says initial medical tests indicate a 39-year-old man died of suspected bird flu earlier this month.

A ministry official says the man had been in contact with sick poultry.

If the World Health Organization laboratory confirms the man had the H5N1 strain of bird flu, it will raise Indonesia's death toll from the virus to 12.

Bird flu is known to have killed more than 70 people in Asia since 2003.

CNOOC Buying Nigerian Oil Field Interest

China's largest gas and oil producer has agreed to buy a 45 percent stake in a Nigerian oil field.

The state-controlled China National Overseas Oil Company, CNOOC, will pay almost $2.3 billion for its interest in the oil field off the coast of Nigeria. CNOOC says the deal with South Atlantic Petroleum, Limited, still requires both governments' approval.

The large investment follows last year's failed attempt by CNOOC to take over the American oil giant Unocal.

Chinese oil companies have been aggressively seeking energy supplies to fuel the country's booming economy. China has become the world's second-leading oil consumer, trailing only the United States.

China, Japan Fail to Resolve Drilling Dispute

China and Japan have made little progress following a half-day of talks on resolving a territorial dispute in the East China Sea. Officials of the two countries met in Beijing on Monday.

Japanese officials said the meeting between Japan's envoy Kenichiro Sasae and his Chinese counterpart Cui Tiankai ended at noon Monday with a reaffirmation from both sides that China and Japan should improve their battered relations.

Japan also said the two countries expect to resume talks in the coming weeks.

The two sides are locked in a dispute over parts of the East China Sea, where both want to exploit what they believe may be extensive oil and gas deposits.

China and Japan have agreed in principle to work together to develop the resources, but remain far apart on details of how much each side will invest and how to share profits.

As the world's second and third largest energy consumers respectively, China and Japan are eager to find new oil and gas resources. However, Hiro Katsumata, an expert on Sino-Japanese relations at the Institute of Defense and Strategic Studies in Singapore, says poor ties are slowing negotiations.

"This issue is also a matter of national pride," he said. "Since Japan-China relations are very sensitive emotionally because these anti-Japanese sentiments are very strong in China [and] anti-China sentiments strong in Japan. Therefore, psychologically this issue is so important. Both governments cannot afford to compromise, if you consider the domestic pressure."

Relations have suffered in the past year with Beijing stepping up accusations over Japan's record of military aggression against China in the first half of the 20th century.

China accuses Japan of whitewashing accounts of atrocities committed by its troops during World War Two and has protested repeated visits by the Japanese prime minister to a Tokyo shrine where convicted war criminals are among those honored.

Chinese leaders have allowed--and in some instances encouraged--citizens to demonstrate against Japanese interests, and the protests have sometimes turned violent.

Sunday, January 08, 2006

Bolivian Leader in Beijing for Energy Talks

Bolivia's incoming president is visiting Beijing, inviting Chinese leaders to help him develop his nation's vast gas reserves.

Evo Morales arrived in Beijing on Sunday for two days of talks.

His economic advisor, Carlos Villegas, told reporters the president-elect is interested in Chinese help in turning Bolivia's energy reserves into more profitable products, such as cleaner-burning diesel.

Morales has vowed to increase state control of Bolivia's abundant natural gas reserves, using the profits to help the poor.

China is developing ties with nations rich in natural resources to help fuel its booming economy.

Bolivia's president-elect is on a world tour before he takes office on January 22. He has visited France, Venezuela, Cuba and Spain. He next heads to South Africa and Brazil.

New Toxic Spills Threaten Water Supplies

Officials in China have announced two new pollution spills in Chinese rivers, affecting the water supplies of millions of people.

In the latest announcement, the official Xinhua news agency said a a diesel oil spill some 60 kilometers long contaminated the Yellow River in eastern China's Shandong Province on Saturday. Officials later lifted the pollution warning, saying the water now meets safety standards.

Separately, Xinhua sayid the poisonous chemical cadmium leaked from a factory into the Xiangjiang River in the central province of Hunan on January fourth.

Local officials blamed the spill on an engineering problem.

Also on Sunday, the Chinese government says it will spend over $3 billion over the next five years cleaning up November's toxic benzene spill in the Songhua river.

The plan calls for more than 90 percent of people living in the Songhua River valley to have clean drinking water by the year 2010.

Health Workers Punished for Corruption

China anounced this weekend that it punished more than 1,200 health workers last year for corruption. The offenses included taking commissions from drug companies and accepting bribes from patients.

The official Xinhua news agency reported that investigators from China's Health Ministry uncovered more than 200 cases of hospital staff members buying and selling medicine for personal profit. The health workers are said to have received $1.3 million illegally.

Authorities also found that some doctors took bribes for surgeries, even after patients paid their hospital fees. More than 800 health workers were punished for charging illegal fees.

China's Health Minister Gao Qiang said at a nationwide health meeting Saturday that most hospital staff members are doing a good job. But he said those who become corrupt will be punished without mercy.

Saturday, January 07, 2006

Korean Wave Sweeps China

China may be rising ... economically, militarily, politically ... but culturally, it's South Korea that is ascendant, at least in its region. The hottest thing in Asian pop culture these days is South Korea.

The so-called Korean Wave--Halllyu in Korean--covers the craze for South Korean TV dramas, movies and pop singers, but increasingly also for fashion, cosmetics and electronics.

The Korean drama "Jewel in the Palace" clocked up record television ratings in China, Hong Kong and Taiwan last year. Even Chinese President Hu Jintao admitted to being a fan of the historical drama about a cook at Korea's royal court. The show's actors have become mega stars across Asia.

South Korea has been exporting movies and TV dramas since the late 1990s. Many Asian TV networks initially bought them because the glossy productions were comparatively cheap. But audiences from China to the Philippines soon got hooked.

South Korean pop stars, like the singer BoA, have also achieved cult status in many Asian countries. One young woman in Hong Kong looks for magazines and posters featuring her favorite pop star, the South Korean singer and actor Rain.

"I like him, I'm his big fan," she said. "He dances great and he sings great. And his performance in the drama is good as well."

The popularity of South Korean films and music has led to a veritable craze for everything Korean across Asia.

Hong Kong street markets sell traditional Korean robes to children and some brides in China are wearing them for wedding photos.

Learning Korean has become increasingly popular in many Asian countries, as have Korean food, fashion and cosmetics.

In many parts of Asia, Hallyu has become a byword for cool.

Many Asian tourists travel to Korea specifically to see the locations where popular dramas are shot, the government has organized events with famous entertainers and launched a multilingual web site with information on movies and TV dramas, actors and filming locations.

The Korean wave is a point of national pride for South Korea. After having been colonized or overshadowed by its neighbors, Japan and China, for centuries, the country finally has the chance to outdo them on the cultural stage.

But Hallyu has also boosted South Korea's economy. In 2004, the export of film and television programs along with tourism and merchandising generated revenues totaling nearly $2 billion.

Last Gang of Four Leader is Dead

A notorious Chinese Communist is dead--really, officially dead.

And few Chinese seem to care.

Yao Wenyuan, the last surviving leader of China's infamous "Gang of Four," who along with Communist Party Chairman Mao Zedong led the country's ultraleftist Great Proletarian Cultural Revolution in the 1960s and '70s, died on December 23, according to the Chinese government. The announced cause of death was complications from diabetes.

The Gang of Four was a group of party activists led by chairman Mao's feared and despised wife, Jiang Qing. The group acted under Mao's authority, and was largely responsible for propelling China into utter chaos. They issued political directives and wrote criticisms of party leaders and others who were targeted during the movement.

Millions of innocent Chinese were persecuted--and untold numbers were killed--during the decade-long nightmare that began in 1966.

But for many Chinese interviewed on the streets of Beijing Friday, news of Yao's death came as a surprise only because they thought he had died a long time ago. A woman in her 30s, who said she has little recollection of the Cultural Revolution, and no memory at all of Yao, put it this way: "I don't remember anything about them [the Gang of Four]. My parents' generation might, but for our generation, that period is very unclear. Whatever happened is in the past. Right now, people are focusing on how to conduct our own lives, and not worshipping anything blindly."

The Chinese government discourages public discussions or research on the movement, which was meant to consolidate Mao's hold on power.

The stated aim of the Cultural Revolution was to create a pure socialist society, by destroying elements of traditional Chinese culture and attacking party leaders, intellectuals and others who were seen as members of the elite. It ended in late 1976 with Mao's death and, quickly thereafter, the arrest of the Gang of Four.

The four, who also included Wang Hongwen and Zhang Chunqiao, were given long prison sentences in 1981. They all died out of prison.

David Zweig, who teaches political scientist at the Hong Kong University of Science and Technology, and has written extensively on the Cultural Revolution, said opening up discussion on the matter would be risky for the Chinese leadership, because it would raise questions about Mao himself, whom some still revere as the creator of the Chinese communist state.

"If you call into question too much his status, then you call into question the legitimacy of the Communist Party's rule," Zweig said.

As Zweig sees it, the Cultural Revolution ironically paved the way for today's China. Many Chinese lost their faith in hard-line communist ideals during the chaotic years of the campaign, opening a void that he says allowed China to become more receptive to Western ideas and culture in the decades that followed.

The official history of the Cultural Revolution seems to support Zweig's view. Though Mao himself declared the Cultural Revolution to have ended in 1969, the government-sponsored suffering and madness continued for several years. Formally dating the end of the Cultural Revolution with the arrest of the Gang of Four represented a victory for followers of Deng Xiaoping--father of today's Peacefully Rising China--because it allowed them to portray all of the events between 1966 and '76 as a single movement marked by awful economic stagnation as well as terrible violence and injustice.

Under Deng, who served as China's de facto ruler from the late '70s to the early '90s, China's Communist Party leadership managed to develop one of the world's fastest growing economies without losing its dictatorial control over the country.

Friday, January 06, 2006

Chinese, Japanese Diplomats to Meet in Beijing

There may be a tiny thaw in the frosty relations between Japan and China. Japanese officials say that that consultations on a variety of topics ares scheduled to take place in China on Monday.

Japanese officials say diplomats from Tokyo and Beijing will meet next week for the first such encounter of the new year. The meeting comes after months of China rebuffing Japanese calls for talks.

Japanese Foreign Ministry spokesman Akira Chiba termed the meeting "an informal discussion."

"Mr. Kenichiro Sasae, the director general of the Asian and Oceania affairs bureau, will hold unofficial consultations concerning a wide range of bilateral relations with Cui Tiankai, the director general of the Asian bureau of the Ministry of Foreign Affairs of the People's Republic of China, on the morning of 9th January in Beijing," Chiba announced.

Diplomats in Tokyo say they are especially relieved that China has agreed to resume discussions on a dispute over natural gas resources in the East China Sea. The head of Japan's Natural Resources and Energy Agency will take part in the talks Monday.

Chiba described the talks on that dispute as a positive development.

"We held the third round of talks and we have been waiting for the Chinese response for this," he said. "Apparently the Chinese are ready to talk about the fourth round and we are going to prepare for this."

The dispute concerns a maritime area overlapping both countries' economic zones. Japan has called for China to halt gas extractions and has proposed joint development of the region. Japan also awarded drilling rights in the area last year to a domestic company, but work has yet to start.

Relations between the two giant Asian economic powers significantly worsened in 2005. In addition to territorial disputes, rising nationalism in both countries has increased tension over the legacy of Japanese imperialism on the Asian continent.

In April, a series of violent anti-Japanese street demonstrations were held in Chinese cities. The protests were apparently manipulated, if not directly controlled, by Chinese authorities.

Both China and South Korea have criticized Prime Minister Junichiro Koizumi's pilgrimages to a Tokyo war shrine, which they say demonstrates a lack of remorse for Japan's brutal occupation and warfare before and during World War II. Koizumi insists the visits are to pay homage to all of Japan's war victims and to pray for peace.

Because of the shrine visits, the Beijing government had curtailed contacts with Japan.

China Warns Taiwan Not to Pursue Independence

China is warning Taiwan it will face harsh consequences if it continues to move towards independence. The latest threat came after Taiwan's President Chen Shui-bian this week said he would pursue plans for a new constitution for the self-governed island, which China claims as part of its territory.

The warning from the mainland government's Taiwan Affairs Office on Friday was stern as usual. Office spokesman Li Weiyi spoke at a briefing and lashed out at the Taiwan president, saying anyone who makes an enemy of his own people will "reap a bitter harvest."

"We will not allow Taiwan to pursue independence activities," he said. "We will not tolerate anyone using any way to separate Taiwan from China."

Taiwan has been self-governed since 1949, when Chinese Nationalists under Chiang Kai-shek fled there after losing control of the mainland to communist rebels under Mao Zedong.

The communist government has called for eventual reunification, and has regularly interpreted plans by Chen, such as the drawing up of a new constitution, as steps towards a formal declaration of independence.

Last year, the Chinese government enacted a measure legalizing the use of force if necessary to establish control over the democratically ruled island. The law, combined with a military buildup on the mainland, has raised international concern about a possible war across the Taiwan Strait.

Beijing has portrayed its intentions as peaceful, and has used new trade deals and the establishment of periodic cross-strait flights to try to win the Taiwanese people's support for reunification.

In the last year, the mainland has also hosted the Taiwan president's political opponents--moves that foreign observers interpreted as further attempts by Beijing to undermine Chen and his pro-independence agenda.

In a move meant to balance their approach, Chinese officials--while issuing threats to Taiwan--also said they had selected two panda bears to give to the island as a gesture of good will.

Thursday, January 05, 2006

Foreign TV, Movies, Music Penetrate North Korea

Many assume the people of North Korea are completely cut off from the outside world. But in this report, our corrrespondent, who recently visited the Chinese side of the North Korean border takes us behind the scenes to reveal how information from the outside world is pouring into North Korea.

Since 2002, when Pyongyang unveiled reforms easing government controls on businesses, large numbers of North Koreans cross the border to China regularly, returning with consumer goods, information unavailable at home and music and movies from abroad.

Mobile phones are now commonly seen in North Korea, especially along the border where Chinese telecom providers can support cell phone users. Smuggled South Korean and American movies and TV dramas are available on the black market. The Chinese, who are switching to digital video discs, are dumping their obsolete video cassette players in North Korea.

In the northeast Chinese city of Yanji, Choi, an 18-year-old North Korean girl who fled to China last year, said she used to watch movies and television shows from different countries. She says some of the movies and TV programs she saw were from South Korea, some from China and others from the United States.

She said the videos she watched with her high school friends in secret were eye-opening. She said she felt the North Korean government had been lying to her about the life outside. She said, for example, that she was told in school that South Koreans live in poverty and that the Americans put them in prison. She says she was told that North Korea was much better off than these countries, but realized this was not true when she watched the foreign videos.

Foreign videos are available not only along the border with China but even in the capital, Pyongyang, where teenagers can name all the stars of popular South Korean TV dramas. A North Korean merchant from Pyongyang who frequently travels across the border to China said most North Koreans have seen the American movie "Titanic" on video.

Foreign videos find their way into the country via Chinese and Koreans traveling between the two countries. The tapes are sold in street markets, usually only to known customers. A tape of a Chinese movie costs about 2,000 won, or 90 cents on the black market.

As foreign movies and TV shows become more popular, the North Korean government has strengthened its efforts to stop the flow. Special teams of police raid homes without prior warnings. If people miss or come late to their daily ideology class, agents will yell at them "what did you do last night? Did you watch South Korean or foreign movie?"

The punishment for watching unauthorized programs is becoming harsher. Watching pornography is punishable by up to three years in jail and those watching foreign movies or TV programs face up to three months imprisonment.

Despite the continuing inflow of outside information into North Korea, migrants from there say most people still believe what the government tells them. They believe they are starving not because of their government's mismanagement, but because of America's hostile policies toward North Korea.

Wednesday, January 04, 2006

Japanese PM Puzzled by Chinese Criticism

Japan's prime minister, who just days earlier vowed to improve relations with Asian neighbors in the new year, has lashed out at criticism from Beijing and Seoul over his visits to a controversial shrine.

In a nationally televised news conference Wednesday marking the start of government business for the new year, Prime Minister Junichiro Koizumi rapped China and South Korea for politicizing his annual pilgrimages to the Yasukuni war shrine.

Koizumi said he is baffled as to why some foreign governments insist on interfering with a spiritual matter and try to twist it into a diplomatic issue. The prime minister insists his visits to the Tokyo shrine are meant to honor all of Japan's war dead and says he goes there to pray for world peace.

Several Asian nations have repeatedly called for an end to the pilgrimages because war criminals are enshrined there, along with hundreds of thousands of ordinary soldiers. A museum on the grounds of the shrine also glorifies Japan's 20th century militarism. The Osaka High Court has ruled that Koizumi's visits are official acts that violate Japan's constitutional separation of religion and state, but other courts have not backed that ruling.

After Prime Minister Koizumi made his fourth visit since taking office in mid-October, both Beijing and Seoul canceled talks with Tokyo.

Koizumi said during his news conference that it is up to Beijing and Seoul to resume dialogue with Tokyo and he has a strong desire to see that happen.

The prime minister added that he has never tried to cut off communications with China and South Korea and the door remains open. He said a single problem should not mean ending dialogue because every nation has differences of opinions with others.

Koizumi also said that Japan has a special relationship with the United States. He said he was not trying to suggest that Tokyo's relationship with Washington is the only one that matters, but said it is more critical than ties with other countries because the US is the only nation that sees an attack on Japan as an attack on itself.

US Welcomes Jailed Journalist's Release

The United States Wednesday welcomed the early release of a Chinese journalist, Jiang Weiping, imprisoned since late 2000. However, the US State Department said the issue of press freedom and the treatment of journalists will remain on the US agenda with China.

US officials had frequently raised the case of Jiang Weiping, an investigative journalist jailed on subversion charges in 2000, after writing stories for a Hong Kong newspaper alleging corruption among senior officials in a Chinese province.

His release, for good behavior a year before his six-year prison term was to have ended, was welcomed by State Department Spokesman Sean McCormack, who added that the Bush administration will continue to raise concerns about the treatment of journalists and overall press freedoms in China.

"While we do welcome his release, we do have remaining concerns about the ability of a free press to operate in China," McCormack said. "We do have concerns about freedom of speech in China. We are going to continue to raise these issues with the Chinese government. It is something that Secretary Rice has raised every time she has had official meetings with her Chinese interlocutors. So I expect that that is going to be something that stays on the agenda.

Jiang was originally sentenced to eight years in prison on charges of revealing state secrets and inciting subversion, though a higher court later reduced his term to six years.

His name was on a list of 13 prisoners given to Chinese authorities during a 2002 meeting between US President Bush and then-Chinese President Jiang Zemin, and his case was raised by US officials at several subsequent high-level meetings.

The Paris-based advocacy group Reporters Without Borders had also pressed for Jiang's freedom, and it said his release shows the effectiveness of public statements by Western governments in support of journalists jailed in China.

However the group deplored a stipulation of Jiang's parole under which he will be deprived of civil and political rights for another three years.

Coincidentally, the group issued its annual press freedom report Wednesday, which says China led the world again last year in jailing journalists and cyber-activists.

Reporters Without Borders said that as of the end of 2005, 32 journalists and 62 Internet dissidents were imprisoned in China, with Cuba in second place with 24 journalists held.

It said one Chinese journalist, Yu Dongyue, has been in prison since the violent military crackdown on student protesters in Tiananmen Square in 1989.

The advocacy group said Yu, serving an 18-year sentence for "counter-revolutionary propaganda," had been driven insane as a result of torture.

China-NK Border Separates Two Worlds

From our correspondent on the Chinese-North Korean border comes this disturbing but revealing tale of two worlds.

On the one side of Yalu River is the bustling northeast Chinese city of Dandong; on the other, in North Korea, the ghostly specter of the once industrial city of Shinuiju. Dandong's location on the North Korean border has made it a window to the outside world for the people of North Korea who can make it this far north. North Korea gets approximately 80 percent of its imported goods and 80 percent of its energy through this narrow channel.

Dandong's prosperity derives from Pyongyang's economic reforms that started in 2002 and eased controls on businesses. Since then many North Korean officials and businessmen have come to Dandong to trade. The businessmen and officials in Dandong are living a life of style and wealth.

Across the Yalu River, which marks the border between China and North Korea, lies what remains of the North Korean city of Shinuiju.

Shinuiju was once an industrial giant. But today smoke no longer billows from the smokestacks of its factories, its cranes stand still and its machines no longer roar. The city is dark and lifeless.

Park Young-seng, a South Korean businessman who has lived and worked in Dandong for 13 years, shared his impressions. He described how Dandong has been transformed in the last few years into a strategic stopover point, boasting new highways and a long railroad running through the city. Neighboring Shinuiju, in sharp contrast, "is like a dead city."

If you look at the Yalu River at night, it is clear what has been happening between the two cities. One is dark. The other is a tiara on the night's horizon.

There are dazzling lights including colorful neon signs in Dandong, but Shinuiju's darkness is caused by a shortage of electricity. The only visible light is that which illuminates a statue of Kim Il-sung.

In July 2002, communist North Korea announced major reforms to its economy. It stopped subsidizing state-owned enterprises and demanded that workers be paid according to how much they produce. In addition, North Koreans were allowed to sell manufactured products on open markets. Since then, the state's control has been weakening and money has become king. Workers get bigger salaries and the state has doubled its foreign currency reserves.

Another effect of the reforms is that many North Koreans have moved to Dandong. Yoo Kun-il, the representative of a non-governmental organization in Dandong, said more than 2000 North Koreans are living in the city.

Yoo said the official numbers of North Korean newcomers are not known, but the estimate is at least 2,000 North Koreans and one thousand South Koreans are living here permanently.

Every morning 50 to 60 North Korean 10-ton trucks cross the border into Dandong. Most of the truckers head straight for stores on the square near the Yalu River bridge to buy cigarettes and liquors. After loading up with food supplies, construction materials, heavy machinery, and other goods they head back across the border.

As access across the border becomes easier, many stores and restaurants have opened in Dandong in the last four years. South Korean businessmen manage most of these stores.

Five years ago there was only one restaurant in Dandong. Today, six restaurants compete against each other.

Although all the waitresses in one North Korean restaurant came from Pyongyang, none was wearing the standard (President) Kim Jong Il badge. However all of them were singing and dancing to South Korean and Chinese songs.

Some South Korean media have reported that these changes reflect the reality of Pyongyang's economic reform and its effort to go forward. But there is a downside. The gap between the privileged North Koreans and the ordinary people is widening and there are reports of widespread corruption among North Korean officials.

This general store is one of the most popular shops for North Koreans in Dandong. The South Korean owner said that 90 percents of her customers are North Koreans. She said the most popular goods to North Koreans are electronics home appliances that cost more than 1,000 US dollars.

An average, North Korean workers earn about 3,000 won a month, which is about 10 Chinese yuan or a little more than one US dollar. On those salaries only government officials, who are widely believed to make business deals for themselves, can afford to buy luxuries, such as refrigerators.

Sung Min Kim, a North Korean defector now living in Seoul, who was a member of the upper class when he lived in Pyongyang, asserted that corruption in Pyongyang is rampant.

Kim said North Korean officials and businessmen pocket part of the earnings from their business deals, steal and embezzle. He says they are the ones who buy refrigerators and other luxury goods. It's hard to blame them, he says.

A former senior Chinese official, Jang Jun-sung, said corruption in North Korea has become a grave problem during the last four years. asserting that virtually everybody in North Korea is on the take, from party officials, to policemen and local officials. He said North Korean reforms are not a transformation to market economy, but an enrichment program for the ruling class.

Jang said money has become the most important thing for North Koreans. The reforms, he says, are a mere facade; the aim is to maintain dictatorship.

Meanwhile, two-thirds of the population live below the poverty line and millions of North Koreans do not have enough to eat. The UN World Food Program says that, despite a good year of harvest for the first time since 1995, North Korea this year will still need hundreds of thousands of tons of food aid.

Inside another Chinese border town, Yanji, a North Korean woman who said she was a victim of human trafficking, had this to say about her life north. She said she had to give her children grilled acorns to eat because there was nothing else. She says her children ate it and became sick. She says this went on for 15 days, and the children finally refused to eat even acorns.

The complete dark city of Shinuiju on one side and the glimmering lights of Dandong on the other mirror the life of today's North Korea - the dark poverty for most and shimmering luxury for the government elite.