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---"Focused Coverage Informed Perspectives"---Mon, Sep 22, 1997 edition

Economics and Finance 'Can China really reform itself'?

Also in this edition . . . 1: Taiwan cracks down on porm 2: sales of Taiwan laptops poised to fall 3: China watches Taiwan's elections 4: SE Asia financial crisis brings question to fore 5: news from Hong Kong 6: four part series on Qinghai Province 7: internet media sources

TAIWAN DESK

Pornography: government determined to stamp-out pornography ( China Times ) (Subscription) (Chinese Big 5) Tens of thousands of pornographic publications, including books, videotapes and CD-ROMs, were destroyed Sunday in a public ceremony held at a square in front of the Taipei Railway Station, drawing huge crowds of spectators. This is the first time the Government Information Office (GIO) has publicly destroyed contraband publications to signify the government's determination to wipe out pornography on the island. Addressing the ceremony, GIO Director General David Lee said, elimination of pornography and violent crime is one of the top priorities of Premier Vincent Siew's new Cabinet. "We hope the public destruction of pornographic publications will help arouse public attention to the harm pornography may have on minors," Lee noted, adding that the current anti-pornography campaign cannot succeed without social or public support. Cross-strait relations: ( Central Daily Agency ) China is presently studying the possible effect of Taiwan's year-end mayoral and magistrate elections on cross-strait relations, and one analyst here said on Sunday that to curb the pro-independence wave on the island, Beijing might take "positive" action toward pushing cross-strait ties before the election. Pan Hsi-tang, a professor at Tamkang University, made the remarks while presiding over a seminar sponsored by an exchange association between the two sides of the Taiwan Strait. The professor said that he received this message very clearly during a recent visit to the mainland. He said that China probably won't wait until President Jiang Zemin holds a meeting with U.S. President Bill Clinton in October or the Ninth National People's Congress next March to take action on pushing for the resumption of cross-strait dialogue. Pan pointed out that major factor affecting Beijing's attitude toward handling cross-strait relations will be the year-end local elections in Taiwan. He predicted that both sides of the Taiwan Strait will be willing to push for political dialogue with the "one China" issue putting temporarily shelved. Computer business: downturn in Japan will see purchases for Taiwan notebooks fall ( Economic Daily News ) Japanese dealers are expected to decrease their purchases of Taiwan-manufactured notebook computers, starting from October this year, according to a report in the Chinese-language Economic Daily News Saturday. After climbing to a peak, the Japanese information industry is reported to be in a downturn. Leading Japanese information product manufacturers NEC, Sharp, Hitachi and Epson are expected to cut down their volume of purchases from Taiwan by 30 to 50 percent, the paper said. The slowdown in the Japanese information market is attributed to the depreciation of the Japanese yen, rising consumer taxes, and a hesitance to purchase goods among Japanese buyers. Since Taiwan notebook computer manufacturers rely heavily on Japanese markets, the paper said the recession in the Japanese market may impede local manufactures. For example, in the current year, NEC ordered the same volume of Taiwan-produced notebook computers that had been placed during the same period in previous years. However, the company has halted its order for the following year, the paper said. Latin American tour: ( Secret diplomacy fears rejected as Lee tour praised ) Taiwan's Foreign Minister, National Security Council chief and Defence Minister were summoned to appear before the Executive Yuan and to answer questions about President Lee's recently concluded Latin American tour. "Lawmakers had asked [Vice-Premier John Chang Hsiao-yen] why Panama and Paraguay had failed to voice support for Taipei's UN bid last Wednesday, when the UN General Assembly's agenda-setting committee decided to leave Taiwan's bid off the agenda." " 'They will speak for us when the General Assembly convenes,' Mr Chang said." In related news . . . ( Taipei woos Paraguay with jet deal ) Taiwan will give Paraguay a number of its jet fighters. Taiwan defense officials said that the move will not affect the island's defence once second-generations fighter aircraft have come on-line. The United States is expected to approve the deal. Unification: ( Poll blow to reunification hopes ) Results from a poll of 1,067 people conducted by the Mainland Affairs office show that 82 percent of those polled indicated Taiwan should continue with the status quo vis-a-vis its relations with the mainland. 5.1 percent called for re-unification, and 10 percent wanted immediate independence, reports the South China Morning Post. Nearly half "insisted the government should be stricter about mainland-bound investment, while 20 per cent believed otherwise," writes the paper. 70 percent said Taiwan should cultivate "diplomatic ties with other countries even if it jeopardizes relations with Beijing," reports the paper. New York: The New York State Government plans to set up a commercial office in Taiwan to help boost bilateral trade and economic cooperation, a senior state official said on Saturday. Paolo Palombo, deputy director of the New York State Economic Development Agency, made the statement while attending a dinner in honor of a group of business executives from Taiwan.

ECONOMICS

Taxes: ( Tax policy to assist investors ) Vice-Premier Zhu Rongji said taxes on imported capital equipment needed for foreign-invested projects would be lowered, reports the China Daily. The article also mentions the reform of state-owned enterprises (SOE) and the concurrent development of sound banking and financial markets. China: ( 09/29/97 CAN CHINA REFORM ITS ECONOMY? ) Business Week devotes its cover story to the question, "China: can it really reform its economy?" with a series of articles addressing the subject. The lead story provides a good summary of why President Jiang and the gang are pushing to reform the state-owned sector and what might threaten their success. The article does well in projecting long-term effects of an emerging China 'economic super power' on the global economy and capital markets, while not losing site of the more immediate issues by contrasting state-owned factories, which employ too many in spite of cut-backs and encompass scores of cradle-to-grave pensioners within their purview, with the lean and profitable up-starts across town which find ready sales in China and South East Asia. As the authors note, the reform scheme would pattern many key industries after Korea-style chaebols, but this itself is "fraught with problems. Chaebol have been too inflexible to keep pace with the global economy of the '90s." ". . . Under the guidance of ministries and top planners, state companies in key sectors will be merged to form 1,000 huge corporations modeled on Japanese and Korean conglomerates. They will dominate industries such as telecommunications, petrochemicals, and high-tech electronics. . . . " Meanwhile, the race to list on the stock exchange goes on and on. "Most of these listings are in Hong Kong, whose stock market capitalization has exploded from $84 billion in 1990 to $500 billion today," writes the magazine. One estimate foresees 350 initial public offerings per year for the next decade. Just as Chinese companies are hungry for foreign capital, the government has widened its doors to new schemes for providing this capital. GE Capital, the finance wing of the General Electric corp., has recently secured government approval to set up shop in Shanghai, from where the company will provide backing to emerging companies and entrepreneurs. Chinese banks themselves are breaking out of old molds, providing mortgages and shooting for profits. . . . Energy sector greets foreign investment is a China Daily opinion piece. Does the list go on? Overseas media praise success of 15th congress is a China Daily piece. South East Asia: ( Asia's Economic Tigers Growl at World Monetary Conference ) With the crisis in financial markets in South East Asia continuing, leaders from the region, particularly Malaysia's Prime Minister Mahathir Mohamad, have called foul ball in the game of global economics. When foreign investors pulled out of the region, so stopped the vast capital in-flows, long enjoyed and needed to sustain the rapid development there. This has left Dr. Matathir accusing currency speculators of manipulating the markets. Now the debate has shifted from one of equities to one resembling of "East vs. West". AS the New York Times puts it, "what has broken out at this usually plodding annual meeting of the World Bank and the International Monetary Fund, with its endless seminars bearing titles like 'Pension Reform and the Creation of Efficient Capital Markets,' is a nasty skirmish in the escalating war between nations and global markets." The Times has an interesting remark by Treasury Secretary Rubin, who like his Asian counterparts is in Hong Kong for the IMF / World Bank conference. "It's really been quite remarkable," Rubin reflected Sunday night after a long dinner with his delegation, which is headed to China this week to assess many of the same issues addressed here. "For years, when I was at Goldman, Sachs and then when I first came to Washington, a number of us wondered when countries would fully engage in the debate about the effects of linking global markets." This would seem to be a fundamental question demanding a debate. . . In related news . . . Political changes no threat to deal Thanong underscores commitment to IMF is a Sep 22 Bangkok Post story on the Thai's government's pledge to reform its financial system. "The conditions Thailand accepted in return for a $17.2-billion international bailout were a national commitment that transcended the passing of governments," the paper describes Finance Minister Thanong Bidaya's remarks. "The Thai economy will return to its long-term growth path by the year 2000," Major restructuring key to recovery IMF and World Bank working with state is another Bangkok Post article. (Note: the New York Times on-line edition is free, but requires that users register a name and password, and therefore first-time users should first introduce themselves on the Times registration page.) Development: Zigen Fund: For Sustainable Development in China is a grass-roots development agency working Guizhou, Yunnan and Ningxia, among other places. "The Zigen Fund is dedicated to the support of grassroots projects that provide people-to-people development assistance and advance the conditions of poor and underprivileged communities in China and elsewhere. The Fund was founded on October 4, 1988, as a not-for-profit corporation in the State of New York, and it was granted tax exempt status by the IRS on July 25, 1990." "In our sixth year of operation, The Zigen Fund continues to work under the guiding principle of the organization: to provide assistance to the poor, distressed or underprivileged people in China to achieve economic and social advancement. This mission is achieved through a network of volunteers from the United States, Taiwan, Hong Kong and China."

HONG KONG

Protest: ( SCMP Internet Edition ) Fifty people protested the Tiananmen Square massacre as Premier Li Peng hosted a dinner for IMP dignitaries, reports the South China Morning Post. The protest was peaceful. Exiled dissident Han Dongfang joined the protest and said, "Hong Kong people should exercise their right to protest because, unlike the people on the mainland, they still have the freedom to do it," reports the paper. Society: ( Papers accused of sex bias ) Four Hong Kong newspapers have been cited by the Equal Opportunities Commission for job advertisements which contain sex discrimination, reports the South China Morning Post. The commission will take the papers to court and seek financial penalties. Piracy: ( $47m raid escalates war on CD pirates ) A compact disc pressing plant, licensed to produce some titles, was raided over the weekend, netting some $47 million in pirated discs. Shipping: ( Shipyards 'to be wiped out' by relocation ) Provisional legislatures cautioned that the relocation of 14 shipyards threatens the viability of the industry, reports the South China Morning Post.

REGIONAL

Shanghai: joint-ventures in education ( Shanghai Star ) The Shanghai Star writes: "About 60 joint venture schools have opened in Shanghai since the first one began education preschoolers and adults in 1992." Japan: ( Online NewsHour ) On August 25 the PBS News Hour ran an interview with Frank Gibney, Jr., Tokyo bureau chief of Time Magazine. He talks about changes in Japanese society, American misconceptions about Japan, and vice-versa. North Korea: ( Korea Herald : National News ) The Korea Herald reports: "North Korea's de-facto leader Kim Jong-il is expected to assume the post of general-secretary of the Workers' Party Oct. 10, the 52nd anniversary of the partu [sic], government officials said yesterday." Qinghai: first in four part series looks at the isolated Southwestern province ( Qinghai chases development dream ) Although not very long ,the article makes an interesting passing comment: Qinghai has been the key to stability in Tibet for centuries. . . "Qinghai used to be isolated on the world's highest plateau, the Qinghai-Tibet Plateau. With a total area of 720,000 square kilometers, Qinghai is three times the size of Britain. About 54 per cent of its territory is located more than 4,000 metres above sea level." "Qinghai is one of China's largest sources of raw materials, where huge deposits of salt, petroleum, natural gas and other mineral resources have been discovered."

MEDIA AND SOURCES

Politics and theory: Zhongguo yu shijie (China and the World) publishes in Chinese GB and Big 5 formats. The table of contents of its September issue is printed as a GIF image, making it accessible to those without Chinese-language support in their computer. "Zhongguo yu Shijie" (China and the World) is a newly created electronic magazine on social political issues of contemporary China, and issues of our increasingly integrated globe. This journal will try to distinguish itself from dozens of Chinese electronic journals already on internet, by not submitting to mainstream ideologies or orthodoxies when discussing social, political and theoretical issues. We regard it as imperative to examine the Western capitalist system with a critical eye, and retrospect China's experience of socialism with a wholistic view and historical objectiveness. We deeply believe China should develop along its own road, according to its own needs and will, rather than imitating the past experience of Western countries. We hope our forum will contribute positively to China's cause of development and progress. Science journal: Chinese Science is an "annual journal dedicated to the study of traditional and modern East Asian science, technology, and medicine in the Chinese tradition." PDF versions of selected articles, including one from the French historian Jaques Gernet, are here. Development: China Development Briefing is a Hong Kong based English-language publication founded "last year to improve the flow of information to and between international development agencies funding or implementing work in China." The site has sample articles for your knowledge and perusal.

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