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Week of November 3, 2000

Week of September 28, 2001

The U.S. and China This Week

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DOMESTIC: Communist Party Elites End Meeting

SUMMARY: Approximately 300 Communist Party elites finished a three-day closed-door meeting in Beijing on September 26. An official missive detailing some of what was agreed upon at the meeting of the Sixth Plenum of the 15th Congress of members of the Communist Party’s Central Committee is expected at a later date. However, the official Xinhua news agency reported the delegates agreed on “strengthening and improving the building of the party style.?One of the topics during the Sixth Plenum meeting to be discuss was President Jiang Zemin’s suggestion that the Communist Party admit business people.

The Central Committee’s disciplinary body revealed that Li Jiating, an alternate member of the Central Committee and former governor of Yunnan province, was removed from the Communist Party. He has been accused of taking bribes and using his position to earn illicit profits, Xinhua reported. Li also had an affair with a married woman and used his position to help her to earn illicit profits, according to Xinhua. Li resigned from being governor in June; he now will be tried and faces a possible death sentence.

Meanwhile, Shi Zhaobin, also an alternate member of the Central Committee and deputy Communist Party secretary of Fujian province since 1999, lost his posts and party membership.

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DOMESTIC: Hong Kong Economy Adversely Affected by Terrorist Attacks

SUMMARY:  Hong Kong’s economy will be adversely affected by the terrorist attacks on the United States September 11, Financial Secretary Antony Leung maintained at a meeting to discuss ways to bolster the economy. In late August, the Hong Kong government decreased its growth forecast for 2001 from three percent to one percent after data revealed the economy had grown just .5 percent in the second quarter and had contracted 1.7 percent quarter on quarter. Now Leung says the government will reduce its growth forecast again. Already, pre-Christmas exports and tourism have been affected by the tragic terror events in the U.S.; exports were already down, having fallen in August for the sixth month in a row.

Some private economists think Hong Kong’s economy will shrink in 2001. Nomura International now predicts the Hong Kong economy will contract .2% this year; previously, it had predicted 1.3% growth. According to government economist K.Y. Tang, the violence against America will have a “big, negative impact?on Hong Kong’s economy, which depends on exports. After mainland China, the United States is Hong Kong’s biggest trading partner.

The use of hotels has plummeted since September 11. The 81-member Hong Kong Hotels Association reported September 25 that some of its hotels have 50 percent occupancy instead of the usual 80 percent. Tourism, Hong Kong’s biggest foreign currency earner, took in HK$62 billion last year (US$7.9 billion).

According to Leung, Hong Kong could have a budget deficit higher than the government’s prediction of HK$3 billion. The government is earning far less from land sales than it predicted and it may receive less than anticipated from the sale of shares of the commuter railway MTR due to falling global stock prices. A government spokesperson said the government had always resolved only to sell the shares if market conditions were appropriate.

Leung has met with politicians, business chambers and others to discuss Hong Kong’s ailing economy in recent days. Legislators wanted Leung to promise temporary tax relief and that civil service jobs would remain secure. But Leung, who has been against government handouts in the past, made no promises.

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DOMESTIC: China Launches Security Precautions after Terrorist Attacks in U.S.

SUMMARY: Two weeks after the terror attacks in the U.S., China continues to take precautionary steps in anticipation of retaliatory strikes by the United States against Middle East targets.  Siting security concerns, China Southern Airlines and Air China have indefinitely suspended their few flights to the Middle East.  “The duration of the suspension depends on how things develop in the region,?said China Southern Airlines spokesman Su Liang.  The official Xinhua news agency earlier in the week said the Chinese government planned to guarantee war insurance to the country’s airline companies.

China also took steps as part of a security crackdown to arrest a number of suspected separatists in its territory bordering Afghanistan and Pakistan.  Local officials reported seeing a large number of People’s Liberation Army troop movements in the Muslim-majority region in Xinjiang.  China has been keeping a close eye on the situation in Xinjiang, which is populated mostly by Turkic-speaking Muslims who generally resent Beijing’s actions in the province.  Chinese authorities are aware that cross-border instability from a U.S. military response against Afghanistan could occur on some level.  However, according to Foreign minister spokesman Zhu Bangzao, “all necessary measures?are being taken to ensure stability and overall domestic security.

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INTERNATIONAL: Beijing, Vatican to Reconcile, Magazine Reports

SUMMARY: The Chinese government and the Vatican are planning to reconcile and may soon establish full diplomatic relations, the Far Eastern Economic Review reported September 26. The magazine put out a news release about an article that was due to hit newsstands September 27. The news release said Beijing wants to mend its relationship with the Vatican for political reasons: the Vatican will be forced to break off relations with Taiwan, and the position of six mostly Catholic Latin American countries that have relations with Taiwan will be weakened. For its part, the Vatican will be able to try to increase its followers among 1.3 billion Chinese.

According to the Review, the reconciliation will begin October 14, when Catholic scholars from different nations will visit Beijing for a conference celebrating the 400th anniversary of Italian Jesuit Matteo Ricci’s mission to China. Later in the month, the Pope will apologize for previous harm done to China by the Vatican, primarily through its relationship with European imperialism. Public steps of reconciliation could coincide with U.S. President George W. Bush’s visit to China October 20-21. “This would allow Beijing to deflect U.S. criticism of its human rights record,?the Review said.

China expelled all foreign clergy and broke ties to the Vatican in the 1950s. In January 2000, China defied the Vatican by ordaining five bishops into its state-backed Catholic church. Then on October 1, 2000, on China’s National Day, the Vatican enraged China by canonizing 120 Catholic martyrs in China. Beijing labeled the new saints as “evil-doing sinners?who helped Western imperialism.

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