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---"Focused Coverage Informed Perspectives"---Thu, Dec 11, 1997 edition

Economics market woes, conferences and Microsoft

Also in this edition . . . 1: No news is Bad news 2: top economic conference ends with 6-point agenda 3: Korea's problems bring down Hongkong's share prices 4: Microsoft's Gates enjoys emperor status 5: Tung ends first duty trip to Beijing 6: (12/7/97) Executive will follow Legislative Yuan in deciding fate of local chiefs 7: (12/7/97) party appoints VP Chang as secretary general 8: (12/7/97) National Unification Council meets, no new guidelines emerge 9: (12/7/97) DPP's Chen lashes out at National Unification Council 10: (12/7/97) mainland delegation set for 10-day visit

ERRATA

No news is Bad news: Well, my Taiwan editor has been calling every night, and the news today over the telephone from another advisor was: move forward while regrouping from your loss. Loss? Well, we're usually quite careful with the way we conduct our computer affairs, but when one of our crucial hard drives failed---and boy did it fail---over the weekend, we have been trying to recover. Backups are good so long as they are current, and the previous rendition was just old enough to pose a problem. We've also been busy preparing some other treats---no, we'll unveil them in the coming weeks. Our hiatus was also caused by internet problems at a hub, we are told; and this downtime accounted for a few days, too. I wish someone would explain to me why the internet, despite all the money being poured into it, cannot attain a certain level of redundancy and reliability. The problems on our end might cause problems with the news archive, as it will be difficult to synchronize new editions with the old, until we rebuild some internal indices. I will not concern you with the behind-the-scenes workings of this news service, but suffice it to say that we have done a lot of custom programming to bring us closer to our goals . . . Most of the programming is intact, but newly introduced formatting with embedded fonts (see recent editions) will be lacking in their full glory for a few days to come. Of course, you'll need Netscape's Navigator 4.0, not Microsoft's Internet Explorer; but this is because the children who run the computer industry have learned the lessons about greed---they like it. Oh, an important notice: those who have emailed us in the past week or so and have not received a reply, well. . . . chances are the mail was lost, too. So, if you would be so kind as to re-send the message, a prompt reply would follow. I promise. I mean, we might be rude and crude, but we do reply to all email, so long as it comes with a valid return address (some do not) and is not one of the millions trying to sell us pagodas in Bangkok---we tend to ignore these. Yes, it's the same old story: I have a bridge I'd like to sell you in Brooklyn.

CHINA AND HONGKONG

Economics: top economic conference ends with 6-point agenda ( SCMP Internet Edition ) A three day conference in Beijing ended with China's top leaders promoting a six-point agenda designed to advert social problems caused by economic restructuring. "The six-point agenda comprised strengthening agriculture, state-owned enterprise reform, restructuring the economy, adhering to a stable monetary policy, foreign investment strategy and maintaining social stability," reports the South China Morning Post. The paper says the main focus appeared to be on state-enterprise reform, with particular emphasis given to the textile industry. The paper says cadres in that industry have been given 12 months to firm up with solid results. "They were also told to take all possible measures to support laid-off workers. All city governments were told to establish social security systems by next year to look after the jobless and the needy," writes the paper. The conference also considered how to 'avoid and resolve' any financial crisis which would affect the nation, reports the paper. ( Economic development sound ) The China Daily also reports on the annual Central Economic conference, sponsored by the Central Committee of the CCP and State Council. "According to the conference, the leadership of the CPC Central Committee with Jiang Zemin as the core and under the guidance of Deng Xiaoping Theory and the basic line of the Party have enabled China to score notable achievements in reform, opening and the socialist modernization drive. " "China's economy is developing soundly on a sustained basis, with the basic realization of all economic targets set within the framework of macroeconomic adjustments. "An overview of the Chinese economy shows appropriately rapid growth with low inflation in 1997, and indicates a healthy development trend towards "high growth and low inflation." The market is playing an increasingly important role in economic operations and the allocation of resources. In addition, overall economic structural adjustments show signs of positive change, with more marketable products and a better production/sales ratio. "China has also expanded economic and technical exchanges, leading to an upsurge in foreign trade. "`The conference highlighted various contradictions and problems in the operation of China's economy during the year and urged that appropriate attention should be paid to finding solutions. "Problems include: a number of State-owned and township enterprises operating in the red; the swelling ranks of laid-off workers; the imperfect legal system and poor supervision of China's financial sector; the weak agricultural base; and the deterioration in the rural environment." "New measures will be introduced to resolve important social issues. Progress should also be made in economic structural readjustment and opening up in order to bring about a marked improvement in China's overall economic strength and efficiency. "The conference, which outlined a number of major tasks for China's economic sector in 1998, stressed that the status of agriculture as the economic base should be further reinforced in order to achieve overall agricultural development. "Based on the current healthy situation and a succession of good harvests, investment in the agricultural sector should be steadily increased, according to the conference. "The conference called for optimization of the rural economic structure, improvement in the agricultural infrastructure and the rural environment, and further strengthening of the status of agriculture as the economic base in order to ensure the growth of agricultural production, increase farmers' income and ensure stability in the countryside. "While optimizing the economic structure in rural areas and maintaining the steady growth of grain, the nation should also extend great efforts to develop the planting, cultivating and processing industries in the countryside, the conference stressed. "China should continue along the track of industrializing the agricultural sector and increasing the value and efficiency of the sector. "The conference pledged to complete the crucial stage in restructuring State-owned enterprises to improve the managerial status of State firms. Economy: Korea's problems bring down Hongkong's share prices ( SCMP Internet Edition ) Economic news is still not too good. From the South China Morning Post: "Hong Kong share prices fell sharply yesterday, hit by the fallout from South Korea's deepening economic crisis." "The Hang Seng Index dived 602.19 points, or 5.46 per cent, to end at 10,420.22 in the market's third consecutive losing day." "The dismal mood in the markets continued overnight." "In London, the Hang Seng London Reference Index closed down 73.08 points at 10,347.14." "In New York at the close early this morning (Hong Kong time), the Dow Jones Industrial Average was off by 129.80 points at 7,848.99." Computers: Microsoft's Gates enjoys emperor status ( SCMP Internet Edition ) Thousands flocked to Beijing to catch site of their 'king'. It is not secret Bill Gates has taken to the allure of China's vast market and talent of programmers, and he fielded questions yesterday at a news conference in Beijing. In town for Microsoft developers conference, Gates was optimistic about China's development in computer sciences, but he also raised concerns over piracy in the country. Microsoft earns less per PC in China than in any other country, because of piracy, Gates said. Microsoft is forging important links with mainland universities, where a vast pool of talent can be hired. "The mainland is a small, but rapidly growing, computer market. Personal computer sales this year in China will reach 3.2 million, up from 2.1 million last year, making it the largest market in Asia after Japan. About 60 per cent of owners use a Chinese-language version of Microsoft's Windows software," explains the South China Morning Post. The question is: now that Gates has locked-up the market with an arguably less-than-elegant operating system, and has made a lot of money, what drives him? What does he really want? Hongkong: Tung ends first duty trip to Beijing ( SCMP Internet Edition ) Tung Chee-hwa ended his first duty visit to Beijing, reports the South China Morning Post, and the leadership is satisfied with his performance. Having listened to a progress report on the SAR, Jiang Zemin said the facts demonstrate the territory can mange its own affairs and the SAR government had made a good start, reports the paper. It was also announced Beijing has given its support for establishing an SAR representative office on the mainland. No other information was given on this. Other ranking SAR officials would report to Beijing in the coming months. Tung also told Jiang that a Guangdong-Hongkong committee for mapping out strategic developments would convene in April.

TAIWAN DESK

Election Coverage: Executive will follow Legislative Yuan in deciding fate of local chiefs (7 Dec 1997) In the wake of the KMT's poor performance in last month's mayoral and county chief elections, high-ranking Cabinet officials have said the Executive Yuan will follow the decision reached by the legislature on whether village and township chief elections should be abolished. KMT Secretary-General John Chang said that the consensus reached last year at the National Development Conference to abolish village and township chief elections was only for reference purposes. Other Cabinet officials backed up Chang's remarks, saying the Legislative Yuan should have the final say on the issue. Local elections will continue if the Legislature decides not to follow the recommendations of the NDC, the United Evening News quoted sources in the Cabinet as saying yesterday. Amendments to the Election and Recall Law are now being reviewed by the Legislature. While the New Party has announced its opposition to any plan to terminate the elections, the DPP has stressed its intention to carry out the agreement reached at the NDC. The KMT has remained divided over the issue. Some in the KMT have reportedly had second thoughts about the recommendations in the wake of the unexpected flop in last month's elections. KMT: party appoints VP Chang as secretary general The ruling Kuomintang yesterday appointed Vice Premier John Chang as its new secretary-general, hoping to rebound from its worst election beating in 1949. "We lost a battle, but we did not lose the war," Chang told reporters after his appointment to the post at a meeting of the party's elite policy-making Central Standing Committee. "We still are hopeful for the future," Chang said. "The challenges and difficulties that our party faces are bigger than before," said Chang, who was foreign minister until a Cabinet reshuffle in September. The new secretary-general said he did not think President Lee Teng-hui should respond to calls within KMT ranks and step down as party chairman to take responsibility for the disaster.

CROSS-STRAIT RELATIONS

Cross-strait relations: National Unification Council meets, no new guidelines emerge (7 Dec 1997) The first plenary session of the fifth National Unification Council (NUC) met yesterday to discuss Taiwan's policy toward China, but aside from reaffirming the government's long-held line, no new guidelines were set. With calls from business leaders and politicians in recent months for increased economic relations with China, especially for the application of the "three links," it had been expected that the NUC would put forward guidelines for a relaxation of its policies toward China, and consider entering the so-called intermediate phase of cross-strait relations. But yet again, the long-held KMT line prevailed. President Lee Teng-hui stated in his address that patience was needed to resolve cross-strait difference. Already, he said, the cross-strait relationship has evolved from estrangement to frequent exchanges, especially in the areas of trade, culture, technology and sports. He said that the core of cross-strait problems was the contest between different systems of government and ways of life, not a feud for power among political parties or rivalry for territorial gains. He then asked for the resumption of dialogue as early as possible between the Taipei-based Straits Exchange Foundation and the Beijing-based Association of Relations Across the Taiwan Straits. The call was supported by the Mainland Affairs Council, which added that the island's negotiating door has always been open, but that it was China that had unilaterally shut its negotiating doors. Finally, Lee emphasized Taiwan's policy of pursuing peaceful reunification and securing at the same time the security and development of the island. The other members of the NUC also reaffirmed Lee's views. Premier Vincent Siew reiterated the government's position against independence and stated that the current situation is "a separate China." Most members supported the current "go slowly, be patient" policy with respect to economic issues. They insisted the policy was already sufficiently relaxed, with restrictions only on high tech industries entering China, and the only mandatory review being on companies investing more than NT$50 million. New Party member Hsu Li-non offered the only dissenting voice. He asked the government to review its "go slow, be patient" policy. But even New Party legislator Chen Kuei-miao had reassuring words to add, counseling that Taiwan needs to have self-confidence and that both sides should have political reconciliation and economic cooperation. "Although Taiwan is small in size, it can positively influence China," he said. The NUC was established under the Office of the President in 1990 with the Guidelines for National Unification promulgated in the following year. It functions as an advisory board and provides the president with research findings. As a non-partisan group, it tries to forge consensus among various interest groups regarding the unification of China. The president heads the NUC. One DPP party member and a New Party member are officially invited to sit on the council, along with various high-level officials, civic leaders, and professors and other political representatives. Taipei Mayor Chen Shui-bian and founding DPP member Huang Hsin-chieh, although expected, did not show up at the meeting. See also http://www.chinatimes.com/news/papers/ctimes/focus/86120701.htm. http://www.chinatimes.com/news/papers/ctimes/focus/86120703.htm, and http://www.chinatimes.com/news/papers/ctimes/focus/86120707.htm (Chinese BIG 5 encoding) (Note: Access to China Times articles are limited to subscribers. As the paper's system is currently configured, to access an article listed here you must first go to the front-page at http://www.chinatimes.com and from there locate the article) DPP-KMT governance: DPP's Chen lashes out at National Unification Council (7 Dec 1997) Taipei Mayor Chen Shui-bian lashed out at the National Unification Council, saying that the council was about as useful as an appendix. "President Lee Teng-hui has no right to make a one-man decision which determines the future of the island, nor does any political party have the right," Chen said. Only Taiwan's 21 million residents are entitled to make such decisions, he was quoted by the United Evening News as saying yesterday. It would be no loss to remove the council, Chen said, because then people in Taiwan would be free to make comments on Taiwan's China policy. In addition, the country never reached a consensus in the issue of so-called "national unification," he said, adding that only a portion of Taiwan's citizens believe the island should unite with China. The National Unification Council was, in fact, "as superfluous as an appendix," Chen said, adding that nobody would feel remorse or even notice if it were cut from the body. Mayor Chen made the comments while the country's fifth National Unification Conference, organized by the council, took place at the Presidential Office yesterday morning. Chen turned down an invitation to attend the conference. Senior Advisor to the President Huang Hsin-chien, the other DPP member invited to the gathering, also declined the invitation. DPP central headquarters reiterated yesterday that the party will not change its stance on Taiwan independence. The opposition DPP believes that there is no need to be present at the conference since the conference was held under the premise that Taiwan will eventually unite with China. See also URL: http://www.chinatimes.com/news/papers/ctimes/focus/86120704.htm (Chinese BIG 5 encoding) (Note: Access to China Times articles are limited to subscribers. As the paper's system is currently configured, to access an article listed here you must first go to the front-page at http://www.chinatimes.com and from there locate the article) Cross-strait relations: mainland delegation set for 10-day visit (sources: Central News Agency and China News) (7 Dec 1997) A mission from the Beijing-based China Council for the Promotion of International Trade (CCPIT) is scheduled to arrive in Taipei tomorrow for a 10-day visit, sources from the China External Trade Development Council (CETRA) reported yesterday. The mission, to be headed by CCPIT Vice Chairman An Chengxin, is coming to the island at the invitation of CETRA. CCPIT, a private organization, and its Taiwan counterpart, CETRA, have developed cordial bilateral exchanges over the last two years. CCPIT Chairman Guo Dongpo visited Taipei last year, when he met with CETRA officials and agreed that the two trade councils should exchange visits on a regular basis. During their stay, the mainland Chinese trade officials will meet with their Taipei CETRA counterparts, as well as representatives of the Chinese National Federation of Industries, Tatung Co., and several other leading private enterprise. CCPIT, China's leading trade promotion organization, maintains branches in 42 provinces and cities, and heads 13 trade societies and associations in different industries around the mainland.

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