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---"Focused Coverage Informed Perspectives"---Mon, Sep 15, 1997 edition

Leadership Endorses Massive Restructuring entire nation will be affected as efforts aim to pare losses

Also in this edition . . . 1: Taiwan dismisses hoopla in Beijing and offer for talks 2: Tung Chi-hwa wrap-up 3: boat people to have day in court 4: Japanese chemical weapons abound on mainland 5: floods in Burma and new Chinese ambassador 6: China strikes oils in Peru

NATIONAL CONGRESS

Jiang Zemin formally endorsed a massive restructuring of the state-owned economy last week. If there is wide-spread agreement on its merits, some also warn of the opportunities for increased corruption because of it. ( Graft fear voiced in state firm moves ) Vice-Finance Minister Zhang Youcai has raised concerns over the new government reform scheme to transform state enterprises into joint-stock companies, reports the South China Morning Post. Mr Zhang conceded that the actions are necessary in order to resolve "irrational" structures and inefficiencies in that sector of the economy. But he warned of the opportunities this massive restructuring will give for corruption to flourish. The paper notes that assets in the state-owned sector amounted to 6,500 billion yuan as of last year. "Fraudulent or grossly undervalued sales of state assets became common practice in the early 1990s, forcing the Government to issue more than 100 rules and regulations strengthening supervision of asset trading," writes the paper. "Conservative estimates put the losses to the state from unauthorized cut-rate deals at about US$60 billion (HK$464.04 billion) over the past 10 years," the paper writes. Sichuan: ( SCMP Internet Edition ) The governor of Sichuan, Mr Song Baorui, said today that his province would permit state-owned enterprises to go bankrupt, despite having 390,000 unemployed workers in the province. The governor noted, presently some 90 enterprises have declared themselves bankrupt or are in the process of doing so; and he said that the process usually takes around six months to complete, as there are many legal issues involving many parties to resolve. As the South China Morning Post writes, The governor admitted unemployed workers received only about 200 yuan (HK$187) per month. But the Governor defended this, saying some were unwilling to accept low-paying jobs or did not need the allowance because they had other channels through which to make money. Mr song also spoke about the recent labor unrest in the region and said that foreign media sources had blown the problem out of proportion. He admitted that some "contradictions" exist, but that unemployment had not become a big problem, claiming that only one spat of labor unrest occurred and bankruptcies were largely successful; the paper does not offer any more information on this or other statements made by the governor. Also reported in the article were remarks given by Feng Congtai, party secretary of Mianyang, who "confirmed that his city had been rocked by labour unrest in early July when hundreds of workers blocked the city's traffic for two days," writes the paper. Mr Feng, however, down played the seriousness of the events, claiming the media had ] the size and scope of the protests. "Some reports said 100,000 marched . . . and hundreds were held in jails," he said. "But the urban population of Mianyang is only 80,000 and where are those hundreds of people in jail?" the paper quotes him. As an aside, it is worth noting the tricky definition of 'urban' population in China. In many statistical books the distinction is drawn between those who live within the city and raise their own food, and those who are not. The latter might be considered 'urban' while the former is not. ( Joint-stock system endorsed ) The China Daily offers some more coverage on Governor Song's remarks: "Sichuan has the country's second-largest number of State-owned firms, next to Liaoning Province, in Northeast China," "Our ultimate goal is to increase the firms' adaptability to the market and raise the competitiveness of products," Song said. "The local government will encourage the merger of firms while preventing bankruptcies, unless necessary." The paper also reports, Sichuan Province has loosened its control over smaller firms, while paying more attention to larger ones. Four years ago the provincial government conducted an experiment with firms in Yibin City by establishing share-holding system in its State-owned firms there. Calling the experiment a success, the paper explains, "The city had 16 industrial firms, 11 of which suffered losses. Today, 10 of the companies report profits. State assets increased by 280 per cent between 1993 and 1997. Press conference: Five model-workers asked sensitive questions by the foreign media ( SCMP Internet Edition ) In an effort to demonstrate a new level of openness the National Congress staged a press conference with five model workers, so-called for their virtuous efforts to serve the society and state. Foreign reporters fielded questions concerning Zhao Ziyang and the letter sent by his supporters to the congress; June 4; and state policies.

TAIWAN DESK

Taiwan: on opening day Taipei dismisses hoopla in Beijing The China Post reported in its Sept. 13 edition: Taipei yesterday dismissed the opening of Mainland China's ruling Communist Party (CCP) congress, saying party chief Jiang Zemin's keynote address held no new opportunities for easing their bitter rivalry, now in its fifth decade. "There wasn't any new meaning in Jiang's speech, nor could (we) find any decision with good intentions to promote peace between the sides," said ruling Kuomintang spokesman Tsai Pi-huang in an official response. Tsai spoke after Jiang's address to the Communist Party's 15th Congress in which the party chief and state president reiterated Beijing's resolve to crush any move toward Taiwan's independence. "We shall work for peaceful reunification, but we shall not undertake to renounce the use of force," Jiang said, restating long-time policy. "We shall not allow any forces whatsoever to change Taiwan's status a part of China in any way. "This is not directed against our compatriots in Taiwan, but against the schemes of foreign forces to interfere with China's reunification and to bring about the independence of Taiwan." Jiang also called for Beijing-Taipei political talks under the "one-China principle." In response, Cabinet spokesman David Lee reiterated Taipei's stance, saying cross-strait talks should be conducted without any presumptions. Talks: Taipei dismisses Beijing's offer for party-party talks ( China Times ) (subscription) (BIG 5 Chinese) Premier Vincent Siew, during an address in the national legislature in Taipei last week, rejected Beijing's long-time call for party-level talks between the KMT and CCP. "Party-to-party talks are inappropriate and impossible," Siew said, explaining that under Taiwan's rapidly developing multi-party democracy this would take into account the interests of only some of the island's 21 million people. Australia: Australia supports Taipei's entrance into WTO ( The China Post, Sept 13, 1997) On the last day of an unofficial visit to Taiwan that has been strongly criticized by mainland China, an Australian government minister said yesterday the Australian government supports Taiwan's entry bid into the World Trade Organization (WTO) and is very optimistic about bilateral trade and investment prospects. "Australia welcomes Taiwan's efforts to accede to the WTO," Australian Resources and Energy Minister Warwick Parer told the 13th Joint Conference of the ROC-Australia and Australia-Taiwan Business Councils. And then in Beijing . . . ( Zhu Rongji: Sino-Aussie relations promising ) An Australian delegation led by Treasurer Peter Costello met with Vice-Premier Zhu Rongji yesterday, reports the China Daily.

HONG KONG

Hong Kong: ( September 19, 1997 - ON A CHARM OFFENSIVE ) There is a re-cap of Tung Chi-hwa's visit to Washington in this week's edition of Asia Week. We reported in an earlier edition that Mr Tung had predicted Hong Kong would soon enjoy more democracy than it ever did under the Crown; we see in the Asia Week article the Chief Executive has set 2007 as the year by which this will occur. One point the article makes, and one well worth considering, is that Mr Tung feels that America's media (and Americans) know so little about Asia and Hong Kong. He pointed to American coverage of the handover ceremony: "Yes, PLA soldiers did come," said Tung. "They moved into barracks formerly occupied by British soldiers. To us it was a natural part of the resumption of sovereignty." Tung and others believe that sometimes ignorant reporting has in part prompted U.S. officials to take a harder line on Hong Kong. Awareness of Asian affairs in general is low in the U.S. After Tung's speech, a member of the audience asked if South and North Korea could learn anything from China's resumption of Hong Kong. "That," said Tung, "is not one I've thought about." "China's heavy-handedness toward Hong Kong questioned (9/11/1997)" is a San Jose Mercury piece. Boat people ( Boat people from mainland granted court showdown ) A Hong Kong judge has given the go-ahead for 104 Vietnamese refugees to fight for their right to remain in the territory, reports the South China Morning Post Media: ( Interactive TV set for launch next year ) The Broadcasting Authority announced today that licenses for interactive television will be issued beginning in January. It is unclear how many licenses will be issued, reports the South China Morning Post. "Hongkong Telecom's Interactive Multimedia Services (IMS) and Star Telecom International have both applied. The other two applications have been made in the name of Elmsdale Ltd and Future TV."

REGIONAL

Japan: ( September 19, 1997 - DEADLY HANGOVER ) Asia Week has an article on Japanese chemical weapons left behind after the second world war, and the costs in cleaning it up. There are an estimated 700,000 artillery shells filled with mustard gas and other noxious concoctions which litter China's countryside and rivers. The cost to clean up: $850 million. Under the terms of the Chemical Weapons Convention, which Japan signed, Japan will foot the clean-up bill. But of course it comes to late for those 2,000 or so who have been poisoned by the chemicals since the end of the war. Burma: Floods kill thousands, destroy crops ( SCMP Internet Edition ) Thousands have died in widespread flooding in Burma as unusually heavy monsoon rains have blanketed the country for the past two months. Whole towns have been wiped out and water supplies, mostly drawn from open ponds, have been polluted by dead animal carcasses. Cholera kills 90 percent of its takers there. The South China Morning Post reports: An international aid agency which requested anonymity said in a report that nearly all of Burma's 14 states and divisions were affected, but the worst-hit areas were the central Pegu and Irrawaddy Divisions and Mon State in the southeast. Massive food shortfalls are expected, as up to 50 percent of the rice crop "was likely to be lost", the paper quotes aid workers. If this happens, Burma's already precarious economic health will be struck a blow. There has been some discussion in the past about the nutritional health of Burmese, especially the many for whom the economic 'reforms' have benefited little and rice water seems to be the staple of their diet. We might watch for shipments of aid and food-stuff from both Asean and Burma's friend to the north, China. Burma: (Xinhua via BurmaNet) "New Chinese ambassador to Myanmar [Burma] Liang Dong today presented his credentials to Chairman of the Myanmar State Law and Order Restoration Council (SLORC) Senior-General Than Shwe." "Present on the occasion were First Secretary of the SLORC Lieutenant-General Khin Nyunt and Myanmar Foreign Minister U Ohn Gyaw. During the meeting, the Myanmar leader said that there have been friendly and cooperative relations in all fields between Myanmar and China. He was convinced that such kind of relations between the two countries would be continued and further developed." "The Chinese ambassador also said on the occasion that the Chinese government has consistently attached importance to the development of the neighborly goodwill relations between the two countries. The new Chinese ambassador arrived in Yangon on September 3." Vietnam: ( Bangkok Post Sep 15, 1997 - Army seeks to increase business competitiveness Streamlines sectors for economic punch ) Vietnam's army has streamlined its operations by merging many of its enterprises, reducing the number from 300 to 200. In business with foreign companies since 1988, the army now conducts some 56 joint-ventures, the most recent of which is a $122 million deal with a "US company to produce asphalt in the central city of Danang," reports the Bangkok Post. The army, however is not immune to capital shortages, and the paper notes one example of "the Air Defence Cement company which was provided with only 250 million dong ($23,000) for operating costs, just 5.6% of the necessary costs."

ENERGY

Petroleum: ( Company brings in first batch of crude oil ) China is extracting 6,000 barrels of petroleum a day from the Talara Oilfield in Northwest Peru as part of its joint-venture operation with a Peruvian company, reports the China Daily. CHINA National Petroleum Corp (CNPC) announced that the first batch of crude oil from its overseas projects arrived at Hebei's Qinhuangdao Port yesterday, marking a significant step of its global business. The oil was carried by a 60,000-dead-weight-ton ship, the Liuhe. CNPC shares the oil from its co-operative blocks of the Talara Oilfield in Northwest Peru with a Peruvian company. CNPC signed a contract with Peru to improve the recovery ratio of the blocks in October 1993. China's thirst for oil is growing quickly, and the paper notes that the country is "actively participating in overseas petroleum exploration despite its principle of self-reliance." Operations have been undertaken in Peru, Sudan, Kazakhstan and Venezuela. (See also the Sun, Apr 6, 1997 edition for more information on this topic)

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