Saturday, June 2, 2007

US Defense Secretary Sounds Softer Note on China's Military Build-up

U.S. Defense Secretary Robert Gates has softened his county's rhetoric about China's military buildup, telling a regional security conference in Singapore that he sees "reason to be optimistic" about the U.S.-China relationship. Trish Anderton filed this report from Jakarta.

Robert Gates
Robert Gates (file photo)
Gates told the Asian security conference that the United States is still concerned about what he called the "opaqueness" of Beijing's military spending.

But Gates's tone Saturday was softer than that of his blunt-talking predecessor, Donald Rumsfeld, who expressed concern over China's military buildup. Gates emphasized the common ties between the world's only superpower and the rising Asian giant, and expressed hope for better mutual understanding.

"We have increased military-to-military contacts between all levels of our militaries … As we gain experience in dealing with each other, relationships can be forged that will build trust over time," he said.

China has said its defense spending will grow by nearly 18 percent in 2007. A Pentagon report, however, concluded last month that Beijing spends two or three times more on defense than it has publicly acknowledged.

Speaking after Gates, Chinese Lieutenant General Zhang Qinsheng told the conference that Beijing is telling the truth about its budget. He said the increased spending is for items such as uniforms, training, and higher salaries and pensions.

But Zhang, too, appeared to reach out in cooperation, saying the two countries would set up a hotline to improve communication between their militaries.

Singaporean Prime Minister Lee Hsien Loong, the host of the conference, said most Asian countries do not see China's spending as a threat to regional security.

Nevertheless, Singapore and other Asian nations want a continued U.S. military presence in the region as a guarantee of stability and a counterweight to rising Chinese influence.

Secretary Gates sought to reassure the audience that the U.S. would not be distracted from its responsibilities in Asia by the military actions in Iraq and Afghanistan.

"We are an Asian power with significant and long-term political, economic and security interests. Our commitments elsewhere notwithstanding, we will fulfill our commitments in Asia," he said.

He called on Asian nations to increase their aid to Afghanistan and the former Soviet states of Central Asia, arguing that if those countries were allowed to flounder, they could become breeding grounds for terrorism.

Wednesday, May 30, 2007

Statistical Communiqué on China 2006 National Economic and Social Development

In 2006, under the leadership of the CPC Central Committee and the State Council, the people of all nationalities of China, taking as the guidance of Deng Xiaoping Theory and the important thought of "Three Represents", adhered to the scientific approach to the economic and social development, endeavored to build a socialist harmonious society, carefully carried out various measures set by the central government aiming at enhancing and improving macro-control and made remarkable achievements in the national economic and social development. The major problems existing in the economic and social development are the extensive mode of economic growth and outstanding relationship within the economic structure.

Detailed in the Article: http://www.stats.gov.cn/

U.N.'s Brief Assessment of China's Development Challenges

In China, in which the population is increasing by ten million people a year, it is inevitable that demands on the infrastructure and the environment are intense. At the same time the form of governance is changing from a central planning system to a socialist market economy. In the process, disparities arise in the equity of development, for example, discrepancies arise between the coastal regions and the poorer interior provinces, between males and females, between the demands to sustain a still increasing population and the capacity of the environment and natural resources to accommodate an estimated 1.5 billion people by 2030.

Overall access and coverage of a range of basic social services has improved during the last two decades with notable progress towards, for example, reduction of infant and under-five mortality. There is almost equal enrolment of boys and girls in primary school; a rapid increase in housing stock and living space for families; and increase in access to potable water resources, to name but a few impressive achievements. Some important initiatives are also underway with respect to fuller realisation of the rights of children and women and the prevention of desertification and land degradation.

On the whole, there is more that is similar than dissimilar with other developing countries in the kinds of strategic challenges China faces in achieving various goals and implementing provisions of conventions. Some of these challenges include:

How to accelerate achievement of more regional equity and reduce inequities;

How to maintain economic growth and avoid destruction and pollution of the natural resource base;

How to expand the progress made in increasing access to basic services into higher quality and more widespread coverage;

How to bring about the consistent implementation of existing laws and filling gaps in present legislation;

How to better match gains in development of technical expertise with greater progress in managerial and regulatory competencies.

At the same time, however, there are some more systemic and probably deeper challenges associated with the overall stresses incurred in China's social and economic transition from a centrally planned economy to a socialist market economy. There are a number of instances in which national policy changes are underway or could benefit from major improvements, for example national health and nutrition; prevention and control of HIV/AIDS; environment and energy and social protection.

China is wedded to an overall purpose of increasing the well being of its people. Changing economic and social conditions over the next decade, partly spurred by leaps in technological applications, will open many possibilities for improvement in both societal and personal well being. However, there remain a host of important national goals, partly inspired by global initiatives, the sustainable achievement of which would bolster both national and international development efforts.

Poverty of China (Current situation of Poor)

10% of Chinese live in poverty

Around 48 million Chinese live below China's domestic poverty line, accounting for 3.7 % of the total population. Based on international standards, 135 million Chinese live below the general poverty line, or 10% of the population.  

The numbers come from the "Report of the Development of an Overall Well-off Society (2006)," China's first blue book to be published on building an overall well off society, Beijing Evening News reports.  

The report reveals there are 26 million needy people in China's countryside. Another 22 million living in cities subsist below minimum subsistence levels , or the poverty line. These 48 million people account for 3.7% of the total population in China.  

According to international standards, however, the needy refer to those whose personal daily expenses average below $1.  

The World Bank estimates about 135 million of Chinese live below the international poverty line. These people are the key group China should show concern for in building an overall well-off society.

Migrant workers earn monthly income of 120 dollars

Migrant laborers in Chinese cities earn an average of 966 yuan (US$120.75) per month, much more than the average farmer, but still very low compared to urban residents.  

The per capita monthly income for half of the migrant laborers is less than 800 yuan, with 19.67 percent below 500 yuan, according to a latest survey conducted by the National Bureau of Statistics (NBS).  

Ten percent of the 29,425 migrant workers surveyed have a monthly income of 1,500 yuan.  

Migrant workers are mostly poor farmers who leave the countryside to find jobs in cities. There are more than 100 million migrant workers in China.  

The average income of Chinese farmers is about one fourth that of the urban residents earn.  

The shrinking of farmlands are producing a bigger army of migrant workers in the country and has caused many social troubles.  

The survey shows that jobs in east China are the most lucrative for migrant workers, who earn an average of 1090 yuan per month there, compared with 880 yuan and 835 yuan in the central and western regions.  

Migrant laborers spend an average of 463 yuan per month; 72 yuan on accommodation, 235 yuan on food and 47 yuan on recreation.  

To improve their professional skills, half of the respondents received vocational training , while 24.1 percent were self-taught.  

Of the 5,065 respondents who brought children with them to the cities, only 1.05 percent had seen their children drop out of school, and 49.2 percent had to pay an average registration fee of 1,226 yuan in addition to regular tuition fees.

CHINA, INDIA IN THEIR OWN ‘RACE TO THE MOON'

China and India are both planning to launch moon shots within a year in the latest sign of the two Asian powerhouses' intensifying rivalry and growing technological prowess.

Although both countries deny they are engaged in a 21st century re-run of the 1960s race to the moon between the cold war superpowers, their haste to launch suggests more than casual interest in the other's progress.

China said this month that it expected to launch its first unmanned lunar orbiter, the Chang'e-1 (named after China's mythological "lady in the moon") before the end of this year, while India this week announced that it could send up a similar space probe as early as April 2008.

The two lunar programmes should be scientifically complementary, with Chinese scientists stressing Chang'e's goal of improving understanding of the geochemistry of the moon's surface and India focusing on three- dimensional mapping.

Chinese lunar programme scientist Ouyang Ziyuan told the Financial Times in 2005 that he was excited about the possibility that the moon might be a rich source of helium-3, a potential fuel for nuclear fusion reactors that is scarce on earth.

S Krishnamurthy, a spokesman for the Indian Space Research Organisation, said yesterday that the spin-offs for India's nuclear programme from potential lunar sources of helium-3 could be "considerable".

Non-governmental groups have put the Indian space agency on the defensive about the programme, arguing it is hard for a country that is home to a quarter of the world's poor to justify costly space missions.

Manmohan Singh, India's prime minister, has defended it, saying the country must deal with the fundamental problems of development and at the same time aspire to operate on the frontiers of science.

"In the increasingly globalised world we live in, a base of scientific and technical knowledge has emerged as a critical determinant of the wealth and status of nations and it is that which drives us to programmes of this type," he said last year.

China's satellite navigation has a promising future

China's Global Satellite Navigation Plan has emerged since Xichang Satellites Lunch Center successfully lunched a "Beidou" navigation satellite on April 14 this year.

The satellite navigation positioning is a newly emerging technology, which positions, navigates and monitors all kinds of targets by using the location, speed and time information provided by global satellite navigation and positioning system. Satellite navigation system plays an important strategic role in national security and economic construction.

As a global satellite navigation system with China's independent intellectual property rights, Beidou Navigation Satellite consists of 5 geostationary orbit satellites and 30 non-geostationary orbit satellites; the construction of the whole system will be completed before 2010. The system is expected to satisfy the demands for satellite navigation system of users in China and neighboring countries at that time, and it will be gradually developed into global satellite navigation system. The Beidou navigation satellite launched a month ago, namely COMPASS-M1, is one of the "5+30" system.

Huge potential for navigation industry

Part of industrial users in China are benefiting from "Beidou-1" satellite navigation test system, which has been put into operation. Since 2000, which represented the beginning of the prophase trial of Beidou Navigation Satellite System, China has successfully launched two "Beidou-1" operation satellites and one backup satellite successively, and has built "Beidou-1" Satellite Navigation Test System. Up until now, China has become the third country in the world that owns satellite navigation system following Russia and the USA.

Compared with satellite navigation and positioning systems of other countries, except for equivalent accuracy to GPS in fast positioning and accurate timing, "Beidou-1" also has an advanced and unique short message communication function. Now the System is offering highly efficient navigation and positioning services to national economic construction such as communication and transportation, meteorology, petroleum, ocean, forest, telecommunications, public security and other special industries.

In spite of the own technology characteristics of "Beidou-1", GPS is still monopolizing satellite navigation service market, especially over 95 percent of public service market, because China's independent satellite navigation system started relatively late. This is also the reason why the development of relevant industries in China is lagged far behind than the rapid development of satellite navigation technology. As reference shows, the market size of China's satellite navigation and positioning market had been expanded from nearly RMB1 billion yuan in 2000 to RMB12 billion yuan in 2005. Some experts predict that 5 years later, China will probably become the biggest satellite navigation application market in the world along with the completion of Beidou Navigation Satellite System. In 2010, the scale of satellite navigation and positioning industry of China will reach RMB10 billion yuan

Build the industrial giant of application and development

China's Beidou Navigation Satellite System is also the great white hope of a famous enterprise- Beijing BDStar Navigation Tech. Co., Ltd, which is an operation and service provider specially established for "Beidou-1" satellite navigation test system. Since BDStar obtained the first operating license of "Beidou" civil navigation system at the end of 2004, BDStar has completed technology accumulation from 5 aspects successively in just two more years. What is to say, BDStar has built network operation and service technology, information service technology of ocean fishing, ship-borne terminal technology of ocean fishing, mobile technology and navigation receiving technology basing on Beidou.

Last year, "Beidou Satellite Ocean Fishing Comprehensive Information Service" project, a subject of National 863 Plan undertaken by BDStar, won the bid of "Nansha Fishing Boats Position Monitoring and Commanding System" of Ministry of Agriculture. The project integrated the comprehensive technological methods such as satellite navigation and positioning system, geographical information system, satellite communication system, mobile communication network and database, etc, and easily realized the dynamic control and management of fishing boat position under jurisdiction through building a unified information management platform for Nansha fishing safety management. The project could also give alarm and provide rescue for emergency situations, and provide technical support for the command of fishing boats in avoiding and escaping from dangers.

The circle has reached the consensus that the application of Global Satellite Navigation Technology is limited only by people's imagination. Beidou Navigation Satellite, which was successfully launched by China, not only offers wider space for imagination of China's satellite navigation and positioning industry, but will also become the new opportunity of industrial development. Just like what Zhou Ruxin, President of BDStar, said, "within 3 years in the future, satellite navigation industry will bring about a lot of big enterprises and backbone enterprises. It might give birth to an enterprise that is like Lenovo in computer industry. BDStar hopes to be a leader among them."

China's auto sector sees rapid growth

The auto consumption of China is turning on high-speed development, and sales of new vehicles are growing increasingly. Relative analysis shows that, in the first quarter, the gross margin of listed auto companies was basically the same as that in previous year. Passenger car companies have been in the peak of industrial prosperity during the same period of last year and they had achieved performance at a rather high level. In comparison with passenger car companies, commercial vehicle companies grew much more rapidly. At present, the passenger car industry mainly relies on private consumption and new vehicle purchase, and has entered a fast growing period. Insiders reckon that in the foreseeable 5 years, the growth rate of passenger car sales will probably maintain at a level of not less than 25 percent.


SAIC Motor, being one of the three biggest vehicle-manufacturing groups in China, is keeping its steady growth. In 2006, SAIC Motor achieved an aggregated sales volume of 1.25 million and a market share of 15 percent. The company's market share in passenger vehicle field is 21 percent. Octavia series of Shanghai Volkswagen will launched in batch in the market; Buick Park Avenue of Shanghai GM will go to the market too; Roewe, a self-owned brand of SAIC Motor, will also begin mass production, indicating the company's strong capability of sustainable profit earning. SAIC Group has completed the overall listing of the group, for which insiders analyzed that listed automobile companies may obtain more quality assets through asset injection and profits repatriation, as well as more impetus for future development.

FAW Car Co., Ltd., being the first leading car manufacturer that has gone public, owns certain scale advantage. The main products include Red Flag, Mazda and Besturn, which was newly launched in last year. Mazda 6 is one of the leading models of car market in recent years. The brand value of FAW "Red Flag" has reached RMB5.828 billion. FAW Xiali sees bright future due to its dominant position in economy car sales. After taking control of distribution tache by acquiring all the shares of sales company, FAW Xiali figured out the problem of default in large amount of payment, and therefore the financial status was improved remarkably. However, the competition in economy car market is intense and the strength of rivals is increasing every day. As reference shows, FAW Toyota, of which 30 percent share was held by FAW Car Co., Ltd., is the main profit source of the company.

Changan Auto is a leading company in mini car industry of China, and is ranking No. 1 in Mini car industry throughout the country. It was introduced that Changan Auto plans to input RMB3 billion yuan in a few years in the R&D of high-tech small-displacement vehicles, and will launch a series of mini cars with completely independent IPRs. Moreover, the company has exported 7,050 vehicles in the first quarter of this year, far beyond the industry average of the country.

Golden Dragon Automobile has got a satisfactory business increase in 2006.

According to the annual report, the major business income was RMB9.6 billion yuan, up by 25 percent; the net profits were RMB150 million yuan, increasing by 53 percent. In 2006, the company sold 41 thousand passenger vehicles, increasing by 24 percent, in which large and medium sized passenger vehicles accounted for 27 thousand and increased by 18 percent, light passenger vehicles accounted for 13.8 thousand and grew by 36 percent. The company industrial position got raised. This year, the sales volume keeps growing, in the first quarter, sales volume of passenger vehicles increased by 23 percent, in which large sized passenger vehicle and medium passenger vehicle increased by 49 percent and 37 percent respectively.

In 2006, China National Heavy Duty Truck Group Co., Ltd. obtained a marked increase in income. The year's income was RMB9, 469.53 million yuan, increased by 45.54 percent year on year; the net profit was RMB 224.4 million yuan, increased by 48.97 percent year on year. The sale of heavy-duty trucks reached 44,447 units in 2006, up by 43.09 percent year on year. Analysts said that the prosperity of heavy duty truck of the company, especially those advanced heavy duty trucks with load of 15 tons and above and relevant parts, is improving increasingly, and thus the profit margin of vehicles will maintain constant.

Jiangling Motors Corp's (JMC) major business revenue in 2006 was RMB7.368 billion yuan. The growth areas for sales volume include the industrial growth and the launch of new models. The aggregate sales volumes for complete vehicles were 85,214 units, increased by 16 percent year-on-year. The company will launch the fifth generation of Quanshun series, namely V348, in the second half of this year; with advanced engine performance and improved comfort, the positioning of V348 will be extended to commercial vehicle filed and light passenger vehicles used for middle and short term trips in cities. It is predicted that V348 might become the future growth point of the company's performance. Some analysts consider that the core advantage of JMC relies on better cost control than that of rivals, and this kind of advantage will go on; plus the launch of new models, the company will grow steadily in future.

Anhui Jianghuai Automobile Co., Ltd (JAC) has realized a major business revenue of RMB10.29 billion yuan in 2006, up 9.54 percent year-on-year; but net profits realized decreased by 17.3 percent year on year to RMB410 million yuan. The passenger car project of the company was officially approved in January this year. At the same time, JAC has built a passenger car manufacturing base in Hefei development zone, which was designed for an output of 200,000 units per year; the construction of R&D and product line of matching equipments has been basically completed. It is predicted that JAC will launch the first C-class vehicle in the third quarter of this year and A-class vehicle at the end of this year or at the beginning of next year. According to professional analysis, the transition of car business of JAC is worth expecting.

The performance of Kunming Yunei Power Co., Ltd. grew by 358.55 percent in the first quarter. The main reasons include: adjustment of product structure, bigger proportion of high-end products, effective control of expenses, as well as certain investment income. In early April, the company announced that it would offer not more than 80 million shares publicly; the capital raised should be used in production capacity expansion project of diesel passenger cars. After the project is put into production, the newly increased sales revenue per year will be RMB5.7 billion yuan, and newly increased profit will be RMB0.4 billion yuan. The company's performance in the first half of this year is forecasted to go up by 100 to 150 percent.

Shuguang Automotive's main business includes passenger vehicle, SUV and the production and sales of auto parts like vehicle-bridge and differentials. Shuguang Automotive ranks No. 3 in the production and sales of large and medium sized passenger vehicles, and No. 1 in the manufacturing of vehicle-bridge, especially light vehicle-bridge. In the first quarter of 2007, Shuguang Automotive, as a main manufacturer of light vehicle-bridge, obtained an increase in vehicle-bridge business thanks to the relatively strong growth of light vehicle. However, the average profitability of the company went down slightly on the contrary due to the characteristics of parts and accessories.

China to catch up with US economy - world poll

China is on course to catch up with the United States and join the front ranks of world economic powers, but that is little cause for concern even among Americans, a global survey said Monday.

Most respondents in 13 countries agreed it was "likely that someday China's economy will grow to be as large as the US economy," according to the opinion poll by the Chicago Council on Global Affairs and WorldPublicOpinion.org.

"What is particularly striking is that despite the tectonic significance of China catching up with the US, overall the world public's response is low key -- almost philosophical," said Steven Kull, editor of WorldPublicOpinion.org.

But the poll showed there is also distrust of China to "act responsibly" in world affairs. 

In no country was there a majority who felt that China's economic rise would be mostly negative, but that was not because China is particularly trusted, the pollsters said.

Majorities in 10 out of 15 countries said they did not trust China "to act responsibly in the world." But the same number also said they distrusted the United States.

"Though people are not threatened by the rise of China, they do not appear to be assuming that it will be a new benign world leader," Kull said.

"They seem to have a clear-eyed view that China is largely acting on its own interests."

The Chinese themselves are among the more skeptical populations, with only half saying that their economy will catch up with the United States'. Among Americans, the percentage was 60 percent.

Only in India and the Philippines did a plurality of respondents say the United States would always remain a bigger economy than China.

The highest level of concern about the implications of China's economic march was in the United States, where one in three is worried.

But 54 percent of Americans said that its rise would be "neither positive nor negative" while one in 10 said it would be mostly positive.

Only in Iran did a majority -- 60 percent -- say that it would be "mostly positive for China to catch up."

The survey included 18 countries: Australia, Argentina, Armenia, China, France, India, Iran, Israel, Mexico, Peru, the Philippines, Poland, Russia, South Korea, Thailand, Ukraine, and the United States, plus the Palestinian territories.

Not every question of the poll was asked in each country, so that the results for some questions covered less than 18 countries.

Beijing blasts Taiwan's DPP for 'independence' move

China on Wednesday blasted the leaders of Taiwan's ruling Democratic Progressive Party (DPP) for considering a change to the island's "constitution" which would reflect an identity separate from the mainland.

The DPP has been drafting a "normal country resolution" to amend the "constitution" of the island which still styles itself as the "Republic of China" and claims "sovereignty" over the mainland.

"Its (the resolution's) purpose is to create conditions for "de jure independence" through "constitutional" changes and referendum," Li Weiyi, spokesman for Beijing's policy-making Taiwan Affairs office, said.

"We will never allow any attempts to separate Taiwan from China to succeed."

The DPP's resolution lacks specifics but should be approved by the party on June 30 and sent to "parliament", the party's mainland policy architect said earlier this month. If the party proposes provocative "constitutional" changes, the opposition-controlled legislature will likely reject the resolution.

In an apparent divide-and-conquer tactic, Li said drafting the resolution was a "dangerous act by diehard 'independence' elements to forcefully impose their will" on DPP members.

"We have always held that the broad membership of the DPP is different from a tiny minority of diehard Taiwan "independence" elements," Li said.

"We are willing to make positive responses and engage with DPP if it abandons the 'independence' platform and stops splittist activities."

China has fostered close ties with the KMT and two other opposition parties favouring eventual reunification, but has refused to deal with the DPP leadership and the "administration" of Chen Shui-bian.

Meanhile, Li told the conference, the Chinese mainland has come to the rescue of Taiwan fruit farmers by purchasing 78 million yuan (about US$10.2 million) worth of fruit from the island province.

At the request of Taiwan's Kuomintang Party, Li said, the mainland activated an emergency mechanism, arranging for mainland enterprises to buy 300 tons of bananas and 1200 tons of oranges.

"These measures have effectively helped Taiwan farmers solve the problem of fruit oversupply," Li said.

Li pointed out that the mainland had scrapped tariffs on 15 kinds of Taiwan fruit in August 2005.

Chinese Traditional Sichuan Opera

A performer waits backstage for the start of a Sichuan Opera show at the Jingjiang Theatre in Chengdu, southwest China's Sichuan province May 25, 2007. Sichuan Opera, which is distinguished by the face-changing technique where performers change masks in quick succession with a wave of the hand or by turning around, is one of the oldest forms of Chinese opera.

A performer waits backstage for the start of a Sichuan Opera show at the Jingjiang Theatre in Chengdu, southwest China's Sichuan province May 25, 2007. Sichuan Opera, which is distinguished by the face-changing technique where performers change masks in quick succession with a wave of the hand or by turning around, is one of the oldest forms of Chinese opera.

A performer wears his costume before a Sichuan Opera show at the Jingjiang Theatre in Chengdu, southwest China's Sichuan province May 25, 2007. Sichuan Opera, which is distinguished by the face-changing technique where performers change masks in quick succession with a wave of the hand or by turning around, is one of the oldest forms of Chinese opera.

A performer wears his costume before a Sichuan Opera show at the Jingjiang Theatre in Chengdu, southwest China's Sichuan province May 25, 2007. Sichuan Opera, which is distinguished by the face-changing technique where performers change masks in quick succession with a wave of the hand or by turning around, is one of the oldest forms of Chinese opera.

A performer puts on make-up prior to a Sichuan Opera show at the Jingjiang Theatre in Chengdu, southwest China's Sichuan province May 25, 2007. Sichuan Opera, which is distinguished by the face-changing technique where performers change masks in quick succession with a wave of the hand or by turning around, is one of the oldest forms of Chinese opera.

A performer puts on make-up prior to a Sichuan Opera show at the Jingjiang Theatre in Chengdu, southwest China's Sichuan province May 25, 2007. Sichuan Opera, which is distinguished by the face-changing technique where performers change masks in quick succession with a wave of the hand or by turning around, is one of the oldest forms of Chinese opera.

Actors perform during a Sichuan Opera show at the Jingjiang Theatre in Chengdu, southwest China's Sichuan province May 25, 2007. Sichuan Opera, which is distinguished by the face-changing technique where performers change masks in quick succession with a wave of the hand or by turning around, is one of the oldest forms of Chinese opera.

Actors perform during a Sichuan Opera show at the Jingjiang Theatre in Chengdu, southwest China's Sichuan province May 25, 2007. Sichuan Opera, which is distinguished by the face-changing technique where performers change masks in quick succession with a wave of the hand or by turning around, is one of the oldest forms of Chinese opera.

Beijing fines spitters for city's image

More than 50 people in the Chinese capital have been fined for spitting  during the week-long Labor Day holidays, according to officials in charge of the  city's image.  

Beijing's management department and civilization promotion office have  jointly sent five inspection teams to patrol the downtown Wangfujing pedestrian  mall, Tian'anmen Square, commercial centers and railway stations to stop people  from spitting, littering, posting of advertisements and writing on public  property.  

As of Sunday, 56 people had been fined for spitting and refusing to correct  the bad habit, according to the teams.  

The officials also handed out more than 10,000 bags to tourists, reminding  them not to litter.  

Earlier reports said people spitting in the streets in Beijing will be fined  up to 50 yuan (about 6.5 U.S. dollars).  

"Fifty yuan is a fairly hefty fine for spitters," said Zhang Huiguang,  director of the Beijing Civil Affairs Bureau.  

In Beijing, 50 yuan is about daily income of a Chinese college graduate and  can buy 16 subway tickets or 100 packs of paper tissues.  

The government is anxious to correct the embarrassing habits of Chinese  travelers ahead of next year's Olympics Games. The May Day holiday week is seen  as a good time to start as an estimated 150 million Chinese tourists will be on  the road.  

The China National Tourism Administration has issued a circular, requiring  travel agencies and tour guides to be responsible for correcting the bad  behavior of tourists during the holidays.  

Jumping a queue, spitting, littering and loudly clearing one's throat in  public are some of the frequently observed bad habits that are giving Chinese  travelers a bad reputation, according to the Spiritual Civilization Steering  Committee (SCSC) of the Chinese Communist Party, the official etiquette  watchdog.  

"We are supposed to remind people constantly throughout the tour, and also  lead an etiquette discussion at the end of the tour," said Huang Xiaohui, a  travel guide with a Beijing-based travel agency.  

"The Olympics are coming, and we don't want to be disgraced," Huang said  succinctly.  

Beijing expects to receive 550,000 foreign tourists during the 2008 Olympics  and an estimated two million domestic tourists will also visit the capital city.  

"Promoting civilized behaviors among Chinese travelers is a long-term task.  To harvest short-term results before the games, we need to focus our resources  on the main problems," said Zhai Weihua, SCSC deputy director.  

"Tens of thousands of reporters will come to China to cover the Games next  year, which means both China's positive and negative sides will be amplified.  Once bad impressions are made, they last, " Zhai said.  

"That's why we should grab the opportunity to change uncouth behavior," said  Wu Jianmin, President of China Foreign Affairs University, in a TV interview.  

The Olympics are now only about 450 days away.

Military pumps up China's influence, Pentagon says

China's modernizing military will make it a more muscular player in world events, a U.S. Defense Department report says.

China's developing capabilities "will increase Beijing's options for military coercion to press diplomatic advantage, advance interests or resolve disputes," the Pentagon says in its annual report to Congress on China.

The Pentagon says that Beijing remains preoccupied with military contingencies in the Taiwan Strait -- but adds that the Chinese military is also improving its ability to win possible conflicts over resources or territory.

To that end, the report says, the Chinese army is transforming itself from a force designed to fight wars of attrition on its own territory to one capable of winning short but intense campaigns against high-tech adversaries.

It says China's military expansion is in part designed to protect its access to raw materials around the world, especially coal and oil supplies. At present, the report says, "China can neither protect its foreign energy supplies, nor the routes on which they travel."

The report notes key developments such as China's testing of an antisatellite missile in January and the greater accuracy and range of its missile forces, including intercontinental ballistic missiles.

"New air- and ground-launched cruise missiles that could perform nuclear missions will similarly improve the survivability and flexibility of China's nuclear forces," it adds.

It also says that China continues to modernize its Navy with better air-defense systems and new submarines, while its offensive air power has been improved with the acquisition of Su-30 strike aircraft and F-10 fighters.

Military spending continues to grow more quickly than the expansion of the economy, with Beijing announcing an increase of nearly 18 percent in its defense budget in March.

Looking at the situation with Taiwan, the report says the balance of forces continues to shift in the mainland's favor, with military exercises and deployments contributing to an atmosphere of intimidation. The report adds that tension could also increase as Taiwan prepares for its next presidential election, planned for March 2008.

Despite the pace of modernization, the report says, the People's Liberation Army remains untested in modern warfare and most of China's leaders lack military experience.

That gives rise to a greater potential for miscalculations, according to the report, which "would be equally catastrophic whether based on advice from operationally inexperienced commanders or from 'scientific' combat models."

Asia hit by tumbling China

Chinese stocks slumped more than 6 percent on Wednesday after China tripled a share-trading tax in a bid to cool its red-hot market, knocking Asian markets lower but failing to trigger the broad rout some had feared.

The yen held gains after rebounding from a record low against the euro as the Chinese move prompted investors to cut back risky positions in so-called carry trades financed by borrowing the Japanese currency.

Investors were anxiously awaiting the reaction of European and U.S. markets, with London spread betters forecasting Britain's FTSE 100, France's CAC 40 and Germany's DAX to open down around 0.5 percent.

China's Ministry of Finance raised stamp duty on share transactions to 0.3 percent from 0.1 percent in what was seen as the strongest attempt yet to curb speculation in a market that had risen more than 60 percent so far this year.

Tokyo's Nikkei closed down 0.5 percent, while MSCI's index of regional shares outside Japan was down 1 percent at 0615 GMT.

"The decline today is 100 percent influenced by China," said Soichiro Monji, chief strategist at the equity management department of Daiwa SB Investments in Tokyo.

"In theory it shouldn't matter if Chinese stocks plunge, but markets are at high levels and investors are very aware of the downside risk."

The benchmark Shanghai Composite Index was down 6.2 percent, having fallen as much as 7.4 percent earlier. Shares of brokerages were hardest hit on fears the tax rise would shrink market turnover, with CITIC Securities tumbling by the 10 percent daily limit.

Beijing's cooling measure prompted fears of a repeat of late February, when a steep slump in Chinese stocks triggered a global equities sell-off as risk aversion swept financial markets.

Regional stock markets fell almost across the board but the losses were not as dramatic. Australia's stocks benchmark lost 1.2 percent and Taiwan shares fell 0.4 percent.

Indexes in Hong Kong and Singapore were both down more than 1 percent at their midsession breaks, but South Korea's KOSPI crept into positive territory near the end of the trading day, ending up 0.1 percent at a record close.

"This is not like the China shock in February," said Kim Joong-hyun, an analyst at Goodmorning Shinah Securities in Seoul. "The markets are showing that the impact from China this time will not be long-lasting."

In the foreign exchange markets those jitters prompted some scaling back of carry trades, where investors borrow low yielding currencies such as the yen to buy assets offering higher returns.

Carry trades are vulnerable to reduced risk appetite, often prompting a sharp appreciation of the yen when investors reverse such positions.

The Japanese currency jumped against the dollar and euro as share trading opened in Shanghai, but quickly trimmed gains to trade a little firmer on the day.

"The foreign exchange market is swinging between hope and despair due to developments in Chinese shares," said Kosuke Hanao, head of forex sales at HSBC in Tokyo.

The euro eased to 163.45 yen after reaching a fresh record high of 164.29 yen the previous day as comments by European Central Bank officials suggesting more euro-zone rate increases prompted investors to buy the single currency.

The dollar bought around 121.60 yen at 0615 GMT, little changed from late U.S. trading. The dollar remains in sight of a three-month high of 121.89 yen hit last Friday.

China's midnight announcement, which came late in the U.S. trading day, limited Wall Street gains on Tuesday. The Dow Jones closed 0.1 percent higher, although the Nasdaq rose 0.6 percent on a wave of takeover news in the tech sector.

Benchmark Japanese government bond 10-year yields fell 2 basis points to 1.730 percent.

China announces new anti-porn Internet campaign

China has launched its latest campaign against Internet pornography that will also take aim at fraud, illegal lotteries and "rumour-spreading", the official Xinhua news agency said.

"The boom of pornographic content on the Internet has contaminated cyberspace and perverted China's young minds," it quoted Zhang Xinfeng, vice-minister of public security, as saying in a late night report.

"The inflow of pornographic materials from abroad and lax domestic control are to blame for the existing problems in China's cyberspace," Zhang said.

The campaign will crack down on "distributing pornographic materials and organising cyber strip shows, and purge the Web of sexually explicit images, stories, and audio and video clips," it added.

Zhang said they will target "content that spreads rumours and is of a slanderous nature" as well, though he did not provide details.

"China has roughly 123 million Internet users, most of whom are young people. The Chinese government believes they need to be protected from negative online influences," Xinhua said.

Last November a Chinese court sentenced the founder of the country's largest pornography Web site to life imprisonment.

Pornography was among the vices nearly wiped out in China under the strict and puritanical rule of Mao Zedong. But since economic reforms began and social controls have loosened, it has become more readily available.

China has an army of cyber police who patrol the Internet for unfavourable content, but their targets are more often politically sensitive subjects than pornography.

China's Porn King Gets Life in Prison

China Pornography Crackdown
China is cracking down on Internet pornography suppliers.

Chinese authorities made an example out of Chen Hui, the 28-year-old Internet porn king, and sentenced him to life in prison. Eight others who were connected to Mr. Chen's venture were given jail terms ranging from 13 months to 10 years.

The authorities would have made Chairman Mao proud. Pornography, along with prostitution, drugs and extramarital sex, was a vice he wanted erased from Chinese society. Yet he enjoyed the perks of being a dictator. In "The New Emperors," he is described also as a porn collector, a drug addict and a "sex maniac" who had women at the ready to pleasure him.

While the rich and the almighty party apparatchiki indulge in sex, drugs and rock and roll, the law applies differently to less important, ordinary Chinese.

Like opium that brought 19th Century China to its knees, the Internet should scare the Party, and not because of subversive contents. But how does Beijing monitor 111 million users?

China's Internet censorship scheme is 'sophisticated and effective.' It uses a combination of legal restrictions and highly efficient hardware and software filters. There are human monitors, too, to see who will get jailed next.

Mr. Chen's trial began in August after prosecutors charged him with running "Qingseliuyuetian," or Pornographic Summer. He had eluded the authorities by using overseas servers and shifting them regularly. Much of his assets are believed to be in foreign banks. That may or may not do much good for him now.

"China's Department of Public Security has sent officials to supervise the trial," Xinhua news agency wrote.

China now has an "anti-pornography and anti-piracy" office. The two go hand in hand when it comes to selling pirated pornographic DVD's. An unidentified man received 12 years last week for that crime. (Read more about piracy here.)

When it comes to Internet addiction, China's Civilization Office is leading the charge to protect teenagers. Other than promoting what the Chinese are calling "green" games, it is unclear what else they can do to confine teenagers to friendly content.

But the Internet is being used for sex education, a topic neither school teachers nor parents want to talk about openly.

South China Province to Ban Keeping Of Mistresses

South China's booming province of Guangdong is drafting a law to ban the resurgent trend of keeping of mistresses, in a bid to preserve social harmony, local media reported on Wednesday.

Many Chinese businessmen keep mistresses in second homes, a tradition banished after the Communists swept to power in 1949 but which has made a comeback with nearly 30 years of market reforms.

The law, attached to legislation guaranteeing women's rights, would ban married people from setting up "love nests" to engage in extra-marital affairs, the Beijing News said.

"Adding this provision is aimed at preserving and enhancing marital stability," the paper quoted a Guangdong lawmaker, Cheng Jingchu, as saying.

China has repeatedly urged its officials to honor the sanctity of marriage after a string of high-profile corruption cases involving mistresses led to the sacking and punishment of senior cadres.

Last year prosecutors launched criminal proceedings against Beijing vice-mayor Liu Zhihua, who was denounced for taking millions of yuan in bribes and helping his mistress "seek profit" while he was in charge of Olympic venue construction.

China also sacked top naval officer Wang Shouye for graft last July after one of his mistresses blew the whistle on him for taking millions in bribes from military contractors.

Taiwan's Lee Visits Japan Despite Beijing Protest

Former Taiwan president Lee Teng-hui, despised by China for asserting the self-ruled island's sovereignty, arrived in Japan on Wednesday for a trip that has already sparked protest from Beijing.

Japan said this week that the visit was for tourism only and should have no impact on its ties with China, but the 84-year-old Lee is scheduled to give speeches and a news conference in Tokyo during the 11-day stay.

Lee, who was the Taiwanese leader from 1988 to 2000, has been to Japan twice after stepping down, the last time in January 2005, but had stayed away from the capital and refrained from speaking in public.

"It'll be my first time in Tokyo in 22 years. I am looking forward to it a lot," Lee told reporters after arriving at an airport just outside of Tokyo, where he was greeted by supporters chanting "banzai" (long life).

Lee denied speculation that he may meet Japanese politicians, but did say he would visit Tokyo's Yasukuni war shrine, seen by many in Asia as a symbol of Japan's past militarism.

The shrine honors Japan's war dead -- among them soldiers from Taiwan and Korea who fought for Japan, their colonial ruler at the time -- but also some convicted war criminals including wartime prime minister Hideki Tojo.

Lee's older brother died fighting for the Japanese military.

"As for Yasukuni, I have not set a time yet, but I have to see my big brother."

The former president had planned another Japan trip for September 2006, but cancelled it citing health reasons after Beijing told Tokyo it would harm their relationship.

On Tuesday, Chinese Foreign Ministry spokeswoman Jiang Yu said Beijing had made a "solemn representation" to Japan over the latest visit.

"We strongly demand Japan attach importance to China's serious concern ... and not provide political stages to Taiwan independence elements or forces," Jiang told reporters.

Lee, who will be traveling with his wife, did not apply for a visa as Japan has waived visas for short-term tourists from Taiwan since 2005.

During his stay, Japan-educated Lee will also receive a prize in memory of Japanese colonial administrator Shinpei Goto, and tour a series of Japanese temples throughout the country.

Beijing has claimed sovereignty over Taiwan and demanded that it accept reunification ever since 1949 when the Nationalist forces fled to the island after losing power on the mainland to the Communists.

US, Chinese Officials Discuss Difficult North Korean Funds Issue

The chief U.S. negotiator on North Korea's nuclear programs has been meeting with Chinese officials in Beijing to try to resolve problems in transferring money from a Macau bank to North Korea. Pyongyang has refused to resume six-nation talks on its nuclear weapons program until it has possession of the $25 million in the previously frozen accounts, and the U.S. official stays it still might take some time. Daniel Schearf reports from Beijing.

Christopher Hill talking to reporters in Beijing, 30 May 2007
Christopher Hill talking to reporters in Beijing, 30 May 2007
Assistant Secretary of State Christopher Hill met Wednesday with his Chinese counterpart to six-nation talks, Wu Dawei, to see if they can find a way to transfer the money and resume negotiations to end North Korea's nuclear programs.

The six nations, which include also South Korea, Russia, and Japan, agreed in February to a preliminary timetable for North Korea's nuclear disarmament. The deal included North Korea shutting down its main nuclear reactor by mid-April, but that deadline passed with no action because the transfer was stalled. Pyongyang says it will not act until it has its money in hand.

The funds are in several North Korean accounts at Macau's Banco Delta Asia. They were frozen in 2005 on U.S. suspicions that the bank was aiding North Korean money laundering and counterfeiting.

After meeting Chinese officials Wednesday, Hill told reporters it has been difficult for any bank to move the money because of legal concerns and regulatory issues.

"I know that it's hard to believe that something technical can go on for a couple months," he said. "But it really is a technical matter, which cannot just be solved though political means, but rather needs a complex set of technical solutions which involves several agencies of government on our side. So, it's not easy."

The issue of the funds has bedeviled the disarmament process for almost two years now. After the accounts were frozen, Pyongyang boycotted the negotiations, and last October, it tested a nuclear explosive.

The North Koreans were persuaded to return to talks after the U.S. said it would work to free the Macau funds. It did so earlier this year, but still hasn't figured out how to transfer the money to North Korea.

Chinese Shares Slump After Stock Trading Tax Hike

China increased its tax on share trades, leading to a 6.5 percent drop in its main stock index and jitters throughout Asian markets. Joseph Popiolkowski reports from Hong Kong.

A stock investor naps in front of the stock price monitor at a securities company in Shanghai, 30 May 2007
A stock investor naps in front of the stock price monitor at a securities company in Shanghai, 30 May 2007
The benchmark Shanghai Composite Index fell 281 points Wednesday after China's decision to triple its tax on share trades.

Late Tuesday, China's Ministry of Finance announced the increase from 0.1 percent to 0.3 percent.

It is the government's latest effort to cool the market, which has more than doubled over the past 12 months.

The effect was felt region-wide as Hong Kong's Hang Seng share index closed down nearly one percent Wednesday. Markets in Japan and Singapore also declined.

Wednesday's drop comes after weeks of warnings by economists and market experts - including former U.S. Federal Reserve chairman Alan Greenspan - that Chinese stocks were due for a fall.

One expert called the market's decline a "healthy correction". However, Enzio von Pfeil, who heads the research firm Commercial Economics Asia in Hong Kong, says the increased tax is an attempt to stabilize the market before China's Communist Party Congress late this year.

"What we've seen today is a bump on the way up, in other words it's people going up an escalator not down an escalator for the very simple reason that the central government in Beijing wants to continue very, very strong growth. It wants to show its very best possible face that it can," he said.

Enzio von Pfeil downplayed its effect on regional markets and says after an initial downturn they will rebound.

"There will be a short, sharp move down Wednesday but in those economies where the economic time is still particularly good - for instance in Hong Kong and Korea, which is what we're telling our clients - that is where I think you will find a lot of buying coming back in. So the idea here is to buy on weakness and that's what I think will happen tomorrow," he said.

In recent weeks, China also increased its interest rates and bank reserve ratios, which, like Wednesday's stamp tax increase, von Pfeil says were part of a series of attempts to rein in the market. However, he says, Beijing is reluctant to pull the reins too hard and risk slowing the economy too far and causing a rise in unemployment.

China Sentences Former Food And Drug Safety Chief to Death

China has delivered a death sentence to the former head of its food and drug administration, for taking bribes to approve untested medicines. The court case was heard as China faces growing complaints about unsafe drugs and food. Daniel Schearf reports from Beijing.

A Beijing court sentenced Zheng Xiaoyu to death for taking bribes worth over $830,000 while he served as chief of the State Food and Drug Administration.

China's official Xinhua news agency announced the verdict, saying Zheng allowed substandard medicines onto the market in return for cash and gifts. It said one antibiotic approved by the regulator caused at least ten deaths.

Xinhua said the punishment was appropriate given the "huge amount of bribes involved" and the "damage he inflicted on the country and the public."

Jiang Yu 29 May 2007 210
Jiang Yu answers reporters' questions in Beijing, 29 May 2007
China's Foreign Ministry spokeswoman, Jiang Yu, says the sentence reflected the Chinese government's determination to fight corruption.

Jiang says the Chinese government has always attached great importance to the health and safety of consumer goods, especially food and drugs, and is willing to work with the international community to safeguard the quality and reputation of Chinese food products.

China's food safety came under intense scrutiny this past month, after tainted pet food from China killed animals in North America.

In the past week, the Dominican Republic, Panama, and Nicaragua have pulled thousands of tubes of Chinese-made toothpaste from store shelves for containing a potentially deadly chemical used in engine coolants.

Poor quality food sickens tens of thousands of people in China every year.

The official China Daily newspaper reported Tuesday that the country will introduce its first food safety recall system by the end of the year.

The newspaper gave no details on how the system would work, but said any companies that failed to follow the new rules would be blacklisted from the Chinese market.

Tuesday, May 29, 2007

China Society Issues (Part three):disadvantaged groups "So Much Work, So Little Time"

About a mile from Tiananmen Square lies a pit from which a 28-story hotel will rise in a little more than a year. An army of construction workers lives and works at the open site, enduring plunging temperatures and freezing winds.

Some work the midnight hours, while the rest of the city sleeps.

Others rise at dawn. They work 15-hour days or longer, seven days a week. When they topple onto their bunk beds, it is 12 to a room. There is no heat.

One of them is Wei Zhongwen. He has more than two decades as a construction worker, and the injuries to prove it: a missing pinkie and a palm-size dent on his head under his neatly cropped hair. In the past decade, the 41-year-old has helped build skyscrapers, shopping malls and much else in Beijing and nearby provinces. He hasn't seen his wife or daughter in two years, and because of the press of work ahead of the Beijing Summer Olympics in 2008, he may not see them this year either.

'For me, one of the biggest problems of this job is loneliness,' says Mr. Wei, puffing on a cigarette.

In his rural hometown, the money Mr. Wei has sent back has built his extended family a five-room house with a thatch roof, a 21-inch color television set and rooms housing a horse and some pigs. The hardship of his work is worth it, Mr. Wei says, to educate his daughter and sustain his family on their farm.

Beijing is in the midst of an enormous building boom -- one of the most ambitious construction projects the world has ever seen. Cranes clutter its skyline. At more than 10,000 sites across the city, there is a total of 1.7 billion square feet of floor space under construction -- an area that, if laid out, would be nearly three times the size of Manhattan.

This colossal development is due to the efforts of a nearly invisible army, a group of almost two million migrant workers who drift from China's farmlands. Toting their bedrolls from work site to work site, they earn as little as 50 cents an hour. They work in a hazardous profession with practically no workplace protections and little or no medical coverage. Many of the workers live right in the heart of the city, yet few ordinary Beijing residents ever glimpse their crowded barracks, where privacy, cleanliness -- even meat -- are luxuries.

They often get paid late or not at all. A report this year by the research arm of the State Council, China's highest administrative body, found that in 2004, construction firms in Beijing owed roughly 700,000 of their workers more than $380 million in wages. Mr. Wei is fighting to collect about $400 he says he is owed -- half his earnings last year -- and he may never see it.

In such an uncertain environment, workers drift from job to job together. They rely on word of mouth to protect themselves against bad bosses. And, in bad times, they rely on each other.

These men -- there are few women in their crews -- are working against a deadline: December 2007. That is when the bulk of the Olympic construction work must be completed so that Beijing, one of the world's most polluted cities, has time for the air to clear of construction dust before the Games begin.

There is a lot to finish. The Olympics will attract a flood of foreign visitors and unprecedented media attention. Beijing's construction workers are aiming to have built a chunk of a subway system that, when completed, is projected to be the longest in the world, surpassing London's underground. They are erecting an airport terminal bigger than all five at London's Heathrow Airport and about 110 hotels. Including suburbs of Beijing, the building binge could cost more than $180 billion. Some call it China's most ambitious construction project since the Great Wall.

What happens to these workers after the boom already has become a topic of controversy. Beijing officials have made it clear they want to clear them out ahead of the Olympics. But authorities also fear political instability if so many workers are forced to leave because they may have trouble finding jobs back home.

As it is, the construction workers have a tenuous standing in the city. Lacking the papers to stay in Beijing legally, most work off the books, relying on oral promises instead of contracts. When they are sick, they visit illegal clinics, which are cheap but often dirty and run by unlicensed doctors.

Mr. Wei speaks proudly of his 18-year-old daughter Xiaowei, who lives with the rest of his family on a farm in Yushu county, in northeastern Jilin province. He says the girl is a good student and obedient. 'We're not that close. I don't know what she likes,' he says, awkwardly fingering a bunch of keys on his belt. A badge of prosperity among middle-age Chinese men, Mr. Wei's keys are a small vanity. He says he picked them up on the street. They are keys to things he doesn't have: a car, an apartment.

Like other construction workers, he lives frugally in the city. In his latest job he earns about $300 or so a month, but keeps only about $60 of it. The rest he sends home to the '3861 army' -- a term used to describe the women and children left behind in China's interior. (March 8 is China's Women's Day, June 1 Children's Day.)

NEXT TO COAL MINING, construction work has the highest number of casualties in China, with 2,607 reported fatalities in 2005. Steel-tipped boots are rare. China's workers clamber around in thin canvas shoes, often without safety harnesses, and buy their own work gloves. Many of their hard hats are just thin plastic shells, sold for a dollar apiece.

Wang Qishan, the mayor of Beijing, said in a recent interview that he personally reviews construction accident statistics daily. 'I can never be happy when I read such reports,' he said. 'Beijing can't do without these people.' The city tries to provide services such as health care for registered migrant workers, but its resources are overstretched, he said.

Like many other construction workers, Mr. Wei entered the trade because there was little else to do on his family's farm, a small plot where corn and soybeans grow. He left home at 17 for a province next to Beijing.

When he was in his 20s, Mr. Wei's left little finger was sliced off by an electric saw. In 1994, he was hit on the head by a steel rod, landing him in the hospital for more than a month. He counts himself lucky because his employer paid for his medical bills.

Last year, the owner of an art gallery in Tongzhou, a Beijing suburb, stiffed Mr. Wei and 76 crew mates, according to the men and a later court ruling. They had been paid halfway through the project and promised the rest of the pay upon completion. Instead, when they finished they say they were driven from the site by thugs armed with iron staffs and meat cleavers.

China's state-controlled banks have poured credit into real estate, where many companies are politically connected. The easy money often leads to ill-conceived projects that quickly go bust. When financing collapses, construction workers -- the ones at the bottom of the totem pole -- aren't paid. They find it difficult to claim restitution because they often are employed indirectly through subcontractors.

Mr. Wei and his friends say they had no success appealing to authorities in Tongzhou. About 20 of the workers drifted home, defeated. With no money, Mr. Wei and the remaining workers were forced to make camp in the neighboring province of Hebei, eking out a living with odd jobs. They say they lived on steamed buns, mostly, six for one yuan, or about 13 cents.

In November 2005, more than 50 of them rose at dawn. They marched for five hours to central Beijing to appeal to authorities there. They wound up at Beijing's Legal Aid office on Qianmen West Street.

Wang Xuefa, the center's director, remembers the sight of Mr. Wei and his friends kneeling en masse on the office floor. 'It was sad to see men brought so low,' he says.

The Intermediate People's Court in Tongzhou ruled in the group's favor on Jan. 6, ordering the Hong Kong developer Lian Ka Fu International to pay more than $30,000 in back wages to the workers. They haven't seen a cent. Lian Ka Fu's proprietor, Wang Xiaohu, told the court she doesn't have the money, says Chang Mingchuan, a lawyer at Beijing Legal Aid. Ms. Wang couldn't be reached for comment, and her Europe American Art Gallery -- a green low-rise with gold Corinthian columns -- is now shuttered.

Going home for Chinese New Year, China's most important holiday, is a ritual for construction workers. It is the only time in the year they see their families. Like returning heroes, they are feted and tell tales of car-choked streets and the towering skyscrapers they helped build. 'Some of my neighbors have not even taken a train,' Mr. Wei says.

Back home, Mr. Wei is a man of substance. Over the years, his wages, which are higher than average among construction workers because of his bricklaying expertise, have helped his family enjoy some comforts. 'We're very well respected in my home,' he says.

Last January, however, Mr. Wei stayed in a Hebei flophouse instead of returning home for the new year holiday. Penniless, he and his friends were too ashamed to go. To cheer up, they went to an airfield and watched planes taking off.

'Really, that's the only time I felt like suicide. I thought if a car hit me, at least I can get some compensation,' Mr. Wei says.

Reached by telephone, his wife, Ding Guiying, says it is a hard life taking care of Mr. Wei's aged parents, raising her daughter alone and tending the crops. Mr. Wei's wages nowadays go to pay for his daughter's secondary education -- which isn't free in China, even at public schools. Ms. Ding says the bill comes to around $1,300 a year.

Ms. Ding, 42, hopes her husband can come home when their daughter has finished school. 'We keep being separated for such a long time, and I can hardly count how many days we've been together in the past 19 years,' she says.

(MORE TO FOLLOW) Dow Jones Newswires

December 22, 2006 23:20 ET (04:20 GMT)

Copyright (c) 2006 Dow Jones & Company, Inc.

WSJ(12/23) So Much Work, So Little Time -2-

Mr. Wei spent most of this year in Hebei, the province surrounding Beijing. In May, he and his friends found a job at a residential site. Mr. Wei roomed in a wooden shack with 10 other workers. The floor was a brick-and-dirt mixture. The only running water was from a sink in the courtyard. The toilet was a shed with wooden planks over a hole. In the kitchen, flies clustered thickly.

In Hebei, as is common on such jobs, Mr. Wei paid his employer about 60 cents daily for three meals, mostly rice and tofu. Meat was rare, but he is a vegetarian. Growing up poor, he never got used to the taste of meat.

One of the crew, Yang Xinguo, 53, injured his leg in a traffic accident and had to stop working in September. After lingering for a while, hoping to get compensation from the art-gallery job, he decided to go home in mid-November. He had a few dollars earned before the accident and $50 or so that Mr. Wei and other friends gave him.

'We will send your pay to you, once we get it,' promised Mr. Wei, sitting on Mr. Yang's bed. He offered his departing friend a cigarette. Through the smoke, Mr. Yang's eyes shimmered. 'Men don't want to cry, but we have cried many times,' he said. By late November, Mr. Wei and his crew had moved back to Beijing. They found better work building the 28-story, four-star hotel. Conditions are cleaner. Mr. Wei now lives in barracks perched next to the yawning site. He has 10 roommates, including some new ones. There is no canteen, so they cook in the room, using a gas ring attached to a five-foot canister next to Mr. Wei's bed.

With no heating, they sleep in their jackets, and sometimes hats and gloves, too. Temperatures can drop below zero Fahrenheit in Beijing's winter. Some have electric blankets they bought for about $1.25 each.

They are creative with their limited space, rolling back their bedrolls and using the boards beneath as makeshift tables. The cook, Wen Fenglin, adroitly uses the space to chop cabbages and peel onions, ladling water from an old paint bucket to clean the food and utensils. The 55-year-old used to work on the crew but now is employed by the construction company to cook. 'Boss said I have to learn because I'm too old to do heavy work,' he says, browning onions for an omelet.

There are no washing facilities, so baths and clean clothes are treats. Mr. Wei remembers taking a bath well more than a month ago at a bathhouse, paying about 60 cents.

With no laundry, Mr. Wei buys secondhand clothes, wearing them until they get too dirty. Currently, his favorite is a gray cotton shirt he bought for a little more than a dollar, which looks as if it once might have belonged to a corporate executive. 'I normally throw away the clothes after wearing, but maybe I'll sell this. In about 10 days,' he says.

Around Beijing's small alleyways, an underground economy caters to construction workers. Vendors often do their business by barter because the workers don't have space to keep much and adopt a throwaway culture. One popular item is underwear with zippered pockets, to keep money and valuables close.

MR. WEI'S PACE OF WORK is now frenetic. The hotel still is just a big hole in the ground. Under city ordinances, concrete trucks from the hundreds of factories ringing the city are allowed in the city center only after 11 p.m. and on weekends, so he and his friends must work long past midnight curing concrete. Once the hotel's foundation is done, in about two months, Mr. Wei says the plan is to build a floor every five days.

On the next-to-last day of November, Mr. Wei and his comrades crowded into a small postal outlet, their grimy appearance setting them apart from other customers. The air smelled of unwashed clothes, and some people edged away.

It was exactly a year since they had made their long march to the Beijing Legal Aid office. Mr. Wei had given up hope of recovering his lost wages, but on this day the mood was celebratory. It was payday, and the men wanted to mail their money home. There was a flurry of bewilderment as they fumbled with forms. Mr. Wei, his eyes red-rimmed after a 24-hour shift, helped some of the workers who can't write well fill out the forms.

Zhang Tao, 20, in a paint-stained blue sweater and matted hair, slowly scrawled the amount he is sending home: 900 yuan, or about $115. He said he earns 1,000 yuan, or $128, a month.

On another night, Mr. Wei took a walk, wandering around the city's glittering towers and looming cranes. 'I have no regrets,' he said. 'I'm the migrant worker who stays out all year so home is better. I've seen things my neighbors have never imagined -- 50-story buildings, planes so big they can carry hundreds.'

He stopped in front of a European five-star hotel near his work site. 'I build these things, but I have never been inside,' he said.

Timidly, he pushed the swing door and went in.

Chinese warning over toy safetyChinese warning over toy safety

Dangerous teddy
Some Chinese-made toys have been banned in the EU
More than 20% of Chinese-made toys and baby clothes are below standard, the country's consumer watchdog has said.

An investigation by the General Administration of Quality Supervision, Inspection and Quarantine found some were even dangerous, Beijing News said.

Industrial waste, including dirty carpet fluff, paper and used instant noodle packaging, was found in some toys, the newspaper reported.

Some baby clothes contained harmful chemicals, the investigation found.

"These fluffy toys with bacteria or even viruses in them could cause children to itch if they touch them for a short time, or even cause disease over the long term," Beijing News said.

It said some toys had parts which could be broken off and swallowed.

Safety tests

China is the world's largest exporter of toys.

The US and the European Union - which have safety standards regulations - have complained about the quality of Chinese-made toys.

About half of all goods withdrawn from sale in the EU in 2006 were Chinese, according to figures from the European Commission.

China's state news agency, Xinhua, has reported that China will ban the sale of toys that fail to pass a national compulsory safety certification beginning from 1 June.

Toys that "could have a direct effect on the safety of babies and children" will have to bear the mark CCC (China Compulsory Certification) before they can be sold in China, according to a statement issued by the country's consumer watchdog.

China has been facing persistent consumer and food safety problems.

In 2004, China punished 97 government officials over the sale of fake milk powder with no nutritional value that caused the deaths of at least 13 babies in the eastern province of Anhui.

In recent months there have been complaints in the US about pet deaths from tainted wheat gluten and rice protein imported from China.

Monday, May 28, 2007

PORK CRISIS IN CHINA PROMPTS CONCERNS

A disease killing millions of pigs in China has sharply lifted the price of pork, the country's staple meat, fuelling fears about inflation and prompting calls from Beijing's top leadership for increased production of the meat.

Wen Jiabao, the premier, provided confirmation of the seriousness of the crisis with a weekend visit to a market in Shaanxi, where he said farmers should help "resolve the problem" of providing meat for China's 1.3bn people.

Pork prices have risen by as much as 30 per cent in Chinese cities over the last week. According to the agriculture ministry, wholesale prices for pigs have gone up even more, rising 71.3 per cent since April.

China's 500m-odd pigs are the country's most important source of affordable meat, and any sustained interruption in supply would be a major political problem for the government.

While the price of feed, such as corn, has risen, the main culprit is an epidemic of a mysterious illness known as 'blue ear' disease, as well as the more common foot-and-mouth affliction.

"I have heard it has killed as many as 20m hogs," an industry executive said yesterday.

The government has not issued any estimate of how many pigs have been struck by disease and China's size and the number of small producers make it difficult quickly to obtain reliable figures.

But the impact of the shortage of pork is apparent in many areas, from sausage makers switching meats, to rising offal prices, and attempts by Hong Kong to import meat from South America.

China cannot easily find competitively priced pork to replace the shortfall at home, because of its own health-related restrictions on imports from South America, where prices are relatively low. US and European pork is relatively expensive.

China Concerned Over Pork Price Increase

China's leaders are trying to calm public concern over sharp price rises for pork, the country's staple meat, ordering local governments to ensure adequate supplies and help low-income families.

''Production and distribution of pork and its products relates to the lives of the masses and influences the overall situation,'' China's Cabinet, the General Office of the State Council, said in a statement carried on the front pages of official newspapers Wednesday.

High-level concern over the price rises was signaled by Premier Wen Jiabao's visits last weekend to pork producers and markets, when he pledged an official response would be forthcoming.

State media mentioned the possibility of using a strategic reserve of frozen pork and live pigs that the government maintains to guard against severe shortages, although the Cabinet's circular, issued after a meeting Tuesday, did not directly address such a move.

Urban Chinese eat more pork than any other meat, an average of 42 pounds per person in 2006, according to official statistics.

Prices of the meat rose by an average of 8.6 percent in April over the previous month, and were up 43.1 percent over April 2006, according to the Commerce Ministry.

Among measures ordered were subsidies for producers to encourage hog rearing and increase supply. Railways and other transport networks also are to give priority to deliveries of pork and live hogs, while governments are to increase food assistance to low-income families in line with the rise in pork prices, the circular said.

The document blamed the price increases on rising grain and feed costs, and an outbreak of blue ear disease, also called porcine reproductive and respiratory syndrome, which led to the slaughtering of herds and a sharp reduction in the numbers of piglets born.

''Appropriate increases in the price of live pigs and pork can be of benefit by boosting farming incomes,'' the circular said.

''However, if they rise too fast, that will cause increases in the price of other meat, poultry, eggs, and other foods and prices in the food and beverage industry, and affect the lives of low-income residents,'' it said.

Chinese Foreign Ministry Lashes Out at US Defense Report

China's Foreign Ministry has reacted forcefully to a U.S. Defense Department report on the expansion of China's military.

Schearf China Foreign Ministry spokeswoman Jiang Yu 
China Foreign Ministry spokeswoman Jiang Yu 
Ministry spokeswomen Jiang Yu said in a statement Monday that the Pentagon's annual report exaggerates China's defense spending in an effort to play up China's military threat. She said China is a peace-loving country pursuing its right to protect its national security.

Jiang also called on Washington to stop sending what she called "wrong signals" to pro-independence forces on the self-governing island of Taiwan.

Taiwan severed ties with mainland China following a a 1949 civil war, but Beijing considers the island a renegade province.

The U.S. Defense Department report issued Friday says, despite China's military buildup, it lacks the power for a successful attack against Taiwan.

The report says China is developing sophisticated missiles, aircraft and ships, and is increasing its capacity to launch pre-emptive strikes beyond East Asia. The Pentagon says China is developing weapons to protect the country's access to resources, such as oil.

China announced plans in March to increase military spending by nearly 18 percent this year to about $45 billion. Analysts believe the actual budget is much bigger.

Sunday, May 27, 2007

FATIGUE FEARS OVER CHINA'S EXPORTS

Could Chinese steel exports bring the industry's party to an end?

That is the question on the minds of steel executives as they consider the chances of a four-year boom in the sector juddering to a halt sometime during the next 12 months.

Since the middle of 2003, share prices of quoted steel stocks have trebled compared with the average price of all listed groups worldwide.

The spurs have been a surge in demand, particularly from China, and consolidation efforts in the industry that have produced bigger groups more capable of dictating prices.

But the trend worrying many has been a large rise in exports from China in the past 18 months, tipping the country from being a small net importer of the metal in 2005 to a net exporter last year of 35m tonnes.

This year, steel exports from China could be as high as 70m tonnes, based on the large trade flows in the first four months, according to some industry observers.

They are concerned that this amount of extra material coming on to world markets could depress steel prices, which have doubled in the past four years, and result in a reversal of the large profit rises that have made steel groups favourites among investors.

Another consequence could be to damp the climate for mergers and acquisitions that has been a feature of the sector.

John Tulloch, chief commercial officer of Ipsco, a Canadian maker of specialist steel plate and pipes, which is being bought by SSAB of Sweden for $7.7bn, said: "The flow of steel from China to the rest of the world is potentially destabilising.

"It's being driven by a rise in steel production capacity in China, which in my opinion dwarfs the capability of markets in Asia to absorb the extra material."

Ugur Dalbeler, chief executive of Colakoglu Metalurgi, a Turkish maker of steel rod for the construction industry – a sector that has seen hefty price rises in the past few years – said: "I feel the threat [of high Chinese steel exports] is getting closer."

Last year, China accounted for 34 per cent of world steel output of 1.2bn tonnes, and so far this year, steel being made by the country's mills is up by about one fifth compared with the same period in 2006.

The production surge worries Barry Solarz of the American Iron and Steel Institute, a trade body representing US steel makers.

Mr Solarz said much of the extra production – and exports – were being driven by subsidised loans and other help to Chinese steel producers, most of which are controlled by the state.

Wu Jingjing, of the China Iron and Steel Association, representing the Chinese steel industry, intensified the concerns of many non-Chinese steelmakers when he told a steel conference in Istanbul last week that progress towards consolidation in the sector was proceeding much more slowly than the official Beijing policy appears to require.

Many non-Chinese steel observers have tended to applaud the government's ideas to encourage Chinese steelmakers as a means of making the steel industry more globally competitive.

The reasoning in favour of efforts to consolidate is that having fewer steel producers in China would lead to companies cutting capacity to focus on the most profitable mills. That would push up Chinese steel prices, which are in general considerably lower than elsewhere.

But Mr Wu told the conference that last year, the biggest 10 Chinese steel companies accounted for 34.9 per cent of total Chinese steel output – little changed on 2004 and well short of the 50 per cent figure that Beijing would like to see. Much of China's extra output had been driven by "speculative" investment by smaller companies, he said.

Such data demonstrate that the "commitment by the Chinese government to encourage consolidation is hollow", according to Alan Price, a lawyer at the Washington legal firm Wiley Rein.

The firm specialises in steel trade and advises US steelmakers such as Nucor.

According to Mr Price, net steel exports from China could rise to up to 70m tonnes.

Concerns in the US about Chinese steel trade are shared in Europe, according to Karl Tachelet, director of trade at Eurofer, a Brussels-based body that represents European steel producers.

"It's not the absolute numbers that are disturbing but the scale of the change," said Mr Tachelet.

"In 2006, 5m tonnes of steel from China entered the European Union, and this year the figure could rise to 10-12m tonnes – in which case Chinese steel imports could account for a third of all steel coming into Europe."

Although Mr Tachelet and others are stepping back from saying a crisis is brewing, the trade data from China will be pored over in the steel industry with special intensity in the coming months.

US TRADE WITH CHINA

Global imbalances" have been seen as a threat for so long that it's tempting to conclude that the world economy is, in fact, in harmony. That said, many things still look out of whack. From Spanish property to emerging market debt, asset prices and valuations are stretched. Consumer indebtedness, particularly in Anglo-Saxon countries, is at record levels. Other indicators, such as currency market volatility and risk premiums are well away from long-term trends. But the most commonly cited "imbalance" is the US trade deficit.

Many are blaming China and point to its ballooning surplus with the US, which now exceeds $200bn. In Washington, Congress in particular is gunning for sanctions. A simplified solution is for China to revalue its currency and, if vice-premier Wu Yi received a dollar each time this was requested at this week's bilateral talks, she could almost have returned home and solved the trade deficit single handedly.

If this is the biggest problem facing global stability, then worryingly, there appears to be no managed solution in sight. China is well aware of the negative effect that a strong renminbi would have on its export-fuelled growth and has given no ground. And it wouldn't just be Chinese companies that suffer – little is said about the hit to margins for foreign companies with significant manufacturing exposure to China. A sharp appreciation may also cause a shock to the rest of Asia, which, although receiving a step gain in competitiveness, has been grateful for cheap Chinese imports.

That means the deficit will probably have to unwind at the US end. Indeed, the US dollar has already fallen against most other currencies, particularly the euro. The most damaging "solution" would be if imports fall as a result of a contraction in consumption, possibly due to recession. And with Japan still weak, it is debatable whether Europe could support global growth alone. Best to hope these imbalances do not topple over any time soon.

TOXIC PET FOOD DOGS US-CHINA RELATIONS


Memo to Chinese food exporters: don't mess with America's pets.

It was, after all, the apparent accidental poisoning of thousands of cats and dogs that first drew widespread US media attention to the failings of Chinese food safety controls last month.

Fuelled by revelations of other Chinese food problems and reports of exports of toxic toothpaste to Central America, the resultant furore is now threatening China's fast-growing agricultural export sector.

Washington has already demanded tighter regulation of Chinese exporters. Democratic senator Dick Durbin has declared that "Made in China" has become a "warning label" for food sold in the US. And, US news agency Dow Jones last week ran a story considering the practicality of calls for a ban on Chinese food imports.

Such a heated reaction has taken Chinese observers aback. Food safety has long been an issue of consumer concern in China's richer cities, but few expected the death of a reported 16 US pets to escalate into the newest source of friction in ever-prickly Sino-US ties.

Some observers have dismissed the food scare as an effort by US interest groups to push an anti-China agenda. The overseas edition of the Communist party's People's Daily blamed US media for "stirring up" the pet food problems.

"In a moment, the US has filled the air with a 'China Food Threat Theory', the newspaper said.

Zhao Min, a corporate consultant and blogger, saw the food scare as a US effort to win ground ahead of last week's Sino-US Strategic Economic Dialogue.

"When the US government has economic talks with a foreign government, it is just like a war," Mr Zhao wrote. "The media is the air force; conducting aerial bombing to set public opinion before the talks, seizing the high ground while attacking and destroying the opponent's self-confidence."

Others see the scare more as part of a US zeitgeist where China is already seen as a challenger to US economic security and military supremacy.

Some Chinese, however, not only sympathise with the US reaction to the pet deaths – they actually welcome the attention.

Restaurant Fire Kills 11 in Northeastern China

Chinese state media say a fire in a popular restaurant in the northeastern province of Liaoning has killed 11 people and injured 16 others.

The official Xinhua news agency reports Sunday that the fire broke out in the kitchen and fully engulfed the Baixinglou restaurant in the city of Chaoyang Saturday evening. Firefighters put out the blaze after battling the flames for more than hour.

Xinhua says the victims included diners and waiters at the restaurant. They are hospitalized and are reported in stable condition.

The news agency says initial investigations show improper use of a stove sparked the fire.