Chinaus: July 2005

Wednesday, July 27, 2005

China's Growing Pains Shouldn't Hurt Us

China's Growing Pains Shouldn't Hurt Us
China's Growing Pains Shouldn't Hurt Us

By Albert Keidel

Sunday, July 24, 2005; Page B05

Yes, China is growing fast and buying global assets. And yes, its economy is going to be bigger than America's.

But this will not happen nearly so soon as most people think -- 2040 at the earliest and more likely 2050. In the meantime, rather than trying to block China's access to U.S. assets and markets, the task at hand is to craft, with China, an international system inclusive enough and flexible enough to enable China to grow and for the rest of the world to share the potential gains its economy has to offer.

This hardly seems to be the spirit here in Washington these days. Anxieties about China's burgeoning economic might have been heightened by the sale of IBM's personal computing business to a Chinese firm and Chinese bids to buy American corporate icons such as Maytag and the oil company Unocal. Other worries have centered on the more than $700 billion of foreign exchange reserves China has piled up, much of it invested in U.S. Treasury bonds.

Yet these anxieties have more to do with our own economic challenges than with China's, which remain largely domestic. And those who would build a Great Wall of America to fend off China's influence could end up jeopardizing everyone's long-term peace and prosperity while doing little to improve prospects for political change in China.

In fact, the United States has a major stake in whether or not China succeeds in pulling most of its 1.3 billion people out of poverty. Average consumer spending in China is less than a tenth that in America. Those fearful of the prospect of a bigger Chinese economy should consider the alternative. If China fails in its ambitious program of market reforms and commercial globalization, it could turn into the "sick man" of Asia, governed at the local level by organized criminals and hemorrhaging desperate boat people and migrants.

We have an even greater stake in ensuring that China's success, which seems likely, does not proceed in a world of growing diplomatic and even military confrontations over access to scarce resources. Otherwise we risk a return to late 19th-century globalization patterns -- not with colonies but with spheres of influence. Leading powers would scramble to expand their spheres at the expense of others, with the United States trying to limit China's access to minerals, technology and information. In the past, this sort of pattern led to war.

Trying to hold on to outdated price advantages, whether for U.S. labor, U.S. industries or U.S. energy consumers through blockade and exclusion can only result in destructive retaliatory strategies and military tensions.

The right procedure for absorbing China's growth is through market mechanisms, especially the price mechanism. China's thirst for scarce commodities will inevitably show up in higher prices. But higher prices trigger a whole range of beneficial developments -- exploration for new resources, development of substitutes, breakthroughs in conservation, and adjustments in human behavior. These changes are faced equally by all nations, and competition dictates who benefits most from the resulting productivity gains.

While we concentrate on China's external posture, China's domestic challenges -- many of them left from the Maoist era -- are so big that the country's attention will be turned inward for a long time to come. The most fundamental of these has been the need for wrenching dislocation of state workers, tearing them from long-held but overpaid and unproductive positions and compelling them to find less secure jobs, to work for themselves, or to move to new cities. Between 1997 and 2004, 50 million Chinese workers lost jobs in state-owned and collective firms. The result has been major gains in market-based productivity and income increases. The cost is anger, social tension, demonstrations and riots.

At the same time, close to 200 million rural workers have migrated to non-farm jobs in towns and coastal areas from remote interior regions. Their competition for jobs and housing is a constant source of social tension, while back on the farm, loss of rural land to non-farm investment often triggers local conflict.

China's transition is thus far from easy, and the country could hit many bumps along its way. The government has acknowledged that more than 50,000 demonstrations take place each year -- many of them large and violent. That is well more than a hundred a day. Many demonstrations are labor actions, protesting unpaid wages, poor working conditions and plant closings. Profit motives have also worsened pollution and environmental degradation. Managing these side effects of market reform is a daunting challenge.

Is the Chinese Communist Party to blame? Yes, in part because of its rigid response to criticism, but no form of government promoting change at this pace could avoid similar tensions, demonstrations and violence. Less energetic economic reforms might result in less violence, but also in less progress in eliminating poverty and raising living standards. Grievances in China are magnified in some cases by local corruption. But even as China arrests and convicts corrupt officials, the introduction of markets in new areas continues to provoke resentment among those losing their previously vested privileges.

China's domestic programs are tackling many of these challenges head-on. There have been improvements in legal mechanisms and procedures, but the process is slow, has a long way to go and is hampered by a severe shortage of qualified personnel. Nongovernmental organizations are becoming more numerous, and there are legal frameworks for those seeking redress. Citizens can sue government officials, even if most cases are "settled" out of court. Demonstrations and protests themselves are one avenue of recourse. Chinese authorities defuse most of them peacefully and often work out some meaningful response to the grievance. Organizers and ringleaders, however, are frequently arrested -- especially if there has been violence.

A different challenge -- infrastructure investment -- also illustrates market-oriented tensions. China's cities are booming -- and so are their needs for mass transit, office space, housing and treatment for water and waste. But infrastructure takes money, and with a low per-capita income of just over $1,000 per person, tax and fee revenues are inadequate. China's solution to the funding challenge has been to use banks and other deposit-taking institutions to raise needed money, with repayment to depositors ultimately guaranteed by the government out of future tax revenues. Such programs are anathema to free-market financiers here in the United States. But this is an East Asian pattern that worked for Japan, Korea, Taiwan and Singapore, at least for a while.

Access to world resources is also a vital part of managing China's market transition. Energy supplies are the best-known problem, along with needs for technologies and management methods, information and technical skills. Opening itself to foreign investment on a scale not seen elsewhere in Asia has helped meet many of these needs. Buying foreign companies has helped too. But at this point, with China getting bigger, the country's transactions begin to impinge on privileged access to resources heretofore enjoyed by already industrialized countries.

If the United States reflexively blocks these transactions, it will damage China's trust in its ability to rely on even-handed global market rules for solving its domestic problems. A good example is grain. China's farmers need to increase incomes by diversifying away from grain. They don't make any money growing grain -- the single most important food in China. If China felt safe relying on grain imports for its food needs, farmers could convert their land to more lucrative crops and products, like vegetables, oilseeds, fruits, meat, milk and fish. And America could sell a lot more grain to China. But China doesn't feel safe. China's leaders worry about a supply cut-off or blockade. And so, the emergence of a rural middle class in China is delayed, and U.S. farm interests are hurt.

Instead of appreciating the challenges China faces, Americans naturally concentrate on what plays well in the domestic political arena. China's currency is a good example. U.S. politicians, sensitive to manufacturing job losses in the last recession, blame China. Never mind that last year China's overall trade surplus (with partners worldwide) was only 8 percent of the U.S. trade deficit, compared to 26 percent for the euro currency zone's surplus, 21 percent for Japan and 19 percent for the rest of Asia excluding Japan and China. The sister countries of Singapore and Malaysia together had a larger overall trade surplus than China last year. No one claims they are causing "global imbalances." But China is fair game.

The result is an image of China's sources of foreign reserves that distorts thinking when China comes to bid for U.S. companies like Unocal. The real source of the large U.S. trade deficit is those surpluses in Euro-zone countries and Japan. But these countries are friends and allies; China is not. And so a recent congressional hearing on China's Unocal bid could unblushingly entertain anti-China rhetoric that is out of touch with the reality of China and U.S.-China relations. One member even wondered whether the Unocal purchase could be the first step leading to China's military occupation of major Middle East oil fields and hence control of world oil prices. It is this kind of rhetoric, not China's desire to acquire a U.S. company, that endangers American national security.

The best U.S. response to China's global emergence is to welcome it on the basis of shared commercial rules and procedures. At the same time, America itself needs to accelerate its own domestic restructuring if it is to raise the productivity and incomes of its own labor force in response to the opportunities and challenges that China presents.

Author's e-mail:

AKeidel@CarnegieEndowment.org

Albert Keidel is a senior associate at the Carnegie Endowment for International Peace. He previously served as deputy director for the Office of East Asian Nations at the Treasury Department and senior economist in Beijing for the World Bank.

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Sunday, July 24, 2005

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中国正日益"内向化" 美国对中国的重要性下降

楚树龙

2005年07月25日10:27 【字号大中小】【留言】【论坛】【打印】【关闭】

　　●中国恢复联合国合法席位，加入世贸组织，获得奥运会主办权以及加入几乎所有的国际组织后，中国已从体制上解决了与外部世界的关系问题

　　●随着在学习、工作、生活等方面，中国与西方差距的缩小，“国外”不再是中国人关注和向往的惟一地方

　　●美国等一些势力鼓吹中国“威胁”，与其说中国对外部世界的“野心”、“要求”在增长，不如说中国人对外部世界的关注和兴趣在减少

　　今年年初以来，美国国内出现了一些对中国较为消极的战略判断和战略思维。说中国是“军事威胁”、“经济威胁”，“能源威胁”的声音不绝于耳。

　　美国重新出现“中国威胁论”并不出乎预料。几年前，包括笔者在内的不少中国学者就提出，“9·11”没有根本改变美国的战略基础、战略意识、战略目标和全球战略部署。反恐从根本上说，对美国仍是局部的、技术性的和暂时的战略重点，一旦反恐有一定进展，美国势必把其战略矛头重新对准地缘大国。

　　但是，美国的“新中国威胁论”，显示出这些政治家、战略家不但对中国历史、文化、哲学、思维缺乏深刻的了解，也说明他们对中国今天发生的事情、对中国国内的深刻变化和社会潮流所知不多。

　　中国正日益“内向化”

　　只要每天接触中国人，观察、体验、归纳他们的生活、感受、思维及价值观念，就会发现，在美国等一些国家的人担心，中国力量的增长会导致扩张、带来“威胁”的同时，中国举国上下正出现“内向化”的趋向。无论是中国普通民众还是政府，关注、思考、兴趣、利益的重心越来越在中国国内，而不是外部世界。

　　换句话说，在举世关注中国的崛起、美国等一些人担心“中国威胁”的同时，中国人自己对外国人的关注、对国外的关心和兴趣，与几年前相比不是在增加，而是在减弱。

　　相对而言，中国人越来越关注国内的建设，比如经济发展、社会福利保障、环境、台湾及两岸关系；他们越来越关注自己身边的问题，比如学习、工作、机会、住房、汽车、手机、旅游等；与以前相比，他们越来越欣赏和享受国内而不是国外（包括美国）的生活，一个明显的共识是，国内的个人发展机遇比起国外来，要多得多。

　　中国的“内向化”趋势有它广泛坚实的基础和依据，具有其必然性。

　　中国和世界的差距在缩小

　　一是，中国经济发展的模式根本改变。经济是基础，在改革开放后的多数时间内，中国经济发展的模式没有跳出亚洲经济发展的模式，即“出口导向型”经济模式。但1997年的亚洲金融危机改变了这一点。从1998年起，中国政府明确提出，中国的经济增长是走“以扩大内需为主的增长道路”，而不是以前的以出口、外资为主的“出口导向型”模式。这也是为什么，1997年的亚洲金融危机、2000年来的西方经济不景气，并没有影响中国经济持续高速增长。显然，中国的经济发展不再以国外市场和投资为主，而是以国内需求为主，越来越多的中国人在国内进行大笔消费：买房子、买汽车、用手机、下餐馆、上学、旅游等；国内市场上的投资也以国内、而非美国等外国投资为主。这不是说国外市场、资金、外贸等不再重要，它们仍然重要。但它们的重要性比以前减弱。

　　二是，中国的“国际化过程”基本结束。工业革命后，世界开始大规模相通、相连。但由于长期闭关锁国，中国近代以来总是被动挨打。为了改变这种状况，包括孙中山、毛泽东、邓小平在内的几代中国人努力使中国“进入世界民族之林”。中国恢复联合国合法席位，加入世贸组织，获得奥运会主办权以及加入几乎所有的国际组织后，中国已从体制上解决了与外部世界的关系问题。随着中国加入世界体系过程的基本完成，几十年来中国孜孜不倦努力实现的国际日程基本完成。中国人在国际上要做的象征性大事做完了，别国再难在这些大事上刁难中国。中国人对世界的兴趣和需求，当然就功能性、情感性地减弱了。

　　三是随着在学习、工作、生活等方面，中国与西方差距的缩小，“国外”不再是中国人关注和向往的惟一地方，越来越多的中国人感到，国内同样有更多、甚至更好的发展机遇、学习环境、工作条件和生活质量。曾几何时，国内高校、特别是名校70%左右的学生，毕业后首选是出国；而今天正好相反，70%左右的毕业生的首选是在国内找个好工作。据美国驻华使馆官员告诉笔者，据他们与英、德、法、澳等使馆负责签证的官员接触了解，去年中国申请去外国留学的人数全面减少。究其原因，主要不是因为签证，而是随国内教育、就业机遇的改善，越来越多的中国青年人不选择出国。这些真正在中国生活工作的外国官员，确实比远在万里之外的拉姆斯菲尔德之类，对中国有更切实和真正的了解。

　　美国的重要性在全面下降

　　上述观察、观点不是说中国要回到孤立、闭关锁国的时代。这些趋向表明：在美国等一些势力鼓吹中国强大导致“威胁”的时候，发展和强大中的中国人，对美国等外国的关注、崇拜在减弱、减少。与其说中国对外部世界的“野心”、“要求”在增长，不如说中国人对外部世界的关注和兴趣在减少。

　　反过来，倒是美国对中国的“兴趣”在不断增长：先是中央情报局局长、国防情报局局长向国会做例行的美国国家安全形势报告，重新强调中国“对美国的长期威胁”（前两年的报告中还强调中国在反恐等方面的贡献）；紧接着是美国国防部长、副部长在国会作证时大谈中国的“军事威胁”，包括拉姆斯菲尔德在新加坡大肆鼓吹“中国军费、军力增长”的“威胁”。7月20日，推迟了一个月发表的五角大楼《中国军力报告》，称中国迅速现代化的军队将可能对亚太地区其它军事力量构成“长期威胁”。

　　对付“中国威胁论”的办法之一是不予理睬，因为这类说法对中国的发展不会有什么根本性影响。

　　写到这儿，笔者不禁想到，十年前，中美两国人士就中美关系、特别是其中分歧问题探讨交涉时，背后有一个双方很少直说、但起根本作用的问题：在中美关系中，谁对谁的需求更大？不言自明，当时，中国对美国的需求大于美国对中国的需求。

　　今天再思考这一问题，答案虽然并不一定正相反，但说“美国对中国的重要性比以前下降”，却是事实。中国只是在一个方面仍然像过去那样需要美国：即反对“台独”、维护国家主权完整和安全。在这一方面，美国的作用，主要是负面、消极的，因为如果没有美国的纵容、支持和“保护”，台湾不可能分裂出去。

　　其实，中美间的这种变化不是孤立的。不但美国对中国的重要性在相对下降，美国对日本之外的几乎所有国家的重要性都在下降。伊拉克战争和虐俘等，使美国的“民主”、“自由”、“人权”等价值在全世界贬值；俄罗斯以及亚洲、非洲、拉美的很多国家都从切身的经历体验到，美国根本靠不住。世界确实在走向多样、多元，这些倒是拉姆斯菲尔德等先生应多思考的，否则，最强大的国家也会被世界和历史抛弃。

　　（作者是清华大学公共管理学院战略研究所所长。）

　　《环球时报》 (2005年07月22日第十一版)

来源：人民网-《环球时报》（责任编辑：王金雪）

Friday, July 22, 2005

LexisNexis(TM) Academic - Document

Copyright 2005 The Financial Times Limited
Financial Times (London, England)

July 18, 2005 Monday
London Edition 1

SECTION: LEADER; Pg. 14

LENGTH: 481 words

HEADLINE: US-China relations must resist the hawks Belligerence and populism threaten a vital partnership

BODY:

Major-General Zhu Chenghu is a senior Chinese military officer and dean at Beijing's National Defence University. He is also a notorious hawk on questions of nuclear doctrine. So when he declares that China is prepared to use nuclear weapons against the US in any future conflict over Taiwan, it is both alarming and predictable. He represents widespread thinking in the People's Liberation Army, but he is an extremist: a Chinese version of Curtis LeMay, the former US air force general who proposed massive nuclear pre-emptive strikes during the cold war.

The danger is that Gen Zhu's words, delivered at a briefing of foreign correspondents in Beijing last week, could scarcely have come at a worse time in terms of US-China relations. Anti-China hawks in Washington are eager to seize on any evidence of Chinese belligerence to justify draconian restrictions on trade and investment in the US Congress. The general has obliged, even though other Chinese officials have played down his views.

The Pentagon's annual report on the Chinese military is due for publication next week. It is expected to be more critical than usual, although the White House has toned down some of the language forecasting a dramatic increase in firepower by the 2020s.

On Capitol Hill, however, senators and congressmen are preparing to pass protectionist legislation such as the Schumer-Graham bill that would impose a 27.5 per cent tariff on Chinese exports. The recent Dollars 18.5bn (Pounds 10.6bn) bid by CNOOC, the Chinese energy group, for Unocal, has galvanised the anti-China lobby, which demands the sale be blocked on security grounds.

The White House knows such actions would be counter-productive and badly damage a vital strategic relationship. Not least, George W. Bush, US president, needs China's help to contain the far more immediate nuclear threat from North Korea. But the administration has been strangely half-hearted in its resistance to the anti-China brigade. It is putting its faith in a revaluation of the renminbi, which may not happen soon if Congress is seen to demand it.

The problem lies in the lack of a clear view from Mr Bush on how the most important bilateral relationship of the 21st century should develop - and the lack of priority in developing one. US business, which has a huge stake in maintaining an open trading partnership with China, is cautious about speaking out against the prevailing mood. The result is that US policy towards China is in danger of being hijacked by populism and exaggerated fears over cheap Chinese imports, Chinese investment and nuclear capacity.

None of this excuses the unguarded words of Gen Zhu. He should be firmly rebuked in Beijing. The danger is that without a clear commitment to the strategic relationship on both sides, and a willingness to speak out in favour of close engagement, policy will be driven by the hawks on both sides.

LOAD-DATE: July 17, 2005

LexisNexis(TM) Academic - Document

Copyright 2005 The Financial Times Limited
Financial Times (London, England)

July 19, 2005 Tuesday
London Edition 1

SECTION: COMMENT & ANALYSIS; Pg. 17

LENGTH: 2039 words

HEADLINE: A stir in Asia: nationalism is on the rise even as the region's economies intertwine WORLD POLITICS: The rise of China, Japan's wish to shed its wartime legacy and a shift by South Korea away from the US are making for a volatile mix, writes Victor Mallet

BYLINE: By VICTOR MALLET

BODY:

Even in peacetime, nationalism in east Asia is not an abstract concept but a matter of flesh and blood. Take Hiroshi Kawahara. So fiercely does he support Japan's claim to the disputed Takeshima islands, which are controlled by South Korea and known there as the Dokdo, that he recently cut off one of his little fingers to make his point to Roh Moo-hyun, the South Korean president, and Junichiro Koizumi, the Japanese prime minister.

"I sent one joint by airmail to the presidential office in South Korea and the other to Mr Koizumi," says Mr Kawahara, who heads a Japanese rightwing pressure group called Doketsusha ("Same Blood Organisation"). He bemoans what he sees as the westernisation of Japan and the loss of national pride since its defeat in the second world war. He yearns for a return to the days when the emperor was regarded as divine.

Passionate nationalism is not new in east Asia. Albert Ho, a Hong Kong legislator, tells how he and other Chinese felt so strongly about the distortion of Asian history in Japanese school textbooks two decades ago that they collected their blood in a vase and used it to paint a calligraphic letter of protest.

The past year, however, has brought a palpable resurgence of nationalist feelings in the region that is beginning to worry politicians and diplomats. "Japan wants to be a 'normal country'. China is rising. South Korea wants to play a major power role, at least in north-east Asia," says a Chinese professor and political analyst in Shanghai. "And Japan's asking for a permanent place on the UN Security Council has ignited dissatisfaction in east Asian countries, especially China and South Korea."

Relations between Japan and China, the two giants of the region, have become so strained that smaller countries are calling for calm. "Both sides need to moderate nationalist sentiment," Lee Hsien Loong, Singapore's prime minister, said in a recent speech in Tokyo.

In Japan, the world's second largest economy, many voters say they are fed up with apologising for a war than ended 60 years ago next month. The newly assertive mood - expressed in films and manga comic books as well as in a directive from the Tokyo Board of Education requiring teachers to stand in front of the Rising Sun flag at school ceremonies and sing the imperial national anthem - has worsened Japan's relations with the rest of Asia. Japan now has active territorial disputes with all its Asian neighbours, including Russia, where Mr Koizumi has raised the temperature by surveying disputed islands from a ship.

Shintaro Ishihara, the powerful governor of Tokyo and Japan's best-known nationalist abroad, was once seen as a maverick but his views are today almost mainstream. "I haven't changed a bit," he says. "I think all the environment and the circumstances surrounding the Japanese people and Japan have changed, and that has made the Japanese change."

Mr Ishihara's argument is that the country is under threat from a dangerous North Korean regime and the territorial claims of a rising China and cannot rely on the US for support in a crisis. Japan should therefore stand up for itself diplomatically and militarily. It should rearm and consider calling for a boycott of the Beijing Olympics in 2008 if China continues to misbehave.

"In the past I never thought it was necessary for us to have nuclear weapons but if you look at what is happening these days I think the nation would have a demand for them," he adds.

Mr Ishihara is scornful of Chinese protests over Mr Koizumi's visits to the Yasukuni shrine in Tokyo, which commemorates 14 convicted Class A war criminals as well as ordinary Japanese soldiers. "There's no way for a solution," he declares. "The best way is for them (the Chinese) to keep their mouths shut."

In China, a sense of historical grievance against Japan and the west, fuelled by relentless Communist party propaganda over the years, is combined with the ambition and self-confidence generated by China's rapid economic growth. The mixture is potentially explosive. Only last week, a Chinese general said China might respond with nuclear weapons if it were attacked by the US in any conflict over the disputed island of Taiwan, even if that meant the destruction of hundreds of Chinese and US cities.

In April, thousands of Chinese took part in fiercely nationalistic and sometimes violent street protests against Japan. One of the triggers was the launch of another of Japan's controversial textbooks, which have become steadily less honest over the years about Japanese military atrocities in the 1930s and 1940s, including the massacre of Chinese civilians in Nanjing.

The Chinese government's attitude is ambiguous. Beijing is vigorously pursuing its national interests by modernising its armed forces and staking claims to disputed territories, including the Diaoyu/Senkaku islands now under Japanese control. Last November, China was forced to apologise after one of its nuclear-powered submarines was detected in Japanese territorial waters.

Leaders of the Communist party routinely use patriotic rhetoric to shore up their legitimacy. But Beijing knows it is playing with fire and risks being rushed into a foreign confrontation by the very nationalism it has promoted. Worse, the passions unleashed could be turned against the party.

"Ideally, the Chinese government would use patriotism to inspire people to work harder and on track towards the direction the government wants," says the Shanghai professor, who wants to remain anonymous because of the political sensitivity of his comments. "But nationalism is double-edged. Uncontrollable nationalism would do more harm than good.

"The Chinese government is worried that once you have this nationalism in the street, it will have a boomerang effect. The first three days they will shout against Japan, and on the fourth day it will be against corruption and about the Chinese government."

In South Korea, public anger has been stirred not only by the Dokdo dispute with Japan but also by recent Chinese suggestions that the ancient kingdom of Koguryo - forerunner of Korea - was a vassal state of China. President Roh is as ready as his Chinese counterparts to use nationalism to boost his fading popularity.

"There's no doubt that the environment in north-east Asia over the last six months has become much more nationalistic," says a senior South Korean diplomat in the region. Despite hitherto warm relations with China, he says, "the Koguryo issue was like an alarm call".

This wave of nationalist sentiment is not confined to the three largest economies in east Asia. Taiwan is torn between competing nationalisms - one that sees the island's future as part of greater China and the other emphasising Taiwan's identity as a separate nation. In Thailand, Thaksin Shinawatra, the prime minister, has won support by playing the nationalist card. Even in Malaysia and Indonesia, which share a language, nationalism has been fuelled by a territorial dispute over offshore oil reserves near Borneo.

Although the political temperature has yet to reach boiling point, some thinkers are worried that rising nationalism could one day cause serious trouble in the region. "It's very disturbing," says Noriko Hama, an economist and professor at Japan's Doshisha business school. "It's all becoming very childish, which of course is a dangerous thing."

One of the puzzling aspects of the nationalist trend in politics is that it comes at a time of exceptionally close economic ties. Japanese and South Korean exporters, for example, have never been as dependent as they are today on the Chinese market, while Chinese factories rely heavily on investment and high-technology components from Japan and South Korea.

Ironically, says Ms Hama, integration may lead to intolerance. The Japanese are waking up to the threat of low-cost competition from China, just as French voters who rejected the European constitution developed a fear of Polish plumbers stealing their jobs following Poland's accession to the European Union.

For Akihiko Tanaka, a politics professor and director of the Institute of Oriental Culture at Tokyo University, there are at least two reasons for a surge of old-fashioned nationalism comparable to that in Europe in the 19th and early 20th centuries.

First, there are two important nations in the region that feel incomplete. China has yet to regain Taiwan, which enjoys de facto independence, and has threatened to use force to do so. Korea remains divided between the poverty-stricken, Stalinist North and the prosperous, democratic South. "In Asia still I think there's a quite strong social need for nationalism as a sort of integrator," says Prof Tanaka.

Second, the end of the cold war has released pent-up nationalist emotions. In the 1980s, Japan and China had a common enemy in the Soviet Union. Now they compete with each other for access to Russian oil and gas. Shigeru Ishiba, a member of the Japanese parliament and former defence minister, who is working to revise his country's pacifist postwar constitution, points to renewed nationalism in eastern Europe as well as in Asia. "During the cold war there was a clear split . . . there was a balance of power. Now it's over, there is an imbalance of power. The factors comprising nations - people, ethnic groups, religion and so on - all those became more apparent."

Prof Tanaka says nationalism in one country feeds it in another. "It's a chain reaction," he says. "Chinese anger (with Japan) creates anger in the Japanese - if you like, a vicious cycle of nationalism started to take place."

Among the reasons for hope is the fact that nationalism, even in particular countries, is far from monolithic. For every Chinese or Japanese demonstrator flinging racist insults, there are others who insist that their motives are cultural or economic. In Japan, some are anti-US, some are anti-Beijing and some are both. "One of the difficulties of the Japanese nationalists today is that they are essentially anti-Chinese as well as anti-US. This 'double-anti' position is very difficult to sell to the Japanese public," says Prof Tanaka.

It is true that nationalism and resentment lie close beneath the surface. Mr Kawahara, now missing one finger, and Hasumi Yoshimoto and Hirotomi IgaÂrashi - two other rightist leaders who organise noisy protests in Tokyo from loudspeaker vans - explain variously how they want Japan to adopt nuclear weapons, reject the US-imposed parliamentary system and cut diplomatic ties with Beijing.

Yet many Japanese, including the increasingly strong opposition Democratic Party of Japan, regard these as fringe groups. Even Mr Ishihara is admired more for his management of Tokyo than for his nationalist gestures.

The Yasukuni museum next to the shrine shamelessly glorifies Japan's war record and glosses over such "incidents" as the Nanjing massacre, but the mixed and sometimes acerbic responses recorded in the visitors' books suggest that many Japanese remain unconvinced.

Public opinion in China is harder to gauge. But academics in the region hope that tensions can be eased with the help of an official dialogue between countries, possibly facilitated by the US, which remains the ultimate guarantor of security in east Asia.

"There's no adequate mechanism to manage the triangular relationship between China, Japan and South Korea," says the Chinese academic. "The US is still playing a very important role." For commentators in east Asia, this makes it all the more unfortunate that Condoleezza Rice will be the first US secretary of state for two decades not to attend the annual multilateral security meeting that follows the Association of South East Asian Nations summit in Laos this month.

Some are proposing a trilateral dialogue between Japan, China and the US. Others suggest a simple China-

Japan rapprochement to match the Franco-German pairing at the heart of post-war Europe. Either way, there is a feeling that something must be done to stop what Prof Tanaka calls the "vicious cycle of nationalism and counter-nationalism" from undermining east Asian co-operation. As Ms Hama warns: "It's probably going to get worse before it gets better. People really ought to explore the possible darker consequences."

LOAD-DATE: July 18, 2005

LexisNexis(TM) Academic - Document

Copyright 2005 The Financial Times Limited
Financial Times (London, England)

July 20, 2005 Wednesday
London Edition 2

SECTION: COMPANIES INTERNATIONAL; Pg. 30

LENGTH: 411 words

HEADLINE: Microsoft sues Google over executive CONFIDENTIALITY AGREEMENTS:

BYLINE: By RICHARD WATERS

DATELINE: NEW YORK

BODY:

The escalating rivalry between Microsoft and Google erupted yesterday as the software giant sued to prevent one of its top engineers from defecting to run the search engine company's new China operations.

Kai-Fu Lee, who had been in charge of Microsoft's Beijing research and development centre before moving to head office in Redmond, was yesterday named president of Google's China business and the first head of its planned R&D centre in the country.

Microsoft said it had filed lawsuits against Google and Mr Lee to force him to honour confidentiality and non-competition agreements he had signed.

The agreements, which are signed by all new Microsoft employees, are designed to prevent workers from moving to a direct competitor for a year after leaving the company, or hiring other Microsoft employees or disclosing the company's trade secrets.

Tom Burt, deputy general counsel at Microsoft, said the company often reached agreements with former employees that let them work for a competitor in a position that did not overlap directly with their former responsibilities, but Mr Lee, who resigned on Monday, did not try to negotiate this kind of release.

The fight over Mr Lee threatens to mar one of Google's most important international initiatives.

Its Chinese R&D centre, scheduled to open this year, will give Google a toe-hold in a country that already accounts for one of the world's largest internet populations.

Hiring a leading Chinese expert to build a team of local engineers was yesterday billed as a sign of Google's long-term commitment to the market.

That was before Microsoft's legal intervention.

Mr Lee, a former assistant professor at Carnegie Mellon University in Pittsburgh, one of the top US computer science institutions, worked in the field of interactive media software at Apple and Silicon Graphics before opening Microsoft's Beijing R&D centre in 1998.

An expert in speech-recognition technologies, he was most recently head of Microsoft's natural interactive services division, which was set up to develop technologies that make it easier and more natural for people to use computers.

"As a senior executive, Dr Lee has direct knowledge of Microsoft's trade secrets concerning search technologies and China business strategies," Microsoft said in a statement. "He has accepted a position focused on the same set of technologies and strategies for a direct competitor in egregious violation of his explicit contractual obligation." www.ft.com/it

LOAD-DATE: July 19, 2005

LexisNexis(TM) Academic - Document

Copyright 2005 The Financial Times Limited
Financial Times (London, England)

July 21, 2005 Thursday
London Edition 1

SECTION: LEADER; Pg. 16

LENGTH: 475 words

HEADLINE: China's rising power Military strength is normal. What matters is how it is used

BODY:

China has reacted angrily to the US defence department's report to Congress on Chinese military power, condemning the Pentagon for "unreasonably" and "rudely" attacking Beijing's modernisation of its armed forces.

Beijing protests too much. The US document - neither as hawkish as Pentagon hardliners nor as accommodating as State department doves would like - is measured and clearly written. It does not reach alarmist conclusions but summarises what is known about Chinese strategy and the People's Liberation Army and sets out a range of plausible scenarios. The report talks of a possible future threat to Asia but also says China's ability to project its power is currently limited and declares that the US would welcome the rise of a peaceful and prosperous China.

Yet there is a grain of truth in the Chinese complaint. The US establishment as a whole - after all, it is Congress that commissions these public annual assessments, not the Pentagon that wants to hand them out - seems to assume that there is something inherently abnormal and disturbing about China's attempts to modernise its old-fashioned military forces.

Nothing is more reasonable or predictable than a rising economic power such as China using some of its newly earned wealth to enhance its military might. What matters is how that strength is used. Increased influence requires increased responsibility.

Here China's Communist rulers have much to learn. The statement last week by Major-General Zhu Chenghu, a hawkish commander, that China was prepared to countenance the nuclear destruction of hundreds of US and Chinese cities if the US attacked China in a conflict over Taiwan was the opposite of responsible. The theory that his wild threats are part of a campaign to deter the US from defending Taiwan hardly justifies such inflammatory rhetoric.

A more immediate threat to US interests is China's willingness to use its power in diplomatic rather than military contests. Washington is alarmed at the speed with which China is befriending unsavoury regimes hostile to the US, including Iran and Venezuela, simply because they have oil.

The US has guaranteed the security of the Pacific since the second world war and enjoyed a period as sole global superpower following the end of the cold war but it will have to get used to an increasingly muscular China.

China will also need to adapt to its new circumstances. The Pentagon rightly complains about the secrecy surrounding China's military strategies and budgets, and reckons real spending is two to three times the published figure of Dollars 30bn (Pounds 17.3bn) a year.

There may thus be a good reason why the latest assessment reveals nothing shocking about the PLA. The truly alarming aspects of China's plans and capabilities will be the ones that are not in the report because the Pentagon knows nothing about them.

LOAD-DATE: July 21, 2005

LexisNexis(TM) Academic - Document

Copyright 2005 The Financial Times Limited
Financial Times (London, England)

July 21, 2005 Thursday
London Edition 1

SECTION: ASIA-PACIFIC; Pg. 6

LENGTH: 748 words

HEADLINE: Report strikes Beijing nerve at politically sensitive time: China's expanding military has raised fears among its neighbours too, write Mure Dickie, Kathrin Hille andDemetri Sevastopulo

BYLINE: By MURE DICKIE, KATHRIN HILLE and DEMETRI SEVASTOPULO

BODY:

Chen Shui-bian, Taiwan's feisty president, has long issued dire warnings to regional neighbours that China's rapid military modernisation poses a potential threat that reaches far beyond the shores of his disputed island.

Mr Chen's warnings tend to be ignored, publicly at least, but this week he won some strong backing in the shape of a report by the US Department of Defense that suggested China's growing military could tempt Beijing in future to use force against its neighbours.

The Pentagon report also detailed China's efforts to acquire the means to wage war successfully against Taiwan, over which it claims sovereignty, and to deter other countries from coming to Taipei's defence.

In doing so it highlighted one of Asia's most sensitive security issues: China's determination to use its growing economic power to create a modern military capable of operating far beyond its borders.

Joseph Wu, Taiwan's top official responsible for policy towards China, says: "The report's assessment - that China's military build-up is a threat both in the Taiwan Strait and also to regional security - is in line with our assessment, and we welcome that."

Dan Blumenthal, defence analyst at the American Enterprise Institute, said the report underscored the US view that China was determined to be the dominant power in Asia, and that the arms being developed for any Taiwan conflict could "have applications for its aspirations elsewhere".

While Taipei welcomed the report, Beijing was furious at what it called a baseless attack on its normal and reasonable defence modernisation - and a scheme intended to provide excuses for US sales of advanced weapons to Taiwan.

The report comes at a sensitive moment in ties between the world's most populous country and its most powerful.

CNOOC, the Chinese state-controlled oil group, is bidding to acquire the US energy group Unocal, a move that has already prompted objections from some US politicians on security grounds. And Hu Jintao, China's president, is planning to visit the US in September.

Beijing's efforts to promote its military modernisation as merely part of its "defensive defence policy" had already suffered a blow last week when a senior Chinese military official declared that the People's Liberation Army was prepared to use nuclear weapons against the US in case of a conflict over Taiwan.

Zhu Chenghu, a PLA major-general and professor at China's National Defence University, said that if the US was determined to interfere in such a war, then China might have to go nuclear. The remarks sharply contradicted China's long-standing pledge never to be the first to use nuclear weapons. While Beijing officials have played down the general's remarks as his personal opinion, they have not publicly disavowed them.

Indeed, one respected Chinese academic says Mr Zhu's view is merely a logical recognition of the fact that the PLA would not be able to rely on conventional weapons to ward off US involvement in a battle over Taiwan. "If the US sent its military to Taiwan without the Chinese government's approval, that would constitute an invasion of China, and subsequently undercut China's core interest," the academic says.

Jing Huang, a senior fellow in foreign policy studies at the Brookings Institution, says Mr Zhu would never have been able to make such comments unless he was backed by powerful forces within the PLA.

There is no doubt, however, that Mr Zhu will have fuelled US concerns about Beijing's development of its nuclear forces.

China has long been an extremely restrained nuclear power, relying on a "minimum deterrent" force centred on only a few dozen liquid-fuelled silo-based missiles capable of hitting the US.

But the Pentagon report notes Beijing plans to deploy over the next few years new road-mobile solid-fuelled DF-31 and DF-31A ballistic missiles that would be much harder for the US to target and destroy. One Senate aide says the report is "completely consistent" with US mainstream thinking about China.

"(China's) defence modernisation is focused principally on Taiwan contingencies that include the need to dissuade or deter American involvement in a Taiwan contingency," he says.

The report was the subject of intense debate in Washington, with National Security Council and State Department officials opposing some of the harsher rhetoric included by the Pentagon in earlier drafts.

The aide said the NSC appeared to have convinced the Pentagon to tone down some of the original more inflammatory language.

LOAD-DATE: July 21, 2005

LexisNexis(TM) Academic - Document

Copyright 2005 The Financial Times Limited
Financial Times (London, England)

July 21, 2005 Thursday
London Edition 1

SECTION: THE AMERICAS; Pg. 6

LENGTH: 505 words

HEADLINE: China hits at US claim of military threat PENTAGON REPORT:

BYLINE: By MURE DICKIE, KATHRIN HILLE and DEMETRI SEVASTOPULO

DATELINE: BEIJING , WASHINGTON and TAIPEI

BODY:

China has denounced a report by the US Department of Defense that painted its increasingly powerful military as a potential threat to other Asian countries.

The foreign ministry said yesterday it had summoned the acting US ambassador to a meeting with Yang Jiechi, vice-minister, to express Beijing's "strong dissatisfaction and resolute opposition" to the Pentagon's annual report to Congress on China's military power.

The assessment was a flagrant mischaracterisation of China's peaceful defence policy and reasonable military development, the ministry said in a statement. "This report ignores fact in order to do everything it can to disseminate the 'China threat theory'. It crudely interferes in China's internal affairs and is a provocation against China's relations with other countries."

The report and Beijing's response underline the sensitivities over China's growing military clout in a region where US supremacy has been unchallenged for decades. The report, which had been delayed reportedly because of disagreement within the US administration about its content, said China's ability to "project conventional military power beyond its periphery remains limited".

It detailed Beijing's efforts to acquire the means to wage war against Taiwan, over which China claims sovereignty, and to deter other countries from intervening in such a conflict.

Armed with an increasingly potent People's Liberation Army, Chinese leaders might be tempted to resort to force more quickly to resolve disputes with its neighbours, the report said. "Over the long term, if trends persist, PLA capabilities could pose a credible threat to other modern militaries in the region," it said.

China's foreign ministry dismissed such forecasts and the report's assessment that Beijing's defence spending was likely to be between two and three times as high as the Dollars 30bn (Euros 25bn, Pounds 17bn) publicly allocated for this year. The ministry said US defence spending was nearly 18 times as high as China's - and 77 times as high in per capita terms.

However, China's response is unlikely to ease concern among US analysts and politicians about the potential threat posed by its drive to deploy advanced weapon systems, ranging from attack submarines to intercontinental nuclear missiles.

A senior Chinese military official raised hackles in Washington last week by declaring that China was prepared to use nuclear weapons against the US in a conflict over Taiwan.

Analysts in Taiwan said the island would benefit from the report's focus on China's military expansion. However, Andrew Yang, secretary-general of the Chinese Council of Advanced Policy Studies in Taipei, said Beijing was likely to push Washington to contain Taiwanese moves towards independence as a condition for any promise not to use its strengthened military capabilities. "Thus we will see rising US pressure on the Taiwanese government very soon," he said. Additional reporting by Demetri Sevastopulo in Washington and Kathrin Hille in Taipei .. Editorial Comment, Page 16

LOAD-DATE: July 21, 2005

Friday, July 15, 2005

LexisNexis(TM) Academic - Document

Financial Times (London, England)

May 24, 2005 Tuesday
London Edition 1

SECTION: INTERNATIONAL ECONOMY; Pg. 9

LENGTH: 341 words

HEADLINE: US threatens to take film piracy war with China to WTO

BYLINE: By RICHARD MCGREGOR

DATELINE: BEIJING

BODY:

The US film industry yesterday threatened to push for action against China in the World Trade Organisation as illegal DVD copies of the latest Star Wars movie went on sale on Beijing's streets just a few days after its opening.

Dan Glickman, president of the Motion Picture Association of America, said piracy had not diminished in China despite the seizure of 500m discs by authorities in the last five years.

"This is the kind of thing that could raise trade tensions to the point where they affect bilateral relations," he said in an interview at the end of his first trip to China since his appointment in September.

Mr Glickman gave his meetings a personal touch by displaying a pirate DVD he had bought in Beijing of The Hitchhiker's Guide to the Galaxy, a recently released filmed on which his son, Jonathan, was a producer.

Industry officials travelling with Mr Glickman said the Chinese authorities had attempted to find out where he had bought the disc so the shop could be shut down.

Mr Glickman, a former congressman and agriculture secretary in the Clinton administration, is one of a succession of senior US visitors to China in recent months to have warned Beijing about a backlash brewing in Washington.

WTO rules governing intellectual property rights allow member states to file complaints against other nations on the grounds that their copyright regimes are not acting as a deterrent against piracy.

Mr Glickman said he had tried to convince Beijing that enforcing intellectual property rights was in China's interest, allowing it to build vibrant local movie and music industries, which are also crippled by piracy.

Despite Chinese fears that their market could be swamped with US movies, China had a positive "balance of trade" in culture with America last year, Mr Glickman said, because of the box office success of films like Hero, a martial arts epic.

In November the global music industry urged the US and Europe to use trade agreements to demand tougher anti-piracy action from the governments of Russia, China, Mexico and Brazil.

LOAD-DATE: May 23, 2005

LexisNexis(TM) Academic - Document

Copyright 2005 The Financial Times Limited
Financial Times (London, England)

July 15, 2005 Friday
London Edition 3

SECTION: THE AMERICAS; Pg. 8

LENGTH: 483 words

HEADLINE: Push for China bill ahead of Cafta vote

BYLINE: By EDWARD ALDEN

DATELINE: WASHINGTON

BODY:

The US House of Rep-resentatives will vote as early as next week on a package of measures to toughen US trade enforcement against China, a move aimed at rounding up desperately needed support for a bilateral trade deal with central America.

Bill Thomas, the powerful Republican chairman of the House ways and means committee, yesterday said he would support legislation to allow US companies to seek import duties if they believe their Chinese competitors are unfairly subsidised by Beijing.

In addition, the bill would step up US monitoring of China's compliance with its trade commitments in areas such as intellectual property rights and agriculture, and would tighten reporting requirements on currency manipulation.

The move was a sign of the obstacles the US administration and the Republican leadership face in pushing the Central American Free Trade Agreement through Congress. While Cafta was narrowly approved by the Senate last month, House Democrats are virtually united in their opposition, forcing the administration to seek support from Republicans for whom the trade deficit with China is a central concern.

Mr Thomas said he would urge the Republican leadership to hold a vote on the China bill before the final vote on Cafta, which is expected by the end of this month.

The administration has already slapped quotas on many categories of Chinese clothing imports, in part to win support for Cafta from undecided Republicans in southern states where the textile industry remains influential.

Phil English, a Republican Cafta opponent with close ties to the steel industry, said the proposed China legislation would "form the basis for us to move forward on a bipartisan basis on Cafta and other trade issues".

He said he would now support Cafta, and believed five or six other members of Congress would be persuaded as well.

But yesterday's action did little to appease Democrats.

"To get one vote on the (ways and means) committee for Cafta, the Republicans are willing to support a new China bill - much of which has been advocated by Democrats for years without any response," said Charles Rangel, the top Democrat on the committee. "They talk about sugar, textiles, and now China, but the Republican leadership cannot get the votes to pass Cafta on its own merits."

China is currently treated as a "non-market economy" by the US, with special rules for anti-dumping cases because it is assumed that Beijing is heavily involved in most sectors of the economy. It is not clear how the US would attempt to calculate the level of government subsidies to individual companies in China.

Mr Thomas had previously opposed allowing subsidy cases against China, and he acknowledged that the administration "would not prefer something in this area".

While the bill would not directly affect the takeover bid by Cnooc, the Chinese oil company, for Unocal, it is likely to get caught up in the same debate.

LOAD-DATE: July 14, 2005

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Article 26

World

China seeking to curb US clout in Asia, say critics

Eugene Low , US Correspondent
724 words
15 July 2005
Straits Times
English
(c) 2005 Singapore Press Holdings Limited

But others dismiss warnings of many lawmakers as alarmist

WASHINGTON - A BID by China National Offshore Oil Corp (CNOOC) to buy one of America's largest oil companies, Unocal, drew plenty of flak in Congress, with critics slamming the move as an attempt by Beijing to curb US influence in Asia.

'A Chinese takeover of Unocal will introduce or increase political influence in all the regions where Unocal's assets are located, some of which are of political and strategic importance to the United States,' said Mr Richard D'Amato, chairman of the US-China Economic and Security Review Commission.

He told the House of Representatives' Armed Services Committee on Wednesday that the deal was not merely commercially driven, but was aimed at advancing Beijing's strategic interests at the expense of the US.

The bulk of Unocal's assets are in South-east Asia. Among these are natural gas production facilities in Indonesia, which supply Taiwan, Japan and South Korea.

Mr D'Amato warned that if CNOOC locked up Unocal's gas holdings in Indonesia, there could be a threat to regional security.

Mr Frank Gaffney, a Pentagon strategist under the late president Ronald Reagan, said the deal was guided by Beijing's 'ominous' strategy to gain 'dominance over strategic energy resources and technologies'.

'China's aim is inexorably to supplant the US as the world's premier economic power and, if necessary, to defeat us militarily,' he said.

Republican Representative Duncan Hunter of California, who heads the influential Armed Services Committee, had convened the hearing.

Mr Hunter, who has been a consistent critic of CNOOC's US$18.5 billion (S$31.5 billion) bid, told reporters it would be a mistake for the administration to allow the deal to go through.

The proposed transaction is to be reviewed by the US government's Committee on Foreign Investments in the US.

Mr Hunter said he would consider legislation to block the deal even if it were approved by the government. The House has approved a measure to block the Treasury Department from using funds to approve CNOOC's bid.

The deal has provoked sharp opposition from Congress. China-bashing is on the rise as politicians become increasingly worried by its growing military and economic clout.

Most of the lawmakers at Wednesday's hearing agreed that selling Unocal to CNOOC, which is 70 per cent owned by the Chinese government, would harm America's interests.

A number of senators have also made similar protests. Republican Senator Chuck Grassley of Iowa, who chairs the Senate Finance Committee, and Democrat Senator Max Baucus of Montana said in a letter to President George W. Bush on Wednesday that the deal could contravene China's obligations to the World Trade Organisation.

Some experts, however, have described such concerns as alarmist.

Cato Institute analyst Jerry Taylor said at the hearing that Congress was wrong to imply that Chinese control of Unocal would hurt US interests in the global oil market.

'Even if a Unocal-CNOOC transaction led to the diversion of oil to China, it would have no net effect on the amount of oil available to buyers in the world market,' he said. 'America has enough enemies abroad without conjuring more out of thin air.'

His point was not lost on all the lawmakers at the hearing.

'If you call China an enemy, it will become an enemy,' warned Democrat Representative Vic Snyder of Arkansas.

eugene@sph.com.sg

POLITICAL CONCERNS

'A Chinese takeover of Unocal will introduce or increase political influence in all the regions where Unocal's assets are located, some of which are of political and strategic importance to the United States.' -- MR RICHARD D'AMATO, chairman of the US-China Economic and Security Review Commission

ECONOMIC AND MILITARY CONCERNS

'China's aim is inexorably to supplant the US as the world's premier economic power and, if necessary, to defeat us militarily.' -- MR FRANK GAFFNEY, a Pentagon strategist under the late president Ronald Reagan

NO REASON FOR CONCERNS

'Even if a Unocal-CNOOC transaction led to the diversion of oil to China, it would have no net effect on the amount of oil available to buyers in the world market.' -- Mr JERRY TAYLOR, a Cato Institute analyst

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Article 25

Asia - China

US moves to curb sale of foreign arms to China

Roger Mitton , US Bureau Chief
544 words
15 July 2005
Straits Times
English
(c) 2005 Singapore Press Holdings Limited

House passes Bill that lets US penalise non-US firms that sell Beijing weapons

WASHINGTON - THE United States House of Representatives has passed controversial new legislation that will severely curb foreign arms sales to China.

It will mandate the Bush administration to report to Congress any foreign company or individual that sells weapons or defence equipment to China.

The new law will thus permit closer monitoring of such arms sales and, if necessary, allow steps to be taken to stop them.

Coming at a time when senior members of the US government and Congress have lambasted Beijing's military expenditure, the new Bill will further confirm the perception that the US views China as its greatest future rival.

US Secretary of State Condoleezza Rice said in Beijing last weekend: 'There is no doubt that we have concerns about the size and pace of the Chinese military build-up.'

Reflecting that concern, the legislation - the East Asia Security Act of 2005 - got strong support in the House of Representatives. It was tabled on Wednesday by the House international affairs committee's chairman, Republican Henry Hyde, and seconded by top Democrat Tom Lantos.

Requiring a two-thirds majority, it passed easily on a voice vote.

The measure also enjoys support among conservative groups aligned to Mr Bush.

Said Mr Richard Fisher, vice-president of the International Assessment and Strategy Centre in Washington: 'The Act represents a landmark expression of concern by the House that the world not arm a Chinese government that refuses to abide by civilised rules.'

China expert John Tkacik of the Heritage Foundation here said the Bill 'will enhance US security and force China to reconsider its military build-up and confront the growing backlash against its aggressive behaviour in East Asia'.

The new law had its genesis earlier this year in American outrage at a proposal by the European Union to lift a 15-year-old arms embargo on China.

Mr Lantos said if the EU had lifted its embargo, it would have 'raised a threat that US soldiers could face the latest in high-tech weaponry manufactured in Europe, as well as Chinese weapons systems that could be greatly improved by European technology'.

After the US protested, the EU curbs stayed. But US legislators complained about loopholes which allowed arms technology to flow to China.

The new Bill will address these concerns. Governments or companies known to have engaged in such sales can be penalised, if necessary, through US sanctions.

The Bill may face difficulty in the Senate, which has been more restrained in its attitude to the rise of China. If it does not pass unamended in the Senate, then it will not become law.

But many China watchers here are worried that the new Bill may have a negative effect.

Said Mr Alan Romberg, director of the East Asia Programme at the Stimson Centre in Washington: 'To jump to the conclusion that a threat (from China) currently exists, and to fashion legislation that codifies a confrontational US response, is actually likely to contribute to a sense of mutual hostility, thus making a 'China threat' a more probable outcome.'

rogermitton@hotmail.com

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Chinese General Lays Nuclear Card On U.S.'s Table

By Jason Dean
746 words
15 July 2005
The Asian Wall Street Journal
A2
English
(c) 2005 Dow Jones & Company, Inc. To see the edition in which this article appeared, click here http://awsj.com.hk/factiva-ns

BEIJING -- A Chinese general suggested that if the U.S. were to attack China in a conflict over Taiwan, Beijing could respond with nuclear weapons.

Maj. Gen. Zhu Chenghu, a dean at China's National Defense University, made the comments to a visiting group of Western journalists based in Hong Kong, including an editor from The Asian Wall Street Journal. The Chinese general said that the comments represented "my assessment, not the policy of the government." He also said that he was confident that "China and the U.S. will not go into war."

Gen. Zhu's role doesn't involve policy making, and analysts in the U.S. and China familiar with the general agreed that his stance doesn't likely represent the Chinese government's position.

"I think what he said is not mainstream thinking" in the Chinese government, said Chu Shulong, director of the Institute of Strategic Studies at Tsinghua University in Beijing, who says Gen. Zhu is a friend.

Still, Gen. Zhu's comments could fuel tension between Beijing and Washington, where distrust toward China is already simmering over trade and other issues. This week, for example, U.S. congressional hearings over Chinese oil company Cnooc Ltd.'s bid to buy Unocal Corp. have featured sharp criticism of Beijing's strategic intentions.

Statements like Gen. Zhu's "have sort of sown the seeds in Washington that the Chinese are not just a threat, they're a real danger," said John Tkacik, a China specialist at the conservative Heritage Foundation who is often critical of Beijing. Mr. Tkacik said Gen. Zhu's comments may have been intended as a kind of "psychological warfare" to underscore China's resolve, but that they would likely "backfire" in Washington.

Gen. Zhu's remarks aren't the first time a Chinese military official has brought up the specter of a nuclear response against the U.S. In 1995, Lt. Gen. Xiong Guangkai, then deputy chief of the general staff of China's People's Liberation Army, told then-U.S. Assistant Defense Secretary Charles Freeman that Beijing could attack Los Angeles with a nuclear missile if the U.S. were to attack China regarding Taiwan.

Gen. Zhu's comments were in response to a question on how China might prepare against U.S. interference in the case of a conflict over Taiwan.

Taiwan has enjoyed de facto independence since 1949, when the Kuomintang fled there after being defeated by the Communists in a civil war. But Beijing still claims Taiwan as part of China and has threatened to use force to prevent a permanent split.

The U.S. is legally obliged to aid Taiwan's self-defense, and could well be drawn into conflict in the event of a Chinese attack.

"If the Americans draw their missiles and position-guided ammunition into the target zone on China's territory, I think we will have to respond with nuclear weapons," Gen. Zhu said, adding that Chinese territory includes the country's warships and aircraft.

"If the Americans are determined to interfere . . . we will be determined to respond, and we Chinese will prepare ourselves for the destruction of all cities east of Xian," he said. Xian is an ancient city based in central China. "Of course the Americans will have to be prepared that hundreds of, or two hundreds of, [or] even more cities will be destroyed by the Chinese."

Although China has a no-first-strike nuclear policy, Gen. Zhu said he believed that policy applied to nonnuclear powers and could be changed. He said China has no intention to enter an arms race against the U.S., however, pointing to the former Soviet Union as an example of the futility of doing so.

Gen. Zhu described Taiwanese independence as "a cancer" that could spread, though he said, "I don't think we are facing any imminent threat."

On North Korea, Mr. Zhu blamed the U.S. for Pyongyang's efforts to develop nuclear weapons, saying it was doing so because it felt threatened by the U.S. and its nuclear capabilities.

Yesterday's meeting was part of a tour arranged by the Better Hong Kong Foundation, a private Hong Kong organization that has sought to improve people's understanding of China. Gen. Zhu was originally speaking to the journalists about China's national-defense policy.

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U.S. Seeks to Bolster Relations With India --- Washington Envisions New Delhi as World Power; A Bulwark Against China?

By Jay Solomon and Neil King Jr.
1,298 words
15 July 2005
The Asian Wall Street Journal
A1
English
(c) 2005 Dow Jones & Company, Inc. To see the edition in which this article appeared, click here http://awsj.com.hk/factiva-ns

WASHINGTON -- A state visit by Indian Prime Minister Manmohan Singh Monday is setting the stage for the Bush administration to significantly upgrade a relationship that many American conservatives believe should be the cornerstone of a new U.S. security strategy toward Asia.

Central to this policy is a desire for the U.S. to check China's growing economic and military might globally, as well as to partner with New Delhi to counter Islamic fanaticism out of such South Asian countries as Pakistan and Bangladesh.

Among the issues U.S. and Indian officials are expected to discuss next week are the Bush administration's plan to sell sophisticated new weapons systems and nuclear technologies to New Delhi. Mr. Singh, in turn, is expected to seek President George W. Bush's support in securing for India a veto-wielding permanent membership on the United Nations Security Council, as well as some semiofficial standing in the Group of Eight industrialized countries.

"We have very high expectations" for this state visit, said a senior Bush administration official working on its planning. "We're interested to help India become a world power." Mr. Singh will address a joint session of Congress Tuesday, and Mr. Bush is expected to attend a meeting of key Indian and American businessmen later in the week.

Aides to Mr. Bush said he has taken a particular interest in India since 1999, viewing its democracy and massive, and moderate, Muslim population as a stabilizing force for Asia and the Middle East. This positive sentiment only grew after the Sept. 11, 2001, terrorist attacks on the U.S., as former Indian Prime Minister Atal Bihari Vajpayee was among the first foreign leaders to call Mr. Bush and lend his country's support in the war against al Qaeda.

The Indian leadership said "you now understand what we've endured for a long time," recalls Robert Blackwill, who served as the Bush administration's ambassador to India at the time. Islamic militants operating out of Pakistan and the disputed region of Kashmir have launched a number of terrorist attacks inside India during the past 15 years.

U.S. officials seeking to build the partnership with India said they recognize that it will take time, and that squeamishness about Washington still runs deep in India after decades of determined separation. New Delhi tilted toward the Soviet Union during the Cold War.

The most recent case in point came when the two countries signed a defense pact late last month, after U.S. Defense Secretary Donald Rumsfeld gave an unusually warm welcome to his Indian counterpart, Pranab Mukherjee. No sooner had the ink dried than an outcry issued from various factions in India, particularly on the left.

"Guardedness becomes all the more essential," said an opinion piece in the Hindu, a large Indian daily, "when it pertains to...a super-power which regards all the world its fiefdom."

Many in India also are wary of any Bush administration designs to see the South Asian giant mainly as a friendly bulwark against China and as a huge new market for military hardware. India, with a defense budget this year of $17.5 billion, is the world's third-largest importer of defense items. Topping its shopping list are 116 fighter jets and 500 helicopters, which have companies like Lockheed Martin Corp., Boeing Co. and Bell Helicopter Textron Inc. knocking at the door.

Indian officials are quick to stress that their burgeoning relationship with the U.S. isn't directed against China. In April, New Delhi signed its own "strategic partnership" with Beijing, they said, and two-way trade between the long-standing rivals has boomed in recent years.

"I don't look upon our relations with the U.S. as meant to rival China," Mr. Singh said in a recent speech. "I look forward to enhanced cooperation with China."

Senior U.S. State Department officials also have said in recent interviews that Washington isn't seeking to develop a containment strategy toward China. But a number of American conservative strategists, both inside and outside the Bush administration, are calling for just that. On Wednesday, a forum on U.S.-India relations in Washington by the conservative U.S. India League described as almost inevitable a U.S.-China conflict.

India will provide "an economic alternative to when we need to face the Chinese challenge," said Alan Keyes, a former Republican presidential candidate and senior State Department official.

One significant barrier to the Bush administration's ambitious plans for India are legislative restrictions that block Washington from selling sensitive "dual-use" and civilian nuclear technologies to New Delhi. India has never signed the Nuclear Non-Proliferation Treaty, or NPT, and Washington sanctioned New Delhi after it conducted secret nuclear tests in 1998. Though most of the sanctions have been lifted, many counter-proliferation experts worry about leakages of sensitive technologies out of India, particularly to its neighbors such as Iran.

"What kind of signal are we sending by giving these technologies to India?" said Henry Sokolski, executive director of the Nonproliferation Policy Education Center, a think tank in Washington. "You're encouraging countries to flout the NPT."

The administration may try to finesse a way around the many legal hurdles that stand in the way of selling nuclear technology to India, U.S. officials familiar with the matter said. Discussions are still underway as to how the Bush administration can offer assistance to India's nuclear-power industry without going too far, they said.

"The Indians have high expectations on nuclear, and I'm not sure we can fully satisfy them," said one U.S. official.

On the U.S. side, the Bush administration would like to see India open up more widely to U.S. investment, including in the retail and service sectors, and put in place more stringent export controls for sensitive technologies. U.S. officials complain that efforts to push ahead on some of these more brass-tack issues have bogged down in recent months, despite all the high-level talk.

Still, U.S. and Indian officials are expected to point to real progress on the economic front during Mr. Singh's visit. Two-way trade between the countries has boomed, with U.S. exports to India growing by more than 20% last year to $6.1 billion. And institutional investment by American funds in India jumped to nearly $10 billion for the fiscal year ending March 2005, from around $500 million for the previous fiscal year.

One hallmark of the India-U.S. meetings is expected to be the announcement by New Delhi of a comprehensive settlement of Dabhol, the failed Enron Corp. power project in India. Successive Indian governments and key U.S. investors in the $2.9 billion gas-fired plant, such as General Electric Co. and Bechtel Group Inc., have been in a negotiating standoff for nearly four years over unpaid debts after a local Indian government shut down the facility in 2001. U.S. officials said the dispute has been blocking other American companies from engaging in big-ticket infrastructure projects in India.

Both Bechtel and GE have agreed to payouts by the Indian government in recent weeks, U.S. officials said. And Mr. Singh is expected to announce the settlement next week.

"This is a major step forward in so far as improving the investment climate in India," said Ron Somers, president of the U.S India Business Council in Washington. "Resolution of Dabhol clears a major hurdle that had been a nagging legacy adversely affecting investment decisions in boardrooms all across America."

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Thursday, July 14, 2005

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美国贸易保护危及全球十余项惩罚中国法案待批

中国网 | 时间：2005 年07 月14 日 | 文章来源：每日经济新闻

美国保护主义情绪高涨造成它与一些重要贸易伙伴之间紧张局势升级，可能导致全球自由贸易运动停滞不前。

一些经济学家担心，这继而可能引发贸易战，致使全球经济增长放慢，服装和电视机等商品价格广泛上涨，对美国消费者不利。

贸易关系紧张的迹象几乎每天都出现，美国是焦点。

美国哥伦比亚大学经济学家贾格迪什·巴格瓦蒂说：“纵观全世界，领导人真正关心贸易自由化有诸多理由。有一个问题确实在美国方面。美国人害怕贸易，担心与相对贫穷国家展开贸易会让美国人自己变穷。”

巴格瓦蒂特指中国和印度。美国国会现有十几项旨在惩罚中国“不公平贸易做法”的法案等待通过，可能会招致中国报复。

围绕给各自的飞机制造巨头以补贴，美国与欧洲的争端愈演愈烈。5月，欧洲和加拿大对美国商品征收了4000多万美元关税，因为美国国会拒绝修正世界贸易组织认定为非法的反倾销法。

糖料作物种植者、纺织品制造商和工会与国会民主党议员联手，企图使拟议签订的中美洲自由贸易协议法案胎死腹中。专家警告说，如果不能通过这项法案，可能会损及更为雄心勃勃的努力，即把自由贸易倡议扩大到整个西半球和全世界。

自由贸易倡议的反对者表示，他们希望确保在同等水平上展开竞争，保护工人权益。而支持者担心，美国如果退缩，将为贸易战升级打开大门，引发通货膨胀，惊扰金融市场。

多数经济学家和美国国会议员认为，美国在第二次世界大战结束后推动资本自由化和鼓励跨国贸易对全球经济增长发挥了有利作用。取消关税和其他贸易壁垒使美国企业能够扩展海外市场，寻求最廉价生产商，向消费者提供价格更低、选择更多的商品。

尽管贸易使经济广受其惠，痛苦却集中在受低成本竞争威胁的地区或行业。面对来自农场主要求保护的压力，美国政府1930年通过了《斯穆特—霍利关税法》，许多人认为那是诱发美国经济大萧条的关键因素。

美国保护主义情绪高涨的其他例子包括20世纪80年代抵制日货和1994年围绕是否通过《北美自由贸易协定》展开的政治斗争。

不过，一些分析师说，当前对自由贸易的不安更广、更深。养老金和社会安全网的其他保障不断消减之际，全球经济变革加剧了美国就业市场的严峻形势。

美国的贸易逆差去年达到6180亿美元，贸易已经成为美国国会争论日趋激烈的问题，国会内部共和党与民主党之间严重的党派偏见使温和人士难以在争议问题上超越党派界限。

分析师们说，近年来全球化使美国人失去就业机会的速度加快，尤其在工会林立的部门，如制造业，民主党对贸易产生更多怀疑。就连民主党温和派人士也转而反对中美洲自由贸易协议法案，指出它对工人的保护措施不够。

传统基金会经济学家蒂姆·凯恩说：“20年来，我从来没有看到过国会对自由贸易的支持率如此之低。”

(伊夫林·入谷作者系美国《洛杉矶时报》记者)

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美担心中国崛起以两面手法阻碍我突破能源瓶颈

NEWS.SOHU.COM 　　2005年07月11日00:40　　华夏时报供稿

　　在世界主要产油区形势不太稳定而世界需求大幅增长的交错作用下，原油正成为一个政治名词，因为谁对原油的控制力强，谁的发展前景就光明，对国际政治的发言权将可能大。这个道理，不幸地在中美两国的复杂关系中以不恰当的方式体现。作为全球能源消耗头号大国的美国并没有打算和同样是能源消耗大国的中国共同协调能源政策，以长远眼光应对必然到来的原油等能源枯竭，而是在阻延中国崛起的大框架下，采取了口惠而实不至的两面手法。

　　赖斯称“乐见中国经济强大”背后的矛盾心理

　　美国国务卿赖斯昨天下午结束了对中国的旋风式访问。在北京的近20个小时里，赖斯分别和中国国家主席胡锦涛、国务院总理温家宝、国务委员唐家璇以及外交部部长李肇星会面。除了朝核问题，台湾问题和中美经贸关系是赖斯与中国领导人对话的两大重点。

　　赖斯重申美国坚持一个中国的原则，强调不愿意看到单方面改变台海现状。对于两岸近期政党之间的对话接触，美国方面表示欢迎。但她又说美方希望大陆能够与台当局进行接触。

　　或许是因美国3位部长今天将与中方会谈经贸问题，赖斯对中美经贸关系的阐述占了相当的篇幅。赖斯说，美中两国在广泛领域开展了有成效的合作。美方期待双方不断增进了解，通过对话，为美中关系确立一个框架。她表示，中国经济增长迅速，美中经贸关系中的一些问题在美国国内引起了高度关注。美方不认为世界经济是个零和游戏，美方欢迎中国经济强大，认为中国经济的发展有利于世界经济发展。美方希望与中方建立一种开放的经济联系，妥善处理有关问题，加强合作。

　　赖斯的话并未突破美方一贯立场，但也不是“无味”之语。所谓“希望美中关系确立一个框架”表明美国对中国崛起后两国关系走向没有确定的对策；而“欢迎中国经济强大”之语如果不是美方把中国可以强大的领域限定在经济的话，就是客气的外交辞令———因为经济强大势必带来军力和政治影响力的强大，这绝非美方所乐见。———事实上在加拿大，美国已经在用行动对“欢迎中国经济强大”作着反证。

　　中国在加拿大采购油源，美国着慌安排切尼赴加

　　外电报道，中国加强在加拿大采购油源，已经引起美国的“关切”。美国财政部长斯诺8日前往加国主要油砂遣锸》梦剩闪朔梦恃遣锸〖侗鹱罡叩拿拦僭保飧黾侗鹂赡苈砩暇陀忠黄啤＞荼ǎ拦弊芡城心嵋灿锌赡芮袄囱遣锸∈档亓私庥蜕翱蟮那樾危壳叭栽诎才胖小?/P>

　　控制着世界上众多油区、经济受能源制约远小于中国的美国，为什么很快对加拿大的油砂表现出了同样的兴趣？美方一家能源公司的总裁一语道破了美国这样做的天机。他说，华盛顿过去一直认定油砂纯属北美洲的资源，中国开始投资这一矿产后，让美国极不舒服。这位总裁没有道出的是，美国尤其不愿意中国在有限的能源“蛋糕”上分得更大的一块，原因是中国是最有可能和美国比赛的运动员。

　　对美“普天之下莫非王土”的能源思想中国有准备

　　美国的利益诉求，在许多方面是经过政治层面的包装的，比如人们熟知的用“人权”和“民主”牌来达到目的。但在能源占有方面，美国常常表现出当仁不让的霸权气质。面对美国“普天之下莫非王土”的能源观，中国应有足够的警惕。因为美国的搅局能力远远超过日本在东海和俄罗斯输油管道上不成功的作为。

　　能源对中国现代化进程至关重要，这在相当程度上决定了中国外交政策的特征。好在，在中国领导人外交的推动下，中国能源引进多元化颇见成效。最近胡锦涛主席访俄期间，中国最大的能源企业“中石油”和“中石化”与俄罗斯石油公司签署了长期合作和建立合资企业的议定书；中国国家电网公司也与俄罗斯统一电力系统股份公司签订了长期合作协议。全长3000多公里的中哈石油管道将于今年年底全线贯通。多元的能源引进将缓解中国能源进口对某一国家、某一地区和某一运输线的过分依赖，对于一些想从中作梗的国家来说，也增加了“捣乱”的难度，这大大增加了中国的能源安全系数。（徐立凡）

　中国与世界能源大国之间关系
　 ·中俄能源合作战略大局已定中俄油管望中旬开工

　　中俄能源巨头在胡锦涛主席访俄期间终于完成了对接。7月1日，中石油与与俄罗斯石油公司（以下简称“俄石油”）签订了长期合作协议；中石化与俄石油签订了建立合资企业的议定书；国家电网公司也与俄罗斯统一电力系统股份公司（以下简称“统一电力”）签订了长期合作协议......[全文]

　 ·美国将在华设能源办公室拟就能源问题实时讨论

　　美国能源部一名高官透露，美国能源部长昨日与中国有关方面官员进行会晤，并将宣布在北京成立其能源办公室，中美双方代表将就减少两国能源需求的能源使用效率及再生计划等展开磋商……[全文]

　 ·中俄两大国越走越近能源合作让日本眼红

　　俄罗斯总统普京在中俄峰会后表示，他为不断发展的中俄关系欢呼。他说：“中俄两国之间主要的政治问题几乎全都已经解决了。”中俄在军事、能源领域的合作，印证了普京的话，也让美国和日本非常警惕……[全文]　　　

　全球能源现状及中国之道
　 ·需求导致能源紧张全球目前尚未出现供应短缺

　　2004年，石油的平均价格达到了38美元／桶(布伦特价格)，比2003年度的价格高出近10美元，油价上涨主要原因在于需求增长，特别是亚洲的需求增长更为强劲，其中，中国的石油消费量增幅达90万桶／日，这些增量几乎全部依赖进口来满足……[全文]

　 ·胡锦涛在中央政治局集体学习时就能源问题讲话

　　中共中央政治局6月27号下午进行第二十三次集体学习，中共中央总书记胡锦涛主持。他强调，能源资源问题是关系中国经济社会发展全局的重大战略问题.....[全文]

　 ·高油价带来国际偏见谁策划了中国能源威胁论？

　　石油价格上涨，为此中国去年多付出86亿美元，而作为经济受害者的中国，却同时还要承受“能源威胁论”的某些舆论中伤。是谁、又如何导演了中国的这种双重受害者角色？油价上涨的真正操控者又是谁？中国如何摆脱这种被动局面……[全文]

　 ·中国“终端能效项目”正式启动将破解能源困局

　　世界第二大能源消费国——中国今日正式启动了一个名为“中国终端能效项目”的庞大节能计划。项目执行机构国家发改委对外称，终端能效项目实施的前三年，中国将降低能源消费量约一千九百万吨标准煤，而整个项目完成后，将累计减少碳排放量七千六百万吨……[全文]　　

　网友精彩评论
　 ·美国向来是说一套作一套

　　搜狐网友发表时间：2005年07月11日10时52分 IP地址：202.110.201.★

　　美国向来是说一套，作一套，我们不听他的真实谎言，我们必须提高警惕。随时应付各种复杂的国际风云。

　　搜狐网友发表时间：2005年07月11日10时17分 IP地址：60.34.22.★

　　很佩服赖斯！为了美国国家利益而“拼搏”啊。虽然是对手，但值得钦佩！

　　搜狐网友发表时间：2005年07月11日10时04分 IP地址：202.111.79.★

　　美国口是心非，霸权思想作祟，对自己‘民主’对他人‘霸主’，双重标准处世极不公道！

　 ·必须考虑解决能源问题

　搜狐网友发表时间：2005年07月11日09时23分 IP地址：61.136.151.★

　一方面能源短缺，国家领导人四处寻找能源；另一方面国人讲气派，抵制小排量汽车。作为城市交通的“的士”有什么必要要用大排量的车？？！！

　搜狐网友发表时间：2005年07月11日07时02分 IP地址：221.202.147.★

　如果世界上所有的发展中国家的发展速度都与中国差不多，那么世界的石油岂不是更加缺乏，难道人类的发展就必须依靠原油吗？目前我们可以去竞争原油，但解决问题的关键是发展持久性的能源。

搜狗(www.sogou.com)搜索:“能源”,共找到 10,705,078 个相关网页.

http://news.sohu.com/20050711/n226257146.shtml

Wednesday, July 13, 2005

People's Daily Online -- Four strategic opportunities for China-US relations

Home >> Opinion
UPDATED: 15:48, July 13, 2005
Four strategic opportunities for China-US relations

Currently, the US political circles and think tanks are all filled with concerns about whether China's peaceful rise will threaten the global interests of the United States, and a debate is unfolding in the country. There are among it both constructive, inspiring voices and pessimist, conservative views. Is confrontation with the United States unavoidable once China becomes strong? Is there any opportunity for the China-US relations in the 21st century? And where is the opportunity?

On July 10, when meeting with visiting US Secretary of State Condoleezza Rice, President Hu Jintao said that China highly values its relationship with the United States. China is ready to work along with the United States to handle the overall relations from a strategic perspective, strengthen dialogues, mutual trust and cooperation, respect and care for each other's concerns in an effort to achieve greater progress in the bilateral relations.

By handling the overall China-US relations from a strategic perspective, we must not regard the bilateral ties as "driven forward by external force". From both a short-term and long-term view, the China-US ties enjoy quite considerable room for "growing in pace with each other" as well as development opportunities.

The first opportunity lies in profound interdependence and mutual needs for the sake of their respective interests in a time of globalization.

It is out of this reason that the bilateral trade volume has risen from US$500 million in the late 1970s to US$170 billion today. Meanwhile, China has spent more than 70 percent of its US$660 billion foreign exchange reserve on US Treasuries, binding the two parts quite closely with common interests. If the US side could refrain from "politicizing" trade questions, the trade ties will sure to witness another great leap.

The second opportunity comes from the new security concept of "cooperation between big powers" brought about by rising non-traditional safety threats.

Non-traditional security threats, such as terrorism, WMD proliferation, environment degeneration and disease, have risen to major threats facing today's world. China and the United States have excellent conditions for further in-depth cooperation in the field of strategic security, for which the key lies in building up mutual trust.

The third opportunity stems from the common efforts to address regional hot issues and to maintain international order.

The Asia-Pacific region serves as the stage of China-US common development. The region, however, remains unstable in the shadow of both cold war and hot war. Therefore, the two countries face both the historical task of clearing up Cold War legacies and the realistic challenge of avoiding the breakout of a hot war.

If the two sides can share such a broader vision in observing their relations, the worry about "China's exercising of an Asian version of Monroeism to elbow out US interests" can be dispersed and they will be able to seek for co-existence, common development and peace on the basis of caring their respective interests. As for safeguarding the international order and promoting reform to such an order, the two countries, in particular, shoulder unshirkable responsibilities.

The fourth opportunity is brought by the co-existence and converging of the two civilizations.

The time of globalization is not an era of "clash of civilizations", but one of cultural exchange and harmony. By now, China-US exchanges and cooperation in cultural resources and cultural industry have become an important part of China's fast-moving cultural market. For the United States, a deeper understanding of the Chinese culture is increasingly serving as a base of co-existence of the two nations.

Opportunities are not windfalls, but must be created by common efforts. We hope that the United States could achieve three "break-aways" in handling China's rise and the bilateral ties.

First, to break away from the Cold War mentality which draws lines by ideology and social system, for this mindset easily leads to misjudgments on the socialism with Chinese characteristics and the Communist Party of China.

Second, to break away from the "cultural superiority" theory, which stresses a certain set of values, because we have entered a new era featuring long-term coexistence and blending of various civilizations.

Third, to break away from the traditional idea that a newcomer is sure to challenge existing powers, for this theory can hardly explain China's road of peaceful rise and its role as a staunch force in maintaining world peace.

This article by Zheng Bijian is carried on the first page of the People's Daily Overseas Edition, July 12, and is translated by People's Daily Online

People's Daily Online -- Four strategic opportunities for China-US relations

Tuesday, July 12, 2005

Los Angeles Times: Unocal Bid Tests U.S.' China Ties

Los Angeles Times: Unocal Bid Tests U.S.' China Ties
http://www.latimes.com/business/la-fi-uschina11jul11,1,3258417.story

Unocal Bid Tests U.S.' China Ties
Blocking CNOOC's offer could trigger a backlash against American firms eager to invest in Asia.
By Don Lee
Times Staff Writer

July 11, 2005

SHANGHAI — The controversy over a Chinese oil firm's bid for Unocal Corp. has obscured another key development: American companies are accelerating efforts to buy or invest in Chinese businesses. But those American firms now fear a backlash amid heightened U.S.-China trade tensions.

U.S. corporations are plowing billions of dollars into shares or outright control of Chinese companies in industries as varied as beer, banking and biotech.

The surge reflects Beijing's easing of restrictions on foreign ownership, as well as American executives' conviction that they simply must be in China's booming market.

"For us, it's not just a place to manufacture. It's turned into a substantial market," said Christopher Adams, Eastman Kodak Co.'s chief China representative in Beijing. Kodak has invested well more than $1 billion in China, and its 9,000 stores dot the nation, already Kodak's No. 1 market for roll film.

Last year Anheuser-Busch Cos. paid $720 million to take over Harbin Brewery, which dominates China's beer-guzzling northeast region. Amazon.com Inc. spent $75 million for Joyo.com, China's largest online seller of books, DVDs and CDs. And private equity firm Carlyle Group agreed to put up $400 million for a 25% stake in China Pacific Life Insurance Co.

But the strong U.S. political opposition to state-owned CNOOC Ltd.'s $18.5-billion offer for El Segundo-based Unocal has highlighted the tense commercial relations between the two nations. Members of Congress have railed against the CNOOC proposal as a Beijing-orchestrated grab for valuable oil resources and have threatened to block the deal on the grounds of national security. The Chinese government has warned Washington not to interfere.

The standoff has raised fundamental questions about trust and fairness, how the U.S. will approach China's rising economic influence and how Beijing will respond.

If CNOOC's bid is thwarted by Washington, analysts say, it will almost certainly trigger a reaction that could prove costly for American businesses.

The Chinese could cut purchases of U.S. goods, as when Beijing protested an American arms deal with Taiwan by ordering aircraft from Europe's Airbus instead of Boeing Co. The Chinese also could delay approvals of American projects in China, analysts say, or add a few more hoops to the complex procedures for clearing acquisitions by foreigners.

Such moves, though, could also hurt China. If Beijing pulls back from two decades of opening up its markets, it could hamper China's economic development and political reforms. Chinese companies crave not only U.S. cash but the management and technical know-how that investments and joint ventures bring.

"China has come a long way from pure state ownership to gradual private ownership and foreign ownership," said Rupert Li, a partner at Morrison & Foerster's mergers and acquisitions law practice in Hong Kong.

Liu Baocheng, dean of Sino-U.S. studies at the University of International Business and Economics in Beijing, doesn't think the outcome of a single deal such as CNOOC-Unocal will impair long-term relations between the two countries. Still, he sees the American response to CNOOC's bid as a litmus test of their current standing and what may lie ahead as China asserts itself in the international marketplace.

"This might reveal the true face of the U.S." toward China, Liu said.

Even before CNOOC lobbed its bid, strains in U.S.-China trade had been building for months. China's soaring textile exports prompted the Bush administration to impose new quotas. Several bills in Congress threaten tariffs on Chinese goods if Beijing doesn't revalue its currency, which critics say is undervalued, giving Chinese exporters an unfair advantage. American industries complain about lax protection of intellectual property rights in China.

Some of those issues will be discussed today by top officials from the U.S. and China meeting in Beijing for annual trade talks.

For the Bush administration, the CNOOC matter is particularly difficult. On one hand, the bid is being seen against the backdrop of America's huge trade deficit with China, which is increasingly blamed on allegedly unfair Chinese trade practices. On the other hand, free trade advocates argue that it would be hypocritical for U.S. politicians to derail a deal when there isn't strong evidence that it threatens American security interests.

Some of America's largest corporations, including Exxon Mobil Corp. and Bank of America Corp., have urged politicians not to interfere — and for no small reason. Bank of America last month agreed to pay $2.5 billion for a 9% stake in one of China's largest state-run banks and has an option to buy much more. Exxon just last week signed a $3.5-billion deal with another Chinese oil company and a Saudi concern to expand a refinery in south China.

And Goldman Sachs is considering an investment in China's largest bank, according to various reports.

"Almost every major company is here and making money or wanting to make money," said Andy Rothman, a China specialist at CLSA Asia-Pacific Markets in Shanghai. "They don't want to spoil this."

U.S. corporations have been investing in China for years, setting up joint ventures or wholly owned enterprises, mainly to take advantage of China's cheap manufacturing base. But the pace of American investment activity has jumped in the last two years, with pledged investments exceeding $12 billion in 2004, after running in the $6-billion to $8-billion range from 1992 to 2002, according to the U.S.-China Business Council.

It's unclear what share of total investments involved mergers and acquisitions, but those deals are proliferating as more Chinese businesses mature and Beijing continues to divest state-owned assets and open various industries to greater foreign ownership, under its obligations for joining the World Trade Organization in 2001.

New regulations last December allowed foreigners to buy shares of Chinese insurance and media companies. China's huge retail sector also became completely open to foreign ownership, although U.S. businesses complain that Beijing has been dragging its feet in liberalizing wholesale and distribution activities.

Some sectors are restricted. Foreigners can buy only as much as 20% of banks and as much as 50% of telecommunications and life insurance businesses.

And one notable industry remains closed to foreigners — energy, which is under state control. That's prompted some to ask: Why should CNOOC be allowed to buy Unocal when a bid by Unocal for CNOOC would be a nonstarter?

But many others point out that it's less an issue of fairness than what the respective laws of the two nations permit. The U.S. allows such an acquisition, whereas China doesn't.

"To say, 'You can buy us, but we can't buy you' ignores the overall context in which these companies operate," said Steve Chu, a principal at Strategic Impact Group in Shanghai, which provides investment funds and advice. By and large, he said, foreign investment in most Chinese industries, including state-owned enterprises, is quite open. The Chinese intended it that way to develop their economy and push domestic companies to become more competitive.

That's a significant difference from Japan in the 1980s, when its economic rise also triggered a backlash in the United States. Many U.S. politicians complained that Japan's markets weren't open and Japanese companies weren't receptive to takeovers by foreigners, a pattern that persists today.

Many Chinese are eager to sell out or join up with a foreign partner. Just last week, American eye-care firm Bausch & Lomb Inc. said it had agreed to buy a 55% stake in Shandong Chia Tai Freda Pharmaceutical Group for $200 million in cash.

"We want to get money for other investments," said Stephen Tse Hsin, executive director of Sino Biopharmaceutical, which owns Shandong Chia.

What's in it for Bausch & Lomb? A known brand in China, hundreds of sales staff members familiar with eye products, distribution channels at 1,000 hospitals and shelf space at just about every major pharmacy in the country. "If they build their own, it might take them even 10 years" to establish a presence like that, Hsin said.

Chinese companies are now starting to venture abroad themselves. Recently, they have sought to buy established brands, illustrated by Lenovo Group Ltd.'s $1.25-billion purchase of IBM's personal computer business and appliance maker Haier Group's interest in buying Maytag Corp., reportedly for $1.3 billion.

"The trend is clear: The Chinese are going to buy more companies" in the U.S. and other countries, said Liu of Beijing's University of International Business and Economics.

Will that be met with resistance? "If there's a perception from the Chinese that they don't have the same opportunities abroad, that could create a backlash here," said Jeffrey Bernstein, chairman of the American Chamber of Commerce in Shanghai. The American economy can't afford that, he said.

"U.S. companies need to take a strong position in the Chinese market. It's going to be a strong component of the economic engine."

Chinaus

Wednesday, July 27, 2005

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Friday, July 22, 2005

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Wednesday, July 13, 2005

People's Daily Online -- Four strategic opportunities for China-US relations

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Los Angeles Times: Unocal Bid Tests U.S.' China Ties

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