Sat, Sep 6, 1997 edition

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Sat, Sep 6, 1997
Lee Meets with Gen. Chang

leader of Xian Incident reportedly maintains ties with CCP
also: labor unrest grows; Beijing executive-mayor resigns; and downturn in SE Asia market is opportunity for Beijing . . .
Taiwan: from Honolulu to Panama and back again ( SCMP Internet Edition ) President Lee Teng-hui arrived in Honolulu at noon on Thursday, en route to four Latin American countries and the Panama Canal Conference. Welcomed by Richard Bush, the newly appointed US envoy to Taiwan, the two met; no details were divulged, owing to the 'unofficial' nature of US-Taiwan relations.
Lee also met with a number of pro-Taiwan local residents.
But of most significance was Lee's unannounced meeting with General Chang Hsueh-liang, the 96-year-old instigator of the 1935 'Xian Incident,' so named after the place where Chang kidnapped General Chiang Kai-shek and held him until Chiang, the leader of the KMT, agreed to align with the Communist Party against the Japanese military occupation of China.
General Chang had spent his subsequent years under house arrest in Taiwan until 1994, at which time President Lee permitted him to leave for Honolulu.
The significance of the meeting lies in that General Chang reportedly maintains close ties with the CCP; and while neither the meeting nor the nature of it were revealed, relations across the Taiwan Strait would seem to be a natural point of conversation.
Taiwan maintains official diplomatic relations with 30 nations, many of which are located in the region in which Lee and his entourage of 100 will spend the next two weeks. Beijing, for its part, made a point today to herald the importance of its newly established friendship with the small Caribbean nation of Saint Lucia, which last week broke with Taipei and shook hands with Beijing.
( China set to beef up links with Saint Lucia )
Such are the realities facing President Lee whose credentials few will recognize or tolerate. Panama, which perhaps stands as important to Taipei as any nation, had hoped President Clinton and other world leaders would come to the Canal Conference.
But even the United Nations bowed out, saying it would be inappropriate for it to participate with Lee in attendance.
With few nations ready or able to receive the President of a 'renegade province,' Taiwan keenly jumps at any opportunity to sidestep Beijing's long reach. Each time it does so, however, Beijing reminds the US and other nations of their commitment to upholding the 'One China' policy.
Yet, just as for every action there is an equal and opposite reaction, with the arrival of Lee Beijing's representative in Panama, Ju Yijie, has decided to depart the country for the duration of the President's stay, Taiwan's media reported today.
Capitalizing on the diplomatic success so far, Overseas Taiwan business leaders announced today their intention to hold an annual meeting in Panama. As if to drive the point home, it was also reported that Chang Ching-yuh, the chairman of the vitally important Mainland Affairs Council, will attend and brief business leaders on the state of cross-Strait relations, in a country so far from---yet so central to the issues surrounding---the Taiwan Strait.
On his 16 day trip to Honolulu and the Americas, Lee will spend an estimated NT$20 billion, mostly in economic aid to Panama, Honduras, El Salvador and Paraguay. The price of friendship does not come cheaply to Taiwan,
As we watch the trip unfold and new diplomatic skirmishes erupt around it, we might wonder if the entire affair will pass in a relatively sedate way. For not just last week did the Taiwan government predict an early spring thaw in the two side's icy relations, suggesting that President Lee himself might travel to the mainland not as the President of the ROC, but as a high official of Taiwan.
We might also wonder, what words did General Chang and President Lee exchange in a Waikiki condominium?
Labor: labor unrest grows, as Beijing faces tough choices ( Chinese gear for labor overhaul ) The Australian newspaper The Age reports that workers protested in Chengdu, capital of Sichuan Province this week; and that labor unrest in China is growing as urban unemployment reaches 10 percent or higher. In the Wed, Sep 3, 1997 issue we reported on protests in another city in Sichuan, and it would appear that these protests point to a much a widely spread condition throughout China.
With the government expected to announce at the 15th Party Congress additional 'shock therapy' for the unprofitable state sector, the absence of safety nets to catch the unemployed and hungry could explode into demonstrations much larger than Tiananmen, some have suggested.
The Far Eastern Economic Review addressed this issue in its June 26, 1997 issue. Correspondent Matt Forney notes, the cash-strapped government will have to spend money to support money-loosing state firms, dolling out back pay owed to workers and addressing their concerns. Matt Forney writes:
'China has no shortage of workers who have reached the limit of their tolerance. As Beijing tries to cut handouts to money losing factories, millions of workers are taking home thinner pay envelopes or none at all. In Nanchong, it took silk workers six months without pay before they rebelled. Across China, countless workers have suffered longer. Beijing's deepest fear is that they will follow Nanchong's example. "Widespread labour unrest doesn't just threaten economic reforms, it threatens the party's hold on power," says a Beijing scholar familiar with the uprising.'

(Note: the Far Eastern Economic Review on-line service is free, but requires that users register with them and login, and therefore first-time users should first introduce themselves on the FEER registration page.)
Economy: Today the China Daily reported, the government has again requested that financial firms tighten their lending practices. ( Financial firms requested to manage capital better )
Agriculture: Production of early rice up nearly 2 million tons is a China Daily article.
Bejing: ( SCMP Internet Edition ) Beijing Executive-Mayor Zhang Baifa resigned his position today, reports the South China Morning Post. Mr Zhang, who survived the purges leveled in the aftermath of the 1995 corruption scandal involving Mayor Chen Xitong, was past retirement age and "insisted on retiring several times," explained Beijing Mayor Jia Qinglin.
There's no word on who will replace him.
South East Asia: ( MARKETS ) The Far Eastern Economic Review offers a partial story on the continuing financial malaise affecting South East Asian financial markets, and on the solutions, proffered by various analysts, to the problem: loosen currency controls and permit the free flow of money; depoliticize central banks and permit them to use free-flowing capital to regulate monetary policy; cut back on government mega-projects in order to wrestle in interest rates and import demand; tighten banking laws and reign in dangerous lending practices; dismantle monopolies and open industries to increased competition; and hold government to greater accountability and stamp out government corruption and cronyism.
The article was paired up with another one entitled, "Imperial Intrigue" ( DIPLOMACY ). According to the Review, Beijing is taking advantage of the downturn in the SE Asian markets by offering financial aid and rhetoric: During a recent trip to the region, Premier Li Peng "offered a dose of fellow-Asian sympathy and support," writes the Review. "China and Southeast Asia need to cooperate to 'ward off international financial speculation,' he told his audience in Singapore. Earlier, in Kuala Lumpur, his remarks were more pointedly aimed at Western powers: 'Some countries attempt to lead while some attempt to bully others into accepting their standards.' ", writes the Review.
The Review quotes one Thai official who said there is a growing belief that the United States actually orchestrated the market drop in order to disrupt the region's economy " in order to head off China's growing clout."
What is China's intention? The Review quotes Thai journalist Kavi Chongkitavorn , "China has elevated Asean as a player in international relations, which Japan has refused to do." In return, "Asean is acting as a window to the world to show that China can live in peace with its smaller neighbours," reports the "Review".

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Sat, Sep 6, 1997	Lee Meets with Gen. Chang leader of Xian Incident reportedly maintains ties with CCP also: labor unrest grows; Beijing executive-mayor resigns; and downturn in SE Asia market is opportunity for Beijing . . . Taiwan: from Honolulu to Panama and back again ( SCMP Internet Edition ) President Lee Teng-hui arrived in Honolulu at noon on Thursday, en route to four Latin American countries and the Panama Canal Conference. Welcomed by Richard Bush, the newly appointed US envoy to Taiwan, the two met; no details were divulged, owing to the 'unofficial' nature of US-Taiwan relations. Lee also met with a number of pro-Taiwan local residents. But of most significance was Lee's unannounced meeting with General Chang Hsueh-liang, the 96-year-old instigator of the 1935 'Xian Incident,' so named after the place where Chang kidnapped General Chiang Kai-shek and held him until Chiang, the leader of the KMT, agreed to align with the Communist Party against the Japanese military occupation of China. General Chang had spent his subsequent years under house arrest in Taiwan until 1994, at which time President Lee permitted him to leave for Honolulu. The significance of the meeting lies in that General Chang reportedly maintains close ties with the CCP; and while neither the meeting nor the nature of it were revealed, relations across the Taiwan Strait would seem to be a natural point of conversation. Taiwan maintains official diplomatic relations with 30 nations, many of which are located in the region in which Lee and his entourage of 100 will spend the next two weeks. Beijing, for its part, made a point today to herald the importance of its newly established friendship with the small Caribbean nation of Saint Lucia, which last week broke with Taipei and shook hands with Beijing. ( China set to beef up links with Saint Lucia ) Such are the realities facing President Lee whose credentials few will recognize or tolerate. Panama, which perhaps stands as important to Taipei as any nation, had hoped President Clinton and other world leaders would come to the Canal Conference. But even the United Nations bowed out, saying it would be inappropriate for it to participate with Lee in attendance. With few nations ready or able to receive the President of a 'renegade province,' Taiwan keenly jumps at any opportunity to sidestep Beijing's long reach. Each time it does so, however, Beijing reminds the US and other nations of their commitment to upholding the 'One China' policy. Yet, just as for every action there is an equal and opposite reaction, with the arrival of Lee Beijing's representative in Panama, Ju Yijie, has decided to depart the country for the duration of the President's stay, Taiwan's media reported today. Capitalizing on the diplomatic success so far, Overseas Taiwan business leaders announced today their intention to hold an annual meeting in Panama. As if to drive the point home, it was also reported that Chang Ching-yuh, the chairman of the vitally important Mainland Affairs Council, will attend and brief business leaders on the state of cross-Strait relations, in a country so far from---yet so central to the issues surrounding---the Taiwan Strait. On his 16 day trip to Honolulu and the Americas, Lee will spend an estimated NT$20 billion, mostly in economic aid to Panama, Honduras, El Salvador and Paraguay. The price of friendship does not come cheaply to Taiwan, As we watch the trip unfold and new diplomatic skirmishes erupt around it, we might wonder if the entire affair will pass in a relatively sedate way. For not just last week did the Taiwan government predict an early spring thaw in the two side's icy relations, suggesting that President Lee himself might travel to the mainland not as the President of the ROC, but as a high official of Taiwan. We might also wonder, what words did General Chang and President Lee exchange in a Waikiki condominium? Labor: labor unrest grows, as Beijing faces tough choices ( Chinese gear for labor overhaul ) The Australian newspaper The Age reports that workers protested in Chengdu, capital of Sichuan Province this week; and that labor unrest in China is growing as urban unemployment reaches 10 percent or higher. In the Wed, Sep 3, 1997 issue we reported on protests in another city in Sichuan, and it would appear that these protests point to a much a widely spread condition throughout China. With the government expected to announce at the 15th Party Congress additional 'shock therapy' for the unprofitable state sector, the absence of safety nets to catch the unemployed and hungry could explode into demonstrations much larger than Tiananmen, some have suggested. The Far Eastern Economic Review addressed this issue in its June 26, 1997 issue. Correspondent Matt Forney notes, the cash-strapped government will have to spend money to support money-loosing state firms, dolling out back pay owed to workers and addressing their concerns. Matt Forney writes: 'China has no shortage of workers who have reached the limit of their tolerance. As Beijing tries to cut handouts to money losing factories, millions of workers are taking home thinner pay envelopes or none at all. In Nanchong, it took silk workers six months without pay before they rebelled. Across China, countless workers have suffered longer. Beijing's deepest fear is that they will follow Nanchong's example. "Widespread labour unrest doesn't just threaten economic reforms, it threatens the party's hold on power," says a Beijing scholar familiar with the uprising.' (Note: the Far Eastern Economic Review on-line service is free, but requires that users register with them and login, and therefore first-time users should first introduce themselves on the FEER registration page.) Economy: Today the China Daily reported, the government has again requested that financial firms tighten their lending practices. ( Financial firms requested to manage capital better ) Agriculture: Production of early rice up nearly 2 million tons is a China Daily article. Bejing: ( SCMP Internet Edition ) Beijing Executive-Mayor Zhang Baifa resigned his position today, reports the South China Morning Post. Mr Zhang, who survived the purges leveled in the aftermath of the 1995 corruption scandal involving Mayor Chen Xitong, was past retirement age and "insisted on retiring several times," explained Beijing Mayor Jia Qinglin. There's no word on who will replace him. South East Asia: ( MARKETS ) The Far Eastern Economic Review offers a partial story on the continuing financial malaise affecting South East Asian financial markets, and on the solutions, proffered by various analysts, to the problem: loosen currency controls and permit the free flow of money; depoliticize central banks and permit them to use free-flowing capital to regulate monetary policy; cut back on government mega-projects in order to wrestle in interest rates and import demand; tighten banking laws and reign in dangerous lending practices; dismantle monopolies and open industries to increased competition; and hold government to greater accountability and stamp out government corruption and cronyism. The article was paired up with another one entitled, "Imperial Intrigue" ( DIPLOMACY ). According to the Review, Beijing is taking advantage of the downturn in the SE Asian markets by offering financial aid and rhetoric: During a recent trip to the region, Premier Li Peng "offered a dose of fellow-Asian sympathy and support," writes the Review. "China and Southeast Asia need to cooperate to 'ward off international financial speculation,' he told his audience in Singapore. Earlier, in Kuala Lumpur, his remarks were more pointedly aimed at Western powers: 'Some countries attempt to lead while some attempt to bully others into accepting their standards.' ", writes the Review. The Review quotes one Thai official who said there is a growing belief that the United States actually orchestrated the market drop in order to disrupt the region's economy " in order to head off China's growing clout." What is China's intention? The Review quotes Thai journalist Kavi Chongkitavorn , "China has elevated Asean as a player in international relations, which Japan has refused to do." In return, "Asean is acting as a window to the world to show that China can live in peace with its smaller neighbours," reports the "Review".

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©1997 Matthew Sinclair-Day
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