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China Culture & History

China Irked by Pentagon Report

The Pentagon was very critical of China’s growing military power in its annual report to the U.S. Congress, claiming it is altering the military balance in Asia.

The U.S. Department of Defense criticized China’s development of “disruptive military technologies,” including “nuclear, space, and cyber warfare.”

The U.S. is also worried about the purpose of China’s military, stating in the report that, “much uncertainty surrounds China’s future course, particularly regarding how its expanding military power might be used.”

Chinese officials have expressed their disappointment with the Pentagon’s annual report, which they feel unfairly portrays China as a military aggressor.

Foreign Ministry spokesman Qin Gang has urged the U.S. to “drop the Cold War thinking… to prevent further damage to the relationship between the two countries and two armies.”

China’s military spending is still a fraction of America’s and it maintains that the “peaceful rise” in military spending is appropriate in concordance with the country’s economic growth.

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China

China Calls for U.S. Dollar to be Replaced

Zhou Xiaochuan, governor of the People’s Bank of China, released an essay in Chinese and English on Monday which called for a new currency reserve system to be implemented by the International Monetary Fund.

This move may be an indication of China’s increasing concern over their foreign exchange reserves which, valued at almost US$ 2 trillion, are the largest in the world. Of those assets, more than half are made up of U.S. treasury and other dollar-valued bonds.

In his paper, Zhou supported his request with what he claimed the current economic crisis has revealed as, “inherent vulnerabilities and systemic risks in the existing international monetary system.”

“Chinese are quite concerned that the large U.S. government deficits will eventually lead to inflation, which will erode the purchasing power of the dollar-denominated financial assets which they hold,” said Nicholas Lardy, an economist with a focus on China at the Peterson Institute in Washington. “It is a legitimate concern.”

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China Culture & History

Tibetan Protests Break-out in Western China

In the largest protest in Qinghai province this year, almost 100 Tibetans have been detained after a crowd surrounded government buildings near Rabgya Monastery.

The unrest seems to be in response to the 28-year-old monk, Tashi Sangbo, committing suicide.

The young monk was arrested last week for having a Tibetan flag in his possession as well as several political leaflets – both of which are banned in the region. Tashi then escaped custody and killed himself by jumping into a river.

“Angry protesters managed to snatch from police the Tibetan national flag that was earlier confiscated by the Chinese officials,” according to the Phayul report, which also reported that thousands were involved in the protest.

Chinese officials managed to block all communication in and out of the Tibetan enclave by closing roads, as well as cutting telephone lines, text messages, and internet, making it difficult for reports to be authenticated.

This year marks the 50th anniversary of the exile of the Dalai Lama, which has triggered China to issue thousands of paramilitary troops to the region to ensure stability.

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China Culture & History Vietnam

China-Vietnam Friendship Year Set for 2010

To celebrate the 60th anniversary of diplomatic ties between the two countries, Vietnam and China have mutually agreed to launch the “China-Vietnam Friendship Year” in 2010.

As a part of this year of friendship, both countries have vowed to resolve their border disputes in a peaceful and effective manner as well as enhance cooperation in science, technology, agriculture, and athletics.

Furthermore, the two sides have agreed to jointly tackle the worldwide financial crisis with a win-win strategy that will include high-level exchanges that will achieve mutual political trust.

Chinese State Councilor Dai Bingguo stated that he hopes the event will establish, “long-term stability, future orientation, good-neighborly friendship, and all-round cooperation.”

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China

China Rejects Coca-Cola Takeover

China’s Ministry of Commerce rejected Coca-Cola’s US$2.4 billion bid for China’s juice maker Huiyuan yesterday which would have been the largest takeover in history of a Chinese company by an overseas competitor.

Officials from the Ministry of Commerce claim that the takeover would have been bad for competition and cited anti-monopolistic grounds as the reason for their rejection of the deal.

This move may have a negative effect on how companies perceive business investment in China given the friendly and seemingly fair offer proposed by Coca-Cola to Huiyuan.

“It indicates that the Ministry of Commerce is going to take a very hard look at foreign acquisitions of leading Chinese brands, even if the foreign acquirer has little or no market penetration in that particular segment of the market,” said Lester Ross of the Wilmer-Hale law firm in Beijing.

This move by China, however, is not without precedent. In 2005, America’s government strongly contested the attempted takeover of U.S. based oil company Unocal by China National Offshore Oil Company citing “national strategic interests” even though their bid of US$18.5 billion was the highest.

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China

Second-hand Markets in China

In an effort to increase domestic consumption, China’s Ministry of Commerce has recently unveiled plans to establish a chain of second-hand markets throughout the country.

This comes as part of China’s plan to stimulate the economy through an increase in domestic spending, which will be a tough task as individual’s incomes are affected by the financial downturn.

Officials believe that creating a market for second-hand goods like home appliances and clothes will encourage individuals to sell off their current possessions in order to buy new ones.

The theory being this being that people who are hesitant to buy new refrigerators and televisions may have increased incentives if they can recuperate some of the expenses of their current appliances. It also will provide cheap goods to those who cannot afford new merchandise.

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China Culture & History

More Issues in the South China Sea

In another controversial move, China has recently dispatched a state-of-the-art patrol ship to the South China Sea – possibly in response to the signing of the Philippine Archipelagic Baselines Law and the recent altercation with a U.S. surveillance vessel.

The Philippines believe the move to be a show of intimidation in the region following the island country’s claim on the Spratly Islands and Scarborough Shoal.

“The deployment of the patrol ship was a message and we cannot just ignore it,” Philippines National Security Adviser Norberto Gonzales told the Philippine Daily Inquirer. “We have to take it seriously.”

While the Philippines maintain that their claim is consistent with the United Nations Convention on the Law of the Sea, it has been met with fierce protest in Beijing where the Baseline Law is regarded as ‘illegal.’

The Spratly Islands are claimed in full by China and Vietnam, as well as partly by the Philippines, Malaysia, Brunei, as well as Taiwan, and have been a contentious topic for years.

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China North Korea Russia

China and U.S. to Look Past Recent Incident, Collaborate on Economic Issues

Officials say the recent incident between a U.S. surveillance ship and China’s naval vessels in the South China Sea won’t adversely affect relations between the two countries as they work together to fight the global financial crisis.

The U.S. ship, Impeccable, was conducting tests designed to seek submarines and other vessels within China’s economic exclusion zone, less than 200 miles south of Hainan Island. The ship was harassed by a group of Chinese naval vessels which performed maneuvers within 25 feet of the Impeccable.

U.S. Secretary of State Hillary Clinton met with Chinese Foreign Minister Yang Jiechi in Washington yesterday and both parties have agreed to try and prevent these types of incidents from occurring in the future.

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China Culture & History

China to Increase Military Budget

In its 19th double-digit increase in 20 years, China is again increasing military spending for the 2009 fiscal year – this time by 14.9 percent. The increase will boost the country’s military finances up to RMB480.6 billion, or a 6.3 percent share of the total budget.

The funds will help maintain “sovereignty and integrity of Chinese territory and would not threaten any country,” according to a report by National People’s Congress spokesman Li Zhaoxing, issued today.

Li went on to say, “The increased part of the budget is mainly used to raise salaries for soldiers as well as spending on military ‘informatisation’, counter-terrorism and internal security.”

In a policy report issued by Beijing in January, government officials asserted that China’s national security was improving, but that the country’s armed forces needed to be upgraded in order to deal with potential conflicts abroad.

China currently boasts a military force of 2.3 million soldiers, the largest in the world.

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China Culture & History

Chinese Art Collector Reneges on Winning Bid at Paris Auction

The Chinese antique art collector who placed the winning bids on two highly controversial statues at a Christie’s auction in Paris last week is now refusing to pay out of protest.

The pieces in question are the bronze head sculptures of a rat and a rabbit – two out of twelve that were looted from Beijing’s Summer Palace in 1860 by Anglo-French forces during the Second Opium War.