Bill Zhang

Thursday, August 18, 2005

China, Russia starts joint military exercises

Chinese and Russian troops started a cynosural 8-day military exercise in Russia's coastal city Vladivostok on Thursday, marking the first-ever war game between the two countries.

After conducting a brief high-level strategic consultations for the exercise, Liang Guanglie, chief of the General Staff of the Chinese People's Liberation Army and his Russian counterpart Yury Baluyevsky jointly announced the official commencement of the military exercises at around 11:00 a.m. local time (8:00 a.m. Beijing time) in the base of Russia's Pacific Fleet on Thursday.

Chiefs of the general staff of the Chinese and Russian armed forces jointly announced the official commencement of the first Chinese-Russian joint military exercise, code-named "Peace Mission 2005", in Russia's Vladivostok at 11:00 a.m. local time (8:00 a.m. Beijing time) Thursday.

Gen. Liang Guanglie, the chief of the general staff of the Chinese People's Liberation Army, left and Gen. Yuri Baluyevsky, the head of the Russian armed forces general staff, salute at a World War II memorial in Vladivostok, Russia, Aug. 18. 2005. (Photo: AP)

The exercise, code-named "Peace Mission 2005," is scheduled to involve nearly 10,000 troops from the two armies, navies, air forces as well as airborne units, marine corps and logistic units, according to an earlier announcement made by the Chinese Ministry of Defense.

Four hours after the commencement, the first phase of the military maneuvers officially started with staff officers carrying out strategic consultations and battle planning at the order of the chiefs of the general staff of the two armed forces.

While attending a press conference later in the morning, Liang denied the military exercise aims at any third party, concerns the interests of any third country or will pose threat to any country.

The participating troops will focus on the maneuvers of strategic consultations and battle planning, transportation and deployment of troops, and combat practice, said Liang.

Baluyevsky, Liang's Russian counterpart, said the holding of the joint military exercises does not mean that the two countries want to form a military bloc in any form.

According to the two generals, the joint military drills target at deeper mutual trust and friendship, and better cooperation and coordination between the two armed forces so as to improve their capabilities to deal with new challenges and threats.

To be more specific, the war game showcasing the two countries'military might is aimed to help them get ready for a joint fight against international terrorists, national separatists and religious extremists, said Sergey N. Goncharov, charge d'affaires of the Russian Embassy in China, in an exclusive interview with Xinhua in Beijing on Thursday.

According to the Russian diplomat, the forces of terrorism, extremism and separatism have conducted activities in both China and Russia, and have been growing in the member countries of the Shanghai Cooperation Organization (SCO), which groups China, Russia, Uzbekistan, Kazakhstan, Kyrgyzstan and Tajikistan.

Let them have a look at our joint military exercises and think it over whether it is worth continuing their activities," said Goncharov, adding, "We hope the joint military exercises could help cool down the 'fervor' of these terrorists, separatists and extremists."

The diplomat expressed hopes that similar drills would be held within the SCO framework in the future, which he said might involve more troops.

Defense ministers and military experts of the SCO member nations, and their ambassadors and military attaches to China have been invited to observe the exercise.

Representatives of SCO observer countries such as Mongolia, India, Pakistan and Iran are also invited to watch the military exercise, according to military sources.

According to the schedule, the second and third phases of the 8-day mission will be staged in China's Shandong Peninsula and its neighboring sea area. Enditem

Tuesday, August 16, 2005

U.S., China textile talks scheduled for next week

WASHINGTON: The U.S. Trade Representative's office said on Tuesday that U.S. and Chinese officials will hold textile trade talks next week in San Francisco but the Bush administration has not decided whether to formally seek a comprehensive textile trade deal with Beijing.

The Aug. 16-17 talks are the latest in a series of "consultations" required under world trade rules after the United States imposed emergency import curbs in May on billions of dollars of clothing from China, said John Stubbs, a spokesman for the U.S. Trade Representative's office.

They are also the first face-to-face meetings between U.S. and Chinese textile trade officials since Commerce Secretary Carlos Gutierrez said last week the United States could seek a comprehensive textile trade agreement with China.

The Bush administration is still consulting with Congress and industry groups on that issue and has not made a final decision yet, Stubbs said.

Meanwhile, Chinese President Hu Jintao is expected to meet with President Bush near the time of next month's United Nations General Assembly meeting in New York.

U.S. textile groups want a deal with Beijing that would eliminate the need for them to file petitions asking the Bush administration to impose emergency import curbs, as World Trade Organisation rules allow through the end of 2008 under the terms of China's entry nearly four years ago.

Imports from China in many key clothing categories have already hit the ceilings set earlier this year by the Bush administration.

The European Union and China reached a textile agreement in June covering 10 categories of clothing and textiles through 2007. However, European retailers are already pressuring Brussels to reopen the pact to allow more sweaters in.

China's economy to grow by 9% in 2005

BEIJING, Aug. 16-- The World Bank said Tuesday China's economy is expected to grow by 9 percent in 2005, and about 8 percent in 2006.

In its quarterly update on the country's economy, the China mission of the World Bank said the economic outlook for China "remains good" in a stable macroeconomic environment and with favorable financial conditions.

"We now project (China's) GDP (gross domestic product) growth of 9 percent in 2005, and about 8 percent in 2006," the bank said in the report released in Beijing Tuesday.

The bank based the projection partly on global economic factors, saying the growth in world economic activity and trade is projected to slow during the rest of 2005.

"World trade growth is now expected to slow from 12 percent in 2004 to 6.4 percent in 2005, which is likely to affect China's export growth."

China's exports will also be affected "somewhat by the modest revaluation of the RMB (the Chinese currency)" and the recent measures designed to discourage exports of "highly energy intensive products" including the cancellation of rebates to exporters of VAT (value-added tax) on aluminum and steel, the bank says.

"Domestically, investment growth is expected to ease, reflecting the moderation in credit growth since the first half of 2004 and the more recent reduction in profitability and profit growth

Price pressures are projected to ease. International raw material prices are generally easing, with the important exception of oil (energy) prices, according to the report.

Based on past patterns and the World Bank's international commodity price projections, increases in China's raw materials prices are expected to decline from 9.6 percent year-on-year in the second quarter to 7.3 percent in the fourth.

In addition, continued rapid productivity increases in China's manufacturing industry put downward pressure on prices, the report says, adding that the recent revaluation of the Chinese currency will help ease imported inflationary pressures somewhat.

According to the bank, China's domestic demand is slowing down.GDP growth remains high due to a large contribution of external trade as exports continued to power ahead while imports decelerated significantly.

"Net of external demand, the GDP numbers suggest that a slowdown in domestic demand is under way."

"Slower credit and profit growth, lower FDI (foreign direct investment) and modest growth in machinery and equipment imports are pointing to a further slowdown in investment to a more sustainable pace in the period ahead."

The change in the exchange rate system and the accompanying revaluation may further slow domestic demand, but the impact on the trade balance is likely to be limited, the report says.

The bank suggests China's macroeconomic policy makers should remain alert to the possibility that risks materialize, for now the focus could be more on the structural issue of rebalancing growth.

The rebalancing would be away from the relatively volatile export and investment-based growth to more stable consumption-based growth, it says.

"Measures in social security and shifting government spending away from investment towards health, education, and social safety could help increase consumption's share in GDP, policies that would also help in redressing the surpluses on the current account."

To maintain growth and employment creation as consumption increases, however, more efficient investment as well as a shift of investment to services is needed, it says.

"Financial sector reforms, better corporate governance, and a dividend policy for state enterprises could be measures towards that goal."

Monday, August 15, 2005

China premier under fire over rising medical costs - Benjamin Kang Lim

Chinese Premier Wen Jiabao, under fire from political rivals over the disintegration of medical welfare, has pledged to expand a pilot program that provides subsidized care to rural residents, sources and state media said.

The vow came days after a 42-year-old farmer with terminal lung cancer set off a home-made bomb aboard a bus in the southeastern province of Fujian in a suicide attack one political source said was linked to his inability to afford treatment.

Wen chaired a cabinet meeting on Wednesday which decided to accelerate the two-year-old pilot program and expand it to cover 40 percent of rural counties nationwide by 2006 from 21 percent now, the official People's Daily reported on Thursday.

Cingular, RadioShack to team up

Cingular Wireless LLC and RadioShack Corp. are expected to announce a 10-year deal Monday that will put Cingular into more than 5,000 RadioShack-owned stores in the United States.

RadioShack, which currently sells Verizon Wireless and Sprint products through its retail stores, would become Cingular’s largest distribution network when the agreement goes into effect in the first quarter of 2006.

The agreement is expected to boost RadioShack’s lagging wireless sales. Company officials blamed weakness in RadioShack’s wireless business July 19 when they reported a 23 percent decline in net income for the second quarter.

Cingular will also get a needed lift as it fights to stay in the lead among U.S. cellular phone companies. Cingular claims 51.6 million subscribers on June 30, ahead of No. 2 Verizon with 47.4 million, but its lead over Verizon has been shrinking.

Cingular operates 2,300 company-owned stores and kiosks, sells its postpaid products in 5,100 retail stores owned by others and is sold through 15,000 authorized agent locations.

Cingular is expected to sell both postpaid services – the more common type of cellular services with annual and two-year contracts – and prepaid services through RadioShack. RadioShack will sell Cingular’s entire line of phones and other products.

RadioShack chief executive officer David Barnes had confirmed the company’s previous guidance for 2005 earnings at a conference call with analysts July 19. However, he left hints that changes could be in store with its wireless partners.

“Note also that our full year outlook does not reflect any potential impact of changes in our relationships with our wireless carrier partners,” Mr. Barnes told analysts. “Both of our existing agreements are up for review within the next 12 months. discussions with carriers are underway.”

There was no immediate word about RadioShack’s plans for Sprint and Verizon, although it may be cutting its Verizon arrangement. Adding Cingular gives RadioShack a chance to sell wireless service based on the global GSM technological standard, along with the CDMA standard used by both Verizon and Sprint.

Cingular officials have been promising to improve Cingular’s distribution system as it works through the merger of its nationwide sales network with that of AT&T Wireless, the rival it bought last year.

The deal with RadioShack “builds on Cingular’s already-strong distribution system,” Cingular president and CEO Stan Sigman said.

“RadioShack brings a nationwide network of stores and a team of knowledgeable and helpful salespeople with an unparalleled understanding of wireless products. Cingular is looking forward to leveraging these new sales channels to grow our business and serve our customers,” he said.