NOTES FROMVOL.49 NO.40 THE OCT. 5,EDITORS 2006

BEIJING REVIEW JANUARY 19, 2006 1 BEIJING REVIEW JULYJUNE 3,26, 2003 2003WILL JAPAN’S NEW LEADER THAW TIES WITH CHINA?1 VOL. 49 NO. 40 CONTENTS OCT. 5, 2006 2 EDITOR’S DESK 2 Influence of Chairman Mao

3 PEOPLE & POINTS

4 WEEKLY WATCH

10 WORLD 10 A New Dawn for Doha? China urged to help restart stalled trade talks 14 Chilly Ties Persist Japan’s new leadership may not bring improved relations with China 16 Flexing Muscles Non-aligned movement regains strength 20 COVER STORY Thirty years after his death, 18VIEWPOINT Mao Zedong’s legacy is a varied one. To many 18 Economic Interaction people in the country, and especially in his Impact of China’s policies on U.S. financial hometown of Shaoshan in Hunan Province, he is markets still a hero, remembered as the leader who helped to transform China, bringing it into the modern era 20NATION and creating a powerful country. On the other hand, 20 Still a Hometown Hero the repercussions of the Great Leap Forward and Tourists flock to Mao’s birthplace Cultural Revolution are still being felt today. 22 The Long March and Mao Whatever the ultimate evaluation of Mao’s legacy, Critical moment in Communist Party history 24 Red Capitalist he remains a legendary figure whose influence Serving Mao’s favorite foods is still evident. 25 Interpreting Mao 40 Risk Avers e , Broa d l y Speaking Views on Mao’s legacy Sl o w start for new financial prod u c t s 27 Mao Now 41 Ex u b e r ant Economy No Probl e m ? For some, words to live by Ne w measures may be needed to control growt h 42 St a te of the Market 32 BUSINESS 32 Enriching Education FORUM A private school “goes public” 46 34 A Foreign China 46 Should a Click of the Mouse Decide the Fate Do foreigners control too much of China’s of a Criminal Suspect? industry? 38 Presidential PR 48EXPAT'S EYE Big dreams for a public relations professional 48 Driven to Drink

Beijing Review (ISSN 1000-9140) is published weekly for US$64.00 per year by Cypress Book (U.S.) Co., Inc., 360 Swift Avenue, Suite 48, South San Francisco, CA 94080. Periodical Postage Paid at South San Francisco, CA 94080. POSTMASTER: Send address changes to Beijing Review, Cypress Book (U.S.) Co., Inc., 360 Swift Avenue, Suite 48, South San Francisco, CA 94080. EDITOR’S DESK Influence of Chairman Mao A News Wee k l y Published Since 1958 By TANG YUANKAI ht t p : // ww w .b j r evi e w.c o m . c n E-mail: [email protected] ince the founding of the Peo p l e ’ s Repu b lic of China in 1949, President & Editor in Chief: Wang Gangyi Mao Zedong’s portr ait has gaz ed down from the symbol of Vice President: Qi Wengong st a te power , the Tiananmen Rostrum (entrance to the Associate Editors in Chief: Li Jianguo S Huang Wei For b i d den City). Executive Editor: Zhou Jianxiong Eve r y yea r , master painters touch up the painting. For the past Assistant Executive Editors: Yao Bin, Ding Zhitao, 30 yea r s, since he passed away, this tradition has rem a i n e d , kee p- Zhang Zhiping, Francisco Little ing the enduring image of Mao pristine in the minds of the Chinese Editorial Administrators: Li Ning, Shi Bosen na tion. He seems to be watc hing the cha n g es the country is passing Senior Consultant: Shao Haiming Opinion Editor: Yao Bin th r ough, awar e of the growing pains and the rapid development all World Editor: Ding Zhitao ar ound him. Nation Editor: Tang Qinghua The architect of the Communist Par ty of China (CPC), as wel l Business Editors: Yu Shujun, Lan Xinzhen Editorial Consultants: Erin Conway-Smith, as the founder of the Peo p l e ’ s Repu bl i c , Mao not only cha n g ed the Linda Mattson, de s t i n y of the Chinese people, but also the patt e r n of the worl d . Matt Young Tod a y, his political ideas and determi n a tion still influence not only Staff Reporters: Tang Yuankai, Feng Jianhua, China, but also people all over the wor ld who fight for liberty . Zan Jifang, Ding Ying, Ni Yanshuo, Ding Wenlei, Wang Jun, Yan Wei, Mao demonstrates China’s growing influence on the worl d Tan Wei, Li Li, Liu Yu, Liu Yunyun, st a ge. Adherence to the Mao Zedong Thought has been inscrib e d Yin Pumin, Jing Xiaolei, Pan Xiaoqiao in the Constitution of China. It is also to be found in the CPC’s Photo Editor: Wang Xiang Photographers: Jiang Xiaoying, Wei Yao constitution, for ming the fundamental principles of the ruling party . Art: Li Shigong Ho wever , for all his grea tness, Mao was just a man, with the Design & Layout: Xu Husheng, Hou Lina, same hopes, emotions and human foi b les as all of us. In ret ro s p e c t , Wang Yajuan Proof Reading: Qin Wenli he made mistakes, as people do. As the Chinese know, in his late Online Editor: Li Zhenzhou yea r s, he initiated the Cultural Revolution (1966-76) in a bid to “p u r ify” the Par ty and state leadership. Unfort u n at e l y, the sweep i n g Advertising Director: Cheng Guangyan Distribution Directors: Wang Weiwei, Pan Changqing political campaign went beyond its orig inal intention, resulting in Human Resources: Zhang Xiaoli the tremendous losses in almost all aspects of social life and a cult International Cooperation: Pan Shuangqin fol l ow i n g . Legal Counsel: Yue Cheng Tod a y, the opening of Chinese society allows the people to North America Bureau br oaden their views and reconsider Mao’s dominating influ e n c e . Chief: Wang Yanjuan Reporter: Chen Wen Gi ving an objective eval u a tion of Mao in history, more and more Tel/Fax: 001-201-792-0334 Chinese people admit that, apa r t from his wrongdoings, he was a E-mail: [email protected] grea t cha ri s m a tic leader with num e r ous achi e vements to his name. General Editorial Office Un d o u b t e d l y, he contrib uted to an important cha pter of wor ld his- Tel: 86-10-68996252 Fax: 86-10-68326628 to r y in the 20th century along with other influential men of his gen - English Edition er ation. Tel: 86-10-68996259 “F or most of his life, Chairman Mao did ver y good things. Many Advertising Department Tel: 86-10-68995813, 68326072 times he saved the Par ty and the state from crises. Without him the Fax: 86-10-68329398 Chinese people wou l d , at the ver y least, have spent muc h more time E-mail: [email protected] groping in the dark, ” said Deng Xiaoping, another grea t Chinese Distribution Department le a d e r , in his talks with Oriana Fallaci, an Italian journalist. Tel: 86-10-68310644, 68995807 Fax: 86-10-68328738 As peace and harmonious coexistence remain the mainstrea m E-mail: [email protected] goal of the modern worl d , Mao’s over emphasis on “class strugg l e ” Published every Thursday by to d a y seems out of date . Nonetheless, the emerging social prob - BEIJING REVIEW, 24 Baiwanzhuang Lu, lems such as widening wealth gap, inefficient social security sys- Beijing 100037, China. Overseas Distributor: China International Book Trading tem, growing unemployment rate , soaring education and medical Corporation (Guoji Shudian), P. O. BOX 399, costs and increase in corrupt officials remind people of Mao’s Beijing 100044, China motto: to who l e h e a rt e d l y serve the people, whi c h has been the Tel: 86-10-68413849 Fax: 86-10-68412166 E-mail: [email protected] ba c kbone of daily Chinese moral values for gen e r ations. Website: http://www.cnokay.com For most Chinese, Mao is immortal in a spiritual sense. The General Distributor for Hong Kong, Macao and Taiwan: ne w round of Mao’s commemoration ref lects people’s good wishes Peace Book Co. Ltd. for the future—the desire for sound social order and frie n d l y 17/Fl, Paramount Bldg, 12 Ka Yip St, Chai Wan, HK human rel a tionships. Nurtu r ed by Mao’s philosophy, people seek Tel: 852-28046687 Fax: 852-28046409 the truth in a modern China. SUBSCRIPTION RATES (1 Year) Mao will never be for gotten in Chinese history, and his legac y Australia...... AUD 135.20 will rem a i n . ■ New Zealand ...... NZD 144.00 UK ...... GBP 48.10 U.S.A...... US$ 75.30 ...... CAD 114.40 Canada Ha ve a comment, complaint or question? Beijing Revi e w welcomes your fee d b a c k. Printed in China by E-mail our editorial team at co n t a c t @ b j r ev i e w.c o m . c n or write to us at Beijing Revi e w, BEIJING LEEFUNG-ASCO CHANGCHENG PRINTERS CO. LTD. 24 Baiwanzhuang Lu, Beijing 100037, China. Letters may be edited for length or content.

2 BEIJING REVIEW OCTOBER 5, 2006 PEOPLE & POINTS

“The key to solving the present dif- ficulties is for the Japanese leader to make an early resolution on removing the political barrier of the visits to the [war-related] Yasukuni Shrine, and bringing bilateral rela- tions back on track.” Qin Gang, Chinese Foreign Ministry spokesman, called on newly elected Japanese Prime Minister Shinzo Abe to make efforts to improve bilateral relations

“Either we live side by side in a spirit of brotherhood, not separated by ethnic or sectarian identities, or SOFT SHOE SHUFFLE Iraq becomes a battlefield for differ- He n r y Pau l s o n , the Bush administrati o n ’ s new guardian of the nati o n a l ent groups to settle their scores.” co f fer s, won over many people during his visit to China in mid-Sept e m b e r . Iraqi Prime Minister Nuri al-Maliki urge Pau l s o n ’ s war m rec e ption was based around the fact that he wanted to peace in his war-ravaged country after the nurt u r e a long-term discussion of major economic issues, and not to look for fasting month of Ramadan started amid “q u i c k fix es” to curb run a way U.S . trade deficits, such as a quick reval u at i o n insurgent attacks and explosions of the ren m i n b i . From the Chinese viewpoint, an independent, managea ble and grad u a l “There have been questions that RMB reval u a tion would be the best cho i c e . Cabinet members in the previ o u s In t e rv i e wed befor e the trip, the trea s u r y secret a r y called China the go ver nment abused their authorit y em e r ging global economic engine and encouraged the country to embrac e to benefit from approvals of some ma r ket - o r iented policies. He said China had contrib uted half of the global projects…. The investigation is growth in the past five yea r s, together with the United States, to ease needed because those actions have st r ained trade disputes. caused severe loss to the nation.’’ Du r ing his visit to Beijing, Paulson and Chinese Vice Premier Wu Yi Army Chief Sondhi Boonyarataglin, who announced on September 20 that the two countries agreed to launch a strate - heads the National Administrative Reform gic economic dialogu e . Council that now runs Thailand under mar- Ac c o r ding to a repo r t of the China Radio Interna tional, the agree m e n t tial law, announced its decision to set up a puts Paulson, a for mer head of investment bank Goldman Sachs who has commission to probe graft allegations against ousted Prime Minister Thaksin ext e n s i ve China exp e ri e n c e , in cha r ge of discussions with Beijing on the Shinawatra and his allies lo n g - t e r m cha l l e n g es of a rel a tionship that has been fraught with disputes ran g ing from intellectual prop e r ty to the value of the RMB. “I had a very strong conversation U.S . officials said Paulson, who took over Trea s u r y in Jul y, had persu a d - with the [Pakistani] intelligence ed cabinet colleagues and Bush that a broader economic dialogue with chief. I told him that for Americans China was needed. “Wh a t we’ ve done here is to put a process in place that gives us the best this was a black or white issue. chance of getting us the results that we need to get , ” The New Yor k Tim e s Pakistan was either with us or quoted Paulson as saying in Beijing. “To me the key thing always in wor k- against us.” ing with the Chinese is to be able to get access to all the right people at the Former U.S. Deputy Secretary of State right level and have a process whe r e there’ s a real discipline.” Richard Armitage denied that Washington had threatened to bomb Pakistan “back to aulson is staking out a role as the the Stone Age” after the September 11 attacks and said a Pakistani official might administration’s coordinator on a wide have distorted U.S. resolve to press “Prange of China issues beyond those Islamabad for help normally handled by Treasury.” “For the first time, Forbes maga- Nicholas Lardy, China expert at the U.S. Institute zine’s list of the 400 richest for International Economics Americans consists exclusively of t appears that our China policy in recent yea r s people worth $1 billion or more. As a group, the people who made the la r gel y has been periodically telling China to rankings released September 21 “Ire value its currency. Paulson seems to have a are worth a record $1.25 trillion, wider view, with the currency just one of them.” compared with $1.13 trillion last Don Straszheim, Vice Chairman of Roth Capital year.” Partners in Newport Beach, California Vinnee Tong, AP Business Writer

BEIJING REVIEW OCTOBER 5, 2006 3 WEEKLY WATCH

OPINION It ’ s unaccept a ble that the emergen c y response system targets only Learning or Vacationing? the 2008 Olympic Games. Isn’t it better to take advan t a ge of the cur- In a country whose per-c a pita GDP has just exceeded $1,000, rent emergen c y response system building as an opportunity to creat e for ordi n a r y people, it is rea l l y a luxury to travel abro a d . an ext e n s i ve public health security system? The new system should Re c e n t l y, a group of village leaders from a province in north e a s t co ver outbreaks of serious epidemics, foo d - b o r ne diseases, drin k i n g China visited South Kor ea, aiming to “gain exp e r iences” in rura l water sanitation, rad i o l o gical health and tropical diseases. co n s t r uction. The tour, whi c h took the delegation to sever al scenic Combined with new measures, public health emergen c y spots, cost ever yone at least 10,000 yuan. This amount may be noth- response exer cises should be made a regular activi t y , and be contin- ing to the ric h, but it is a big sum to farm e r s who have to pay for the ued after the 2008 Olympics. Only a regular public health defen s e vi l l a ge leaders’ tour, as their aver age annual income is betwee n system can effec t i vel y mitigate health risks and ensure the health of 1,000 and 2,000 yuan. the public at large. China has benefited a lot from other countries’ exp e r iences since Hua Nan News, Peo p l e ’ s Daily the beginning of refo r m and opening up in the late 1970s, but obvi - ou s l y not all for eign models are suitable for China. Of importance is Book Prices Hamper Reading the fact that there is no existing model in other countries for China’s on g oing drive to make the countryside pros p e r ous and enric h far m- In Sept e m b e r , two big bookstores in west Beijing wer e crowd e d ers . with eager book buye r s, trig ger ed by a price war between the two After the frequent visits to other countries, how many of these st o r es. At the same time, the fou r th national survey on reading habi t s of ficials who travel abr oad have actually put wha t they learn to use? in China found the number of people regu l a r ly reading books has The r e is a growing fear that the ongoing rur al revi val drive will offer been declining over the last six yea rs . ne w excuses for officials to travel abro a d . Isn’t it better to spend their Yet these crowds showed there is an interest in books, but does tr aveling fees on actually wor king to revi ve the countryside? the survey mean people are buying books merel y as house decora- Ma r ket News tions? Actually, it is che a p books that draw people to these book- shops, as they are items that have risen to abo ve the level of wha t Long-term Public Health System Needed ma n y people can regu l a r ly affor d. Research done by the Chinese Institute of Publishing Science shows that price remains the key fac - As part of the effor ts to ensure the success of the 2008 Olym p i c s , tor affecting people’s purchase of books. Beijing has begun to organ i z e public health emergen c y res p o n s e The fact that book prices are infla ted is an open secret in China, exer cises to strengthen the city’s ability to cope with outbreaks of as the actual cost of a book, including pape r , printing and issuing, is di s e a s e . Undoubtedly, it’s necessary to have such a system, but to on l y 30 percent of the final pric e . Fifty percent of the prof its go to en s u r e public health is something rel a ted not only to the upcoming the pockets of who l e s a l e r s and ret a i l e r s. Even after the discount, sp o r ts gala, but is a long-term mission. bo o k s e l l e r s are still able to make big money and this price war is Frequent public health incidents in recent yea r s are a rem i n d e r seen as an attempt to sell books at the accept a ble prices at whi c h they th a t ever yone can be affected by such incidents, and also affected are should be sold. social security and stabi l i t y . To integrate the public health securit y Book price competition occurs not only in Beijing, but in other into the over all social development planning, therefo r e, is inevi t a ble . Chinese cities too—a phenomenon exp e r ts see as an implication of he a ted competition between increa s i n g l y stron g er indivi d u a l l y run bo o k s t o r e businesses and their decades-old state - o wned counterpa rt s . Ul t i m at e l y rea d e r s are the benefic i a r ies of the ongoing price war . Peo p l e ’ s Daily Shared Economic Growth Needed The fact that wage growth has fallen behind the pace of increa s e of the country’ s GDP is now an unavoi d a ble prob lem facing the Chinese Gover nment. The stagnant salary growth among the low- and middle-income earne r s not only leads to insufficient consump- tion, declining labor skills and ineffec t i ve distrib ution mecha n i s m s , but also ref lects that social achi e vements are not fai r ly shared by the pu bl i c . This yea r , the Chinese Gover nment has begun to pay grea t att e n - tion to the prob lem of a widening wealth gap. Some provinces and municipalities have alrea d y begun to raise the standard of livi n g wage. Good news indeed, but we should not neglect the system defi- ciencies behind this prob lem. The hikes in the living wage standard alone are unable to solve the prob lem of crimped wage growth, there must be a system of guarantees and supporti ve measures . Lo w wages will prevent Chinese labo re r s from improving their own skills. As a result, China will only become the destination of the tra n s f er of manufa c t u r ing industries of low added val u e . Besides, th e r e is alrea d y a lack of skilled technical wor ker s due to low wages in China, whi c h will even t u a l l y hamper the country’ s industria l up g rading effor ts. The re fo r e, a higher standard of the living wage is CHEAP READ: Discounted books are needed needed for the sake of China’s long-term economic growth and na tional interes t . to help restore reading levels in China Wor ker s’ Daily

4 BEIJING REVIEW OCTOBER 5, 2006 WEEKLY WATCH

Joint War Games An soldier hangs from a helicopter as it lands during mountain warfare joint exercises held in Kulyab, Tajikistan on September 23. Some 300 Tajik troops and 150 Chinese troops practiced a coordinated response to possible terrorist attacks during the two-day drills, code named “Coordination 2006.” The drills were held under a memorandum signed by the Tajik and Chinese defense ministers in Beijing this April. They were designed to enhance mutual trust and cooperative ties, as well as to maintain regional security and stability.

BEIJING REVIEW OCTOBER 5, 2006 5 WEEKLY WATCH

Senior Official Sacked billion yuan of social insuran c e Chen Liangyu, Secret a r y of funds for basic pension, unem- the Shanghai Municipal pl o yment, employment injury, Committee of the Commun i s t mat e r nity and basic medical Par ty of China (CPC), has been in s u ra n c e , with an annua l sa c ked for his invol v ement in a income growth of 20 percent in social security fund scandal. recent yea r s. Chen was also suspended From 1998 to 2005, more fr om the posts of member of the than 24 million laid-off wor ker s Political Bureau of the CPC fr om state - o wned enterpri s e s Ce n t r al Committee and member be n e f ited from basic livi n g al l o wances, while over 19 mil- of the CPC Central Committee. lion wer e ree m p l o yed , he said. The Political Bureau of the CPC Central Committee con- Impact Study of vened a meeting on Sept e m b e r Qinghai-Tibet Railway STANDARD CONFUCIUS The China Confucius Foundation on 24 and discussed a prel i m i n a r y September 23 unveiled a standard portrait of ancient The Chinese Academy of philosopher and educator Confucius in order to give him in ves t i g ation repo r t on Chen’s Sciences is planning to send an a single, recognizable identity around the world. pro b lems, whi c h was tabled by expedition team this month to the CPC Central Commission the Hoh Xil region, China’s Gy aincain Norbu, the 11th Asian Candidate Supporte d for Discipline Inspection. Chen’s la r gest area of uninhabited land, Pan c hen Lama, was wel c o m e d case is still under further inves t i - China firm l y supports an bo rd e r ing Tibet, Qinghai and Se ptember 23 by 10,000 fol l o w- Asian candidate in the election gation. Xi n j i a n g , to study the impact of er s to Tib e t ’ s Baiqoi Monastery, Ac c o r ding to the prel i m i - of the next secret a ry - ge n e r al of the Qinghai-Tibet Railway on whe r e he held a Buddhist rit u a l . the United Nations, said na r y inves t i g ation, Chen was wi l d l i f e. Du r ing the ritual, the 17- Chinese For eign Minister Li also invol v ed in other discipline The 45-member team will yea r -old Pan c hen Lama prayed Zh a o xing at the gen e r al debat e vi o l a tions, such as helping to in ves t i g ate the geo l o gy, ecology, for the monks at the Baiqoi of the 61st UN General fu r ther the economic interests of animals and plants and envi ro n - Mo n a s t e r y and offer ed them As s e m b ly on September 22. il l e gal entrepre n e u r s, prot e c t i n g ment of the region during the alms. After lunch, he gave ble s s - Li noted that as chi e f his staff who severe l y violate d 50 - d a y expedition, to begin ings to sever al thousand local ad m i n i s t r ator of the United la ws and discipline, and furth e r - October 10, said Ding Lin, lead Tibetans, touching their heads. Na tions, the secret a ry - ge n e ra l ing the interests of fam i l y mem- scientist of the expedition. On the same day, the be r s by taking advan t a ge of his While gover nment offic i a l s Pan c hen Lama also held brie f has an important role to play. of ficial posts. applaud the envi ro n m e n t a l l y Bu d dhist services at two other “China will firm l y support an fri e n d l y construction of the rai l - mo n a s t e r ies in the same county. Asian candidate , and we are Expanded Social Insurance way, some Chinese scientists are Traveling from place to place, co n vinced that Asia can prod u c e Coverage res t r ained in their assessment, he stopped his car many times to a competent and wel l - re s p e c t e d Ch i n a ’ s social insurance sys- be l i e ving that more time is need- bless his fol l o wers . se c re t a ry - ge n e r al accept a ble to tem has cover ed 6 percent more ed to eval u a te the impact of the The young lama studies all member state s , ” he said. The people annua l l y in recent yea rs , pr oject. Bu d dhism in Beijing and fre- last Asian to hold the post was said Tian Chengping, Minister Ding said the cha n g es in the qu e n t l y visits Tibet and other Mya n m a r ’ s U Thant, who s e of Labor and Social Securit y , at li ving habits of the Tib e t a n Tibetan ethnic areas in Qinghai, te nu r e ended in 1971. the fir st annual meeting of the antelopes will be the focus of Gansu, Sichuan and Yun n a n The minister said China China Social Security For um on the expedition. pr ovinces to hold rel i g ious cere- welcomes progress in UN Se ptember 23 in Beijing. monies. Since his ordi n a tion in refo r m and announced China’s Tian said that by 2005, Pan c hen Blesses Followe r s 1995, the living Buddha has decision to pledge $3 million to China had accumul a ted 606.6 Tibetan Buddhist leader blessed about 300,000 people. the UN peace-building fund.

TOO EXPENSIVE TEA ETIQUETTE TO EAT A jade An expo on carving in the Pu’er tea, shape of fried grown in chicken is on southern Yunnan sale in the Province, is eastern Province staged in the of Shandong, capital city of priced at Kunming on 280,000 yuan September 22, featuring performances by ethnic minorities showing the traditional preparation of the tea

6 BEIJING REVIEW OCTOBER 5, 2006 WEEKLY WATCH

Construction of Shanghai in October. Next-generation Network The bank expects to rai s e China has successfully bui l t be t w een $18 billion and $21 bil- the core networ k of its next gen - lion through the IPO, whi c h er ation Internet, leading the could be the worl d ’ s larges t wor ld in developing a larger , since Japa n ’ s top mobile phone faster and safer Internet that is to op e r ator NTT DoCoMo Inc. do m i n a te the future. raised $18.4 billion in 1998. The networ k, named CNGI- Be t w een September 22 and CERNET2/6IX, passed the 23, ICBC posted its prel i m i n a r y exa m i n a tion of an exp e r t team pr ospectus on the websites of the China Securities Regu l at o r y or gan i z ed by the Ministry of Commission and Hong Kon g Ed u c a tion in Beijing on Ex ch a n g es and Clearin g Se ptember 23, according to a Li m i t e d . Xinhua repo r t. The bank said it wants to China launched the bui l d i n g issue 13 billion A-shares, whi c h of the China Next Generati o n ar e priced in Chinese curren c y, In t e r net in 2003 and in 2005 in Shanghai, and offer 35.39 bil- completed its fir st next - ge n e r a- lion H shares, priced in HK dol- IPO TOAST Chairman of the China Merchants Bank Qin Xiao tion Internet, the CNGI-CER- la r s, in Hong Kon g . (right) and Henry Tang Ying-yen, Financial Secretary of Hong NET2. Kong, smile at the Hong Kong listing of the Merchants Bank on The success of the CNGI’s Soaring Profits in September 22 co r e networ k freed China from Industrial Sector coalmines that are later covere d Spiking Cotton Import de pendence on for eign key Ch i n a ’ s industrial firm s up continue to claim lives, the Demand In t e r net techn o l o gies and prod - rec o r ded 1.1327 trillion yuan of Chinese Gover nment has ucts and ensured national infor - pro f its in the fir st eight months Ch i n a ’ s demand for cotton is la u n c hed a movement to inves t i - ma tion securit y , Xinhua quoted of 2006, up 29.1 percent from a expected to rea c h 10.6 million unnamed exp e r ts as sayi n g . year earli e r , according to the gate the interests of govern m e n t tons this yea r , while output is only Pr oposed in the mid-1990s, Na tional Bureau of Stati s t i c s of ficials in coalmines. es t i m a ted at 6 million tons, said the next gen e r ation Internet is (NBS). On September 22, Vic e Lei Xiangju, General Manager of es t i m a ted to increase the infor - The booming growth was Minister of Supervision Chen the China National Cotton ma tion transmitting speed by pri m a ri l y driven by soaring prof - Changzhi said at a press brie fi n g Re s e r ves Corp. She estimated the mo r e than 1,000 times to 40 its in sectors such as non-fer rou s th a t since the start of the cam- sh o rt f all at 4.51 million tons. gig abytes per second. It also metals, oil and gas, and tran s p o r t paign at the end of last yea r , Lei said the gap betwee n of fer s more safet y , easier man- equipment, according to the 5,357 officials have repo rt e d su p p l y and demand continues to agement and almost inex- NB S . st a k es in coalmines wor th 755 widen in 2006 despite tougher ha u s t i b le Internet addr esses. No n - fe r rous metal fir ms saw million yuan, of whi c h 94 per- times for the textile industry, their prof its more than double cent or 709 million yuan has whi c h is having to face up to ris - Top Lender’s Upcoming IPO fr om the same period last yea r , been withdrawn . ing costs, falling competitiven e s s The Industrial & pro f its of tran s p o r t equipment Chen said the next steps in and the strengthening of the Co m m e r cial Bank of China ma ke r s surged 53 percent and avoiding corruption rel a ted to Chinese yuan. (ICBC), the country’ s top lender pro f its of oil and gas prod u c e r s coalmine accidents are to In 2006, China’s cotton- by assets, is prepa r ing to launch jumped 40.2 perce n t . in c r ease the inves t i g ations of growing area totaled 79 million 48.4 billion shares of its initial of ficials investing in coalmines mu (5.27 million hectares), an pu b lic offer ing (IPO) simul t a n e - Mining Interests Inve s t i g a t e d and dig up any corruption that is in c r ease of 3 million mu (200,000 ou s l y in Hong Kong and As accidents in small behind a mine accident. he c t a r es) from a year ago.

UP, UP AND FUTURE STARS AWAY Coaches from the Twenty hot Manchester United air balloons Football Club, fly over the brought to China by Great Wall international school during Dulwich College China’s Beijing and Care second for Children, annual hot an NGO, provide air balloon professional-standard tournament, football training to on the disadvantaged morning of children from the September 10 Shunyi Special Education School and Dulwich students

BEIJING REVIEW OCTOBER 5, 2006 7 WEEKLY WATCH

BACK ON STAGE Hezbollah chief Hassan Nasrallah gestures at a massive rally in the southern suburbs of Beirut on September 22, the first time Nasrallah appeared in public after Israel’s war against Lebanon that ended on August 14

DEFECTIVE COMPUTERS This file photo shows an employee of Japanese electronics giant Toshiba displaying a Toshiba lightweight notebook computer. The company said on September 19 that it would recall 340,000 laptop computers worldwide due to problems with batteries made by its rival Sony

PERFECT LANDING U.S. space shuttle KING’S RECOGNITION On September 22, Thailand’s coup leader, General Sonthi Atlantis touches down at Kennedy Space Boonyaratglin, kneels in front of the portraits of Thai King Bhumibol Adulyadej and Center on September 21 after traveling Queen Sirikit at the army headquarters in Bangkok, where he formally received the over 7 million km in 12 days endorsement of the nation’s revered king

8 BEIJING REVIEW OCTOBER 5, 2006 WEEKLY WATCH

BELL TOLLS FOR PEACE UN Secretary General Kofi Annan rings the peace bell in observance of International Peace Day during the 61st General Debate on September 21 at the UN headquarters in New York

TRACKING A RUMOR French Defense Minister Michele GLOBAL COMMITMENT Former U.S. President Bill Clinton (left) Alliot-Marie visits the police force in Dijon on September 23. and Sir Richard Branson hold a signed commitment letter after She has ordered an investigation to determine the source of an the billionaire entrepreneur announced that he would invest intelligence leak that led to a newspaper report saying Osama some $3 billion to combat global warming at the Clinton Global bin Laden died this month of typhoid, something that Initiative annual meeting in New York on September 21 authorities say was unconfirmed

HI-TECH TRAGEDY An aerial view shows the scene on a bridge where a high-speed magnetic levitation train collided with an engineering vehicle during a test run near Lathen, northwestern Germany on September 22, a disaster that killed 25 and HOLY SEASON Muslims in Gaza City prepare food as Ramadan, seriously wounded 10 the month of fasting, begins on September 23

BEIJING REVIEW OCTOBER 5, 2006 9 WORLD A New Dawn for Doha? said the Doha Round is like a patient who has China is being urged to exert its efforts been released from the intensive care unit but is still confined in the hospital for a whi l e . to get the stalled Doha Round of trade The Doha Round of trade talks, whi c h be gan in 2001, was named after the Qata r i negotiations moving again ca pital whe r e the talks wer e launche d . Wit h an avowed aim to lift millions out of pover - By DING ZHITAO Mu l t i l at e r al meetings of stakeh o l d e r s have ty through fai r er trading conditions, the oc c u r red in Brazil and Singapo r e, and rel e - round has been billed as the “devel o p m e n t he Doha Round of global trade talks vant nations are scheduled to meet again in round” of WTO talks, as well as a once-in- was suspended in Jul y, but that is Ge n e va soon. a- ge n e r ation chance to boost global eco- not the end of the story. While there Amid these effor ts, the possibility of a nomic growth. ha ve been a lot of fin ge r s pointing resumption of the stalled talks is growi n g . Ho wever , on Jul y 27, WTO Direc t o r over the causes of the brea k d ow n , “T he Doha Round of negot i a tions is Ge n e r al Pascal Lamy decla r ed a halt to the Tdeb a tes on differ ent aspects of the Worl d li k e a boat. It is stranded on the beach. But five- ye a r -old talks after the parties failed to Trade Organ i z a tion (WTO) talks have it is sure to set sail,” said Zhou Shijian, the ach i e ve substantial progress. Lamy said he gained forc e . Standing Councilor of the China Society for would consider resuming the talks after all At the same time, a flu r ry of diplomacy Wor ld Trade Organ i z a tion Studies. pa r ticipants showed sufficient sincerit y . has taken place for the resumption of the His comments wer e echoed by Braz i l ’ s On September 9-10, interna tional trad e Doha Round. Bilate r al talks on this subject For eign Minister, Celso Amorim, on of ficials from the Group of 20 (G-20) devel - ha ve been held around the globe. Se ptember 10 in Rio de Jan e i r o, when he oping nations met in Rio de Jan e i r o for the

Zhou Shijian, the Standing and in the meantime, it can coordi n a te the Councilor of the China Society opinions of other developing countries, to for World Trade Organization fin a l l y achi e ve a balance of interes t s China and Doha among all the parti c i p a n t s . China, as the biggest devel o p - Studies Why did Susan Jeffrey J. Schott, Senior Fellow ing country and a trade gia n t Sch w ab come to of the Institute for International in the worl d , plays an impor- China? Why did Economics, Washington, D.C. tant role in the global trade sys- Pascal Lamy come to China? The y China has been a construc t i ve but low- tem. Because of this dual iden- came for one pur- key participant in the Doha Round of mul - ti t y , the country is under the pose: to persu a d e ti l at e r al trade negot i a tions in the WTO. It global spotlight. Both WTO China to exer t its has played a useful role in advancing the Di r ector General Pascal Lamy in f luence on the ne got i a ting process through its member- resumption of the ship in the G-20 coalition of devel o p i n g and U.S . Trade Repre s e n t at i ve Doha Round. co u n t ri e s . Susan Schw ab visited Beijing Di f fer ent from its peers among devel o p - Tha t said, China’s low prof ile in the rec e n t l y to exh o r t its leaders to ing countries, China is not reliant on agric u l - WT O talks is not befitting its status as one st r engthen their effor ts towar d tu r e for its economic growth and exp o r t rev- of the worl d ’ s enu e . The re fo r e, it has a smaller stage in agri- la r gest economies a successful conclusion of the cu l t u r al negot i a tions of the Doha Round. and trading nati o n s . cu r rent Doha Round of trad e Besides, China is both a developing country It has not offere d ne got i a tions and play a bigger and a trade giant. It has a perfect underst a n d - ad ditional refo rm s be yond the ext e n s i ve role in revi ving the worl d ’ s ing of how other developing countries and de veloped countries feel in the talks. Due to commitments under- mul t i l at e r al trade system. this unique status, China can wor k as a ta k en in its 2001 Ma n y believe China can help to bri d g e and commun i c a tor between the devel - pr otocols of acces- res t a r t the talks, whi c h wer e oping and developed worl d . sion, and deserves blame—along with other major trad i n g suspended in Jul y. Severa l If China plays this unique role in savi n g the Doha Round, it will have its status in the nat i o n s — f or the current impasse in the exp e r ts give their views of the in t e rn a tional community further proved . talks. China has an important stake in a rel a tionship between China To revi ve the talks, China can press the well-functioning mul t i l at e r al trading sys- and the Doha Round. United States and the EU to comprom i s e , te m — t h at ’ s why it spent so muc h effor t to

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fir st time since the Doha Round was sus- pe n d e d , with the aim of developing a uni- fied position. Wha t happened in Jul y was “a serio u s ac c i d e n t , ” said Lamy at a press confer ence at the close of the G-20 meeting, but “we have been able to move ahead in Rio de Jan e i ro . ” He said all the parties at the Rio meeting agreed that negot i a tions should res u m e . “By mid-March of next year we have to get to know if there is a deal in the making or not,” Lamy said, though a definite date for for mal negot i a tions was not set at the me e t i n g . Why Doha failed “T he Doha talks will be revi ved by the end of the year and last for one or two yea rs , or even more,” Zhou predicted in an intervi e w with Beijing Revi e w. “Any w ay, the [previ o u s ] Uru g u a y Round took seven yea rs . ” Jeff r ey J. Schott, Senior Fel l o w at the Institute for Interna tional Economics in Washington, D.C., explained the reason why “We hope the developed WTO member countries the Doha Round fai l e d . “Disagreements over agric u l t u r al refo r ms—in parti c u l a r , how will make substantial contributions in order to resume muc h the United States and the Europ e a n the talks as soon as possible.” Union (EU) should cut subsidies and tariff s —Chinese Commerce Minister Bo Xilai pr otecting their farm e rs — h a ve been a major

join the WTO and why it needs to take a the Doha Round of regar d, China’s role as a bystander in the mo r e active leadership role in revi ving the ne got i a tions]. I think worl d wide effor t to reduce greenhouse gas Doha Round. the solution should emissions and addr ess other global scale Wha t needs to be done? Fir st, China be the collective env i r onmental [prob lems] is increa s i n g l y should wor k clo s e l y with other major trad i n g [e f for ts] of [many] un t e n a ble . If China is to be seen as a na tions to ensure that the WTO talks re- co u n t ri e s . le a d e r , it must be prepa r ed to pay its fai r en g age and progress. To that end, China In the past, you sh a r e (whi c h, indeed, will be substantial) should offer improved access to its market s could have some of the costs of addr essing cli m a te cha n g e by cutting its tarif fs on non-agric u l t u r al goo d s key countries push- and other issues involving tran s - b o u n d a r y by a half from the current applied rates and ing for the end of ha r m. While China has many poor people li b e r alizing trade and investment in the fin a n - the rou n d , but not these days. You need a and must prio ri t i z e addr essing their plight, cial and other service sectors. This is not as co l l e c t i ve push and collective [sharing] of po ver ty can no on e r ous as it sounds. China is in a position to res p o n s i b i l i t y . lo n g er be accept e d co n t ri b ute more than other developing coun- as an exc u s e . China tr ies to the final Doha Round accord. Daniel Esty, Director of the Yale has grea t wea l t h Because China’s trade barrie r s are alrea d y World Fellows Program to d a y and mus t lo w compared with other developing coun- China has a potentially critical role to th e re fo r e be pre- tr ies such as India and Brazil, large perce n t - pl a y in making the interna tional trad i n g pa r ed to contribu t e age cuts in base tarif f rates will tran s l a te into system wor k to the advan t a ge of all fin a n c i a l l y and oth- small cha n g es in China’s applied tarif fs. Such na tions—and no country benefits more erwise as a middl e - action could yield important dividends: It fr om open markets than China. China income country (of would allow China to respond positivel y to needs to step up to the leadership position grea t size) to global prob lem solving. pr otectionist pres s u r es in Europe and the th a t it aspires to fill in many respects. In China, more than any other country, will United States, and would rei n fo r ce Chinese the context of the Doha Round, China gain from the ongoing trade liberal i z at i o n economic and political rel a tions with other could emerge as a critical mediato r , help- and risk a serious economic slowd o wn from de veloping countries in the WTO. ing to brid g e the gaps between the United its fai l u r e. So China should use all of its St a tes and Europe and the developed and di p l o m a tic and economic strength to lean on Supachai Panitchpakdi, de veloping wor lds. the European nations to make comprom i s e s Secretary General of the United But China also needs to accept that su f ficient to res t a r t the stalled talks. ■ Nations Conference on Trade those who rec e i ve benefits from global (W ang Yanjuan and Chen Wen and Development co o p e r ation must share in the bur dens of co n t ri b uted repo r ting for this China alone may not [be able to revi ve pr oviding “global public goo d s . ” In this art i c le from New York )

BEIJING REVIEW OCTOBER 5, 2006 11 pa r t of the foo t - d r agging grou p . ” “T he developing countries wer e angry, as the developed ones always carry out a ‘d o u b le standard’ in wor ld trad e ,” said Zhou. “Industria l i z ed countries, whi c h do m i n a ted the trade talks, are ver y selective about whi c h sectors should be pro- f re e - tra d e . For products they are not good at [m a nu fa c t u r ing], for exa m p l e , textiles, they impose not only tarif fs, but also quotas. For IT products, in whi c h they have a competi- ti ve edge, there is no tarif f at all.” Getting the talks restarted Zhou said that mentality is not good for “The WTO and its members wor ld trad e . “The United States and the EU need a solid Doha outcome ar e both trade giants. If the Doha Round col- la pses even t u a l l y, whe r e will the WTO head? to remain an effective Without the WTO, the globalization of the force in the global trading ec o n o m y cannot be achi e ved ,” he said. system.” On the rel a tionship between the Doha —U.S. Trade Representative talks and wor ld trad e , Morgan Stanley Chief Susan Schwab Economist Stephen Roach has a differe n t vi e wpoint. In his arti c le titled “Doha Doesn’t cause of the impasse in the Doha Round,” he Mat t e r ,” Roach writes that the Doha Round “By mid-March of next year told Beijing Revi e w. was “a sideshow to the main event in the glob- we have to know if there is Chinese exp e r ts on the WTO tend to al economy” from the ver y begin n i n g . a deal [on the Doha Round] att ri b ute the collapse of the Doha Round to “A successful completion of the Doha de veloped countries’ neglecting the inter- Round of trade liberal i z a tion would have in the making or not.” ests of developing countries. been nice. But the benefits would have been —WTO Director General “T he developed wor ld and the devel o p - fle e t i n g , at best. The r e are muc h bigger fis h Pascal Lamy ing wor ld failed to agree with each other, to fry in an increa s i n g l y contentious era of while in the developed worl d , differe n t gl o b a l i z at i o n , ” he said. seem to be in the mainstream. As the third co u n t r ies cannot rea c h a consensus,” said Ho wever , Roach’ s comment does not qu a r ter of the year comes to a clo s e , more Zhou. “For exa m p l e , the EU just cannot voices are heard appealing for the res u m p - compete with the United States in terms of tion of the WTO negot i a tions, and stres s i n g cutting gover nment subsidies.” the importance of the Doha Round to the Tha t may partl y explain why EU Trad e es t a blishment of a stable and open global Commissioner Peter Mandelson once had economic system. sc a thing criticism of the United States. “The “A fai l u r e of Doha would stren g t h e n United States has been asking too muc h those who want to turn their backs on glob- fr om others in exch a n g e for doing too little al i z a tion and ret re a t into protectionism. It th e m s e l ve s , ” he said in Jul y. would undermine the WTO system, whi c h He said Washington was res p o n s i b le for has brought stability and pred i c t a bility to the fai l u r e of the WTO talks and war ned of the global economy,” Mandelson said. ne gati ve consequences in global trad e , par- In Rio de Jan e i r o, U.S . Trad e ti c u l a r ly for poor nations. Rep re s e n t at i ve Susan Schw ab said the But there are other views. Daniel Esty, United States “is committed to finding a Di r ector of the Yale Wor ld Fel l o ws Program , successful outcome for this round if there is said the biggest obstacle to a successful con- one to be fou n d .” clusion of the Doha Round is the EU’s intran - “T he WTO and its members need a si g ence in reducing its trad e - d i s ru p t i ve agri- solid Doha outcome to remain an effec t i ve cu l t u r al subsidies, whi c h blo c ks access to the for ce in the global trading system,” she said. Eu r opean market for many developing nati o n s But it req u i r es ext r a effor ts on the part with potential agric u l t u r al exp o r t sectors. of developed and developing countrie s “T he slow pace at whi c h the EU is al i k e, she said, cautioning that exp e c t i n g pr oposing to reduce these subsidies, whi c h “A failure of Doha would im m e d i a te results was not rea l i s t i c . amount to tens of billions of euros each strengthen those who want Mandelson said high-level talks to yea r , is the major stumbling blo c k to ju m p s t a r t the Doha Round could be possi- pr ogress. And within Europ e , the fin g er of to turn their backs on ble at the end of this year or early next yea r . blame must be pointed direc t l y at France for globalization and retreat In t e rn a tional Monetary Fund (IMF) its refusal to make adequate concessions on into protectionism.” Ma n a ging Director Rodrig o Rato and far m subsidies.” —EU Trade Commissioner Wor ld Bank President Paul Wol f owi t z , Esty also crit i c i z ed sever al Asian Peter Mandelson speaking at the annual meeting of the two na tions. “Japan and South Kor ea are also in t e rn a tional organ i z a tions in Singapo r e on

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Se ptember 19, said all countries should se i z e the opportunity and re- e n e r giz e the Doha talks. “There are Who will take the first step? much bigger Other finance officials exp r essed their fish [than the optimism that a swift conclusion to the Doha Round] Doha Round talks could be rea c hed soon. to fry in an Go r don Brown, British Chancellor of the Exche q u e r , gave the most positive state - increasingly ment, sayi n g , “The aid-for- t r ade announce- contentious ment, the determi n a tion of America, the era of st a tements made by European ministers, the co m m unique that says we want a successful globalization.” outcome by the end of the year show that —Morgan Stanley Chief Economist we are fir ed up as a group in wanting both a Stephen Roach co n c lusion to the trade round and a success- ful outcome, and I believe that is sending a me s s a ge right across the worl d .” Despite the optimistic talk, the probl e m “T o get political support for cha n g es in Wor ld Trade Organ i z a tion Studies. “On the remains of who will take the fir st step. In their long-standing trade barrie r s, trade offi- one hand, they must cut agric u l t u r al subsi- her trip to Beijing in late August, Schw ab cials from those countries will need to brin g dies by a large margin. On the other hand, used the “rock - p ap e r- s c i s s o r s” game to home agreements that offer substantial new th e y must give a clear timetable . The y can de s c r ibe the importance of simul t a n e o u s tr ading opportunities in agric u l t u r e, manu- le a r n from wha t has been done in regar d to action by all player s. Otherwise, she fac t u r ing and services. Simply put, a big tex t i l e s . ” warn e d , “One cannot play the gam e .” pa ck a ge of market access refo r ms is essen- He said it is difficult to rea c h a consen- “Th e r ein lies the key cha l l e n g e for tial for a successful Doha Round deal. sus among 149 members, but somehow a WT O diplomats , ” Schott told Be i j i n g “T hus, the leading developed and devel - solution will fin a l l y be rea ch e d . “Nobody Rev i e w. “The United States, the EU, Japa n oping trading nations need to act in tandem can shoulder the responsibility for the fai l - and others will have to offer refo r ms of to improve wha t is on offer in the Doha ur e of the WTO talks.” ■ res t r ictions that have survi ved liberal i z at i o n Ro u n d ,” said Scho t t . (W ang Yanjuan and Chen Wen in i t i at i ves over the past 50 yea r s. China maintains that developed nati o n s co n t ri b uted repo r ting for this ar e expected to “take the lead in making art i c le from New Yor k) substantial conces- sions” in terms of cutting far m tariff s and subsidies. In his meeting with Sch w ab, Chinese Co m m e r ce Minister Bo Xilai said, “We hope the devel o p e d WT O member coun- tr ies will make sub- stantial contribu t i o n s in order to resume the talks as soon as possi- ble and rea c h the ob j e c t i ves of the ne got i a tions in a ti m e l y manner.” These countrie s account for the lion’s sh a r e of wor ld trad e and repr esent a wide ran g e of commerci a l in t e r ests. Consensus “We are fired up as a among them is con- group in wanting both a si d e r ed crucial for a conclusion to the trade gen e r al agreement of all WTO members. round and a successful “T he devel o p e d outcome.” co u n t r ies must act —British Chancellor of firs t , ” said Zhou of the the Exchequer Gordon Brown China Society for

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the LDP can win parli a m e n t a r y elections ne xt yea r . Se c o n d , most Japa n e s e , from ordi n a r y ci t i z ens to political fig u r es, hope to dispel the bad effect of Koi z u m i ’ s visits to the Chilly Ties Persist Yasukuni Shrin e . A survey by the Japa n e s e For eign Ministry in March shows that 77.9 Si n o - J apanese relations seem unlikely to pe r cent of the Japanese polled exp r essed the vi e w that Japan should improve the wors e n - improve under the leadership of Shinzo Abe ing ties with China caused by Koi z u m i ’ s visits to the Yasukuni Shrin e . By ZHAO DAWEI Tai w an leader Lee Teng-hui, who backs Thi r d, the United States neither wan t s “Ta i w an indepe n d e n c e ,” to visit Japan. Japan to get out of the alliance with it, nor does he deterio r ating state of rel at i o n s On the issue of oil and gas fields in the it want to see the isolation of Japan in Asia. be t w een China and Japan may per- East China Sea, Abe has freq u e n t l y delivere d Thus, in the near future, Washington wou l d sist under the gover nment of Shinzo pr ovoc at i ve rem a r ks. He also remains in li k e to see better Sino-Japanese rel a tions. Ab e , who won the presidential elec- close contact with right-wing for ces in Japa n Fou r th, the rec o ver y of Japa n ’ s econo- tion of the ruling Liberal Democrati c and has visited the Yasukuni Shrin e . He my has mainly been due to the fast growt h TPar ty (LDP) on September 20 and was holds that it is China’s wishful thinking that it of bilate r al trade with China. The named the new prime minister of Japan on would be able to sepa r ate a few militaris t s economies of the two countries are comple- Se ptember 26. fr om the bulk of the Japanese people. Abe’s me n t a r y and mut u a l l y beneficial. In this Jud g ing from Abe’s public rem a r ks and aide for diplomacy, Hisahiko Okazaki, who se n s e , maintaining good political rel at i o n s election proposals, there are enough rea s o n s was also his teache r , holds typically rig h t - to develop economic rel a tions serves the to believe that the successor to Jun i ch i r o wing views in Japa n ’ s political arena. in t e r ests of the peoples of both countries. Koizumi will hold an even tougher policy Co m p a r ed with Abe, Koizumi seems Ab e ’ s hawkish backg round and the to war d China. mo r e moderate . After all, Koizumi has impact of reality may jointly determine that Du r ing Koi z u m i ’ s time in offic e , Sino- al ways held that China’s rise is an opportu - his policy towar d China will be two- s i d e d Japanese rel a tions rea c hed their coldest nity for Japan. He accepts the Tok yo tri- and unstable . On one side, he may show point since the norma l i z a tion of bilate ra l bun a l ’ s ver dict on Wor ld War II war crim i - di p l o m a tic flex i b i l i t y . He may fir st make a rel a tions in 1972. The outgoing prime min- nals, and has repe at e d l y mentioned the ne w promise on the issue of Yasukuni Shrin e ister visited the Yasukuni Shrin e , whi c h sp e e c h deliver ed by Japa n ’ s for mer Prim e visits in order to provi s i o n a l l y rem o ve the ho n o r s Japa n ’ s war dead, including Worl d Minister Tom i i c hi Murayama on Aug u s t political obstacle to the meetings of the lead- War II war criminals, on six occasions, 15, 1995, whi c h ackn ow l e d g ed and apo l o - er s of the two countries. It is also possible whi c h gravel y damaged the political fou n - giz ed for Japa n ’ s actions in Wor ld War II. th a t he may suggest the two countries hold a da tion of rel a tions between China and Japa n But, will Abe proceed down Koi z u m i ’ s wi d e - ra n g ing strate gic dialogue on vari o u s and led to a halt in mutual visits between the road? Tha t does not appear to be so simple. issues between the two countries or elevate senior officials of the two countries. The domestic and interna tional envi ro n m e n t s the level of the dialogues that alrea d y exi s t , Fu rt h e rm o r e, the antagonistic sentiment mean that he cannot do what e ver he wants. su c h as the regional cooperation in East Asia, be t w een the peoples of the two countries has Fir st, Abe must improve Sino-Japa n e s e en e r gy cooperation, oil and gas devel o p m e n t also been aggravate d . Due to the negati ve rel a tions and lead Japan out of its curren t in the East China Sea, or even military and ef fect of the cold political rel a tions betwee n di p l o m a tic predicament, whi c h can show st r ate gic dialogues. the two countries, trade between the two his political capa bility to the nation, so that He is also likel y to discuss new cooper- co u n t r ies has decrea s e d , and Japa n ’ s inves t - ment in China has been shrin k i n g . On the issues of energy and other res o u r ces, Japan has also competed with Abe’s Political Views away from the post-war system, and China, including an oil pipeline project in what he will do first during his term Russia and oil and iron ore projects in Sudan. Abe discussed much about his is to try to remove the obstacles to The two countries also have had disputes views of politics and diplomacy in revising the Constitution. Regarding rel a ted to territ o r y in the East China Sea. his election program, showing that the Japanese-U.S. alliance, Abe Besides, the ties between Japan and he means to be a tough party presi- holds that the role of the alliance Tai w an have become closer in recent yea rs , dent and prime minister. should be improved and its mutually de veloping from economic contacts to secu- First, on the issue of constitution- interactive feature needs to be rity cooperation, whi c h has cha l l e n g ed the al revision and collective self- ensured in order to change the awk- co r e interest of China. defense right, Abe strongly advo- ward situation that U.S. troops are The wor sening bilate r al ties betwee n cates completely revising the unilaterally stationed in Japan but China and Japan, two important Asian coun- Constitution to remove the limit that Japanese self-defense forces cannot tr ies, seem likel y to continue after the cha n g e Japan can only exercise military provide overall support to the U.S. of Japa n ’ s prime minister. Abe app e a r s more power in self-defense. At the same military. ha wkish than his pred e c e s s o r . As an impor- time, by enacting a law, Japan would Second, on the issue of historical tant member of Japa n ’ s pro- Ta i w an group, he be able to send its self-defense p ro blems, Abe made an ambiguous used to activel y advoc a te permitting form e r forces overseas at any time. Abe comment on the meaning of claims that Japan should break To m i i chi Muraya m a ’s “August 15” The author is a researcher with the China Institute of International Studies

14 BEIJING REVIEW OCTOBER 5, 2006 WORLD

ation channels on economic contacts and Profile of Shinzo Abe the development of bilate r al political rel a - tions. He may att a c h importance to cultural Shinzo Abe, 52, was born into a distinguished political family. His exch a n g es, educational cooperation, peo- father, Shintaro Abe, was former secretary general of the LDP and for- ple-to-people contact and perso n n e l mer foreign minister, and his grandfather was former Prime Minister exch a n g es, so as to increase the good fee l - Nobusuke Kishi. Following graduation from the Department of Political ings between the two peoples. Science of the Faculty of Law at Seikei University in 1977, Abe studied On the other side, it may also be true politics at the University of Southern California. In 1979, he returned to th a t Sino-Japanese rel a tions will not Japan and began to work at Kobe Steel Ltd., where im p r ove substantially. he remained for about three years. Abe entered Co o rd i n a ting with the United politics as his father’s secretary in 1982. In 1993, St a tes and containing China he won a seat in the House of Representatives by will still be Japa n ’ s diplomati c running in a constituency in Yamaguchi st r ate gy. Japan is also likel y to Prefecture. In 2000, he was appointed deputy chief maintain its strate gic advan - cabinet secretary in the second cabinet of Prime ta ge over China by rel ying on Minister Yoshiro Mori. He was elected LDP secre- the alliance with the United tary general in 2003 and became a cabinet mem- St a tes. Abe also favor s a strate - ber for the first time in the post of chief cabinet gic “alliance of democrac i e s ” secretary in Junichiro Koizumi’s third cabinet in among the United State s , 2005. Aus t r alia and India to offer a The following factors helped Abe win the LDP co u n t e r w eight to China. presidential election: First, he is a member of the In addition, Japan may Hashimoto Faction, the most powerful faction of de velop its military under the the LDP, and is strongly backed by Koizumi. pre t e xt of the missile and Second, his hawkish political thinking conforms to nuc lear threa t from North the right-wing inclination of Japan’s social trend of Kor ea, with the real intention thought. Third, his tough and uncompromising being to deal with China. Japa n attitude on the issue of abductions of Japanese is likel y to provok e events on nationals by North Korea and other diplomatic JAPAN ENTERS INTO ABE TIME: the Tai w an issue and the oil and problems caters to the sense of crisis of some Japanese Chief Cabinet Secretary gas development of the East Japanese people. Fourth, family influence has Shinzo Abe seals 464 votes among China Sea and damage rel a - the total 703 ballots. He was elected helped him gain adequate election funds. Fifth, the the 21st president of the ruling tions with China. Of course , LDP’s voting system was favorable to Abe. Liberal Democratic Party on su c h events as anti-China As a political figure born after World War II, Abe September 20 rem a r ks and a new round of shows a decisive and tough working style with a te xtbook disputes may occur. strong hawkish flavor, gaining him high prestige in the nation, especial- But, gen e ra l l y speaking, Sino-Japa n e s e ly among young people. Looking young and handsome, he is also good rel a tions during Abe’s tenur e will not spin at taking advantage of his “star” quality, which helped him attract many out of control. Although the two countrie s voters. Abe is also a good writer, and his new book, Toward a Beautiful will not repe a t their frie n d l y rel a tions of the Nation, became a bestseller in Japan immediately after it was published. 1980s, they will not have a hostile confron t a - tion or conflict in the fore s e e a ble future. ■

s p e e ch, saying it was delivered on e rs. Abe did not make cl e a r the other two countries. With regard the 50th annivers a ry of the end of remarks on whether he would pray to North Korea, Japan should handle World War II and thus has become at the Yasukuni Shrine as prime the abduction issue and the nuclear something related to the past, and m i n i s t e r. and missile problems in a tough there is no need to express new Third, on diplomatic issues, Abe manner, such as imposing economic v i ews on the matter. On the issue advocates that the Tokyo- sanctions. Based on some common of Yasukuni Shrine visits, Abe said Washington alliance should contin- values, Japan should push forward he has alw ays had a feeling of ue to be strengthened. Apart from strategic dialogues with the United respect for those who fought fo r overall cooperation with the global States, Europe, Australia and India, the country and would like to pray strategy of the United States, Japan finally making Japan a country with for them. He said that whether needs actively enhance its status in important responsibility in the Japanese leaders should pay visits the international arena and quicken world. to the shrine or not should not its move toward becoming a politi- Abe has made few comments on reflect the will of other countries, cally important country. In Asia, Abe his views about the economy, edu- and if Japan is misunderstood by holds that Japan should establish cation and other domestic issues in other countries because of this, it reliable relations with China and his election program. He is very like- should try to clear up the misun- South Korea and try to resume talks ly to follow Koizumi’s lead on these d e rstanding but not listen to oth- between the leaders of Japan and issues. ■

BEIJING REVIEW OCTOBER 5, 2006 15 WORLD

After the end of the Cold War , many NAM members gave prio r ity to bui l d i n g their own countries and the opportunities for them to join together to promote wor ld devel - opment became fewer . Meanwhi l e , because of an increase in conflicts among NAM Flexing Muscles me m b e r s themselves, the establishment of other economic organ i z a tions for devel o p i n g The non-aligned movement, representing co u n t r ies and Wes t e r n countries’ disengage- ment, the NAM ’ s influence became less, and two thirds of UN members, is gaining it was on the brink of being for got t e n . En t e r ing the new millennium, however , vigor in world affairs the wor ld order cha n g ed great l y. U.S . uni- lat e r alism and its pree m p t i ve strate gy fai l e d By NI YANSHUO summit supported Iran ’ s right to peaceful uti- to contain the development of terror ism. On li z a tion of nuc lear energy and objected to the contrar y, terror ism has increased worl d - ma gine nearly two thirds of the UN do u b le standards in this regar d. wi d e . me m b e r s meeting together to discuss “It is impossible for the worl d ’ s nati o n - Ac c o r ding to Wu, the worl d ’ s probl e m s , and rea c h consensus on internat i o n a l alities to be in one mode; differ ent countrie s su c h as wea pons of mass destruction, the events. This is wha t happened in should have differ ent development modes,” Mi d dle East, and the Iranian and North Ha vana, Cuba, at the 14th Non-Aligned He r nandez said. Kor ean nuc lear issues, are also pressing on ICo u n t r ies Movement (NAM) Summit from Cuban leader Fidel Castro did not par- the NAM. The organ i z a tion needs to have a Se ptember 11-16. Cuba, the new holder of ti c i p a te in the summit because of his rec e n t pl at fo r m to speak about these affai rs . the pres i d e n c y of the NAM, again became a gas t r ointestinal surger y, but he was elected “Cuba has done well in arran g ing the focus of wor ld att e n t i o n . cha i r man of the NAM. co n fe r ence and all the 118 NAM countrie s “Y ou can see from the participants in sh o wed grea t unity at the confere n c e , whi c h the summit confer ence that the repre s e n t a - Three highlights is rare l y seen in history. This is the second ti veness of the NAM this time are ver y “T he NAM has now developed into an highlight of the summit,” said Wu. He bro a d ,” Carlos Miguel Pere i r a Herna n d e z , im p o r tant for ce in pushing the wor ld eco- ad ded that the NAM members are differe n t Cuban Ambassador to China, said in an nomic and political system in the direc t i o n in many aspects: Some are African coun- in t e rv i e w with Beijing Revi e w. of justice and rea s o n a ble n e s s , ” Wu Miaofa, tr ies, some are Arab countries, some are At the summit, two more countrie s , a res e a r cher with the China Institute of U.S . allies, such as India and Pakistan, and Haiti and St. Kitts and Nevis, wer e In t e rn a tional Studies (CIIS), told Be i j i n g so m e , such as Iran, have been labeled part app r oved as NAM members, expanding the Rev i e w. of an “axis of evil” by Washington. “The y number to 118. A total of 56 top leaders and Ac c o r ding to him, the NAM summit left can still rea c h a consensus on many interna - 90 for eign ministers parti c i p a ted in the con- a deep impression in at least three aspects. tional affai r s, whi c h indicates the NAM ’ s fere n c e . Meanwhi l e , some delegations wer e “T he fir st is that the NAM, after decades of a st r ong internal unity,” Wu said. headed by vice presidents or vice prim e lo w ebb, has regained its vigor in internat i o n - He denied that the NAM is an anti-U.S . mi n i s t e r s. Fifteen observer nations, inclu d - al affai rs , ” Wu noted, adding that the gath e r - or gan i z a tion. “Most of the members wou l d ing China, took part in the summit. ing of NAM members and their discussion of li k e to cooperate with the United States to Par ticipants also included UN Secret a r y var ious interna tional affai r s demonstrated the im p r ove the wor ld orde r .” Ge n e r al Kof i Annan, African Union repr e- or gan i z at i o n ’ s vitality. “T he third highlight is that the NAM ’ s se n t at i ves, and repre s e n t at i ves from the Du r ing the 45 yea r s since the fir st NAM suspicion of U.S . for eign policy influ e n c e d MERCOSUR customs union and the summit was held in Belgrad e , Yugo s l a via, in the country’ s hegemonism and unilate ra l - Andean Community in South America. 1961, many developing countries, mainly in is m , ” said Wu. “All countries and regional organ i z a - Asia, Africa and Latin America, have fol - Because of the deterio r ation of the image tions in the Carib bean area parti c i p a ted in lo wed an independent and non-aligned for - of the Bush administration among NAM and the confere n c e . This is the fir st time in eign policy, serving as a third important polit- Eu r opean Union members, the United State s NAM history,” Hernandez said. ical for ce between the United States and faced a dilemma and the White House is grad - The major goal of the summit was to So viet Union during the Cold War perio d . ua l l y cha n g ing its practices. It has cha n g ed its “r evi t a l i z e the movement so that it will play Wu wor ked in the UN as a councilor in attitude towar d the UN. “Previ o u s l y, the a role in the interna tional arena that is in the 1970s and said he felt the strong influ - United States could take action without kee ping not only with its current member- ence of the NAM in the wor ld organ i z a tion at app r oval from the UN, such as the war agai n s t ship of 118 countries but also our history of th a t time. Because of the large gap betwee n Ir aq; but now, it has started to rel y on the worl d ba ttles in the name of the loftiest causes,” finished product prices and raw mate ri a l bo d y on many issues,” Wu said, adding that Raul Castro, President of the Council of pr ices, whi c h had hurt developing countrie s ’ the country also began to mend its rel at i o n s St a te and Ministers of Cuba, said in his in t e r ests, the NAM made effor ts to establi s h with European and Asian countrie s . closing addr ess to the summit. a new interna tional economic and political Ac c o r ding to Hernandez, the NAM Besides stressing the implementation of system at the sixth Special Session of the UN co u n t r ies’ unity and coordi n a tion is not only the UN Charter and maintaining worl d Ge n e r al Assembly in 1974. Many devel o p - im p o r tant but also necessary. NAM coun- pe a c e , the NAM summit also voiced support ing countries rallied to that cause. “This indi- tr ies will have strong power in the UN whe n for the development courses of Ven e z u e l a ca tes the NAM could sense unsatisfying ele- th e y are united because they account for the and Bolivia, as well as Cuba’s effor ts to com- ments in the wor ld economic and political ma j o r ity of UN members. ba t the U.S . blo c kade and its occupation of st ru c t u r e and take active measures to try to “Our movement is essential to the quest Guantanamo Bay. At the same time, the cha n g e them,” Wu noted. for a new system of interna tional rel at i o n s , ”

16 BEIJING REVIEW OCTOBER 5, 2006 NO TO ALIGNMENT: Representatives to the 14th Non-Aligned Movement Summit pose for a photo in Havana on September 15

Ca r los Lage, Cuba’s Vice President, said at The summit highlighted views that differ rejoin. “You can see from the Havana con- the opening session of for eign ministers of fr om those of European countries and the fer ence the developing trend of the NAM as the NAM. “We do not align ourse l v es with United States on many interna tional events. It mo r e countries would like to join the move- war , terror ism, injustice, inequity or double su p p o r ts Iran ’ s nuc lear development for peace ment since developing countries can see the st a n d a r ds. We align ourse l v es with peace ends and believes all countries have the rig h t s im p o r tance of the organ i z a tion in prot e c t i n g and justice.” to peacefully utilize nuc lear energy. It crit i - their interes t s , ” said Herna n d e z . ci z ed U.S . Govern m e n t ’ s pree m p t i ve methods China became a NAM observer in 1992 No double standards in its antiterror ism campaign and the label of and from then on has cooperated with the This is the second time Cuba has held a “axis of evil” Washington applies to some or gan i z a tion. Vice For eign Minister Yan g NAM summit, the fir st being in 1979. At that co u n t r ies. The summit also appealed for diplo- Ji e c hi led a delegation to the confer ence to ti m e , the main task for the NAM summit was ma c y to res o l v e interna tional disputes. pr esent China’s views on interna tional and to coordi n a te internal rel a tions, such as the Ac c o r ding to South African Deputy Fore i g n regional affai rs . war between Iran and Iraq. “Now, things Minister Aziz Pah a d , the current internat i o n a l “China, as a participant in, maintainer ha ve cha n ge d ,” said Hernandez. “Though the si t u a tion is more complicated and peril o u s and constructor of the wor ld system, has Cold War ended, conflicts still exi s t . than it was decades ago. The wor ld struc t u r e nat u r al connections with the NAM. The y Ch a l l e n g es facing developing countries are has cha n g ed great l y, and the NAM ’ s mul t i l a t- to gether crea te strong for ces to promote the no longer coming from themselves, but from er alism is of grea t significance under the cur- wor ld economic and political system in the ou t s i d e . Outside pres s u r e and defiance forc e rent interna tional situation of imbalanced di r ection of justice and rea s o n a ble n e s s , ” the third wor ld countries to unite.” political power and frequent regional confli c t s . said Wu of the CIIS. The 14th summit spoke out against dou- “W e must fight against a wor ld in whi c h Wes t e r n countries, especially Europ e a n ble standards in fighting terror ism. “To some a sover eign nation is denied the use of co u n t r ies, have attended NAM summits as de veloped countries, there is good terrori s m nuc lear energy for peaceful ends whi l e ob s e r ver s. During the 13th NAM summit held and bad terrori s m , ” Hernandez said. “The y another is aided in the accumul a tion of a in Malaysia in Febru a r y 2003, the United di vide this on the basis of their own political nuc lear arse n a l , ” said Lage in commenting St a tes also parti c i p a ted as an observer . goals. But to the NAM, terror ism is terror - on the Iranian nuc lear dispute. “N AM is an organ i z a tion of third worl d ism, no matter in wha t manner or form . ” co u n t r ies whi c h ref lects the interests of the Ac c o r ding to the ambassador, the A better future th i r d wor ld countrie s , ” said Herna n d e z , United States is still sheltering Luis Pos a d a He r nandez is optimistic about the future ad ding that the NAM countries will make Ca r riles, alleged l y res p o n s i b le for a Cuban de velopment of the NAM as he sees the ef for ts to implement the agree m e n t s ci vilian plane bombing in 1976 that killed number of participants ris i n g . “This indi- rea c hed at the Havana summit in vari o u s 73 civilians, mostly Cubans, inclu d i n g ca tes more countries rea l i z e the importa n c e st a ges, mainly in the UN. Meanwhi l e , the Cuban youth fencing team members who of the NAM and give prio r ity to it,” he said. tr oika of Malaysia, Cuba and Egypt will had just won a championship in Central Ac c o r ding to him, a platfo r m for devel - also contact and discuss with devel o p e d Am e r ica. Carriles was a Cuban who late r oping countries has been for med under the co u n t r ies rel a ted issues under the NAM became a Venezuelan citizen. “This year is NAM fram e wor k. Par ticipants in Havan a fra m e wor k through var ious channels. the 30th annivers a r y of the bombing and in c luded NAM members, observer s, repr e- Ac c o r ding to Hernandez, the NAM was Ca r riles and his partn e r s are still at large in se n t at i ves of var ious organ i z a tions and for med during the Cold War and played an the United State s . ” Hernandez adde d . co u n t r ies that quit the NAM and now wish im p o r tant role in wor ld development. Tho u g h Venezuela has asked for his ext r adition but to come back. the Cold War ended, prob lems still occur, with has been ref u s e d . Ar gentina used to be a NAM member, war s and conflicts still threa tening worl d “In this sense, the United States is not but left during the pres i d e n c y of Carlo s de velopment. The re fo r e, the movement has against terror ists, but protects them,” Menem. It parti c i p a ted in the Havana confer - good reason to continue to exist and exer t its He r nandez said. ence as a guest, and exp r essed the desire to in f luence under a new circu m s t a n c e . ■

BEIJING REVIEW OCTOBER 5, 2006 17 VIEWPOINT

Re s e r ve, European Central Bank and Bank of Japan intervene in the for eign exch a n g e ma r ket to push the dollar lower . The argument that intervention is neces- Economic Interaction sa r y to get all parties to agree to let their cur- rencies app re c i a te against the dollar in East At a hearing befor e the U.S .-China Economic and Securit y Asia is questionable . Stephen Green, senior Rev i e w Commission on August 22, 2006, James A. Dorn, Vic e economist at Standard Charte r ed Bank in Pr esident for Academic Affai r s, Cato Institute, offer s his ideas Hong Kon g , notes that it is unlikel y that Asian currencies would stand still whi l e on the impact of China’s financial system and monetary policies China let the RMB/dollar rate app re c i at e . If on U.S . exch a n g e rates, capital markets and interest rate s . a country did not fol l o w suit, it might have Ex c e r pts fol l o w. a temporar y advan t a ge. But as its trade sur- plus grew, there would be pres s u r e to reval - Macroeconomic impact Go ver nment should begin by reducing its ue or suffer infla tion as a means to reval u e the real exch a n g e rate . Changing one If China continues to open its capi t a l exc e s s i ve spending and rem o ving onerou s pr ice—the exch a n g e rate—is far less costly ma r kets and to make its exch a n g e rate ta x es on savings and investment. than cha n g ing the rel at i ve price level . regime more flex i bl e , it will even t u a l l y be While it is useful to consider the macro- economic impact of Chinese financial poli- Ra ther than a new Plaza-Louvre type able to use monetary policy to achi e ve long- agreement, an alternat i ve app ro a c h to correc t - run price stabi l i t y . At present, the Peo p l e ’ s cies on the United States, it is well to ing global imbalances is to have monetary Bank of China (PBC) must buy up dollars remember that China is still a rel at i vel y small economy. Wha t matt e r s most for the au t h o r ities agree on common principles and (s u p p l y RMB) to peg the RMB to the dollar ob j e c t i ves. In a wor ld of pure fia t monies, the and then withdraw excess liquidity by sell- U.S . economy is to pursue sound monetary and fiscal policies at home. If we fol l o w pr inciple should be to establish credibility by ing securities prim a ri l y to state - ow n e d ha ving central banks constrain themselves to banks. This “steril i z a tion” process puts su c h policies and maintain an open trad i n g system, U.S . pros p e r ity will continue . lo n g - r un price stabi l i t y . Many central banks up wa r d pres s u r e on interest rates, whi c h, if al re a d y have adopted infla tion targeting and al l o wed to increa s e , would att r act addi t i o n - The case for economic liberalism ha ve substantially reduced inflat i o n . al capital inflo ws. The PBC thus has an En g agement does not mean dictati n g China has exp r essed its long-run desire in c e n t i ve under the current system to con- wha t the RMB/dollar exch a n g e rate should to make the RMB fully convert i bl e , allow tr ol interest rates and to rel y on administra- be or calling for a new Plaza-Louvre type ma r ket for ces to guide the exch a n g e rate , ti ve means to control money and cred i t agreement to correct global imbalances. and to liberal i z e interest rates. It is in growth. But the longer this system persi s t s , When the Group of Five industria l i ze d Ch i n a ’ s self-interest to do so. Crea ting an the larger the PBC’s for eign exch a n g e na tions (United States, United Kingdom, in t e rn a tional market - l i b e r al order is a slow res e r ves become and the more pres s u r e Japan, Germa n y and France) met in 1985 to pr ocess, in whi c h the United States mus t th e r e is for an app re c i a tion of the RMB/dol- agree on collective action to lower the for - ta k e a leadership role—not by dictating pol- lar rate . Those pres s u r es have led to refo rm , eign exch a n g e value of the dollar, China ic y, but by example and persuasion. Sound with the Jul y 21, 2005 reval u a tion and with was not a fac t o r . The PBC’s fore i g n domestic monetary policy, unilate r al free a number of cha n g es in the institutional set- exch a n g e res e r ves wer e only $12.7 billion, tr ade and limiting the size and scope of gov- ting to establish new mechanisms for mar- and China’s over all current account was er nment are essential in that endeavor . ket maker s and hedging operations as the rou g h l y in balance. Intervention in the for - cu r ren c y becomes more flex i bl e . eign exch a n g e markets and var ious cha n ge s The politics of China’s economic China will move at her own pace. Wha t in fiscal policies in the G-5 did help to brin g reform mat t e r s most is that she moves in the rig h t the dollar’s value down, but the U.S . curren t Since the start of the refo r m movem e n t di re c t i o n — t o war d liberal i z a tion, not cen- account deficit still rea c hed a peak of 3.4 in late 1978, China’s leaders have decla re d tra l i z a tion. We must be patient and rea l i s t i c . pe r cent of GDP in 1987, at whi c h time the th a t the country’ s top prio r ity should be to Most of the costs of China’s underval u e d G-5 met in Par is to rever se course and inter- ach i e ve rob ust economic growth and cu r ren c y are borne by the Chinese people. vene to stem the dollar’s slide. im p r ove the standard of livi n g . The fai l u r e Placing proh i b i t i vel y high tarif fs on Chinese Tod a y, the U.S . current account defic i t of central planning and the Soviet devel o p - goods until the RMB/dollar rate is allowed has risen to more than 6 percent of GDP, ment model led to institutional innovati o n to app re c i a te substantially is not a rea l i s t i c China is the worl d ’ s third largest trad i n g and economic res t ru c t u ri n g . China’s acces- option. It would unjustly tax American con- na tion, and Asian central banks play an sion to the Wor ld Trade Organ i z at i o n su m e r s, not balance our over all curren t im p o r tant role in financing the U.S . bud ge t (W T O) in December 2001 was further evi - account deficit or even our bilate r al trad e de f icit. A new Plaza Accord would req u i r e dence of the commitment to liberal i z e trad e de f icit with China, and slow liberal i z at i o n . a muc h larger group to negot i at e — t h e and the financial sector. Adjustment req u i r es that China not only Gr oup of 20—without any cred i bl e Pr ogress has been made since 2001, but al l o w grea ter fle xibility in the exch a n g e rate en fo r cement mechanism. William Cline of muc h remains to be done. The r e has been but also allow the Chinese people to free l y the Institute for Interna tional Economics co n s i d e r able discussion of how China co n ver t the RMB into what e ver curren c i e s has argued that emerging market economies should sequence its economic refo r ms and or assets they cho o s e . A more liberal in Asia can over come the “pris o n e r ’ s dilem- ma k e the transition from financial repre s - in t e rn a tional economic order is a more fle x- ma” by jointly agreeing to allow their cur- sion to capital freedom. It is clear that open- ib le one based on market - d e t e r mined pric e s , rencies to app re c i a te against the dollar. The ing capital markets without refo r ming state - sound money and the rule of law. We should extent of over all app re c i a tion would then be owned banks and without maintaining mon- help China move in that direction—not by muc h smaller than if each country acted et a r y stability could lead to substantial cap- th re a ts, but by exa m p l e . The U.S . al o n e . He would also have the Fed e ra l ital flight and exa c e r b a te the prob lem of

18 BEIJING REVIEW OCTOBER 5, 2006 CLOSE LINKS: China-U.S. business-building conferences like this one in 2002 play an important role in boosting economic cooperation between the two big economies no n - p e r fo r ming loans. Moreo ver , there of capital freedom than on the narrow ques- folio investment. However , China is intent must be an effec t i ve legal system to prot e c t tion of the proper exch a n g e rate . China should on moving at its own pace, especially new l y acquired private prop e r ty rig h t s . co n t i n ue to liberal i z e its exch a n g e rate regar ding the transition to a flo at i n g In a recent intervi e w, Zhou Xiaochu a n , regim e , open its capital markets, allow full exch a n g e rate regim e . According to Zhou, head of the PBC, emphasized that China is co n ver tibility of the RMB, liberal i z e interes t the “noises” being made on Capitol Hill committed to crea ting an institutional fram e - rates and use domestic monetary policy to ( e. g., by Democratic Senator Charle s wor k for a more flex i b le exch a n g e rate ach i e ve long-run price stabi l i t y . Most impor- Sc humer and Repu b lican Senator Lindsey regime “based on market demand and sup- ta n t l y, China needs to privati z e its stock mar- Gr aham) for protectionist measures — i f pl y,” and “grad u a l l y rea l i z e RMB conver t- kets, its banks and its firm s . China does not signific a n t l y revalue the ib i l i t y … b y lifting the res t r ictions on cros s - The PBC’s Monetary Pol i c y Committee RMB/dollar exch a n g e rate—“will not bo r der capital movements in a selective and has been concerned with the lack of flex i - cha n g e the basic conditions and sequence of st ep - by - s t e p manner.” In sequencing the bility in the current financial system and Ch i n a ’ s exch a n g e rate refo rm . ” financial sector refo r ms, the fir st prio r ity is made the fol l o wing rec o m m e n d a tions at its Co n g ress can best foster sound U.S. - to put the banking system on a sound foo t i n g th i r d quarte r ly meeting in 2005: China rel a tions by not trea ting China as an by rec a pitalizing large state - o wned banks “T he market itself should be allowed in ev i t a ble enemy and by taking the oppor- and turning them into joint-stock companies to play its role in economic res t ru c t u ri n g .” tunity to capi t a l i z e on China’s emergen c e with the parti c i p a tion of for eign strate gic “M a r ket-based interest rate refo r m as a market economy, albeit a “socialist in ves t o r s. Further progress must also be policies should be continuo u s l y carrie d ma r ket economy.” In parti c u l a r , U.S . poli- ach i e ved in widening the scope of fore i g n ou t . ” cym a ke r s should trea t China as a norma l exch a n g e transactions, including liberal i z i n g “M e a s u r es should be taken to furth e r rising power , not as a prob a ble advers a r y, the capital account. Zhou rec og n i z es that im p r ove the managed flo a ting exch a n g e co n t i n ue to liberal i z e U.S .-China rel at i o n s institutional cha n g e cannot occur overn i g h t rate regime and maintain the exch a n g e and hold China to its WTO commitments; because “people need some time to learn rate … a t an adapt i ve and equilibrium level . ” and rec og n i z e that advancing economic and adapt to cha n g e.” A new “mindset” mus t “E f for ts should be made to advan c e fr eedom in China has had positive effec t s be devel o p e d . Moreo ver , he understands that financial refo r m” and “to enhance the effec - on civil society and personal freedom for China “cannot wait to start refo r ming the ti veness of monetary policy tran s m i s s i o n . ” the Chinese people. exch a n g e rate regime until all banking Those pro- m a r ket policy rec o m m e n d a - Pr otectionist measures to for ce China to refo r m measures have been completed.” tions are a positive sign and a clear signal revalue would place a large tax on U.S . con- Re fo r m must move along a broad front. th a t China’s top policym a ke r s are awar e of su m e r s and not advance capital free d o m . wha t needs to be done to improve the fin a n - Ad h e r ence to the principles of a liberal Policy recommendations cial archi t e c t u r e. in t e rn a tional order—as opposed to prot e c - The United States and China need to con- China has promised to allow full parti c - tionist measures designed to for ce interna - ti n ue the policy of engagement and rec og n i z e ip a tion by fore i g n e r s in its banking sector tional agreements—should be the prim a r y th a t it is more important to focus on the issue by 2007 and to further open to for eign port- object of U.S . policy. ■

BEIJING REVIEW OCTOBER 5, 2006 19 STILL A HOMETOWN HERO 20 BEIJING REVIEW OCTOBER 5, 2006 NATION Thirty years after his death, Mao’s legacy is most obvious at his birthplace

By LI LI Mao as god ever y souvenir stall in Shaoshan. Despite making a living by selling trin - Tang Tian, 24, a civil servant of local e Yanghui, 60, understands wel l kets with his image on them, He thinks gover nment, said she wou l d n ’ t say anyt h i n g th a t the quality of life for her hus- Ma o ’ s grea test legac y at his birthplace is not un f avor able about Mao on any occasion. band and herself this year depe n d s the rampant consumerism but his spirit u a l Besides her affection for the grea t leader, as usual on sales of souven i r s at le gac y. “I will remember him as an altrui s - she has a fear of punishment from beyon d their two- s q u a r e-meter stall. tic man for losing six fam i l y members to the the grave for offending Mao’s spirit. HThe couple grows their own rice for sta- revol u t i o n , ” she said. Song Zihao, a tourist from Hebe i ple foo d , but for ever y bit of the fam i ly ’ s Shaoshan is Mao’s birthplace and Pr ovi n c e , has carried with him a Mao talis- di s p o s a ble income, the founding father of whe r e he spent his childhood and early man ever y day since 2001. He believes his the Peo p l e ’ s Repu b lic of China, Chairma n te e n a ge yea r s befor e depa r ting for furth e r wor ship for Mao gave him the strength to Mao Zedong, takes credit three decades studies in Changsha, capital city of Hunan end his six-year addiction to drugs, whi c h after his death. Pr ovi n c e , in 1910 at the age of 17. He came almost killed him. “I was doing nothing but Their stall, one in a row of a dozen, is in ba c k in the 1920s, founding undergrou n d waiting for death, without thinking in my mountainous Shaoshan in southern Hunan rur al Par ty bran c hes and educating farm e r s wildest dreams that I could be norma l Pr ovince and only about 100 meters away on fighting landlords for a fai r er society. agai n , ” said the middl e - a ged bus i n e s s m a n fr om a mud - w all house that has since been Ma n y townspeople fol l o wed Mao’s rev- who is now finding success in the construc - ren o vate d . This was the home of Mao’s par- ol u t i o n a r y path, including his two brot h e r s tion mate r ial business. ents, and the birthplace of the man himself. and his fir st wife, who died in the strugg l e Song said that back in his home provi n c e To people who rever e Mao, it is like Mecca. for Communism and are considered mar- he is among the spiritual believer s in Mao, So u v enir stall own e r s like He are a dime ty r s. He came back to Shaoshan twice after who think that Mao saved the people from a dozen among the farm e r s of this village, the 1949 founding of the new China, in su p p r ession and exp l o i t a tion in his human ma n y of whom earn a living by selling 1959 and 1966. Items on display in mus e - li f e and came back to earth to save people. mo s t l y che a p items with Mao’s image on it, ums in Shaoshan include a pair of wor n out The believer s regar d Mao as a Buddha. fr om badges to key rings to alarm clo ck s . sl i p p e r s and a robe Mao wor e during his While Song’s tale is one of ext re m e He ’ s three sons are all in the same bus i n e s s . tr ips to his hometown, rei n fo r cing the de votion, stories about people who have had “All yea r , I only take three or five days im a ge of a leader who would sacrif ice lux- their wishes come true after praying in fron t of f, when the far m wor k is rea l l y bus y ,” said ur ies for the well-being of his people. of statues of Mao are widely traded in the He , who grew up in the area and has been Ma o ’ s perce i ved high moral grou n d al l e ys of Shaoshan. selling Mao souven i r s for 20 yea r s. “Af t e r along with his image as a savior of the all, I can earn a little more than 10,000 yuan na tion has fos t e r ed some people’s wors h i p Mao tourism in a normal year by selling souven i r s, and of him. Credit card- s i z ed metal talismans Ma o ’ s hometown is located in a moun- th a t gives us a comfort a ble life.” with engraved portr aits of Mao to brin g tainous area, 100 km southwest of He ’ s stall is on the side of a path leading health and fort u n e , instead of the more usual Changsha. The county has a population of to the tomb of Mao’s parents, whi c h many im a ges of Buddha, can be bought at almost 100,000 in an area of 210 square km, a to u r ists will take time to visit after seeing the house. When there are no customers aro u n d , He enjoys eagl e - e ying the touris t s MAO MECCA: According to local tourism officials, fr om all over the wor ld as they wea ve last year, 2.8 million people visited Mao’s family th r ough the jumbled mess of old bui l d i n g s . home in Shaoshan, only slightly less than the She regar ds the length of the queues as her peak number during the Cultural Revolution business cli m a te index. “T he crowd has become bigger and big- ger in recent yea r s. I’ve seen longer queues on l y during the Cultural Revol u t i o n , ” said He , watc hing the crowd three days befor e the 30th annivers a r y of the death of Mao. “Long live Chairman Mao,” once the most popular slogan during the Cultural Re volution, faded away for most Chinese peo- ple with Mao’s death on September 9, 1976, the conclusion of the Cultural Revolution that year and social upheavals therea f t e r . Yet for the people in Mao’s hometown , and in particular the souvenir sellers, it all seems still rel e vant as ever y day they see and feel the direct benefits of living arou n d Ma o ’ s birth p l a c e .

BEIJING REVIEW OCTOBER 5, 2006 21 NATION small town by Chinese standards, but local to u r ism authorities say it has accommodat- ed more than 50 million visitors since the 1950s. Last yea r , the total reven ue of the to u r ism sector was 396 million yuan, THE LONG MARCH AND MAO accounting for one third of the GDP. Huang Lishan, Vice Director of the By TANG YUANKAI to a non-resistance policy towa r d s Shaoshan Govern m e n t ’ s Media Center, said the Japanese invasion while stepping th a t the development of tourism, while mak- The Long March, from October up the civil wa r, and relocated hun- ing limited contrib utions to the local trea s u r y, 1934 to October 1936, was a 6,000- dreds of thousands of troops to has great l y improved the quality of life for mile trek by the s o u t h west China to encir- local farm e r s. In 2005, the per-c a pita income Communist Party that cle the Red Army on the resulted in the relocation of of Shaoshan County’s 80,000 peasants was Long March. their revolutionary base in At the Zunyi meeting, 5,150 yuan, muc h higher than the aver age central China to Yan’an in Mao made a long speech le vel of Hunan Province of 3,118 yuan. the northwest. to illustrate that the essen- One third of the total county area, or 70 Three months into its tial reason for the militar y sq u a r e km, has been developed as a touris m most famous retreat, the setbacks the Red Army zon e , highlighting Mao’s birth p l a c e , scho o l , Red Army took over and suffered is “the mistake in me m o r ial museum, memorial hall, the Mao occupied the southwestern strategy.” Zedong librar y and the hotel whe r e Mao city of Zunyi from the Before the Zunyi meet- li ved in 1966. nationalist Kuomintang ing, the Communist Party Besides selling souven i r s and books army in January 1935. A of China had uncondition- about Mao, many farm e r s have opened conference took place in a MAO ON THE ally respected the authority res t a u r ants selling “Mao’s favor ite dishes” 27-square-meter room that MARCH: Mao’s and followed all instruc- or hotels to accommodate touris t s . would change the face of military genius and tions of the Comintern, China. command of the Red which was founded in 1916 Ac c o r ding to Shaoshan tourism offic i a l s , Army were confirmed 2.8 million tourists visited Mao’s chi l d h o o d A military commanding to unite Communist parties team consisting of Mao through the Long around the world for the home last yea r , an increase of 40 perce n t March over the previous year and close to the peak Zedong, Zhou Enlai and socialist movement. This Wang Jiaxiang was formed fig u r e of 2.9 million in 1966, the fir st yea r complete loyalty, according at the meeting. Mao emerged from to Professor Jin Yi’nan from China’s of the Cultural Revolution. the conference as the leader of the National Defense University, brought “O v er half of the visitors are middl e - Communist Party and in full control of destructive losses to the Red Army aged or older,” said Han Li, 25, an adminis- the Red Army after losing militar y and the Communist regime. Thus, the tr ator at the tourism spot. According to her command for two years. The confer- Zunyi meeting marked a turning point ob s e r vations, Shaoshan is a lot less of an ence had 20 participants, including in that China’s young Communist att r action to chi l d r en and teenager s, who such future prominent state leaders Party started to act on its own initia- mo s t l y come under organ i z ed school tours. as Zhou and Deng Xiaoping. tive and in accordance with China’s Bo r n and raised in Shaoshan County, When the Kuomintang forces of actual circumstances. ci vil servant Tang Tian visited most Mao Chiang Kai-shek threatened to encir- After the meeting, Mao directed the to u r ism spots sever al times when she was in cle and crush the Communist forces troops to make unexpected move- pri m a r y and middle school, on school grou p at the end of 1934, the Communists ments to escape from the encir- tr ips. Thus it is not surpr ising that whe n decided to break through the clement of Kuomintang troops. The ac c o m p a n ying friends also in their 20s who Kuomintang lines at their weakest ensuing successive military victories wer e visiting for the fir st time, her com- point and march westward. The are attributable to the regained lead- me n t a r y, dotted with anecdotes from Mao’s Communists called the militar y ership of Mao over the Red Army and li f e, is comparable to that of any profe s s i o n - maneuver the “west march;” Chiang his military tactics. al tour guide. was the first to come up with the term The Long March laid the foundation Long March, in a speech referring to for the victory of the Chinese revolu- Tang said she had grea t respect for Mao, his military action to annihilate the tion and is regarded as a critical but the Chinese literatu r e major admitted Red Army. moment for the Communist Party. she has little knowl e d g e of Mao’s poems, The same month as the Zuny i Many soldiers who survived the Long es s a ys or thinking. Tang said she could sing meeting was held, Japanese arm i e s March later become state leaders of most of the songs praising Mao since they that had occupied China’s nort h e a s t- the new republic. After the march, ar e broadcast in public places in Shaoshan, e rn provinces for over three ye a r s Mao remained leader of the li k e bus e s . i nvaded further south to the centra l Communist Party and later of China When asked whether she would sing p r ov i n c e s. Howeve r, Chiang still stuck until his death in 1976. ■ Ma o ’ s songs at karao k e, a popular enter- tainment for m for young people throu g h o u t China, she answer ed with a laugh: “No, of co u r se not—that’ s differe n t . ” The county has a legac y of such inves t - ried innum e r able Mao devotees dressed in ments. In 1967, two days after Mao’s birth - their blue Mao suits on their pilgrim a ges to Hometown advantage da y and a year after the start of the Cultural visit their beloved leader’s hometown . Besides the development of Shaoshan Re volution, a rai l way station opened along The train still arrives from Changsha as a site of pilgrim a ge, another boost to the with direct train service from Changsha to once a day, but the rai l way station isn’t ec o n o m y is the huge amount of govern m e n t Sh a o s h a n . bustling anym o r e, a huge painting of Mao in vestment in infras t ru c t u r e. In the yea r s that fol l o wed , the train car- looking down on the empty benches.

2222 BEIJING REVIEW OCTOBER 5, 2006 NATION

su r y, in building and ren o vating Mao memo- rial facilities and improving the infras t ru c t u r e in the tourism zon e . Last Novem b e r , the Hunan Provincial Gover nment also issued an outline to make Shaoshan a so-called model county of a “ wel l - o f f socialist society” in the ne xt five yea r s by investing 100 million yuan in the area ever y yea r . “H o n e s t l y, it is difficult for Shaoshan to de velop fast by rel ying solely on its own st re n g t h , ” Huang said. He explained that the county has no heavy industry and rec e n t yea r s have seen the decline of the state - owned economy as many fac t o r ies wen t ba n k r upt or wer e bought by indivi d u a l s . “After all, it is the common hope of all Chinese people to see pros p e r ity in Mao’s ho m e t ow n , ” he adde d . TIME WARP: On display at the memorial museum in Shaoshan are photos and In May, the Shaoshan Govern m e n t posters of Mao, as well as badges of him from different time periods la u n c hed a campaign of “jointly devel o p i n g Sh a o s h a n , ” inviting leaders from 29 big The construction of a new highway, base under something called the “No. 1 cities from across China to make an inves t - built for the 110th annivers a r y of Mao’s Pro j e c t . ” The other two places on the proj e c t ment in or donation to Shaoshan with the bi r th in 2003 made it faster to travel by list are Jinggangshan, the location of the goal of building a “wel l - o f f society.” Thi rt y roa d — o n l y one and a half hours from Co m m unist Part y ’ s outpost agai n s t million yuan was collected, Huang said. Changsha to Shaoshan by bus, instead of Kuomintang suppression in the 1920s and Ho wever , he added that Mao ref u s e d about two and a half by train. Another high- 1930s, and Yan’an, the Communist Part y ’ s similar initiati ves when municipalities and way is curren t l y being bui l t . he a d q u a rt e r s in the 1930s and 1940s. pr ovinces vol u n t e e r ed to help with Huang Lishan said the best news in Ac c o r ding to the campaign, whi c h began Sh a o s h a n ’ s development in the 1950s. “He te r ms of Shaoshan’s development last yea r last December, by the end of 2007 the gov- lo ved his hometown, but didn’t want it to was the Central Govern m e n t ’ s decision to er nment will have invested 290 million yuan, en j o y privi l e ges because of his statu s , ” build the county as a nationalism educati o n in c luding 236 million from the central trea - Huang said. ■

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BEIJING REVIEW OCTOBER 5, 2006 23 NATION

ence crea ted by stories connecting the res t a u r ant with the man himself, centerin g on the 1959 encounter, the business took off. In 2004, Mao Jia Restaurant Devel o p - ment Co. ran k ed 23rd among the top 100 cat e r ing companies in China, according to a RED CAPITALIST su r vey released by the Ministry of Com- me r ce and the China Cuisine Association. A life changed by a chat with Mao But despite this success, the matri a r ch of this business empire says she has no mo n e y. “Why should I have any money? ” Tang asked . “I used to be a beggar . I am illit- er ate and too old to do any work . ” She said th a t all the money the res t a u r ant earns still belongs to her customers, and she wants to find the best way to give the money back to the people. “I never for get that after writing out the name of my res t a u r ants, Wang Shoudao told me three things to do so as not to fai l REMEMBERING THE HELMSMAN: the name,” said Tan g . “The fir st thing is to Tang Ruiren says tre a t the customers well, whether they have Mao should take mo n e y to pay the bill or not; the second is to the credit for her ma k e contrib utions to the country and the happy life th i r d is to care for the you t h . ” Tang has been trying to fulfill the three By LI LI This meeting in the village of Shaoshan, rules over all these yea r s. She set up an edu- in Hunan Provi n c e , resulted in a sort of ca tion fou n d a tion, whi c h so far has spon- ang Ruiren, 76, a peasant-turne d - over night fame for Tan g . A photo of a grin - so r ed over 500 chi l d r en to finish their res t a u r ate u r , has led a cha r med life. ning Mao sitting with Tan g ’ s fam i l y sch o o l i n g . She is proud that four of the chi l - The founder of Mao Jia Restauran t app e a r ed on a poster that for a while deco- dr en she supports are starting univer sity this De velopment Corp., with 145 fran - rated millions of homes around the country. yea r . “I love chi l d r en and it is important for chise res t a u r ants in 20 provinces, she People knew Tang only as a member of a them to be educate d , unlike me,” Tang said. Theads an empire that employs 20,000 people far mer fam i l y the Chairman took time to Due to a poor chi l d h o o d , Tang never and last year paid more than 60 million yuan in q u i r e about and pose with for a photo. went to school. Although she taught herse l f in taxes. What ’ s so special about her res t a u - The brief meeting inspired Tang in her ho w to read later in life, she can still only rants? Mao Zedong’s favor ite dishes. en t r epre n e u r ship half a century late r . In wr ite seven Chinese cha ra c t e r s—her name The res t a u r ants serve such recipes as hu o 1984, Tang became the fir st private bus i n e s s and that of her company. bei yu, or bitter-tasting fish baked with chi l i owner in Shaoshan by selling zh o u (a por- Among the cha r ity wor k she does, she pep p e r , whi c h Mao touted as helping people rid g e-type dish also known as congee , its has fin a n c i a l l y helped dozens of orph a n s , to think only about revolution, and hong shao Cantonese name) to visitors of Mao’s old do n a ted tens of thousands of yuan to build a rou , or braised fatty pork—Mao said that fam i l y home. She said her intentions wer e pa ved road for a local school and employed on l y by eating fatty pork can he get enough to trea t “Mao’s guests,” the visitors to his ha n d i c a pped people and laid-off wor ker s at nut r ition to his brain to win the batt l e . for mer res i d e n c e , as well as to make money. her company. She said she can’t calculate Tan g , who opened her fir st res t a u r ant in Her initial investment in the res t a u r ant was the exact fig u r e of the money she has donat- 1987, has tied her legen d a r y business suc- on l y 1.70 yuan, or $0.21. ed to cha ri t a ble causes. cess to New China’s founding fath e r . It was not until 1987 that Tang had Tang said she felt happ y after rec e iv i n g She often thinks of June 25, 1959, the enough money to start a res t a u r ant at her a spoken guarantee from her chi l d r en, who da y Chairman Mao paid a visit to Tan g ’ s own house. To name her res t a u r ant, Tan g will succeed her as president of the compa- fam i l y home, whi c h over looks the pond went to Beijing to seek suggestions from ny, that her path of devotion to educati o n whe r e Mao learned to swim and beyond it Wang Shoudao, Mao’s for mer secret a r y and cha r ity wor k will be continued after her the old residence of Mao’s parents. She who was also from Hunan Provi n c e . Wan g de a th. “I ask them to be sophisticate d , dili- recalls that in a short convers a tion with su g gested the name of Mao Jia Restauran t , gent and patri o t i c ,” she adde d . Mao, the leader asked about her hometown or Mao Fam i l y Restaurant, and wrote it in She recalls that in 1953 Mao took a and the name of the baby in her arms, her ca l l i g raph y for Tan g . This rec o n n e c t e d swath of cloth out of his own pocket and firs t - b o r n son. Mao jokingly said, “I should Tan g ’ s business with the legen d a r y leader gave it to Tan g ’ s fam i l y. She got part of the call the baby uncle according to fam i l y hier- 11 yea r s after his death. cloth to make a new shirt, a luxury for ar chy. The friendship between two fam i l i e s When asked wha t motivated her to trav- Chinese people at that time. has run across gen e r ati o n s . ” el 1,600 kilometers to Beijing just for a “C h a i r man Mao is a grea t man who had In Chinese villages, trad i t i o n a l l y ever y- na m e , she said with a sly smile, “I was just six of his fam i l y members die for the cause of one is somehow rel at e d , all of them descen- th a t cle ver .” li b e r ating the people,” said Tan g , who con- dants of the same fam i l y. Tan g ’ s baby son Tan g ’ s business sense and hard wor k ti n ues to both rever e his memory and benefit was Mao’s uncle . According to Tan g , the br ought her rapid success. With its prim e fr om it, and refuses to crit i c i z e Mao’s legac y. mi dw i f e who attended to the birth of Mao lo c a tion less than 500 meters away from “I know there wer e bad things said abo u t was the grandmother of her husband. Ma o ’ s childhood home, and the Mao ambi- him, but I don’t give a damn.” ■

24 BEIJING REVIEW OCTOBER 5, 2006 NATION

ated life, you know, the socialist tran s - form a tion was class strug gle and the ending of the private sector, and came muc h too early and muc h too abru p t l y. I INTERPRETING MAO think China should have taken a muc h mo r e gradual roa d . Thi r ty yea r s ago, Chairman Mao Zedong died in Beijing Yan g : As the founding father of the at the age of 83. On the occasion of the September 9 Peo p l e ’ s Repu b lic of China, Mao was the an n i vers a r y of his death, Beijing Revi e w as k ed scho l a r s to on l y Communist Par ty leader who dared to use military tactics and to cha n g e the discuss the legac y of the most legen d a r y state leader that modern sc heme of class strug gle at will to defea t China has ever seen. Me r le Goldman, Prof essor Emerita of the enemies. Although he managed to Hi s t o r y at Boston Univer sity and an associate of the Fai r b a n k de s t r oy an old worl d , he failed to con- Center for East Asian Research at Harvar d Univers i t y , Tho m a s st r uct an ideal new worl d . His mistake Paul Berns t e i n , a political science prof essor and member of the lies in cli n g ing to the exp e r iences of cla s s Wea therhead East Asian Institute of Columbia Univers i t y , and st ru g gle in guiding the social tran s i t i o n and rec o n s t r uction. The afterma th is that Yang Kui s o n g , a history prof essor at Peking Univers i t y , shared people fell into the mire of political strug - their opinions with Beijing Revi e w repo rt e r s Wang Yanjuan and gles after the brief excitement of peaceful Chen Wen in New Yor k and Li Li in Beijing. de vel o p m e n t .

Ho w does he continue to influ e n c e Wha t aspects of present China do Chinese politics today? you think are a result of the yea r s Be r nstein: The interesting thing under Mao? about Mao is that he had this utopian Goldman: I think that China’s high si d e — t ra n s fo r med new men and rate of literac y, the rise in the position of women, unselfish society and things like women, improved health care and the th a t. And then he had a ver y rea l i s t i c be ginning of the building of a modern st r eak. I think over time, the utopian in f ra s t ru c t u r e wer e due to the leadersh i p aspect prevailed over the realistic aspect, of Mao and the Chinese Commun i s t and the Chinese people paid a grea t Part y . pr ice for that. But when he was in his Be rn s t e i n : When one goes to China, realistic mode, he understood that you you will see a rem a rk a ble amount of ca n ’ t get along without mate r ial incen- ad m i r ation for Mao. Among ordi n a r y ti ves; you can’t get along without pe o p l e , like the taxi driver s, they often im p r oving people’s standard of livi n g . kee p a portr ait of Chairman Mao. Peo p l e I think there are a lot of negati ve sa y he was tough, and he managed to lessons that his successors have learne d . unite the country and he eliminated for - Class strug gle has its limits; it may be eign influence on China. good for the takeo ver perio d , in a time Yang: Ma o ’ s influence still can be Merle Goldman when you have landlords and counter- seen every wh e r e in China, from the revol u t i o n a r ies arou n d , and this perma - jumbo sculptures in many city squares , Be rn s t e i n : He was a grea t state nent labeling crea tes a kind of caste: out- ai rp o r ts and colleges to the portr aits dec- builder and a person who was chi e f ly casts. Constant campaigns are too or ating the walls of the farm e r s’ homes res p o n s i b le for China’s standing up— de s t ru c t i ve to orde r ly growt h . in povert y - s t ri c ken areas. Many of rec o ver ing its place as a power that had One can take his wor ks and find ver y Ch i n a ’ s social prob lems today can fin d to be taken serio u s l y, even though it was se n s i b le things. You can pluck out the their source in Mao’s era, such as the still a weak country, but a country ver y se n s i b le things and study those. But that se ver e inequality between cities and di f fer ent from the one befor e 1949. of course isn’t the whole Mao. You can rur al areas and the harsh criticism on the That ’ s his grea tness. use them today but you ’ re not rea l l y In t e r net over the yawning wealth gap. He had the determi n a tion to for ge using the full Mao; you ’ re only using ahead and tran s fo r m China, making it an pa r t of him. Ho w do you view Mao’s role in in d u s t ri a l i z ed nation and implementing Yan g : The influence is mainly sprea d founding the Peo p l e ’ s Repu b lic of all the socialist and communist ideals. by the gover ning Communist Par ty of China in 1949 and why could Mao But he did it at a sharpl y accelerate d China, whi c h publi c i z es an ideology glo- ach i e ve this success? Wha t do you pa c e . The orig inal idea was to maintain rifying Mao through media and educa- think Mao brought to the Chinese ne w democrac y for maybe 50 yea r s tion. Meanwhi l e , Mao’s theories on egal i - pe o p l e ? be fo r e moving ahead into socialism and ta r ianism and class strug gle are still Go l d m a n : Mao had the strate gy to to lay a solid fou n d a tion for the socialist lat e n t l y affecting many people’s minds. reunite China after 60 yea r s of disunion tra n s fo rm a tion. I think a lot of people in by the use of military for ce and att e n t i o n China, intellectuals, regret the fact that Mao is widely noted for starti n g to the needs of the farm e rs . the new democrac y had such an abbr evi - the revolution from the countrys i d e .

BEIJING REVIEW OCTOBER 5, 2006 25 NATION

Ho w do you think the drastic effec t so muc h. Mao had heavy responsibility for Mao had on rur al China is playi n g this. Tha t weighs ver y heavi l y on the eval - out today? ua tion of Chairman Mao. Goldman: Fir st of all, he and the Yan g : De n g ’ s judgment is regard e d Co m m unist Par ty had the strate gy to as the most accurate by the Commun i s t unite China after 50 to 60 yea r s of dis- Part y . The successive Par ty leaders union; that was ver y important. Second, be l i e ve they are entitled to inherit the he and the Communist Par ty provided an st a tesmanship of Mao without needing to ed u c a tion for a whole you n g er gen e r a- bear his mistakes. The y know that any tion. Tha t means that today’ s China has campaign criticizing Mao, like a literac y rate of close to 90 perce n t . Kh ru s h ch ev ’ s indictment of Stalin in Remember this is a country of 1.3 bil- 1956, would invite trou b le for themselves . lion people, but with a ver y high literac y The re fo r e as long as the Commun i s t rate . Thi r d, he raised the position of Par ty is the gover ning party , Deng’s judg- women. [It’s] ver y important in trying to ment over Mao will be stuck to. un d e r stand what ’ s going on today. Mao and the Communist Par ty began Wha t do you think is the main building the infras t ru c t u r e in this perio d . le gac y of Mao? And fin a l l y, and maybe just as impor- Yang Kuisong Be rn s t e i n : Despite the disasters of tant, the health care of the Chinese— the Grea t Leap For wa r d and the Cultural China had a life exp e c t a n c y of that of a Re volution, Mao did lead a muc h de veloped country, even though it was a model, Mao regar ded farm e r s and their st ro n g er country that had economic and ver y, ver y poor country. And we made pr ivate land as potential threa ts to rea l i z - mi l i t a r y achi e vements. I don’t know how fun of those baref oot doctors who wen t ing Soviet Union-style socialism. He also the Chinese people rea l l y feel; it’s hard fr om village to village. But they did be l i e ved that industria l i z a tion should be to gau g e. something ver y important; they wen t based on the sacrif icing of farm e r s’ inter- The r e is another aspect of Mao that into the villages, they cleaned up the ests. Thus, through the implementation of one needs to take serio u s l y. When you wate r , they gave injections, they moved the commune system for land own e rs h i p co m p a r e Mao with Stalin, Stalin pre- on. But China’s life exp e c t a n c y certa i n l y and the hu ko u [r esidence regis t r ation] sys- tended to have a well thought-out ideol- was ver y muc h prol o n ge d . tem in the 1950s, farm e r s wer e put in a ogy, to be an innovator of Marxism, but So when Deng Xiaoping came to di s a d van t a geous position again. Although Mao rea l l y did think about fundamentals po wer in the late 1970s and began the to d a y farm e r s have regained the right of of socialist and communist devel o p m e n t . economic refo r ms, he had a literate , fr ee migration, compared with city res i - The result was terribl e , but in the mid- he a l t h y population that’ s rea d y to dents, they are still victims of Mao’s poli- 1950s, in the Anti-Rightist Campaign, res p o n d . And I think those fac t o r s are ci e s Mao made his “Contradictions Among ver y important in understanding wha t People” speech. I think this is still a hap p e n e d . The Chinese people say, in the guiding principle for China today. The r e Yan g : Mao used to be the savior of wor ds of Deng Xiaoping, that Mao ar e interest conflicts in China among the poor farm e r s in China. Meanwhi l e , due to was 70 percent good and 30 perce n t people as well. The r e are not necessaril y his blind wor ship of the Soviet Union ba d . Do you think this legac y will co n t r adictions between people and ene- evol v e in the yea r s to come? mies among the people. Now there are Go l d m a n : When I teach my class I mo r e and more conflicts in China. Mao eval u a te Mao as 30 percent good and 70 rec og n i z ed that at a ver y early stage. I pe r cent bad. The 30 percent are the think he was the fir st one in the commu- points I made abo ve—the strate gy for nist camp to rec og n i z e that. Mao knew uniting China, providing univer sal edu- the contradictions between farm e r s and ca tion, health care and raising the posi- wor ker s, between Han and minorit i e s , tion of women. But then Mao perse c u t e d be t w een towns and cities, betwee n the intellectuals whom he needed to he a vy industry and light industry. mo d e rn i z e the country; he carried out Yang: The most important legac y of the Grea t Leap For wa r d campaign in the Mao is the regime that continues today. 1950s, and launched the Cultural The regime has achi e ved unific a tion of Re volution (1966-1976), whi c h under- the country, whi c h previous gover n- mined the earlier refo r ms and caused ments had failed to do for a long time. chaos, disunion and blo o d s h e d . Another important legac y from Mao Be rn s t e i n : I don’t think one can put is the failed egal i t a r ian ideals and prac - pe rc e n t a ge terms on it. I don’t think these tices. Although Mao’s try in this regar d pe rc e n t a ges are meaningful. Given the dis- ended up a total fai l u r e, it still was the as t e r s of the Grea t Leap For wa r d and the utmost attempt to pursue equal distrib u- Cu l t u r al Revolution, if any perce n t a ge, I tion in modern history. Tha t still rec a l l s Mao and Mao’s era to many Chinese Thomas Paul Bernstein would say 70 percent bad and 30 perce n t goo d , simply because they set China back pe o p l e . ■

26 BEIJING REVIEW OCTOBER 5, 2006 ON HIGH: A painting depicting Mao Zedong launching workers’ movements in the 1920s is on display at an exhibition showing art from the era of Mao last year in Guangzhou With his legacy in flux, some Chinese people are appropriating the life and words of Chairman Mao to meet the challenges of MAO NOW modern life

By TANG YUANKAI would swear on Mao’s name as if it wer e thanks to the encouragement of Mao th a t of God. Zedong thought, once a mandato r y part of is face is no longer ubiquitous in da i l y life for many Chinese. China, but it remains by far the most Countryside connection Mao, the son of a pros p e r ous farm e r rec og n i z a ble . The image of the Grea t Chen Fan g , a 53-yea r -old prof essor at fam i l y, was known for having a special rel a - Helmsman, Mao Zedong, is the only Renmin Univer sity of China, buys old tionship with the Chinese farm e r s. He start- one on the country’ s curren c y. A copies of Mao’s selected wor ks at the ed his revolution by cultivating a farm e rs ’ Hma s s i ve portr ait of him still hangs over Pan j i a yuan antique market in Beijing. In mo vement in Hunan, his home provi n c e . Tiananmen Gate , 30 yea r s after his death . 1967, the second year of the Cultural Subjects of his early revol u t i o n a r y doctrin e s Yu Hai, 38, a basketball teacher at a Re volution (1966-1976), the city-born Chen in c lude dividing land among farm e r s and Beijing middle school, says even his 3-yea r - was sent to wor k in the countryside accord- taking over the regime by fir st storin g old daughter knows who he is. As he put ing to Mao’s instructions. st r ength in the countrys i d e . away old magazines rec e n t l y, he found one Although it took Chen time and grue l - “Mao sincerel y hoped that all Chinese with Mao’s portr ait on the cover . He asked ing effor t to escape from the countrys i d e , he people could live a happ y life, although the his daughter to guess who the man was, and refuses to crit i c i z e Mao. Chen insists that actual situations went against his will,” said the toddler answer ed “Chairman Mao,” to Ma o ’ s initial intention of sending you n g Chen, adding that nowad a ys Mao is still the the surpr ise of Yu, who hadn’t even taught people to a harsh envi r onment to ref ine their most popular among the farm e r s, many of her about him. te m p e r ament remains correct. whom face growing hardship. “Thro u g h Despite this, Yu said that most chi l d re n Du r ing those days in the countrys i d e , holding memorial activities for Mao, the of his daughter’s age or a little older are able Chen had nothing to read but Mao’s little farm e r s hope the gap between urban and to rec og n i z e banknotes, but not the face on red book, Qu o t a tions from Chairman Mao rur al areas will narrow.” them. “I think my gen e r ation, the same with Ts e - t u n g . “I prac t i c a l l y grew up rec i t i n g “Mao rea l i z ed that farm e r s are revol u - my fath e r ’ s gen e r ation, holds an inborn rev- Ma o ’ s sayings and Mao’s thinking has ti o n a r y for ces and called on the public to er ence of Mao,” said Yu, who was a chi l d al ways been my source of spirit u a l fight against bure a u c ra c y. This is how Mao when Mao died and couldn’t underst a n d st re n g t h . ” Chen said that although he isn’t tr ied to awak en the democratic conscious- ho w such a deified man could pass away. wea l t h y, he holds a positive attitude towar d ne s s , ” said Zhang Tia n g u a n g , 40, a free - When Yu was you n g , he and his frie n d s li f e in spite of setbacks and diffic u l t i e s , lance playw r ight.

BEIJING REVIEW OCTOBER 5, 2006 27 NATION

As a student at the Shanghai Univer sity of em p l o yees of his company for a packa ge him down to the realm of the people after Traditional Chinese Medicine in the 1980s, he tour to Jinggangshan, location of the being viewed for yea r s as a god - l i k e fig u r e. was a fir m believer in Wes t e r n democrac y. He Co m m unist Part y ’ s outpost against the Ac c o r ding to Gao Hua, a history profe s s o r said he cha n g ed his mind later in life after Kuomintang in the 1920s and 1930s and at Nanjing Univers i t y , there is a new wave of st u d ying Mao’s wor ks. “I admire his sayi n g no w a nationalistic tourist site. Chen co m m e m o r ation of Mao, rel a ted to social rea l - th a t rebellion is fully justifie d ,” said Zhang. Tianqiao said one of the reasons he hired ities such as the widening gap between ric h Di f fer ent from the Red Guards during the Tang to be the president of Shanda was that and poor. He said that against the backg rou n d Cu l t u r al Revolution, who understood it as th e y had a common affinity for Mao. of a large number of wor ker s being laid-off en c o u r agement for violent destruction, Zhang Ho wever , Tang Can, a res e a r cher for the fr om state - r un companies and the collapse of in t e rp r eted the line as, “the people’s request for Chinese Academy of Social Sciences, said the social wel fa r e systems in cities, as well as li b e r ation is sensible .” Zhang sees it as the th a t you n g er people wor ship Mao only as sky ro c keting costs for health care and educa- lo c a l i z a tion of Marxism by Mao. an idol, differ ent from the total devotion to tion, people left behind by China’s refo r ms are Mao of the previous gen e r ati o n . no s t a l g ic about Mao’s era. Mao as business guru Young people tend to like Mao for his Gao said that some people have a selec- Ren Zhengfei, the founder of ti ve memory of Mao, scree n i n g major Chinese telecom equipment out such events in the later yea r s of pr ovider Huawei, said he rea d s his rule as the Grea t Leap For wa r d Ma o ’ s wor ks for “the spirit of rebe l - and the Cultural Revolution, and li o n , ” whi c h he believes is importa n t taking Mao as a token of social to his company’ s innovation and justice to exp r ess their dissati s fa c - de velopment. The nascent company tion over the current rea l i t y . once had to compete with such wel l - Zhang Suhua, a historian who es t a blished for eign brands as Alcate l studied Mao’s life and wor ks for 27 and Lucent, whi c h had dominate d yea r s, has summariz ed four rea s o n s the Chinese market for yea r s. why Chinese people have a lasting Ren successfully directed the in t e r est in Mao. Fir st of all, she said, co m p a n y to grab market share by Ma o ’ s status as one of the fou n d i n g adopting Mao’s military tactic of fath e r s both of the Commun i s t “using the countryside to encircle Par ty and of the country is prom i - ci t i e s . ” He said he even uses Mao’s nent and unique. The adherence to th e o r y of criticism and self-crit i c i s m RED COLLECTOR: Zhang Yuhuai, a retired worker from Ma o ’ s way of thinking has been at staff meetings. Tianjin, has collected over 100,000 Mao Zedong badges and over 1,000 Mao portraits since 1978 wr itten into the Constitution and the Zong Qinghou, founder of Par ty Constitution. ho m e grown soft-drink gia n t rebellious and defiant spirit. Tang Gang, a Se c o n d , Mao is a complicated fig u r e, Hangzhou Wahaha Group, is also a loyal un i ver sity student from the wes t e r n city of whose life invol v es grea t historical achi e ve- be l i e ver of Mao’s idea of “using the country- Xi’an, said, “He was a man of strong will and ments and sever e mistakes. “People are side to encircle cities.” This is how he devel - fea r ed nothing, whi c h was part of Americ a n in t r igued by the eval u a tion of such a contro- oped his company, by fir st occupying the jo u r nalist Edgar Snow’ s conclusion abo u t ver sial fig u r e,” she said. ma r ket of rur al areas. Future Cola, a carbon- Ch i n a ’ s future half a century ago. ” Thi r d, he used to be glorif ied and res t o r - ated drink the company designed for the Ma o ’ s cha r isma also makes him inter- ing him into an earth l y man invol v es a lot of domestic market, has brok en the monopoly esting to univer sity students. “Mao’s say- wor k and debat e . Fou r th, she adde d , Mao of Pepsi and Coca-Cola since its launch in ings are deep as well as colloquial and is a man of grea t wisdom and ref lects an the late 1990s. Zong’s management style is viv i d ,” said Han Tian, a Peking Univers i t y en t i r e epo c h. Studying Mao’s successes and quite bossy, whi c h he admitted is “learne d student. Han gave an example: “When Mao fai l u r es is still meaningful for today. fr om Mao.” ta l k ed about the role of heavy industry in “W hen studying the fai l u r es of Mao, it The founder of computer giant Lenovo, the country’ s development, he used vivi d is important to distinguish those caused by Liu Chuanzhi, also borrowed Mao’s style in me t ap h o r s—If the economy is a human the system, those by his shallow under- ma n a ging his company. He once said half- bo d y, agric u l t u r e is one fist, military standings of socialism, those by his miscal- jo k i n g l y, “Legend has its commerci a l de f ense is the other fist; to punch your ene- cu l a tion of the situation and those by his se c r ets, but not to those who underst a n d mies hard, you need to steady you rs e l f , and pe r sonal rea s o n s , ” Zhang said. Ma o ’ s theorie s . ” th a t is the role of heavy industry.” Pro f essor Gao regar ds Mao as an Ev en some up-and-coming Chinese “M a o ’ s emphasis on patr iotism is an im p o r tant historical phenomenon wort h y of en t r epre n e u r s, who didn’t exp e r ience the im p o r tant reason why he led the Chinese ref lection and study by future gen e r ati o n s . Cu l t u r al Revolution, are looking to Mao in revolution to victory. But this revol u t i o n a r y “M a o ’ s phenomenon is the outcome of their business dealings. mo vement failed to over come patri a r cha l China in a transitional perio d , from an Chen Tianqiao, 33, CEO and cofou n d e r tr aditions in Chinese culture later in his life, im p e r ial country to a repu bl i c . At the turn of of Shanda Interac t i ve Entertainment Ltd., whi c h fuels the unfavor able personal wor - the new century, China is facing new cha l - was listed as the ric hest man in China for ship and abuse of power ,” said a univers i t y le n g es, whi c h req u i r es new thinking and running the country’ s most successful te a c her who refused to give her name. ne w systems,” he said. “So all the refl e c - online gaming company. He wrote an arti cl e tions on Mao should be future- o ri e n t e d .” ■ on company management that mimicked Image overhaul Ma o ’ s style of language. Ma o ’ s image has gone through severa l CORRECTION: Beijing Review misspelled the name Top Shanda exec u t i ve Tang Jun, form e r tr ansitions since his death, starting offic i a l l y of a “super girl” in its No.38 issue published pr esident of Microsoft China, is yet another in China with Mao Zedong Man, Not God, September 21. The error appears in the left column of page 20. The correct spelling should read Shang admitted fan of Mao. He once organ i z ed all a book fir st published in 1989 that brou g h t Wenjie. Beijing Review apologizes for the error.

28 BEIJING REVIEW OCTOBER 5, 2006 BACK TO SCHOOL INC.: The New Oriental Education & Technology Group Inc. is recognized as the first Chinese school to be listed

pr ograms, services and products consisting pri m a ri l y of English and other for eign lan- gu a ge trai n i n g , test prepa r ation courses for major admissions and assessment tests. By Enriching Education the end of May this yea r , the New Orie n t a l Sc hool had trained more than 3 million stu- dents and established an ext e n s i ve networ k “IPO” and “education” are two different of 25 schools, 111 learning centers, 13 an i m a l s , but they’re beginning to cohabitate in bo o k s t o r es, and 1,700 teache r s in 24 cities. The scho o l ’ s virtual online networ k has China and hopefully will procreate smarts app r oxi m at e l y 2 million regis t e r ed users. But perhaps the most impres s i ve is its By LAN XINZHEN and made a for tune out of it,” said Gu recent IPO. Mi n g yuan, a prof essor with Beijing Norma l On that day, Yu Minhong, founder and hen the Beijing-based New Un i vers i t y . pr esident of New Oriental School, saw his Or iental Scho o l ’ s parent com- The New Oriental School is an ext re m e assets soaring to $200 million overn i g h t pa n y went public in New Yor k example of school privati z a tion in whi c h a based on owning 31 percent of the stocks . on September 7, it essentially sc hool isn’t public—it goes publi c . As the New Oriental School also encour- nul l i f ied the oxy m o r on “ric h But in a country that priz es educati o n , ages its teache r s to buy its shares, many of Wte a ch e r .” ma n y Chinese wonder whether schools so them also have become rich . On the fir st day of New Orie n t a l obv i o u s l y interested in prof it can do a prop - For all the attention New Oriental got Ed u c a tion & Tech n o l o gy Group Inc.’s IPO er job with their youth. for its IPO, Yu remains a cool cat. when its share value rose by 46.7 percent to The successful IPO of the New Orie n t a l “I don’t know how muc h pres s u r e I close at $20.88, its educato r s, encouraged to has shown the country that private educa- should bear at the present stage,” he said. “If in vest, found that teaching is indeed a tion can be industria l i ze d . But should it? I fail in the future, the New Oriental will be rewar ding exp e ri e n c e . in c luded as a negati ve case in MBA cla s s e s . ” “S t i mu l a ted by people’s craz e for learn- Aye for school IPOs He has a reason for confidence: The ing English and going abo a r d, the New Founded in 1993, the New Orie n t a l IPO isn’t just a get - ri ch - q u i c k sche m e . Or iental School grasped the opportu n i t y Sc hool offer s a wide ran g e of educati o n a l Ma n y believe it has solid grou n d i n g .

32 BEIJING REVIEW OCTOBER 5, 2006 BUSINESS

“T he biggest benefit of the listing is that ed u c a tion segments should be listed, whi c h is in d u s t r y.” As a result, many educati o n a l the school can collect muc h more money in c o h e r ent of our actual situati o n . ” institutions trea ted education as an industry, for its devel o p m e n t , ” said Sun Baoquan, Basic education in many regions is far whi c h direc t l y led to var ious arbitrar y pro f essor with Beijing Geely Univers i t y . “It fr om sufficient, Gu said. The biggest prob - cha r ges such as epidemic prevention fee s . is ver y inspiring for China’s money- t h i rs t y lem is the shorta ge of educational funds, and In 2003, the gover nment identified alto- pr ivate scho o l s . ” some village schools do not even have pub- gether 853 million yuan of arbitrar y Ac c o r ding to statistics from the li c - s c hool funds. Some schools owe salarie s cha r ges, punished 2,488 offen d e r s, and 359 Mi n i s t r y of Education, by 2005, there wer e to teache r s. The heavy economic bur den on he a d m a s t e r s wer e fire d . But in 2004, the al t o gether 86,200 private schools and more students’ parents has resulted in a consider- Na tional Bureau of Statistics revealed that than 29,000 private training institutions able number of dropouts. Curren t l y, the num - ar b i t ra r y cha r ges wer e still prevalent in 50 ar ound the country. ber of adult illiterates, abo ve the age of 15, counties it had inves t i g ate d . These statistics indicate that the num b e r rea c hes as high as 100 million. In 2005, the Chinese Academy of Social of China’s private educational institutions is “A sad truth is that many cannot go to Sciences issued the Blue Book of China’s not small. “H o wever , their scale is mostly small with limited development potential due to a sh o rt a ge of money,” said Sun. From 2002 to 2005, many of the private sc hools stopped operation as their teachi n g equipment was insufficient and could not meet the req u i r ements of the Ministry of Ed u c at i o n . Under such circumstances, many pri- vate schools and sociologists call for gov- er nment fiscal support. But Yu insisted that the only way out for pr ivate schools is industria l i z at i o n . Wha t is industria l i z a tion? Yu exp l a i n e d, “ I n d u s t ri a l i z a tion means to earn mo r e money from the market to stimul at e the development of educati o n . ” And seeking development is wha t New Or iental does. Repo rt e d l y, its goal is to jump out of the niche market of English training to de gree-based education. The New Orie n t a l Sc hool also plans on for ging an entire educa- tional chain that would include the links of ki n d e r gar ten, prim a r y school, middle scho o l and even higher educati o n . Co py c a ts are beginning to turn up too, as repo rt e d l y the Beijing-based 101 Distant Le a r ning Center is taking on the project of SOCIETY FRIENDLY: While earning enormous money from the education market, New being listed. Oriental pays back society by establishing free community training classes Government is good sc hool because of pove rt y,” said Gu. So c i e t y , whi c h revealed that many students Li Yumei, a teacher with the Beijing “Th e re fo r e, at present, special att e n t i o n dr opped out of school due to povert y . No. 15 Middle School (a public school), has should be focused on the development of The Chinese Ministry of Educati o n given some thought to the listing effor t of basic educati o n . ” itself has taken some measures to curb the New Oriental Scho o l . Be ginning this yea r , the Chinese sc hool industria l i z a tion, announcing that “Our final conclusion is that we are dif- Go ver nment decided to implement complete- sc hools should not be industria l i ze d . fer ent from the New Oriental School, and we ly free compulsory education in rur al area s . Ho wever , the ministry, adopting a “non- ha ve got differ ent objectives in educati o n , ” Li Luo Yan, lecturer with Tsinghua in t e r vention” attitude towar d private Yumei said. “We shoulder the res p o n s i b i l i t y Un i vers i t y , pointed out that govern m e n t - sc hools, did not prevent their industria l i z a - of conducting compulsory education and are funded free compulsory education in rura l tion effor t. It has become a hidden rule that funded by the gover nment. The New ar eas can guarantee the implementation of pu b lic schools should not be industria l i ze d Or iental School, however , is a private scho o l basic education, while industria l i z ed educa- but the private schools can. and earns money from educati o n . ” tion could lead to more poor dropouts if “W hen the country lacks sufficient edu- Re gar dless of New Orie n t a l ’ s success- sc hools tried to make money off of them. ca tional funds, it is beneficial to devel o p ful listing, the fact is that most teache r s in The Chinese educational circle had ed u c a tion in an all-around way,” Gu said. China like Li will remain without shares in once questioned whether education should Mi d dle school teacher Li suggests a their scho o l s . be industria l i z ed as they had seen that many co m p ro m i s e . “T he New Oriental Scho o l ’ s IPO is just an sc hools posed arbitrar y cha r ges on students. “T he govern m e n t ’ s investment can guar- in d i vidual case,” said Gu Mingyuan, profe s s o r Still, in 1998, the Chinese educati o n antee the input of basic education, while the with Beijing Normal Univers i t y . “It doesn’t br ass rea c hed a consensus that “education is ma r ket can make sure that private educati o n ne c e s s a ri l y mean that once it is listed, all of our a public product and can have feat u r es of an can get enough money,” Li said. ■

BEIJING REVIEW OCTOBER 5, 2006 33 BUSINESS

Economics, CASS. “On the other hand, en j o ying such advan t a geous intangi bl e assets as techn o l o gy and managem e n t skills, for eign inves t o r s are evolving into ma n i p u l a ting for ces in the Chinese market . ” Ac c o r ding to statistics issued by the A Foreign China United Nations Confer ence on Trade and De velopment, in 2005, China att r acted $60 Ha ving grown up on FDI, China now is billion of direct for eign investment (FDI), ranking third in the worl d , next only to the weighing down its ability to cut loose and United Kingdom ($219 billion) and the United States ($106 billion). cultivate domestic enterprise Favor able policies aiming to att r act for - eign investment began to appear in the early By LAN XINZHEN 1980s during the early stages of China’s mar- ket refo r ms. Tod a y, the aver age tax rate for his is not your fath e r ’ s China. Chinese companies ran g es from 22 percent to Co m p a r ed to state - m o n o p o l i ze d 24 percent, while that for for eign companies is in d u s t r ies of yes t e r yea r , China has on l y between 10 percent and 13 percent. come a long way in att r acting for - By Jul y 2006, China had accumul at i ve- eign inves t o r s. But in doing so, it ly absorbed FDI of $655.1 billion, whi c h Tapp e a r s to have given away control of major great l y contrib uted to the growth of the in d u s t r ies. Chinese economy. In ever y one of China’s industries open “H o wever , when a large part of major to other countries, the top five enterpr ises are Chinese industries’ share holding is in the ac t u a l l y controlled by for eign inves t o rs , hands of for eign companies and whe n ac c o r ding to new survey results. And among NOT SO MICRO: In April 2006, the qu a n t i t at i ve cha n g es are likel y to result in Ch i n a ’ s 28 major industries, 21 have most of “Microsoft Innovation Day” is held in qu a l i t at i ve cha n g es, there is the potential to their assets controlled by for eign inves t o rs . China. Currently, most computers in see serious conflicts and prob lems in the The survey results, revealed by the China are equipped with the Microsoft coming days , ” said Wei . De velopment Research Center of the State operating system Fir st of all, the competitiveness of the Council, shocked Dr. Shi Wei g an from the domestic companies come into their own , Chinese economy will decli n e , Wei continue d . Institute of Wor ld Economics and Pol i t i c s , rising to the top of industry? And wha t prac - By now, Coca-Cola has grabbed over 70 Chinese Academy of Social Sciences tical solutions are there to make this happen? pe r cent of China’s soft drink market and in (C A S S ) . la r ge and medium-sized cities, fore i g n “I t ’ s time for the country to readjust for - Too controlling chain superma r kets have snatc hed 80 per- eign capital inflo w in China”, said Shi, in an As early as December 2005, the China cent of the market share. es s a y. Economic Monitoring Center of the If such a trend continues, the who l e Be yond Shi, quite a number of econo- Na tional Bureau of Statistics repo r ted that Chinese market is likel y to be grad u a l l y mists feel anxious and uneasy about the the five top elevator companies, who s e ta k en up by for eign inves t o r s, Wei said. in c r easing share of for eign capital in China’s ma nu fa c t u r ing accounts for more than 80 Se c o n d , prob lems are looming in the economic activities. The y are afraid that pe r cent of the country’ s total elevator pro- co u n t ry ’ s industrial securit y , he adde d . dominant positions of for eign companies duction, have had their shares controlled by Consider this: Import and exp o r t vol u m e will do harm to China’s economic securit y . for eign inves t o rs . accounts for 60 percent of China’s GDP, FDI In fact, the Chinese Gover nment is Fu rt h e r , among the country’ s 18 nati o n - amounts to 10 percent of the GDP and 40 wor king on just such a readjustment. al - l e vel electrical appliance maker s, 11 are pe r cent of its basic energy depends on In Jul y, measures limiting for eign inves t - no w operating in the for m of Sino-fore i g n im p o r ts; while the country only has 4 perce n t ment in industries like real estate and steel joint ven t u r es; China’s cosmetic industry is of independent intellectual prop e r ty rig h t s . and its acquisition of Chinese enterpri s e s under the control of 150 fore i g n - f u n d e d As for eign capital has controlled a high wer e issued. For exa m p l e , fore i g n e r s are companies; 20 percent of the country’ s rate of core industries, China, a devel o p i n g on l y allowed to buy one apa r tment in China. ph a r maceutical industry is at the hand of economic power , is doomed to face sever e For eign curren c y in for eign institutions’ spe- for eign inves t o r s; and 90 percent of the sales pro b lems in industrial securit y , according to cial accounts is banned from investment in of the auto industry can be att ri b uted to for - Wei . Chinese real estate . And for eign inves t o r s are eign bran d s . Ne ver theless, he said, China should req u i r ed to app l y for app r oval with the The list goes on ad nauseam. kee p absorbing for eign capital, whi c h is an Mi n i s t r y of Commerce if their acquisition This situation will likel y not cha n g e for im p o r tant part of China’s refo r m and open- will or is likel y to impose a negati ve impact the time being as for eign investment plays ing-up policy. Instead of blo c king fore i g n on China’s economic securit y . an important role in China’s economy. ca pital inflo w, China should try to guide or The Provisions for For eign Inves t o r s to “On one hand, the influx of fore i g n res t r ict the investment scale in certain area s Me r ge and Acquire Domestic Enterpri s e s in ves t o r s will stimul a te market competition th r ough policies, he said. th a t came into effect in September also put in China and promote the improvement of As Liu Changquan, a res e a r cher from for wa r d clear regu l at i o n s — i n c luding limi- co rp o r ate management and technical level CA S S , has pointed out, so far , all over the ta tions on for eign inves t o r s’ takeo ver of of Chinese enterpr ises, leading to the effec t worl d , no country risks exposing all its eco- Chinese enterpri s e s . of technical over fl o w,” said Wei Houkai, a nomic areas to for eign capital. In some But are such measures enough? Can res e a r cher from Institute of Industria l im p o r tant industries, obstacles and legal

34 BEIJING REVIEW OCTOBER 5, 2006 BUSINESS

res t r ictions are imposed on for eign capi t a l . panies, he said. “If they mainly wor k for over seas mar- In spite of differ ences in specific details, all Besides, he said, a large market share is ket, it’s accept a ble to grant them certa i n co u n t r ies share some practices in common: on l y one of the conditions for monopoly. favor able policies, as it is helpful to China’s Fir st, unfair competition laws and anti- Mo n o p o l y occurs when a competitive enti- em p l o yment and taxation, but the truth is mo n o p o l y laws are used to prevent the for - ty tries to hinder others from becoming its no wad a ys, most for eign companies prod u c e eign investment inflo w. rivals by making use of its dominant role in and sale in China, so why should they enjoy “If China fails to adjust its policies on the market. So to judge whether a company better policies than our domestic enterpri s - for eign inves t o r s in a timely manner and is practicing monopoly, it must be deter- es? It’s unfair to the latter!” Shi said. does not exer t necessary res t r ictions over mined whether this company is res t ri c t i n g The Ministry of Finance is wor king on for eign inves t o r s’ merger and acquisition of fr ee competition through its pred o m i n a n c e a solution for the muc h-disputed prob lem of Chinese industries, disastrous results are in the market, he said. un i f ied taxation of both Chinese and fore i g n expected to come,” said Liu. “Our survey shows that fore i g n companies and rel e vant policies are due out Liu suggested that for eign inves t m e n t in ves t o r s possess an abs o l u t e l y high prop o r - in two yea rs . be absorbed in a selective way and att e n t i o n tion of market share in certain sectors, but But the answer isn’t just refo r ming the should be paid to two important aspects. mo n o p o l y is not what ’ s happening yet , ” tax system. It’s crea ting a fair competition Fir st, China should raise the thres h o l d Wang said. env i r onment, said China’s Nati o n a l for for eign investment to allow those with Wu Yi, Vice Premier of China’s State De velopment and Refor m Commission the most advanced techn o l o gy in the market Council, indicated in early September that sp o k esman Li Pumin. and kee p those with lower techn o l o gic a l although among the worl d ’ s devel o p i n g “A fair envi r onment in these industrie s abilities at bay. co u n t r ies, China is the biggest rec e i ver of should be crea ted for Chinese and fore i g n Se c o n d , China should try to absorb for - FDI over the past 15 yea r s, the prop o r tion of co m p a n i e s , ” said Li. eign inves t o r s in the fields of res e a r ch and pe r- c a pita FDI remains low, and in this Ne ver theless, without favor able policies de velopment, design, branding and key se n s e , China’s for eign investment abs o r p- for for eign companies, for eign inves t o r s ma ch i n e r y parts . tion is below the worl d ’ s aver age level. ma y ret re a t. Alrea d y, there is concern with- in the European Union, for exa m p l e , that The monopoly misinterpretation Tax reform China is beginning to support “economic Do m i n at i n g , perhaps, but for eign inves t - One way to clean up the for eign over - nat i o n a l i s m , ” as stated in a position pape r ment isn’t monopolizing any industry, in vestment may be through tax refo r m. released September 5 by its chamber of ac c o r ding to China’s Ministry of Commerce . Shi Wei g an from the CASS believes that co m m e r ce here. True , for eign inves t o r s have grabbed a 20 yea r s ago, for eign capital was badly need- “M e m b e r s would like to see China la r ge share of the market in some sectors, ed to fill the country’ s domestic res e r ves and ach i e ve its domestic goals in an open mar- but this does not mean monopoly, said to learn advanced techn o l o gy and manager i- ket envi r onment and not through increa s e d Wang Zhile, Director of Research Center on al exp e ri e n c e . At that time, most prod u c t s pro t e c t i o n i s m , ” the paper said. Mu l t i n a tional Corpo r ations of the Chinese ma nu fa c t u r ed by for eign inves t o r s wer e If for eign inves t o r s began ret re a ting in Ac a d e m y of Interna tional Trade and exp o r ted to the over seas market. dr oves, their capitals’ dominance in the Economic Cooperation under the Ministry Ho wever , today, these inves t o r s believe Chinese economy would wea k en, but the of Commerce . For eign companies invol ve d China has alrea d y evol v ed from a low- c o s t economic growth rate would also slow— n o t in the same sector also compete agai n s t pr oduction center into a bur geoning big something desirable if considerable , said Li. ea c h other, so it’s unwise to trea t all the for - ma r ket, so their products mainly target the So control, monopoly— wh at e ver you eign inves t o r s as an entity that is trying to Chinese market instead of the internat i o n a l want to call it—of Chinese industry by for - wr estle market share from the Chinese com- ma r ket. ei g n e r s will likel y continue for some time. ■

COKE IS IT: This is part of the production line of Coca-Cola in southwest China’s Chongqing. By now, Coca-Cola has grabbed more than 70 percent of China’s soft drink market

BEIJING REVIEW OCTOBER 5, 2006 35 Inv estment Opp o r tunities & Job Inf o rm a t i o n

res u m e @ c hi n a j o b .c o m

Do n g guan City, Guangdong Provi n c e , is rec r uiting ESL teache r s Teaching Vacancies: no w. The r e are only three to eight students in a class, with most of Si c huan Education Associati o n them coming from South Kor ea. The school pays 10,000 yuan per for Interna tional Excha n g e, an month for 22 teaching hours a week. Roundtrip airfar e is offer ed after or gan i z a tion administered by the Education Depa r tment of Sichu a n on e - y ear contract. Candidates should be nati ve English speaker s from Pr ovi n c e , wor ks as an agent to help schools in Sichuan rec r uit quali- the United States, Canada or UK, with a bache l o r ’ s degree at least or fied ESL teache r s from English-speaking countries, and help scho o l s TEFL/TESOL certi fi c a tes and TEFL teaching exp e ri e n c e . Interes t e d both at home and abr oad establish exch a n g e programs. If you ’ re applicants can send their resumes to oh s e e j a n e @ y ahoo.com and call in t e r ested in teaching in Sichuan, we are the fir st to be contacted. 86-20-39737375 to schedule for an intervi e w. Email [email protected], or call Luo Hong at 86-28- Zhejiang Taizhou Public Univers i t y is looking for English 89 8 3 3 6 2 7 . te a ch e r s for this semester. Salary offer ed is 5,000 yuan per month for Xi’an Jahoo Interna tional School (XJIS) is seeking kinder- 18-20 teaching hours a week from Monday to Frid a y. The scho o l gar ten, science, math and ESL teache r s for the 2006-07 academic also provides free accommodations (equipped with TV, kitche n , yea r . XJIS, an interna tional school, curren t l y has students from 15 was h e r , Internet and bath r oom), travel allowance and rou n d t r ip tick- co u n t r ies. Applicants should have at minimum a bache l o r ’ s degree , a ets for one-year contract. Candidates should be nati ve English speak- te a ch e r ’ s license and teaching exp e ri e n c e , and ESL exp e r ience is pre- er s from the United States, UK, Aus t r alia, Canada, New Zealand or fer red . Annual salary begins at 77,000 yuan to be paid monthly, with Ir eland aged between 22 and 60, with a bache l o r ’ s degree or abo ve. in c r ements for advanced academic degrees, yea r s of teaching exp e r i- Please send email to Vic ki at vi c ki r ua n 5 2 0 @ y ah o o . c o m . c n for more en c e , ESL certi fi c a tion and over seas teaching exp e ri e n c e . XJIS offer s detailed inform a tion. fu l l y furnished (including TV, DVD player , microwave, etc.) and Jilin EF English Training Center is rec r uiting for eign English ren t - f r ee apa r tments, basic medical and accident insuran c e , rou n d t ri p te a ch e r s for this semester. Salary offer ed is 5,000-6,000 yuan per ai r fa r e rei m bu r sed upon exp i r ation of contract, and bonus equal to a month for 18-22 teaching hours each week. For eign teache r s who ma x i m um of one month’s salary upon exp i r ation of contract. Contact te a c h more hours than req u i r ed will rec e i ve additional payment. The Kevin at de a n @ j a h o o e d .c o m . sc hool also provides health insuran c e , free Chinese courses, airfar e In t e rn a tional Business Scho o l , Yanjing Over seas Chinese for one-year contract and free accommodations with necessary fac i l i - Un i vers i t y , located in Fengtai District in Beijing, is seeking five ESL ties. Candidates are req u i r ed to be confident, enthusiastic and outgo- te a ch e r s for this semester. For eign teache r s will mainly teach English in g , and parti c u l a r ly love teaching in China. Please contact Miss wri t i n g , rea d i n g , listening and convers a tion. The r e are no more than Yang with your res u m e , a recent picture and copies of any educati o n - 20 students aged between 18 and 28 in one class. The school will al and teaching certi fi c a tes att a c hed at hr es l j o b i n c hi n a @ y ah o o . c o m . of fer a monthly salary of 4,500-5,500 yuan for 20 teaching hours per Sun Yat-sen Univers i t y , located in Zhuhai City, Guangdong week, in addition to insuran c e , rou n d t r ip airfar e, free accommodati o n Pr ovi n c e , is rec r uiting ESL English teache r s for this semester. The with necessary facilities and a $1,000 bonus for one-year contrac t . sc hool will provide 7,000 yuan per month for 20 teaching hours per Ca n d i d a tes should be nati ve English speaker s aged under 60, from week from Monday to Frid a y. Other benefits include 900 yuan per the United States, UK, Aus t r alia, Canada, New Zealand or Irel a n d , month for renting an apa r tment on campus and one-way ticket for with a bache l o r ’ s degree or abo ve and a half-year teaching exp e ri e n c e on e - y ear contract. Candidates should be nati ve English speaker s aged at least. Please contact at st i c ker _ b i 1 2 5 @ y ah o o . c o m . c n for more 22-55 from the United States, Canada, UK, New Zealand or details. Aus t r alia, with a bache l o r ’ s degree or abo ve. Contact Jac ky at Wenzhou For eign Language Scho o l , located in Wenzhou City, ja c ky_ w u _ g z @ 1 2 6 . c o m or Emma at te a c hi n g d @ 1 2 6 . c o m for more Zhejiang Provi n c e , is seeking ESL English teache r s for this semester. detailed inform a tion. The r e are only 20-25 students ever y class. The school offer s a month- Qingdao Voc a tional and Tec hnical College is looking for ly salary of 5,000 yuan for 16 teaching hours a week, in addition to nat i ve English speaker s with language teaching qualific a tions and rou n d t r ip airfar e and free accommodation with necessary fac i l i t i e s . exp e r ience for this semester. Salary offer ed is 4,000 yuan per month. Ca n d i d a tes should be nati ve English-speaking teache r s from the The school also provides free accommodation and rou n d t r ip airfar e United States, Canada, UK, New Zealand or Aus t r alia. Experie n c e for those from the United States, Canada, UK, New Zealand or and degree prefe r red but not req u i re d , enthusiasm and positive att i - Aus t r alia, with a bache l o r ’ s degree or abo ve, tude is essential. Contact at ne a l yao @ 1 6 3 . c o m for more detailed TE S O L / T E F L / C E L TA/ D E L TA/ I C E L T certi fi c a tes and teachi n g in fo rm a tion. exp e ri e n c e . Please contact evi t a 3 0 0 3 @ g m a i l . c o m for more detailed The Tut o r ing Center for Interna tional Students, located in in fo rm at i o n .

2006 TEFL Training Concluded Se r vices Interna tional and Chinajob.com organ i z ed the trai n i n g The 2006 TEFL training (Beijing and Zhongshan) concluded on co u rs e . The trai n e r s consist of profe s s o r s from the United States and August 27. Certi fi c a tes wer e issued to students who had finished all UK in the field of teaching English as a for eign language and admin- the TEFL courses and passed the demo exam at the closing cerem o n y. is t r ato r s from the State Administration of For eign Experts’ Affai rs . Pro f essor Ter esa Dalle (the TEFL trai n e r , Master of Arts in English as The TEFL training mainly cover s: how to teach English in China, a Second Language and Ph.D. in linguistics) and Yi Fanping (General ho w to adapt to the cultural differ ence and rel e vant Chinese laws and Ma n a ger of the China Service Interna tional) wer e present and awar d- regu l at i o n s . ed the certi fi c a tes. The TEFL training staff also parti c i p a ted in the cer- Due to the increasing demand for for eign language teache r s in em o n y. China, the State Administration of For eign Experts’ Affai r s noted that The TEFL training in China was initially launched in Janu a r y TEFL training in China, tailored for for eign teache r s who teach 2006, sponsored by the China Association for Interna tional Excha n g e Chinese students, is important and helpful to regu l a te and promote the of Per sonnel and the Center for Tea c hing & Learning in China. China co u n t ry ’ s for eign language teaching market . Tourism Information

Jinan of Shandong Province Jinan, capital of Shandong Province on China’s east coast, is the provi n c e ’ s political, economic and cultural center. Jinan was one of the birthplaces of Chinese civilization. Cultural relics representing the Xihe Culture (7,300-8,400 years ago), especially pottery, have been discovered in the city. Jinan is known as the “City of Sprin g s .” Underground streams from Tai s h a n Mountain flow along the limestone strata to Jinan, where they are halted by igneous rocks and spurt out in the for m of num e r o u s sp ri n g s . There are many places of interest in the city. Thousand-Buddha Mountain Lying 2.5 km (1.55 miles) to the south of Jinan, the Thousand- Buddha Mountain is one of the key places of interest of the city. It is about 258 meters high and was made into a park in 1959, occupying an area of about 166 hectares. In the early days of the Sui Dynasty (581-618), a great many statues of Buddha were chiseled on the rocks of the mountain and the Thousand-Buddha Temple was built and soon became famous, so the name of the temple became the name of Thousand-Buddha Mountain the mountain. There are many scenic spots and historical relics distributed in the mountain. You can enjoy the beautiful scenery all along the way wandering up either on foot or by bus.

Dai Temple of Shandong Province Located in Tai’an City at the southern base of Taishan Mountain, Dai Temple is dedicated to the God of Taishan Mountain and is the place to perform sacrificial cer- emonies to the God of Taishan Mountain. The history of Dai Temple can be traced back to the Qin Dynasty (221-206 B.C.). The continuous remodeling in successive dynasties made Dai Temple a grand archi- tectural complex. Covering an area of 96,000 square meters, Dai Temple has an ancient palace architecture. The temple complex is sur- rounded by a wall almost four meters high with eight gates originally opening to the outside. Now gates at the north and south are still in use. The central north-south axis of Dai Temple is aligned with the mouth of the valley at the base of the mountain. Dai Temple is a quiet place with numer- ous famous ancient trees, stone steles and cultural relics. Entering Dai Temple is like visiting a museum of Chinese history. Sacrificial rite for Confucius Dai Temple

Jining of Shandong Province Jining is a prefec t u r e - l e vel city in southwest Shandong Provi n c e . Jining administers 12 county-level divisions, including Shizhong and Rencheng distric t s , Qufu and Yanzhou cities, and Wei s h a n , Jinxiang, Jiaxiang, Wenshan, Sishui, Liangshan, Yutai and Zoucheng cities, cover ing 11,000 square km and is the economic, cu l t u r al and commodity circulation center of southwest Shandong. Jining has a history of 7,000 years’ civilization. During the Spring and Autumn Period, the four greatest saints, namely, Confucius, Mencius, Yanzi, Zengzi, and the earliest ancestors of the Chinese, Fuxi, Nuwa, Huang Di and Shao Hao, were all born in Jining. In the city’s territory there are seven cultural relics under first-class state protection, 50 under the provincial protection, and hundreds under the municipal protection. Among them, Confucius Temple, Confucius Mansion and Confucius Cemetery have been listed by UNESCO as World Cultural Heritage sites. These splendid Chinese traditional cul- tures have drawn numerous tourists both from home and abroad to come to Jining. Grand ceremony of worship of heaven on Taishan Mountain

Photos are provided by local tourist bureaus. BUSINESS

First, he’s not a Bush. Made In China: Second, he’s not a politician. Third, he’s in China. American Dreams In fact, these realities only buttress Alintuck ’s real As our series continues with this, the second of five plan: to fo r ever dare to dream. That’s, after all, what articles beginning in Beijing Review’s No. 38 issue, ev e n t u a l ly brought a shy Boston boy here. And Martin Alintuck has the faint prospect—in his mind t h a t ’s why he has become a leading PR man in only—of taking over George W. Bush’s job. China. Although Alintuck’ s communication skills are certa i n - So go ahead, Martin, dream a little dream, or a big ly better as the frontman for public relations company one. Edelman in Beijing, his “strateger y” is a little odd. China feels you brother.

one day,” he said. Le t ’ s state the obvious: as a PR man in China, the prospects for that are slim. But his American dream—the notion th a t he, or anyon e , can do anyt h i n g — i s wha t kee ps “president” on the to-do list and Presidential PR mo r e China business success in the “been- Could smooth communicating in China be th e re - d o n e - t h a t” cate gor y. The day boring died a stepping stone to the Oval Office? Al i n t u c k had a pretty plain life growi n g up—a typical secure American life one By LI LI dent PR company, Edelman, might be an might say. ea rs o r e in Mandarin. But the fact that he’s Bo r n and raised in Boston, he comes ar tin Alintuck could be consid- a powerful commun i c a tor without know- fr om a middl e - c lass fam i l y of four kids. His er ed one of China’s most ing his host country’ s language flu e n t l y father was in sales and his mother a stay- at - pr ominent commun i c at o r s, and sh o ws he’s no dummy. He’s an example of home mum. He was a “normal kid” in high he did it without knowi n g ho w even the most remote of Americ a n sch o o l — p r etty quiet and shy. The fam i l y Ch i n e s e . Dr eams can come alive in China. tr aveled mainly in New England, with New M“My fir st wor d was fapi a o , or rec e i p t , ” That ’ s good news for Alintuck, who Yor k being the far thest place. said Alintuck half-jokingly. “Somebo d y even t u a l l y wants to be a U.S . pres i d e n t . As a young adult, he wor ked for the told me I need to know this wor d.” “I have always wanted to be the pres i - ma yor of Boston and gover nor of Al i n t u c k, Managing Director of the dent of the United States since I was ver y Ma s s a c husetts immediate l y after univers i t y Chinese bran c h of worl d ’ s largest indepe n - little; that’ s why I might get back to politics in the 1980s. But wha t he learned about pursu i n g ha ppiness in those strait-laced yea r s was im p o r tant. “T he American dream is about growi n g up in a place that encourages every b o d y fr om ver y young to have grea t dreams and fu l f ill them,” Alintuck said. An d , after wor king in PR for six yea r s in San Francisco, that latent wisdom was ce n t r al to correc t l y responding to a cruc i a l te l e phone question. “I will never for get when they called me and said, ‘How would you like to go to Ch i n a , ’ and at fir st I thought it was a joke,” he said. Ex p a ts who accept this cha l l e n g e, like Al i n t u c k, freq u e n t l y have this subsequent thought: Why not? You can always go back home if it doesn’t wor k out. But—and this may be unique to China—the reality is often grea ter than the initial wide-eyed contemplation. “Th a t decision is the best thing I ever PEOPLE PERSON: Martin Alintuck’s vision to build PR firm Edelman is to support the did in my life, whi c h completely cha n ge d “hearts and minds” of his people, clients and sometimes kids in rural China my life,” Alintuck said.

38 BEIJING REVIEW OCTOBER 5, 2006 BUSINESS

Opportunity, not crisis the momentum would be accelerated with the west China’s Yunnan Provi n c e . On the side- Al i n t u ck ’ s fir st job in China was with ne a r ing of the 2008 Olympics. line of their meeting, they adopted a poor ele- Bu rs o n - M a rs t e l l e r , another leading interna - “China in 10 yea r s in terms of commu- me n t a r y school. All participants in their China tional PR company, but since 2003 he has ni c a tion in public rel a tions has achi e ved meeting spent a day at the school cle a n i n g , headed Edelman’s China bus i n e s s . wha t took the United States 30, 40 or 50 pa i n t i n g , fixing windows and doors, building a Sh o rt l y after his appointment, Alintuck yea r s to do,” Alintuck said. ne w librar y, donating books and playing with was faced with a textbook cris i s - m a n a ge- And he has been in the corner offic e , students and local families. Alintuck sees it as ment case when the company’ s bigges t spearheading the PR revol u t i o n . a good team-building exp e r ience and a means client, P&G China, had to cease its contrac t In the eyes of Wu, her for mer boss has a of giving back to the commun i t y . with Edelman China after the parent com- grea t sense of humor, a quick mind and “Yo u ’ ve got to crea te a place whe r e pa n y Edelman signed with consumer goo d s wonderful management skills. She used your people can enjoy work i n g , grow and competitor Unilever . “p ro f essionalism” to summariz e wha t she build their caree rs , ” Alintuck said. “PR is a “It was rea l l y a difficult time when rev- le a r ned from Edelman under Alintuck. She people business. We have the hearts and the en ue dropped dram at i c a l l y and people left sp o k e highly of a monthly staff meeting minds of our people and hearts and minds the company in droves, but Alintuck held on Al i n t u c k initiated whe r e he repo r ted the lat- of our cli e n t s , ” he said. and kept the company on the right trac k and est engagement to ever yone and award e d Re place “PR” with “democrac y,” and wi s e l y moved the business focus from an events organ i z a tion to strate gic consulting,” said Jen n i f er Wu, who wor ked with Al i n t u c k for half a year and now is the account director of an interna tional PR co m p e t i t o r . Ac c o r ding to the China Internat i o n a l Pu b lic Relations Association (CIPRA) 2006 survey on the Chinese PR industry, in t e rn a tional companies enjoy obvi o u s ad van t a ges over homegrown companies in the more val u e - a d ded business of strate gic consulting rather than event exec u t i o n , whi c h explains their muc h higher per-c ap i - ta annual revenu e . Ac c o r ding to Edelman’s prediction for the year of 2006, a 49 percent revenu e in c r ease is expected over 2005, the larges t growth rate ever for Edelman China. And an industrial survey by CIPRA in March 2006 ran k ed Edelman China one of the top 10 interna tional PR companies in China for the fifth year in a row. With Alintuck at the helm, the company also has witnessed a staff expansion from 51 in 2003 to 120 by the end of this year and rel o c a tion of its head office to Beijing For tune Plaza, one of the most exp e n s i ve of fice prop e r ties in town. Al i n t u ck ’ s brand new 30-square- m e t e r GREAT WALL OF HONOR: Edelman’s brand new head office in Beijing has a wall of fice on the 33rd floor gives a bird’s - e ye showcasing the events the company organized for its clients vi e w of China’s vigor ous and vibrant econ- om y in the for m of bustling traf fic and star employees. It is practiced in all three su dd e n l y Alintuck sounds like he could be mus h r ooming skys c r ape r s holding the frui t s of fices in Beijing, Shanghai and Guangzhou stumping for the grea test American Dream. of imagin a tion, like at Edelman. to d a y. “He att a c hed a lot to instilling the As k ed whether he is serious about run - “I think China is a fantastic place for pr oudness of being an Edelman employee ning for president in the future, he answere d me to pursue American drea m s , ” Alintuck into ever yon e ,” said Wu. fir st by explaining his fir m belief that any- sa i d , his brown eyes beaming. “I see a Al i n t u c k thinks employing good people one can dream of becoming who m e ver he co u n t r y of people starting to dream grea t is a key to the company’ s success. or she wan t s . dr eams and I feel ver y lucky that I can be But they may be more easily employed Pre s s e d , he stayed true to PR form , in the middle of it.” than ret a i n e d . Wu said she learned the an s wer ing somewhe r e in the land betwee n basics of the business in Edelman but only tr uth and spin. Turning ‘PR’ into ‘professional’ “b lossoms” at her new company, whi c h “M ay b e , who knows , ” he said. ■ Although the PR industry in China has of fer s “a creat i ve and energetic work i n g on l y a nascent development history of 20 env i ro n m e n t . ” “Made in China: American Dreams” is a five-part yea r s, the potential is huge. According to Chen Still, last October, by his sugges t i o n , series that will appear biweekly and r eveal how and Xi a n g yan g , deputy secret a r y of CIPRA, the Edelman situated their annual all-China meet- why entrepreneurs and executives are increasingly realizing their American Dreams in, or because of, whole industry has maintained an annual rev- ing at Lijiang, a prim i t i ve tourism res o r t in a China. The series began in the No. 38 issue pub - en ue growth of over 30 percent since 1998 and po vert y - s t ri c ken mountainous area in south- lished on September 21.

BEIJING REVIEW OCTOBER 5, 2006 39 BUSINESS FINANCE

th a t ran g e, if it’s 3 percent, there will be little ea r nings left after deducting management fee s and costs and taking RMB app re c i at i o n Risk Averse, Broadly Speaking against the U.S . dollar into account. Ev en though BOCOM’s QDII prod u c t s Investors greet China’s first QDII products ar e expected to offer ret u r ns of up to 12 per- cent, some wealth management profe s s i o n - with caution als advise inves t o r s to compare it to other RMB wealth management products and ta k e exch a n g e rate risks into considerati o n . Most banks’ RMB fix ed-income prod - ucts offer ret u r ns of around 3-4 percent, with no exch a n g e rate risk att a ch e d . A QDII prod - uct with a one-year matu r ity of less than 6 pe r cent in ret u r n would not be competitive. With ret u r ns on the money market around 2 pe r cent at present and taking exch a n g e rate risk into account, only a QDII product offer - ing a ret u r n grea ter than 5 percent will be att ra c t i ve to inves t o r s. Whether BOCOM’s QDII products will be as profi t a ble as antici- pa ted is yet to be seen, as some exp e r ts pre- dict they will ret u r n just 2 perce n t . Some exp e r ts say the banks have made their products too complicated and that few in ves t o r s can understand them. QDII products are still at the initial st a ge of development in China and there is a long way to go befor e they are fully un d e r stood by the market . Portfolios preferred QDII GATEKEEPER: Bank of China finds interest in the QDII product the day it is launched, but so far, prospects for the product have been lackluster Ev en so, QDII products, as a new inves t - ment channel, are still att ra c t i ve for inves t o r s By LIU NIAN After BOC’s product launch, the to spread their investment risk arou n d . In d u s t r ial and Commercial Bank of China BO C ’ s products are similar to open- s. Wan g , a financial planner at (ICBC), the country’ s largest lender, also ended funds in that they invest in prod u c t s one of China’s largest state - la u n c hed its fund, allowing residents in on over seas money markets and short- and owned banks, takes five phone Be i j i n g , Shanghai, Shenzhen, Guangdong, me d i u m - t e r m bonds to maintain high liq- in q u i r ies a day from cli e n t s Zhejiang and Jiangsu to purchase its QDII uidity of their assets, with no definite exp e c - about its new QDII prod u c t s , pr oducts. Later in August, the Bank of ta tion of ret u r ns. Inves t o r s can purchase or Mwith most clients saying they will consider it. Co m mu n i c a tions (BOCOM), HSBC and redeem them at any time and, as a res u l t , “I have an enquiry about your bank’s the Bank of East Asia came out with simi- QDII products provide grea ter liquidity than QDII products. Wha t are the ret u r ns? Wha t lar prod u c t s . for eign exch a n g e and RMB wealth man- ar e the risks?” are the typical call of this But despite intense promotion, the agement prod u c t s . nat u r e, she said. “A lot of people show grea t la u n c h of QDII products in China has not Add i t i o n a l l y, to meet the needs of in t e r est at the begin n i n g , but few order them.” rec e i ved the investor appeal that was hoped. in ves t o r s with differ ent prefe r ences, ICBC The long anticipated QDII prod u c t s and BOCOM produce both exch a n g e rate wer e fir st launched by the Bank of China Less competitive risk avoi d a ble and non-avoi d a ble prod u c t s , (BOC) on Jul y 28. The product is a kind of On August 9, when the period to sub- al l o wing clients to choose whi c h they prefe r . fund launched by app r oved banks, fund sc r ibe for ICBC’s fir st QDII prod u c t s If clients’ exp e c t a tion of RMB app re c i at i o n ma n a gement companies and insure rs , exp i re d , the subscription amount was less is muc h, they may pref er to choose exch a n g e called Qualified Domestic Institutional than 1 billion yuan—just half that exp e c t e d . rate risk avoi d a ble products. Otherwise, non- In ves t o r s (QDII), to invest in over seas capi - Some of the bank’s cashiers wer e repo rt e d - avoi d a ble products will be chosen. tal markets on behalf of their clients. QDII ly unclear about exa c t l y wha t a QDII prod - Some exp e r ts believe the ret u r ns of would conver t renminbi (RMB) into fore i g n uct is, and ret u r ns are not as certain as more QDII products could be lower than exp e c t - cu r ren c y and invest in over seas bills and tr aditional dollar- and yuan-denominate d ed if RMB app re c i a tes too fast or interes t mo n e y market instruments with high inves t - in vestments in the Chinese market. rates hike in the second half of this yea r . ment grade ratings. Some wealth management profe s s i o n - Gi ven that most advi s o r s say inves t o r s QDII is considered as a sche m e , allow- als believe that when a 3 percent exch a n g e ar e wise to allocate capital across a ran g e of ing limited domestic inves t o r s to invest in loss is taken into consideration, ret u r ns of in vestment options to avoid risks, QDII over seas securities markets, whi c h earli e r QDII products may fall in value or even lose pr oducts may have a place in a divers i fi e d th e y wer e unable to do because of limita- mo n e y. po rt f olio, along with fix ed-income depo s i t s , tions on RMB conver tibility under China’s Ho wever , ICBC’s QDII products prom i s e tre a s u r y bonds and domestic RMB wea l t h ca pital account. ret u r ns of 3-7 percent. But on the lower end of ma n a gement prod u c t s . ■

40 BEIJING REVIEW OCTOBER 5, 2006 BUSINESS FINANCE

Ex ch a n g e rate s Sun Mingchun, an economic analyst with Lehman Brot h e rs , be l i e ves a series of recent res t ri c t i ve mea- Exuberant Economy No Problem? su r es will only serve to ease surplus liquid- ity in the short run and the fundamental By JUMBO ZHANG co n t r ol to date has been the raising of inter- issue is renminbi (RMB) app re c i at i o n . est rates, but, with large levels of curren c y pu r red by a 31.3 percent rise in Although the exch a n g e rate of RMB agai n s t li q u i d i t y , banks’ actual loan rates have not urban fix ed assets inves t m e n t , the U.S . dollar brok e the “eight” mark, the risen signific a n t l y. In fact, the demand for Chinese economic growth in the pre s s u r e of RMB app re c i a tion still exists. loans has risen. fir st half of the year rose 10.9 per- New l y launched proj e c t s On Aug u s t cent yea r- o n - ye a r , according to the Four trump cards ? 1, five ministries including the Nati o n a l Sp e c i f ic measures to implement macro- Na tional Bureau of Statistics, with the sec- De velopment and Refor m Commission S co n t r ol policy include adjusting fix ed assets ond quarter rec o r ding 11.3 percent—a 20- issued the Instructions for Clearing Up in vestments, slowing down the inves t m e n t year high. New l y Launched Projects, req u i r ing all of the real estate sector and addr essing over - Despite these fig u r es, a number of for - regions to take measures within one month cap a c i t y . Restricting the liquidity of curren - eign economists believe that the economy is to clear up construction projects listed in the cy and curbing the demand for credit is the not over h e at e d . fir st half of the year with a total inves t m e n t main goal of monetary policy. Be r t Hofman, Chief of the Economics of and abo ve 100 million yuan. The fol l o wing are recent initiati ves, but Unit at the Wor ld Bank Beijing Offic e , sug- The iron and steel, electrol ytic alu- to wha t extent will they be effec t i ve? gested that the macroe c o n o m y was in a mi n um, calcium carbide, fer roa l l o y, coke, On August 18, the cen- sound position, with evidence of rec e n t l y In t e r est rate s au t o m o t i ve, cement, electricity and text i l e tr al bank, Peo p l e ’ s Bank of China, implemented measures, including tighten- in d u s t r ies are req u i r ed to clear projects with announced a 0.27-perce n t a ge-point hike in ing interest rates and req u i r ed res e r ve rati o s a total investment of 30 million yuan. In the in t e r est rates. Xie Guozhong, Chief of commercial banks at the central bank, coal industry, projects with prod u c t i vity of Economist of Morgan Stanley Asia Pac i fi c , al re a d y taking effect, whi c h wer e exp e c t e d 30,000 tons per year will be cle a re d . be l i e ves that China will continue to rai s e to lead to slower exp o r t growth in the sec- Yuan Gangming, a senior macroe c o n o m - in t e r est rates. “The rise of 0.27 perce n t a ge ond half of the yea r . ic res e a r cher with the CASS, believes that points in August was just an alert, with no Si m i l a r ly, Laurence Klein, a recipient of these controls will be effec t i ve in curbing root effect on the market due to its small the Nobel Memorial Priz e in Economics, exc e s s i ve fix ed assets investment. With imple- sc o p e ,” he said. This was unlikel y to curb said he believed the Chinese economy was me n t a tion in ever y region of China, the effec t recent infla tion or pierce through the rea l not over h e a ted at all but rather that prod u c - is set to carry through to the stock market . es t a te bub ble . tion capacity and consumer Real Estate In Jul y, the pace of urban de posits had fallen. in vestment fell substantially. The prices of Ho wever , not ever yone is as new l y built commercial residential bui l d - op t i m i s t i c , with some Chinese ings fell in 14 cities, including Shenzhen, economists feeling that the gov- with its rapid rises dropping sharpl y. The er nment should introduce furth e r pr ice falls indicate that macro- c o n t r ol mea- me a s u r es to control the pace of su r es are alrea d y taking effect. The need for growth. on g oing res t ri c t i ve policies will depend on Yi Xianron g , an economist th i r d quarter data . with the Institute of Finance and Qiu Hong, Chairman of the Beijing Banking of the Chinese Academy Ji n c hengxin Real Estate Agen c y, believes of Social Sciences (CASS), con- th a t res t ri c t i ve policies for for eign inves t m e n t si d e r s that if the gover nment does in real estate are ineffec t i ve on the market . not introduce further macroe c o - The scale of for eign investment is rel at i vel y nomic controls, the economy small with no more than 10 percent of the could face huge risks in the future. total investment in Beijing, Shanghai and Lin Yifu, an economist from so u t h e a s t e r n coastal cities, he says. He pre- Peking Univers i t y , agrees, sayi n g dicts investment will show an upwar d devel - th a t overc a pacity is wors e n i n g . opment tren d . The r e has been too muc h inves t - Niu Li of the State Inform a tion Center ment, and too muc h credit and su g gested that tightening new project app r oval tr ade surpluses, he says. He was needed, in addition to controlling cred i t be l i e ves the gover nment should and land use. Implementing future control s co n t i n ue res t ru c t u r ing its industry, over the real estate market was difficult, with and stick firm l y to and improve its the leading shares of real estate stocks prob a - po l i c y of macro- c o n t r ol. bly set to bounce to new highs. ■ Si m i l a r ly, Xie Fuzhan, Vic e (Xinhua Fin a n c e ) Di r ector of the Devel o p m e n t DISCLAIMER: The information contained herein Re s e a r ch Center of the State is based on sources we believe to be reliable, is Council, says economic growt h , provided for informational purposes only, and no em p l o yment, infla tion, and fis c a l representation is made that it is accurate or and corpo r ate perfor mance fig u re s complete. This briefing should not be construed as FAST TRACK: Even though China has already legal, tax, investment, financial or other advice, and conceal the real extent of long- employed a tightening policy, the economic train is is not a recommendation, offer or solicitation to buy te r m weakness. The main macro- still running at fast speed or sell any securities whatsoever.

BEIJING REVIEW OCTOBER 5, 2006 41 BUSINESS

16.8 percent to 82.7 billion yuan, and that of other sectors totaled 15.2 billion yuan, State of the Market climbing 2.4 percent compared with the same period last yea r . CPI Retail Sales Retail sales of foo d , clothing and com- In August, the consumer price index In August, retail sales of consumer modities for daily use rose 17.2 perce n t , (CPI) was 1.3 percent higher than that in goods stood at 607.7 billion yuan, up 13.7 18.5 percent and 21.3 percent, res p e c t i vel y, the same period last yea r , said the Nati o n a l pe r cent over the yea r- e a r lier perio d , year on year (see graph 3). Bu r eau of Statistics (NBS). The CPI ros e ac c o r ding to the NBS. In the fir st eight 1.3 percent in urban areas and gained 1.4 months, the total sales volume amounted to Industrial Growth pe r cent in rur al areas year on yea r . On a 4.85 trillion yuan, a yea r- o n - y ear increa s e In August, all state - o wned enterpri s e s mo n t h l y basis, the CPI inched up 0.3 per- of 13.5 perce n t . and non-public enterpr ises with annua l cent from Jul y. From Janu a r y to Aug u s t , By region, retail sales of consumer sales reven ue exceeding 5 million yuan the CPI rose 1.2 percent compared with goods in urban areas peaked at 408.2 bil- (e n t e rp r ises abo ve the designated size) the same period last yea r . lion yuan in August, rising 14.3 perce n t completed 735.6 billion yuan in adde d By cate gor y, the price of foo d over a year ago, and those in rur al area s val u e , edging up 15.7 percent year on yea r , in c r eased 1.4 percent while that of non- regis t e r ed a growth of 12.8 percent to said the NBS (see graphs 4 and 5). food products went up 1.3 percent from a 194.7 billion yuan. The sales ratio of industrial prod u c t s year ago. Prices of consumer goods and By sector, the sales volume of the ar rived at 98.74 percent, 0.67 perce n t a ge se r vices grew 1 percent and 2.3 perce n t , wholesale and retail sector ticked up 13.7 point higher than the rate a year ago. The i r res p e c t i vel y, year on year (see graphs 1 pe r cent to 509.8 billion yuan, that of the exp o r t deliver y value amounted to 505.3 and 2). ac c o m m o d a tion and cate r ing sector gai n e d billion yuan, up 23.9 percent compared with the same period last yea r . Graph 1: CPI Changes, Aug. From Janu a r y to August, the adde d 4 % value of enterpr ises abo ve the designate d 3.1 si z e totaled 5.44 trillion yuan, a yea r- o n - 2.4 year increase of 17.3 perce n t . 2 Fixed Assets Investment -1.9 -3.1 -4 -0.1 0 From Janu a r y to August, the aggregate Grain Oil Meat & Eggs Aquatic Vegetables fix ed assets investment in urban areas was Meat Products Products 5.26 trillion yuan, shooting up 29.1 perce n t -2 co m p a r ed with the same period last yea r , said the NBS (see graph 6). State - ow n e d -4 and state-holding enterpr ises and the rea l es t a te development sector completed Graph 2: CPI Changes, Aug. in vestment of 2.47 trillion yuan and 1.11 % 6 tr illion yuan, res p e c t i vel y, increasing 18.4 4.8 pe r cent and 24 percent year on yea r .

4 The investment in projects bud g ed by the state trea s u r y was 568.2 billion yuan, a rise of 29.4 percent over the yea r- e a rl i e r 2 1.5 1.5 1.5 pe ri o d , and that in local projects stood at 0.1 0.1 4.69 trillion yuan, surging 29.1 perce n t -0.5 -0.1 0 year on yea r . Tob a c c o Wi n e Cl o t h i n g Ho u s e h o l d He a l t h Tran s p o r t Re c r e a t i o n , Ho u s i n g By industry, the investment in prim a r y, Fac i l i t i e s Ca r e & Tel e c o m Ed u c a t i o n se c o n d a r y and terti a r y industries rea ch e d -2 & Servi c e s & Personal & Sports Go o d s

Graph 3: Retail Sales Growth, Aug. % 40

33.1 30.3 30 24.8 21.8 23.3 19.7 20.4 20 18.5 15.9 17.5 17.9 13.5 14.4

10

0 Gra i n Me a t Cu l t u ra l Sp o rt s Da i l y Ho m e Fu rn i t u r e Co n s t ru c t i o n Co s m e t i c s Je wel r y Tel e c o m Aut o m o b i l e s Pet r o l e u m & Oil & Eggs & Office & Co m m o d i t i e s Ap p l i a n c e s , & Decorat i o n Eq u i p m e n t & Oil Go o d s Re c r e a t i o n a l Aud i o Ma t e ri a l s Pr o d u c t s Go o d s & Video Products

42 BEIJING REVIEW OCTOBER 5, 2006 BUSINESS

Graph 4: Industrial Growth, Aug. % 30

23.1 23.7

19.8 20 18.3 17.2 17.4 14.8 14.2 13.7

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0 Text i l e s Chemical Non Metals Ferrous Metals Ge n e ra l Tran s p o r t El e c t ri c a l Tel e c o m Pr o d u c t i o n Ma t e ri a l s Eq u i p m e n t Eq u i p m e n t Machines & Eq u i p m e n t , & Supply of & Products Eq u i p m e n t Computers & Power Other Electric & Heat

Graph 5: Industrial Growth, Aug. % last yea r , said the Ministry of Commerce . 30 The sector’s retail sales accounted for 13.5 pe r cent of the nati o n ’ s total retail sales of 20.8 21.3 consumer goods, contrib uting 2.1 perce n t - 20 age points to the over all growth of ret a i l 16.4 17 16.6 sales of consumer goods. The industry’ s 13.3 10.3 yea r- o n - y ear sales growth, 15.7 perce n t , 10 was 2.2 perce n t a ge points higher than the over all growth of retail sales of consumer goo d s . 0 In August alone, retail sales of the Raw Coal Electricity Pig Iron Crude Oil Rolled Steel Cement Automobiles in d u s t r y wer e 82.7 billion yuan, edging up 16.8 percent over a year ago. The yea r- o n - Graph 6: Fixed Assets Investment Growth, Jan.-Aug. year increase of the industry was 3 per- % 150 ce n t a ge points higher than the overa l l 129.1 growth of the total retail sales of consumer goods during this month. 100 In the fir st eight months, the sector saw the app r oval of 693 for eign-funded enter- pr ises, a drop of 6.6 percent from the same 50 46.1 pe r iod last yea r . The commitment and 36.3 42.2 27.2 paid-in capital stood at $1.77 billion and 15 4.3 $450 million, res p e c t i vel y, up 13.3 perce n t 0 and 25 percent year on yea r . Coal Production Railway Non Ferrous Non-ferrous Exploitation Mining & Supply of Transport Metals Metals Metals of Oil & Creative Industry Expo & Was h i n g Power & Heat Na t u r al Gas The Fir st China Beijing Internat i o n a l 54.8 billion yuan, 2.29 trillion yuan and yuan, ticking up 23.5 percent year on yea r . Cu l t u r al and Creat i ve Industry Expo will 2.92 trillion yuan, res p e c t i vel y, shooting up Of the total, the number of newl y starte d be held in Beijing on December 10-14. 38.2 percent, 32 percent and 26.8 perce n t pr ojects was 131,086, whi c h was 17,297 Co ver ing a total floor space of 40,000 year on yea r . mo r e than a year ago, with the total sq u a r e meters with 11 exhibition areas, the Du r ing the Janu a ry - A ugust perio d , the planned investment of 4.45 trillion yuan, expo is aimed at “introducing to the worl d in vestment made by domestic enterpri s e s growing 11.4 percent from a year ago. excellent products of China’s cultural and rea c hed 4.65 trillion yuan, edging up 29.8 In the fir st eight months, the paid-in cre at i ve industry to att r act both domestic pe r cent compared with the same perio d ca pital totaled 6.04 trillion yuan, a rise of and for eign capital and techn o l o gies for last yea r . The investment made by enter- 30.1 percent over the yea r- e a r lier perio d . co o p e r ation in this industry.” pr ises with capital from Hong Kon g , Of this, domestic loans, for eign inves t m e n t Ten specialty exhibition areas will Macao and Tai w an and by fore i g n - f u n d e d and self-collected funds rose by 29.8 per- ca ter to the cultural and creat i ve industry’ s en t e rp r ises stood at 243.4 billion yuan and cent, 18.6 percent and 33.4 percent, res p e c - companies and achi e vements in radio, fil m 339.5 billion yuan, res p e c t i vel y, up 16.5 ti vel y, year on yea r . and television, publi c a tion and copyri g h t pe r cent and 24.8 percent year on yea r . tra d e , art perform a n c e , cartoons, fla s h , At the end of August, 207,714 proj e c t s Accommodation and Catering games and softwar e, advert i s i n g , confer - ea c h valued at 500,000 yuan or abo ve wer e From Janu a r y to August, retail sales of ences and exhibitions, tourism res o r ts and under construction, 30,863 more than the the accommodation and cate r ing industry pr oduct design, industrial design, fas h i o n number in the same period last yea r . The rea c hed 653.76 billion yuan, an increase of design, archi t e c t u r al design, paintings and planned investment totaled 17.99 tril l i o n 88.49 billion yuan over the same perio d ca l l i g raph y, handicrafts and sculpture. ■

BEIJING REVIEW OCTOBER 5, 2006 43 FORUM

Zhang Baosheng (Vice Dean of the China Political Science and Law Should a Click of the Un i vers i t y ) : The program avoids outside in t e r fe r ence when making judicial decisions. As equal and fair as the univer sity and college Mouse Decide the Fate admission process to Chinese students, the sentencing will correct human mistakes to give fair ver dicts and on another level curb Of a Criminal Suspect? co r rup t i o n . Co m p u t e ri z ed assistance will break the om p u t e r s have been pro- er ing obli g ation, negl i g ence and compensa- mo n o p o l y of judges and lawye r s in control - grammed to do just about any- tion to set standard terms for any subtle dif- ling legal knowl e d g e, in the same way the thing today and ver y little they fer ence in var ied cases of the same crim e . In t e r net gives ordi n a r y people the chance to do still raises eyebr ows. Wel l , Chinese prof essionals began their wor k on exp r ess themselves, and of course commun i - th a t was until a softwar e pro- le gal softwar e development in the mid- ca tion leads to shared inform a tion. Softwar e Cgram was developed to decide the fate of sus- 1980s. The criminal sentencing system, cre- of this kind will inevi t a bly become weap o n s pects on trial in a court of law within minutes. ated by Prof essor Zhao Yanguang from for defendants to protect and guarantee their Zi c huan Peo p l e ’ s Court, Zibo City, in Wuhan Univer sity in 1993, is capa ble of la wful rights. I think a system that can deal east China’s Shandong Province has taken a se a r ching legal codes and providing ver - with complicated cases and judicial rea s o n - le a p of faith in the direction of computer dicts for criminal cases. ing will be the trend for future decades. lo gic . Jud g es there now input case details Those who support the electronic sen- Xue Feng (Deputy Director of the into a computer, whi c h automati c a l l y calcu- tences believe it could avoid corruption in Beijing Court Research Institute): The la tes the app ro p ri a te ver dicts. This innova- the judicial system. However , some people ne w legal softwar e is essentially a trial prac - ti ve move in China’s judicial system speeds doubt how muc h the system can res t ra i n tice to introduce the idea of hi-tech assis- up the wor k of the court and standardi ze s abuse of discret i o n a r y power . tants. To improve accurac y and effic i e n c y pro c e d u r es, but exp e c t e d l y not ever yone in Though controver sial, the Shandong the softwar e will not take the place of the loop is happ y. Pr ovincial Court has recommended the soft- ju d g es, but be used as a source of refe re n c e . Chief Jud g e Wang Hongmei of Zichu a n war e to all courts within the province after Pra c t i c a l l y, whether the accused is guilty Di s t r ict Court explained: “We devel o p e d testing for two yea r s in Zichuan. In March, or not, whi c h cate gor y the crime belongs to, the system to prevent judicial power abus e .” the Zichuan District Court had rec e i ved and how to punish the convi c t e d , are major St a tistics show that, in recent yea r s, China’s po s i t i ve comments from China’s Suprem e issues of the trial. In this respect, the convi c - cr iminal cases have seen a 60 percent rise in Peo p l e ’ s Court for its intelligent system. tion is the basis of sentencing, while the ver - appeals against arbitrar y rulings, half of Electronic assistant dicts will be the final decision of the trial. The whi c h wer e caused by unfair impris o n m e n t app e a r ance of unfair judgments req u i r es the te r ms. Since the sentencing softwar e was Wang Hongmei (chief judge of the assistance of the softwar e. in t r oduced in 2003, Zichuan Court has seen Zi c huan Court) : The dominant authority in Zhao Guangrui (writer with a marked drop in appeals to courts of a high- sentencing is the standard regu l a tions, but the Guangming Website): Justice is the war ran t er level . so f t wa r e acts as an assistant in giving verd i c t s . for social fai r ness. The publi c ’ s low confi- Pr evious repo r ts described the computer Ho wever , it is the judges who make the fin a l dence in justice indicates a lack of trust and sentencing as a judge, but Wang said stric t l y decisions. Jud g es are there to fac i l i t a te them to co n f idence from society, who demands judi- sp e a k i n g , it is not computer sentencing, but ma k e the correct decisions. cial refo r ms. Per h a ps the introduction of this rather standard sentencing. Wang Jiandong (court president of the sc i e n t i f ic method could be a solution. Human The full name of the electronic judge Zi c huan Court) : I am pretty sure that the decisions are not always objective, therefo r e de veloped in China is the Standardi ze d on g oing sentenc- the softwar e ver dicts may Sentencing Softwar e Management System. ing by softwar e help in this regar d. is grea t progres s It is a tailored system that can calculate the Dear Readers, Some argue that the app ro p ri a te prison sentences for the 100 for China’s so f t wa r e cannot be suitable “Fo r um” is a column that pro- most commonly occurring crimes and input judicial future. for ever y detailed case, and vides a space for var ying perspec- another thousand cases for refe re n c e . Chinese judges th e re fo r e should not be ha ve more dis- ti v es on issues affecting contempo- The sentencing proc e d u r e is the major rar y Chinese society. In each issue, us e d . Nonetheless, in task of this softwar e. In addition, it is also c re t i o n a r y Wes t e r n countries, our po wer than “Fo r um” will announce the topic for equipped with legal rules and regu l at i o n s , an upcoming issue. We invite you co u n t e rp a r ts are also turn- judicial exp l a n a tions and cases for academ- their fore i g n ing to hi-tech for help whe n c o u n t e rp a rt s , to submit personal viewpoints (in ic study. As to the judges, it previ o u s l y cost either English or Chinese). it is necessary, for instance, them a grea t deal of time to recall similar yet in rura l Upcoming topic: Should debt the usage of the lie detec- cases, but now that’ s avai l a ble at the cli c k of ar eas, such as to r . the southwes t collection be allowed as a profes- a mouse. Even the calculation of pris o n sion in China? In accordance with te r ms can be offer ed by the system, whi c h and north we s t Ch i n a ’ s current crim i n a l E-mail us at [email protected] raises the effic i e n c y of sentencing from sev- pa r t of pro c e d u r e laws, the discre- er al weeks to a couple of minut e s . S h a n d o n g Please provide your name, tele- ti o n a r y power can only be Be fo r e this system, the United State s Pr ovi n c e , the phone number, postal code and applied by judges. In theo- had applied the worl d ’ s fir st computer intel- u n d e r- t ra i n e d address along with your com- ry, the discret i o n a r y power li g ence system in assisting ver dicts as early judicial staff ments. is the power of the people, as 1981. The system program, abbr evi at e d can be assisted Editor: Liu Yu en d o wed by authorit y , and as LDS, was developed in a few modes cov- by the softwar e. the people can depr ive the

46 BEIJING REVIEW OCTOBER 5, 2006 FORUM

ju d g es of their power if they commit mal- tw o obvious fla ws and defects: case may var y with subtle distinctions. In pra c t i c e . In that case if the computer sen- Fir st of all, the scope of the softwar e this regar d, computers are helpless. tences are rel i a ble , they should be used. us a ge will be limited in var ious cases with Justice could be corrected by hi-tech Using the softwar e to curb the power of ill- subtle distinctions. Despite being a similar sometimes, but it is not the ultimate solu- tr ained or corrupt judges can also help to case to the computer, the initial intention of tion. Fundamentally, we should stren g t h e n br ing a more just and legal envi r onment in cr iminals causes var ied damage to society, our judicial system to accommodate ever y China. whi c h needs fle xibility in ver dicts. Tha t is case and ever y defendant. Wha t we need are What e ver the methods adopted, the aim why we authoriz e our judges to take control wel l - t r ained judges, improved survei l l a n c e is to rei n fo r ce legal authority and to preven t of the discret i o n a r y power to secure the dig- systems and app ro p ri a te methods to curb co r ruption. Without more effec t i ve solu- nity and seriousness of laws . flo a ting discret i o n a r y power to res t o r e the tions, the softwar e is wor th a try. The second, and the most important, is tr ust and confidence of the publi c . Liang Jiangtao (commentator of th a t judges will have a negati ve effect. If One thing I am concerned about is why Zhejiang online): A computer calculati o n co u r ts of differ ent levels all over the country so many people are in support of the com- will measure ver dicts. Ever y citizen can pr oduce their standardi z ed softwar e at will, puter judges. At most, they can avoid abus e input the detail of cases and get the res u l t s . the ill-trained or under-e d u c a ted local judges of judicial power and corruption. If confi- With refe r ence to rel a ted stipulations and could not necessaril y guarantee the legal sys- dence is res t o r ed in the way our judges pr ovisions, the process will also be a course te m ’ s rea s o n a ble and scientific struc t u r e. For op e r ate we won ’ t need softwar e of this kind. of legal case study for common people. pr oper and accurate prison terms, China’s Xiao Bo (writer with the Guangming Mo re o ver , this is also a way to be pro- cr iminal proc e d u r al laws are in need of stric t Webs i t e ) : It is undeniable that digital devi c e s tected from the abuse of a judge’ s power . tr ial proc e d u r es, and only qualified judges ar e subordi n a tes; the key is whether to use For the judges, the softwar e could be an aid ar e authoriz ed to make final decisions. If the them or not. When the jury cannot give the to prevent them from misbehavior and mak- computer plays the role of judge, the legal co r rect penalty to criminals, they may ref er to ing error s. au t h o r ity will be lower ed to a point whe r e co m p u t e r s. Nonetheless, this demonstrate s human brains are dominated by digital pro- the low level of prof essional knowl e d g e and ‘Byting’ off too much grams. Wha t is more, that could excuse the wor king exp e r ience in our judicial system. Liu Hongyu (National Peo p l e ’ s laziness of judges, and perhaps help them whi c h is unaccept a ble . The public will ques- Co n g ress repre s e n t at i ve, Beijing lawye r ) : es c a pe the criticism of injustice, since they tion the capa bility of our judges. If the com- In some cases, computer decisions play pos- will use computers as standard assistants. puter can solve every t h i n g , wha t is the pur- it i ve roles, for exa m p l e , to res t r ain the dis- Meng Shan (commentator of Ch i n a pose of having a judge? To my view, the col- cre t i o n a r y power of judges, and therefo r e Tim e s ): Obv i o u s l y, machi n e r y can never lab o r ation between judges and computers is gain the trust of defendants, and for app e a l s ta k e the place of rational thoughts and the a far ce to lower people’s opinion of our judi- reduction. However , that could not offset its lo gic of people. In real life ever y detailed cial system. ■

BEIJING REVIEW OCTOBER 5, 2006 47 EXPAT’S EYE

By FRANCISCO LITTLE the increase in alcoholic consumption in Chinese men over the age of 15 are depe n - Ch i n a . ” He was speaking after having under- dent on alcohol. That ’ s over 30 million peo- he r e I come from drinking is ta k en a Wor ld Health Organ i z at i o n - s p o n - pl e . The repo r t said only 0.2 percent of a way of life. Around the so r ed study of the probl e m . women wer e similarly affec t e d . He calculat- br aai (barbeque) watch i n g Wha t emerged made interesting rea d i n g ed the Chinese consumption equated to 5 sp o r t, at the pool in fact any and points to the fact that China does indeed li t e r s per capita a year of pure alcohol. Woccasion is a good enough excuse to down seem to be taking one too many tipples, and And with this demand has come the need a few frosties and have a rip. Often, drin k - it is starting to impact on the nati o n ’ s health. to increase alcoholic bever age production by ing back home does not include any foo d , Ch i n a ’ s brewing industry dates back fur- 10 percent a yea r . Wei said this had a rip p l e apa r t from the odd peanuts or crisps. It ther than any other. Newscientist.com says ef fect, as the desire for alcohol had resulted in de velops from youth into the rowd y binges solid evidence backing this fac t a gradual increase in drinking rel a ted illness- th a t end in skull splitting hangover s, car was found in 2004, when a es. These included cirrhosis of the liver and accidents and alcoholism. ul c e r s, along with psychi at r ic disorde r s such Dr inking in China has trad i t i o n - as alcohol depe n d e n c y and dementia, al l y been an altogether differe n t he said. af fai r . Most drinking is done Wei ’ s repo r t was crit i - at the dinner or lunch table . cal of the scant att e n t i o n You drink, but you eat in tan- given to public health dem. Sensible , no doubt. Foo d st r ate gies, despite the does absorb the alcohol and in c r easing documented evi - sa ve that stomach lining from a dence of rising alcohol abus e . po u n d i n g . “W e only talk about the disor- Apa r t from the regu l at o r y de r s—not the preven t i o n , ” host getting plastered at form a l said Wei. The r e are curren t l y banquets and having to be no hospitals dealing with alco- es c o r ted to his car- and the end- hol rel a ted health prob lems in less rapid gulping at obli g ato r y China, but the psychi at r ist is co n f ident that his repo r t will help gan b e i (toasts), drunks are not a cha n g e that. common sight on Chinese stree t s . He points a fin g er at you t h Well, certa i n l y not streets that I watc hing and fol l o wing the lead of walk on. their Wes t e r n counterpa r ts, who In fact, I didn’t think that alco- mo r e often than not drink alcohol holism was an issue at all in China. DRINK AND EAT: Drinking has traditionally taken place without eati n g . This says Wei, is People drink at meal times, down along with eating in China but that’s all changing br eaking down the traditional Chinese the odd ba i j i o u or 10, drop emphasis on moderate drin k - a few Tsingtaos and go ing accompanied by some ho m e . Maybe the scene kind of substantial meal. will repe a t itself the fol l o w- And with all the bus i n e s s ing wee ke n d . It’s all harm- Dr iven to Drin k being conducted around the less fun. Or is it? economic boom, it’s forc i n g It was therefo r e inter- Ch i n e s e - A m e r ican team discover ed traces of another kind of cultural cha n g e. “In bus i n e s s , esting to see the recent comments made by alcohol can be used to improve the rel at i o n - one of China’s top psychi at r ists. He said that alcoholic drinks on pottery dating back as far as 7000 B.C. Moderate drinking throu g h o u t ship—so it for ces you to drink a lot,” Wei the country’ s searing economic boom and sa i d . Anyone who ’ s been on the rec e iv i n g this long history has been a hallmark of the galloping influx of Wes t e rn i z ed trends have end of chasing down a business deal will na tion, but in the past two decades Wei ’ s given rise to a major increase in alcohol attest to this. st u d y found that there has been a 10 perce n t abuse over the last 20 yea rs , With more cars even more new driver s rise in the rate of alcohol consumption. Wei Hao, of China’s Central South on the roads, Wei ’ s survey also looks at this Un i vers i t y , told the Wor ld Congress on “T wenty yea r s ago people wer e gen e ra l - da n ge r ous consequence of drin k i n g , fin d i n g Alcohol Research in Sydney in Sept e m b e r , ly ver y poor, so they didn’t have enough th a t driving under the influence is now the th a t evidence had emerged of a strik i n g mo n e y to buy food and even clo t h i n g . Now th i r d top cause of traf fic accidents in China. in c r ease in drinking and rel a ted health prob - people have become ric her and rich e r , they Whether this is all a case of another “neg- lems in China. ha ve ext r a money to buy (alcoholic) bever - ati ve” Wes t e r n influence on Chinese culture, An Associated Press repo r t quotes Wei ages , ” he said. or the inevi t a ble spin of the wheel of progres s as saying: “Economic development is the Wei ’ s study invol v ed almost 27,000 peo- is debat a ble . And perhaps those two are not most important factor that has contrib uted to ple in China. It shows that 6.7 percent of mut u a l l y excl u s i ve. Or are they? ■

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48 BEIJING REVIEW OCTOBER 5, 2006