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Week of November 3, 2000

Week of July 20, 2001

The U.S. and China This Week

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INTERNATIONAL: China and Russia Sign Friendship Pact

SUMMARY: (7/17/01) President Jiang Zemin of China and President Vladamir Putin of Russia signed the first friendship treaty between the two countries since the Sino-Soviet military pact of 1950.  The agreement, officially titled the Sino-Russian Treaty of Good-Neighborly and Friendly Cooperation, is claimed not to be a strategic alliance between the two countries and directed against any other nation (like the United States), but rather is a reaffirmation of a common vision of a “new international order?as well as bilateral cooperation in areas ranging from trade to countering terrorism.  The two countries used this opportunity to reinforce areas of common purpose, including opposition the Bush Administration’s proposal for national missile defense.  Practically, the alliance is thought to ensure the continuation of the growing cross-border arms trade estimated at $1.5 billion this year, providing much needed military equipment to China and money for a cash-strapped Russia.  Despite this increase in trade, the importance of general trade between China and Russia pales in comparison to each country’s bilateral trade with the United States.  While new treaties and increased trade are important, Western diplomats who observe the strengthening Moscow-Beijing ties say they are more concerned about specific contents of military and arms trade.

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INTERNATIONAL: China Agrees to Purchase Additional Russian Fighter Jets

SUMMARY: (7/19/01) Just days after the Chinese and Russian presidents signed the first friendship pact since the 1950, China has signed a contract with a Russian aircraft manufacturer to purchase approximately $2 billion worth of Su-30 MKK ground-attack planes.  This follows a $1.8 billion agreement in 1999 for 40 Su-30s, 10 of that have been delivered, and a 1992 purchase of Su-27 fighters.  This additional fleet of aircraft will further modernize China’s military and improve its ability to launch an assault on Taiwan.  The build-up of China’s airforce in addition to missile bases has been a concern to the United States, particularly
as it affects tensions and the possibility of military conflict in the Taiwan Straits.  This new agreement is a significant development in the recent strengthening of Sino-Russian ties as China has now become Russia’s largest arms market according to a recent report by Interfax agency.

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INTERNATIONAL: China Will Host 2008 Olympic Games

SUMMARY: (7/14/01) By a large vote, the International Olympic Committee (IOC) has selected Beijing to host the 2008 Olympic Games. The Chinese capital captured 56 of 105 votes in the second round of secret ballots. Toronto got 22 votes, Paris 18, and Istanbul 9. Osaka, Japan was defeated in the first ballot. “I’m very excited,?said Wang Wei, secretary general of the Chinese bid committee. “We’ve been working very hard, and now our efforts have paid off. ?With the Games coming to Beijing, the world is going to have a better understanding of our country and our people.? Australian IOC member Kevan Gosper called the historic vote “a resounding victory for China and the Chinese people.?#060;/font>

German IOC member Thomas Bach said the vote shows the “universality of the Olympic Games??However, he said he hopes hosting the Olympics will cause Beijing to improve its human rights record. U.S. Representative Tom Lantos (D-Calif.) lambasted the IOC for its decision. “China lacks political, religious and press freedoms, and it is an absolute outrage that the IOC has decided to reward China’s deteriorating human rights record by giving Beijing the honor of hosting the Olympics,?he said. Chantal Beniot, a Paralympic athlete and a member of Toronto’s bid team, said the vote was political. “It’s sad that sport has not been recognized as the focus of these Olympic Games,?Beniot said.

National security adviser Condoleezza Rice said the choice of China was “an IOC decision.?She stressed that human rights will be on the agenda of President Bush’s bilateral relationship with China. Meanwhile, Li Lanqing, vice premier of China’s state council, promised the Chinese government would fulfill its promises to the IOC. Those included pledges to maintain a high standard against blood doping, to provide efficient transportation, and to lower pollution.

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         DOMESTIC: Experts Speculate on Olympics?Effect on China

SUMMARY: (7/14 ?7/15/01) Various experts have speculated on what effect hosting the Olympics might have on Chinese nationalism and human rights. A senior Beijing journalist maintained that the Communist Party may become more hard-line in part because it knows its critics will be heartened by the Olympics and tempted to openly oppose the government. The pressures are only going to increase in the next few years, especially after China joins the World Trade Organization (WTO),?the source said. WTO accession may bring wider unemployment to China as its inefficient industries and farms will face foreign competition.

After the announcement that China would be the host for the Olympics, 400,000 people celebrated in the streets of Beijing. Kenneth Lieberthal, a China scholar at the University of Michigan and a former Clinton administration adviser, said pride from hosting the Olympics could give Chinese nationalism “a more benign cast, one that identifies national pride in being Chinese and a sense of comfort in dealing with the rest of the world.?But Tsai Ingwen, chairwoman of Taiwan’s Mainland Affairs Council, said nationalist pride from hosting the Olympics might mean “The people ?may be willing to put their demands for democracy on hold.?

New York-based Human Rights Watch called on the International Olympic Committee and international corporate sponsors to pressure China on human rights. “If abuses take place as preparations for the Games proceed, it won’t be just the Chinese authorities who will look bad,?said Sidney Jones, Asia director of Human
Rights Watch. “The IOC and the corporate sponsors will be complicit.?

The ruling Communist Party had distanced itself from the bid for the Olympics. However, after China found out it had won, party officials began claiming credit. Beijing’s Communist Party chief, Jia Qinglin, who had kept a low profile for many months, appeared on national TV on the night of July 13 to introduce President Jiang Zemin. State television showed pop stars singing newly written patriotic songs and songs praising the Communist Party. There
was also live coverage of Politburo members congratulating members of the bid committee. Tang Long, a spokesman for the Beijing municipal government, said, “Beijing owes its success in winning the Olympic bid to the correct decisions by the Central Committee of the Communist Party of China.?

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         DOMESTIC: China Convicts, Expels American Professor for Espionage

SUMMARY: (7/14 ?7/15/01) (7/15 & 7/18/01)American Professor Li Shaomin was convicted of espionage July 14 and ordered expelled from China. Li, 44, is a Princeton-trained advocate for democracy who was born in China.  A professor at the City University of Hong Kong, Li was arrested February 25 and charged with spying for Taiwan. The state-run New China News Agency, which reported Li’s sentence, did not specify when he would be deported from China. He was originally accused of giving state secrets to Taiwan, according to the news agency, but he was convicted only of hurting China by giving Taiwan “qing bao? or intelligence. “Qing bao?includes items in the public domain that the government does not want sent abroad.

There was no indication of trial dates for other U.S. citizens and residents being held for suspected espionage in China, although a lawyer for U.S. resident Gao Zhan said he suspects she will be tried soon because she has been indicted. Jennifer Millerwise, a White House spokeswoman, said U.S. President George W. Bush welcomed Li’s release. It is unclear if Li will be permitted to return to his home in Hong Kong, which is part of China.

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     DOMESTIC: Chinese Indict American Resident for Espionage

SUMMARY: (7/14 ?7/15/01) Scholar Gao Zhan, a permanent American resident, has been indicted for espionage and will probably be brought to trial soon, according to one of her lawyers. While her friend Li Shaomin was convicted of espionage and deported, Gao is a Chinese citizen so China may treat her differently, said Jerome A. Cohen, who represents Gao’s family in the U.S. Gao was arrested at the Beijing airport February 11 along with her husband, Xue Donghua and their five-year-old son, Andrew, who is a U.S. citizen. The family had been visiting relatives in China. Andrew was kept in a Chinese kindergarten for 26 days before being released; China did not notify the U.S. embassy of his detention, as it was required to do under a bilateral agreement. Xue was
also released, and is considering filing lawsuits in America and China against Chinese officials he claims abused him
and Andrew during their detentions.

According to the Chinese government, Gao, 41, has confessed to spying for Taiwan. In an interview with her lawyer in China last week, however, she reportedly denied such activities. Gao’s meeting was her first contact with her lawyer, Bai Xuebiao, since her arrest; she may go on trial as early as next week, Bai said. Her case is tied to the case of Professor Li Shaomin, an American citizen who was convicted of espionage and ordered deported. According to Cohen, last year Li asked Gao for help in finding documents on China’s perception of Taiwan and its Taiwan policies. Gao got a friend to give her xeroxed speeches, magazine articles and book excerpts. She then gave the materials to Li.

Cohen said Gao knew some of the materials were “neibu? or internal documents. Such materials are limited to certain officials, though many still circulate freely and some are available in bookstores. Gao told Cohen, however, that she was not aware that any of the materials were classified as state secrets, which are more restricted. Li was accused of gathering the information for Taiwan’s government, prompting his arrest and that of Gao. Gao will almost certainly be convicted, as such cases are rarely brought to trial in China unless the government is almost certain to win. However, her lawyers are hopeful that her sentence will not exceed the duration she has already been detained, meaning she would then be released.

President George W. Bush’s nominee for ambassador to China, Clark Randt, met with Xue July 18 and said securing Gao’s return home is at the top of his agenda. Xue also met with Senator George Allen (R-Va.) July 18.

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     DOMESTIC: Chinese Report Robust Growth

SUMMARY: (7/14 ?7/15/01) Despite the global slowdown, China grew at an annual rate of 7.9% growth during the first half of 2001, its government maintains. The State Statistical Bureau, which reported the figures, said China’s growth for all of 2001 could be more than the government’s target of 7%. Analysts say China’s vast domestic market and heavy government infrastructure and public works outlays contributed to its large growth.

According to the Chinese government, foreign domestic investment in China was up 20% during the first six months of 2001 compared to the first six months of 2000. Yiping Huang, China economist for Salomon Smith Barney, said overall investment in China could well go over $50 billion in 2001, as multinational corporations get ready for China’s probable imminent entry into the World Trade Organization (WTO). Huang said if China receives a 25 percent year-on-year increase in foreign direct investment, it could increase economic growth by one percentage point.

WTO membership is expected to help China by increasing exports and forcing domestic companies to improve efficiency due to foreign competition. However, tariff reductions could force closure of weak domestic firms, thereby increasing unemployment and stifling demand in the short run. Economists say hosting the Olympics may spur economic growth due to tourism and government-funded construction. Many economists say there could also
be a symbolic effect to hosting the games, with international companies and investors seeing China as a country committed to modern market-oriented values.

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