China opposes US lifting of Taiwan contact ban
2006-06-30 China Daily
Beijing said yesterday that it strongly opposes US moves to lift decades-old restrictions on contact between American and Taiwan officials, saying it runs counter to the one-China principle. The US House of Representatives approved the measure on Wednesday but it has not yet been considered by the Senate. "China has always resolutely opposed any form of official contact between US and Taiwan authorities," Foreign Ministry spokeswoman Jiang Yu told a news conference. She called the resolution a "serious violation of the fundamental principles of Sino-US relations" and said it ran contrary to the commitment to the one-China policy the United States has affirmed many times. US restrictions that prevent high-ranking American military officers from travelling to Taiwan have been in force since 1979, when it established diplomatic relations with Beijing. Also prohibited are meetings between US and Taiwan civilian officials in certain government buildings, including the White House. The House approved the measure in an amendment to a funding bill for the State Department; and the Senate could debate the issue later this summer. In another development, China yesterday expressed appreciation to US Deputy Secretary of State Robert Zoellick for his "contribution to the promotion of China-US ties." Vice-Foreign Minister Dai Bingguo extolled Zoellick's efforts during a phone conversation with him on Wednesday night, according to a statement from the Foreign Ministry yesterday. Zoellick resigned on June 15 to take up a position with Goldman Sachs.

Leaders optimistic on Sino-Australian FTA talks
2006-06-29 China Daily
Both the Chinese premier and the Australian prime minister have expressed their hopes of accelerating talks on a free-trade agreement yesterday in the southern city. The sixth-round negotiation of the Sino-Australia FTA will be held in Beijing in early September, tackling substantial issues such as bidding and offering. Talks began last May. "We have agreed to speed up the free trade area (FTA) negotiations," Premier Wen Jiabao told reporters after a one-hour meeting with Australian Prime Minister John Howard. "Both sides are very sincere I believe Chinese and Australian trade will both benefit," he said. Liao Xiaoqi, vice-minister of commerce, said the Chinese and Australian FTA delegations are working hard to reach a balanced agreement in one or two years. "We are quite confident," he told an FTA seminar. Given that both countries have different economic structures and are at different development stages, problems are inevitable, especially in agricultural trade, the service industry mode and the openness of investment, Liao said. "We believe all issues concern both sides and could be discussed at the negotiating table Only with an open and active attitude and full consideration and understanding of the difficulties of each party, can we finally make a breakthrough and reach a win-win FTA agreement," he said. Howard said the negotiations are going well and he is optimistic about them. He said Sino-Australian trade has made remarkable achievements even without the free-trade agreement. "What we should remember is that whether we sign a free trade agreement with China or not we have one super economic relationship with this country and the quadrupling of exports over a period of 10 years is a pretty remarkable achievement," he said. He also agreed that there are some important issues to be addressed and hoped the industries of both countries are able to understand the corresponding situations. Howard said he hoped China would put forward concessions on Australian access to its agriculture and services. He said Australian trade negotiators would reciprocate with similar concessions in manufacturing. He noted that Australia was very keen to export far more natural resources to China, where energy and commodity use is going to continue to surge as the nation's 1.3 billion people grow wealthier. However, he stressed Australia's economic relations with China should be viewed more broadly than just the resources sector. "The service sector has certainly got enormous opportunities and I think we should see the relationship in a very broad manner; for example, the financial service, education and even in manufacturing, and not just see it in terms of coal, iron ore and gas," he said. ()

China urges Palestine, Israel to refrain from "circle of violence"
2006-06-29 People's Daily
China on Thursday expressed its deep concerns over worsening situation in the Middle East, urging Palestine and Israel to exercise restraint to cool down the conflicts. "China is deeply concerned about the increasing tension between Palestine and Israel," said Chinese Foreign Ministry spokeswoman Jiang Yu. Israel launched the operation of "Summer Rain" early Wednesday after two days of unfruitful international mediation over the release of Cpl. Gilad Shalit, who was kidnapped by Palestinian soldiers in an attack on a military position near the Gaza border Sunday morning. "We urge Israel to exercise restraint and halt military action, and call on Palestine to release the hostage as early as possible," Jiang told a regular press conference. China holds that the Middle East issues should be solved through political negotiations on the basis of relevant UN resolutions and the "land for peace" principle, Jiang added. "We hope the two sides will take concrete actions to relax the current tension and stop circle of violence at an early date," Jiang said.

China hopes Iran gives early response to package on nuclear issue
2006-06-29 Xinhuanet
China hoped Iran would work together with the International Atomic Energy Agency and deliver an early response to the six-nation package proposal aimed at resolving the nuclear dispute. "We hope Iran will pay due attention to the concerns of the international community, take a positive attitude and make a formal response to the proposal soon," China's Foreign Ministry spokeswoman Jiang Yu said on Thursday. According to Jiang, to solve the Iran nuclear dispute peacefully through diplomatic means is the right way and serves the interests of all parties. "We also hope that all the other parties show the utmost patience and restraint, continue to take a constructive attitude to create a favorable atmosphere and conditions for the resumption of negotiations," she said.

China urges North Korea not to test missile
2006-06-29 China Daily
Chinese premier urged North Korea on Wednesday to desist from firing a long-range missile, while South Korea called on the United States to talk directly with North Korea to forestall a launch. Premier Wen Jiabao said China was paying close attention to information that North Korea may be preparing a test-launch and urged Pyongyang to avoid any actions that would aggravate regional tensions and further derail long-stalled negotiations on the North's nuclear fuel programs. "We hope that the various parties will proceed from the greater interest of maintaining stability on the Korean Peninsula and refrain from taking measures that will worsen the situation," Wen said at a joint news conference with visiting Australian Prime Minister John Howard. Wen's remarks Wednesday were the first time the senior Chinese leadership acknowledged concerns about a possible missile launch in the two weeks since intelligence reports detected North Korean preparations. "No country in the world has a greater influence on North Korea than China has," said Howard, in Shenzhen to inaugurate deliveries of Australian natural gas and discuss a free-trade agreement with Wen. According to intelligence reports, the missile, a Taepodong-2, was being fueled at a launch pad on North Korea's north eastern coast. A US government estimate puts the range of the Taepodong-2 missile at between 5,000 and 7,500 miles, making it capable of reaching the United States. A senior South Korean official urged Washington to talk directly with Pyongyang, a demand a North Korean diplomat has hinted at but that the Bush administration has refused. "Our government has the view that the US administration should also be more actively involved in discussions," South Korean Unification Minister Lee Jong-seok said in a speech reported by the Yonhap news agency. "We will continue to push for this matter. ... The most important thing is to stop North Korea from firing a missile." Wen's and Lee's remarks come a day after the Chinese and South Korean foreign ministers conferred in Beijing on the missile issue. The two countries, both North Korean neighbors, have drawn closer in recent years, joined by burgeoning economic ties they don't want to see disrupted by regional crises. Beijing and Seoul have increasingly struck an even handed approach, trying to persuade the North into negotiations while encouraging the Bush administration not to take actions that could worsen the situation. Wen echoed this strategy, saying a resumption of the six-nation talks on North Korea's nuclear programs, which also include the US, Russia, South Korea and Japan, offered the best opportunity for regional stability. He suggested both North Korea and the United States need to moderate their positions to get the talks back on track. "We still believe that the six-party talks are the only way to a peaceful settlement of the nuclear issue on the Korean Peninsula," Wen said. "So China will work actively on the concerns of the various parties on the matter so that we can resume negotiations as soon as possible and bring about a peaceful solution to the nuclear issue." ()

China, ROK hold talks in Beijing
2006-06-27 Xinhuanet
Chinese Foreign Minister Li Zhaoxing held talks with Minister of Foreign Affairs and Trade of the Republic of Korea (ROK) Ban Ki-Moon here Tuesday morning. The two sides exchanged views on bilateral relations and international and regional issues of common concern, according to the Chinese Foreign Ministry. Speaking highly of bilateral relations, the two sides agreed to continue making joint efforts to push forward the China-ROK all-round partnership of cooperation. At the invitation of Li, Ban will stay in Beijing for a two-day working visit. Upon his arrival late Monday, Ban was reported to have said he planed to discuss matters including the early resumption of six-party talks and a plan of the Democratic People's Republic of Korea to test-fire a missile. During the meeting with Ban on Tuesday afternoon, Chinese State Councilor Tang Jiaxuan said all the relevant parties should keep to peaceful resolution of the Korean Peninsula issues through dialogues under such circumstances, and prevent from deteriorating the tense situation. Tang urged all parties concerned to promote an early resumption of the six-party talks halted since November of last year, and help maintain through common efforts the peace and stability on the Korean Peninsula and in the region. Ban said the ROK side is highly concerned of the present situation, and is willing to work with the Chinese side to push forward the six-party talks, and to maintain the peace and stability of the Korean Peninsula and the region. FM Spokeswoman Jiang Yu also stressed at a regular press conference Tuesday afternoon that all the parties involved should keep dialogues and peacefully resolve the Korean Peninsula issues, and strive for an early resumption of the stalled nuclear talks. China has always been devoted to maintaining the peace and stability on the Korean Peninsula, and is willing to work with all sides to strive for such a goal, Jiang said.

China, Japan to discuss gas in July
2006-06-30 - China Daily
China and Japan will hold talks in Beijing early next month to try to resolve differences over a disputed natural gas field in the East China Sea. The talks -- originally expected to take place this month -- will be held on July 8-9, Japan's Foreign Ministry said in a statement. In May, Japan said it was considering joint use of the gas field with China after Japanese Foreign Minister Taro Aso and his Chinese counterpart Li Zhaoxing discussed the issue in a rare meeting on the sidelines of an Asian summit in Doha, Qatar. Ties between Beijing and Tokyo have deteriorated since Japanese Prime Minister Junichiro Koizumi took office five years ago and began annual visits to the Yasukuni Shrine for war dead, seen by China and South Korea as a symbol of past Japanese militarism. The dispute over the gas field has also soured relations. The two countries disagree over the position of the border between their exclusive economic zones in the East China Sea.

Brief talks 'won't seal' Vatican ties
2006-06-28 SCMP
Sino-Vatican relations will not be re-established through "a couple of discussions", a leader of the state body which controls the Catholic Church on the mainland said yesterday. The remarks by Anthony Liu Bainian, a vice-chairman of the Chinese Catholic Patriotic Association, came as the Foreign Ministry declined to confirm that a high-level Vatican delegation was visiting Beijing to negotiate the re-establishment of ties. Veteran Vatican negotiator and China policy expert Archbishop Claudio Maria Celli, and Monsignor Gianfranco Rota Graziosi, undersecretary of the Vatican Secretariat of State are believed to be staying in Beijing until Saturday. Saying he could not confirm the visit, Mr Liu said his association was not involved in the diplomatic negotiations as this was the responsibility of the governments of China and the Vatican. "Establishing diplomatic relations between China and the Vatican is not a matter that can be done in one or two days, and no success will result from a couple of discussions," Mr Liu said, adding he would like dialogue to continue.

WHO fears unreported mainland H5N1 cases - Organisation asks for details after death of soldier in 2003 found to be bird flu
2006-06-29 SCMP
The World Health Organisation is trying to find out from mainland authorities if more human H5N1 cases have been found in retrospective tests after scientists discovered that a man who died in 2003 had contracted the virus, which causes bird flu. A letter from the scientists in the New England Journal of Medicine last Thursday has drawn international attention to the possibility, and led to questions about the number of human bird-flu cases the mainland may have seen before it announced the first case last October.Roy Wadia, the WHO's spokesman in Beijing, said yesterday that the organisation was eager to know whether any other patients were tested retrospectively and whether any of these tested positive for bird flu. "We also want to know if other samples were also tested for H5N1 and if there are other positive outcomes that have been shared internally in the [mainland] government," Mr Wadia said. "This case does raise the possibility that there are other cases we need to know about." The Ministry of Health has yet to confirm if the case mentioned in the scientists' letter was a human H5N1 case. The ministry has told the WHO it has been looking into the matter. Mr Wadia said he had been told retrospective tests of samples from the patient who died in 2003 were now being carried out in a laboratory under the ministry in accordance with the standard practice to confirm a human bird flu case. The WHO was told the patient was a People's Liberation Army soldier who had been admitted to PLA Hospital No309 in November 2003 after showing what were thought to be Sars symptoms. He died in early December. Samples taken from the patient tested negative for Sars and the disease has been ruled out, according to the scientists. The official reply to the WHO's inquiries failed to address several crucial questions, including how many retrospective tests were conducted, when they took place and whether other patients were tested retrospectively. "We also asked for the firm date of confirmation and a more clear time line of the testing and also what prompted them to test [for] H5N1 and what was the rationale behind it," Mr Wadia said. "We also want to know any information of the possible source of this man's infection, how did he contract H5N1 and whether his family and friends had contracted the disease." Mr Wadia said the inquiries were sent to the Ministry of Health late last week. He said the WHO has also asked Beijing to share the samples from the case with the international community, as it did for every human bird flu case. The eight scientists who signed the letter to the journal include Sars researchers Qin Ede and Zhu Qinyu. The Ministry of Health refused to comment yesterday and none of the scientists could be reached for comment.

5.51 bln yuan of budgetary funds misappropriated: NAO
2006-06-27 Xinhuanet
China's top auditor Li Jinhua on Tuesday said the National Audit Office (NAO) has found that 48 central government departments misappropriated 5.51 billion yuan of central budget in 2005. Li Jinhua, Auditor-General of the National Audit Office, said in his annual audit report to the Standing Committee of the National People's Congress on the central budget that "the general situation of the central budget performance in 2005 is good. The government's budgetary and accounting management capabilities have been improved." However, problems exist. Nine central government departments cheated a combined 176 million yuan of central budgetary funds by lying about the number of their subordinate units or applied for budgetary funds by reporting fabricated projects. Eighteen departments embezzled 702 million yuan of central budgetary funds or other special funds for building office buildings or for daily expenditures on themselves. Seven departments earned 360 million yuan worth of central budgetary funds by hiding their revenue or fabricating expenditures. Twelve departments failed to allocate 28.531 billion yuan of budgetary funds to specific projects or units in time, causing at least 1.037 billion yuan of budgetary funds not to be used in its fiscal year. Li Jinhua, dubbed the "iron-faced auditor", has for several years exposed budgetary funds misappropriation by governmental departments. "But changes have emerged. The focus of his annual audit report has shifted from exposure of budgetary fund misappropriation to institutional construction. It will help the Chinese government administrate by law and intensify anti-corruption efforts ," said some lawmakers after hearing Li's report. According to this year's audit report, 176 people were punished in 106 budgetary funds misuse cases, while according to last year's report, 762 people were given criminal or disciplinary punishments for budgetary fund misuse. "It is down to the enhanced inner supervision by government departments themselves," Li said in his report, adding that after several year's stringent audit supervision, government departments are starting to implement financial laws and regulations. Since 1999, a large number of government departments have been exposed as misappropriating funds in the annual audit report by LiJinhua. But Li said, "Ninety-nine percent of officials I have exposed are honest and upright. Budgetary misuse occurred mostly because of institutional defects, not through an official's lack of morality. Li focused on institutional defects in this year's audit report. He said local annual budgets were widely found to exclude tax rebates from the central government and subsidies from the central government. This resulted in 420 billion yuan of funds not being supervised last year. Currently, 57 percent of central government expenditure is for subsidizing local finance. The fund is listed in local budget plans and is under public supervision.

On the table: fines for breaking news
2006-06-26 SCMP
Mainland media outlets will face fines ranging from 50,000 to 100,000 yuan if they break news on emergencies such as natural disasters without authorisation, according to a draft law being reviewed by the National People's Congress Standing Committee. Media organisations would also be penalised if they report on the handling and developments of such emergencies without authorisation, or publish false reports about disasters. The law also stipulates officials in charge of handling the emergencies should release information to the public and "manage" media reports on time. However, they are not required to make the news public if it will inhibit their work. Public emergencies include natural disasters, accidents, public health crises and social security crises, such as protests and clashes between farmers and local officials, which are on the rise. Journalism Professor Zhan Jiang, of the China Youth University for Political Sciences, said he was shocked to hear fines for the media were being stated in a law. "I don't know whose idea was it to impose economic penalties on the media and even include them in a law," Professor Zhan said. "It is scary ... I was shocked when I read the report. I hope the NPC deputies will say something about this." Mainland journalists say they are often told by the Communist Party's Propaganda Department that they can only use reports on emergencies from Xinhua and independent reporting was not allowed. However, there has never been a law that sets out fines for the media if they run their own reports. Meanwhile, the law also stipulates that individuals are responsible to report emergencies to the government help with rescue efforts and even maintain social order. It says that people who do not obey or co-operate with local officials in cases of emergencies will face criminal charges. Outspoken law professor Teng Biao said these clauses would make it easier for the government to penalise protesters in cases of land seizures or clashes between farmers and local officials. "Before, they were using excuses such as `disturbing social order' and even subversion to detain citizens fighting for their rights," Professor Teng said. "But now the charge can be more direct, saying they are not obeying decisions by local governments handling emergencies."

Life or death decisions made in open
2006-06-30 China Daily
Death penalty appeals will be heard in open session from tomorrow, top justice Xiao Yang told a national seminar yesterday. "The whole court procedure when hearing death sentence trials in the second instance, should be video and sound recorded," he told presidents from the high people's courts of the 31 provinces, municipalities and autonomous regions. The move is designed to ensure justice and avoid deficient verdicts. Currently, municipal-level intermediate people's courts have the right to impose the death sentence after an initial trial. If the accused appeals, provincial-level high people's courts hear the case. "Appeals are key in ensuring a just death verdict," said Xiao, president of the Supreme People's Court. He forbade all high people's courts from asking the opinion of the Supreme People's Court when hearing death penalty appeals, except for requests related to the application of the law. "All high people's courts must make their judgments independently," said Xiao. High people's courts have already prepared themselves for the new policy, which will be adopted from tomorrow. In East China's Jiangsu Province, the provincial people's court has trained 15 experienced judges to hold public hearings on death penalty appeals. According to Xue Jianxiang, chief judge of the First Criminal Court of the High People's Court, feedback will be given to a court after an initial trial if its decision is regarded as inappropriate. To hear death penalty appeals in open session is only one step in making judges more cautious about delivering the death penalty, as well as ensuring their decisions are just and well grounded. The Supreme People's Court has decided to withdraw its power to re-examine all death penalty verdicts and give the final nod to execution. But no timetable has yet been given for it to rescind its rights. The nation's top court currently reviews and makes final decisions on some sorts of death penalty cases, including economic crimes, but gives the power on sentencing for violent offences, such as murder and arson, to provincial-level high people's courts. Three new criminal tribunals under China's Supreme People's Court in April began to review death sentences handed down by provincial-level high people's courts. They do not yet formally have the right make final decisions on death sentences. In another development, the country's procuratorial departments investigated 9,633 officials above county level, who were involved in crimes over the past three years, according to the 12th national procuratorial work conference, held yesterday in Beijng. Another 4,024 cases involving corruption and embezzlement topping 1 million yuan (US$120,000) were resolved.

Abortion law amendment to be abolished
2006-06-25 China Daily
Chinese lawmakers have decided to abolish an amendment to the Criminal Law making sex-selective abortions illegal, said a senior lawmaker in Beijing on Saturday. Big differences remain over the amendment, which calls for jail terms of up to three years for people involved in abortion based on the sex of the fetus, according to Zhou Kunren, vice-chairman of the Law Committee of the Standing Committee of the National People's Congress (NPC). Some lawmakers and family planning officials support the law because of the serious imbalance in the ratio of genders in the population. China has 119 boys born for every 100 girls, much higher than the global ratio of 103 to 107 boys for every 100 girls, according to Xinhua. However, other experts argue it is inappropriate to criminalize such practice because pregnant women enjoy the right to know the sex of the fetus. A previous amendment was discussed by NPC Standing Committee members in April. The NPC Standing Committee opened its six-day 22nd session on Saturday when members held the first hearing on three draft laws known as the emergency management law, the anti-monopoly law and the farmers co-operatives law. They will also review a draft sixth amendment to the criminal law, a draft amendment to the compulsory education law and a draft law on supervision. The emergency management law labels emergency matters, which include natural disasters, accidents and public health disasters, at four levels, according to Cao Kangtai, director of the Legislative Affairs Office under the State Council.

Death toll in C. China flash floods rises to 21
2006-06-30 China Daily
The death toll in flash floods last weekend in central China has risen to 21, with another six people missing, the official Xinhua News Agency said Friday. The floods swept through Lonhui county in Hunan province on Sunday after some 25 centimeters (10 inches) of rain fell and mudslides toppled at least 15 houses. The death toll was orginally put at 11 but grew as rescue workers found more bodies. Some 11 villagers were still hospitalized, Xinhua said. Among the dead are Liu Qingdong, a 32-year-old village head who helped with evacuations, Xinhua said. While the months of June through August mark the annual rainy season that sets off floods and landslides in China, storms this year arrived unusually early. Almost 200 people have been killed and more than a million have been forced from their homes since late May.

Highway projects leave farmers out of pocket: auditor
2006-06-28 SCMP
Irregularities in highway projects and violations in several government departments were revealed yesterday as the National People's Congress Standing Committee reviewed reports by the auditor general. Finance chief Jin Renqing also told the Standing Committee that central government revenue reached 1.663 trillion yuan in the first five months of the year, a 22.8 per cent increase over the same period last year. Expenditure grew 16.7 per cent to 1.118 trillion yuan. Mr Jin said the government was doing a better job controlling expenses and allocating funds to priority areas this year. He also reported a slight reduction in the government's deficit for last year, saying it stood at 299.95 billion yuan - 50 million yuan less than the budgeted figure. According to China News Service, Mr Li told the Standing Committee that his department examined the accounts of 38 central government agencies. As a result, 76 government officials were arrested, charged or sentenced, while 213 officials were penalised by the Communist Party or government. Mr Li said auditors last year reviewed 34 highway projects involving a total investment of 166 billion yuan and found 21 had violated government regulations by not paying farmers proper compensation. He said local governments had siphoned off 1.6 billion yuan in land compensation funds and used the money to make up their own budget shortfalls or pay bonuses to staff. As an example, Mr Li cited a highway around the city of Wuhan, saying the local government had short-changed the affected farmers by 145 million yuan. "Of the 34 projects, 20 failed to do a proper job in inviting public tenders," Mr Li was quoted as telling the Standing Committee. ()

Writethru: Former Chinese navy deputy commander stripped of paliamentary post
2006-06-30 Xinhuanet
Former deputy commander of the navy of the Chinese People's Liberation Army (PLA), Wang Shouye, was expelled on Thursday from China's national legislature on charges of economic crimes, after his mistress turned him in. The resignation of 62-year-old Wang Shouye as deputy to the National People's Congress (NPC) was approved by the NPC Standing Committee at the end of its six-day legislative session. Wang has also been dismissed from the post of deputy commander of the PLA navy by the Central Military Commission. According to documents submitted to the NPC, an unmarried young woman admitted to authorities that she had been keeping an "improper relationship" with Wang "for a long time." In January this year the army ordered discipline measures be taken against Wang and later removed him from the post of deputy commander due to his "loose morals" and abuse of power by seeking and taking bribes, the documents said, noting his actions were serious violations of the law and military codes of conduct, "Because of my involvement in economic crimes, I had been stripped from the post of deputy navy commander and thus I am no longer qualified to be a deputy to the NPC. Please take me off the position," Wang said in his resignation letter dated March 29, 2006. Born in September 1943, Wang joined the PLA at the age of 24 as a civil engineering graduate from Tianjin University. He rose to the head of camp construction unit of PLA General Logistics Department in 1995 and was appointed deputy navy commander of the PLA in 2001 and promoted to the rank of Vice-Admiral. Two other deputies of the NPC also had their membership cancelled for illegal business activities. ()

Measures to tighten Web controls
2006-06-30 SCMP - The mainland's internet minders have vowed to step up controls of internet content, especially in the areas of blogs, bulletin boards and search engines. "As more illegal and unhealthy information [is] spread through blogs and search engines, we will take effective measures to put the BBS (bulletin board service), blogs and search engines under control," Xinhua quoted government spokesman Cai Wu as saying. The mainland was taking steps to make registration mandatory on millions of blog sites and BBSs, or sites where internet users can converse online, Mr Cai said. According to Tsinghua University, the mainland could have 60 million blog sites by the end of the year. "We will speed up technology development to safeguard network management and do more research on the internet security issues triggered by the new technologies in blogs and search engines," the report quoted Minister of Information Industry Wang Xudong as saying. The mainland has for years been waging an online battle to censor the internet and stifle political and religious material.

Taiwan leader survives recall bid
2006-06-28 China Daily
Scandal-plagued Taiwan leader Chen Shui-bian survived the island's first-ever bid to recall a "president" yesterday after the opposition-led campaign expectedly failed to get through the "legislature." Only 119 "lawmakers" in the 221-member "Legislative Yuan" voted for the recall motion far short of the two-thirds majority, or 148 votes needed to pass the motion calling for a public referendum on whether to oust Chen. All the 88 members of the ruling Democratic Progressive Party (DPP) boycotted the vote while 12 members of the DPP ally, Taiwan Solidarity Union, and two independents cast null ballots. The opposition Kuomintang (KMT) and its ally People First Party (PFP) launched the unprecedented "parliamentary" move last month when Chen's son-in-law, Chao Chien-min, was arrested on suspicion of insider trading. Chen's wife, Wu Shu-chen, has also been accused of illegal financial dealings. Both claims are being investigated. The opposition claimed Chen, whose approval rating has sunk to a record low due to the scandals, had lost the public's confidence and should resign, with two years left in his second term. The Taiwan leader, however, has repeatedly refused to step down, saying the legal system should deal with the graft allegations. After the vote, Chen issued a statement saying "the 'president' wants to apologize again because my personal life and family caused such great controversy with a big social cost." KMT Chairman Ma Ying-jeou condemned the DPP for foiling the "parliamentary" motion aimed at ousting embattled Chen, calling the move "a victory for corruption." He charged that DPP "lawmakers" had chosen to "stand side by side with corruption" during the landmark recall motion. If the motion had passed, it would have triggered an islandwide referendum on whether to remove Chen before his term ends in May 2008. "Chen dared not let people decide whether he should be ousted or continue serving," Ma said. "Although we regret the failure... we do not feel frustrated." PFP Chairman James Soong urged Chen to "quickly tender his resignation" as over half of the "legislators" voted to recall him. Soong vowed to push for a vote of no confidence against the "cabinet" led by "premier" Su Tseng-chang, also from the DPP. The KMT also pledged to press ahead with a signature drive, which has gathered 1.67 million names so far from among the island's 23 million people, urging Chen to resign.

Yuan to be convertible in Tianjin
2006-06-30 China Daily
China may allow its currency, the renminbi, to become convertible under a quota system in a newly approved economic zone in North China's port city of Tianjin. The initiative, a pilot programme that will be conducted with the help of the country's top foreign exchange regulator, will take place in Tianjin's Binhai New Area, Shanghai Securities News reported yesterday, citing Tianjin Mayor Dai Xianglong. The report did not give details as to when the programme will begin and what the quota will be. Large-scale commercial banks in Binhai New Area may also be allowed to engage in non-banking financial services in the area. "In order to sharpen large-scale commercial bank's competitiveness, conditionally allowing them to branch out into non-banking financial services is a must," the Shanghai-based newspaper quoted Dai as saying. The newspaper made no mention of when that programme would commence. Dai, who served as China's central bank governor between 1995 and 2002, also confirmed that the State Council, China's cabinet, has given the go-ahead for the establishment of a 20 billion yuan (US$2.5 billion) Bohai Industrial Investment Fund. This will be the first such fund in the country that invests directly in companies. The banker-turned-mayor has made improving his city's financial industry a top task since assuming the post in 2002. Two new banks, Binhai Development Bank and the Northeast Asian Bank, will be allowed to set up in the city to support the development of Binhai New Area, reports say.

Julie Kong
Embassy of Switzerland