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12 January 2004

• Sars Investigation Continues
• Chen Shui-bian Warns China Not to Pressure Taiwan
• Upcoming Constitutional Amendment in China: Private Property is Inviolable

Sars Investigation Continues

This week Beijing classified a third person as a suspected Sars case. The patient is a 35-year old male who lives in China's southern Guangdong province. Significantly, this man does not work in a job that involves handling wild animals. Health officials believe that contact with animals is a likely means of transmission for the virus.

This theory was strengthened last week when a woman who worked as a waitress in a Guangdong restaurant was classified as a suspected case. The restaurant served civet cats, small weasel-like mammals considered to be a delicacy in the region. According to health officials, civet cats are known carriers of a Sars-like corona virus and may transmit the virus to humans.

Officials in Guangdong province have been carrying out a high-publicity campaign to prevent another outbreak of the virus. In response to the waitress's infection, thousands of civet cats were slaughtered as a precaution. Guangdong is also undertaking a massive cleanup program focusing on rats, roaches, and similar pests.

Despite these necessary precautions, this latest outbreak highlights the fact that we still know very little about where Sars comes from and how the virus is transmitted.

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Chen Shui-bian Warns China Not to Pressure Taiwan

In a new book by Taiwan's President Chen Shui-bian, he warns China not to use the U.S. to pressure Taiwan. While Chinese Premier Wen Jiabao was in Washington last December, President Bush criticized Taiwan for trying to upset the status quo, a reference to Chen's plan to hold the island's first referendum just before the 2004 presidential elections on Taiwan.

Chen sees this latest development as part of Beijing's larger strategy of using economics to promote unification and the threat of force to prevent independence. Last week for example, China gave a Taiwanese business delegation unusual VIP treatment, even granting them a rare audience with Chinese President Hu Jintao. In his new book however, Chen claims that this "divide and conquer strategy will only increase hostility and confrontation and fortify Taiqwan's political identity and national identity".

China is Taiwan's number one trading partner, and there are nearly one million Taiwanese businessmen living in Shanghai. As the two sides integrate economically, Chen Shui-bian has never met with leaders in Beijing to discuss political integration because of his refusal to recognize the one-China Principle? Chen has demanded that he meet with the Chinese President on an equal level. Beijing on the other hand views Taiwan as a renegade province and has refused Chen's suggestion.

As the March 2004 elections in Taiwan rapidly approach, Chen has begun to call for island-wide referendums on such issues as China's military deployment and constitutional revision. Beijing promptly denounced Chen's plan as a provocative move towards independence, and went so far as to threaten war in the event of any referendum that results in a change to the status quo.

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Upcoming Constitutional Amendment in China: Private Property is Inviolable

While China's Constitution maintains that socialist public property is inviolable, it is much more ambiguous about the status of private property. A new amendment stating that lawful private property is not to be violated is set to take effect in March 2004.

This amendment comes as a welcomed relief to the millions of Chinese engaged in the private economy, from the large multi-national corporations down to the street vendors. Although the Communist Party's acceptance of the private sector has greatly increased since it first began as an experiment in 1978, the party only started to trust private entrepreneurs within the past three years.

In 1988 China's constitution was amended to allow the private economy to exist as a complement to the public economy. In 1993, the term socialist market economy?was created in order to justify the existence of market capitalism in a socialist country. Then in 1999, the role of the private economy was upgraded to an essential part of the socialist market economy. This latest amendment will place private property on an equal legal footing with public property.

Additionally, under the new amendment private property will be expanded to include the means of production, non-work-related income and intellectual property. While the state still has the right to expropriate or collect private property in the name of the public interest, now it must compensate the owners.

The private sector in China is increasingly important not only for future economic growth but also for social stability. As more and more workers are laid off from the inefficient state-owned enterprises (SOEs), the government increasingly looks to the private sector to provide jobs and social services for the masses of unemployed.

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