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
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 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
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
Last updated: 17 January 2001