Chaos in south China village after clashes

By Lindsay Beck and Ben Blanchard BEIJING, Dec 9 (Reuters) - Armed police have sealed off a village in southern China after violent clashes with residents that rights group Amnesty International said marked the first time Chinese police had fired on protesters since 1989.

Residents said riot police had opened fire on Tuesday on protesters in the village of Dongzhou in Guangdong province after they moved in to quell demonstrations over lack of compensation for land lost to a wind power plant. Estimates from residents and rights groups put the number of dead between two and 20.

"Now the authorities are coming to the village to detain people," said one villager, adding his brother was among those shot dead during the demonstrations. "My parents and my sister-in-law are kneeling in front of the house to ask the government officials to explain the killing," he said in a telephone interview. He put the number of dead at more than 10.

China's Communist Party has a monopoly on power and brooks no dissent but protests are becoming increasingly common, sparked by disputes over land rights, corruption and a growing gap between rich and poor. Many of the protests turn violent, but Amnesty said police opening fire marked an ugly turn.

"Police used guns on protesters the last time in 1989," said Chine Chan, East Asia Campaigner for Amnesty International, referring to China's military crackdown on pro-democracy demonstrators. "There is lack of guidance from the central government about what kind of force is allowed to be used," she said. Chan added that many young men from the village had fled to avoid being arrested. "We call on the central government to investigate what's going on there," Chan said. "Freedom of assembly and freedom of expression are fundamental human rights that should not be cracked down on in any way."

The resident said police were chasing away family members who tried to claim the bodies of those who were killed, describing the scene as "chaos" and pleading for help. "Please send somebody to help us," he said. Noise in the background was so loud it was difficult to hear.

LAND DISPUTE

The Dongzhou dispute has centred on compensation for land taken to build a wind farm in the area, which lies on the east coast of the province along the South China Sea close to the financial hub of Hong Kong. Residents said compensation allocated by the government was appropriated by officials. Amnesty said protests had been going on since September, with villagers complaining of forced evictions, and some fishermen worried the plant could affect their livelihood.

A government official in the administrative centre of Shanwei said armed police had been sent into the area but that the violence was started by the villagers, who attacked police with pipe bombs. "This is a society ruled by law. How can we let this kind of thing happen?" said the official, who gave his surname as Cai.

Residents said there were thousands of armed police in the area, blocking roads and detaining those suspected of involvement in the protests. "A lot of families have moved away from the village. We are all very scared. At night, nobody dares go out," said another villager.

U.S. broadcaster Radio Free Asia said armed police had sealed roads into the area and that people were not allowed to enter or leave. (Additional reporting by Vivi Lin) - alertnet.org

China signals reserves switch away from dollar

By Geoff Dyer in Shanghai and Andrew Balls in Washington Published: January 5 2006

China indicated on Thursday it could begin to diversify its rapidly growing foreign exchange reserves away from the US dollar and government bonds – a potential shift with significant implications for global financial and commodity markets.

Economists estimate that more that 70 per cent of the reserves are invested in US dollar assets, which has helped to sustain the recent large US deficits. If China were to stop acquiring such a large proportion of dollars with its reserves – currently accumulating at about $15bn (€12.4bn) a month – it could put heavy downward pressure on the greenback.

In a brief statement on its website, the government's foreign exchange regulator said one of its targets for 2006 was to "improve the operation and management of foreign exchange reserves and to actively explore more effective ways to utilise reserve assets".

It went on: "[The objective is] to improve the currency structure and asset structure of our foreign exchange reserves, and to continue to expand the investment area of reserves.

"We want to ensure that the use of foreign exchange reserves supports a national strategy, an open economy and the macro-economic adjustment."

The announcement came from the State Administration of Foreign Exchange (Safe). It gave no more details about whether this meant a big shift in the investment strategy for Chinese reserves, which according to local press reports reached nearly $800bn at the end of last year and are expected by economists to near $1,000bn this year.

The regulator also said it would end quotas on the amount of foreign currency Chinese companies can acquire to invest in overseas assets, a decision that removes a bureaucratic hurdle facing companies that plan to make international acquisitions.

The statement comes at a time of growing debate in China on how the reserves are invested. Some economists have called on Beijing to use the funds to finance infrastructure investment and clean up state-owned companies, or to invest in higher-yielding assets rather than financing US borrowing.

However, according to Stephen Green, economist for Standard Chartered in Shanghai, although the language was "vague", Thursday's statement was the first time Safe has publicly indicated a shift away from dollar assets.

"It is a subtle but clear signal that they are interested in moving away from the US dollar into other currencies, and are interested in setting up some kind of strategic commodity fund, maybe just for oil, but maybe for other commodities," he said.

The Group of Seven leading industrialised economies has repeatedly called for an adjustment in global trade imbalances, including a rise in the renminbi. The US has expressed frustration that China has not allowed its currency to rise significantly after last July's 2 per cent revaluation. That saw China move from a dollar peg to managing its currency against a basket of currencies, potentially allowing the renminbi to rise against the dollar.

John Snow, US Treasury secretary, speaking earlier on Thursday, repeated his call for China to allow the renminbi to rise against the dollar. "The trade deficit is influenced by lots of things, differential growth rates, differential savings rates and investment rates and so on. But clearly, getting the [Chinese currency] more appropriately valued will be helpful to the global adjustment process," he said.

However, some economists believe it would be a mistake for China to shift its reserves into domestic investment or other asset classes. - ft.com

Hu stresses need for modern army

BEIJING, Jan. 5 2006 (UPI) -- It is crucial for China to modernize its military as the nation grows more prosperous, President Hu Jintao said in a high-profile visit to an army newspaper. Hu, who chairs the Central Military Commission, said the People's Liberation Army should adopt the political concept of scientific development, the South China Morning Post reported Thursday.

"Scientific development" is a watchword of Hu's rule, the Post pointed out.

Hu spoke Tuesday to editors and hundreds of staff at the PLA Daily, accompanied by nine of the 11 members of the powerful military commission, in a visit that was broadcast on national television. The newspaper visit offered a rare glimpse of the military leadership following a recent personnel shake-up involving dozens of senior officers. - United Press International

China demobilizes 200,000 troops

ISN SECURITY WATCH (Tuesday, 10 January: 10.12 CET) – The authorities in China have announced they have cut the country's military by 200,000 personnel over the past three years in accordance with planned defense reforms.

Despite the massive demobilization, the Chinese military is still the world's largest, with 2.3 million troops.

The troop reductions, the results of which were announced on Monday, are intended to improve the quality and structure as well as the combat readiness of the armed forces. - .isn.ethz.ch

China must play by WTO rules, warns US

By Christopher Swann and Edward Alden in Washington Published: January 25 2006 - The administration of President George W. Bush issued a harsh warning on Wednesday to China that it must start behaving as a "fully accountable" member of the global trading system or face growing trade friction with the US.

Karan Bhatia, the deputy US trade representative, said in a speech in Washington that the US-China trade relationship was entering a new phase four years after China joined the World Trade Organisation.

"It must act in all aspects of its trading relationships – multilaterally, regionally and bilaterally – as a mature partner and, to borrow a phrase, a ‘responsible stakeholder'," he told the US-China Business Council.

The language will resonate strongly in Beijing, because it is drawn from a speech delivered last year by Robert Zoellick, the deputy secretary of state and former US trade representative who is visiting China this week. Mr Zoellick's use of the phrase "responsible stakeholder" in a speech last year has been carefully parsed by Chinese officials, who saw it as the clearest expression by the Bush administration of its broader policy towards China.

Mr Bhatia said on Wednesday that the "apprentice period" for China, which began when it joined the WTO in 2001, must now come to a close.

While the US had benefited enormously from its trade relations with China, he said "many in the United States are profoundly uneasy over the current state of our trade relationship, and there is growing frustration that China is not ‘playing by the rules'".

He said this was evident in China's record $200bn trade surplus with the US in 2005, as well as in Beijing's currency policies, its subsidies to favoured industries and the pirating of US intellectual property. Such frustration was particularly apparent with small and medium-sized US companies that "have begun to wonder whether a growing trade relationship is in their best interests".

The intellectual property rights issue has come to a head this week, with US trade officials saying Washington could be forced to launch a dispute settlement case in the WTO if China continues to refuse to hand over information about its enforcement of the rights.

China last month rebuffed an initial request from the Office of the US Trade Representative and has questioned the US right to ask for such information. On Tuesday a senior US trade official said that a dialogue was continuing with China but suggested that they were now expecting a prompt response to their demands.

"We are running out of options, short of litigation at the World Trade Organisation," the official said, indicating that impatience was mounting over "the problem of reducing piracy and counterfeiting in China". The official added: "A resort to WTO litigation remains a possibility."

The US, along with Japan and Switzerland, had set a January 23 deadline for China to respond to a request to provide detailed information on how China is using its regulatory and criminal procedures to try to crack down on intellectual property violations. - ft.com

China Keeps Increasing Holding of US T-bonds

(SinoCast Via Thomson Dialog NewsEdge)BEIJING, Jan 25, 2006 (SinoCast via COMTEX) --China mainland is still keeping increasing holding of the United States' treasury bonds, yet with the country's quicker growth of foreign exchange reserves, the proportion of its US treasury bonds in the entire foreign exchange reserves presented a descending trend month by month.

According to statistics, by last January, China mainland had held USD 223.5 billion worth of US treasury bonds, accounting for 35.84% of its total foreign exchange reserves of USD 623.646 billion by the month.

And by last November, the mainland's US treasury bonds increased USD 26.3 billion to USD 249.8 billion than January, while its foreign exchange reserves rapidly rose to CNY 794.2 billion by the last November-end and jumped about 38%, or USD 220.3 billion than the same period of a year ago, making the proportion of its US treasury bonds decline to 31.45%.

The figures show that the growth of Chinese mainland's holding of US treasury bonds is lower than that of its foreign exchange reserves.

- tmcnet.com

First foreign family bank enters China

BEIJING, Jan. 26 -- The Edmond De Rothschild Banque, a subsidiary of Europe's Edmond De Rothschild family bank group in France, set up a representative office in Shanghai recently. This is the first foreign family bank that has obtained approval of the China Banking Regulatory Commission and entered China's financial market.

The group is mostly dedicated to private banking and asset management, and its operating assets total as high as US$80 billion. It has two headquarters in Paris and Geneva and a large number of operating offices in Europe, Asia and South America.

The bank's CEO Michele Cicurel said that the bank is very confident of China's booming financial market.

Like many renowned financial institutions which have entered the Chinese financial market, the bank sets private banking service as one of its major tasks in China and set an appalling "threshold" of US$1 million of personal property for its target clients. - xinhuanet.com

Internet firms 'bowed to Beijing'

US congressmen have condemned major IT firms including Microsoft and Google for helping China censor the internet. Members of the Congressional Human Rights Caucus said four US firms were putting profits before American principles of free speech. The hearing follows Google's decision to block politically sensitive terms from its new Chinese search site. Microsoft, Yahoo, Cisco and Google were also criticised for not attending the hearing in Washington. Yahoo and Microsoft defended themselves in a statement, saying they did not have the power to force change on governments.

Their services had, they said, "enabled far wider access to independent sources of information for hundreds of millions of individuals in China and elsewhere".

'Caved in'

Tom Lantos, top Democrat on the House International Relations Committee, said: "There has been a string of disturbing incidents in which US-based Internet companies have bowed to pressure from Beijing." "These massively successful high-tech companies, which couldn't bring themselves to send representatives to this meeting today, should be ashamed. They caved in to Beijing for the sake of profits."

The Chinese government enforces strict laws on internet use, blocking content it considers a threat, including references to the Tiananmen Square massacre and notable dissidents.

Google.cn, launched last month, complies with these guidelines.

The group Reporters Without Borders alleges that Yahoo provided information to the Chinese authorities that helped them identify and convict Shi Tao, a journalist who criticised human rights abuses in China. Microsoft pulled an internet posting by a Chinese government critic, after being ordered to do so.

Information 'will out'

Carolyn Bartholomew, an internet expert, told the hearing that China was becoming the biggest internet hub in its region, and was exporting filtration technology that allowed other "oppressive regimes, including North Korea and Uzbekistan" to control and use the web for their own ends.

Congress will hold a more formal inquiry in two weeks' time.

The firms have said they will attend that process.

In Portugal on Wednesday, Microsoft chairman Bill Gates said attempts to prevent the spread of information would ultimately fail.

"The ability to really withhold information no longer exists... if there is a desire by the population to know something, it is going to get out," he said. BBC

Amid China Threat US To Hold Mammoth Naval Operations In Pacific

It has been at least 10 years since four aircraft carriers have operated in the Pacific Ocean at one time, the Hawaii-based Roughead said, adding that the increased activity was in line with findings of the QDR released on February 6.

by P. Parameswaran Washington DC (AFP) Feb 15, 2006

Amid persistent warnings about China's growing military clout, the US military said Tuesday it would hold one of its biggest naval exercises in the Asia Pacific this summer. The large-scale operations will involve several carrier strike groups, each of which includes at least three warships, an attack submarine and a support ship. Four carriers would be involved in three military maritime exercises -- one of them touted as the world's largest -- between June and August in the region, Commander of the US Pacific Fleet Admiral Gary Roughead said in Washington.

Two of the exercises are expected to be largely confined to US forces and held in the Western Pacific while the third involving navies from at least eight countries, including Australia, Chile, Japan, South Korea and Peru, would occur near the Hawaiian Islands.

While the war games would boost bilateral and multilateral cooperation and improve military preparedness, it "also provides a deterrent for anyone who would wish us ill," Roughead told a forum organized by the US-based Asia Society, which aims to bridge ties between the two sides of the Pacific.

A major Pentagon review of US military strategy earlier this month singled out China as the country with the greatest potential to challenge the United States militarily.

The Quadrennial Defense Review (QDR), conducted every four years, said a key goal for the US military in the coming years will be to "shape the choices of countries at a strategic crossroads." The QDR report noted China's steady but secretive military buildup since 1996.

Some analysts also see recent Sino-Russian rapprochement as a sign of a desire to wrest military and economic power in the Asia-Pacific region from the United States, which is linked by half century military alliances with Japan and South Korea.

It has been at least 10 years since four aircraft carriers have operated in the Pacific Ocean at one time, the Hawaii-based Roughead said, adding that the increased activity was in line with findings of the QDR released on February 6.

His spokesman Navy Captain Matt Brown said it could be the largest combined aircraft carrier operations in the Pacific since the Vietnam War. Aside from the Japan-based Kitty Hawk, the other carriers to be involved in the exercises are the San Diego-based Ronald Reagan and one more each from the Pacific and Atlantic fleets. "I think for an East Coast carrier to be operating in the Pacific -- probably Vietnam was the last time we had East Coast ships operating up in the Western Pacific," he explained. Elaborating on the exercises, Brown said, "As the QDR mentioned, it is important for us to be focusing on the Pacific, to be working with friends and allies in the Pacific. "And we think that the carriers are a capable multimission platform for gaining familiarisation for forces operating in the Western Pacific."

Citing the massive US-led tsunami relief operations last year in Asia, Brown said, "Our leaders in Hawaii were able to pick up the phone and call counterparts in Singapore, Bangkok, Kuala Lumpur, New Delhi and rapidly exchange information because they knew each other. "In a situation where there is a disagreement, wouldn't it be nice to pick up the phone and refer back to rely upon a long term established relationship to hopefully prevent that conflict," he asked.

Brown also said that the US military hospital ship "Mercy," deployed last year to help tsunami-hit Indonesia, will leave this spring on a five-month mission to Southeast Asia. "We are still working on the locations," he said. "This is follow on to the tsunami experience because we found that it was important and the people benefited and is good to do it again," he said. Mercy is one of two American hospital ships. - spacewar.com

Taiwan Shares Fall 1.5 Percent

Feb. 22, 2006, - TAIPEI, Taiwan — Taiwan shares fell Wednesday as President Chen Shui-bian confirmed his commitment to scrap guidelines on unification with rival China, a measure likely to anger Beijing.

The Weighted Price Index of the Taiwan Stock Exchange fell 100.81 points, or 1.5 percent, to 6,530.70, the lowest closing figure since Jan. 24, when the index closed at 6,451.94. China and Taiwan split amid civil war in 1949, but Beijing still occasionally threatens the use of force if the self-ruled island moves toward formal independence. China is likely to see Chen's plan to abolish the guidelines, first mentioned last month, as a step in the direction of formal independence.

In a meeting with visiting U.S. Representative Robert Simmons Wednesday, Chen reiterated his plan to scrap the guidelines, describing them as "absurd products of an absurd era." "President Chen made it very clear today that he's serious about the plan," said Oliver Fang, a sales trader with Yuanta Core Pacific Securities. "That's very bad indeed, and phone calls just arrived in droves (from clients) asking to unwind their positions."

Electronics shares, many of which have been pulling back recently because the first quarter is normally a slow season for the technology sector, dropped 2 percent as a whole. AU Optronics, Taiwan's largest thin-film-transistor liquid-crystal-display maker by revenue, fell 3.3 percent to 52.9 New Taiwan dollars. Rival Chi Mei Optoelectronics lost 4.5 percent to NT$48.8. The index numbered 113 gainers against 960 decliners, and 87 stocks closing unchanged. - chron.com

China, riding "third wave" of global engagement: report

China is experiencing the "third wave" of its embrace of the world, with the basic principle of building a sustainable and harmonious society, said an article of the China Daily on Wednesday.

The article said, if we view China's opening up policy in the 1980s as the "first wave" of China's embrace of the world, its admission to the World Trade Organization and its subsequent policy of encouraging business to go outside as the "second wave", today's acceptance of the principle of building a new harmonious society could be seen as the "third wave".

The article referred to a recent survey by the Modernization Institute under the Chinese Academy of Sciences. The survey shows that by the mid-century China will encounter 10 big opportunities and challenges.

"Of particular interest is the fact that the 'big 10' includes 'a peaceful international environment' and 'development based on co-ordination between man and nature'." "More amazing is the former, which spells out a clear yearning for peace in the larger world and indicates that the Chinese people are increasingly aware of their own closeness with the outside world," said the article. "This survey has assured us that China is, in its own way, joining the new humanist movement that has been sweeping the world," said the article, "It is part of the worldwide social movement that addresses issues in the time of economic globalization." "In China, the shock waves of the movement are evident, such as our attention to sustainable growth, human needs, disadvantaged social groups, social harmony, justice and fairness, ecological protection, prevention of family violence, women's rights, and world peace." "Because of this, the Chinese people are making strides into the world and are embracing it with open arms," the article said. - english.people.com

Hu accuses Taiwan of `grave provocation'

Published March 1, 2006 - BEIJING, CHINA -- Chinese President Hu Jintao reacted sharply Tuesday to the decision by Taiwanese President Chen Shui-bian to terminate the island's unification council, calling it "a grave provocation."

Chen on Tuesday completed the formalities for scrapping the National Unification Council and guidelines for unification with mainland China.

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," Hu said in remarks published by the official Xinhua news agency. - chicagotribune

Expo on artificial intelligence to be held in Beijing

BEIJING, March 2 (Xinhuanet) -- China's first exposition on the achievements of artificial intelligence science will be held in Beijing in August to mark the 50th anniversary of the founding of the science.

The chief organizer, the Chinese Society of Artificial Intelligence, told Xinhua that the exposition will include a wide range of subjects using artificial intelligence, such as housing facilities, examination devices, controlling devices, transportation tools, software and games, as well as robots.

"All the items on show will demonstrate the technological advancement in artificial intelligence research," said the organizer. The show will help research staffs in the field to strengthen communication and cooperation, thus boosting the national innovation capability in sciences like artificial intelligence.

The organizer also revealed that a football game between artificial intelligence robots will be held during the exposition. And a team of five chess players will also compete with computers using artificial intelligence.

The exposition is scheduled from August 1 to 3, at Beijing International Convention Center. xinhuanet.com/

China, Russia to form anti-terror task force

BEIJING: China and Russia have agreed to form a joint task force to further their cooperation in fighting against cross-border crimes, illegal immigration and terrorism as well as enhancing law enforcement.

This was decided after Chinese State Councillor and Minister of Public Security, Zhou Yongkang held talks with Russian Interior Minister Rashid Nurgaliyev, the state media reported on Friday.

After the talks, the two ministers signed an agreement on setting up a joint taskforce to crack down on cross-border crimes. - geo.tv/

Pentagon 'hedge' strategy targets China

By Bill Gertz THE WASHINGTON TIMES March 17, 2006

The Pentagon is moving strategic bombers to Guam and aircraft carriers and submarines to the Pacific as part of a new "hedge" strategy aimed at preparing for conflict with China, Pentagon officials said yesterday.

Peter Rodman, assistant defense secretary for international security affairs, told a congressional commission that the response to the emerging military threat from China is part of the White House national security strategy made public yesterday.

Although U.S. relations with China are good, "both sides understand very well that there is a potential for a conflict, particularly in the Taiwan Strait," Mr. Rodman said during a hearing of the U.S.-China Economic and Security Review Commission.

China's arms buildup in recent years altered the U.S. "strategic calculus" for defending Taiwan from a mainland attack and shows that "a prudent hedging policy is essential," Mr. Rodman said.

The placement of about 700 Chinese missiles opposite Taiwan has changed the status quo between the non-communist island and the communist mainland, he said.

The Pentagon policy calls for watching China's military and "being ready to deal with it, if the worst case should happen," Mr. Rodman said. James Thomas, deputy assistant defense secretary for plans, said key elements of the "hedging" policy are aimed at nations with uncertain futures, including China and Russia.

Cooperation is preferred, but the Pentagon must prepare "for the possibility that others could choose a more hostile path," Mr. Thomas said. "In [the China] part of the hedging strategy, we're looking at the deployments of bomber elements to Guam on a more routine basis," he said. "We're also looking at making adjustments in our naval posture globally, shifting to six carrier battle groups in the Pacific region, given the shift in global transport and trade, as well as over the next several years shifting approximately 60 percent of our attack submarine fleet to the Pacific." The public term for the strategy is "hedge," but in internal Pentagon discussions the term is "effective preparations to swiftly defeat Chinese aggression," one defense official said.

The comments about a conflict contrast with statements by Pentagon officials that have sought to minimize the emerging threat from China. The plan calls for frequent rotations of B-2 strategic bombers to Guam, part of what the Air Force calls its global strike mission to reach crisis areas quickly. Special hangars and other deployment and maintenance facilities are being built on Guam, a U.S. territory about 1,800 miles from the Chinese coast. Three attack submarines are based in Guam, and arms storage there includes long-range air-launched cruise missiles and Joint Direct Attack Munitions. Adm. William J. Fallon, commander of the Pacific Command, has visited Guam and told reporters that the island will become a pivot point for U.S. forces in the Pacific because of the relatively short distances to the Taiwan Strait, South Korea and Southeast Asia.

Yesterday, Mr. Thomas said the Pentagon is strengthening alliances in Asia as part of the strategy. - washtimes.com

Putin signs energy cooperation deals with China

By Richard McGregor and Andrew Yeh in Beijing - March 20 2006

Vladimir Putin, Russia's president, arrived in China on Tuesday for a visit that Beijing hopes will secure it a decisive advantage over Japan in their lengthy battle to secure the route of an oil pipeline from east Siberia.

The two leaders inked several agreements, the most important of which focus on long-term energy cooperation in oil and natural gas.

"Current Russia-China relations have reached a high level," Mr Putin, accompanied by dozens of top energy officials and executives, told Hu Jintao, the Chinese president.

Of the documents signed on Tuesday, China National Petroleum Corp was involved in three – one with Russia's state-owned oil giant Rosneft to form a joint venture, another with Russia's Gazprom, the state-controlled natural gas giant, to guarantee gas supplies, and a third with Transneft, the Russian pipeline transport firm – according to the Xinhua news agency.

Alexei Miller, Gazprom's top executive, said his company would supply China with 60bn-80bn cubic metres of gas annually through new pipelines in about five years, Reuters reported.

The accords were finalised amid growing frustration among some Chinese officials over the failure to reach concrete deals, and worries that Russia has been wavering in its commitment to specific projects.

China's dependence on Russian energy is nonetheless likely to grow in the years ahead, and will jump if any of the agreements signed on Tuesday on oil and gas come to fruition.

The gas deals, in particular, face obstacles. China's domestic price controls keep the costs of the resource to consumer and industry far lower than global benchmarks, making sales of Russian gas at the moment uneconomic.

Sino-Russian economic ties have been expanding, despite difficulties over some key deals, with total bilateral trade volume reaching $29.1bn (€24bn, £16.6bn) last year, a year-on-year increase of 37 per cent.

Officials on both sides have for months been locked in talks over a proposed Russian oil pipeline, as competing routes are being pushed by Beijing and Tokyo.

China sees that pipeline as a potentially valuable source of future oil supply and is lobbying for it to extend into its northern oil heartland, while Japan wants to it to reach the western Pacific coast.

Senior Chinese officials, including vice-minister Zhang Guobao of the National Development and Reform Commission, which is in charge of energy policy, have reportedly been confounded by Russia's back-and-forth attitude on the pipeline.

Moscow has its own worries. Mr Putin expressed concerns in a recent Xinhua interview over falling Russian machinery exports to China.

"Efforts should be made to promote Russia's export of machinery to China, particularly products of Russia with an absolute competitive edge," Mr Putin said. He singled out Russian equipment used for power generation and mining as examples of such exports. - FT.com

China, Russia united on Iran

By Lindsay Beck Tue Mar 21, BEIJING (Reuters) - China and Russia are united in pushing for more diplomacy to resolve the Iranian nuclear issue, China said on Tuesday, a day after the two deflected Western moves to authorize U.N. Security Council threats against Iran.

After more than two weeks of discussions, the five veto-wielding members of the Security Council -- China, Russia, the United States, Britain and France -- have been unable to agree on a draft statement that tells Iran to stop enriching uranium.

"China and Russia have common views on how to resolve the Iranian nuclear issue," China's Foreign Ministry spokesman Qin Gang told a regular news conference. "Our objectives are to solve the issue in a peaceful way through negotiations," he said, as Chinese President Hu Jintao and Russian President Vladimir Putin held talks in Beijing.

Iran insists it has the right to atomic research -- which it says is for peaceful purposes -- but the Western powers believe it is seeking the ability to make nuclear weapons.

Qin said China supported a Russian compromise proposal that would allow Iran to use nuclear fuel enriched in an internationally monitored plant on Russian soil, easing fears that Tehran could divert atomic material to develop weapons. "Under current circumstances, Russia's proposal is a helpful way to break the impasse," Qin said. "We call on all parties concerned to step up their negotiations and demonstrate flexibility."

Both Russia and China are wary of action by the Security Council, which can impose sanctions, fearing threats might escalate and prompt Iran to cut off contact with the International Atomic Energy Agency (IAEA) in Vienna.

Envoys close to the talks on the draft statement said Russia, backed by China, was toughest on its provisions, objecting to its setting a two-week deadline for the IAEA to report whether Tehran has complied, saying the time limit is too short.

But underscoring the urgency to reach a resolution, U.S. President George W. Bush reiterated that Washington was ready to use military force against Iran if necessary. "The threat from Iran is, of course, their stated objective to destroy our strong ally Israel," he said in a speech to the City Club of Cleveland. "That's a threat, a serious threat. It's a threat to world peace... I made it clear, I'll make it clear again, that we will use military might to protect our ally, Israel." Bush also stressed the desire for a united message on Iran from the Security Council "in order to say loud and clear to the Iranians this is unacceptable behavior."

The full 15-member council consults later on Tuesday. Under a November 2004 agreement with Britain, France and Germany, negotiators for the European Union, Iran agreed to freeze uranium enrichment activities in return for economic and political rewards. That deal broke down last year, and Iran resumed uranium conversion in August. - Yahoo News

Taiwan president joins drill simulating Chinese blitz: report

TAIPEI, April 13 (AFP) Apr 13, 2006

Taiwan President Chen Shui-bian has for the first time taken part in an exercise simulating a surprise Chinese attack on the presidential building, a report said Thursday.

Chen was escorted to the tightly guarded Hengshan command center in the capital around 8:00 pm Wednesday, 10 minutes after the beginning of the drill codenamed "Yushan No 2", the United Daily News said.

Other top government officials joining the 150-minute drill included Premier Su Tseng-chang, Defense Minister Lee Jye, National Security Council secretary-general Chiou I-jen and Mainland Affairs Council chairwoman Tsai Ying-wen, it said.

Television footage showed limousines carrying officials rushing to the command center.

The scenario was that "the Chinese communist troops launched a surprise assault on the presidential building, pitting the president against a dangerous situation," the paper said.

The exercise aimed to review the emergency capabilities of government units, it said. The defense ministry declined to comment on the report.

Taiwan held the first such exercise last year, without the participation of the head of state.

A Pentagon report has warned that China is building up its military at a pace that is tipping the balance against Taiwan and could pose a credible threat to other armies in the region. China regards Taiwan as part of its territory and has vowed to invade should it declare formal independence. - spacewar.com

China installs first statue of Mao in Tibet

Monday, April 17, 2006 - BEIJING: China has installed a statue of Mao Zedong in Tibet, the first of the legendary Communist leader in the remote Himalayan region, which was liberated by the Red Army from the Dalai Lama in 1951.

The 35-tonne granite statue, rising 7.1 meters from a 5.16-meter pedestal, is said to be the largest of its kind in China and the first in Tibet. The statue has been erected at a square in Gonggar County ahead of the 30th anniversary of Mao's death.

Changsha, capital of Hunan Province and Mao's hometown, donated USD 812,500 for the plaza, of which USD 60,000 was spent on the statue, deputy head of Gonggar County Feng Conglong said.

"Many Tibetan people suggested we should have a statue of Chairman Mao to show our gratitude for the people of his hometown when we planned the square," Daindar, deputy secretary of the county's committee of Communist Party of China, said.

Mao, born into a farming family on December 26, 1893, was the founder and leader of the Communist Party of China and the People's Republic of China.

In 1951, Mao and the Red Army 'peacefully liberated' Tibet and then ushered in a reform to abolish the thousands years old serfdom on this plateau.

"To protect the statue, we attached a lightning rod and strengthened the base, so Chairman Mao can withstand earthquakes up to 5.5 on the Richter scale," Daindar said.

"We seldom see earthquake or lightening in Gonggar, but we want to ensure the statue is secure," he said. - times of india

China's Hu Will Press Bush to Restrain Taiwan, Analysts Say

April 17 (Bloomberg) -- China's President Hu Jintao will press U.S. President George W. Bush to reiterate opposition to any move toward independence by Taiwan when they meet in Washington later this week, analysts said.

China has been angered by Taiwan President Chen Shui-bian's scrapping of a forum on unification with the mainland in February and comments last month by Japan Foreign Minister Taro Aso that referred to the self-governing island as a country. Taiwan yesterday rebuffed an offer by Hu for talks that's conditional on the island recognizing both are part of the same country.

"The Taiwan issue is miles ahead of any other agenda, as far as China is concerned,'' said Tao Dong, chief Asia economist at Credit Suisse in Hong Kong. "A reiteration of the one-China policy would be the minimum expectation from China. Any comments against the current movement would be considered a breakthrough.''

Mainland China and Taiwan have been ruled separately since a civil war ended in 1949. The government in Beijing regards the island as a renegade province, and has said repeatedly that it would invade if Taiwan tries to declare independence.

The U.S., which is committed under the Taiwan Relations Act to support the island's defense capability, adheres to a "one China'' policy that declares the mainland and Taiwan are part of the same country. The one-China principle was agreed in Hong Kong in 1992 by negotiators from the mainland and Taiwan's then-ruling Nationalist Party.

Trade Delegation

Hu yesterday renewed an offer for talks on an "equal basis'' with Taiwan's government after hosting the biggest delegation of opposition and business leaders from the island to visit Beijing. He said acceptance of the one-China principle is a precondition.

"We can only resolve historical problems through negotiations,'' Hu told former Taiwan Nationalist Party leader Lien Chan and 400 party members and industrialists at Beijing's Great Hall of the People.

Hu, who arrives in the U.S. tomorrow for a three-day visit, will meet Bush at the White House on April 20 for talks that are likely to be dominated by trade and currency issues.

"The Bush administration, though it doesn't support Taiwan independence publicly, still retains strong support for'' Chen and his pro-independence Democratic Progressive Party, said Guan Anping, a Beijing-based trade lawyer and former government official. "President Hu wants President Bush to commit to reining in Taiwan independence forces.''

`Erroneous Signals'

China's Foreign Minister Li Zhaoxing on March 7 urged the U.S. to avoid sending "erroneous signals'' to Taiwan's government. Chen on Feb. 27 said the National Unification Council, a body set up in 1990 to plan for reunification, would "cease to operate'' and its guidelines wouldn't be implemented.

In a statement issued late yesterday, the Taiwan cabinet's Mainland Affairs Council called for the government in Beijing to drop the one-China precondition and resume talks immediately. Chen came to power in 2000 on a pro-independence platform and doesn't accept Taiwan is part of China.

Taiwan and China haven't had direct shipping, air and postal links across the 150-kilometer (98-mile) Taiwan Strait since 1949, when Mao Zedong's Communist forces forced Chiang Kai-shek's Nationalist army to flee to the island.

Still, an estimated 1 million Taiwanese live and work in the mainland and the island's businesses have invested $100 billion in the mainland. China is Taiwan's biggest export market and Taiwan is China's seventh-largest trading partner. Taiwan's Cabinet on April 12 said it's open to regular, direct flights as long as the mainland government negotiates with Taiwan officials.

"The U.S. must make a promise to China to contain the Taiwanese authorities from moving toward independence,'' said Chen Xingdong, a Beijing-based economist with BNP Paribas Peregrine. The U.S. "may not have made efforts enough to contain or control Chen Shui-bian,'' he said.

The U.S., which switched official diplomatic ties from Taiwan to China in 1979, on Feb. 24 called on Taiwan to maintain the status quo. American policy on cross-Strait issues is "firm and unchanging,'' said David Keegan, acting director of the American Institute in Taiwan, the U.S.'s de facto diplomatic mission. - bloomberg.com

Japan scrambled jets more than 100 times to intercept Chinese spy planes, general says

April 20, 2006 - mdn.mainichi-msn.co.jp

Japan has scrambled fighter jets more than 100 times this year to intercept suspected Chinese spy planes approaching Japanese air space, a top general said Thursday, amid growing concern in Tokyo over China's recent arms buildup.

The 107 times alerts in the first three months of the year _ the most in at least a decade _ marked a dramatic increase from the previous year, when fighters scrambled only 13 times against Chinese planes, said Gen. Hajime Massaki, chairman of the Joint Staff Committee.

"Chinese activities in areas around Japanese territory have reached unprecedented levels," Massaki told a press conference. "We believe these planes to be engaging in information-gathering activity, and behind the trend is the rapid modernization of China's military," he said.

The bulk of the incidents took place over the East China Sea, where the two countries are feuding over gas deposits and an island chain, according to the Joint Staff.

Beijing was quick to rebuff Tokyo's allegations. "China's national defense, especially the air force, operates for the purpose of maintaining our national sovereignty and territorial integrity," Chinese Foreign Ministry spokesman Qin Gang said at a regular briefing. "All these operations are justified and normal," he said, adding he couldn't comment further because he had not studied Japan's announcement.

China has announced double-digit spending increases for its 2.5 million-member military nearly every year since the early 1990s. Japan's Defense Agency lists China's military expansion as a top security concern in the region, and Foreign Minister Taro Aso has repeatedly called China a threat -- drawing angry protests from Beijing.

Though linked by billions of dollars in trade, relations between the two neighbors have plunged to their lowest level in decades over a spate of disputes.

Earlier this year, Japan accused China of using spies to pry state secrets from a Japanese diplomat in Shanghai, ultimately driving him to suicide in 2004. China has angrily denied the claims.

The two powers are also feuding over undersea gas and oil deposits, territory and Prime Minister Junichiro Koizumi's repeated visits to a war shrine criticized for its strong links to past Japanese militarism. Beijing has refused top-level talks since Koizumi's last visit in October 2005.

Rocky relations threaten to destabilize a region already tense over North Korea's nuclear weapons program, as well as a recent territorial standoff between Tokyo and Seoul.

South Korea has dispatched 20 gunboats near disputed islets in the Japan Sea to intercept two Japanese vessels that plan to study the area. Seoul warned Thursday of a possible confrontation at sea unless Japan abandons its survey.

Tokyo claims the islets are an integral part of Japan's territory, and that the survey is for scientific purposes. (AP)

Bush warns China to avoid clash over future of Taiwan

Francis Harris / - Telegraph | April 21 2006

America and China yesterday exchanged barely veiled threats on the future of Taiwan, as President George W Bush welcomed China's leader Hu Jintao to the White House.

Greeting the first Chinese leader to come to Washington for nine years, Mr Bush laid out the red carpet, complete with a 21-gun salute.

But within minutes, the issues dividing the two nations became starkly apparent as Mr Bush pointedly referred to the Taiwan Relations Act, legislation which commits America to aid Taiwan against Chinese attack.

Casting aside the usually innocuous sentiments reserved for visiting foreign leaders, Mr Bush said the two countries must be candid. "We oppose unilateral changes in the status quo in the Taiwan Strait by either side, and we urge all parties to avoid confrontational or provocative acts," he said.

The American military has noted with concern the deployment of 700 short-range Chinese missiles close to Taiwan and of cruise missile technology which could be used against the US navy's carrier task groups. Minutes after the Chinese president's arrival, it was announced without comment that the Americans had approved the sale of improved radars for Taiwan's fleet of US-built F-16 combat aircraft.

President Hu responded with a prepared statement in which he acknowledged the deep differences over Taiwan's future. "Taiwan is an inalienable part of Chinese territory. We will continue to make every effort and endeavour with every sincerity to strive for the prospect of peaceful reunification of the two sides across the Taiwan Strait," he said. "However, we will never allow anyone to make Taiwan secede from China by any means."

China has regarded the island as a renegade province since 1949 and demands reunification. It says it would regard any move by Taiwan to declare independence formally as a cause for war.

America too opposes Taiwanese independence. But Mr Bush has stated more explicitly than any of his predecessors that he was willing to confront China in any invasion of Taiwan. "Our nation will help Taiwan defend itself," he said in 2001.

Mr Bush and Mr Hu agreed yesterday that Taiwan should remain in international limbo, but could not agree what would happen if the island tried to alter its status. It was one of a number of disputes where no progress appeared to have been made at yesterday's talks.

Although the Chinese offered some movement over irritants in their critically important trading relationship, there was no sign of progress on security issues such as the suspected attempt by Iran and North Korea to acquire nuclear weaponry. Although trade has grown to once-unimaginable levels, Washington feels that Beijing is enjoying the economic benefits of globalisation without defusing explosive international threats.

Mr Bush focused on North Korea, the impoverished and erratic Stalinist state highly dependent on Beijing's goodwill yet seeking nuclear weapons, but he suggested that little progress had been made. At one point Mr Hu was asked when China would become a democracy with free elections. "I don't know," he said. "What do you mean by a democracy?"

The only unscripted moment came when a Chinese woman screamed at Mr Hu from a camera stand overlooking the White House lawn where the leaders met. "President Hu, your days are numbered. President Bush, make him stop persecuting Falun Gong [a persecuted Chinese sect]," she shouted before being hustled away.chinese coffee, not tea

My Note: the last part of this report is very strange: chinese coffee, not tea [WTF?]

US warns Taiwan on China barriers

By Kathrin Hille in Taipei - Published: May 26 2006 - FT com

Taiwan should ease its trade restrictions with China or risk economic marginalisation, the deputy US trade representative said on Friday.

The call by Karan Bhatia, the most senior US official to visit Taipei in six years, came after he rejected an appeal by President Chen Shui-bian to start negotiations on a bilateral trade agreement with Taiwan in the near future. He said congressional restrictions prevented the administration from starting a new round of free trade agreement talks.

The refusal was a disappointment to Taipei, which had hoped such an agreement would make it politically easier for other countries to seek trade pacts with Taipei against pressure from China. This would have helped Taiwan to counter a drift to economic isolation as Beijing pushes for bilateral and regional trade agreements in Asia.

Mr Bhatia said Taiwan's growing isolation was self-imposed. He said a strong economy, not political bargaining chips, would offer a way out.

"Taiwan faces [the challenge] of retaining its competitive edge within the increasingly integrated Asia Pacific region," he said.

"Finding a way to ensure that Taiwan continues to participate in the region's dynamic growth requires that it pursues policies consistent with the evolving strategies of multinational businesses."

Echoing positions long held by the business community, Mr Bhatia said globalisation required integrated cross-border supply chains, in which China played an increasingly important role.

Against this background, Taiwan's restrictions on the transfer of commercial technology, imports of certain goods from the mainland, cross-Strait travel, investment in China and direct transport links across the Strait put the island at a disadvantage, he said. Taipei had long assumed that progress on bilateral economic issues of concern – such as the protection of intellectual property rights, agricultural trade and the regulatory regime for pharmaceutical products – would bring the US to talks on a trade pact. But Mr Bhatia's unusual focus on cross-Strait issues showed their importance had surpassed all other trade concerns.