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Sun, Mar 23, 1997
Reports on Dalai Lama's Taiwan Tour

foot-and-mouth disease strikes Taiwan's hogs; Tung calls for closer ties with China; changes in China's housing system; mainland navy pays visit to Philippines

Please read the statement of purpose.

Taiwan: the Dalai Lama will meet with various pro-independence political parties in Taiwan over the next few days, including the Democratic Progressive Party (DPP). President Lee Tung-hui and he will also meet.

Also in the news concerning the Dalai Lama's visit to Taiwan, the South China Morning Post has a short piece on a possible rift growing between the three main Buddhist organizations on the island. Leaders from two of the groups have been conspicuously absent from activities surrounding the Dalai Lama's visit. Speculations is that they do not want to participate in what is already a highly politicized event. "The groups hold significant political sway among the island's largely Buddhist population of 21 million," reports the paper.

Taiwan: an outbreak of foot-and-mouth disease in Taiwan's pig farms on March 20 has halted the country's lucrative pork export market and caused a bit of a political stir. The ministry of agriculture has offered to compensate pig farmers with NT$2400 per kilo, but farmers have demanded NT$3000 (US$820) for each meat hog destroyed. "If the Government fails to give us reasonable subsidies and offer us financial and technical aid to slaughter the diseased pigs, we will not rule out setting free hundreds of pigs in Taipei," a Hog Breeding Association official quoted by the paper said.

Figures "showed 37,569 pigs in 5,919 breeding farms in 12 counties had contracted the deadly and contagious disease, while 11,943 had died of it as of Saturday," writes the paper.

Hong Kong: Chief Executive-designate Tung Chee-hwa said Hong Kong and China should strengthen their ties as the date for the hand-over approaches, reports the South China Morning Post. It is unclear what exactly Tung means. But he did say, "The young generation needs to know more about their motherland and develop their affection towards the country. It is significant to our success."

Governor Patten, the paper reports, warned against tinkering with the political and economic system.

Philippines: the Hong Kong Standard reports that two guided-missile frigates of China's Eastern Fleet arrived in Manila as part of a three-day good-will tour designed to "boost naval cooperation" between the two countries and to underscore the peaceful relations between them, despite their disputes over the Spratly Islands.

The Chinese Commercial News is a Chinese-language publication in the Philippines and, it would appear, a pro-Beijing one. They have published a story on the arrival of the two warships and a few words from Admiral Yang Yushu, the commanding officer of the group. Admiral Yang's remarks are in Chinese. I have translated a few here:

    "This is the first time a Chinese warship has called on the Philippines, and in making this visit a new page has been opened on the history of relations between our two nations' navies. We have come to promote friendship and to develop mutual understanding and exchanges between our two nations, and to strengthen the friendly relationship between our armed forces, especially our navies. By means of this visit, we shall take further steps in promoting the developing friendship between the people of China and the Philippines, the armed forces of our two nation and our navies."

    "We are deeply thankful for the invitation extended by the Philippine navy to visit here, as we are also deeply moved by the enthusiasm of the Philippine navy and the people of Manila and by the grand welcome afforded to us. We trust, under the careful and meticulous preparations of the Philippine navy, this visit will definitely achieve thoroughly satisfying results."

The Chinese embassy hosted the admiral, his officers, invited guests from the Philippine navy and others at a banquet at which China's ambassador reiterated the message:

    "China is the world's largest developing nation, and in order for it to become modernized it will require yet a few more decades of hard work, as well as an extended period of stability and a peaceful environment on all of its sides. Safeguarding the peace and stability of this region, promoting each nation's economic prosperity and cooperation, working for the mutual benefit of China and the nations of South East Asia, and developing with ASEAN long-term and peaceful friendships comprise an important part of China's foreign policy. . . ."

Housing: the Asia Times has a story on the ongoing Government efforts to provide city-dwellers with "commercially priced but affordable homes." The government is currently drafting plans for a new housing deposit fund modeled after a German system: "the home deposit fund would be modeled on Germany's Bausparvertrag housing deposit system. Home-hunters would enter the fund on a voluntary basis, contracting with participating banks to deposit a fixed sum each month."

Correspondent Matt Miller reports, the experimental system will be tested in Shanghai, Chengdu and Taiyuan, capital of Shanxi Province. It will augment a number of systems in place already, including provident fund and commercial lending systems. In a provident fund system, Miller explains, employees and their employers contribute to the fund, from which mortgages are made available to participants. It was in Shanghai that the first and most successful provident fund was established. To date some "6.3 million workers and their employers" have been making monthly contributions of 5 percent, reports Miller. "Since its establishment in 1991, the fund has provided 47,700 individual home buyers in the city with low-interest loans." In 1996 alone over 22,000 home buyers received mortgages through the Shanghai fund, writes Miller, and this year's growth is expected to be 50 percent higher.

By its design the housing deposit fund will provide low-income earners and others whose employers do not participate in provident funds and other cost-sharing schemes the means to purchase housing. It will rely on government contributions for its operations. Under the system people would voluntarily enter into an agreement with a lending institution to make regular monthly deposits. These deposits could only be removed for payment toward a home.

But in its reliance on government funding the scheme differs from the provident funds which amass enough contributions to be self-sustaining, and it is in this aspect that the deposit fund might run into problems, writes Miller. He quotes a senior official with Shanghai's housing authority, "In Germany, the incentive is funded through income taxes collected by the banks, not from the government. I wonder whether or not the [Chinese] government can afford to encourage housing deposits in this way."

Miller notes, individual home mortgages are available in only 35 cities in China, and the Construction Bank of China handles 70 percent of the lending.

(More information on changes in China's urban housing system can be found under the heading Shanghai in the Sat, Mar 1, 1997 issue)

Taiwan: Taiwan reworked its Hong Kong-Macau Relations Act last week, and under the new law Hong Kong businesses with more than 20 percent ownership by mainland Chinese parties may be banned from conducting business there, reports the Asia Times. The act reflects concerns in Taiwan over growing economic ties with the mainland and the possible political influence by Beijing in Taiwan's domestic politics that such ties might provide. Currently companies from the colony are treated as any other foreign entity and do not have to report their links to mainland Chinese capital, reports the paper.

Some have criticized the act, reports the paper, because of the difficulty for a company to monitor trading of its shares in order to ensure no more than 20 percent were owned by mainland China parties. But Taiwan officials have said, precedents established by the 1992 cross-strait relations act would be followed, and normal stock trading would not be scrutinized. "We will pay special attention only when there is intentional manipulation by China," said one official quoted by the paper. The paper writes, "free trade and capital movement will continue on condition that Hong Kong and Macau maintain their autonomous free market operations. Direct trade, shipping and transport links with the territories will go on."

The act also will control Taiwan investment on the mainland. But the paper notes that many Taiwan firms skirt around these restrictions by listing their countries abroad or funneling funds through people with foreign citizenship.

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China Informed

a news service focused on China, Taiwan and Hong Kong
©1997 Matthew Sinclair-Day