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Week of May 16, 2003

 

Week of July 4, 2003

The U.S. and China This Week


Domestic: Hundreds of Thousands Take to the Streets in Hong Kong

An estimated 300,000 to 500,000 people marched in Hong Kong Tuesday in protest of government plans to enact stringent anti-subversion laws, constituting the largest outpouring of sentiment the city of 6.8 million inhabitants has seen since approximately 1 million people took to the streets to protest the Tiananmen killings in June, 1989. Many of the protestors wore black to symbolize the death of their civil liberties and could be heard chanting "Return rule to the people."

Though far less draconian than the British colonial regulations it is intended to replace, the controversial bill does carry maximum life prison sentences for sedition, secession, theft of statesecrets, and treason. The most divisive provision grants the Hong Kong government the power to ban any organization with links to organizations already banned by Beijing. Religious groups such as the Catholic Church of Hong Kong, human rights activists, and journalists fear the legislation will curtail their activities, and the business community is wary of any impediments to the free flow of information.

Yet, not all the protestors rallied around the cry to protect civil liberties. Many were motivated more by rising unemployment, plunging property prices, and the government's slow response to SARS. Participants expressed general dissatisfaction with the current government, led by Chief Executive Tung Chee-hua, whose effigy was carried through the streets during the march.

The demonstrations were peaceful with the exception of an early scuffle between police and protestors attempting to burn the Chinese Communist flag outside of an official handover anniversary celebration attended by Tung and Chinese Premier Wen Jiabao. Premier Wen called for "social unity" and presented a "gift" in the form of concessions aimed at stimulating the Hong Kong economy.




 



 

Domestic: The PRC Government Gives a "Gift" to Hong Kong in the Form of a Trade Deal

In what is being hailed as a "gift" by the PRC government, China will open its markets to Hong Kong's highly competitive shipping, transportation, and movie making industries, eliminate most of its tariffs on imports from Hong Kong's shrinking manufacturing sector, and allow Hong Kong banks, management construction firms, and lawyers greater privileges than their rivals elsewhere. In effect, the deal constitutes a streamlined approach that gives Hong Kong companies and local subdivisions of multinationals faster access to the mainland than currently offered to other countries through the WTO process. In exchange, Hong Kong is required to offer little in terms of concessions because it is already a free port.

Many analysts point to the timing of the trade deal as key. With record unemployment, falling housing prices, public anger over the government's slow reaction to SARS and the new stringent anti-subversion laws due to be taken up in the Hong Kong Legislative Council next week, they suggest the deal could help get the economy back on track and restore faith in the government.

For their part, many multinationals are hoping the deal will amount to a way around the requirement that foreign investors enter into joint ventures with Chinese domestic enterprises. They point out that this requirement frequently exposes them to risk in the form of fraud, corruption, overstaffing, and other maladies associated with the Chinese business culture. Yet, the trade deal includes provisions designed specifically to curtail an end-run around current trade laws by multinationals. For example, eligible companies must show they have conducted businessin Hong Kong for 3 to5 years, and then they are only allowed to offer services in the mainland that they currently offer in Hong Kong.







 

 

 

INTERNATIONAL: China Envoy in Town for Talks on North Korea

Point man on North Korea, Chinese Vice Foreign Minister Wang Yi, is in Washington DC to exchange views on North Korea and the situation in Asia in general with representatives of the National Security Council and the Pentagon. According to an article appearing in the New York Times on July 2, a senior U.S. diplomat said China is continuing to press Washington to negotiate directly with Pyongyang. Meanwhile, at the United Nations China and Russia are seeking to delay a Security Council condemnation of North Korea's nuclear arms program after a top North Korean general warned that any sanctions or blockades would bring "strong and merciless retaliatory measures," and that "horrible disasters" would befall the people of south Korea.

The U.S. would like Pyongyang to abandon its nuclear weapons program. China also supports a nuclear-free Korean Peninsula. Pyongyang seeks a U.S. pledge of non-aggression, diplomatic ties with the U.S., guarantees of economic assistance from Japan and South Korea, and completion of light-weight reactors promised under a 1994 agreement. During three-way talks in Beijing in April, Pyongyang hinted that it would be willing to trade its nuclear program for aid and security guarantees. President Bush responded by asserting that the U.S. would not give in to blackmail. all sides agreed that further talks were necessary. The U.S would like to convince Asian nations that the situation has since become dire enough to require a united front, and has called for expanded talks with North Korea that would include South Korea and Japan. China is wary that cornering North Korea even diplomatically will precipitate a security crisis that will draw resources away from its development initiatives.



 

 

The U.S. and China This Week
The U.S. and China This Week

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