http://www.atimes.com/atimes/China_Business/HB18Cb05.html
China hunts abroad for academic talent
By Pallavi Aiyar

BEIJING - Having already impressed the world with the creation of its glittering, international-quality infrastructure, the erstwhile Middle Kingdom has now turned its attention to transforming its universities into world-class institutions.

"Our government realizes the connection between a nation's overall power and the quality of its higher education," said Dr Weiying Zhang, assistant president of Peking University.

In this latest bid to raise the country's global prestige, Chinese universities backed by massive injections of governmental funding



are spending billions of dollars to attract top foreign-educated and overseas-born Chinese, building cutting-edge research centers, partnering with the world's best educational institutions, and developing new programs taught in the international lingua franca - English.

Under a central government program started in 1998 called the 985 Project, 10 of China's leading universities were given special three-year grants in excess of 1 billion yuan (US$124 million) for quality improvements. Peking and Tsinghua universities, the top two ranked institutions in mainland China, each received 1.8 billion yuan. These grants were awarded in addition to special financial support provided by the 211 Project, a separate program aimed at developing 100 quality universities for the 21st century.

In 2004, the second phase of the 985 Project was launched and the number of universities under its purview was enlarged to 30. Included in this second phase of special funding was Beijing Normal University (BNU), ranked 15th in the country. Its special "international department" alone receives some 16 million yuan annually from the center.

Han Bing, deputy director of the international department, explained that the funds are used to hold international conferences, attract world-renowned academics as faculty, and support BNU scholars in attending conferences abroad.

Han said BNU hosts 30-40 scholars from leading Western universities annually. While most of these join the university faculty as guest lecturers and researchers for a semester, those who are hired as full-time faculty can expect $40,000 a year.

The positions are open to all nationalities, although cultural affinities and language requirements have meant that so far only ethnic Chinese have been recruited by BNU as full-time staff. "We hope to get a more international academic mix in the future," said Han.

At Peking University's Guanghua School of Management, of which Zhang is the executive dean, full professors with PhDs from prestigious universities abroad can expect $60,000 a year. Such pay levels are reasonably attractive to overseas academics, comparable to US pay levels of anywhere from $30,000 to $300,000 and up (depending on the institution and the prominence and seniority of the individual involved). This year the school recruited its first non-ethnic-Chinese faculty member, a Canadian national and former associate dean of the University of Victoria. The ability to offer internationally competitive salaries is key to attracting quality academics, said Zhang.

The official national salary given to a full professor in China today as set by the Ministry of Education (MOE) is a mere 4,000 yuan per month. But for the past few years, the government has permitted individual academic departments to supplement official salaries with private funds that the departments raise through fees, consultancies and commercial spinoffs. Thus the Guanghua School of Management makes up the difference between official and actual salaries through the revenue it gains from its executive MBA (master of business administration) program, for which it charges a hefty $35,000 per year.

BNU in its turn supplements salaries with the money it generates from the $2,700 a year paid by foreign students learning Mandarin in its language programs. The university has more than 2,000 foreign students enrolled in various courses, and has academic agreements with 153 universities abroad, including Princeton University, which holds an annual summer-school program at the BNU campus.

As a result of its improved pay scales, the Guanghua school currently boasts some 50 "returned scholars" (Chinese nationals who return to the mainland after studying abroad) and more than half of the faculty hold foreign PhDs. "These are not PhDs from any old university," said Zhang, himself a DPhil from Oxford. "We only look at Ivy League or Oxbridge-educated talent."

In fact several of the research institutes at China's better universities have a minimum requirement of a foreign PhD for faculty members. The first such center, called the China Center for Economic Research (CCER), was established in 1995 at Peking University. One of CCER's earliest staff members, Professor Feng Lu, recalled the Herculean efforts required to persuade quality academics to return to China a decade ago. In contrast, he said, there are now more than 50 applications for every vacancy advertised at the center.

Examples of world-renowned academics choosing China as their new home abound. In 2004, Princeton Professor Andrew Chi-chih Yao, one of America's leading computer scientists, took up a place at Beijing's Tsinghua University to lead an advanced computer-studies program. Though born in Shanghai, Yao is a US national. Peking University in its turn successfully wooed Tian Gang, a leading mathematician from the Massachusetts Institute of Technology (MIT), to return to his native China and set up an international research center for mathematics.

"For a world-class university, it's necessary to attract the best students and faculty internationally. Eventually we don't just want the best Chinese students, but the best from around the world," said Zhang. As a result, Chinese universities are increasingly offering courses wholly taught in English and in collaboration with internationally recognized partners. The Guanghua School of Management offers a dual-degree program in English with the National University of Singapore. In addition, undergraduate courses and an MBA program in English wholly administered by Guanghua are on offer.

Dual-degree programs are becoming increasingly common as foreign universities are lured by China's potential. CCER's MBA (called BiMBA), for example, is jointly offered with Fordham University in New York City, which contributes both faculty and curriculum. Similarly, Tsinghua University's International MBA is jointly taught with MIT's Sloan School of Management.

In September 2004, the University of Nottingham, Ningbo, China (UNNC) began its first intake of students. The school is a branch of the United Kingdom's Nottingham University and is China's first joint-venture university with an independent campus (there are, however, more than 700 foreign-affiliated colleges in mainland China). At UNCC, all students are required to speak only English during study and even while socializing.

The net result of all these joint-venture projects is that it increasingly makes sense for Chinese students to stay at home, rather than seek more expensive but largely similar degrees in the West. However, Zhang pointed out that collaboration with Western partners and the promotion of English cannot in itself fundamentally close the gaps in China's current educational system. For him, one of the most significant reforms pioneered at Peking University and promoted by himself has in fact been the end to lifetime tenure, for decades a defining characteristic of Chinese universities.

Since 2003, professors at Peking University are no longer promoted on the basis of seniority but with an eye to their research and publication records. If a new lecturer cannot make it to associate professor within six years, he or she is asked to leave. "This was the only way to change the orientation of our faculty towards academic research," explained Zhang.

The combined results of these efforts are already paying off. Despite the common perception that Indian higher education, with such renowned institutions as the Indian Institute of Technology and the Indian Institute of Management, is superior to its Chinese counterpart, China's universities in fact beat India's in almost every international ranking.

According to the well-regarded Shanghai Jiaotong University (SJTU) Academic Ranking of World Universities, mainland China has two universities in the top 300, while India has none. Mainland China features eight times in the top 500, India only three. The SJTU rankings are compiled on the basis of university alumni and staff winning major academic prizes, the publication of highly cited research articles published in prestigious academic journals, and articles indexed in major citation indices.

According to Dr Subarno Chatterji, an English-literature professor at Delhi University with a DPhil from Oxford, there are no special incentives in India to attract top-quality academics from abroad. Salaries remain fixed at government-funded institutions by the University Grants Commission at Rs50,000 (US$1,130) per month for full professors, and there is "little concerted or organized interface between academia and the corporate world". Chatterji himself is contemplating leaving India to teach at Miyazaki University in Japan. "They pay their academics very well," he said wryly.

Calla Weimer, a fellow at the economics department of the National University of Singapore, said, "The NUS economics department increasingly sees China as a competitor in attracting and retaining good faculty, but the same does not hold for India." She added: "While Chinese economists are being lured back to universities in their home country, Indians seem more content to remain in Singapore."

The long strides China has taken toward literacy and basic education have put India to shame for years. For example in 2000, only 47% of all children in India had managed to complete Grade 5 of elementary schooling, as opposed to 98% of Chinese children. But China's remarkable recent renaissance in higher education means that even elite education in India is falling behind the standards being set to the north of the Himalayas.

In 1978, only about 1.4% of the Chinese population was enrolled in higher education, or held a university degree of some type. Today the figure is close to 20%. Currently, some 20 million students are studying in various kinds of higher educational institutions in mainland China.

However, China still has a considerable distance to go before its aspirations to create truly world-class universities become a reality. According to the SJTU rankings, the United States had more than 50 universities in the top 100, compared with zero for China.

The absence of critical thinking and freedom of expression in university classrooms - the result of China's authoritarian political system - hampers the development of academic debate. Michael Pettis, a professor at the Guanghua School of Management and former adjunct professor at Columbia University, said "the fundamental problems with Chinese education - an intensive focus on rote learning and an inability to develop arguments" - remain, despite the large inflows of university funding from the central government.

Zhang said, "We still suffer from too much governmental control and have little leeway to implement reforms without cumbersome permissions and procedures." Chinese universities are unable, for example, to develop new programs or curricula without prior governmental approval. "To do something good and experimental invariably means violating government rules," rued Zhang. He added that university presidents in China remain government appointees and are rarely academics.

Thus, despite having the funds available to make the cream of international academia fairly lucrative offers, even China's leading universities have so far only been able to recruit China-born or ethnic-Chinese scholars in any significant numbers.

"We have been able to improve our hardware considerably," said BNU's Han. "But as is always the case in China, the software takes longer."

Pallavi Aiyar is the Beijing correspondent for the Indian Express newspaper.

(Copyright 2006 Asia Times Online Ltd. All rights reserved. Please contact us for information on sales, syndication and republishing .)

http://www.atimes.com/atimes/China_Business/HB18Cb06.html
US firms thriving in China: Survey

BEIJING - American companies in China are prospering as they gain more access to domestic markets, despite the ongoing trade frictions between the two countries, according to an American Chamber of Commerce (AmCham) survey released February 16.

China's increasing market growth and improved regulatory environment have contributed to more AmCham-member companies producing for the domestic market and trying to become wholly foreign-owned enterprises (WFOEs), said the report, which is based on seven years of annual AmCham polls in China.

About 38% of respondents in 2000 cited market access restrictions as a top-three barrier to profitability, while 66% reported negative effects from business scope restrictions. However, from 2002 to 2005, two-thirds of the respondents were successful in expanding products and services offered in China.

"Market access, while it still is a challenge, has become much easier," Teresa Woodland, co-chair of AmCham's public policy development committee, said at a news briefing held for the report's release. She said the issue had dropped off the list of the companies' top-10 challenges of doing business in China.

Members were also increasingly more likely to have WFOEs, with 60% reporting one in 2005, versus 33% in 1999. Conversely, the percentage of AmCham members with joint ventures dropped to 27% in 2005, versus 78% six years prior. "That really exemplifies how things have changed here. Companies really do have a lot more options," Woodland said.

According to the survey, companies in recent years have also been able to introduce more products and services to the Chinese market. About 83% of respondents in 2005, versus 60% in 1999, listed producing goods and services in China for the local market among their top three reasons for entering China.

For the past three years, three-quarters of companies surveyed were making a profit, more than in previous years, according to the survey.

However, competition-based issues have been the top challenge faced by AmCham members in China. This trend is putting pressure on profit margins. In 2005, 70% of respondents reported increased competition from both foreign and local companies.

On February 14, the US Trade Representative Office released its first top-to-bottom review of Sino-US trade in five years. The review had positive comments on trade growth between the two countries in the past five years, but Washington also blamed China for its large trade deficit.

AmCham-China president Charles Martin said the chamber mostly agreed with the report's conclusions, noting US-China commercial relations are quite robust. As illustrated in the chamber's report, China is opening its markets, while US firms as well as the American and Chinese economies were benefiting, he said.

The US figures released last week showed the US trade deficit with China rose 24.5% last year, to US$201.6 billion. China reported that its surplus with the US last year was 114.2 billion because of different statistical standards.

The USTR report said it would take a tougher stance and set up a task force to ensure China abided by trade laws. In terms of boosting US business in China, however, the US "must move to a much higher level of trade promotion on behalf of small and medium-sized companies", Martin said.

Federal and state governments and industry and trade associations needed to open offices in China to promote their products, he said. "There is a large communication gap at present. China's marketplace is hungry, but our SMEs [small and medium-sized enterprises] need help to feed it," he said. "US efforts are modest compared to those of the EU and inadequate given the opportunities available."

Martin suggested using the World Trade Organization's dispute resolution process only as a last resort. "That process is lengthy and difficult and should be used only when other efforts have failed," he said, noting that bilateral negotiations, such as those used to solve last year's textile dispute, were fast and mutually beneficial.

Even so, Martin said important problems remained in areas such as intellectual property rights enforcement and transparency. "Much more needs to be done in these areas," he said. "They require commitments of substantial Chinese resources."

(Asia Pulse/XIC)

Water Cut Off For 20,000 People After Latest Chinese River Toxic Spill
http://www.sinodaily.com/reports/Water_Cut...oxic_Spill.html

Beijing (AFP) Feb 19, 2006 - Water supplies have been cut off to 20,000 people after another toxic chemical spill into a Chinese river, state press said Friday.


China Finds Dangerous Heavy Metals In Fish
http://www.sinodaily.com/reports/China_Fin...ls_In_Fish.html


China To Step Up Environmental Protection Efforts
http://www.sinodaily.com/reports/China_To_...on_Efforts.html


Shanghai Implements Tough New Auto Emissions Standards
http://www.sinodaily.com/reports/Shanghai_..._Standards.html

http://www.csmonitor.com/2006/0227/dailyUpdate.html
posted February 27, 2006 at 11:00 a.m.

Taiwan's president abolishes China reunification committee

Move angers China, worries US, may lead to crisis in Taiwan Strait.

By Tom Regan | csmonitor.com

The president of Taiwan Monday abolished the National Unification Council, a committee ostensibly responsible for overseeing reunification with China. Reuters reports that President Chen Shui-bian had been under strong pressure from China and the United States not to abolish the committee since he announced his intention to do so last week. But he went ahead with his plans anyway.
"Taiwan has no intention of changing the status quo and firmly opposes any use of non-peaceful means that will cause the status quo to change," Chen said after a meeting with his top national security advisers.
Chen, keen to shake off Beijing's claim of sovereignty over the self-ruled island, declared the National Unification Council has "ceased to function" and guidelines on unification have "ceased to apply."

China passed an antisecession law last March, which could lead to war if Taiwan declares formal independence.

The Associated Press reports that on Sunday, China accused Taiwan of inciting tensions by even debating the future of the committee.

"The further escalation of Taiwanese independence and secessionist activities, pushed by Chen Shui-bian, will no doubt cause a serious crisis across the Taiwan Strait," said the Chinese government statement.
Chen was elected on a pro-independence platform in 2000. The BBC reports that Chen said at the time he would not scrap the committee or its guidelines. But he now says the decision to close the council was based on China's military threat.
The Financial Times reports that Chen is also unwilling to reassure the United States, its only major ally, that he will not declare Taiwan's independence from China, a move likely to lead to war.

Mr Chen's aides said his hardline stance had arisen from deep frustrations over US-Taiwan relations. After China enshrined its threat of military force against Taiwan in March last year, Taiwan heeded Washington's advice and refrained from aggressive reactions. But Taipei feels the island has been weakened rather than received anything in return.
The United States is legally committed to make sure that Taiwan is defended from any attack from China. There was no word Monday from the American Institute in Taiwan – the de facto US embassy – on the move by Chen.
The official Chinese news website, Xinhuanet.com, reported Monday that Chinese in America denounced the Taiwanese government's decision to abolish the committee. Chuen Hsiung Hua, president of the New York Association for Peaceful Unification of China opened a symposium this past weekend by voicing what he said was the Chinese community's opposition to the move.

After visits to the mainland by leaders of some major parties on the island province last year, relations across the Straits have improved with deepening trade contacts and frequent personnel exchanges, Hua said. The Taiwan authorities, however, turned a deaf ear to the reality and attempted again to instigate conflicts both inside the island and across the straits, Hua added.
By doing so, Chen Shui-bian is aimed at strengthening his position within the Democratic Progressive Party (DPP) at the cost of provoking tension in cross-Straits relations, Hua said, stressing that these attempts, which run counter to the wishes of Taiwan compatriots, will only make himself even more isolated, bring instability to the region and damage the already flagging economy of the island province.

Reuters reports that Taiwanese businessmen working in China have also been critical of Chen's decision. Taiwan investors have invested more than $100 billion in China since détente began in the late '80s. Chen Guoyuan, secretary general of the Association of Taiwan-Funded Enterprises in Beijing, said the wishes of the group were very simple: "We require only the rights of existence and development, and we don't want Taiwan to set any grey future for us

http://www.atimes.com/atimes/China/HC01Ad01.html
Diminishing status of Taiwan's status quo
By Craig Meer

TAIPEI - Just three weeks after raising the idea in his Chinese New Year's day address, Taiwan President Chen Shui-bian abolished the National Unification Council (NUC) and National Unification Guidelines (Guidelines). The move is the latest step in a saga of increasing Taiwan-China tensions that is particularly significant for what it diminishes - the status quo in cross-strait relations.

While the initial proclamation on Monday used a lawyer's language (Chen is a trial attorney by profession) and spoke of "terminating" (zhongzhi) the operations of the NUC and Guidelines rather than "abolishing" (feichu) them outright, this wording should not be much consolation for Taiwan's self-appointed guardian, the United States.

In Taiwan, freezing a government agency is code for getting rid of it slowly but inevitably. The Taiwan provincial government and the National Assembly both started their trip to the dustbin of history via this route.

The status quo in cross-strait relations is a term that seems to mean all things to all people. Some, including pro-independence elements in Taiwan's ruling Democratic Progressive Party (DPP), believe that it refers to Taiwan's indivisible status as a sovereign state, and this is probably what Chen believes as well.

The chairman of the opposition Nationalist Party (Kuomintang or KMT), Ma Ying-jeou, has said recently he sees it as an unspoken agreement between Beijing and Taipei to define "greater China" as both sides see fit (the so-called "1992 Consensus").

However, implicit in all the definitions advanced by stakeholders - including those of the US and China - is a recognition that Taiwan's political status is currently undecided or open to contest. It's the difference between Taiwan's de facto or practical independence in the international arena that few openly dispute, and its final de jure status that remains open to debate between pro-independence and unificationist groups in Taiwan today.

This is the essence of the status quo, and the reason Monday's announcement is not just more hot air in the cross-strait imbroglio.

The NUC was established by executive decree when the KMT was in power during the early 1990s. Its first and arguably only important function was to draft the National Unification Guidelines, which commit the Republic of China (Taiwan's official title) to uniting with the mainland at some distant point in the future. The Guidelines establish a series of stringent criteria for Taiwan's return to the motherland that include China's complete transition to democracy.

The end game of the Guidelines is less important than their mere existence. If uniting with the mainland is the island's ultimate goal, then now the place is in political limbo.

Being in limbo formally satisfies Beijing, which has declared its intention to invade Taiwan if the island makes the full transition to a de jure independent state. It gives credence to America's unwieldy "one-China" policy, which allows the US to recognize Chinese sovereignty even while providing military support to the island of Taiwan.

Finally, being in limbo also allows the Taiwanese people to concentrate on the things they do best: namely developing the island as a prosperous democracy and a shining example of the potential for indigenous modernization.

By freezing the NUC and Guidelines, Chen has commenced the task of removing one of the few substantive government documents in Taiwan that indicates the current status of the island is unclear. Contrary to the president's claims, this is anathema to the spirit of the status quo, which calls for more ambiguity, not less, in the island's external politics.

Some observers have argued that the status quo has already had its day, and Chen's initiative is merely a response to external events. True enough, the institution has suffered badly in the past 12 months under the weight of Beijing's Anti-Succession Law. This document codifies a military response from the Chinese government in the event of a formal declaration of independence in Taiwan.

In so doing it not only reduces Chinese political and strategic options in the event of a cross-strait showdown, it demonstrates a determination to decide the political destiny of Taiwan. None of this is good for an institution that is all about leaving Taiwan's status up in the air.

But Chen's enthusiasm for eradicating the NUC and Guidelines is only partly driven by external factors. In large measure, the timing of the event - following the DPP's resounding defeat in last year's local elections - suggests it is all about regaining the initiative in domestic politics.

KMT chairman Ma has been wrong-footed by Monday's announcement, and appeared extremely uncomfortable while participating with Chen and other leaders in Taiwan's 228 celebrations on Tuesday. [1] As a short-term political strategy for dealing with the opposition, Chen is on a winner.

But more can be expected from him. Finding ways to reinforce the status quo is not only in Taiwan's objective interests, according to nearly 20 years of polling data, it's also what 70% or more of the Taiwanese population actually want.

The unenviable goal for all Taiwanese leaders is to deliver this goal in the face of Chinese aggression. Getting rid of the NUC and Guidelines adds to the problem rather than fixing it.

Note
[1] This memorial celebration marks the date, February 28, 1947 of an uprising by Taiwanese people against the Chiang Kai-shek's Kuomintang government in which many people were killed.

Craig Meer is a freelance writer based in Taipei.

(Copyright 2006 Asia Times Online Ltd. All rights reserved. Please contact us for information on sales, syndication and republishing .)

http://www.atimes.com/atimes/China_Business/HC01Cb06.html
Chinese shipping aims for global leadership
By Michael Mackey

SHANGHAI - A tantalizing and expansive view of what China's shipping and shipbuilding industries could become in the next five years is emerging, glimpsed occasionally through events such as the recent launch of the first Chinese-built LNG (liquefied natural gas) carrier.

The nautical industry taking shape is one that has restructured and expanded on an almost epic scale, one more open to the rest of the world in terms of technology, exchanges and capital, and one that poses a great challenge to China itself, its partners and its rivals.

Better ships, better ports, more openness
Xu Zuyuan, China's vice minister of communications, has outlined a marine-development strategy that has three key strands: development of a "reach for the stars" type of shipping fleet; a massive improvement in shipping-related infrastructure both on coastal and river ports; and opening the shipping sector to the outside world.

Regarding the first goal, Xu said China will "speed up development of [the] shipping fleet in terms of enlargement, specialization and modernization levels, thus enhancing its international competitiveness ... While [the] bulk-carriers fleet has to be expanded, great efforts will be made in developing [an] enlarged, specialized and modernized fleet of container ships, oil tankers, LNG carriers and ro-ro vessels." (The last refers to roll-on, roll-off vessels - a type of ship designed to carry wheeled cargo such as automobiles or railcars.)

Xu also promised a huge leap in infrastructure. "Top priorities in coastal ports construction will be wharves and berth places suitable for large-sized container ships of the fifth- and sixth-generation [type] or 300,000-deadweight-ton (dwt) crude-oil tankers, 200,000dwt ore carriers and 50,000-100,000dwt coal carriers." In short, many massive ports will be built all along China's coast to complement the just-built Yangshan Deep Water Port in Shanghai.

An important part of the infrastructure plans is accelerated construction of facilities for inland water transport. China's river ports have been neglected compared with developed-country counterparts such as those along the Mississippi River in the US or the Rhine in Europe. The key point, according to Xu, is the building of "two transversal [waterways] - one longitudinal [waterway] and two networks", including a number of inland harbors with advanced technology.

"Moreover, to lay a solid foundation [for] modernized inland water transport, enlargement levels of harbors as well as their specialization, mechanization and informatization levels are all to be enhanced," said Xu. Improved riverine transport is expected to accelerate development of China's vast interior, especially by facilitating the movement of bulk freight, given that rail freight remains in chronic short supply.

Xu was also clear that a greater welcome will be given to foreign investment in shipping operations. While not entirely new, this aspect of the modernization plans answers in part the obvious question about how the strategy will be paid for. "Foreign funds, technologies and management experiences will be further attracted to develop ocean shipping and harbor businesses by way of Chinese-foreign joint ventures or cooperations," he said.

Domestic shipping, from Wei to Fu
Notwithstanding the apparent red carpet for foreign players, China's own shipping industry is hardly a soft touch. A number of large and internationally competitive groups already exist, such as China Ocean Shipping (Group) Co (COSCO), China Shipping Corp (CSCO), the China Merchants Group, and a number of up-and-coming mid-sized international shipping enterprises, such as Nanjing Oil Shipping Co and Hebei Ocean Shipping Co.

As the Chinese shipping industry transitions from being part of the planned economy to a more open system, a new generation of tycoons who sing the market's tune has been created. Two of the most prominent of these are Fu Yuning, president of the Beijing-backed ports-focused conglomerate China Merchant Holdings International, and Captain Wei Jaifu, president and chief executive officer of COSCO Group. Of the pair, Wei Jaifu probably has more of an international profile.

Wei recited a poem as his company was listed on the Hong Kong bourse and was the expansive host of a recent major shipping conference in Shanghai. He also doubles up as chairman of the China Shipowners Association, which gives him ample scope to act as a cheerleader for China's shipping industry and its modernization - a task he undertakes with considerable elan, tempered with a strong pinch of realism.

A key part of Wei's outlook is encouraging all industry players to build on China's success, and to grow the Chinese market even further by creating win-win partnerships, while not forgetting the many challenges this involves. Wei is also an enthusiastic advocate of the shipping industry's becoming an e-business, although he concedes there are problems.

China, he said at a recent conference, remains a key driving force for the prosperity of world shipping, something where the opportunities can be grasped and the challenges dealt with "only with extensive cooperation". A fluent English speaker, Wei sees the future as one in which China and its shipping industry will shift from quantity to quality, and says this "will push shipping companies to create innovative models".

Fu's China Merchant Holdings International is said by many shipping observers to be the best bet for investors, as it is involved in terminals in both the Yangtze and Pearl River deltas as well as Bohai Bay in the northeast, including a recently purchased stake in Shanghai International Port Group (SIPG).

"Acquisition of shares in SIPG is a crucial move for China Merchants to further complement its layout of strategic hub ports in China, improve its asset quality, rationalize [its] asset structure, enhance the return from assets and ultimately bring higher returns to our shareholders," said Fu in a comment on the strategy of the group.

However, he also said in another statement that "our growth will be in the terminal sector", reflecting a certain shift away from the core shipping business to infrastructure operations. The company is the sole or partial owner of a large group of mostly infrastructure-related subsidiaries, including China Merchants Shekou Industrial Zone, China Merchants Logistics Group Ltd, Huabei Expressway Co Ltd, Hoi Tung Marine Machinery Suppliers Ltd, Haihong Coatings Co Ltd, and the China Merchants Bank.

Fu, 48, is a marine engineer who earned a doctorate from Brunel University in England before doing some post-doctoral research. He told one reporter that "2006 will be an interesting year. We'll see all the strategic investments come into the earnings stream."

The Shanghai government's role
The central government and, in particular, the Shanghai municipal government are major movers of the country's shipping industry. The immense Yangshan deepwater port, whose first phase opened recently and was intended to solve the problem of the Huangpu River being too shallow for deep-draft container ships, isn't so much the end goal for these officials as the start of a much more ambitious project: making Shanghai a world shipping center.

The new hardware "marks the formation of the framework", Xu Peixing, director of the Shanghai Municipal Port Administration, told local media. "Naturally a lack of deepwater berths has been hindering Shanghai's development on the world stage. The present construction project will help the city catch up."

Further up the hierarchy the view is similar but more forcefully expressed, with no less a personage than the city's mayor advocating major changes and the building of the east coast metropolis into an international shipping hub.

"The general goal of our city is to become an international economic, financial, trade and shipping center," Mayor Han Zheng told a recent CEO Roundtable organized by China Daily. "We first designed two stages for the achievement of our goals. The first is to build a framework for an international economic, financial, trade and shipping hub by 2010, and the second stage is fully accomplish that by 2020."

Although the mayor went on to say there were several major changes the city had to digest, including the transition from a planned economy to a market economy, his pronouncements were more important than mere civic boosterism. The mayors of Chinese cities are far more than simple administrators, wielding substantial economic and "can do" clout. The mayor's job in Shanghai is also a stepping stone to bigger things, with two of China's recent leaders, former premier Zhu Rongji and former president Jiang Zemin, both having been mayors here.

Han Zheng has not yet been tipped for such a role, but he is bullish on Shanghai's future as an international shipping city.

"The cargo handled through Shanghai ports will exceed 400 million tons this year, a volume no port in the world achieved last year. In particular, container handling will surpass 17 million twenty-foot equivalent units [TEUs] this year, up 3 million TEUs. Based on this growth the volume will likely exceed 20 million TEUs next year. By my reckoning the growth of Shanghai's handling capacity will continue to grow at 3 million TEUs each year."

Shipbuilding
Leading the fray in the shipbuilding context is Tan Zuojan, vice president of the China State Shipbuilding Corp (CSSC), who aims to make his company the largest shipbuilder in the world. The Japanese and South Koreans have been warned, and both are anxious as their bigger and lower-cost rival is now emerging in earnest.

Tan has outlined a five-pronged vision for CSSC in the coming half-decade: redoubling efforts to construct a new shipbuilding base, adjusting the product mix, using more science and technology in product development, enhancing overall competitiveness, and pursuing more foreign linkages.

To many observers, the real surprise lay in the last point. Tan advocated moving from the existing approach of a reclusive shipbuilding industry, one virgin to overseas involvement, and offered not one but two modes of international linkage. The first is foreign exchanges and cooperation; the second, less standard, was an invitation for overseas investment. "We sincerely welcome overseas capital actively to take part in the construction of CSSC's new shipbuilding bases and marine-related equipment production bases," the text of his speech said. Foreign investment has galvanized many other sectors of the Chinese economy, and it's now seemingly shipbuilding's turn.

As for the actual building of ships, the focal point is is the building of what is in effect the Shipbuilding Island of Changxing just outside Shanghai. Changxing may eventually become the largest shipyard in the world. By 2015 its shipyards are projected to have a capacity of 8 million dwt. Other shipyards in the vicinity will have a total capacity of 12 million dwt - and that is to be just half of China's production.

"We will step up the new shipbuilding base project in Changxing Island," said Tan. The real impact of Changxing may actually not be the expansion of capacity that it will allow, impressive though this is, but in the across-the-board product mix strategy it appears to be a catalyst for.

"We will implement [a] diversified development strategy by centering on the shipbuilding, ship repairing, shipboard-equipment production and offshore engineering as well as other non-ship businesses," Tan said.

Nor is Changxing or CSSC alone in this. A more thoughtful and detailed view but echoing much of what Tan said came from Chen Minjun of the smaller but no less proactive Shanghai Waigaoqiao Shipbuilding Co. Its goal, according to Chen, is "to develop an annual shipbuilding capacity of 3 million dwt by 2010 and to do this in part by developing other vessel types such as [the] Aframax products oil tanker, very large crude carriers [VLCCs], container [ships] and floating production storage and offloading [FPSO] vessels."

This lateral expansion is to be complemented by added technological depth. CSSC will, according to Tan, adhere to a more technological approach in "a big way". In nitty-gritty terms this means establishing shipbuilding research centers and using new, high and information technology to push their own innovative capabilities forward.

Bulk carrier developments
There have been some interesting developments within the bulk-carrier subsector where, for the past two years, research on an "optimized type bulk carrier" has been carried out jointly by several important shipping players. Among the participants have been the China Association of Shipbuilding Industry, the Chinese Society of Naval Architecture and Marine Engineering (CSNAME), both major Chinese shipbuilding corporations, the China Classification Society, and COSCO, with the International Maritime Carriers (IMC) invited as well.

The result, said Jin Caikuan, vice president of CSNAME, has seen the development of four new-generation bulk-carrier types; one "handy-sized" type of the 50,000dwt class, one Panamax type of the 70,000dwt class, one T-max Panamax type of 100,000dwt, and one Suez Canal type of 170,000dwt class.

"All ... four vessel types have good economic indicators and technical performance, [and meet] new requirements of being green, environmentally friendly, safe and healthy ... 48 vessels have been ordered to date. Its expected that container ships and oil tankers will also be optimized [in] the same manner as ... bulk carriers," said Jin in a recent speech. Jin also said recently that "superior ore carriers are jointly being investigated and designed by Brazil and China".

Container ships, LNG carriers, VLCCs
China is currently "studying [the] research and development" of 8,000TEU-class container ships and large-type LNG carriers of 140,000 cubic meters' capacity, said Jin. It has also started batch production of such large vessels as VLCCs, 5,668TEU super-large-type container ships and 175,000dwt "cape size" bulk carriers.

And it builds them fast, according to CSSC's Tan Zuojun, who boasted in a speech that the shortest building time for the 74,500dwt bulk carrier is only eight months, with the shortest time on the building berth only 62 days. On top of this, a method called semi-series building, which sees four ships built in parallel in one dock, has already been introduced to the construction of the 175,000dwt bulk carrier, he said.

Jin estimated that China would complete more than 10 million dwt of new vessels this year, giving it about 18% of the global market, and making it already the world's second-largest builder of container ships and bulk carriers. All this is of course not only a challenge to the Japanese, who recently lost their No 1 shipbuilding slot to the South Koreans, but to the Koreans as well, who may find that they can't hold the pole position against the sheer size and fundamental cost advantage of the emerging Chinese shipbuilding industry.

Michael Mackey is a Shanghai-based freelance writer.

(Copyright 2006 Asia Times Online Ltd. All rights reserved. Please contact us for information on sales, syndication and republishing .)

http://www.wpherald.com/storyview.php?Stor...27-102414-4509r

China offers missile replacement for Bolivia
By Bill Gertz
The Washington Times
Published February 27, 2006


WASHINGTON -- China's communist leaders are advising the new leftist government in Bolivia to avoid upsetting the United States, but at the same time have offered to replace shoulder-fired missiles that a CIA-led operation removed from the South American country last year, U.S. intelligence officials said.

Bolivian President Evo Morales, during a recent visit to China, was told he should avoid actions that could lead to U.S. intervention and perhaps the ouster of his government, said officials familiar with intelligence reports.


The Chinese fear the United States will orchestrate a coup against Mr. Morales using sympathetic officers within the Bolivian military.

A Bush administration official said China told Mr. Morales, "You have to be nice to the United States," and the advice is part of Beijing's long-term strategy to undermine U.S. influence in the region and other parts of the world.

Before Mr. Morales' election in December, the CIA led an operation that secretly took 38 Chinese-made HN-5 surface-to-air missiles. The agency was helped by Bolivian security officials concerned that the weapons would fall into the hands of terrorists linked to the new ruling Movement to Socialism (MAS), Mr. Morales' party.

The official said a Chinese missile replacement "would be a very provocative act."

A Bolivian Embassy official said he had no information about his government's plan to obtain Chinese missiles. A CIA spokesman declined to comment.

The missile operation was part of a program by the CIA and other international intelligence services to limit the spread of so-called "manpads," or man-portable air defense missiles, that terrorists could use against commercial aircraft.

The missiles were flown to the Army's weapons facility at Aberdeen, Md., and dismantled.

The election of Mr. Morales and the consolidation of power by Hugo Chavez in Venezuela, and both nations' growing military and intelligence ties to Cuba are raising new concerns. Both Bolivia and Venezuela also have increased contacts with Iran, a state sponsor of international terrorism, the officials said.

A U.S. military official said any Chinese offer would include missiles more advanced than the HN-5s, which are a Chinese version of the Russian-made SA-7 shoulder-fired missile.

If the missiles are supplied, "China will take another step toward solidifying its nascent position as an alternative to the United States for the supply of military equipment, along with any political influence that accompanies that role, a main objective for any sale," the official said.

During his visit to China in early January, Mr. Morales met with Wang Jiarui, head of the international department of the Communist Party. The department is the party's main liaison with foreign communist and leftist parties. He also met with Chinese President Hu Jintao.

The Chinese government is rapidly increasing its influence in South America. Senior Chinese political and military officials have made numerous visits to the region in the past several years. China is seeking to obtain natural gas from Bolivia, which has large reserves.

China has signed an estimated 40 agreements with South American governments, including some that involve military training programs.

The Morales government also is developing close military and intelligence ties to the Cuban government. Mr. Morales announced in January that he has invited Cuban and Venezuelan intelligence teams to conduct security sweeps and to prevent what he called "imperialist intervention."

Mr. Morales, a former coca farmer, announced in January that he plans to dismantle the U.S.-backed military Joint Task Force that was involved in eradicating coca plantations in an effort to prevent the use of the plant for illicit drugs.

Defense Secretary Donald H. Rumsfeld has called the election of Mr. Morales "worrisome."

March 1, 2006
Beijing Accuses Taiwan Leader of 'Grave Provocation'
By JOSEPH KAHN and KEITH BRADSHER
BEIJING, Feb. 28 — President Hu Jintao of China reacted sharply on Tuesday to the decision by President Chen Shui-bian of Taiwan to terminate the island's unification council, calling it "a grave provocation" and "a dangerous step on the road toward Taiwan independence."

Mr. Chen on Tuesday completed the formalities for scrapping the National Unification Council and guidelines for unification with mainland China. Though largely moribund, the council and the guidelines were symbols of Taiwan's political links to Beijing that Mr. Chen had once vowed to preserve.

Mr. Hu said the move threatened stability in the Taiwan Strait and the region.

"We will continue to strive for the prospect of peaceful reunification, but never tolerate the secession of Taiwan from the motherland," Mr. Hu said in remarks published by the official New China News Agency.

The Taiwanese government rejected the mainland's objections, repeating Mr. Chen's position that Taiwan was trying only to preserve a balance in its relations across the Taiwan Strait as China builds up its military forces facing the island.

"The criticism by China is groundless," said Joseph Wu, the chairman of the Mainland Affairs Council, the Taiwan government agency that handles relations with Beijing. "What we are doing has nothing to do with changing the status quo."

But experts in China said the action had shaken Beijing's confidence that Mr. Chen's recent electoral setbacks and pressure from Washington would check his drive for formal independence. Beijing had hoped that the upset victory of the opposition Nationalist Party in local elections last year had stymied Taiwan's independence movement.

And many Chinese foreign policy experts expected that the Bush administration would do more than it had done to prevent Mr. Chen from trying to legalize Taiwan's de facto independence.

"The reality is that even under heavy American pressure, Chen Shui-bian is determined to provoke a big response from China," said Huang Jiashu, a Taiwan expert at People's University in Beijing.

"He pushes through this measure today and something else tomorrow," Mr. Huang said, adding that "you cannot rule out a confrontation before 2008," when Mr. Chen's second and final term ends.

Mr. Chen still faces an uphill struggle to achieve formal independence for Taiwan, the main goal of his core political constituency. His approval ratings have sunk below 30 percent in some recent polls. The Taiwan legislature, which would have to approve changes to the island's constitution, is controlled by the Nationalists, who favor more cordial ties with the mainland.

Moreover, the United States, Taiwan's only major military and political partner, has tried to check creeping moves toward independence. Washington needs China's help in managing pressing problems like the nuclear programs in North Korea and Iran, and seems determined to prevent Taiwan from undermining diplomatic ties to Beijing.

Even so, the scrapping of the unification council, which Mr. Chen first signaled in late January, was widely viewed in Beijing as a test of how successfully the United States could constrain Mr. Chen.

After a concerted diplomatic push by the Bush administration, Mr. Chen modified the wording of his order, saying the council would "cease to function" rather than be abolished, the term he had used in January. He also reiterated his pledge to maintain the status quo in cross-strait relations.

The pledge and the wording change appeared to reassure Washington. The State Department issued a statement on Monday noting Mr. Chen's decision not to abolish the council formally, suggesting that Washington considered that a significant concession.

But in Beijing's view, Mr. Chen effectively prevailed over Washington's objections.

"Although he did not use the term 'abolish' and changed the term to 'cease function,' this is merely a word game," China's Taiwan Affairs Office said. "Basically he is tricking the Taiwan people and international opinion."

Yan Xuetong, an international relations expert at Tsinghua University in Beijing, said Mr. Chen had shown that he could manage American pressure. Though Mr. Chen violated his onetime pledge to the United States to leave the unification council in place, he ended up winning tacit American support for his effort to terminate it, Mr. Yan said.

Mr. Huang of People's University gave the United States credit for forcing at least a nominal concession from Mr. Chen, but said China would probably look for President Bush to make a fresh commitment to oppose Taiwanese independence, perhaps during the planned visit of President Hu to Washington in April.

In Taiwan, some lawmakers argued that Mr. Chen's move was vital to preserving a balance in cross-strait relations. Hsiao Bi-khim, an influential lawmaker from Mr. Chen's governing Democratic Progressive Party, said Mr. Chen had been increasingly worried that China had been trying to gain the upper hand.

"He feels that you need to do something drastic to pull things back into balance," she said, adding that she did not expect any further initiatives on sovereignty issues..

Joseph Kahn reported from Beijing for this article, and Keith Bradsher from Taipei.



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http://csmonitor.com/2006/0302/dailyUpdate.html?s=mesdu
Report: A democratic China could be 'great risk' to Asia

An Australian think tank suggests democracy might lead to a hostile, populist Beijing.

By Arthur Bright | csmonitor.com

A democratic China may bring as much harm to Asia as it does good, according to a new report from an Australian defense think tank.
In an Australian Strategic Policy Institute report, economist David Hale warned that the peaceful, predictable economic engagement policies of the current Beijing could be undone by the greater democracy the next generation of Chinese leaders might bring, writes Agence France-Presse.

"When a fifth generation of leadership assumes power in ten to fifteen years, China could become more open and tolerate greater dissent," the report said.

"Such a political opening could then open the door to forces such as nationalism and populism. There is no way to predict exactly how Chinese politics will evolve in a more democratic era, but it is a development which could produce new challenges for the countries of East Asia after 2020.

"An authoritarian China has been highly predictable. A more open and democratic China could produce new uncertainties about both domestic policy and international relations."





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Poll: US troops signal desire to come home

02/28/06

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Such uncertainties could include military threats to other nations in the region, Hale writes, though he notes that such threats would be likely only if "domestic political instability... produced an upsurge in nationalism and a search for external scapegoats."

Australian newspaper The Age reports that Mr. Hale sees similiarities between a democratic China and the "banana republics" of Central and South America, in part due to the increasing economic divide in China between the rural population and wealthy urbanites.

"If China had a democratic regime, there is a great risk that the increasing income inequality in the country could produce a populist regime which would suspend economic reform and plunge the country into the kind of inflationary crises which have characterised Latin America for much of the modern era," Mr Hale said in the report.

The potential for trouble is already apparent from the Chinese government's own admission of a seven-fold increase in protest marches in the last 10 years, many by rural people upset about the loss of their land to property developers or urban people concerned about job losses.

Hale adds that China needs "more freedom of the press, greater transparency plus other developments to increase government accountability and allow more debate about policy choices."

While he underscores the peaceful predictability of current Beijing policies due to its reliance on foreign trade within Asia, Hale acknowledges that the risk of hostile Chinese action still exists, especially because of flash points like Taiwan and North Korea. In a portion of his report published in The Australian daily newspaper, Hale draws comparisons between the rise of China and that of pre-World War I Germany.

The fact that Germany helped to launch a war with Britain in 1914 is a reminder that economic integration does not guarantee that a country will have a benign foreign policy. On the eve of World War I, 76 per cent of Germany's foreign trade was with other European countries. As Norman Angell wrote in 1911, there should never have been a European war because it was economic madness for the players. Angell was vindicated by events but Germany nevertheless allowed her alliance with Austria-Hungary to set the stage for a conflict that engulfed all the major European nations....

The experience of 1914 is a warning that one cannot depend upon economic factors to resolve political conflicts, but the situation in East Asia today contains fewer political risks than Europe during the early 20th century. The challenge for the US, China and Japan is to continue minimising the potential for conflict through effective dialogue, while pursing the economic integration that will encourage further political co-operation.

One way for the US to minimize the potential for conflict with China is by strengthening ties with India, reports The Christian Science Monitor. As part of his diplomatic trip to India, President Bush looks to build ties with India as a way to influence the other - communist - giant in the neighborhood, China.

A commentary in the Hindustan Times argues that the US aims to create such influence by promoting democratic values hand-in-hand with India.

[Bush and US secretary of State Condoleezza Rice] are in search of substantive partners in this global endeavour of pushing democratic values. The partners themselves must be deeply wedded to free electoral process and pluralism. Thus the fateful words on the Bush-Singh accord of July 18, 2005 : "create (together) an international environment conducive to promotion of democratic values, and to strengthen democratic practices in societies which wished to become more open and pluralistic".

These are activistic words indeed. Of course, the balance of power in Asia in the 21st century between a dictatorship of the proletariat, China, and a thriving democracy, India, is of major significance in the Bush-Rice decision matrix.

But if economic reform in China is widely seen as, at least indirectly, fostering democratization, democracy in India is seen by some as a drag on the kind of economic progress that would make India a stronger counterweight to China. Opinions differ on how much democracy has helped economic growth in India, and democracy's effect on economic growth will likely play a large part in China's decision to adopt democratic reform.

Trudy Rubin, a columnist for The Philadelphia Inquirer, writes that democracy gives India opportunities for innovation and productivity that China cannot match.

And India's democratic openness and rule of law have encouraged a wave of technological innovation that China still lacks. "There is a degree of freedom that creates aspirations," says Anand Mahindra. This Harvard M.B.A. returned home and now is vice chairman of a family firm, Mahindra & Mahindra Ltd., that produces automobiles and farm equipment, among other items. Indian democracy means that no one censors Google, and the country is way ahead of China in the information-technology sector. Independent thinking also produces better managers.

Although it receives fewer foreign and investment funds, India uses the capital more productively, I was told by Massachusetts Institute of Technology professor Huang Yasheng at Davos. Maybe that productivity comes from the fact that managers and local officials aren't protected from scrutiny the way they often are in China. India's democracy provides a check on corrupt government officials.

But Carl Mortished writes in The Globe and Mail that obstacles in India's democratic society snag economic progress, whereas no such obstacles exist for China.
There is a lingering doubt that the Indian tiger will be roused from its 50-year sleep. India is not China; even as the [Bombay Stock Exchange's Sensitive Index] soars, the government reached a deal with airport workers, promising them job security after a five-day strike created stinking rubbish heaps. Where China's despotic gerontocrats can bulldoze teeming slums for new highways, India's leaders must negotiate. The government sees a need for an extra 100 gigawatts of power by 2012, but the dams and power stations will be fought every inch of the way by petty officials, hysterical NGOs and any babu after a buck.

These issues are unvoidable for India, Mr. Mortished writes. "It's the price India pays for democracy."

China urges renewed talks on Iran nuclear crisis

BEIJING (Reuters) - Chinese Foreign Minister Li Zhaoxing urged Iran on Sunday to resume talks with Russia and the European Union on its nuclear programme as soon as possible, a day ahead of a key meeting of the U.N. atomic watchdog.

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http://www.atimes.com/atimes/China_Business/HC04Cb05.html
China embraces the atom
By Frederick W Stakelbeck Jr

With domestic energy demand expected to increase steadily over the next several decades and with a precipitous decline in domestic production from existing oil and natural-gas fields, China finds itself at an unavoidable "energy crossroads" that will define its growth, influence and prosperity for years to come.

Recognizing the potential consequences associated with any protracted energy shortage, Beijing has embraced nuclear power as a solution. According to the China National Nuclear Corp (CNNC), the government body responsible for much of the country's nuclear-power program, China plans to invest US$48 billion to build 30 nuclear reactors by 2020. Currently, the country has nine reactors in operation with another two under construction at a combined cost of $3.2 billion.

"Nuclear-power development is a must for China, especially in the coastal areas," said Shen Wenquan, vice chairman of the Committee for Science and Technology for CNNC.

The US Department of Energy's Energy Information Administration (EIA) predicts China's annual nuclear-energy consumption could rise to 66 billion kilowatt-hours in 2010, up dramatically from 16 billion kWh in 2000. In addition, EIA predicts the country's nuclear electricity consumption will rise to 129 billion kWh by 2015 and 142 billion kWh by 2020, surpassing both Canada and Russia. Striking a balance between energy demand and supply will be a key objective for Beijing's nuclear program moving forward.

The country's 11th Five-Year Plan (2006-10) supports progress in the areas of nuclear-power-plant development and construction. As a result, more than 16 Chinese provinces, regions and municipalities have already announced plans to participate in nuclear-power-plant construction. CNNC president Kang Rixin recently noted that this construction boom could increase the amount of nuclear power generated from 2% of the country's total energy capacity to 6% by 2010, with as many as 32 additional reactors built within the next 15 years.

Several factors have encouraged Beijing to pursue nuclear energy. First, chronic electricity shortages of 35 million kW in 2004 and 25 million kW in 2005 forced Beijing to recognize the country's deteriorating energy situation. Second, continuing difficulties with the Chinese coal-mining industry, the country's main energy source, have become inescapable. Coal produces 74% of China's energy; however, the industry is beset by dangerous safety issues, with more than 6,000 killed in 2005 in mining-related accidents. In addition, the negative environmental impact of greenhouse gases makes coal an increasingly unattractive energy alternative.

Third, China's growing reliance on foreign oil and liquefied natural gas (LNG) has placed the country in a precarious position. For China, dependence on oil means dependence on the Middle East - a complex and potentially explosive region that currently provides 60% of the country's oil imports. Predictions by some industry experts that China will import more oil than the United States within the next two decades has raised fears in Beijing that oil could control the country's destiny, making the identification and development of alternative energy sources a key priority.

Fourth, the skyrocketing cost of building the country's oil and LNG infrastructure has raised concerns in Beijing. Intricate pipeline-construction agreements involving foreign countries; the construction of a fleet of modern LNG carriers and updated and expanded railroad systems; and the construction of large transport terminals capable of handling huge quantities of oil and LNG continue to place an enormous financial burden on the country.

Zhang Guobao, vice minister in charge of the National Reform and Development Commission (NRDC), noted recently that China's tight power squeeze could ease somewhat this year as new nuclear plants come online. Beijing has also announced that it will continue its prospecting efforts in the oil-and-gas-bearing basins in Bohai Bay, Songliao, Tarim and Ordus, while coal exploration will continue in Shaanxi, Shanxi, Shandong and Anhui provinces.

A key component of China's energy program is the development of alternative nuclear power technologies. This year, a $370 million, 190-megawatt nuclear plant using "pebble-bed technology" is expected to begin construction. Built by China Huaneng Group, parent of Huaneng Power International Inc, the power plant will use new high-temperature, gas-cooled reactor technology instead of the pressurized-water technology.

Pebble-bed technology is intended to address the safety issues of older reactor technologies; it is theoretically impossible for a pebble-bed reactor to melt down, since even if all safety devices were shut off and staff literally left the site, the reactor could not achieve a high enough temperature to melt its own materials, and therefore would simply cool slowly while remaining physically undamaged.

Opponents of the new technology, such as Liu Wei, vice president of the Beijing Institute of Nuclear Engineering, say it is cost-prohibitive - $500 a kilowatt more than other commercially available technologies. Other critics have noted that pebble-bed technology can only be used in reactors of less than 300MW, making it incompatible with a majority of China's new reactors, which are 1,000MW or more. However, pebble-bed advocates suggest multiple reactor units at the same site as a way of circumventing this shortcoming.

In another move designed to develop alternative energy technologies, China has partnered with the United States, the European Union, Russia, South Korea, India and Japan to experiment with nuclear fusion. Fusion reactions, distinct from the fission reactions that power all operational nuclear reactors today, produce energy by fusing lighter atomic nuclei together into heavier ones at extremely high temperatures and pressures.

"Fusion will be the final way out for the future," said Shen Wenquan of CNNC. But fusion research has been conducted for decades at enormous cost, and while technical progress has been made, no practical prototype of an operational fusion reactor has been produced so far.

To power its new generation of nuclear power plants, China will need enormous amounts of uranium from a diverse pool of providers. The country's known resources of 70,000 tonnes of uranium, from several domestic uranium mines, is sufficient to meet only short-term needs. The State Council announced last month that uranium prospecting will be emphasized, including additional domestic exploration and mining.

Also last month, it was reported that Beijing would consider the joint development of uranium mines with foreign countries as a possible solution to its supply problems. Shen said, "If there's a possibility of developing these resources through [a] joint venture, then we can discuss that also."

Although China has agreements with Kazakhstan, Russia and Nambia, further talks have commenced with Australia and Canada to fuel the country's expected nuclear-reactor base.

China's push toward nuclear power has attracted the attention of the international nuclear-power industry, with hundreds of well-known companies such as US-based, UK-owned Westinghouse, France's Areva and Russia's AtomStroyExport battling for a chance to participate in reactor construction and design.

For its part, the US has voiced its support of China's efforts to develop a clean and safe nuclear-power industry. "The US wants to be part of such a rapidly growing nuclear-power-plant program," said one US diplomat.

The US Nuclear Regulatory Commission has already given its approval for the export of nuclear equipment and engineering services, as well as fuel and generating units to China. The US Commerce Department and the US Embassy in Beijing have approached the Chinese government to promote a pending bid by Westinghouse for the construction of four 1,000MW nuclear power facilities. Last month, the Export and Import Bank of the United States approved $5 billion in loans to support the bid.

Although Beijing's efforts to address its emerging energy needs have received a positive response from many observers, several questions remain unanswered concerning the nuclear program. Under even the most optimistic projections, a 2-4% increase in the country's overall power capacity over a 15-year period as a result of nuclear-power-plant construction will not be nearly enough to cover expected increases in residential and commercial energy demand.

In addition, some members of the scientific community have questioned the benefits associated with nuclear power, when the risks of catastrophic failures, waste disposal and terrorism are considered.

"We don't have a good plan for dealing with spent fuel, and we don't have a very good emergency plan for dealing with [a] catastrophe," admitted Wang Yi, a nuclear-energy expert at the Chinese Academy of Sciences in Beijing.

With energy-consumption levels expected to reach those of the US by 2025 and dependence on foreign energy sources accelerating by the day, Beijing is in need of a long-term remedy to its energy ills - nuclear power may or may not provide such a remedy. Whatever the answer to China's energy needs, it should be pursued with caution, keeping in mind the delicate balance between the country's future energy needs and the possible human and environmental costs associated with achieving energy autonomy.

Frederick W Stakelbeck Jr is an expert on bilateral and trilateral alliances as they relate to China foreign policy. His writings address the implications of China's emerging regional and global strategic influence and relationships upon US national security. Comments can be forwarded to frederick.stakelbeck@verizon.net.

(Copyright 2006 Asia Times Online Ltd. All rights reserved. Please contact us for information on sales, syndication and republishing .)

China Boosts Defense Spending Another 15 Percent
http://www.spacewar.com/reports/China_Boos...15_Percent.html

Washington (UPI) Mar 06, 2006 - The strategic significance for Asia of the nuclear cooperation deal signed with India last week in New Delhi by U.S. President George W. Bush was underlined Saturday by the announcement that China's military budget for the coming year will rise by almost 15 percent.

China Warns U.S. On Issue of Taiwan

By Edward Cody

BEIJING, March 7 -- China warned the United States on Tuesday against sending "false signals" to Taiwan by playing down a recent decision by the island to do away with the National Unification Council.

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http://www.wpherald.com/storyview.php?Stor...06-095908-4192r

Walker's World: China's military ambitions
By Martin Walker
UPI Editor
Published March 6, 2006


WASHINGTON -- The strategic significance for Asia of the nuclear cooperation deal signed with India last week in New Delhi by U.S. President George W. Bush was underlined Saturday by the announcement that China's military budget for the coming year will rise by almost 15 percent.

This is the 18th consecutive year of double-digit growth in China's defense budget, which officials from the Pentagon and from India's RAW (Research and Analysis Wing) intelligence service agree is now the second largest in the world after the U.S. defense budget of $450 billion.


The paradox is that China's military spending is rising sharply just as the overall numbers of military personnel are falling, as China shifts from a strategic doctrine that relied on mass armies and human wave attacks to a far more sophisticated and capital intensive military with modern and high-technology equipment.

The American and Indian commitment to a new strategic partnership, symbolized by the Bush visit to India, owes a great deal to the common concern over the rise of China and the strategic implications of China's headlong economic growth. The Goldman Sachs financial group last week issued a report suggesting that the Chinese economy will be larger than the American by 2050, and Indian security officials are concerned by the prospect of Chinese dominance over Asia.

The news of the new rise in China's military budget was released in Beijing by parliamentary spokesman Jiang Enzhu, who said the country will increase its military spending by 14.7 percent this year to 283.8 billion yuan or $35.3 billion. He noted that the United States spent a greater proportion of its wealth on defense and that China had "no intention of vigorously developing armaments," claiming that much of the new spending would be devoted to higher petrol and fuel costs and to salaries and concluded that China was a "peace-loving nation."

But much of the new defense expenditure of recent years has gone to buy advanced new weaponry, including S0-27 and su-30 warplanes, Kilo-class submarines and Sovremenny-class warships, all from Russia. China also sought to buy the Phalcon AWACS airborne early warning system from Israel, but was barred when the Bush administration pressured Israel to stop the deal. China has also sought, so far without success, to press the European Union to lift its own arms embargo against China, first imposed after the Tiananmen Square massacre 17 years ago.

American defense analysts claim that the official Chinese budget massively understates the real level of spending, which they believe to be as much as $100 billion a year, three times higher than Beijing admits. They say that the military research and development budget, the military construction and pension and medical bills and some of the procurement costs are all hidden away elsewhere in the civilian budget. They also claim that profits from private companies owned or managed by the Peoples Liberation Army also swell the real military budget.

The new Chinese budget comes after the publication last month of the Pentagon's Quadrennial Defense Review, which described the new priorities of the U.S. military as preparing to conduct a "long war" against terrorists worldwide, to improve homeland security capabilities, and to prepare for possible confrontation with China as an emerging superpower rival.

"China is likely to continue making large investments in high-end, asymmetric military capabilities," the Pentagon report said. "These capabilities, the vast distances of the Asian theater, China's continental depth, and the challenge of en route and in-theater U.S. basing place a premium on forces capable of sustained operations at great distances into denied areas."

American military concerns are matched in India, which has watched nervously the construction with Chinese funds and engineers of new ports and naval bases in Pakistan and Myanmar, as China builds a string of bases to protect the sea routs of the oil tankers from the Persian Gulf on which China's energy imports depend. But for India, this new Chinese presence on both its flanks in the Indian Ocean, along with China's central role in arming Pakistan, means that Beijing is a major security concern. India's last Defense Minister, George Fernandes, said publicly that India's new nuclear arsenal was aimed at deterring China.

India security officials told United Press International in interviews in Delhi last week that they have taken careful note of the American report, "The National Security Implications of the Economic Relationship Between the United States and China," published by the Congressional China Security Review Commission (CSRC), which argues that:

"China's leaders consistently characterize the United States as a 'hegemon', connoting a powerful protagonist and overbearing bully that is China's major competitor, but they also believe that the United States is a declining power with important military vulnerabilities that can be exploited."

The report said that "China sees the United States as a hegemonic power that is a major obstacle and competitor for influence in the world; believes the United States is a superpower in decline, losing economic political, and military influence around the world; and China aspires to be a major international power and the dominant power in Asia."

Indian officials broadly agree, which is the background to the new strategic partnership between India as the world's largest democracy, and the United States as its most powerful democracy, each of them nervous at the rise of a China where political power is still a monopoly of the Communist Party.

Indian and U.S. officials are paying particular concern to China's suspected capabilities in unconventional warfare, particularly in cyber-warfare and information warfare, attacking the computer networks on which advanced military forces increasingly depend. The U.S. concerns were first made public by U.S. Air Force General Ralph Eberhart, Commander of U.S. Space Command, who noted in 2001 that, "We see this (cyber-warfare) in terms of capabilities we know they have, we see this written in their doctrine, we see this espoused by their leadership."

Joint alarm about China has led to an unprecedented degree of cooperation between Indian and U.S. forces, with intensive joint exercises between their militaries, which include giving U.S. pilots dog-fighting experience against China's Su-30 warplanes, also operated by India. U.S. and Indian intelligence officials have operated a number of cooperation and data-sharing agreements, most notably in Afghanistan and Central Asia, where both countries share a common concern for Islamic and jihadist radicalism, as well as for China's growth and ambitions.

- China Downplays Fears Over Military Spending
http://www.spacewar.com/reports/China_Down...y_Spending.html

Beijing (AFP) Mar 07, 2006 - China sought Tuesday to ease fears over its rising military budget as Taiwan claimed the threat from the mainland's armed forces was growing much stronger. "Our defense policy is transparent and our defense is entirely defensive in nature," Foreign Minister Li Zhaoxing told a press conference.

- Walker's World: China's Big Arms Budget
http://www.spacewar.com/reports/Walkers_Wo...rms_Budget.html

- Taiwan Says It Now Faces Almost 800 Chinese Missiles
http://www.spacewar.com/reports/Taiwan_Say...e_Missiles.html

China Sends Warning To US Over Taiwan
http://www.spacewar.com/reports/China_Send...ver_Taiwan.html

Beijing (UPI) Mar 07, 2006 - China's foreign minister Li Zhaoxing Tuesday touched on the Taiwan hot button and its capacity to sour bilateral trade relations with the United States. At the same time he downplayed Beijing's recent decision to boost defense spending.

Clashes over land roil China's poor
A rise of new money and power groups has widened the gap between rich
and poor, urban and rural. By Robert Marquand
http://www.csmonitor.com/2006/0309/p01s03-woap.html?s=hns

China's prosperity inspires rising spirituality
Their newfound time and freedom to think are helping to revive China's
venerable religions, like Buddhism. By R. Scott Macintosh
http://www.csmonitor.com/2006/0309/p01s04-woap.html?s=hns

- China Holds Military Exercises Amid Heightened Taiwan Tensions
http://www.spacewar.com/reports/China_Hold...n_Tensions.html

Beijing (AFP) Mar 03, 2006 - China is this week staging military exercises, state press said Friday, coinciding with a spike in tensions with Taiwan and the start of the nation's annual parliamentary session. The joint air force, army and navy exercises began on Wednesday and are aimed at simulating modern battle conditions using advanced information technology.

- Aerospace Expert Calls For Unified Management Of Space Program
http://www.spacedaily.com/reports/Aerospac...ce_Program.html

Beijing, China (XNA) Mar 09, 2006 - China should set up a governmental agency as a leading body of the nation's space program, a former chief designer of spacecraft said during the annual session of the country's top political advisory body.

- Shanghai Launches Clean Electricity Scheme
http://www.terradaily.com/reports/Shanghai...ity_Scheme.html

Shanghai (AFP) Mar 09, 2006 - Shanghai residents can for the first time buy "clean power" after solar and wind-generated electricity was this week included in the Chinese city's power grid, the firm behind the project said Wednesday. The project by Shanghai Municipal Electricity Power company is aimed at cleaning up Shanghai's polluted environment, company spokesman Yu Qinde said.

March 9, 2006
China Attacks Its Woes With an Old Party Ritual
By JIM YARDLEY
BEIJING, March 8 — Like a giant company concerned with organizational disarray and a sinking public image, the Chinese Communist Party is trying to remake itself into an efficient, modern machine. But to do so, it has chosen one of its oldest political tools — a Maoist-style ideological campaign, complete with required study groups.

For 14 months and counting, the party's 70 million rank-and-file members have been ordered to read speeches by Mao and Deng Xiaoping, as well as the numbing treatise of 17,000-plus words that is the party constitution. Mandatory meetings include sessions where cadres must offer self-criticisms and also criticize everyone else.

"It is an effort to cope with the declining reputation of the party and the distrust of the people toward party officials," said Wenran Jiang, director of the China Institute at the University of Alberta.

But many are distinctly uninspired. Jokes have been circulating mocking the study campaign and many party members privately grumble that it is a pointless waste of time. Web sites offer fake essays that cadres can download to meet homework requirements.

On the surface, the campaign, known as "bao xian," or "preserving the progressiveness," would seem an unlikely modern-day remedy. But in China it is partly a byproduct of a closed political system that ensures Communist Party rule but is without any national elections to force the party to whip itself into shape.

President Hu Jintao, who is also general secretary of the party, has insisted that every party member complete the program.

Some analysts say the campaign's primary purpose, besides addressing corruption, is to rebuild grass-roots party organizations that have been falling apart. "The party is not in great shape," said Cheng Li, a specialist in Chinese politics at Hamilton College in Clinton, N.Y. "Loyalty is deteriorating. And the grass-roots organizations are very weak."

As for the bao xian campaign, Professor Li said, "For Hu Jintao this is better than nothing."

Requests to attend bao xian meetings were turned down by three different provinces. But conversations with several party members found apathy and annoyance. A Beijing graduate student said he was required to attend four meetings a week from September through December. He said that the self-criticism sessions were awkward, and that most people refrained from making harsh attacks against others. Most people opposed the "rigid form" of the meetings, he said, but added that the sessions provided useful opportunities "for people who are so busy to get together and talk."

At one meeting, the graduate student said everyone watched a movie about the collapse of the Soviet Union "to show us the 'grave consequences' of losing Communism." The student, fearing reprisals, would only allow his English name, Ben, to be used.

At a recent news conference about bao xian, Ouyang Song, a vice minister overseeing the campaign, acknowledged that party organizations had atrophied in villages and small towns in recent years, noting that the exodus of migrant workers had diminished the pool of young candidates for party work.

But Mr. Ouyang said the movement had already resulted in 54,000 new "grass roots" party organizations, while 80,000 cadres had been promoted to leadership positions.

Asked by a Chinese reporter about complaints over the campaign, Mr. Ouyang said the public had seen the campaign's benefits through the response of party members. As an example, he described a 75-year-old party member who, on completing the study sessions, volunteered to scrub public toilets.

Not everyone has been so enthusiastic since the campaign began in January of last year. The program has flowed down the party's hierarchy, led by central government ministries and major state-owned enterprises. The third, and final, phase is now under way at village party branches and is to end in June.

Businessmen have complained of having to reschedule appointments to make time for bao xian meetings. Mr. Jiang, the University of Alberta scholar, said he had led a delegation of Canadian oil and gas executives to an energy conference last year in Beijing. But Chinese energy officials, citing scheduling conflicts with the party study sessions, unexpectedly canceled meetings in which the two sides had planned to talk business.

"The executives were asking me if this political movement will affect China's way of doing business," Mr. Jiang said. "The Chinese immediately reassured us that it wouldn't."

Campaigns of this sort are a legacy of the Chinese Communist Party. When he was president, Jiang Zemin initiated study campaigns, including one for his signature "political thought," the Three Represents. More famously, Mao introduced as many as 200 campaigns, from the angry purges that predated the Cultural Revolution era to mass mobilization efforts to exterminate rodents.

The old-style aspects of the bao xian campaign, like the criticism sessions, have raised concerns by some party members that individuals could be persecuted. Some participants say the campaign has allowed ambitious members to show off in front of their superiors with angry, bombastic displays.

But others say the meetings have a pro forma quality and focus on decidedly nonideological issues. Ben, the graduate student, said members of his party committee had complained about the food at the school cafeteria. An older party member in Henan Province, Mao Yinduan, said one of the topics discussed during bao xian meetings held by his party branch was lunchtime boozing.

"He used to like drinking," Mr. Mao said during an interview last year, nodding toward an embarrassed colleague. "But other party members mentioned this in a meeting. Now he has stopped drinking." Then Mr. Mao added: "I used to like drinking, too. People raised that with me and I've stopped."

Behind the meetings looms the issue of corruption. In February the party's Central Discipline Inspection Commission announced that it disciplined 115,000 party members for corruption in 2005.

Wang Yicheng, a political scientist with the Chinese Academy of Social Sciences, said corruption and other social problems had shaken public confidence — and the confidence of some party cadres — about whether the party was capable of managing an increasingly chaotic country. He said the sessions were a method of reinforcing the goal of the party.

"The goal is to raise the quality of party members and strengthen the party organizations to better serve the people," Mr. Wang said. "If these problems inside the party cannot be solved, the ruling position of the party could also be challenged."

Bao xian has received the praise one might expect from the state media and was listed as one of the most searched phrases on the Chinese Internet last year. But much of that traffic appears to be driven by cadres downloading essays from the Internet to meet homework obligations.

In a posting last year, a prominent Chinese blogger, Keso, said Web sites and bloggers were using the ideological campaign as a money-making opportunity by offering essays customized to a person's party rank. The head of a street committee, for example, can find a fake self-criticism essay tailored to that job and then tinker with it to make it seem original.

In a posting last year, Keso wrote: "The Web sites cheat party members, the party members cheat their leaders and the leaders cheat their leaders. So in the end we all cheat the party. This is the comedy of our time." Such cynicism underscores why many experts say efforts like bao xian will have little meaningful impact. In fact, some political analysts speculate that Mr. Hu is using the movement partly as a gesture to ingratiate himself to the older generation of former leaders who remain influential behind the scenes.

Others contend that the only effective way to improve government efficiency is for the party to embrace political reform to introduce checks and balances in the system rather than depend on periodic mobilization campaigns.

Ben, the graduate student, said one topic that rarely came up at the meetings was politics and the future of the Communist Party. "It was a difficult topic," he said, "because people have different ideas. The teacher brought it up once. He said he thought the party was facing a grave challenge.

"I agree with him."



Copyright 2006The New York Times Company Home Privacy Policy Search

China to Deter Farmland Seizures

BEIJING - Chinese officials vowed to crack down on land seizures
that are displacing as many as 1 million farmers a year and
increasing public unrest. By Ching-Ching Ni.
http://email.latimes.com/cgi-bin1/DM/y/ezN...Io30G2B0HL7B0EA

March 9, 2006
China Returns Sharp Retort to U.S. Report on Human Rights
By JOSEPH KAHN
BEIJING, March 9 — China today criticized the human rights record of the United States, arguing that racial discrimination remained pervasive and that the American military abused prisoners held at detention centers abroad.

In a sharply worded response to the annual State Department report on human rights conditions globally, which was released in Washington on Wednesday, China's State Council, or Cabinet, said the American government should concentrate on improving its own rights record.

"As in previous years, the State Department pointed the finger at human rights situations in more than 190 countries and regions, including China, but kept silent on the serious violations of human rights in the United States," the Chinese report said.

The State Department's survey, which assesses conditions in all foreign countries, "fully exposes its hypocrisy and double standard on human rights issues," the Chinese study said.

The section of the State Department's report dealing with China said rights conditions had worsened there in 2005, reversing a modest trend toward improved respect for rights that the department had observed earlier. It cited "increased harassment, detention, and imprisonment" of people viewed as threats to the government.

The report also criticized tighter controls on the Chinese press and more assertive censorship of all kinds of media, including the Internet.

Chinese diplomats play close attention to the tone of the State Department report because it often indicates how aggressively the United States will work on censuring China at the United Nation's annual human rights convention in Geneva, which takes place in April.

Though Beijing publicly dismisses the value of the State Department's report, Chinese diplomats often lobby Washington privately to soften criticism and avoid pushing motions to sanction Beijing, Chinese and American diplomats say.

Human rights discussions between American and Chinese officials have been especially tense this year because China has detained and arrested a number of well-known journalists, lawyers, religious leaders and human rights activists, people involved in the talks said. Police and thugs hired by the authorities also have used force to suppress social unrest in the countryside.

To ease condemnation of its record, China recently released several people from prison before the formal expiry of their terms. On Wednesday, the same day the State Department report was issued, the Dui Hua Foundation, a San Francisco-based human rights group, said it had been notified by Chinese authorities that Tong Shidong, 72, a physics professor convicted of helping found an opposition political party in 1999, would likely be released three years before his sentence is up.

President Hu Jintao is scheduled to make his maiden visit to the United States as China's top leader in April. Early releases and other concessions on sensitive human rights cases often precede such trips as a good-will gesture. But human rights groups argue that treating political prisoners as bargaining chips has not often heralded lasting improvement in China's rights record.

China defends its progress on human rights. Qin Gang, a foreign ministry spokesman, said Thursday that the government's respect for rights "not only satisfied the Chinese people but also has been affirmed by the international community."

The Chinese rebuttal to the State Department report, much of which appears to be compiled from American newspaper clippings, devoted special attention to what it described as the "chronic malady" of racism.

It said blacks and other minorities had lower living standards, less reliable access to health care and faced discrimination in the workplace. Blacks also got the death penalty more often than whites convicted of the same crimes, it says.

The Chinese report also noted a deterioration in conditions for Muslims in America since the Sept. 11, 2001, terrorist attacks and bemoaned the use of "various kinds of torture" at Guantanamo Bay, Cuba, and other overseas detention centers where suspected terrorists are held.

The unchecked spread of guns in private hands and secret wire taps authorized by the White House were among the other rights problems China cited.



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http://www.atimes.com/atimes/China/HC11Ad01.html
China frets over nuclear 'double standard'
By Antoaneta Bezlova

BEIJING - With the dispute over Iran's controversial nuclear program moving this week to the United Nations Security Council, the stage is set for a perilous confrontation between the Islamic Republic and the international community - a showdown that not only Tehran but also world powers China and Russia have fought to avoid.

While reporting Tehran to the Security Council is being executed in the name of preventing nuclear proliferation, China has voiced fears that the whole non-proliferation system has been destabilized by the freshly inked nuclear deal between the United States and India.

"The United States' making an exception to accommodate India, driven by geopolitical considerations, has sent repercussions through the international non-proliferation infrastructure," Hu Shisheng, a fellow of South Asian Studies at the China Institute of Contemporary International Relations, wrote in the China Daily of March 7.

"The double standards will very likely complicate the nuclear issues of Iran and the Democratic People's Republic of Korea all the more," he argued. "Now the international community is presented with a big question: How can the effectiveness and binding power of the non-proliferation system be guaranteed?"

The official line from Beijing on the nuclear-cooperation agreement signed last week between Washington and New Delhi has been more restrained, but the Chinese Foreign Ministry has questioned the gains for global nuclear-non-proliferation efforts.

Foreign Ministry spokesman Qin Gang said the deal came at a time when the international community was working to enhance the authority and effectiveness of the international non-proliferation regime. Nuclear cooperation between the United States and India must conform to the rules of the global non-proliferation regime, he emphasized.

Speaking of the nuclear Non-Proliferation Treaty (NPT), Qin Gang said: "As a signatory country, China hopes non-signatory countries will join it as soon as possible as non-nuclear-weapons states, thereby contributing to strengthening the international non-proliferation regime."

The remark was clearly aimed at New Delhi, which without signing the NPT has now been given the rights enjoyed by the members of the Nuclear Suppliers Group, and also the five nuclear powers.

Under the deal sealed between US President George W Bush and Indian Prime Minister Manmohan Singh in New Delhi, India retained the right to deny UN inspectors access to its fast-breeder reactors capable of producing weapons-grade fissile material.

As India didn't agree to cap its production, it means there could be unlimited expansion of its nuclear arsenal, sparking fears this could lead to a new regional arms race.

Critics of the deal have charged the US with gambling away its chances of success in the global campaign to limit the spread of nuclear weapons for the questionable benefit of counterbalancing China.

It was a point emphasized this week in an editorial in the Chinese Communist Party's flagship publication, the People's Daily. "The United States, accustomed to view problems with Cold War mentality and from the perspective of geopolitics," said the editorial, "saw the power of India'' as being able to ''help it achieve balance among powers in Asia.''

The paper went on to warn that there could be consequences for the "two deadlocked nuclear talks [with Iran and North Korea] and the non-proliferation system".

Over the past two years China has been trying to prevent both its allies Iran and North Korea from being referred to the Security Council but has found it increasingly difficult as all major world powers from France to Japan had started thinking aloud about the consequences of allowing Iran to build a nuclear weapon.

Although China has huge oil stakes in the Middle Eastern country, in recent months Beijing has sided with the US and Europe in their combined efforts to curtail Iran's nuclear ambitions.
Chinese Foreign Ministry officials have called on Tehran to observe all obligations that go with the NPT so that the crisis can be resolved without moving it to the Security Council. China, which has veto power in the council, would be forced to make an uncomfortable choice between its international standing and economic interests should developments lead to a vote on sanctions against Tehran.

Agreeing to UN sanctions would potentially destroy the value of many investments Beijing has made. In Iran, where US companies are prohibited from investing more than US$20 million annually, Chinese companies have signed long-term contracts totaling $200 billion, making China Iran's biggest oil and gas customer.

But encouragement of Tehran in its controversial nuclear program would make China appear an outcast in the eyes of the White House, and the international community.

Hoping to avoid clear-cut choices, Beijing has argued vigorously that continued negotiations are the best, if not the only, way to resolve the nuclear dispute in Iran, as well as the one involving North Korea.

A similar appeal came just hours before the International Atomic Energy Agency (IAEA) ended its meeting on the Iranian nuclear program in Vienna, sending the file to the UN Security Council in New York.

"The Iranian nuclear issue is at a critical juncture," Zhang Yan, director of the arms control department of the Chinese Foreign Ministry, told the IAEA board members. There exists both a risk of deterioration and chances of improvement, he said.

"The key is whether all concerned parties choose dialogue instead of confrontation. China believes that the continuation of the diplomatic efforts remains the wise option for the solution of the Iranian nuclear issue," Zhang concluded.

(Inter Press Service)

March 12, 2006
A Sharp Debate Erupts in China Over Ideologies
By JOSEPH KAHN
BEIJING, March 11 — For the first time in perhaps a decade, the National People's Congress, the Communist Party-run legislature now convened in its annual two-week session, is consumed with an ideological debate over socialism and capitalism that many assumed had been buried by China's long streak of fast economic growth.

The controversy has forced the government to shelve a draft law to protect property rights that had been expected to win pro forma passage and highlighted the resurgent influence of a small but vocal group of socialist-leaning scholars and policy advisers. These old-style leftist thinkers have used China's rising income gap and increasing social unrest to raise doubts about what they see as the country's headlong pursuit of private wealth and market-driven economic development.

The roots of the current debate can be traced to a biting critique of the property rights law that circulated on the Internet last summer. The critique's author, Gong Xiantian, a professor at Beijing University Law School, accused the legal experts who wrote the draft of "copying capitalist civil law like slaves," and offering equal protection to "a rich man's car and a beggar man's stick." Most of all, he protested that the proposed law did not state that "socialist property is inviolable," a once sacred legal concept in China.

Those who dismissed his attack as a throwback to an earlier era underestimated the continued appeal of socialist ideas in a country where glaring disparities between rich and poor, rampant corruption, labor abuses and land seizures offer daily reminders of how far China has strayed from its official ideology.

"Our government only moves forward when it feels there is a strong consensus," said Mao Shoulong, a public policy specialist at People's University in Beijing. "Right now, the consensus is eroding and there is a debate over ideology, which we haven't seen for some time."

The divide does not appear likely to derail China's market-led growth. President Hu Jintao, in what Chinese political experts and party members said was a clear reference to the debate, told legislative delegates last week that China must "unshakably persist with economic reform."

China has generally stuck by its market-opening commitments to the World Trade Organization. Wen Jiabao, the prime minister, has allowed billions of dollars in foreign investment to flow into the once tightly protected financial sector.

Legislative officials insist that the proposed law, which has taken eight years to prepare and is intended to codify a more expansive notion of property rights added to the Constitution in 2003, will sooner or later be enacted, though possibly with some significant modifications.

But Mr. Hu and Mr. Wen wittingly or unwittingly invited the debate when they made tackling growing inequality a center of their propaganda efforts, political analysts say. The state-run news media are abuzz with calls to make "social equity" the focus of economic policy, replacing the earlier leadership's emphasis on rapid growth and wealth creation.

Since his rise to power in 2002, Mr. Hu has also tried to establish his leftist credentials, extolling Marxism, praising Mao and bankrolling research to make the country's official but often ignored socialist ideology more relevant to the current era.

He told party leaders in 2004 to study how Cuba and North Korea maintained political order, party officials say. And he has tried to distance himself from his predecessor, Jiang Zemin, who invited private businessmen to join the Communist Party and was viewed as permitting well-connected officials to enrich themselves with public property at the expense of the poor.

"Hu is himself a centrist who is not really pursuing one agenda or the other," observed a party official who said he could be punished for talking about leadership politics if he were quoted by name. "But he did pull us to the left to restore balance, and that gave the old guard an opportunity it has not had in years."

As a result, analysts say, the leadership may find it harder to pursue market-oriented solutions to some pressing problems, like providing health care to rural residents, grappling with rampant corruption in the state sector, expanding access to education and overhauling banks, insurance and securities companies.

Beijing's new plan to address its rural woes, labeled "building a new socialist countryside," promises an infusion of government cash for peasants and rural areas. But it steers clear of tackling some restrictions on economic activity, like a ban on private land sales in the countryside, that many pro-market economists say have left peasants economically disenfranchised.

"My impression is that allowing an expanded role for the market in education and health care is off the table," said Mr. Mao, the People's University policy expert. "Rural land ownership is also too sensitive to consider now."

The tensions reflect rising concern that breakneck growth averaging nearly 10 percent annually over 20 years has left China richer but also dirtier and, by the standards of the one-party state, politically volatile.

Corruption, pollution, land seizures and arbitrary fees and taxes are among the leading causes of a surge in social unrest. Riots have become a fixture of rural life in China — more than 200 "mass incidents of unrest" occurred each day in 2004, police statistics show — undermining the party's insistence on social stability.

Many Western and some Chinese experts have argued that these problems stem from China's authoritarian political system, and that they will not easily go away until people have a greater say in how they are governed. But the Communist Party and many left-leaning scholars reject that view. They say the ills are caused by capitalist excesses and rising inequality, which they say requires that the government reassert itself in economic affairs.

One measurement of inequality, the gap between the average incomes of urban and rural residents, has risen to about 3.3 to 1, according to the United Nations Development Program, higher than similar measures in the United States and one of the world's highest. A study by the party's Central Research Office estimates that the ratio could rise to 4 to 1 by 2020 if current trends continue, a level some Chinese economists say could incite wider social turmoil.

Such political fears seemed to give an opening to critics who felt economic policies had strayed too far toward capitalism. The strength of leftist opposition had faded throughout the 1990's after Deng Xiaoping, who called economic development "hard truth," and later Mr. Jiang tolerated little ideological discussion of the direction of changes.

Liu Guoguang, a Marxist economist and a former vice director of the Chinese Academy of Social Sciences, stimulated an outpouring of opinions about inequality last summer when he gave a private talk that was transcribed and posted on the Internet. His talk supported the emphasis on growth and development but called for a much larger role for the government in managing economic affairs.

In a subsequent interview with Business Watch, a state-run magazine, Mr. Liu said, "If you establish a market economy in a place like China, where the rule of law is imperfect, if you do not emphasize the socialist spirit of fairness and social responsibility, then the market economy you establish is going to be an elitist market economy."

He has been joined by other scholars, including Mr. Gong, whose incendiary polemic on the property law prompted a succession of sympathetic essays and study sessions.

Also contributing to the response is the Hong Kong-based economist Lang Xianping, who has used a television show to pillory what he describes as raids on state assets by managers and foreign investors.

One top official who has come under scrutiny is Zhou Xiaochuan, the central bank governor and a promoter of market initiatives. Mr. Zhou attracted foreign investment to the financial sector, partly delinked China's currency from the United States dollar and steered the three biggest state-owned banks toward stock market listings overseas.

Mr. Zhou was attacked directly in a widely circulated Hong Kong newspaper article and indirectly by commentators in Beijing, who accuse financial officials of selling China's most valuable assets too cheaply.

Ji Baocheng, president of People's University in Beijing, criticized Mr. Zhou's banking changes in a public session of the legislature last week. He cited the big Hong Kong stock market listing of China Construction Bank, which was completed after the government injected billions of dollars to clean up its balance sheet.

Mr. Ji said the government priced shares in the bank too low, given the fresh infusion of capital, and he accused officials of "blindly sacrificing the interests of China and its people."

The government defends the overseas listings as a necessary step to raise capital, attract foreign experts to the boards and executive offices of the troubled banks and put the financial system on sounder footing.

Some pro-market economists, who seemed ascendant in the 1990's and early in this decade and now often sound defensive, have denounced the leftist revival as dangerous. Many also criticize the Hu-Wen administration for micromanaging investment and bank loans, tinkering with property and stock markets and declining to extend market-oriented policies to the countryside.

Zhou Ruijing, a retired newspaper editor associated with the pro-market camp, captured the sentiment in a January magazine essay.

"A widening gap between rich and poor is not the fault of market reforms," he wrote. "It's the natural result of them, which is neither good nor bad, but quite predictable."



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- China Conference Slams Taiwan
http://www.spacewar.com/reports/China_Conf...ams_Taiwan.html

Beijing (UPI) Mar 14, 2006 - China's top political advisory body ended its ten day gathering Monday with a resolution against Taiwan independence and praise for President Hu Jintao's new rhetoric on how to rule China.

http://www.atimes.com/atimes/Middle_East/HC14Ak04.html
China could overtake US's India trade
By Paranjoy Guha Thakurta

NEW DELHI - Despite the substantial nuclear cooperation deal, sealed by visiting President George W Bush earlier this month, trade growth between India and China has been so rapid that the United States may lose out to China as India's largest trading partner within a few years.

India's bilateral trade with China in 2005 set a new record at US$18.71 billion, up nearly 38% from 2004. India had set a target of $20 billion by 2008, but that could be achieved well in advance. India's exports to China grew by more than 27% in 2005, nearly 38% higher than the overall growth in Sino-India bilateral trade.

"China should emerge as India's largest trading partner, overtaking the US within a year or two, with two-way trade exceeding $30 billion in 2007," Nagesh Kumar, director general of the Research and Information System for Developing Countries, a government-funded think-tank, told IPS in an interview.

Other analysts disagree, contending that the US will remain India's largest trading partner for the foreseeable future. Merchandise trade between India and the US stood at about $25 billion in 2005 and is expected to touch $40 billion by 2009, and Bush took pains on his visit to emphasize the importance of trade relations with one of the world's fastest-growing economies.

After he landed in the southern Indian city of Hyderabad, capital of Andhra Pradesh, Bush was given a basket of Banganapalli mangoes, reputed to be the world's finest, by state chief minister Y S Rajasekhara Reddy. This small gesture was a giant stride in trade terms considering that for 17 years the US had kept its doors shut to this luscious Indian product. "The US is looking forward to eating Indian mangoes," Bush said.

Citing public health concerns, the US has resisted the entry of Indian mangoes. "The regulatory process for [the] export of irradiated mang