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India - China: Relations And Developments
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>China gets business, India moves on border </b>
Press Trust of India/ New Delhi
In ground-breaking steps to upgrade their ties, India and China on Monday agreed to work out an early "package settlement" of the vexed boundary question by making "mutually acceptable adjustments" as Beijing categorically accepted Sikkim as part of India.

Making it clear that they were not rivals but partners, the two countries also decided to establish a strategic and cooperative partnership for peace and prosperity.

After over two-hour talks here, Prime Minister Manmohan Singh and visiting Chinese Premier Wen Jiabao signed a Joint Statement and witnessed the signing of 12 accords, including a protocol on modalities for implementation of confidence building measures in the military field along the Line of Actual Control (LAC) and another on upgrading air links.

The agreement on political parameters and guiding principles for the settlement of the boundary question, signed by Special Representatives MK Narayanan, national security adviser and Senior Executive Vice Foreign Minister Dai Bingguo, said the two sides should in the spirit of mutual respect and understanding "make meaningful and mutually acceptable adjustments" to their respective positions on the boundary question.

This is to arrive at a "package settlement" which is "final" covering all sectors of the India-China boundary, said the agreement which outlined 11 political parameters and guiding principles to resolve the vexed issue that has bedevilled bilateral ties for over four decades.

Putting behind one of the irritants in bilateral ties, the Chinese side gave a categorical acceptance of Sikkim being part of India, foreign secretary Shyam Saran said.

He said the Chinese side handed over to India an official map, which shows Sikkim within the boundary of India.

Saran quoted the Chinese side as saying that "it (Sikkim) is no longer an issue in India-China relations. We have put it behind us."

On its part, India said it recognized the Tibet Autonomous Region (TAR) as part of China's territory and would not allow Tibetans to engage in anti-China political activities on its soil.

Declaring that differences on the boundary question should not be allowed to affect the overall development of bilateral ties, the two sides decided to seek a fair, reasonable and mutually acceptable solution to the vexed issue through consultations on an "equal footing".

Outlining 11 political parameters and guiding principles for the settlement of the boundary question, the two sides agreed that the boundary should be along "well-defined and easily identifiable" natural geographical features to be mutually agreed upon.

The Joint Statement said both sides were convinced that an "early settlement of the boundary question will advance the basic interests of the two countries and should, therefore, be pursued as a strategic objective."

The two sides agreed to complete the process of exchanging maps indicating their respective perceptions of the entire alignment of the LAC to arrive at a "common understanding" as soon as possible.
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Officials say there are no big disputes to be settled. One official said the only area of dispute between the two sides is a place called Barahoti.

After handing 38,000 Square Kilometres to China the Kangress Kammunist Kriminal Klan can hand over as much of Jammu and Kashmir to Pakistan. <!--QuoteEnd--><!--QuoteEEnd-->
Congress and DDM are doing best to twist facts and stories to make it look good, China is raising issue which is no issue for India i.e. Sikkim, Tibet. But India is not talking at all about AKSAI CHIN or occupied AP. First time Nehru screwed India now left over legacy will be completed by left over Kangressi.
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Bhaichara ok, but Army on guard along China border </b>
Pioneer News Service/ New Delhi
The Indian Defence establishment is not relaxing its vigil on the 4,056-km long Line of Actual Control (LAC) despite content and significant improvement in relations with China in the last two decades.

Peace and tranquillity prevailed on the LAC and both the sides had not fired <b>"even a single shot in anger in the last one decade" but the Army was not willing to let its guard down and earmarked ten divisions for guarding the LAC.</b>

Incidentally, one division comprises about 10,000 soldiers and India has to maintain vigil on the LAC stretching from Ladakh to Uttaranchal and Himachal Pradesh and upto Arunachal Pradesh.

The LAC, though yet to be demarcated and delineated on ground, was divided into three sectors including western sector in Ladakh (1,000 kms), middle sector in Uttranchal and Himachal Pradesh (554 kms) and remaining sizeable stretch in eastern sector in Arunachal Pradesh.

The two countries had, so far, exchanged maps pertaining to the middle sector and parleys were on to arrive at a consensus and subsequent demarcation and delineation. India was at a disadvantageous position in military terms as far as the eastern and western sectors were concerned as reports indicated that China had built all weather logistical lines and military infrastructure at major positions along the LAC.

Given the rugged terrain in Arunachal Pradesh and Ladakh, the logiscital chain was proving to a major challenge for the Indian army, it was learnt. <b>In fact, the nearest road head at many places was far away from the LAC and the essential supplies had to carried by porters after marching for five to seven days. China, however, had constructed all weather roads, both metalled and kutcha, upto the LAC thereby ovecoming the problem of rapid movement of logistics in Arunachal and Ladakh.</b>

<b>Coupled with this, China was reportedly conducting aggressive patrolling inside the Indian territory in some sectors of Ladakh and Arunachal as they claimed the territory was disputed</b>. Reports also indicated that <b>China had also constructed structures inside the demilitarised zones at some places in the eastern and western sectors</b>. The demilitarised zone comprised 10 to 15 km of land on either side of the LAC. The task force on border management, which reviewed the situation on all the borders in the wake of Kargil war, had given a detailed report on the Indo-China border. <!--QuoteEnd--><!--QuoteEEnd-->
<b>Thousands of villagers riot in China</b> <!--emo&Big Grin--><img src='style_emoticons/<#EMO_DIR#>/biggrin.gif' border='0' style='vertical-align:middle' alt='biggrin.gif' /><!--endemo-->
In what India terms a "movement forward," China on Monday gave a "clear political statement" that it would be "happy" to see India as a permanent member of the UNSC. While New Delhi says this is "every indication" that China welcomes India's candidature, the two countries do not agree on the basic formula of an SC expansion. China says any decision on the issue should be made not by vote but through consensus which feeds genuine fear that the process will get stalled or even scuttled.
<b>China non-committal on backing India at UNSC</b> <!--emo&Big Grin--><img src='style_emoticons/<#EMO_DIR#>/biggrin.gif' border='0' style='vertical-align:middle' alt='biggrin.gif' /><!--endemo-->
Now Indian commies should hang their head in shame.
The road ahead
Col (retd) Anil Athale's
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->C O M M E N T A R Y

<b>Facing the dragon</b>
India held up against Chinese attacks better than expected.

18 April 2005: It will take another day for a cool assessment of General Pervez Musharraf’s visit to India. Right now, it has taken on the proportions of a page 3 event. On the other hand, the concluded visit of the Chinese premier, Wen Jiabao, provides some insights into Chinese thinking, which is basically cutthroat diplomacy, but for once, the <b>Chinese have not been able to crack the Indian wall</b>. There was remarkable unity, for a change, on the Indian side, and the prime minister, his cabinet colleagues handling security issues, and officials, <b>including the military, were in step most of the time</b>.

To start with, an apology from our side. We misreported that in their meetings, <b>PM Manmohan Singh and Wen Jiabao tentatively agreed on a swap of disputed territories, China keeping Aksai Chin in the Western Sector in exchange for dropping claims on Arunachal Pradesh, Tawang, and so on in the Eastern Sector </b>(Intelligence, “Secret: PM-Jiabao agree on territory swap,” 11 April 2005). Such a proposal was made by China, presumably at the invitation or hint of someone from the Indian side, during or before Wen Jiabao’s visit, very probably before, but such was Indian Army opposition to this, that the proposal made no progress beyond the initial rounds. There was no question of an Indian agreement on this, not after so much opposition.

<b>The Chinese, on the other hand, were pressuring for a package deal on the border dispute, not a sector-by-sector, territory-by-territory negotiation favoured by India.</b> Officials said what the Chinese hoped was to wrest Aksai Chin, where they have made massive military investments by way of a jetport and helipads, and a network of heavy roads to link Xining, their planned oil and gas hub, to the upcoming Pakistani port of Gwadar in the Arabian Sea, while in the exchanged Eastern Sector, they would haggle over tactically crucial territories, like Tawang. But obviously<b>, <span style='color:red'>the Indian military would not permit this disadvantageous swap. </span></b>

Loaded on to the Western-Sector-for-Eastern-Sector deal was Chinese extortion tactics on India’s bid to become a permanent UN Security Council member with veto powers. For one, Wen Jiabao spoke in two voices, supporting India’s candidature in private talks, but reverting to the Chinese position of “consensus” on the issue in public statements. But even in this private support, conditionalities were attached.

<b>The major conditionality was that, in return for Chinese support in getting veto power in the UN Security Council, India had to give up Aksai Chin and Tawang in the Eastern Sector, but that was not the end of it. There was no guarantee that China would not dispute the status of Arunachal Pradesh, and there was a distinct possibility of reopening the matter of Sikkim’s merger with India. “It was all getting very hot,” confessed an insider on the negotiations. “It looked progressively that it was not worth the effort to get China’s support on a permanent Security Council membership. So very pointedly at some stage, we gave up insisting on it, and the Chinese understood there was no deal.” </b>

The Chinese tried bullying on two other issues, Tibet and Taiwan. On Tibet, as usual, they wanted a blanket ban on the Dalai Lama’s political activity, which is anyhow nil on Indian soil, and this was told firmly to the Chinese. Second, they wanted a clampdown on the political activities of Tibetan youth, and the Indian side said there was no encouragement of this, and such activities were not to its knowledge. Finally, the Chinese wanted Indian funding to the Tibetan refugees to be heavily curtailed, and the Indian side was non-committal. The factual position is, as newer generations of Tibetans have come into trade, especially exports, the Indian funding, necessary to sustain a government in exile, to keep the Dalai Lama in his station as a head of state, and so on, has markedly reduced.

On Taiwan, the Chinese demands were as outrageous. Not only did they want all Taiwanese visitors to India discouraged and monitored for anti-Mainland activities, they also demanded that all visitors from Taiwan be previously cleared by China. In other words, if a Taiwanese delegation sought permission to visit India, the delegation had to be cleared by China. Such was the scorn the Indian side showed to this proposal, according to an official, that the Chinese knew they had failed to impress or convince. But Wen Jiabao also found a distinct lack of timidity on the Indian side during negotiations, partly because of the weight of opinion held and expressed freely by the military and intelligence institutions. For example, Wen Jiabao went into a long explanation of the quality and depth of China-Pakistan relations. While being frank that joint projects, like fighter-jet production, battle tank upgradation, establishing civilian nuclear reactors, etc, could not be abandoned, the Chinese premier said that both countries had come to each other’s aid in times of need. Earlier, such a statement would have been accepted at face value, so as not to embarrass or upset a visitor of Wen Jiabao’s stature.

<b>But not this time. The Indian side said that it accepted the impressive Chinese assistance to Pakistan, but it queried about Pakistani reciprocity. What had Pakistan done for China, what incredible assistance had it rendered, to gain such measure of Chinese gratitude? For once, officials recalled, the Chinese side fumbled for a response. The very unequal nature of Chinese-Pakistan relations was hammered in, and this was a change from Indian moralising, when it was ever possible, and it was a good substitute for anger, which India has never tried with China, anger being an unpredictable entity with the Chinese. “But we sent them back with some very disturbing questions,” an official said.</b>

In other words, for the Chinese, Wen Jiabao’s visit made no progress on contentious military and political issues, while the Indian side called to question the basic premise of China’s relations with Pakistan. Through the Wen tour, India fended off Chinese attacks, without losing its cool or purpose, and the visit was dressed up a success in trade terms, <b>because this was the plea of Indian industry and business, which sees China spinning out of control after the 2008 Olympics and 2010 World Expo, when Chinese internal demand is predicted to collapse, and the bubble of the Chinese economy bursts.</b><!--QuoteEnd--><!--QuoteEEnd-->
Tit-bit from Indian Parliament research student -discussion during China-India border & Nehru.
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>I do not remeberr mentioning one event  about China-India border dispute. In Parliament, Dr. Ram Manohar Lohia raises this issue and what he was doing about it. He replied that it was barren area not worth taking any steps. Dr. Lohia torted that his(Nehru's)  bald head no hair so why not give his head away upon which Nehru's face became red</b>.<!--QuoteEnd--><!--QuoteEEnd--> <!--emo&Big Grin--><img src='style_emoticons/<#EMO_DIR#>/biggrin.gif' border='0' style='vertical-align:middle' alt='biggrin.gif' /><!--endemo-->

<b>SHANGHAI: The Chinese government has authorised a $15-billion bailout of Industrial and Commercial Bank of China (ICBC), the country’s largest but financially weakest lender, the central bank said.</b>

“Recently the State Council has approved the shareholding reform of ICBC,” the People’s Bank of China said. “Through the foreign exchange reserves, a capital injection of $15 billion will boost the core capital adequacy ratio of the (ICBC),” said a Xinhua news agency dispatch posted on the central bank’s website.

The long-awaited move, part of a broad programme of banking reforms that began more than a year ago, is aimed at boosting the state-run bank’s core capital adequacy ratio (CAR) to 6%, it said.

ICBC’s current 5.52% CAR is well below the 8% minimum set under the Basel Accord for commercial banks, and accepted by China’s banking regulator, that is a must for a potential overseas listing. The cash injection is expected to pave the way for an eventual overseas stock offering to further shore up the bank’s finances, while providing an unprecedented test of Beijing’s ability to reform its troubled financial sector ahead of sector-wide liberation at the end of 2006.

“Its all about the government paying the bill for the banks so a better system of multiple shareholders can be created and the historical problems of the banks can be solved,” said Zhao Xianming, financial analyst from Great Wall Securities.

<b>The handout will be financed from China’s massive forex reserves, which stood at $659.1 billion at the end of March, the central bank said. ICBC aims to “finish its shareholding reform in 2005 and then create the conditions and seek the opportunities to gain a public listing both in domestic and overseas markets,” ICBC chief Jiang Jianqing said in a statement.</b>

“Its a complicated and systematic project with high standards, a reform that we cannot afford to fail in,” Jiang said. <b>ICBC is the third of China’s big four state-owned commercial banks to win a bailout by Beijing, though the amount had been expected to well exceed the $20 billion mark. In December 2003, the Bank of China and the China Construction Bank received $22.5 billion each to clean up their balance sheets and prepare them for listing.</b> The move helped boost the CARs at the two banks to around 8%, while reducing their non-performing loan (NPL) ratios to below 10%. Last year, ICBC had a non-performing loan ratio of 19%.

“The other two banks are in a hurry to get listed so they got more money while ICBC has a couple of years before its listing and should be capable of solving part of its capital adequacy problems through profits,” said Zhao

Cheers. <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->
Mughlai Chinese
Mr Swapan Dasgupta, in his article, “You’ve guest it wrong” (Usual Suspects, April 17), supports the Government decision not to offer the Chinese cuisine to Chinese Premier Wen Jiabao. He thinks that the food plays a “seminal role” in the conduct of geo-politics. It reminds me of an anecdote, may be apocryphal, doing the rounds in Delhi during early 1963. On the eve of first Chinese Premier Zhou Enlai’s first visit in 1956, the then Prime Minister, Jawaharlal Nehru, summoned his favourite caterer, Kundan Lal of Daryaganj’s Moti Mahal restaurant, and asked him to prepare some Chinese dinner for the visitor. Though not an expert on Chinese dishes, Kundan Lal valiantly rose to the occasion and laid out an array of “Chinese” food like stir-fried vegetables in dal makhni, etc. He also produced a plump Jama Masjid duck done to a turn in tandoor as “Peking Duck”. When the guest lavishly praised the Indian cuisine, Nehru asserted it was Chinese and not Indian. At that, a strained silence fell on the table. Zhou Enlai was deeply offended at Nehru’s attempts to malign his native cuisine. He quietly plotted revenge. It came on October 20, 1962 morning on the Namka Chhu river bank in NEFA. The rest is history.
Ajoy Bagchi
Lodhi Road, New Delhi
<!--emo&:o--><img src='style_emoticons/<#EMO_DIR#>/ohmy.gif' border='0' style='vertical-align:middle' alt='ohmy.gif' /><!--endemo-->
<b>China won't support India for UNSC: Report</b>
Full membership in the WTO is the very thing that could interrupt the life-giving flow of deadly loans.
China: The Communist Government's Crisis of Legitimacy

By Peter Zeihan

China has begun to tip its hand as to how it plans to unravel a Gordian knot of social, financial and political problems -- any one of which could be life-threatening to the communist government in Beijing. The revelation came April 27, when a China Banking Regulatory Commission (CBRC) official said leaders are examining ways to protect the country's banking sector against foreign competition, while -- at least for now -- still honoring its commitments under the World Trade Organization (WTO).

Though Shi Jiliang, the vice chairman of the CBRC, was careful to emphasize that China's WTO commitments are not in doubt, his discussion of achieving "an appropriate level of protection for Chinese banks" and taking efforts to "reduce excessive competition between foreign and Chinese banks" could hardly be lost on Beijing-watchers waiting for the government -- which faces a crisis of legitimacy on multiple levels -- to signal its next move.

As the situation stands now, any credibility the government gleaned from Marxism, Maoism or Communism has long since faded, and the Communist Party remains in power only by dint of its ability to deliver economic well-being to the masses. Its chosen delivery mechanisms are state-owned enterprises (SOEs) -- government-run companies that directly employ more than half the nation's urban dwellers. These vastly bloated and unprofitable companies are kept "viable" through subsidies and cheap loans, regularly injected by China's state-owned banks.

And therein lies the rub -- for China, its banks and the WTO as well.

By any unbiased definition -- and as recently as two years ago, even in the opinion of the government -- the state banks are all moribund. Their total portfolio of (intentionally given) bad loans amount to somewhere between one- and two-thirds of China's gross domestic product, the highest ratio of any major economy in human history. Should that flow of loans be interrupted, the banks would crumble, the SOEs would crash and China would burn in flames of economic catastrophe and social unrest.

The end of China's five year phase-in to full WTO membership -- scheduled to arrive in December 2006 -- is the very thing that could interrupt that life-giving flow of deadly loans.

At that point, all restrictions on foreign participation in the Chinese banking sector will fall away. And if Beijing allows this to occur as envisioned by the WTO, foreign banks would quickly attract the bulk of China's private savings, which now are forcibly funneled into the state banks and thence to the SOEs.

Currently, foreign access to China's financial world is thin, restricted as it is to local currency transactions in 18 cities. But even this limited access has led to the formation of some 220 foreign bank offices in China and totaled business worth 108.3 billion yuan ($13 billion) at the end of 2004. These foreign banks already hold 12 percent of all lending business in Shanghai, a rate of increase that Shi calls "unexpectedly [read: disturbingly] fast." Full competition would send Chinese money to the foreign banks in droves, and once foreign currency [read: U.S. dollar] operations are allowed, capital flight will reach mountainous proportions.

Hence, Shi has signaled that China will abrogate its commitments to permit banking competition, in order to assure the continued existence of the government. A choice between China's WTO commitments and the continued survival of the government is no choice at all.

There is certainly something to be said for preparation. Foreign bankers -- who have been singing China's praises for years -- have a vested interest in maintaining the Chinese hype, since they turn profits as money moves into or out of China. But for these bankers, access to China's hundreds of millions of savers is the Holy Grail. A sudden split between Beijing and those who thus far have been singing in the choir would signal not the beginning of the end, but the end itself -- for once the choir realizes it has been had, it is only a matter of moments before the entire congregation of investors speeds for the door.

You have been sent this weekly brief as you elected to receive periodic updates from Stratfor. If you do not wish to receive the Intelligence Brief every week, please reply to: sfib-unsubscribe@yorktown.stratfor.com

© Copyright 2005 - Strategic Forecasting, Inc.
I told you -
<b>Chinese army enters into Indian territory</b>
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->NEW DELHI: Hardly a month after India and China signed a landmark agreement to settle their border dispute, a Chinese Army patrol has intruded deep into Indian territory and stayed there for close to 24 hours before withdrawing last week.

The border violation took place in Asafila area of the Upper Subansiri district of Arunachal Pradesh.

This is the same area where on June 26, 2003, a Chinese Army team had intruded into India, stripped Indian intelligence officials of personal weapons and held them hostage for several hours.

The incident had coincided with the then prime minister Atal Bihari Vajpayee's official visit to China.

The issue was taken up by India with the Chinese government then.

The latest intrusion was carried out by a five-member team of the Chinese Army, sources say.

The patrol reached the border on May 10 and crossed over the next day, trekking some five kilometers into the Indian side.

They spent almost the entire day inside Indian side before retreating.

By May 12, the patrol team had fully.withdrawn to their normal stated position beyond the Line of Actual Control.

"Our troops did not allow the situation to get out of hand," sources told Indiatimes News Network . There was no exchange of fire.
What is baffling is that the intrusion came just a month after the highly successful visit of Chinese premier Wen Jiabao to India.

Among the agreements concluded during his visit, the most noticeable one was the "Political Parameters and Guiding Principles for the Settlement of the India-China Boundary Question".

There have been occasional claims by India of intrusion by Peoples Liberation Army.

In 2000, Arunachal Pradesh Chief Minister Mukut Mithi claimed there have been repeated incursions by Chinese troops.

Then reports had pointed out that the Chinese had built a mule trail in Kaila Pass in Dibang Valley district.

China officially does not recognise Arunachal Pradesh as an Indian state.

Chinese Army had overrun most of Arunachal Pradesh during the 1962 war, but had vacated it after the war.

The Line of Actual Control is punctured at many pockets of dispute. In 1986-87 there was a serious flare up of the border stand off between the Indian and Chinese forces in the Sumdorong Chu Valley of Arunachal.

In 1993, the two sides signed an accord to reduce tensions along the border and to respect the LAC.

In 1996 the two sides also put in place many Confidence Building Measures for improving the border peace.

Among the CBMs is an agreement of non-aggression, prior notification of large troop movements and a 10-km no-fly zone for combat aircraft
Why it is baffling? Ask commies and Sonia in center? They were so gaga about new relationship with China, a good slap on UPA face.
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>VIEW FROM CHINA </b>
<b>Aksai Chin, Arunachal ours, says China </b>
D. S. Rajan
The People’s Republic of China (PRC) Premier Wen Jiabao’s visit to India is over. A new era has begun in Beijing-New Delhi relations, say opinion makers in both the countries. An euphoria has come to prevail in India over the likely effect of the Guiding Principles agreed to by both the sides on solving the boundary question. But is the picture so optimistic? Does any one see fresh nuances signifying even a slight moderation in Chinese territorial position especially on Aksai Chin and Arunachal Pradesh? The answers can be ‘no’, considering the reported latest Chinese intrusion in the Asaphila area of Arunachal Pradesh. Such an impression is also being reinforced by what is being conveyed in the post-visit period to readers within the PRC especially in Tibet, through authoritative Chinese language media articles on the border problem. At a time when border talks progress further, New Delhi requires to be alert and continuously monitor Chinese pronouncements on the border coming at various stages from now on, for their likely implications.

Let us pay attention to what the Global Times (affiliated to People’s Daily group, Chinese language, www.tibetinfor.com,May 11,2005) says on the Sino-Indian border. Covering mainly the impressions gained by a group of journalists to border police and army posts along the Chinese side of the Line of Actual Control(LAC) in the first week of April 2005, it observed in a special report that the about 2000 km long Sino-Indian border stretches from Karakorum Pass in the West to the China-India-Burma tri-junction in the East. It highlighted the special feature and mystery surrounding the border. As special feature, it pointed to the absence of a border agreement between China and India historically which led to no formal fixing of the boundary. With no border markers and with only a traditional customary border , there was no way to correctly measure the total length of the boundary. The Sino-Indian border was not under dispute historically as Himalayas provided a natural barrier. Both the sides carried out their border activities on the basis of a traditional customary line, which is in the Southern side of Himalayas as the Tibetan peasants come down to their abodes in this side during winters. After the British occupation of India, the colonialists carried out a conspiracy to occupy Tibet parts by force , which created obstacles to border situation. The cited mystery related aspects included the thin population , long winters and lack of visitors from outside. The Global times report then described the extent of disputed territory as follows:<b> Total area in dispute – 125,000 Sq Kms; Eastern Sector- 90,000 Sq Kms; Middle Sector-2000 Sq Kms and Western Sector- 33000 Sq kms. </b>

The Chinese views mentioned above were more or less repeated in a Backgrounder on the Sino-Indian border given in the official Tibet website (Chinese language) www.tibet.cn/news of May 11,2005. It contained a firm accusation against the British colonialists and the then Tibet local authorities for attempting to incorporate 90000 Sq kms of Chinese territory in Eastern Sector into India through concocting the illegal McMahon line during the 1914 Simla Conference. Historically, the Chinese Governments never recognized such attempts. Criticising the post-1947 Indian administration for its territorial policy of “ advancing to the North’, it alleged that by the Year 1953, Indian territory expanded gradually upto the illegal McMahon line.

What the Chinese media have said in details about Arunachal could be important. Referring to the calm in the borders in the post- “1962 counter-attack in self-defence” period, the Global Times report remarked that much of the LAC coincide with the illegal “Mc Mahon” line in the Eastern Sector. It alleged that many years before, India set up Arunachal Pradesh in its region of Actual Control and so far 7 million people have moved to this region. Stating that Tawang, lying in the Indian - controlled region, is of concern to China as that town’s Wu Qin Ling is the ancestral village of the 6th Dalai Lama and the Tibetan masses therefore attach religious importance to it, the report expressed the view that the difficulties in settling the border dispute in Eastern Sector could become less if such principles concerning nationality and religion are given weight at the time of settlement.It added that with an airport in Linzhi coming up, there are good prospects for development in this area once the Sino-Indian border issue gets solved and opening up of borders takes place. The above mentioned Tibet website, on its part, accused India for setting up in the year 1954, the so called North East Frontier Agency (NEFA) in the ‘illegally occupied Chinese territory’. NEFA became the Centrally- administered Arunachal in 1972. Arunachal was subsequently made an Indian Province on December 8,1986 by an Act passed by both the Houses of the Indian Parliament. The Government of the PRC treats such Act illegal and refuses to recognize the so called Arunachal Pradesh.

Referring to Middle Sector, the Global Times report noted the exchange of maps between India and China showing their respective actually controlled regions some years back..The dispute in this sector is less serious and a preliminary solution to the same has already been found, it added.

Giving its views on the dispute in the Western sector, the Global times report alleged that the British colonialists incorporated a good portion of Chinese territory in the Western Sector into India on the basis of their concocted map, the chief author of which was the British infantry Colonel John Ardagh. The concoction of “Ardagh map” parallels that of Mc Mahon relating to the Eastern Sector, the report pointed out. Global Times further commented that even though there are several unclear areas in the Western sector, China basically controls the Aksai Chin region, which is strategically important to the PRC as the Xinjiang – Tibet road passes through it. Only through this road, much of the required raw material needed for Ali region of Tibet are being transported. The report then revealed that the PRC naval boats are operating in the Chinese side of Pan Gong lake in Aksai Chin <!--QuoteEnd--><!--QuoteEEnd-->
India in UNSC dangerous-China
This proves China is not worth trusting and is not worth a reliable partner. They have betrayed India. In fact, they have been allied to Pakistans for years so nothing is surprising. The Japanese say they are interested in the Indian market. Maybe the India-Russia-China trilateral relation should end cutting off relations with the double standard China and enhancing relationship with Japan and other south eastern countries as well.


New York, 3 June (AKI/DAWN) - China’s ambassador to the United Nations has expressed support for the formula submitted by the “Uniting for Consensus” group (UFC) over the proposed expansion of the UN Security Council, saying "it has many good points". Talking to reporters following a UFC meeting at the Italian mission to the UN, China’s ambassador Wang Guangya said clearly that China would ‘veto’ the G-4 proposal to expand the Security Council, giving them permanent seats, when it comes up for approval by the five permanent members.

China, along with the United States, Britain, France and Russia, has veto powers in the 15 member UN Security Council, and any resolution which calls for amendment to the UN Charter would have to be approved by a two-thirds majority of the member states and approval by five permanent members of the Council.

The charter also stipulates that the amendment be ratified by the respective constitutional process by two-thirds of the members of the UN. Wang said that the draft resolution proposed by the G-4 - Japan, Germany, India and Brazil - was dangerous and divisive for the UN reforms process, as “it puts the whole membership into two groups.”

He expressed the hope that “there is still time” to consult and “find a good formula that could help security council expansion” and have the broad support of all the members.

The “Uniting for Consensus” group led by Pakistan and Italy has consistently opposed more permanent seats in the expanded security council, instead they have proposed expanding the non-permanent slot of the council by 10 seats. As a compromise they have suggested that 12 of the 20 non-permanent seats could be made semi-permanent seats, with regional groups selecting their candidates for a period of three years instead of two.

<b><span style='color:red'>Please email me a real sounding username. Userhandle's such as 'whisper' is not permitted per forum guidelines.
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Chinese City's Allure Fades for Some Firms </b>
By Don Lee Times Staff Writer Sun Jul 3, 7:55 AM ET

DONGGUAN, China — Thousands of foreign businesspeople, primarily Taiwanese, helped turn this southern Chinese city into one of the world's busiest export manufacturing centers.

<b>Now, amid rising wage and pension costs, energy shortages, tighter government regulation, traffic bottlenecks and other concerns, some of them are starting to look elsewhere</b>. Their restlessness reflects a dark side to China's economic boom, as growth pains and other issues prompt companies to reconsider starting up or expanding in China.

Chang Han Wen is having second thoughts. He came here from Taiwan in early 1991 when the area was still largely farmland, launching a shoe assembly line with 200 workers. He has since opened five factories, including three shoe plants that employ 3,000 people and produce 1.5 million pairs of specialty boots and high-end shoes a year for export to the United States and Europe.

But his sixth plant, a garment operation, sits empty. Chang has indefinitely postponed its opening,<b> anxious about China's tense trade relations with the West and the threat of more quotas that would limit clothing exports.</b> That's only part of his worries.

This year Dongguan's minimum wage jumped more than 27%. Even with the increase, employers are struggling with worker shortages. Government inspectors are making the rounds at factories, enforcing work-hour rules and pension contributions that officials paid little attention to in the past. Electricity is in short supply, as is fuel.

All in all, Chang says, things have gotten so much tougher that his next investment may be in Vietnam, where many Taiwanese have gone.

<b>"For manufacturers here, the golden period has passed," </b>he said.

To be sure, Dongguan still enjoys major advantages over other places in China and certainly most other countries, thanks to cheap labor and access to strong infrastructure and extensive supply chains.

But Chang's disenchantment reflects the city's fading allure for some Taiwanese and, more broadly, significant changes that are taking place in China's export manufacturing base as foreign investments show signs of leveling off.

<b>After four years of booming growth, foreign direct investments into China have flattened this year. </b>That signals the waning of massive capital inflows, particularly in the electronics sector, that followed China's ascension to the World Trade Organization in 2001.

Yuan Gangmin, a senior economist with the Chinese Academy of Social Sciences in Beijing, says an investment slowdown was bound to hit places such as Dongguan even harder. Government policies overly emphasized the development of export industries in coastal regions — and now that's coming home to roost.

"Such kinds of shortsighted policy discrimination led to the high cost of immobile resources like energy, land and environment," Yuan said. He saw a silver lining in this picture: It could spur development in the lagging western areas of China, which have more abundant resources.

Dongguan, part of Guangdong province and an area known as the Pearl River Delta, was one of the earliest to benefit from China's policy of opening the nation to foreign investment. With money flowing from Hong Kong and Taiwan, tens of thousands of factories were established in the Pearl River area, making it the world's factory floor for shoes, watches, clothes, electronics, toys and other consumer goods.

But with China's economic growth spreading to other regions, and rural incomes improving, Dongguan is facing stiffer competition for workers, who are increasingly mobile.

At the same time, China is moving up the technology ladder and encouraging the buildup of environmentally cleaner industries. Local governments are being told to stop the often mad rush to put up factories and develop for the sake of generating impressive economic statistics.

The upshot is that traditional manufacturers aren't as welcome as before. And the Taiwanese in Dongguan are feeling that as much as anyone.

Taiwanese investments in Dongguan took off in the early 1990s as restrictions were eased, despite political tensions across the Taiwan Strait. With more than 6,000 companies registered in the city, the Taiwanese are the single largest group of foreign investors in Dongguan. Many of them are in labor-intensive sectors such as footwear, furniture, handbags and toys, although the share of high-tech companies is increasing.

The Taiwanese presence in Dongguan is so large that the first Taiwan schools in mainland China were started here. Tens of thousands of Taiwanese bought homes and live in the city. Taiwanese entrepreneurs brought in machines, raw materials and manufacturing know-how from their homeland and took advantage of the land, favorable tax and other policies and abundant labor force that Dongguan offered.

<b>But in the last couple of years, one of their biggest problems has been with labor shortages</b>. By government estimates, about 2 million jobs went begging last year in the Pearl River Delta. Many workers who had migrated to the urban coast from farms out west didn't return to their factory jobs after going back home for the Spring Festival holiday in February. Others have been heading north to Zhejiang province and up along the Yangtze River, where wages tend to be higher.

In response, <b>Dongguan raised the minimum monthly wage by about $15, to $70.</b>

Lai Wenfeng, a scholar at Jinan University in nearby Guangzhou who has studied Taiwanese investment in Dongguan, says the Taiwan entrepreneurs are partly to blame for the current labor constraints. They should have offered better pay, benefits and working conditions years earlier, he suggests.

"We shouldn't feel sorry if some factories are leaving," he said.

Besides lifting wages, Taiwan-run factories in Dongguan have made other changes recently. At Chang's largest shoe operation, Four Star Shoes Co., he converted the pay system for most of his 1,100 employees from piecework to a straight monthly rate. A five-day workweek was adopted. Overall, Four Star's labor costs shot up 40% to 50% in the last year, says Wang Bi Hui, the company's vice general manager.

To improve recruitment and retention of workers, Four Star built dormitories for workers. A large dining hall was added, as well as a movie room and a library that's expected to hold 1,000 books when completed.

The higher wages and better living conditions have helped employers reduce but not cure their labor shortage headaches. Dongguan Yi Chen Can Factory, which set up in the city in 1992, also spiffed up its housing facilities, lowering the number of workers in a dorm room to five or six and adding a basketball playground as well as a chess and card room.

Still, the company, which makes cans for containing gifts and other uses, relies on several agencies to help recruit workers. As labor costs have risen, the factory has supplemented its employment of 400 with about 100 temporary staff, who don't receive government-required health and welfare benefits for regular employees, spokesman Zhang Min says.

Yi Chen Can Factory has to cut expenses where it can, Min says, because "our other costs are also increasing a lot these days." Metal prices, for example, have soared, driven up by China's big appetite for natural resources. And electricity bills sometimes run triple normal costs during steamy summer days, when Guangdong province and other industrial belts impose limits on use.

Power shortages aren't just in the south, of course. It's up and down the coast. China's energy supply capacity hasn't kept up with the country's booming growth. Like many companies, Zhang's can factory fires up generators to keep things running during rotating blackout and red-alert days. But it takes diesel fuel to power generators, and in recent months, Guangdong province in particular has seen a supply crunch.

It also slows down delivery of goods. "<b>Many of my drivers are coming back and complaining that they cannot get enough diesel," </b>said Sun Ai Hua, who runs a small trucking firm in Dongguan. "These days I have to apologize and explain a lot to my customers."

Highway traffic congestion in and out of Dongguan can be bad enough without fuel problems. The city has built more roads, but numerous construction projects and burgeoning domestic demand for consumer goods and expansions by giants such as Wal-Mart Stores Inc., which operates its distribution center in nearby Shenzhen, all add to the freight traffic on highways.

Samuel Kuo, the Taiwanese owner of Lacquer Craft, a maker of high-end furniture for exports, believes that Taiwan investment in Dongguan is still growing but definitely more slowly. Many furniture makers, he says, already have set up shop in Vietnam and Indonesia. Apart from higher labor costs in China, he says, the moves were prompted by anti-dumping duties of as much as 198% imposed by the United States.

Kuo's company pays a relatively modest 2.6% anti-dumping tax. And he hasn't followed others to Vietnam. But Kuo doesn't preclude the possibility of going there. Vietnam-based furniture makers don't face U.S. anti-dumping duties, and that country's wages are significantly lower than China's. Kuo's increased labor costs in Dongguan include contributions to government-mandated retirement plans, which have risen 24% recently — no small matter for a company with 4,000 employees. Taiwanese entrepreneurs figure it will take a few more years before Vietnam's infrastructure and production quality can catch up to China's. But it may be even sooner than that for some industries such as textiles.

<b>"Vietnam has similar living habits of Chinese, similar cultural background, so it's easier for management,"</b> said Chen Qibin, vice general manager of Roo Hsing Garment Co., which added two more production lines in Vietnam this year.

These days it's not easy for entrepreneurs like Chen to expand in Dongguan, even if they wanted to. For starters, land in the city is much harder to come by.

"Government officials have made it clear that Dongguan should no longer sacrifice environment to achieve speedy development," said Chen Xihui, director of Dongguan's Taiwan Affairs Bureau. "Instead, we should work on scientific and sustainable development."

Chen cited the Shanhu technology industrial zone as an example of this new attitude. The 28-square-mile park stands out among a sprawl of factories and dusty roads, with its lake and flower gardens. Universities and service firms already have moved in there. Traditional manufacturers are conspicuously absent.

Said Chen, "Companies that cannot meet our environmental standard will not be able to enter the zone."
Researcher Cao Jun in The Times' Shanghai Bureau contributed to this report.<!--QuoteEnd--><!--QuoteEEnd-->
<b>New book says Mao-USSR deal on India </b>
For Beijing backing on Cuba crisis, Moscow promised silence on China’s India attack
Posted online: Tuesday, July 12, 2005 at 0000 hours IST

NEW DELHI, JULY 11: In a season when Cold War secrets are tumbling out with astonishing regularity, a new book has just revealed details of a Beijing-Moscow deal on the eve of China’s 1962 invasion of India.

Co-written by China-born author Jung Chang — best known for Wild Swan — and her husband, British historian Jon Halliday, Mao: The Unknown Story (Jonathan Cape) is rated the ‘‘most authoritative’’ biography of the late Communist leader. It is an indictment of his domestic and foreign policies, one of the victims of which, the book says, was India.

In the chapter ‘‘Maoism Goes Global (1959-64)’’, the authors outline Mao’s war preparations in 1962. He ended up promising to back the Soviet deployment of nuclear missiles at America’s doorstep — the Cuban Missile Crisis, as it came to be called — if Moscow supported his adventure in India.

‘‘This was a hefty horse-trade,’’ Jung Chang and Halliday write, ‘‘one well concealed from the world. On the morning of 20 October, just as the Cuba crisis was about to break, Mao gave the go-ahead for crack troops to storm Indian positions...Five days later, with the Cuba crisis at fever pitch, Khrushchev came through with his support for Mao in the form of a statement in Pravda that mortified Nehru.’’

The book describes the build-up to war in ‘‘May-June 1962’’: ‘‘Chou (Chou Enlai) later told the Americans that ‘Nehru was getting very cocky...and we tried to keep down his cockiness’.’’

It was a time of three simultaneous aggressive movements. In Taiwan, ‘‘Chiang Kai-shek was making his most active preparations since 1949 to invade the Mainland’’. Mao had to first ascertain the Americans wouldn’t help Chiang.

Then came the double deal: ‘‘In October 1962, Khrushchev was secretly deploying nuclear missiles in Cuba... Given the danger of a confrontation with the USA, he wanted to ensure that Mao would not stab him in the back. He decided to throw him a bone, a big one: the Kremlin’s blessing for China to attack India.’’

Khrushchev had just signed an agreement to sell India MiG-21 fighter aircraft. ‘‘Mao,’’ says the book, ‘‘sent out a feeler to the Russian ambassador about how Moscow would react if China attacked India. Khrushchev seized this chance to make a startling demarche. On the 14th (of October) he laid out a four-hour farewell banquet for the outgoing Chinese ambassador, at which the Soviet leader pledged that Moscow would stand by Peking if China got into a border war with India, and would delay the sale of MiG-21s.’’ At the banquet, Khrushchev also revealed his plans for Cuba.

As it turned out, both Mao and Khrushchev betrayed each other. ‘‘On 28 October, after Khrushchev agreed to withdraw the missiles in return for a promise by US president John F. Kennedy not to invade Cuba...gigantic ‘pro-Cuba’ demonstrations were staged in China, accompanied by bellicose statements... against Moscow for ‘selling out’.’’

The rejoinder came a week later: ‘‘Khrushchev ... backtracked from his previous support for China even while fighting was still going on inside India. A Pravda editorial on 5 November conspicuously contained not one word endorsing Peking’s position. For him, as for Mao, the collaboration had been completely opportunistic.’’

Mao: The Unknown Story has been rated highly by critics for its decade-long research and its meticulous footnotes. Jung Chang and Halliday interviewed sources from 40 countries, including friends and family of Mao. They also accessed Russian government archives.

Among their interviewees was V.V. Paranjpe, former diplomat — he retired in 1982, as ambassador to South Korea — and doyen of Indian Sinologists. Paranjpe — described in the book as an ‘‘interpreter for Nehru-Mao talks’’ who ‘‘met Mao in a substantial way’’ — remembers Halliday and Jung Chang visiting Delhi in the early 1990s.

‘‘We had no idea,’’ he adds, ‘‘about the 1962 deal. This is new material. I spoke to my former colleagues in the Foreign Service, as well as to the foreign secretary, Shyam Saran. There is nothing in our records about the Khrushchev-Mao negotiations.’’

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