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Web-only Exclusives November 30, 2000 From Our Correspondent: Hirohito and the War A conversation with biographer Herbert Bix From Our Correspondent: A Rough Road Ahead Bad news for the Philippines - and some others From Our Correspondent: Making Enemies Indonesia needs friends. So why is it picking fights? |
Week of December 4, 1998
BEIJING Heavy snowfall brought chaos to the capital. The airport shut down several times over two days, with flights diverted as far away as Harbin in the northeast. Roads and pavements became coated in a thick layer of ice and snow, slowing traffic and resulting in over 300 broken bones, largely the result of falls. While Beijing is used to freezing temperatures, heavy snow is rare and the capital is ill-equipped to deal with even a mild winter storm.GERMAN JOURNALIST JUERGEN KREMB has every right to feel unhappy. Booted out of China after seven years for possessing classified documents, Kremb had 48 hours to pack and leave and cannot return for five years. At a press conference, Kremb said he refused to read or even touch the pile of documentary evidence against him. So a fellow Beijing resident was surprised to see Kremb so visibly happy the day before his departure. Kremb soon explained: "I haven't been here in months and was on the point of leaving China for good. This is the best thing that could happen to me. Now I am the most famous German journalist! It will certainly help my book."
Week of November 27, 1998
THOUSANDS OF PEOPLE ACROSS ASIA left smog-chok ed cities and headed for the hills to get a better view of the Leonid meteor sho wer. Most were left disappointed. Those who braved temperatures of minus eight d egrees Celsius to watch the display from the Great Wall of China saw dozens of shooting stars fall from the fiery tail of comet Tempel-Tuttle, but nothing approaching the ten thousand expected. Elsewhere cloudy conditions frustrated many star-gazers. A spectacular display was seen in Mongolia - but occurred 24 hours earlier than scientists had predicted. Not everyone was saddened by the planetary fizzle, which ensured that communications satellites and Russia's Mir space station escaped the shower unscathed.BEIJING A bold restructuring of the central bank aims to cut local government influence in the implementation of macroeconomic policy, which is blamed for hampering modernization of the financial sector. Instead of having a branch in every province and major city, the People's Bank of China will now be served by just nine, in Tianjin, Shenyang, Shanghai, Nanjing, Jinan, Wuhan, Xian, Guangzhou and Chengdu. The new set-up is similar to that of the U.S. Federal Reserve.
TAIPEI China will send a delegation of academics to Taiwan to observe the island's Dec. 5 elections. The six, including members of the Chinese Academy of Social Sciences, will also meet Taipei mayor Chen Shui-bian of the pro-independence Democratic Progressive Party.
MACAU Local authorities launched a renewed crackdown on organized crime as the enclave entered its last 400 days under Portuguese rule. Around 70 people were detained by police in raids on casinos. Triad violence has escalated in the run-up to the handover as rival gangs battle to control gambling and prostitution rackets.
Under pressure to increase its tax net by $12.08 billion over last year - but fearful of introducing new taxes amid the economic turmoil - Beijing has urged officials to target regional authorities who protect tax-evading firms in their backyards. But a poor revenue-collection system is making it difficult for taxmen to keep track of the chaotic jumble of enterprises and individuals across the nation.
Week of November 20, 1998
AFTER BEIJING SENT SEVEN NAVAL VESSELS and sco res of workers to Mischief Reef (called Panganiban Reef by Manila) in the Spratl y Islands, Philippine Defense Secretary Orlando Mercado accused China of using a "talk and take" strategy to establish further control over the disputed territo ry. The move boosted efforts by President Estrada to get Senate approval of the Visiting Forces Agreement that would allow U.S. military troops, vessels and air craft to make short visits to the Philippines for military exercises. The Spratly chain, which straddles vital sea lanes and could be sitting on vast oil deposits, is also claimed in whole or in part by Brunei, Malaysia, Taiwan and Vietnam.BEIJING Yang Qixian, vice-president of the China Structural Reform Research Society, wants the worst performing state-owned enterprises to simply be shut down. His idea: "Workers will be paid their monthly wages and we'll take care of them. If we shut down SOEs employing 10 million workers and we give them 300 RMB ($36) per month, then the annual cost would be 36 billion RMB. We can afford this."
REINING IN CHINA'S BRASS
THE EXECUTIVE DIRECTOR OF CHINA'S CENTRAL MILITARY COMMISSION, Gen. Zhang Wannian, didn't retire at October's plenum of the Communist Party's Central Committee as expected. Earlier reports had him being forced out of power because of economy-related scandals and disciplinary problems within the army. But, coupled with President Jiang Zemin's moves to force the military to divest itself of its multi-billion-dollar business empire, Zhang's departure might have proven too much for the People's Liberation Army leadership to stomach. Zhang still has the look of a short-timer, though. Jiang has been urging the appointment of Vice President Hu Jintao to become vice chairman of the Military Commission at the Party's next plenum in the autumn of 1999. Hu, seen as Jiang's most likely successor, seems set to complete the president's efforts to finally bring the military under civilian control. That will make Hu the obvious candidate to take over Jiang's position at the head of the Party and, ultimately, the country.CHINA'S STATE-OWNED ENTERPRISES are doing worse than expected. SOEs made only 10 billion yuan in profits in 1997. In the first half of 1998, they accumulated losses in the neighborhood of 56 billion yuan, 20 billion more than the same period last year. The firms used 70% of all domestic funds but contributed only some 30% to GDP.
Week of November 13, 1998
THE STATE ECONOMIC AND TRADE COMMISSION and its local agencies will take over the multi-billion-dollar business empire of the People's Liberation Army. The companies will be reorganized or transferred to state-owned enterprises at no cost. In July, President Jiang Zemin ordered the military to give up its vast business empireWeek of November 6, 1998
BEIJING The government is reviewing the country's 242 trust and investment firms following the closure of Guangdong International Trust and Investment Corp. Finance Minister Xiang Huaicheng told reporters: "I would not say that all the ITICs in China will fail in the way that GITIC did, but I will say that in various provinces, the problem does exist." It was the first such official public admission since GITIC shut down early in October. On Oct. 27 the firm defaulted on an international bond payment, the first time a Chinese company has done so since 1949.CHINA WILL HAVE MORE INTERNET USERS than any other Asian country except Japan by 2001, the research firm International Data Corp. Asia-Pacific predicts. Poor infrastructure, not government policy, is the obstacle to growth, the company says.
IF CONTACTS WITH BEIJING GO WELL, the Dalai Lama hopes to respond in November to President Jiang Zemin's demand that he recognize Tibet and Taiwan as parts of China, Tibetans based in Washington said.
Zhu Sorts out SAR Problems
IT LOOKS AS IF CHINESE PREMIER ZHU RONGJI personally mediated a truce between Hong Kong's Chief Executive Tung Chee-hwa and the territory's property tycoons. During Zhu's high-profile visit to Guangdong province last week, he undertook a significant side-mission. According to SAR press reports, the PM held unprecedented one-on-one meetings with 10 of Hong Kong's wealthiest businessmen in the coastal city of Shantou - hometown of paramount Hong Kong magnate Li Ka-shing. Zhu reportedly listened to their views about the territory's economy and then urged them to cooperate with Tung's efforts to achieve a turnaround. Several days before, Tung met officially with Zhu in Beijing, delivering his annual report on the territory. Apparently, Zhu asked the CE to consult more closely with his business community in formulating policy.It is no secret that Hong Kong's corporate leaders greatly resent Tung's property policies, aimed at fighting sky-high prices by increasing the land and housing supply. And coupled with complaints from mainland companies and individuals who had invested heavily in SAR property and stocks, Tung has clearly lost a lot of friends. But the dissatisfaction with Tung does not appear to be deep-seated - few are pushing for his replacement. And it is almost unthinkable that Beijing, generally pleased with Tung's performance, would ever agree to the early departure of the man they hand-picked to take over their Special Administrative Region from the British. Instead, the tactic seems to be to support him publicly, while giving him direction from off-stage. As for Hong Kong property, land sales were suspended in June until April 1. One sign they'll proceed on schedule: Li Ka-shing, with his usual knack for such things, has been the first tycoon to publicly call for the resumption of sales then.
Week of October 30, 1998
BEIJING China and Vietnam agreed to accelerate the negotiation of their territorial disputes and come to a resolution by 2000. The agreement was made during a meeting between Chinese Premier Zhu Rongji and visiting Vietnamese Premier Phan Van Khai. Under discussion are areas along their border and in the Gulf of Tonkin. Khai's trip is the first by a Vietnamese PMsince the countries normalized ties in 1991.
Revealing Figures
CHINA'S STATE GRAIN SYSTEM IS IN DEEP TROUBLE. Official figures show the disappearance of 214 billion yuan (about $26 billion) from the balance sheets of state-owned grain companies between 1992 and March of this year. A team led by the National Audit Office discovered that more than 80 billion yuan of the money was stolen. The inspectors found that most of it was used to build hotels and guest houses, office buildings and employee housing; to buy vehicles, cellular phones and high-tech electronic equipment; and to speculate in stocks, futures, and real estate. The balance - about 130 billion yuan - is a "systemic deficit." That means that the grain was sold for less than the state-owned trading companies had paid for it. As of March, then-current total loans for grain purchases amounted to 543.1 billion yuan, but all of China's grain reserves were valued at only 329.1 billion yuan at the time - meaning 214 billion yuan more had been lent to buy grain than actually existed in the government's distribution system.Week of October 23, 1998
MACAU China deployed another 500 troops around the Portuguese enclave, which has been rocked by triad violence prior to its return to mainland rule next year. Three new border command posts have been set up. There are now around 4,000 soldiers from various People's Liberation Army units on duty around Macau.IN THE STRONGEST SIGN of a thaw in the five-year freeze in cross-strait relations, Koo Chen-fu of Taiwan's Straits Exchange Foundation arrived in Shanghai on Oct. 14 and was met by his mainland counterpart, Wang Daohan. Top envoys from the two sides have never met on non-neutral soil - Koo and Wang last held talks in Singapore in 1993. Koo will make a six-day tour of the mainland, including a stop in Beijing, where he is due to meet with President Jiang Zemin. At Taiwan's insistence, political talks are not on the visit's agenda, so Koo and Wang are mainly expected to exchange pleasantries and boost the "atmosphere" for bilateral ties. Taipei wants Koo's activities to be referred to as "meetings," not "negotiations" or even "talks."
Changing the Top from the Top
BECAUSE PREVIOUS APPOINTMENTS lacked "scientificness" the government has decreed that senior postings at China's top 500 state-owned enterprises will now be made by the State Council's Personnel Ministry. And the State Council's Administration for Inspectors will, henceforward, assess the quality and performance of the SOEs' managers and report their findings directly to the State Council. The Personnel Ministry now has the power to appoint or release any chairman, general manager, chief accountant or other executives. Bureaucratic gobbledygook? What it means is that Beijing is going to try to clean up the top management of most of those money-losing industrial behemoths it has given birth to over the years. It makes you wonder what those various bureaus, councils, departments and ministries have been doing for the last few decades - and why what they are going to do now is going to be any different, just because a new directive has been handed down.MOODY'S INVESTORS SERVICE put five more Chinese international trust and investment companies under review. The move came after Guangdong International Trust & Investment Corp. went bankrupt on Oct. 6.
Week of October 16, 1998
NOT JUST ANOTHER TOURIST, British Prime Minister Tony Blair arrived in Beijing with 21 businessmen and his wife. Hours before the entourage touched down in Beijing, China signed the International Covenant on Civil and Political Rights at the United Nations in New York. U.N. officials said China did not register any reservations when signing the treaty. Dissidents see a public relations coup for the government but little else, and are wary of the move, which must be ratified by the National People's Congress. For his part, the charismatic Blair said one goal of his visit is to talk to China about human rights, but not to "lecture." He is the first British PM to visit the country in seven years.PRESIDENT JIANG ZEMIN will meet with top Taiwan negotiator Koo Chen-fu during his scheduled mid-October six-day visit to China, Xinhua says. Koo's visit, the highest-level contact between Taiwan and China in five years, could accelerate the pace for the first summit between leaders on both sides of the Taiwan Strait. The announcement followed Taipei's cancellation of live-fire military exercise as a sign of friendship.
BEIJING The People's Bank of China will take over Guangdong International Trust & Investment Corp. which was declared bankrupt. The bank apparently intends to restructure the company.
China-U.S. Ties Going Stale
NORT H KOREA TOPPED THE AGENDA when Chinese Foreign Minister Tang Jiaxuan visited Was hington at the end of September. The Americans appeared unable to agree internal ly on whether to continue U.S. fuel shipments to North Korea under a 1994 deal t o get Pyongyang to abandon its plutonium-producing heavy-water nuclear reactors for less threatening light-water versions to be built by an international consortium. The fuel deal became a harder sell in Congress after North Korea's unannounced attempt to put a satellite into orbit sent a missile over Japanese airspace. Taiwan, motivated by security concerns of its own and a desire to assert itself as a player in North Asian affairs, has offered to help pay for some fuel shipments, but Washington is reluctant to agree for fear of upsetting Beijing. A recent plan by the U.S. to include Taiwan in a theater-defense missile system, ostensibly targeting North Korea but including parts of the mainland, didn't help China-U.S. relations either.In fact, most of the momentum generated by President Bill Clinton's visit to China this summer has been dissipated. Beijing wonders if lame-duck Clinton, preoccupied with the Lewinsky affair, will be able to follow through on the commitments he made during the June summit. And the U.S.trade representative and the Commerce Department accuse China of "moving backward" in negotiations to join the World Trade Organization. America's trade deficit continues to grow while Beijing's pledges of big-ticket purchases of U.S. goods are not materializing. Despite frustration over the WTO talks, Treasury Secretary Robert Rubin and National Security Adviser Sandy Berger are strongly opposed to any threat to impose U.S. trade sanctions, fearing the move would undermine efforts to convince China not to devalue the yuan. Overall, the White House's China-policy team is in low spirits. Even the success of starting a low-level dialogue between the Dalai Lama and Beijing was squandered when the first special envoy to Tibet, Greg Craig, left the post to handle damage control for the Lewinsky scandal. And newly appointed National Security Council senior director for Asian affairs Kenneth Lieberthal, a China specialist, has not received security clearance. He has been dismissed by some senators as a mere academic and a "China apologist" to boot.
Propaganda Pared in the SAR
BEIJING WILL CUT FUNDING for Hong Kong's three pro-China newspapers by the end of the year. Ta Kung Pao, Wen Wei Po and the Hong Kong Commercial Daily, which collectively lose millions of dollars annually, have been instructed to merge or close by the Communist Party's propaganda department. Wen Wei Po is financially the strongest, so the other two will most likely die or fold their operations into their stronger sister. The scheme is a top priority for Wang Fengchao, who recently became deputy director of Xinhua's Hong Kong operation. Wang's wife Lei Yuping, an experienced journalist, has been offered senior positions at all three papers, although she hasn't decided if she will join her husband in his new Hong Kong post. Ta Kung Pao's editor, Tsang Tak-sing, was given an appointment to the Central Policy Unit - the Hong Kong government's think-tank - earlier this year, most likely in preparation for the consolidation.Week of October 9, 1998
BEIJING People's Liberation Army soldiers prepared for the nation's 49th anniversary of the founding of the People's Republic of China on Oct. 1. The military's reputation has been refurbished by the role troops played fighting the floods that devastated parts of the country. The army ranked only behind party cadres and the masses on the list of those praised by President Jiang Zemin at a national conference in the Great Hall of the people where he reviewed the causes and future prevention of the floods. And in Hong Kong, 12,000 passes for a PLA open house on National Day were distributed to the eager public within two hours. Last year, the army's bases were open only to specially invited groups.CHINA'S CENTRAL BANK gave domestic companies an Oct. 1 deadline to repatriate all foreign currency they held outside the country. Despite a monthly trade balance of about $4 billion and foreign investment of at least $3 billion this year, the foreign reserves of about $140 billion are not growing. To head off future hard-currency obligations, the government also blocked new loan guarantees by foreign banks.
Week of October 2, 1998
BEIJING Negotiators met on Sept. 22 with an eight-member Taipei delegation to work out details of a landmark trip to China next month by Taiwan's top negotiator Koo Chen-fu. He will pave the way for resuming high-level talks, which were broken off three years ago.MACAU Governor Rocha Vieira says Beijing's plan to station troops in the territory once it reverts to the mainland's control will have to be negotiated - it is not part of the original turnover agreement. Vice Premier Qian Qichen said last week that Beijing had reversed its previous plans and will put troops in Macau.
JANE'S DEFENSE WEEKLY PREDICTS Gen. Zhang Wannian, executive director of the policy-setting Central Military Commission, will be forcibly retired in October because of economy-related scandals and disciplinary problems plaguing the army. Jane's says Zhang will be replaced by Defense Minister Gen. Chi Haotian, a close confidante of President Jiang Zemin.
Riding the Flood's High Tide
IN CHINA'S FLOOD-STRICKEN HUBEI PROVINCE, the Hong Kong-based Ta Kung Pao daily has donated about 20,000 yuan (about $2,400) to relief efforts. The paper's Wuhan bureau - the city is Hubei's capital - is not officially accredited and has had to rely on political connections to continue to operate. At one point, the deputy propaganda minister for Hubei, Miao Helin, directed the paper's Wuhan bureau chief to make donations to build a "Hope" primary school for underprivileged children in nearby Shishou city - a feather in Miao's political cap. It would be the first foreign donation to build one of the high-profile central government-backed schools in the area, and will help finalize Miao's promotion to his current post. Ta Kung Pao's deputy editor Su Chang-hui traveled to Wuhan to present HK$20,000 (about $2,500) from the newspaper and another HK$10,000 from a Hong Kong department store on Sept. 17. Some party officials initially refused to attend the donation ceremony, saying the sums were too small, but finally showed up. The paper's deputy editor-in-chief, Yang Zu-kun, denied there was a donations-for-accreditation deal. "We didn't feel any pressure from the Hubei government," he says. A reporter in Hubei says that the allocation of much of the donated money for flood relief has been slow - provincial officials also want a piece of the action.Week of September 25, 1998
BEIJING Unprecedented day-long discussions between Japanese deputy foreign minister Haraguchi Koichi and Chinese vice trade minister Sun Guangxiang on the regional economic crisis were "constructive and lively." Although they agreed to continue the high-level "constructive dialogue," no date was set for the next meeting, most likely in Tokyo.WASHINGTON, D.C. Newly released U.S. intelligence documents show that the CIA pumped up to $1.7 million a year into the Tibetan e xile movement in the 1960s. The Chinese government has long held that the Dalai Lama is an agent of foreign forces. In a Jan. 9, 1964 memo, an entry for "Subsidy to the Dalai Lama: $180,000" makes the accusation hard to refute.
Beijing to the Ramparts
BEIJING IS PREPARED to shift $10 billion to $15 billion of its foreign exchange reserves to help defend the Hong Kong dollar. China would convert that amount of its U.S. dollar holdings into Hong Kong dollars to stiffen the currency, should another major attack on the SAR's currency materialize. Given prevailing global economic trends, Beijing's think-tanks have concluded that, with the likely fal l of U.S. markets, the greenback is sure to depreciate in the year ahead, especially with the emergence of the euro. China, which has 57% of its $140 billion in reserves in American dollar-denominated assets, is likely to cut its exposure to 40%, with another 40% in European currencies and the remainder in other denominations.YINMA, IN CHINA'S SHANDONG PROVINCE, used its seven government cars to set up the Yinma Town Officials' Taxi Company. About 70% of business comes from ordinary passengers. Local gov ernment officials must pay if they want to use the cars.
Week of September 18, 1998
BEIJING U.N. human rights chief Mary Robinson - on a 10-day visit - angered critics by not meeting personally with dissidents. But she was upstaged by the annual report from Amnesty International released during her visit which claimed China executed at least 1,876 prisoners last year, more than the rest of the world combined. The toll was down from the 4,367 in 1996, when it soared during Beijing's "Strike Hard" crackdown on common criminals.MACAU Chinese officials u rged authorities In the Portuguese enclave to crack down on violence after a pair of bomb blasts - one possibly detonated by remote control - injured five police officers and 10 journalists. They were the latest incidents in a wave of violence over the last 18 months, as rival triad gangs battle for control of highly lucrative gambling and prostitution rackets prior to the territory's return to Chinese sovereignty in 1999.
Beijing: Speculators Beware
AT A TOP-LEVEL MEETING IN BEIJING RECENTLY, Chinese Premier Zhu Rongji warned that international speculators would "have to reckon with China" if they intend to lay long-term siege to Hong Kong's markets. Zhu's words are understood to mean that Beijing would deny such players access to the China market in the future. And while everybody knows that the Hong Kong government pumped billions of dollars into the SAR's stock exchange to combat speculators, are there other motives for the intervention? The SAR government has now become the biggest shareholder in the Hongkong and Shanghai Banking Corp. and has bought sizable stakes in Hongkong Telecom, both British-controlled behemoths. In the early 1990s, Beijing began signaling to the businessmen it trusts in Hong Kong that it would like them to some day take control of Hongkong Telecom. So to whom will the government sell its shares? One name being mentioned in business circles is that of property tycoon Li Ka-shing, who is well respected in Beijing. His Hutchison Whampoa is already a big player in the telecom sector.
Prosecutor Re-Posted
LUO JI, THE FIRST DIRECTOR of China's Anti-Corruption and Bribery Office, recently resigned from his post after being released from arrest in connection with the corruption investigations involving former Beijing mayor Chen Xitong. Luo deposited funds confiscated in the Chen case into a bank and then used the interest for bonuses for his overworked subordinates. Sources say a lengthy probe revealed Luo broke no relevant state law - only party strictures. He has been assigned to head a state publishing house, a job far less stressful than his previous position.Week of September 11, 1998
TIBET'S TAIWAN CONNECTION
THE DALAI LAMA'S GOVERNMENT-IN-EXILE says Beij ing has imposed two conditions for talks on the possibility of increased autonom y for Tibet: That the spiritual leader acknowledge Chinese sovereignty over his homeland, and that he accept Taiwan as an inalienable part of China. While there's nothing new about the first demand - the Dalai Lama has more or less agreed to it since 1987 - the exiled Tibetan regime in India claims it is "perplexed" by the second requirement. It certainly seems to have put the Dalai Lama in a tight spot. For the Taiwan condition - mentioned by President Jiang Zemin during his June summit with U.S. President Bill Clinton - is the direct result of the Dalai Lama's courting of political forces in Taiwan on the one hand, and his sending of mixed signals about the island's political status on the other. Last year, he visited Taiwan for the first time, prompting a vigorous display of pro-independence activism in Taipei. A second visit was planned this year but the Dalai Lama canceled it after Jiang unexpectedly broached the "Tibet Question" at the summit. But the problem for the Dalai Lama is that if he affirms Chi na's long-held policy on reunification, Beijing can hope to undercut independence forces in Taiwan, while at the same time alienating the Tibetan leader from Taipei. The move will also be a blow to hardliners among Tibetan exiles who want "complete independence" for Tibet. After all, if the Dalai Lama concedes that Taiwan, with its long history of de facto separation from the mainland, is a part of China, the case for an independent Tibet will be rendered much more difficult.CHINA'S CONTINUING WAR AGAINS T CORRUPTION has uncovered 67,842 cases of graft or neglect of duty in the first seven months of this year, the Chinese official news agency Xinhua reports. Included in the list are 1,126 officials at or above the level of county head. Authorities have investigated 24,131 cases and launched legal proceedings in 11,852 of them. Thousands of prosecutors have been sacked for illegal activities in what Xinhua called an "unprecedented shake-up of the legal service."
Week of September 4, 1998
BEIJING As officials in the capital began calling for a radical revamp of China's flood defenses, local authorities in affected regions handled the more immediate task of cracking down on gangs and businesses exploiting the floods for personal gain. Police stepped up measures against criminal gangs looting flooded homes and stealing the sandbags used to reinforce dikes. Meanwhile, heavy fines and arrests have been used to stop profiteers from hiking prices - in two northea stern cities, 200 tons of cheap rice was dumped on the market after prices rocketed by nearly 30%.Week of August 28, 1998
BEIJING The official All-China Association of Journalists set up a committee to protect members' "legitimate rights and interests." The writers, concerned with the growing number of libel cases against media organizations, want clearer laws governing press freedom. "We often feel uncertainty when we are dealing with tortuous news events, especially in investigative reporting," the China Daily quoted newspaper deputy editor Wang Xiaolong as saying.
AWASH IN GOOD FEELINGS
The wholesale recriminations haven't begun yet, so while the floods along the Yangzi and other rivers in China are wreaking havoc on local citizens, the Communist Party and the People's Liberation Army are reaping a propaganda windfall. There was tons of television publicity for President Jiang Zemin, Premier Zhu Rongji and Zhu's flood relief point-man, vice premier Wen Jiabao, as well as all provi ncial leaders, who were under orders to man the frontlines. The politicians shared their prime-time plaudits with the PLA, now being praised in the press as "truly the armed forces of the people." It's a turnaround for the moldering PLA image: coming on the heels of Jiang's recent decree banning PLA businesses, it helps to have the military applauded for its discipline and sacrifice in a time of national crisis. As of Aug. 17, 150,000 troops were deployed along the Yangzi alone. They have organized 120 carg o and other plane flights, 66 military train loads and 32,000 truck loads of relief supplies, and made 32,000 rescue boat trips.Shanghai's Wenhuibao daily editorialized "The CPC is Great After All" and the People's Liberation Army Daily chimed in with "The CPC is good, the PLA is good, socialism is good, and the great family that is the motherland is good." And as the waters rose, the mutual admiration extended farther: CCTV aired a charity phonathon - dubbed Our Hearts Are One - featuring celebrities wh o seldom appear without a hefty fee but who volunteered their services this time. They raised about 600 million RMB- $72 million - in donations from individuals and organizations around the country.
Week of August 21, 1998
BEIJING Reviewing the first year of Hong Kong under China's control, Jiang Zemin - at a top-level meeting- applauded the way the local People's Liberation Army contingent and Foreign Affairs Office conducted themselves. He also praised the SAR's freewheeling media, which he said not only kept the territory's government honest, but also helped Beijing keep an eye on the local administration.
A Security Breach at the Top
THE HEAD OF PRESIDENT JIANG ZEMIN'S bodyguards, You Xigui, will keep his job - for now. The reason for his job insecurity? One of You's subordinates apparently took a fancy to a mysterious woman in her thirties. He illegally arranged for her to be transferred to a neighboring army regiment with a military rank that gave her a permit for access to all de partments within Zhongnanhai, the residence compound for the top brass of the Communist Party. Deeply infatuated, he had the audacity - and the lack of good sense - to let her sit in Jiang's limousine at times. Believing the woman had a suspect background, the State Security Ministry put her under surveillance. Even though her record came up clean, Jiang is livid about the breach of security and almost sacked You once the full extent of the affair came to light.Week of August 14, 1998
AFTER POUNDING TAIWAN, Typhoon Otto slammed into the eastern coast of the mainland on Aug. 5, adding immense pressure to the country's already overloaded flood-control system. More than two million civilians and soldiers have been mobilized along the Yangzi to reinforce dikes and keep watch for leaks that rapidly develop into deadly ruptures. Some flood-control systems have been dynamited or simply allowed to collapse to divert water to less populated areas. At Wuhan - a top flood-defense priority with 7 million residents and an important industrial base - the Yangzi rose far over its danger line, right. The last official tally, released on July 28, said 1,200 people have been killed across the nation by the flooding.
BY THE SEA: TALK OF THE RENMINBI
The value of the renminbi is a prime topic as China's top policy-makers gather at the seaside resort of Beidaihe for their annual summer strategy sessions. Most of the leadership is generally united on keeping the currency at its current level for 1998. But with 1999 just five months away they have begun to study possible devaluation scenarios. Discussions include identifying which conditions will make it necessary, how to go about doing it and es timating its impact at home and abroad. At the center of concern, of course, is the future of the Japanese economy. Shortly before the U.S. and Japan intervened with some $6 billion to shore up the yen in mid-June, the Chinese told Washington that if Japan's currency were to drop to 150 to the dollar, they were ready to let the RMB fall. With the yen in the mid-140s, the yuan is going for nearly 9 to the dollar - against the official rate of 8.3 - on the black markets in such international trading cities as Shanghai and Guangzhou.Meanwhile, Premier Zhu Rongji, who will make the final call on any devaluation plan, is under pressure to ease up on his ambitious reform plans. He has had to compromise over the speed and scale of housing and state-enterprise reforms. There has also been resistance to his goal of steep cuts in the size and budget of the central government, particularly from the ministries of foreign affairs and public security. At one meeting, Zhu and foreign-policy guru Qian Qichen exchanged hea ted words, necessitating mediation by President Jiang Zemin.
Week of August 7, 1998
TO STREAMLINE ITS STATE-OWNED enterprises, China made 400,000 workers in SOE textile companies redundant in the first half of 1998. Beijing's self-imposed restructuring policy has cost more than 10 million jobs in state-controlled firms.Week of July 31, 1998
Taipei China's Science and Technology Minister Zhu Lilan ended a landmark visit to Taiwan on July 20, but failed to sign a draft agreement on technology transfer. Zhu led a 90-member delegation on a six-day trip in her capacity as a Peking University professor.Beijing Amway China is back in business. The American retailer modified its direct-sales methods. Its 40 distribution centers will become retail stores. Amway shut down in April when the government outlawed its perso n-to-person sales method.
Week of July 24, 1998
Beijing launched an attack on the 11 countries which back Taiwan's bid for membership in the United Nations. In a letter to U.N. Secretary General Kofi Annan, Chinese ambassador to the U.N. Qin Huasun lambasted the group for a "brazen attempt" to "split a sovereign state."Beijing Macau's governor, General Vasco Rocha Viera, met with Premier Zhu Rongji and pleaded for more Mainland investment in the Portuguese enclave before the 1999 handover. No mention was made of Macau's security problems in the official press release. China has expressed concern about the law-and-order situation in Macau, where rival triad gangs are battling for control of prostitution, gambling and rackets.
Week of July 17, 1998
BEIJING A record 3.2 million students are trying to enter universities this year by taking a rigorous three day examination. The government issued a circular ordering no noisy construction over the exam period, while those watching the World Cup have been ordered to turn down their televisions during late-night matches."BY ENDING THE AMBIGUITY of the U.S. position we have harmed democratic Taiwan's position," U.S. Senate Majority Leader Trent Lott said of President Clinton's trip to China. "Instead of pressing Beijing to renounce the use of force against Taiwan, Clinton accepted Beijing's position on Taiwan," Lott told the Senate.
JIANG'S HONG KONG PLEDGES
He might not fully grasp market forces, but President Jiang Zemin knows what he likes - and what he likes is Hong Kong. When he came through the SAR to mark the first anniversary of its return to China, Jiang told locally based corporate chiefs of mainland companies that he would be asking Zeng Peiyan, the head of the State Planning Commission, to press ahead on plans to have 50 - yes, 50 - of C hina's biggest corporations establish headquarters - yes, headquarters - in Hong Kong next year. Jiang reckons that not only will the move help the territory's flagging economy, it will also force the companies to shape up and learn to play capitalist hardball the Hong Kong way. Critics of Jiang's initiative warn that the state's attempts to control corporate decisions seldom pay off.The president also noted that while the Hong Kong-dollar peg to the greenback will be around for awhile, there is no good reason for the value of the Hong Kong dollar to be linked to the yuan. He admitted that part of the psychological tie between the Hong Kong and Chinese currencies is due to Beijing's repeated assertions that it won't devalue the yuan because doing so might damage the Hong Kong dollar. Jiang told his audience of red-chip chiefs that it was their job to help maintain financial stability in the SAR. Beijing, he pointed out, is not asking them to transfer their Hong Kong-based cash or assets to the mainland.
WIDESPREAD BANK CLOSURES are "likely" as China's central bank tries to bring the country's financial system under control, the U.S.-based credit rating firm Moody's Investors Service predicts. The "lack of any coherent strategy for resolving the huge insolvency of state banks which hold over 90% of the system's assets," makes weaker institutions precarious, Moody's says.
Week of July 10, 1998
BEIJING The economy probably grew by only 7% in the first half of 1998, under the 8% target for the year, the People's Daily reported.Week of July 3, 1998
BEIJING Two days before President Clinton began his state visit, American businessmen and Chinese officials signed more than $400 million in telecommunications deals. Motorola and Lucent Technologies sealed seven pacts to provide equipment for China's fast-growing telecommunications market.HAINAN The People's Bank of China (PBC) will shut down the Hainan Development Bank. It will be the first bank failure in the history of the People's Republic. The PBC appointed the Hainan a nd Guangzhou branches of the Industrial and Commercial Bank of China to restructure Hainan Development's debts as of June 30.
Hong Kong activists trying to get onto the disputed Diaoyutai islands in the East China Sea abandoned their protest ship after it was rammed by Japanese ships. The survivors were picked up by one of the Taiwanese boat in the six-vessel fleet. The islands - claimed by Japan, China and Taiwan - are known as the Senkakus in Japanese.
REVISIONIST READING LIST
SOME PEOPLE DISMISS journalist-turned-entrepreneur Peng Ming as erratic, but his book - The Fourth Landmark - was recently excerpted in Reference News, Beijing's daily digest of the domestic and foreign press prepared for the higher echelons of the party and government.Peng recommends that China not try to overtake Western economies because the country has too much historical baggage that will not let it win in t he long run, though it might meet with some short-term success. Instead, he says, the country should establish a non-competitive relationship with the outside world and avoid playing "catch-up."
The best development strategy, he suggests, is "that of an 'elephant.' From the standpoint of national status, China should not aspire to become hegemonic but rather master of its own house. China can never become a 'tiger' (like the U.S.) and will never settle for being a 'sheep' and it shouldn't become a 'wolf' (like Japan and India)." Given China's size, such an emphasis on internal strength, Peng says, will lead to a "truly democratic, civilized, and humane socialism." An interesting analysis for the government to place in front of such an elite readership. Peng's thesis as a whole may seem outlandish to many of them, but some of his specific proposals could be attracting their attention.
Week of June 26, 1998
BEIJING On June 15 the People's Daily celebrated its 50th anniversary. Its front page carried photographs of Mao Zedong, Deng Xiaoping and Jiang Zemin with copies of the newspaper. An editorial promised to continue focusing on the "art of propaganda."MACAU The Portuguese enclave's judicial police director, Marques Baptista, made a week-long visit to Beijing and Guangzhou. Baptista - who narrowly missed a car-bomb assassination attempt in May - will discuss cross-border crim e and drug trafficking. The two sides have been trading barbs as the security situation in Macau deteriorates in the runup to the 1999 return to mainland sovereignty.
THE SUFFRAGE OF KOUTOU
THE NEGOTIATORS HAMMERING out the itinerary for President Bill Clinton's trip to China may sideline an originally planned visit to Koutou, a village outside Beijing. Another hamlet has been selected as the most probable site upon which the American entourage will descend. As we pointed out last week, Koutou had initially been picked as an example of the government's new liberal intentions in action - it recently held its first elections for local officials. But Koutou's voting caused some problems: upper echelon apparatchiks recommended one person for the job of village head after the residents had voted in their own choice. The Party then negotiated with the locals - and had their own man installed. The problem is not unique to Koutou. Across the country the government found that nearly two-thirds of the local elections are not following the original election law. Now a draft revision of the law is being submitted to the National People's Congress for ratification. The State Council has ordered that village elections for the more than one million Chinese villages be held under new guidelines intended to prevent more Koutous.Week of June 19, 1998
BEIJING The country's first high-speed rail track will be laid between Beijing and Shanghai. The 1,300 km track will handle speeds up to 300 kph and cost 100 billion RMB. Construction should be finished by 2000.TRAVEL PLANS IN THE AIR While most of the events for President Bill Clinton's trip to China have been finalized, his request for opportunities to be "spontaneous" are proving difficult for his Chinese hosts. Some issues were resolved when Secretary of State Madeleine Albright flew to Beijing recently, but others are still under negotiation. For instance, the Americans requested to go to Koutou village (in Beijing's Huairou County), where local elections were held recently. Apparently, Communist Party higher-ups deemed the newly elected official unfit and appointed someone else to the post instead, a fact sure to be emphasized by the enormous press entourage accompanying Clinton.
There is also concern about the impact in the U.S. of Clinton's presentation of a wreath a t the Monument for the People's Heroes after the official welcoming ceremonies on Tiananmen Square. But Beijing has decided that no attempt will be made to censor the president's speech to the Chinese people - it will be broadcast live. There are some problems with the presidential advance team, too. While surveying venues in the south of the country, they wound up in a restricted area. The car they were traveling in was confiscated and apparently is still impounded.
CHINA MAY HAVE FAILED to qualify for t he World Cup finals, but that hasn't stopped millions of fans from lapping up hours of television trivia and souvenirs. China's central television station reaches more than one billion people. It has the exclusive rights to broadcast all 64 games and will be doing so live on three channels.
Week of June 12, 1998
TIBET According to Liu Wulin, an expert on Tibetan wildlife, Yetis - the "Wild Men of the Himalayas" - may in fact be Kodiak bears. After years of research near the base of Mount Everest, where tens of sightings were claimed, Liu said all the reports were of standing bears that resemble ape-like creatures when seen from a distance. Skins and bones alleged to be those of Wild Men were also from bears, Liu said.BEIJING More than a third of the country's 1.1 million railway wor kers will lose their jobs by the end of the century. The government will invest $5.44 billion this year - 22% more than planned - to improve the antiquated rail network.
MACAU Construction of a 1.5 km bridge between the Portuguese enclave and China's Island of Mountains will start at the end of June. Completion of the $10.6 million project is set for September, 1999, three months before Macau returns to mainland sovereignty.
Week of June 5, 1998
HUNAN PROVINCE: The death toll from heavy summer flooding across China rose above 150 as details of a devastating flood in central Hunan province emerged.CHINA-JAPAN-TAIWAN On May 26 China expressed "grave concern" over a Japanese official's remarks that a recently revised U.S.-Japanese defense pact covers a geographical area including Taiwan. On May 22, Takano Toshiyuki, director general of the Foreign Ministry's North American Affairs Bureau, told Japan's parliament that the zone encompassed by the guidelines - which Tokyo has steadfastly refused to specify - includes the Far East and therefore Taiwan. Washington and Tokyo signed a revised military agreeme nt on mutual logistics support in April.
ISRAELI PM BENJAMIN NETANYAHU got a pledge from China to withhold nuclear and missile technology from Iran.
Week of May 29, 1998
CHINA-U.S. Reports the White House may have helped transfer satellite technology to China in exchange for campaign money led to new attacks by Republicans and the prospect of more congressional probes. Some members want President Bill Clinton to postpone his trip to China, saying agreements resulting from the summit would be "suspect" in light of the allegations. Beijing denies any impropriety.FOREIGN INVESTMENT PLUNGED 19% in April from a year ago, following steady gains in the first three months of the year when growth averaged 9.7%. Despite the Southeast Asian crisis, export growth continued to chug ahead, rising 11.6% in the first four months of 1998, to $56.19 billion.
Week of May 22, 1998
Liberalism Rising
Further politi cal reform - more liberalization - has become an item high on the agenda of China's top leadership. Vice president Hu Jintao's address - he is a likely successor to President Jiang Zemin - on May 8, at a symposium to mark the 20th anniversary of the epic reforms set in motion by Deng Xiaoping, put the topic in front of the public. Many of the country's ideological leaders were in attendance, and from the play Hu's speech got in the press it was obvious he had official support. With the rhetoric peeled away, he was suggesting the adoption of aspects of international democratic practice, though he was vague about details and timing.Skeptical? President Jiang Zemin has directed think-tanks to study ways not only to improve and extend the country's village-level elections, but also how "aspects of the U.S. presidential system" might be adaptable in China. Recently, the Politburo formed a working group to draw up a blueprint for political change, headed by Jiang, Hu and Jiang's top adviser and strategist Zeng Q inghong. Also involved will be representatives from the elite Chinese Academy of Social Sciences (CASS), the Central Party School and the armed forces.
Given the Communists' preoccupation with ideological underpinnings for change, Jiang is actively seeking a theoretical basis for his plans. CASS is likely to lead the way. Its new president, Li Tieying, is a member of the Politburo - the first time the academy has ever been headed by someone of such high political rank. The conservative Li has recently bee n advocating "liberation of thinking" and "the deepening of reform." Watch for growing debate, if not rapid change, in the coming months.
INDUSTRIAL PRODUCTION GROWTH SLOWED in the first four months of the year, hurt by the restructuring of state-owned enterprises and bankruptcies, the State Statistics Bureau said. Production for the period rose 7.9% over 1997 - down from a growth rate of 11.4% in 1997.
Week of May 15, 1998
"A catastrophic drought is threatening China's harvest this year in spite of recent rains," warned Zhao Guangfa, deputy director of flood control and drought-prevention headquarters. The hardest hit grain will be rice, particularly in the south, where water reserves were depleted last year because of a lack of rain.CHINA-RUSSIA Presidents Jiang Zemin and Boris Yeltsin officially opened a telephone hotline between them on May 5. The two countries announced they would set up t he link in 1996. In late April, China said it would also set up a hotline with the United States.
CHINA-JAPAN The head of the Defense Agency, Kyuma Fumio, speaking in Beijing called for more military exercises with China and played down the risk of Japanese forces getting involved in a conflict over Taiwan. He gave assurances that Tokyo's increasingly closer defense cooperation with the U.S. posed no threat to China.
Week of May 8, 1998
Why Hasn't Chen Xitong Been Tried
What will become of Chen Xitong, Beijing's disgraced forme r Communist Party chief? He is no longer under house arrest in Inner Mongolia. S ometime before the party's 15th Congress last September he was moved to Beijing' s Qincheng Prison. Chen, you will recall, was swept out of power in a cleanup of the capital's notoriously corrupt administrative and political hierarchy that started in 1995 and culminated as President Jiang Zemin cemented his grip on power last year. Chen has never been tried, although his son, Xiaotong, was given 12 years in prison for his role in a $2.2 billion property scandal.Significantly, Chen seems to have the public's sympathy. Many Beijingers think that he has been made a scapegoat after losing a power struggle with Jiang and suspect he is no more corrupt than many offici als. During the Lunar New Year celebrations, peasants from Changping county, where Chen once served as party leader, brought him a gift of homemade dumplings - traditionally served at family reunions. Popular support combined with the incriminating information he has on others makes Chen a hard prisoner to convict.
And he refuses to go quietly. He has been insisting on a public trial since he was returned to Beijing. Chen made it clear that if he is handed a death sentence he will start naming names and h ave others "buried" with him. In March, the government announced it would prosecute Chen on charges of graft and dereliction of duty. In early April, a press report emerged saying that the trial had started, but this was quickly quashed by the prosecutor's office, which said it had not received orders to proceed.
CHINA-INDIA Gen. Fu Quanyou, the first Chinese army chief to visit India, said after talks with government and military leaders that both sides had agreed to safeguard regional stability. Fu, he ad of China's People's Liberation Army, called the discussions with PM Atal Behari Vajpayee "very cordial and friendly.
BEIJING CITY AUTHORITIES ARE OFFERING TAX BREAKS and cheap loans to private firms who take on fired state employees. Nearly 10% of public workers in Beijing have been laid off in recent months as part of state reforms. In 1997, the capital's private sector hired 11,000 people from the public sector.
Week of May 1, 1998
Clinton in China
: What About Hong K
ong?Washington says no final decision has been made yet,
but sources in Taiwan's Foreign Ministry insist they have convinced the America
ns to have President Bill Clinton visit Hong Kong on July 3, as the last stop on his 10-day visit to China. Beijing wants Clinton to be in Hong Kong on July 1, the first anniversary of the handover of the former British colony. The dispute is more than just a logistical quibble.Taipei is fearful of yet another strong signal of international approval for last year's takeover. Their worry is that as Beijing's policy of "one country, two systems" succeeds - or even just looks like it is succeeding - in Hong Kong, international support for Taiwan's autonomy weakens. The issue is so important that President Lee Teng-hui himself has lobbied hard to make sure Clinton isn't in Hong Kong on the anniversary. For Beijing, Clinton's itinerary has significance beyond Taiwan's concerns. The mainlanders want the American president to visit Hong Kong as part of his swing through southern China, and not just as a departure point for his trip home. They want Hong Kong - now a Special Administrative Region - clearly recogniz ed as an integral part of the country, more than some historic anomaly appended to the mainland.
The final announcement of the details of Clinton's trip will come when Secretary of State MadeleineAlbright goes to China on April 29 and 30. The presidential visit will end on July 3 - Clinton must be back in the States by July 4, the American Independence Day. The president straddles a tough political situation at home. Taipei has a lot of support within Congress and in the press. As relations between Washin gton and Beijing warm, how the issue of Hong Kong is handled could give another clear prediction of whose good will Washington values more, Taipei's or Beijing's.
CHINA-TAIWAN Representatives from both sides, ostensibly representing only quasi-official organizations, started three days of talks on April 22 in Beijing. Contact was cut in mid-1995 by China, when Taiwan President Lee Teng-hui made an unofficial visit to the U.S.
Week of April 24, 1998
NEW DELHI WILL INCREASE MILITARY SPENDING in its next budget amid threats from China and insurgencies in the country's far-eastern and northern regions, Defense Minister George Fernandes said. He claimed Beijing is making military incursions into the northeastern state of Arunachal Pradesh, which borders China.
A ONE-YEAR BAN ON THE USE OF FARMLAND for non-agricultural projects such as real-estate development to prote ct dwindling arable land was extended. Exceptions will be made for the large-scale development of low-income housing.
THE ARMY IS CONSIDERING REZONI NG its seven military areas into five "war-zone regions" in a major shake-up of the top command, papers in Hong Kong reported. The new areas would be styled after that of the U. S. in a move aimed at preventing army officers from developing local power bases.A GROUP OF TAIPEI NEGOTIATORS WILL VISIT CHINA on April 21, the first delegation from the island in nearly three years. Chan Chih-hung, vice secretary general of the Straits Exchange Foundation, Taiwan's quasi-official negotiating body, is to lead th e group, according to an initial report in the China Times Express.
Week of April 17, 1998
China to the W
TO:Later, MaybeIn
the current round of jockeying between China and the U.S., Beijing's ardor to j
oin the World Trade Organization seems to have cooled. Asia's financial crisis, plus the imminent layoffs of large numbers of government and factory workers, have led many Chinese officials to become wary of opening their own markets too quickly. New Premier Zhu Rongji, even with President Jiang Zemin's clear mandate to revitalize the economy, is reluctant to force the issue on companies and institutions already shellshocked by the sweeping reforms he has announced. Getting those who head them to accept for
eign competition on top of sizable cuts in both manpower and authority could be too severe a political test even for the strong-willed PM.American negotiators say they are frustrated by what they see as Beijing's lack of progress in following through on earlier hints to further open its markets. The U.S. Trade Representative's office - headed by Charlene Barshefsky - has warned Beijing not to allow the stalemate to continue indefinitely, pointing to moves underway in Congress to impose a deadline for win ding up the talks for China's accession to the WTO. If such a deadline is not met, the U.S. could raise tariff rates on Chinese goods to levels prevailing before the 1995 formation of the WTO - about twice what they are now. Barshefsky, who was due to meet with her Beijing counterpart on Apr. 8 in Geneva, might not be unsympathetic to that approach. Given their clout within the world trade body, the Americans can afford a hard line. As Sandra Kristoff, who deals with Asian affairs on the NationalSecurity Co uncil said, when speaking to journalists about Beijing's entry to the WTO:"It's up to China." Going into the Geneva talks, Beijing's message seems to be: "Not now."
From July 1, state-owned housing will be available only for sale and not rent - another step toward abolishing the country's giant welfare housing system. Rents will be increased to 15% of family income or the market level. The full housing reform plan will be made public in May.
Week of April 10, 1998
Archeologists unearthed inscribed bones that could be the earliest evidence of the country's written language, the China Daily reported. Found in eastern Shandong province, the 3,500-year-old sheep shoulderblades bear eight characters, only two of which were recognizable to experts.Week of April 3, 1998
An agreement allowing U.S. nuclear power plant sales to China went into effect March 19, ending a ban and paving the way for multi-billion-dollar deals to ease China's power shortage. But no big Sino-U.S. nuclear deals will be made before the 10th five-year economic plan, which begins in 2001.Week of March 27, 1998
Why Washington Isn't Pushing Beijing
As we predicted at the time of heightening tension between the U.S. and Iraq in mid-February, the Clinton administration - despite heavy domestic opposition - will not sponsor the annual United Nations resolution condemning China's human rights record in Geneva. The move is not unprecedented. In 1990, the Bush administration made the same decisi on. Back then, as the U.S. was preparing for the military attack on Iraq, Beijing abstained from a crucial vote in the U.N. Security Council authorizing the use of force against Baghdad. A few months later, Washington decided that China's human rights situation was not anathema to the American Way and did not pursue the Geneva censure vote.While Beijing again sided with Baghdad during this year's face-off, Bill Richardson, the U.S. Ambassador to the U.N., said after a trip to Beijing that he believed Chi na would abstain again rather than vote against the Americans in the Security Council. The Chinese denied his claim furiously in public, but this time they did not have to choose. U.N. Secretary-General Kofi Annan's diplomatic mission to Baghdad headed off the military confrontation and the need for the Security Council's approval. But the deal had been struck and is now being honored in Geneva.
Still, Clinton's trip to Beijing at the end of June comes as a surprise. His advisers had been pushing for a No vember date, when cold weather would drive the official greeting ceremony indoors, away from Tiananmen Square. The plaza still has ugly connotations for Americans and Clinton's June reception there may give his critics something meatier to snipe at than the sexual scandals that are engulfing the White House. Then again, maybe not.
Week of March 20, 1998
China's Military Says 'No!'
Incoming premier Zhu Rongji's plans to cut back China's bureaucracy have made headlines, but proposed personnel reductions in the weapons, shipping, aeronautics, and industrial-nuclear sectors of the country's military industrial complex are on hold due to an angry backlash from the military. As the plan evolved last year, it was understood that Zhu wanted to fire two-third s of the personnel in existing departments in defense-related bureaus and ministries as part of his plan to do away with 4 million bureaucratic positions throughout the government. A compromise was eventually reached to cut only half of the military's targeted workforce by merging redundant administrative offices. Hard-pressed by troop reductions and other cutbacks in recent years, the armed forces are under even more pressure to retire older cadres while creating sideline businesses to drain off idled work ers. Not surprisingly, Zhu's dictates caused major tremors and sent many middle-aged bureaucrats scampering to look for other jobs. That left skeleton crews manning many department offices, with morale at an all-time low.FORMER BEIJING COMMUNIST PARTY CHIEF CHEN XITONG will stand trial soon. Prosecutor-General Zhang Siqing told the National People's Congress the investigation into Chen's alleged embezzlement of funds is finished, and he will be tried for corruption and dereliction of duty.
CHINA-U.S. A long-delayed Senate report found "strong circumstantial" but not direct evidence that the Chinese government tried to influence American presidential elections in 1996. Beijing has strenuously denied the accusations, made largely by opposition Republican Party members.
Week of March 6, 1998
BEIJING SIGNALLED IT MIGHT accept Taipei's terms for ending the 31-month old hiatus in semi-offical talks. China will host Taiwan's political envoy Koo Chen-fu "at an appropriate time." Koo's visit had been proposed by Taiwan in November and again in January.CHINA PLANS TO ALLOW more of its citizens to vacation in the SAR to help boost slumping tourism numbers there after the July 1 handover. Beijing had restricted the number of mainland visitors to the former British colony , in a bid to avoid a mass influx during the change of sovereignty.
Week of February 27, 1998
Sino-Pakistan Nukes On Ice
As Chinese and U.S. relations slowly warm, Pakistan's defense posture might be left in the lurch. When PM Nawaz Sharif visited Beijing for a week earlier this month, nuclear and military issues topped the agenda. Over the years, the two countries have jointly developed ballistic missile and nuclear capabilities, all arguably within the range permitted by the international Mi ssile Technology Control Regime of 1987. When Sharif's entourage passed through Hong Kong after China, Pakistanis living there were told to expect some news about "a big development related to defense" - most likely a new jointly-developed medium-range missile that might be displayed on National Day, March 23.But that might mark the end of such Sino-Pakistan cooperation. After Sharif's trip, officials privately admitted that, given the nuclear restriction agreement China and the U.S. signed in October la st year, it will not be possible for Beijing to continue its level of support to Islamabad's nuclear and missile programs. But the Pakistanis have few misgivings. They feel they have developed an indigenous capability by now which is sufficient for their national defense.
To commemorate the first anniversary of Deng Xiao-ping's death, China will export some 40,000 videos and 350,000 video compact-discs of a documentary about the patriarch's life. The film, The Great Monument, premiers on Chinese televisi on on Feb. 19, the day of his death.
Week of February 20, 1998
Of Human Rights, China, the U.S. and Iraq
What is going on between China and the U.S.? An errant, loose-cannon dissident - Wang Bingzhang - who smuggled himself into the mainland from Macau was mailed back to Los Angeles post haste on Feb. 9. And three American clerics are traipsing around China - "We're here to learn," they told reporters when they arrived in Beijing - at the invitation of President Jiang Zemin. It was an offer Jiang made when he took his high-profile trek to the U.S. to meet with President Bill Clinton last November.
And there is more. According to a well-placed Washington source, the U.S. might be ready to drop its annual censure motion against China at the U.N. Human Rights Commission in Geneva in mid-March.
The State Department's Jan. 30 annual human rights report on China, which unusually commended Beijing for greater tolerance of opposing views and progress in human rights, could be a precursor to a stand-down in Geneva. And it is clear that Assistant Secretary of State for Human Rights John Shattuck - a strong proponent o f a tough Beijing line - has lost a heated intra-administration battle on China to the State Department's East Asia section and the National Security Council, which seek an easier relationship with Beijing.
Other factors are at work. Many U.S. allies no longer favor the Geneva censure, including Britain, which recently expressed satisfaction on how China handled Hong Kong's handover. And while making its all-out diplomatic push to muster international support in its faceoff with Baghdad, Washington does n ot want to expend political capital on "lesser" issues. In 1991, the U.S. pulled the censure motion in return for a Chinese abstention in a Security Council vote on the U.S. attack on Iraq during the Gulf War. The Americans could do the same this year.
Week of February 13, 1998
Beijing's Davos Pledge
Spontaneous applause broke out among the elite business-academic-government audience at the World Economic Forum in Davos, Switzerland, when China's Vice Premier Li Lanqing promised that Beijing would not devalue the renminbi. But over the course of the six-day meeting, other Chinese dignitaries - in smaller meetings and in one-on-one interactions in the conference hall - indicated that the promise to maintain the currency's value was a finite one, and that it would be reviewed in 12 to 18 months. Li and his team should know. He seems certain to become Zhu Rongji's successor as Beijing's economic master planner at the National People's Congress in March.As for China's negotiations to join the World Trade Organization (WTO), Sir Leon Brittan, the European Union's chief trade representative, likened the recent sessions to a love affair: "We have to work at it. And if we proceed, it will get passiona te quickly, and will achieve a climax." When exactly might China join the WTO? "This year," said one high ranking Chinese official. On the day Li addressed the WEF, he also met with WTO director-general Renato Ruggiero.
CHINA-PAKISTAN PM Nawaz Sharif will make an official seven-day visit to China, starting Feb. 11. Beijing calls Sharif "an old friend of the Chinese people." The two countries have maintained good ties to counterbalance Indian influence in the region.
UNDER NEW BANKING REGULATIONS regulations, Dutch Rabobank will be the first Beijing-based foreign bank to open a fully legal subsidiary in another Chinese city - Shanghai. The official
announcement will come when Dutch Finance Minister Gerrit Zalm visits China at the end
of February.
CHINA-JAPAN After talks in Tokyo between Chinese Defense Minister Chi Haotian and his Japanese counterpart, defense agency director-general Kyuma Fumio, the two countries agreed to allow their warships to visit each other's ports. Chi's six-day trip was the first official visit to Japan by a Beijing military chief since World War II.Week of February 6, 1998
PYONGYANG ASKED that the Feb. 12 meeting to prepare for the resumption of peace talks in Geneva be postponed until President-elect Kim Dae Jung takes power on Feb. 25. The session was pushed back to early March, most likely delaying the Geneva meeting.CHINA-TAIWAN Beijing dropped its demand that Taipei recognize Chinese sovereignty as a precondition for resuming cross-strait negotiations. The mainland also renewed its call to resume the talks that were abandoned in 1995, when President Lee Teng-hui visited the United States.
Week of January 30, 1998
Emerging Piracy Base
Hong Kong was relieved that it was not placed on the U.S. Trade Representative's "priority" list of intellectual property rights violators recently. Such a listing can lead to economic sanctions. A review in April will determine if the SAR stays on the warning level "watch" list it was demoted to in 1997.The Americans are more concerned with nearby Macau, where the production of counterfeit CDs and videodiscs is boom ing. Industry sources say the enclave has about 80, largely triad-owned, production lines turning out more than 300,000 pirated products a day. And Beijing - it is expected to be commended by Washington for its efforts to curb bootleggers - is worried that not only will the hot discs flood China, but that some of its own copyrighted material is already being ripped off in the Portuguese-controlled territory.
THE WORST cold wave in a decade added to the woes of people displaced by the Jan. 10 earthquake 22 0 km northwest of Beijing. Temperatures plunged to minus 35 C in the area where 44,000 people are sheltering in makeshift housing. The earthquake damaged 136,000 homes and killed 50 people.
"THE FIRST SIX MONTHS after the handover make us optimistic that 'one country, two systems' has been transformed from an imaginative concept to a concrete reality," British Foreign Secretary Robin Cook said while visiting the SAR. He did voice concerns about the fairness of upcoming elections, though.
Week of January 23, 1998
Clinton Prefers a Cool Reception in Beijing
The friendly mood between Beijing and Washington that evolved around President Jiang Zemin's November trip to the U.S. soured somewhat over the New Year. Fresh tensions over human rights are the cause. The Chinese consider President Bill Clinton's meeting in the White House with exiled dissident Wei Jingsheng in Decemb er a violation of a promise not to use Wei as a propaganda tool. For their part, the Americans are unhappy that China has not released more dissidents, notably Wang Dan - whom they expected be freed by the end of 1997. But the two sides are trying to patch things up. The U.S. has suggested that continued progress by China on human rights might allow it to end its annual effort to lead a censure vote against Beijing at the U.N. Human Rights Commission in Geneva in March. The Chinese have dropped their threat to release no more dissidents, and are pushing Clinton to make his scheduled state visit to China early in 1998.Clinton is said to prefer an end-of-year date. American mid-term elections come in November, and he could be in Asia for the APEC summit in Malaysia after that. But the winter months have another appeal. Clinton does not want to be received in Tiananmen Square, as protocol requires, because of the bad associations it carries in the American public's mind. The political ammunition that such an official greeting would provide his domestic critics would dog him for the rest of his term. Wintery weather in Beijing provides a plausible rationale for the ceremony to be held somewhere less exposed than Tiananmen, perhaps even indoors.
THREE INSPECTORS from China will join the U.N. Special Commission, charged with disarming Iraq for the first time since the agency was formed after the 1991 Gulf War. Iraq says the current U.N. team is dominated by Americans who are intent on carrying out U.S. - rather than U.N. - policy.
AUSTRALIA GOVERNMENT tests show that vials taken from Chinese swimmer Yuan Yuan's luggage at Sydney airport contained unadulterated human growth hormone. Yuan and her coach, Zhou Zhewen, flew back to China as the swimming World Championships got under way in Perth.
Week of January 16, 1998
The Chinese Academy of Social Sciences (CASS) predicts that 11 million Chinese will lose their jobs this year. Economic growth will stay high, and prices will remain steady, CASS says. The forecast came after railways announced plans to cut 1.1 million jobs in the next two years.Week of January 9, 1998
CHINA AVIATION Fast-growing fleets of aircraft and a slow rise in demand have sparked a price war among China's 34 airlines since the lifting of ticket price controls in October. Airlines placed orders for 101 planes and received 48 in 1997. Beijing's ninth five-year economic plan calls for the acquisition of 300 planes between 1996 and 2000. The government is encouraging the sector to undertake mergers.THE HEALTH MINISTRY plans to link 500 city and country hospitals by t elevision. The network - slated to be online by 2000 - will enable the country's best doctors to consult with colleagues in remote areas. China has 60,000 hospitals, but 80% of its health resources are concentrated in larger cities.
CHINA-RUSSIA The two countries signed a contract finalizing their plans to jointly build a nuclear power station worth $3.5 billion in China's eastern Jiangsu province. The project's twin 1,000-megawatt pressurized-water reactors will go into operation in 2004 and 2005.
News from China in 1997
News from China in 1996
News from China in 1995
