Economy of China - Literature review Example

China is the worlds most populous country, with a continuous culture stretching back nearly 4,000 years (Country profile, BBC). China started to comeup economically in the 1950’s. According to Jinglian, W (2006), the current Chinese economic reforms have resulted in significant progress in the last twenty years. In the early 1980s China, dismantled collective farming and allowed private enterprise again. Jinglian, W (2006) continues to say further that, now it is one of the worlds top exporters and is attracting record amounts of foreign investment. Further, it is investing billions of dollars abroad. As a member of the World Trade Organization, China benefits from access to foreign markets. In return, as Book review (2007) puts it, China must expose itself to competition from abroad. But relations with trading partners have been strained over Chinas huge trade surplus and the piracy of goods. The former has led to demands for Beijing to raise the value of its currency, which would make Chinese goods more expensive for foreign buyers and, in theory, hold back exports (Country review, BBC). Some Chinese fear that the rise of private enterprise and the demise of state-run industries carry heavy social costs such as unemployment and instability. Moreover, the fast-growing economy has fuelled the demand for energy. China is the largest oil consumer after the US, and the worlds biggest producer and consumer of coal (Energy, 2007). The country spends billions of dollars in pursuit of foreign energy supplies. There has been a massive investment in hydro-power, including the $25bn Three Gorges Dam project (Energy, 2007). The economic disparity between urban China and the rural hinterlands is among the largest in the world. Many impoverished rural dwellers are flocking to the countrys eastern cities, which are enjoying a construction boom (Society, 2007). Social discontent manifests itself in protests by farmers and workers as it has been seen in recent days. For example, there were 87,000 protests in 2005, according to official figures (Zhai Kun, 2007). Meanwhile, tens of thousands of people travel to Beijing each year to lodge petitions with the authorities in the hope of finding redress for alleged corruption, land seizures and evictions. Corruption has been so rampant in China. This has been brought to the limelight following the execution of quality assurance chief over corruption allegations. This has been fuelled as the BBC puts it by the Chinese officials need for mistresses. Other pressing problems include the growing rate of HIV infection. A downside of the economic boom has been environmental degradation. China is home to many of the worlds most-polluted cities (Barnes, 2004). The rate of economic change hasnt been matched by political reform, with the Communist Party which is the worlds biggest political party, retaining its monopoly on power and maintaining strict control over the people. The authorities still crack down on any signs of opposition and send outspoken dissidents to labour camps (Country profile, BBC). Chinas media are tightly controlled by the countrys leadership. The opening-up of the industry has extended to distribution and advertising, not to editorial content. Beijing tries to limit access to foreign news providers by restricting rebroadcast and the use of satellite receivers, by jamming shortwave radio broadcasts, including those of the BBC, and by blocking web sites. Ordinary readers have no access to foreign newspapers. After stagnating for more than two decades under the rigid authoritarianism of early communist rule, China now has the worlds fastest-growing economy and is undergoing what has been described as a second industrial revolution. China is undergoing a very tremendous process. Next year, they will be staging Olympics although it has been dogged by misunderstandings. Further, China’s political leadership embraces the creation of alliances. This is evident from the way they are relating with Australia. Also, as Zhai Kun, (2007) puts it, China continues to influence what is happening in Asia Pacific. But of late, the political leadership China is experiencing some problems emanating from Darfur due to its political and economic relationship with Sudan. As an example, China and Australia are in good relationship. According to Mark Vaile, (2003), the signing of the Australia-China Trade and Economic Framework is another important milestone in the Australia-China relationship. He continues to say that, "The new Framework reflects the Governments strong commitment to further trade and investment linkages with Australia as well as strengthening the political wellbeing.  "China has made tremendous progress toward establishing a fully fledged market-based economy and has emerged as an important regional and global economic player.  Australia’s commercial relationship with China is expanding more rapidly than with any other major trading partner. Further, Australia-China two-way merchandise trade has almost trebled since 1996-97 to be worth in excess of $22 billion in 2002-03," (Mark Vaile, 2003). Technology, in all its form, has had impact virtually on every one. It is the driving force in all the world economies today. The information technology-related developments of the last half of the 20th century have caused a revolution in every sector of the economy in all the countries (Braunch, & Zein, 1997). Today, as a result of societys conversion from the Industrial to the Information Age, the adopters of these technologies have been able and compelled to conduct their businesses, work, education, and leisure time differently than previous generations (Mailu, 1996). Specifically, it is the use and integration of the modern information and telecommunications technologies into all aspects of peoples daily lives that have been the genesis of so much change (Mailu, 2000) The pace of this revolution and the technology-related process of change have been relentless. Consequently, it has generally been difficult to assess, much less plan, how best to cope with, adapt and adjust to, or get the most out of all that the information technology (IT) revolution has to offer. Moreover, some sectors of the economy have embraced the IT revolution (Mailu, 2000). In Information, communication technology and e-commerce, the two countries have had nice linkages which have so far been ethical, legally binding and which are taking them a notch higher in this world of competitions. ICT and E-commerce are vitally important to Australians and the Chinese. E-commerce, like the IT industry, has major implications for every business, institution, and organization. This sector is actually a diverse network that deals with or support one or more aspect of business. This vast network employs an estimated one in every 11 workers in china (Mailu, 2000). The people and entities make up the system may be connected via the IT infrastructure to other supporting agencies as well as the array of practitioners that play important roles and serve every segment of society either directly or indirectly (Mailu, 2000). For example, a recent report for the Robert Wood Johnson Foundation by the Institute for the Future concluded that "the changes in information technology will continue to be one of, if not the, prime catalyst of change over the next 10 years" (Mailu, 2000).. This is health in that, the kind of co-operation nowadays is about both parties benefiting and not one of them benefiting economically. Their are several significant reason as to why they are going forward in the ICT arena. As an example, despite all of the internal and external forces that are driving the sectors toward the electronic reinvention of the industry, relatively more research is being conducted in the areas that focus on the issues and barriers to the acceptance and diffusion of IT by practitioners (Braunch, & Zein, 1997). In general, the effect of Chinas booming economic growth is being felt all over the world and is catapulting the country into the limelight. This is not going down well with the other world developed countries e.g. the United States has had complains that consumer goods emanating from the communist state of China are not of the right quantity (sub-standard). Despite, all these, the country is evidently shrugging off the issues and forging forward although it is true that the verification of the good by the Chinese bodies is not up to expectations. This may in the long run affect the growing influence of the country thus the need for good measures. Works cited Book review. Third Quarter (2004). Religion, Economics & Politics in China retrieved 12 September, 2007, from http://www.chinaeconomicreview.com Brauch, et al., (1997). Technology in the modern world. Longhorn retrieved 12 September 2007, from http://www.currentnews.com Country profile. The BBC retrieved 12 September, 2007 from http://www.bbc.co.uk/asia-pacific/china Corruption (2007). Corruption in China retrieved 12 September, 2007, from http://www.chinaeconomicreview.com Energy (2007). US, China to collaborate on Energy efficiency retrieved 12 September, 2007, from http://www.chinaeconomicreview.com Mailu (2000). Technology in China retrieved 12 September, 2007, from http://www.most.goc.cn Mark Vaile, (2003, October 24). Media release. Retrieved 12 September, 2007, from http://www.trademinister.gov.au Society (2007). Vatican approves new Chinese bishop retrieved 12 September, 2007, from http://www.chinaeconomicreview.com Security (2007). China Southern invests in China retrieved 12 September, 2007, from http://www.chinaeconomicreview.com Zhai, K (2007). China Plays a big role in Asia-Pacific Tie retrieved 12 September, 2007, from http://www.chinaeconomicreview.com Appendix 1 Chinas Economic Reform: Past, Present and Future  Jinglian WU Perspectives, Vol. 1, No. 5 Achievements and Problems The current Chinese economic reforms have resulted in significant progress in the last twenty years. An important sign of these progresses has been the diminishing importance of the state sector. Formerly the state sector dominated the Chinese economy. Today, the proportion of the state sector in overall economy has decreased sharply. (See tables 1 and 2 below.) Before us unfolds the embryo of a market economy based on a mixture of ownership forms. Table 1: Composition of National Industrial Output (%)  ---------------------------------------------------------------                            1978 1985 1990 1999  State-owned        77.6    65  54.6 28.5  Collective-owned 22.2   32  35.6 38.5  Private                 0.2     3    9.8 33.0  ---------------------------------------------------------------  Source: Statistical Yearbook of China; China Economic Information Network (www.cei.gov.cn), January 31, 2000. Table 2: Composition of National Retail Sales (%)  ---------------------------------------------------------------                            1978 1985 1990 1999  State-owned        54.6    41  39.5 24.3  Collective-owned 43.3    37  31.7 18.2  Private                  2.1   22  28.8  51.5  ---------------------------------------------------------------  Source: Statistical Yearbook of China; China Economic Information Network (www.cei.gov.cn), January 31, 2000. Along with the change in ownership forms, the Chinese economy has grown rapidly over the last twenty years. Chinas status in the international economic and trading system is also steadily advancing. These achievements have gained international recognition. On the other hand, the achievements of Chinas economic reforms are still limited. If we look at the mechanism of economic resource allocation, the major obstacle to reform still has not been overcome. The Fourteenth National Congress of the Chinese Communist Party (CCP) has clearly pointed out that the nature of the economic reform is to change the mechanism of resource allocation, so China can move from a planned economy to a market economy in which the market plays a critical role in the allocation of resources. Presently, although the state sector produces only about one third of overall GDP, it is still the major user of scarce economic resources. Reform of state-owned enterprises (SOEs) has been far from satisfactory, and the old system maintains its influence and continues to impede the establishment and perfection of the new market economic system. Therefore, we cannot say that the market has started to operate as the primary allocator of economic resources. For example, the state sector, although contributing to only one third of Chinas GDP, consumes two thirds of the countrys capital resources. The failure to carry out market-oriented reforms has been the major factor in the generation of many economic and social problems in China. For instance, the problem of "repetitive construction" has generated a great deal of official attention and public discussion. At the root of the problem is the failure to reform the state sector in a fundamental way. To date, capital resources are still largely allocated by the government through administrative fiat. We can see such problems in many other areas as well. For example, the inefficiency of the state sector leads to a vulnerable monetary system. In another example, the sluggishness of the market is partly the result, from the supply side, of the malfunction of SOEs and the unfavorable environment for non-state-owned enterprises. I also want to mention agricultural problems that seem to be irrelevant to industry and commerce. How can we pull the farmers out of poverty? According to development economics, the key to solving this problem is to transfer the 150 to 200 million excess laborers in rural areas to non-agricultural sectors. Nevertheless, during the last ten years of our reforms, there appears to have been a suspension or even reversal of such transfers. For example, the number of farmers in rural areas not only did not decline but actually increased significantly in recent years. This is because the rate of new labor absorption in SOEs has turned from positive to negative. In addition, some township and village enterprises in the inner provinces have become paralyzed or even defunct, and some cities have also started to send peasant workers back to the countryside. The crux of the problem is that SOEs lack entrepreneurial vigor, while the vigor of the non-state-owned sector has not yet been brought into full play. There are two aspects to the problem. On the one hand, the reform of state-owned enterprises and the restructuring of the state sector are proceeding at a slow pace. On the other hand, the non-state-owned sector has not had a chance to develop fully. So why is there such a situation? I think the reason lies in the core of the old state-owned economic system as reflected in the concept of "state syndicate," proposed by Lenin in his State and Revolution. The key feature of the old system is the unification of the three entities -- the party, the government and the economy. The interest relationship arising from this unification is deeply rooted and complicated. Some people, particularly the social and political elites, have tremendous interest in maintaining the old system. If those people with vested interests in the old system cannot regard the interest of the entire society as of primary importance, they will use all kinds of excuses, including political ones, to hinder the progress of reform and restructuring. As such, the reforms face enormous resistance. Reformers of the Eastern European countries, when assessing their past experience, point out that one of the most important reasons why their reforms were unsuccessful or abandoned halfway was the insurmountable resistance that they encountered when they tried to reform the state sector. I recently went on a trip to Hungary. Our Hungarian friends, including those reformers with whom we have been familiar since the 1980s, told me about their sad experiences. One must wonder why, by the 1980s, the Hungarians could not continue their economic reforms which once looked promising. Apparently some top party and government leaders hindered the reform of SOEs and suppressed the development of the non-state sector with their political power. By granting subsidies, loans and other preferential treatment to the old system, these leaders maintained and reproduced the unity of the party, the government and the economy. In the same way as the Eastern European countries, China also encountered enormous difficulties and resistance in reforming its state sector. In the second half of the 1980s, our central government, under the guidance of Deng Xiaoping, attempted to shift the strategic focus of the reform from the countryside to the cities, and from the non-state sector to the state sector. In 1984, the Third Plenum of the Twelfth CCP National Congress promulgated the well-known Decisions of the Central Committee of the Chinese Communist Party on Economic Reform. However, these decisions were not implemented smoothly, and in 1987, the implementation completely stopped. Breakthroughs and Retreats Since Deng Xiaopings trip to the south in 1992, Chinas reform has seen significant breakthroughs in both theory and policy. Subsequent to the Fourteenth CCP National Congress which set the goal of market reform in 1992, the Third Plenum of the Fourteenth CCP National Congress marked the shift of the economic reform from a "quantity growth reform" to an "overall advancement." At the same time, in order to establish the framework of a socialist market economy by the end of the 20th century, the Third Plenum highlighted the importance of reforming the SOEs in addition to macroeconomic reforms of taxes and finance. In the past, due to excessive emphasis on SOE deregulations rather than the restructuring of SOEs, the SOE reform was not effective. For some SOEs, not only did managerial and financial conditions not improve, the situation actually worsened. In view of this situation, the Third Plenum concluded that the direction of the SOE reform should not be deregulation; instead, it should be institutional innovation. After the Third Plenum, we started, on a trial basis, to establish the modern corporate system in some SOEs. People soon discovered, however, that it is very difficult to convert SOEs into modern corporations as long as the state sector remains dominant and the government maintains control over a overwhelming majority of corporations. Therefore, a plan was proposed to open and revitalize small SOEs and to adjust strategically the structure of the state sector. Based on past experience, the Fifteenth CCP National Congress in 1997 and the Fourth Plenum of the Fifteenth CCP National Congress in 1999 made a series of theoretical innovations and policy resolutions on SOE reforms. The Fifteenth CCP National Congress rejected the Soviet-style view that the quality of the socialist state was proportional to the size of the state sector, and that the more SOEs, the better. The Fifteenth CCP National Congress clearly stipulated that the basic economic system at the initial stage of socialism is a core of public ownership complemented by other forms of ownership. The Congress called for adjusting and perfecting the ownership structure of SOEs and establishing a long-term economic system based on the principle of "Three Benefits." This policy includes three parts. First, the domain of the state sector shall be narrowed. State capital should withdraw from fields irrelevant to the state economic lifeline. Secondly, we shall develop multiple forms of public ownership that can help us improve productivity. And finally, we shall encourage the development of the non-public sector such as private enterprises so as to make it an important part of the socialist market economy. The Fifteenth CCP National Congress modified the guiding principle of reform from revitalizing SOEs and the state sector, to developing multiple forms of ownership structure. As Lenin put it, "the way we look at socialism has completely changed." In the following four aspects, the Fourth Plenum of the Fifteenth CCP National Congress solidified the policies of SOE reform and state sector adjustment laid out by the Fifteenth CCP National Congress. First, four industries are to be under state control. These industries involve national security, natural monopoly, important public goods and services, and key enterprises of high technology. This gives the state sector a definite set of boundaries. Secondly, except for a few enterprises that require a state monopoly, others shall diversify their share ownership. The entry of non-state shareholders will be very beneficial to the improvement of corporate governance. Thirdly, not only did the Fourth Plenum repeat the policy of revitalizing small SOEs as stipulated by the Fifteenth CCP National Congress, but it also expanded the policy to cover medium SOEs. The small and medium SOEs, most of which are presently in straits, constitute more than ninety percent of all SOEs. To revitalize them will not only help relieve local governments at various levels but also inject vigor into various industrial and commercial sectors. Finally, all companies are required to set up modern corporate governance structures and ensure that there is a system of checks and balances between shareholders and senior managerial staff. Some corporations established during the "modern corporate system experiment" in the last several years exist only in name. The crux of the problem is that these "corporations" do not have in place an effective corporate governance structure and a system of checks and balances between the owners of the company and the managers. The requirements laid down by the Fourth Plenum of the Fifteenth CCP National Congress will aid SOEs in establishing efficient systems of corporate governance. The above plans, we should say, elucidate clear ideas and correct principles for our reform. The question now is implementation. In recent years, however, there has been a disturbing trend in which some people in charge neglect economic restructuring and enterprise reform, and fail to focus on establishing a new ownership structure and an efficient corporate governance system. Instead, these people are merely relying on "guanxi" for enterprise and ultimately personal gains. For example, in response to the declining demand resulting from the East Asian Financial Crisis, the Ministry of Finance is mobilizing RMB 300-400 billion investment funds each year through government bond issuance and tax increases in an attempt to increase demand and stimulate economic growth. Although it is necessary to use fiscal instruments to cope with economic cycles, this approach will lead to various micro- and macro-repercussions if it evolves into a solution for rescuing SOEs in the long run. First, the "crowding out" effect will eventually lead to heavier tax burdens, and the dependence on government fund maneuvering will hinder the improvement of economic efficiency. Secondly, this approach in the long run will place an unbearable burden on the governments fiscal coffer or even cause economic and social unrest. Finally and most importantly, if SOEs continue to rely on government funding and ignore restructuring and reform, the old system will be reproduced and strengthened. Appendix 2. from The bbc.co.uk/asia-pacific/china Country profile: China China is the worlds most populous country, with a continuous culture stretching back nearly 4,000 years. Many of the elements that make up the foundation of the modern world originated in China, including paper, gunpowder, credit banking, the compass and paper money. After stagnating for more than two decades under the rigid authoritarianism of early communist rule under its late leader, Chairman Mao, China now has the worlds fastest-growing economy and is undergoing what has been described as a second industrial revolution. Appendix 3 Third Quarter, 2004 A Book Review Religion, Economics, and Politics in China More than 100 leaders of the China Gospel Fellowship were arrested on June 11 while on a retreat near the city of Wuhan in Hubei province, according to the China Aid Association, headquartered near Philadelphia (http://www.chinaaid.org). The arrests were part of the Chinese governments attempt to clamp down on unauthorized house church gatherings. Religious gatherings are not the only illegitimate meetings. Students meeting privately in 2000 to discuss Chinas political future were reported by one among them to the Ministry of State Security. Today, four of those students are in prison. Philip P. Pan, writing in the Washington Post (4/23/04), says that "15 years after the Tiananmen Square massacre and 13 years since the fall of the Soviet Union, the Chinese Communist Party is engaged in the largest and perhaps most successful experiment in authoritarianism in the world." At the same time, China is now a highly regarded economic power, treated with respect by nations throughout the world, including the United States. Jacques deLisle, writing for the Foreign Policy Research Institute (6/4/04--http://www.fpri.org--"Fifteen Years After Tiananmen"), says, "Chinas international standing has escaped from the pariah status endured by the Butchers of Beijing after June Fourth [1989] .... A decade and a half later, almost all nations diplomacy toward the Peoples Republic gives little attention to the Chinese regimes suppression of the popular movement in 1989 .... Resolutions criticizing Beijings human rights record gain little attention in Geneva." How can we make sense of these developments, which include a growing economic market system in China coupled with repressive government action toward religious and political freedom? Can the apparent contradiction and inner tension long survive? A new book (2004) from The Brookings Institution in Washington, D.C. can help us here. It is God and Caesar in China: Policy Implications of Church-State Tensions, edited by Jason Kindopp and Carol Lee Hamrin. Kindopp was a Civitas Fellow at Brookings when he organized the conference that led to this book. Through Civitas and the Center for Public Justice, Kindopp met and teamed up with Hamrin, a veteran China expert at the State Department (now retired), who received the Centers Leadership Award in 2003. The book has three parts: (1) Chinas state policy to control religion, (2) church-state interaction, and (3) religion in U.S.-China relations. The nine contributors include both Chinese and western experts who reach widely and deeply into Chinese history and contemporary experience. Kindopp explains in the introduction that the Chinese "policy framework established after 1978 provides limited space for religious believers to practice their faith but also calls for comprehensive control measures to prevent religion from emerging as an independent social force." This is the tension at the heart of authoritarian government. "Religious faith commands an allegiance that transcends political authority, whereas the Communist Partys enduring imperative is to eliminate social and ideological competition." House churches and resistance groups like Falungong appear to be growing, which leads in turn to the governments reaction with greater repression. In the books concluding chapter on advancing religious freedom in a global China, Hamrin presents a brief history of recent U.S.-Chinese relations and of how the two countries perceptions of one another have changed, particularly with regard to the importance of religion in a societys development. Many American leaders and human rights experts are recognizing that religion cannot be treated as an irrelevant private matter off to the side of the more important and supposedly secular political and economic affairs. For their part, Chinese leaders are beginning to recognize that if they want a growing, competitive economy, they will have to be careful about their education and social policies so as not to discourage the best and the brightest, making it impossible to reverse the brain drain and to attract professionals from overseas. Religious freedom is a crucial ingredient here. China, says Hamrin, will also "need to spur the growth of its third sector, the nonprofit sector, including domestic and international faith-based organizations, to gain more resources for development." Hamrin, who has studied lower levels of leadership in China, urges U.S. policy makers not to focus only on the top leadership, because change is not going to come from the top alone. "There is rapid change beneath Chinas surface appearance of rigid authoritarianism; younger officials and policy advisers are interested in new approaches to modern, accountable, and nonideological governance." Working at lower levels and with economic and nongovernment groups can have a big long-term impact. Americans need to develop a new consensus on how to deal with China, no longer segregating religious from economic and political concerns. By strengthening multiple levels of cultural, economic, and political engagement with the Chinese, Americans and others committed to religious freedom and human rights may be able to influence China in constructive ways that can help China to address its own tensions and not merely to react to outside demands. Appendix 4: China Southern invests in overseas equities (www.chinaeconomic review) Securities 13 September 2007 Investment management company China Southern Fund Management raised US$6.6 billion for an overseas equity fund Wednesday, becoming the countrys first fund to invest in overseas equities, the Financial Times reported. The fund is part of government plans for Chinese investors to put money into international markets. Analysts predict individual overseas investments for mainland Chinese could total in the hundreds of billions of US dollars over the next decade. The fund will invest in Hong Kong and US markets, then expand. "This is the first real sign of Chinese retail demand for foreign assets. But there will be much, much more to come," said Peter Alexander at Z-Ben Advisors, a fund management consultancy in Shanghai. Appendix 5 US, China to collaborate on energy efficiency Energy 13 September 2007 Energy officials from the US and China signed a memorandum of understanding today to improve industrial energy efficiency, Bloomberg reported. Under the agreement, the US will send officials to China to train local authorities in identifying wasted energy and installing energy-saving systems before the end of the year. Encouraging China to adopt energy-saving technologies may cut global warming pollution and provide a sales opportunity for American makers of efficient equipment such as motors and boilers, said Karen Harbert, assistant secretary for policy and international affairs at the US Department of Energy. US government reports show that China will consume more energy than the US by 2030. Appendix 6 Vatican approves new Chinese bishop Society 13 September 2007 Bishop Paolo Xiao Zejiang was ordained in southern China by the countrys official Catholic church with the approval of the Vatican Saturday, the Financial Times reported. Xiaos ordination was attended by "underground" bishops and priests, in what is being seen as a tentative step toward between the state-sponsored and underground Catholic churches in China. On Sunday, underground bishop Han Dinxiang died after spending 35 years in prison in Hebei province and was given a secular burial. In June Pope Benedict XVI wrote a letter urging followers of underground and official churches to move beyond decades of animosity and distrust. Diplomatic ties between the Peoples Republic of China and the Vatican were severed in 1951. Appendix 7 China sets up national bureau of corruption prevention www.chinaview.cn 2007-09-13 09:43:13   Print     BEIJING, Sept. 13 (Xinhua) -- China announced here Thursday the establishment of the National Bureau of Corruption Prevention (NBCP).     "The founding of the bureau is to meet the need to effectively prevent corruption in China," said bureau head Ma Wen at a press conference Thursday.     Ma, who is also Minister of Supervision, said the bureau will focus on supervising and regulating the use of power and adopt effective measures to prevent the abuse of power.     She said the bureau will study ways to stem corruption at their roots, constantly improve corruption prevention systems, push for the sound operation of these systems and coordinate corruption prevention efforts of various departments.     The new bureau will report directly to the State Council, or Chinas cabinet.     "The bureau wont step in the investigation of individual cases as it doesnt have the power," said Qu Wanxiang, deputy head of the bureau.     Qu said the bureau has been assigned the task to push forward transparency of government information at various levels, which he said is the way to "prevent corruption at its root".     The NBCP will also evaluate loopholes in new policies that may give rise to corruption and study countermeasures.     It will also push for sharing information among the prosecutors, police, banks and courts and the NBCP.     "The NBCP staff will collect and analyze information from sectors including banks, land use, medicine and telecommunications and share it with other departments," Qu said.     He said this is an important basic job for finding and exposing corruption as early as possible, a deterrent to corruption activities and an effective way to prevent corruption.     The bureau is also tasked to inspect corruption prevention work at various levels, conduct pilot projects and develop a set of standards to judge whether a department or an official is clean.     Qu said the bureau will guide the anti-corruption work in companies, public undertakings and non-governmental organizations, help trade associations to establish self-discipline systems and mechanisms, prevent commercial bribes, and extend corruption prevention work to rural organizations as well as urban communities.     "Corruption not only happens among civil servants in government departments, but also among employees in private sectors and other organizations," he said.     The bureau will also engage in international cooperation and international aid in corruption prevention, according to Qu.     The bureau will, under the framework of the United Nations Convention Against Corruption, offer help to developing countries on corruption prevention and work to win technical support and other sorts of help from foreign countries or international organizations, Qu said.     He said the bureau will learn from the anti-corruption experience of foreign countries and would like to exchange information with international organizations and other countries.     China punished 16 ministerial-level or higher officials for "serious corruption" in the last five years. Appendix 8 China plays big role in Asia-Pacific ties By Zhai Kun (China Daily) Updated: 2007-09-13 07:34 President Hu Jintao over the weekend attended the Asia-Pacific Economic Cooperation (APEC) meeting. This was the fifth time that Hu has attended an APEC meeting, which shows the particular importance given to it by the Chinese leadership. Chinas extensive and active involvement in regional cooperative mechanisms such APEC is considered by some Chinese and foreign strategists as an integral and successful part of its grand strategy. A host of factors explain why APEC is important to China. First, APEC members territories cover Northeast Asia, Southeast Asia, North America, Latin America and Oceania, which embrace the vast Pacific Ocean on all sides. And its 21 members boast pluralistic economies and cultures. Moreover, it is possible that South Asian economies will be included in the future. Second, APEC, founded in 1989, has the longest history among various dialogue mechanisms in the Asia-Pacific region. Third, APEC often sees the attendance of the highest level of leadership at its sessions. This facilitates exchange and communication at the highest level. Fourth, much emphasis is placed on the equality of organizing APEC meetings. The meetings are hosted by members in rotation. This helps bring the hosting members initiatives into play. However, many researchers and officials believe that APEC has as many shortcomings as strong points. First, they argue, more and more cooperative mechanisms are being introduced in Asia, which impact on APEC. Prominent among these emerging mechanisms, for example, are the East Asia Summit and the 10 plus 3 dialogue between the Association of Southeast Asian Nations on the one hand and China, Japan and Republic of Korea on the other, which are believed to be working to undercut the influence of APEC. Second, the number of APEC members is snowballing. When APEC was founded in 1989, there were only 12 members but today it boasts 21. Now that the end of its second decade in existence is nearing, it means the time has come to enlist more members. At present, some big players like India is applying for APEC membership. Third, APECs initial targets are being stretched to cover much wider areas. For example, APEC was initially defined as an economic cooperative forum but is now increasingly oriented toward addressing security matters. Fourth, the number of APECs topics for discussion keeps on increasing and various kinds of ministerial meetings and working conferences follow one after the other in quick succession. To compound this, new proposals from different fields keep pouring in. While the large number of topics are yet to be fully discussed and implemented, more new topics are flooding in. Fifth, the slow progress of APEC does not live up to peoples expectations of the organization. Many scholars think APEC is anteroom for idle talk, rather than a venue where substantial results can be achieved. Sixth, regional cooperation in Europe, America and Asia has entered into a period of stock-taking and readjustment, APEC is naturally affected. In view of all this, APEC may be haunted by inherent contradictions. This author, however, is of the opinion that China should try its best to propel the progress of APEC because the groupings wide-covering, loose-organizational structure, its equality, non-compulsory and voluntary principles, best suit the Asia-Pacific region. To begin with, APEC enables China to look at the world from a global perspective and, in turn, put forward its own ideas on the Asia-Pacific region. Top Chinese leaders have time and again stressed a win-win situation among Asia-Pacific countries and regions and that Chinas development means an opportunity for the grouping. They have also come up with ideas dealing with peaceful development, a harmonious Asia-Pacific and sustainable development, which have all gained acceptance. In addition, APEC serves as a platform for China to put forward its regional proposals. China has learned to promote mutual trust, clear doubts about its intentions, disseminate its ideas and promote cooperation among APEC members, taking advantage of the stage provided by APEC. For example, Hu at this years APEC meeting, put forward proposals for resolving important issues concerning the worlds sustainable development. Also, the Sydney declaration adopted at the meeting, incorporates Chinas initiatives on forest renewal and management network. This shows that Chinas initiatives have become an Asia-Pacific consensus. Finally, APEC offers China a platform through which it can help orchestrate the working of various regional cooperative mechanisms. China and the United States are both APEC members. But the latter, in the face of the rise of East Asian cooperation, is worried that it could be sidetracked in this region and, therefore, suggested the establishment of an Asia-Pacific free-trade zone, at last years APEC gathering. But many, including WTO secretary-general Pascal Lamy, believe the founding of an Asia-Pacific free trade zone is premature at the present time. Hu remarked at the APEC meeting that the establishment of an Asia-Pacific free-trade zone is a long and gradual process, with many questions needing to be studied, and China is willing to work together with other APEC members toward Asia-Pacific economic integration, including studying the perspective of an Asian-Pacific free-trade zone. This makes clear Chinas attitude toward the Asia-Pacific free-trade zone: It is not realistic at present but China is willing to work for its materialization in the long run. Hu suggested that common development was Chinas goal in its participation in Asia-Pacific cooperation. China, therefore, should work closely together with other APEC members on this in order to bring Asia-Pacific cooperation into full play. The author is a researcher with China Institute of Contemporary International Relations (China Daily 09/13/2007 page10) Appendix 9 Australia-China Relationship The diplomatic relations between China and Australia were established on December 21,1972, bilateral relations have been by and large developing smoothly. The two Governments agree to develop their diplomatic relations, friendship and cooperation between the two countries on the basis of the principles of mutual respect for sovereignty and territorial integrity, mutual non-aggression, non-interference in each other’s internal affairs, equality and mutual benefit, and peaceful coexistence. Leaders of the two countries have maintained frequent exchanges of visits and contacts. The two Governments agree to develop their diplomatic relations, friendship and cooperation between the two countries on the basis of the principles of mutual respect for sovereignty and territorial integrity, mutual non-aggression, non-interference in each other’s internal affairs, equality and mutual benefit, and peaceful coexistence. The Australian Government recognizes the Government of the People’s Republic of China as the sole legal Government of China, acknowledges the position of the Chinese Government that Taiwan is a province of the People’s Republic of China, and has decided to remove its official representation from Taiwan before January 25, 1973. The two Governments have agreed to exchange Ambassadors as soon as the administrative formalities and practical arrangements have been completed, and to provide each other with all the necessary assistance for the establishment and performance of the functions of diplomatic missions in their respective capitals on the basis of equality and mutual benefit and in accordance with international law and practice. The relationship between Australia and China is substantial and long standing - this year marks the 25th anniversary of the establishment of diplomatic relations. It extends well beyond burgeoning economic and political links to include an array of cultural, educational and extensive people-to-people contacts. Australia has very strong and growing economic ties with China, epitomized by the recent natural gas deal, was also evidence of the strong relations. The sustained economic growth not only tends to bring regional countries together, but it brings genuine benefits to the lives of people - both within their near region and in Australia itself. Three key aspects of the relationship which highlight Australia’s determination to make Australia bilateral ties with China even stronger: · the new avenues for expanded trade and investment; · our shared interest in more extensive political and security cooperation; · and the vital role that personal links and people-to-people contacts play in the relationship. Australia welcomes the increasing prosperity and dynamism of China and other parts of East Asia. It has great significance for regional stability and deeper economic cooperation Read More