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Week of November 3, 2000

Week of March 30, 2001

The U.S. and China This Week

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INTERNATIONAL: WTO Bid in Hands of E.U. and U.S., top Chinese Trade Official Says

SUMMARY: In an interview with the Washington Post, China’s top trade official said China’s entry into the World Trade Organization is in the hands of the European Union and the United States, and also expressed concern over the health of the American economy. Shi Guangsheng, the minister of foreign trade and economic cooperation, said what happens with China’s WTO bid is not up to China. “Can the United States and the European Union say when China will enter??he remarked. “They don’t have that answer. Neither do I.?#060;/font>

Shi said the most important issue blocking China’s entry into the WTO was multilateral negotiations on agricultural and
industrial subsidies that will occur this year in Geneva. Shi described China’s stance on agricultural subsidies as “very firm.?China desires that the WTO grant it status as a developing country, which would permit it to subsidize farm products 10 percent; the U.S. says China should count as a developed country, which would allow it to subsidize farm products by only five percent. Presently, China buys products from its farmers at well above the market price. Shi said China will only enter the WTO if it can “ensure that Chinese farmers will not become worse off.?#060;/font>

Shi maintained that China’s entry into the WTO will not have a dramatic impact on its economy either in the short or long term. He said while there would be big effects on uncompetitive sectors, China’s markets will alleviate the shock.

Shi also said he was concerned about the state of the American economy, remarking that in January and February American imports of Chinese clothes and toys went down and imports of computer and telecommunications products dropped 20 percent. He said he is “deeply concerned about the possible impact on China’s economy resulting from the slowdown of the U.S. economy.?Shi said, however, that no need exists for China to devalue its currency to aid exports.

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U.S.-CHINA RELATIONS: Chinese Colonel Defects to U.S.

SUMMARY: A Chinese colonel visiting the United States as part of a military delegation has defected, sources reported.
The delegation was reported by a Chinese source to have visited Canada and the U.S. at the end of last year. Another
Chinese source said the colonel defected while the delegation was in America in January. According to Chinese sources,
the colonel was a member of the foreign affairs department of the army’s general staff. A spokesman at the U.S. embassy
in Beijing said the Chinese government in December asked the U.S. government to locate an officer who disappered in
New York. The U.S. found the individual in good health and informed the Chinese government.

A source close to China’s intelligence services said the U.S. planned for the defection before the officer left China and
helped him vanish when the delegation came to the East Coast. The delegation then left when the U.S. government did
not cooperate in returning the officer. The source close to China’s intelligence services also said the U.S. Embassy in
Beijing arranged for the officer’s wife to go to a party at the embassy; she was then issued travel documents and came to

The source said China’s top military organization, the Central Military Commission, which is chaired by President Jiang
Zemin, convened a meeting on the defection. The People’s Liberation Army has since investigated hundreds of officers
who interact with foreigners to avoid another such occurrence. 

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U.S.-CHINA RELATIONS: President Bush Tells Diplomat U.S. Desires Good Relations With China

SUMMARY: In his first meeting with a high Chinese official, President George W. Bush stressed that the U.S. desires
good relations with China. A senior Bush administration official said Bush told visiting Vice Premier Qian Qichen in
their March 22 meeting that “I’m going to look you in the eye and tell you we can have good relations with China. I
want to lay the foundation for 30 years from now, taking a long-term view.?The official reported Bush added that
“Nothing we do is a threat to you, and I want to tell that to your leadership.?#060;/font>

The official said Qian “listened politely and carefully, and made no expression one way or the other.?According to the
official, Bush brought up the question of the recently arrested American University scholar Gao Zhan, and expressed
concern over the fact that Gao’s son was detained separately from his parents for almost a month. Qian was reported to
have replied that Gao may not have known she was breaking Chinese law. The official said China’s government will
look into the matter and get back to the U.S. “The president was firm about human rights,?the official stated.

Bush was said to have told Qian that U.S. plans for missile defense would not threaten China, and that he hopes to find
common ground with China, which also be threatened by weapons of mass destruction and missiles. Bush told
photographers before the meeting that “It is in our nations?best interests that we have good relations with China.?#060;/font>

Qian met the previous day with Secretary of State Colin Powell and told him that selling advanced weapons to Taiwan
would violate the 1982 U.S.-China joint communique. Powell responded by saying nothing has been decided and that
the U.S. will be guided by the 1979 Taiwan Relations Act on its arms sales to Taiwan, which says the U.S. should
provide Taiwan the weapons necessary for self-defense.

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          DOMESTIC: Suspect in Apartment Bombings Arrested

SUMMARY: The main suspect in the bombings of four apartment buildings in Shijiazhuang that killed 108 people has
been arrested and has confessed, Chinese media reported. Jin Ruchao, 41, was arrested March 23 in the town of Beihai
in Guanxi province, which is about 2,000 km (1,200 miles) from Shijiazhuang. Police said they captured Jin after he led
them on a chase on a motor bike.

Jin lived in the apartment building at the Number Three Cotton Mill, where he was dismissed for hooliganism in 1983.
Jin, who is deaf, is said to have committed the bombings in revenge for grudges against his step-mother, ex-wife, and
former neighbors, all of whom lived in the targeted buildings. It is unclear if any of them died in the blasts. Jin also
confessed to killing his girlfriend a week before the blasts, according to police.

There has been speculation that the bombings may have been carried out by angry workers. More than one million
textile workers have been laid off in recent years. The Hong Kong-based Information Centre for Human Rights and
Democracy has claimed that police have indicated that Jin has no knowledge of explosives. Police have said other
individuals may have been involved in the bombings.

A report in the People’s Daily claimed that Jin arranged bags with fertilizer, labeled them as “chicken feed,?and hired
drivers to put them near the four apartment complexes. He then used a taxi to go between the buildings to set off the

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U.S.-CHINA RELATIONS: A.U. Scholar Accused of Being Paid Spy

SUMMARY:  The American University scholar being held by the Chinese government, Gao Zhan, has been accused by
the Chinese Foreign Ministry of being a paid spy for overseas intelligence agencies. Previously, Vice Premier Qian
Qichen, had told U.S. President George W. Bush that Gao may have broken Chinese law without realizing it. But now
the Foreign Ministry has claimed she took money to spy for "overseas intelligence agencies." No specific nation was
mentioned, but the use of the term “overseas?likely excludes Taiwan. Gao was arrested February 11 while at the airport
to fly back to the U.S. after visiting relatives.

Gao’s lawyer, Jerome Cohen, who has extensive experience with China, said he was worried by the Foreign Ministry’s
accusations. “This suggests we may be in for a longer fight,?he said. Meanwhile, State Department spokesman Richard
Boucher said the allegations are groundless and urged China to release Gao to her family.

Cohen said the reference to taking money may refer to Gao’s role as treasurer of the Association of Chinese Political
Studies. That organization’s president, Chen Weixing, said the group is a non-profit independent academic organization
that gets most of its funding from foundations. He said the group receives nothing from the U.S. government, but has
received funds from other governments in the past, including from the Chinese Embassy in Washington, D.C. Chen said
his group uses its funds for an annual conference and infrequent symposiums. He maintained that other scholars are
concerned about visiting China because of Gao’s arrest.

Gao’s husband, Xue Donghua, and son Andrew were also detained for 26 days but let go. The Chinese government says
Andrew was put in a kindergarten with the consent of his parents. But Xue says he did not give such permission. He
said that he repeatedly asked to see his son or for his son to be sent to the care of relatives and the police responded by
trying to get him to incriminate his wife. Xue said his wife received research funds from American foundations. Gao’s
research is about centered around women’s and family topics.

Last week, President Bush and Secretary of State Colin Powell both asked Qian to have Gao set free.

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Taiwan Minister Approves Goal of Common Market with Mainland

SUMMARY: Taiwanese Economics Minister Lin Hsin-yi has approved forming a common market with the Chinese
mainland as a long-term goal. The suggestion was made by the opposition Kuomintang’s Vice Chairman, Vincent Siew.
Lin emphasized that before a common market is formed, other reforms need to be made, including the adjustment of the
current “no haste, be patient?policy on Taiwanese investment in the mainland, the opening of the “three links?of direct
trade, post and transport between Taiwan and the mainland, and elimination of various trade barriers.

Siew, a former premier, economics minister and chairman of the Mainland Affairs Council, has formed a foundation to
promote a common market with the mainland. Lin said while he is not opposed to the idea, direct personnel,
merchandise and currency exchanges need to be developed before that goal can be achieved.

Lin will represent Taiwan at the June 6-7 Asia-Pacific Economic Cooperation (APEC) forum in Shanghai. He said he
wants to hold bilateral talks with his mainland counterpart but has not formed an agenda for such talks as of yet. He
indicated he wants to discuss a possible agreement to protect rights of Taiwanese investing in the mainland. However,
in the past the Chinese government has said there is no need for such an agreement because the mainland already
protects those rights.

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