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---"Focused Coverage Informed Perspectives"---
Tue, Dec 23, 1997 edition
Cross-strait relations
Lee says next move is in Beijing's court

Also in this edition . . .

1: holiday schedule
2: In South Africa, Beijing's objection to 'Both Chinas' brings change with Taiwan
3: Taiwan spy does not exercise right to appeal in Nanjing
4: regional market woes could slash China's exports
5: Bangkok Bank approaches Taiwan conglomerates for investment
6: police think 'Lilly' sex ring has terminated trade in women
7: despite market shakedown, exchange reserves still show net growth
8: police find it difficult to buy ammunition, halt target practice


Holiday schedule: China Informed will not be published for the remainder of this week, as our service will be closed for the holiday. Publication will resume on December 29")}

Cross-strait relations: Lee says next move is in Beijing's court
President Lee Teng-hui said here Monday that Beijing should resume dialogue with Taiwan without preconditions.

Speaking at an annual meeting of the Association for the Promotion of National Unification and Development, Lee said the Republic of China government has been promoting civilian exchanges with mainland China in accordance with the "Guidelines for National Unification," hoping to turn cross-strait relations into a new page of peaceful competition.

However, in spite of this, Beijing continued its efforts to isolate Taiwan in the international community and even unilaterally closed down the channel of consultation with Taiwan, he pointed out. Lee said, in order to break the bottleneck of cross-strait relations, Beijing has to recognize that the two sides of the Taiwan Strait are now under separate rule, abandon its unrealistic ideological warfare against Taiwan, and reopen the channel of consultation with Taiwan without any preconditions.

Lee said the Republic of China government will continue to promote democratization and economic development, strengthen national security, and improve its foreign relations.

South Africa: Beijing's objection to 'Both Chinas' brings change with Taiwan
(sources: Reuters and Associated Press) South Africa said on Monday diplomatic ties with the People's Republic of China will take effect on January 1, 1998, when Pretoria ends relations with its traditional ally Taiwan in favor of mainland China.

The foreign affairs department said in a statement that mainland Chinese Foreign Minister Qian Qichen and his South African counterpart, Alfred Nzo, will sign agreements to set up diplomatic and consular links on Dec. 30 during Qian's official visit. An investment protection agreement will also be signed.

A South African embassy spokeswoman in Taipei said earlier this month that Pretoria would recognize Beijing on Dec. 28. Qian and a large official delegation will visit South Africa as guests of Foreign Minister Alfred Nzo from Dec. 28 to January 1, 1998, foreign affairs said.

President Nelson Mandela shocked Taiwan in November 1996 by announcing that Pretoria would cut diplomatic ties with Taipei in order to recognize Beijing by the end of 1997. Mandela's announcement reflected an abandonment of his bid to have formal ties simultaneously with what he called "both Chinas," a model that Beijing adamantly rejects.

Direct trade between South Africa and mainland China is expected to reach US$1.6 billion this year. This excludes trade worth US$1.4 billion South Africa enjoys with Hong Kong of which around 70 percent is actually with mainland China. Mainland China is South Africa's sixth biggest trading partner.

South Africa, the largest and most influential of the 30 countries that recognize Taiwan, will concurrently be severing diplomatic relations with Taiwan. However, President Nelson Mandela's government plans to maintain the highest level of relations short of official ties with Taiwan. The ROC Embassy in Pretoria, the capital, will keep operating in all but name after diplomatic relations are cut, according to ROC officials.

Jiandie: Taiwan spy does not exercise right to appeal in Nanjing
(source: Central News Agency) A Taiwan man, sentenced by a communist Chinese court to 11 years for spying on behalf of ROC military and intelligence units, has not launched an appeal against his sentence, a judicial official in Nanjing said Monday.

A official with the court said Wang Guandu, 49, did not exercise his right to appeal the conviction handed down on Nov. 5. Wang, from the central city of Taichung, carried out his intelligence work by posing as a businessman based in Nanjing between March 1996 and May 1997, the court heard. A graduate of military academy, he reportedly established links with ROC's Military Intelligence Bureau in late 1995 and was hired by the bureau in March last year.

Wang was arrested after a "serious and thorough investigation," and reportedly confessed to having tried to establish contacts in Beijing, Shanghai, and the provinces of Shanxi and Shaanxi to gather military and technological intelligence.

Trade: regional market woes could slash China's exports
(source: Reuters)

An export slowdown caused by a currency meltdown in Southeast Asia and rising imports could slash mainland China's trade surplus next year, economists said on Monday.

Fears that exports may drop off and cut the supply of US dollars on the market helped drive down the value of the mainland Chinese currency in Shanghai on Monday. The renminbi ended at 8.2799 to the greenback from 8.2795 on Friday. "Next year's trade surplus will be narrowed," said Li Yushi, an economist of the research academy under the Ministry of Foreign Trade and Economic Cooperation.

Mainland China's trade surplus in 1998 was expected to drop to around US$20 billion from more than US$40 billion officially projected for this year, he said. Mainland China registered a trade surplus of US$40.23 billion in the first 11 months of 1997, customs figures showed. Imports rose by 23.2 percent year-on-year, while imports were up 3.7 percent. Exports in 1998 were forecast to rise by about 12 percent to US$200 billion, and imports to jump 20 percent to US$180 billion, Li said.

The yuan has been strong this year on the back a surging trade surplus and solid inflows of foreign capital. Mainland China has ruled out a devaluation of the yuan to regain its export competitiveness against countries such as Thailand, Malaysia, Indonesia. Dealers said mainland Chinese banks sold the local currency on Monday. They said speculation of a depreciation in the yuan had been widespread following the sharp losses of other Asian countries during the regional financial crisis. Such speculation had emerged despite the continued inflow of investment capital coupled with the strong trade surplus.


Thailand: Bangkok Bank approaches Taiwan conglomerates for investment
(source: Bridge News) Thailand's Bangkok Bank has approached three major Taiwan conglomerates to invite them to take a stake in the bank, the Chinese-language Commercial Times reported yesterday.

The bank has reportedly carried out initial discussions with the Tuntex Group, Koo's Group and the ruling Kuomintang's business arm. The paper said Bangkok Bank has also approached large financial institutions in the US and Europe, inviting them to take a stake in the bank. While interest in the bank is reportedly high, concrete merger or acquisition plans have not been finalized, the paper said. The inflow of funds would reportedly assist the bank in capital restructuring and aid in alleviating its debt burden and bad loans problem.

Prostitution: police think 'Lilly' sex ring has terminated trade in women
(source: Central News Agency)

Following a series of large-scale crackdowns by Taiwan's law-enforcement authorities, a high-profile international sex ring has terminated its illicit operations here, a Taipei prosecutor said on Monday.

Taipei District Prosecutor Liu Cheng-wu said the Taipei County Police Headquarters recently received the passports of many detained foreign prostitutes belonging to the "Lily" sex ring. "We believe that the passports were mailed to the police bureau by operators of the Lily group-which has been associated with human smuggling-as an acknowledgment of the crackdown," Liu said. By doing so, Liu said, the ring might be making a gesture to inform law-enforcement authorities of its disbanding and to appeal for a halt of further police investigations or raids. Liu said this was the first time that a large criminal ring has disbanded itself following crackdowns by law-enforcement authorities.

Liu, who is reputed for his integrity and devotion to fighting corruption and the sex trade, said he will continue to direct officers to investigate the case and bring to justice all those involved in the illicit human smuggling and sex peddling operations.

Police investigations show that the Lily ring had recruited foreign women to work as prostitutes through an under-world syndicate which ran an efficient human smuggling operation from Southeast Asia. The human smuggling ring forced those women to serve as prostitutes by confiscating their passports upon their arrival in Taiwan. Police estimated that more 120 women from Thailand, Malaysia, Singapore, mainland China, Macao and Hong Kong had been forced into the sex trade by the syndicate. The foreign prostitutes entered Taiwan on tourist Visas, or on the basis of fallacious marriages with local men.


Foreign exchange reserves: despite market shakedown, exchange reserves still show net growth
(source: Agence France-Presse)

Hong Kong's foreign exchange reserves rose 5.6 percent from a year ago to US$96.5 billion in November, remaining the world's third largest behind Japan and mainland China, the Hong Kong Monetary Authority (HKMA) said Friday.

The reserves include funds held by the government's land fund, derived from the sale of government land. At the end of November, the foreign reserves held in the exchange fund reached US$79.1 billion and those in the land fund totalled US$17.4 billion.

It is an improvement since April, when Hong Kong had the world's seventh largest reserves with US$66.6 billion. It was then behind Japan with US$222 billion, mainland China with US$115 billion, Taiwan with US$89 billion, Germany with US$85 billion, Singapore with US$ 79 billion and the United States with US$68 billion.

Bullets: police find it difficult to buy ammunition, halt target practice
(source: Agence France-Presse) Hong Kong's police force is running short of bullets and is to stop target practice training, a report said here Monday.

Hong Kong used to turn to the West for ammunition supplies but since the July 1 handover to mainland Chinese sovereignty foreign countries, particularly the United States, have been reluctant to sell their ammunition. Target practice training will be temporarily suspended from next month, the Oriental Daily News said. The forcex supply of MP5, Glock and Remington bullets are all running out, it said. The police force had tried mainland China-made bullets but the results were not satisfactory, it added.

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China Informed

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