Date: Fri, 12 Nov 1993 10:42:51 -0500 Reply-To: ccf-editor@ifcss.org Sender: China-Net From: ccf-editor@ifcss.org Subject: CCF.9315 (Special Edition): APEC Meeting in Seattle To: Multiple recipients of list CHINA-NT ==+==+==+== C h i n e s e C o m m u n i t y F o r u m ==+==+==+=== Friday, November 12, 1993 (Issue No. 9315) Special Edition: APEC Meeting in Seattle +=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+= Chinese Community Forum (CCF) is a journal published on China-Net. CCF is dedicated to the discussion and debate on the issues related to the Chinese community. The opinions expressed here do not necessarily represent the views of the Editorial Board of CCF. Contributions to the discussions and suggestions of new topics are very much appreciated. +=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+= Table of Contents Author | # of Lines ============================================================================ 1. Expectations on the Upcoming APEC Meeting in Seattle ...... Editorial 86 2. News Brief (1 item) ................................................. 43 3. What Makes Us to Pursue a Better Sino-US Relationship Now .............................. Yongsheng Chen 48 4. On the Upcoming Meeting between Jiang and Clinton ...... William Deng 43 5. Clinton to Work on Asian Trade Deficit at Seattle Summit ........ UPI 49 6. Haig Scorns U.S. for Its Tough China Policy ........ Patrick E. Tyler 79 7. Asia Is Techy Too ...................................... The Guardian 43 8. As Chinese Economy Flourishes, Japan Worries About Its Might ............................................... Richard Alm 100 9. China Restructuring Economy "With Singapore and Japan as Models" ...................................... Strait Times 80 ===========***==========***==========**==========***==========***=========== From The Editor ---------------------------------------------------------------------------- Starting from this issue, CCF is going to publish from time to time some special editions on various issues concerned by our community. The focus for this issue is the APEC meeting in Seattle later this month. An editorial of CCF expounds the complexities and challenges of the problems encountered by the APEC participants and the expectations of involved parties. In News Brief some other publications by CCF and CND which will provide a more thorough exposure of the historical background and cross-national comparison on the "Asian Miracle" are introduced. Two analyses from our readers and five from media are included on various aspects related to the APEC meeting and current status of US-China relation. ===========***==========***==========**==========***==========***=========== 1. Expectations on the Upcoming APEC Meeting in Seattle ...... Editorial 86 ---------------------------------------------------------------------------- The APEC meeting in Seattle later this month will be an important event in the emerging post-Cold-War patterns of international relations --- the "new world order". President Clinton's initiative to meet with the heads of governments of the APEC countries and regions during this routine ministry-level has met enthusiastic responses, with good reasons. Since the collapse of the Soviet Union, the world events are no longer rotating around the US-SU axis. The unification of Europe is accelerated, with expanded scope. It has been expected that a new center of economic cooperation will rise there in rivalry to the existing economic superpowers. On the other side of the Euroasia is the most dynamic area of economic development in the world. Amidst the uncertainties in the future of the newly reincarnated Russia and in the foreign policies of the United States as the last military and economic superpower on Earth, each country in the world is trying to exert its own will on the shaping of the new world. Despite the high steam in the economic growth, the Asia-Pacific basin has yet to find a scheme for a better and more comprehensive cooperation, in contrast to the advanced degree of unification and cooperation in Europe. The relics of the old political and military order down from the Cold War era still overshadow the relations among the countries and regions within the area. It is clear that the situation as such cannot accommodate the fast economic development of the region. The question is: What would be the new scheme? This will be one of the questions kept in people's mind when they follow the events during this coming APEC meeting. Americans "turn west" much more slowly than it did in the last century. Even though the trade with the Asia-Pacific region has exceeded the trade with Europe years ago, it is only recently recognized among the leading advisers to the Administration that Asia-Pacific will become the most important area economically and politically in the coming century for America and for the world. Clinton has been characterized as "lack of experience in foreign affairs". However, the inexperienced new-comers do turn up some surprises to the world. John F. Kenndey was once considered inexperienced in foreign affairs, too, but he turned out to have made some moves which marked some of the most profounding changes in the world order. Who knows. As the first post-war generation president, maybe Bill Clinton will surprise the world again, with new acts in the new scenes. China is also looking forward to this APEC meeting. Due to the protests and sanctions after "6.4" of 1989, Chinese Government has not been able to meet with developed countries at the highest level for quite few years. The meeting of the presidents of China and the US during APEC summit will be the first since Bush's visit to China in 1989. It has been said that even if nothing is achieved in this APEC meeting, China is still a winner by merely participating in it. However, it would be a surprise that Chinese Government would only want to gain the symbolic victory with a passive participation without actively pursuit of exerting its influence and shaping the new world order to the best of its interest. To support a sustained high rate growth, China needs a stable and friendly international environment. This has surpassed all past political, ideological and nationalistic sentiments and become the central theme of its foreign policy. It is more fit for Chinese Government to try to play an active rather than passive or ceremonial role in this APEC meeting. For this the Chinese delegation would have to face the criticisms on issues such as human rights, trade policies, and weapon proliferation. The past experiences show that the Chinese Government has come out of the era of revolutionary foreign policy and become more sophisticated. It will not back off easily in front of the pressure when pursuing its goals. The overseas Chinese communities are mainly located in the Asia-Pacific region. They have made significant contributions to the development of the countries in the region, including the US. Because of the distinct cultural differences between China and the West, the overseas Chinese have played a pivotal role in the modernization of China since the last century by forming a bridge for the mutual understanding of the two sides. The prospect of the unprecedented growth and development of China in the coming decades will not diminish but increase the importance and potential of the overseas Chinese communities. They will certainly look forward to opportunities for them to gain a stronger voice in the development of the Asia-Pacific basin. During the last two centuries or more, the Chinese communities in the Asia-Pacific region have also suffered a great deal in wars, famines, economic hardship, racial, national or ethnic hatred, political turmoils, etc.. They have endured the numerous drastic changes which are not only without precedent in the thousands of years of Chinese history, but also parallel anywhere in the modern world. They are among the strongest advocates and supporters for the stability, equality and justice, cooperation and prosperity of the Asia-Pacific region. They hope that the APEC meeting in Seattle will be a step toward that direction. [EBCCF, 11/4/93, ccf-editor@ifcss.org] ---------------------------------------------------------------------------- 2. News Brief (1 item) ................................................. 43 ---------------------------------------------------------------------------- In order to provide broader perspectives of the problems and challenges facing China and East Asia, CCF will publish two weekend edition issues starting this weekend on a series of articles appeared on the Oct. 30 issue of The Economist titled "Asia Survey: A Billion Consumers". The series consists of eight articles. A synopsis of the series is provided by Changqing Yang, a CCF editor, as follows: 1. A BILLION CONSUMERS A quarter-century of the fastest economic growth in history has brought a breakthrough to middle-class life within the grasp of much of Asia. The result will shift enormously the world's economic and financial balance--to everybody's benefit, argues Jim Rohwer. 2. WHY IT HAPPENED East Asia's humdrum methods and miraculous growth, and their meaning. 3. THE SUSTAINMENT DOCTRINE Has Asia's past quarter-century been a flash in the pan? 4. MEASURING UP THE GAINTS China first, India next, in the growth race: each completely different and both utterly unignorable. 5. BUYERS AND BUILDERS Asia's exploding consumer markets and the infrastructural support they need will provide some of the world's biggest business opportunities. 6. PAYING THE PIPER It will be a big -- and remunerative -- job to channel the flood of money about to pour into Asia. 7. THE DILEMMA OF DEMOCRACY In contrast to westerns, Asians do not instinctively believe that freedom, the ballot box and the public interest all mean the same thing. 8. HOPE RACING FEAR With luck, the East's rise will remind the West how it got where it is today. --- --- --- Another article, "The Rise of China", by Kristof on Foreign Affairs will also be published in a separate weekend edition of CCF. CND Books & Journals Review on Nov 7 contains the first part of an article "Greater China: A New Economic Colossus ?" [Luo Ning, 11/10/93, ccf-editor@ifcss.org] ---------------------------------------------------------------------------- 3. What Makes Us to Pursue a Better Sino-US Relationship Now .............................. Yongsheng Chen 48 ---------------------------------------------------------------------------- In the just past several weeks, several senior officials from Washington have been to Beijing. Some others will be there soon. Also the trade talk between the two big countries has hinted some bright light. Furthermore, President Clinton likes to have a "informal meeting" with his Chinese counterpart Jiang. Compared to several weeks ago, much more good news has appeared for the relationship between China and USA. I really wonder what happened to them. Actually, I don't think USA has a sharp turn. Having stayed in Whitehouse for about one year and set down several big foreign and interior events, Clinton administration has finally realized that a better Sino-US relationship benefits USA much more than a nervous Sino-US relationship. The important reasons I believe are followed. 1. After the collapse of USSR, China has much more effects in the World than before. A better Sino-US relationship will help USA global strategy more such as Nucleus-Control and regional stabilization. 2. China has more economic power now. Its greatest market now and in the future has a great abstract to Americans. As the world's most dynamic economy now and in the foreseeable future, China will have more and more exporting and importing ability. Also foreign investment in China is soaring and will soar more. It is predicated that China's economy will grow at 8.3% in the following five years, which maybe the fastest growing economy. Furthermore, Great Economic China is becoming the fourth polar in the world economy. All these make USA government to pursue more economic benefits for American companies and its capital from this great market and therefore a better connection with China. 3. Although USA does not like a more powerful China, neither does it like a chaotic China. A chaotic China will not only make USA nervous, it will also make the whole World nervous. Considering the successor after Deng more serious recently, USA realize that a better relationship will make it has a better understanding to the follower after Deng and more effect on the power transfer. This should benefit USA. 4. China leaders now have more confidence than several years ago. This make them take a stronger line when they deal with USA. They have realized that what the biggest market could have meant. To the future Sino-US relationship, I believe the China side will have a stronger line than before. USA will just take the human rights as a little more than the face of economic relationship. More effects will be on economic and political interests. United States will continue award the MFN status to China next year if there is not some strange event happens. China leaders may mot worry about that any more. NB: I like more discussion on this topic. Thank you. [Yongsheng CHEN, 11/05/93, YCHEN@UVVM.UVic.CA] ---------------------------------------------------------------------------- 4. On the Upcoming Meeting between Jiang and Clinton ...... William Deng 43 ---------------------------------------------------------------------------- After four years since the 6.4 tragedy, top leaders from the U.S. and China will meet the first time at the upcoming meeting in Seattle. I am glad to see this happening because I believe that the best way to transform China into a prosperous and democratic country is keeping communication, negotiation and exchange alive, not isolating China from the world community by sanctions, political or economical. The U.S. and China are two important, if not the most important, players in the world community after the cold war is over. The U.S. needs China's cooperation in policing the 'new world order' and want China's high economic growth help drag the stagnant American economy to a higher gear. China needs the market, investment and technology from the U.S. for the rush to modernization. Maintaining a good relationship is crucial to both countries. On the other hand, each country wants to get most from the other while paying the least, which is illustrated by disputes ranging from human rights issue to arm trade. The lack of mutual understandings (Bao3 Han4 Bu4 Zhi1 E4 Han4 Ji1, or the wealthy guy cannot know the feeling of the poor guy :-) and the difference in ideology (China is trying to privatize health care system while the U.S. is trying the opposite :-) fuels the disputes which highlight the annual review of MFN to China. Just before the coming meeting, the threat of revoking MFN because of China's poor human rights record was repeated. Indeed almost all authoritarian regimes in the world enjoy MFN, most of which have worse human rights record than China. They have no trouble on MFN just because they are relatively insignificant players and so not deserve so much attention. Before "6.4" China's human rights record was not better since Wei Jinsheng was long jailed before that, but then China had no problem on MFN because then China was an ally against the Soviet and the trade deficit was quite small. Although using moral cards to play economic games is sound and easy, I believe that a sure MFN will better serve the goal of human rights. Yi1 Shi2 Zu2 Er2 Zhi1 Li3 Jie2, or when you are well fed you will behave much better. :-) Therefore I suggest IFCSS to take such a stand: Welcome Jiang's visit and the meeting between Jiang and Clinton, advocate unconditional MFN and press China to free all political prisoners. The game between China and the U.S. will last long. Communication is sure a much better way of playing than head-on confrontation. And the upcoming meeting is a good beginning. CSS here can play an important role as interpreters to minimize misunderstandings, simply because CSS have such a big stake in a good Sino-US relationship. Let's wish the meeting is a great success. [William Deng, 11/10/93, XIAOJIAN@ccit.arizona.edu] ---------------------------------------------------------------------------- 5. Clinton to Work on Asian Trade Deficit at Seattle Summit ........ UPI 49 ---------------------------------------------------------------------------- President Clinton conceded Thursday the United States has a large trade imbalance with Asia, but said he hopes to begin reversing the tide this month when he meets with Asian Pacific Economic Cooperation leaders in Seattle. "We have a big trade deficit with our trading partners in Asia, and I'm working hard to do something about that," Clinton said. "I'm going out to Washington state to meet with the leaders of all the Asian countries later this month." The State Department will host an APEC meeting in Seattle Nov. 14-19, with Clinton then hosting an APEC leaders' summit Nov. 19-20. However, Clinton said that before the United States can tackle trade deficits with Asian nations, Congress must first approve the North American Free Trade Agreement. NAFTA aims to reduce trade barriers among the United States, Canada and Mexico, but it first must clear the Congress, where it is a hotly contested issue. The White House claims it has gained momentum, but opponents say they are only a few votes short of defeating the free trade agreement. Clinton said the United States' global trading parters "are going to look at Congress and how we vote on this NAFTA path, and they're going to decide whether America is going to be a trustworthy, reliable leader and partner in the years ahead to make this world what it ought to be." "You cannot run and hide from the world we are living in," Clinton said. "We're going to have to compete and win. I think we can do it." According to the Office of the U.S. Trade Representative, 1992 figures show the United States has a $13.8 million trade deficit with East Asian nations, including Hong Kong, South Korea, Taiwan and Singapore. The U.S. trade deficit, according to the 1992 numbers, stands at $14.7 million with the People's Republic of China, and $8.3 million with Japan. The 1992 figures also showed U.S. trade deficits of $1.6 million with the Philippines, $3.5 million with Thailand, and $702,000 with Malaysia. "We hope that we will have a new trade agreement by the end of the year when all nations, from Asia to Europe and all around, lower their barriers to our products," Clinton said. Meanwhile, details of the APEC leaders' meeting in Seattle were beginning to trickle out of the White House. Officials said there will be an informal meeting Nov. 20 at Blake Island Marine State Park and a Nov. 19 reception at the Seattle Art Museum in Volunteer Park. [From UPI, 11/4/93, forwarded by shusheng@oce.orst.edu] ---------------------------------------------------------------------------- 6. Haig Scorns U.S. for Its Tough China Policy ........ Patrick E. Tyler 79 ---------------------------------------------------------------------------- BEIJING, Oct.27 -- Sitting in one of the skyscraper hotels that signifies China's economic ascent, former Secretary of State Alexander M. Haig Jr. was seething about American policy toward China. Visiting Beijing early this month (October) to introduce the new president of the United Technologies Corporation to the Chinese leadership, Mr. Haig argued that Washington was about to lose China again by driving the next generation of Chinese leaders toward "jingoism" and "anti-Americanism." "How dare we go around telling the rest of the world" that they must live up to American standards on human rights, he demanded. "I think the time has come to take a different tack here. And Tiananmen is a long way behind us." His hotel is a few miles east of Tiananmen Square, where thousands of pro-democracy demonstrators fled the onslaught of the June 4, 1989, military crackdown, a night that left hundreds if not thousands dead. With President Clinton meeting the Chinese Communist Party leader, Jiang Zemin, in Seattle next month, the question of whether and how to move American-Chinese relation into a new era is likely to be answered soon. Exactly where the relationship can move is tricky business, however, and advocates on all sides of the policy issues are maneuvering for influence. The greatest restriction to movement may have come from Mr. Clinton himself. In May he laid down a daunting challenge to the Chinese Leadership when he signed an executive order extending China's most favored nation trading privileges for another year, but insisting that in that time China shows "consistent overall progress" in its human rights record. A number of China specialists worry that this schedule may be too short and internal pressures too great. Paramount leader, Deng Xiaoping, 89, is in declining health, and the prospect of Mr. Deng's death has rendered his potential successors more cautious than ever about undertaking change. Any leader who could be said to have bent to America's will might be vulnerable in any power struggle after Mr. Deng's death. Moving United States-China relations away from the annual Congressional wrangle over renewal of China's trade status, with its emphasis on human rights, is an idea shared by a number of businessmen and diplomats who are coming to China to participate in China's economic boom. The view is also shared by China specialists like Kenneth Lieberthal at the University of Michigan, who have begun to advocate that the United States "should stop punishing China for the massacre of demonstrators in Tiananmen Square" because China is simply too big and too important to isolate indefinitely. The Japan Card Mr. Haig lowers his voice to give the geo-strategic underpinning to his argument. In the future, he said, the only way to protect Asia from the kind of Japan "that we don't want to see" is to build a strong relationship with China. Since the United States already has a strong relationship with Japan, an equally strong American-Chinese relationship will be complementary, he argued. Keeping these future Asian superpowers balanced "is the greatest safeguard against regional uncertainty and instability," Mr. Haig said. And what would become of human rights policy? "We would espouse our values, but we should do it by example, not by pedantry," he replies. Not far from Mr. Haig's hotel suite, a recently released political prisoner provided some contrast. The prisoner was held for more than two years in solitary confinement and thought for a time that he had lost his mind in isolation. His health is broken, his life shattered by his pamphleteering for democracy in 1989. He asked that his name not be used. After listening to a description of Mr. Haig's view, he said that keeping up the pressure on the Chinese leadership to respect human rights has been one of the greatest influences on its behavior. "It would be very sad if the United States changed its policy in this way," he said. [The New York Times, 10/28/93] [Forwarded by: Changqing Yang ] ---------------------------------------------------------------------------- 7. Asia Is Techy Too ...................................... The Guardian 43 ---------------------------------------------------------------------------- Peaceful Asia has become more attractive to Bill Clinton than our own chaotic continent. That was the message as the President reproached Britian over Bosnia while Warren Christopher said that Asia, unlike Europe, did not spend its time criticing the US. Next month's Pacific Rim conference is billed as a new opportunity for the US to go west to the East. Mr. Clinton will be meeting China's Jiang Zemin and (for the second time) Japan's Morihiro Hosokawa. If Europe cannot sort itself out, ran the weekend subtext, the US has other Horizons. This message already begins to look a bit feeble as new wrangling breaks out between the US and China, and Japan. Mr. Christopher started it with Beijing by warning that on present progress he did not see how the Most-Favoured Nation status could be renewed next year. Yesterday China replied by denying any link between human rights and trade. Meanwhile the intractable trade issues which are always lurking behind the smiles in US- Japan relations all leapt on to the stage at the same time. Again it was the US which took the high moral ground, when trade representative Mickey Kantor warned that it would impose sanctions on Japan if there was no agreement to open up government construction to US companies by November 1. That is two weeks before the happy gathering of the Asian-Pacific Economic Cooperation conference in Seattle. Neither bundle of issue is quite so spiky as it looks. The game that the US and China play is a familiar one: Washington huffs and puffs about human rights but still needs Beijing's vote in the Security Council and a Chinese card in the Far East. While Mr. Christopher spoke, the US Secretary of Agriculture was in Beijing delivering a more nuanced message. We want to put our relations on a `sounder footing', so please make some gesture. China will probably oblige as usual. The trade row with Japan also bubbles on, fanned by political wind but never quite boiling over. It is hard to see how it can ever be finally resolved. If US cars were better, they would sell better in Japan. US companies are eager to break into the `upstream' element of Japanese government construction. But this will requires a very radical reform of the public works structure. With the industry already wracked by scandal, a November 1 deadline is quite unrealistic. Mr. Hosokawa is already wobbling on his pledge to tackle rice imports. The issue goes to the heart of Japanese sentiment about its rural way of life, and will only be solved as that way slowly changes. Still Asia is not going to be exactly an oasis of calm for Mr. Clinton, and its diplomats are baffled by the continual shifting of US targets. The world is a complicated place, as the last Democratic president discovered. If Mr. Clinton really wants complete peace and quiet, he may have to settle for the Antarctic. [The Guardian, 10/22/93, forwarded by Yao Xinzhong] ---------------------------------------------------------------------------- 8. As Chinese Economy Flourishes, Japan Worries About Its Might ............................................... Richard Alm 100 ---------------------------------------------------------------------------- TOKYO - The end of the Cold War didn't really make the world safer for the Japanese. They still live in a dangerous neighborhood. To the north, there's Russia, an old nemesis still teeming with uncertainty. Just across the Sea of Japan, the militarized Korean peninsula holds the last standoff between communism and capitalism. To the south lies a hulking giant that turns up most often in Japan's nightmares - China. "China is not posing a threat today, but the trends are toward a stronger China," said Masashi Nishihara, professor of international relations at Japan's National Defense Academy. "Ten years from now, how are we going to cope with it?" Many Americans focus on Japan as the power on the other side of the Pacific. But Asia experts say the central fact of life in this part of the world will be the coming of age of a what might be called a "Chinese-based" economy. The term comes courtesy of Murray Weidenbaum, director of the Center for the Study of American Business at Washington University in St. Louis. The Chinese-based economy includes China, but it's more than China. In addition to the People's Republic, it encompasses Hong Kong and Taiwan - the other Chinas - and the overseas Chinese that dominate the private sectors of such places as Singapore, Malaysia, Thailand, Indonesia and the Philippines. Statistics to measure the size of this Chinese-based economy don't exist. The best proxy involves the three Chinas - the People's Republic, Hong Kong and Taiwan. All three are growing briskly and increasing their exports. Projections by DRI-McGraw Hill Inc., a forecasting firm in Lexington, Mass., show the propulsion behind the region's economy: ---China will grow by 9.2 percent a year for the first five years of this decade and then expand by 8.2 percent in the second five years. Taiwan will average better than 6 percent a year. Hong Kong's business will increase by 4.8 percent from 1990 to 1995 before slowing to 3.7 percent through the year 2000. ---Exports from the three Chinas will jump from $237 billion in 1990 to $592 billion in 1997. The Chinese share of world exports will grow from 5.5 percent to 9 percent. This is simply the world's most dynamic economy. The region has it all: The land, resources and labor of mainland China. The technological know-how of Taiwan. The marketing and services of Hong Kong. The financial capital of Taiwan, Hong Kong and Singapore. All across the region, the Chinese traditions of family, education and entrepreneurship make for good business. Chinese culture has always been there. What's gotten the economic engines moving has been an integration among the Chinese enclaves. It simply ignores the deep political divisions that separate the Chinese in Asia. Some signs the Chinese are becoming one economy: Eight years ago, only 10 telephone calls a month went from Xiamen, a special economic zone on the mainland, to Taiwan. Now, the average exceeds 60,000 a month. Four-fifths of all Hong Kong manufacturing companies operate branches in China. Sixty percent of China's exports go through Hong Kong. The combined investment from Taiwan, Hong Kong and Singapore rivals what Japan sends to Malaysia, Thailand and Indonesia. The Chinese-based economy has problems to overcome on its way to becoming a power. Mainland China needs to better manage its economic growth or face another bout of ruinous inflation. Political questions litter the landscape: Who will follow Deng Xiaoping and the rest of China's aging rulers? Will a sudden lurch in economic policy alter China's "Open Door," which began in the late 1970s to reverse Maoist isolationism? How will China integrate Hong Kong, now a British colony, in 1997 without undermining the city's economic success? Mr. Nishihara expects the revival of Chinese power to leave its mark on Asia, whether the mainland's economic resurgence continues or falters. An economically charged China will be a military power and perhaps an unsettling force in international trade. If the economy slips badly, spillovers might include unrest, repression and refugees. With its sheer size, the growing Chinese economic presence cannot be ignored. The political reality is that mainland China won't be bullied. The regime still causes heartburn, with its recent nuclear test, its arms sales and its trade policies. Japan shares with the United States the desire to do what it can to steer the Chinese toward good citizenship. According to Mr. Nishihara, the Japanese will seek an economic partnership with the emerging Chinese economy in Asia but cling to its security alliance with the United States as a bulwark against an aggressive China. President Clinton, running for office last year, talked about getting tough with China, perhaps revoking trade privileges over human rights violations. As president, however, he's clearly looking to smooth relations with Beijing. Next month in Seattle, he will be the first American president to meet with a Chinese envoy since the crackdown at Tiananmen Square in 1989. Mr. Clinton will get grief for it, but his willingness to approach China recognizes the rising power in Asia. [Staff writer Richard Alm reports on international business and economics for The Dallas Morning News, forwarded by Shusheng Luan] ---------------------------------------------------------------------------- 9. China Restructuring Economy "With Singapore and Japan as Models" ...................................... Strait Times 80 ---------------------------------------------------------------------------- China is using the economic systems of Singapore and Japan as models in its plan to restructure its economy, according to the Sunday Morning Post in Hongkong. In a report from Beijing, the newspaper quoted sources as saying that Chinese vice-premier and economic tsar Zhu Rongji was putting the finishing touches to a blue-print which would see a radical overhaul of the country's economic system. The restructuring plans would see major reforms in the country's banking, financial, taxation and investment systems as well as the reforms of state-owned enterprises. Under the reforms, the government would introduce: A central provident fund, along the lines of Singapore's Central Provident Fund. A unified corporate tax of 33 per cent on all domestic enterprises. According to sources, taxation will not follow Hongkong's low tax-based model but will fall more into line with Singapore's tax structure. Corporate rate tax in Singapore is currently 30 per cent. A turnover and value-added tax. According to the plan, VAT will be applied to the entire process of commodity production and circulation. In this way, the production and supply of cars, liquor and cigarettes will be regulated. A unified individual income tax of 33 per cent is to be levied on all foreigners working in China. Reform of the financial and capital markets will also mean the full convertibility of the yuan, with a convergence of the swap rate and official rate planned. This could mean a devaluation of up to 50 per cent. Under the plan, the People's Bank of China would be given more independence in monetary policy in line with Germany's Bundesbank, the Post said. Mr Helmut Schmidt, former chancellor of West Germany, has been an adviser to the Chinese on monetary policy. The report was prepared by the State Commission for the Restructuring of the Economy, which reports directly to Mr Zhu. Highly placed sources say the plan is scheduled to be presented before the Third Plenum of the Central Committee, which meets in Beijing next month, according to the Post. The plan, called "A Comprehensive Framework for a Socialist Market Economic System", has been widely circulated among Communist Party leaders. The document is expected to become official party policy at the People's Congress in March. It proposed that the economy be steered by administrative policies, similar to the practice in Japan, the newspaper quoted sources as saying. Key industries --- including the energy and nuclear industries, raw materials and strategic industries like armaments --- will remain in state control but with independent management. A pension and savings scheme, similar to Singapore's Central Provident Fund, is being planned as a vehicle for the government to get additional funds, the newspaper said. Prime Minister Li Peng has already approved civil service reform proposals, which will include pay scales and a grading system. According to the Post, the reforms will include a new economic classification system in which the government will have the ultimate say in where industries are located. Heavy industries will predominate in the north-east; high-tech and electronics will be favoured in Dalian, Beijing and Tianjin. Southern coastal provinces will concentrate on exports; energy and heavy chemicals will predominate on the middle reachs of the Yellow River, with mineral resources on the upper reaches. The upper reaches of the Yangtze will concentrate on industries requiring large amounts of energy and the middle reaches will be China's agricultural corridor. [From The Straits Times (Singapore), 10/25/93 forwarded by Shusheng Luan] +=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=++ + Executive Editors: Shusheng Luan and Ning Luo + + Executive Moderator: Tong Shen + +--------------------------------------------------------------------------+ + For subscription: mail "SUB CHINA-NT Your-First-Name Your-Last-Name" + + to LISTSERV@UGA (bitnet) or listserv@uga.cc.uga.edu (internet) + + For back issues of CCF: + + anonymous ftp to cnd.org[132.249.229.100]:pub/community/CCF + + For contribution and inquiry: mail to ccf-editor@ifcss.org + +=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=++