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Nine Hot Issues in 2005

Recap of China’s most important events in 2005.

1. Beijing Keeps Tight Control Over Former Chinese Leader Zhao Ziyang’s Death

When former Chinese Communist Party (CCP) General Secretary Zhao Ziyang died on January 17, 2005, the CCP took a pragmatic and opportunistic approach in dealing with his memorial by allowing a limited number of people to mourn him. His mourners, however, were but a fraction of those from all levels of society who are discontent with the Party. They bravely broke the CCP’s taboo to gain a little bit of freedom-the right to express their grief.

In 1989, Zhao Ziyang was a central figure in openly opposing the use of force to suppress the pro-democracy protestors. In typical CCP tradition, guns lead the Party, and the Party directs the government. Party Chief Zhao Ziyang was helpless to stop the June 4 Massacre and was ousted for "supporting the turmoil" and "splitting the Party." As a result, Zhao was forced to join the ranks of the many CCP general secretaries who had lost power in the CCP’s brutal political struggles.

In the past 15 years since Zhao was stripped of his position, political dissidents have continued to demand that the government redress the June 4 event and restore Zhao Ziyang’s freedom and his reputation. The CCP power holders, however, who have reaped benefits from the June 4 crackdown, have continued to suppress the voices of dissent. The CCP made it taboo even to mention Zhao Ziyang-a taboo that was broken by Zhao’s death. In a number of ways, Zhao’s passing has created occasions for political expression.

The overseas media reported on several topics: the CCP’s evaluation of Zhao Ziyang, the Party’s control of the memorial activities for Zhao, reactions from Zhao’s family and his supporters, public memorials for Zhao overseas, and the CCP’s suppression of dissidents during this politically sensitive time.

The taboo on discussing Zhao was broken when some individuals within the CCP published memorial articles that openly supported Zhao and criticized the Party for the June 4 Massacre. Although they do not hold high positions, their influence should not be underestimated. According to the Hong Kong-based Ming Pao newspaper, Hu Jiwei wrote a 2,000-word memorial entitled "Deeply Mourn Zhao Ziyang" that criticized the CCP’s house arrest of Zhao as a violation of the Party’s constitution, state laws, and humanity. Hu Jiwei was once the People’s Daily chief in the 1980s and a member of the Standing Committee of the People’s Congress before he was demoted for supporting Zhao Ziyang.

People outside the Party who hold diverse opinions have appealed for democratic reforms and for redressing the June 4 event. Although their voices have been suppressed in China, they have gained attention in the international community with the help of modern media and communications. Their voices for democracy exert pressure on the Chinese communist regime. Typical among them are the "Tiananmen mothers," whose children were murdered during the June 4 Massacre, and such dissidents as Bao Tong, Li Rui, Liu Xiaobo, Yu Jie, and Zhang Lin.{mospagebreak}

The CCP did not allow people to publicly mourn Zhao Ziyang, controlled who could attend his memorial service, and, in his official eulogy, criticized Zhao for making mistakes in 1989. Turning a eulogy into an opportunity for criticism is a rarity in the world. Former U.S. Presidents Nixon and Reagan both made mistakes during their terms in office, but at their memorial services no one blamed Nixon for the Watergate scandal or criticized Reagan for his secret weapon deals with Iran.

2. Pop Culture Fever Challenges CCTV’s Dominance

The pop culture fever created by regional Chinese television stations is challenging the dominant position of CCTV, the television station run by China’s central government. Both the Super Girl contest and the Korean soap drama I, introduced by the provincial Hunan Satellite Television Station, have gained unprecedented popularity among Chinese viewers. The ensuing culture fever is shaking the elite position that CCTV has enjoyed over the years.

Produced by Hunan Satellite Television, Super Girl enables amateurs to compete in a televised Karaoke contest much like the American Idol show. The competition is open to any female regardless of age, beauty, or talents. The recent contest attracted 120,000 applicants from five cities—girls and women ranging in age from 4 to 89. The winner was chosen by viewers who cast their votes through a cell phone Short Message Service, with each phone number allowed a maximum of 15 votes. The grand finale drew 400 million television viewers and tallied eight million votes sent via cell phone for the Super Girl finalist.

On the day of the finale, there were 2.4 million postings about the show on the Internet discussion forum. Television ratings for the finale reached a record high for a provincial level television station, second only to CCTV. Li Yuchun, the winner of the contest, has become a household name in China and made the cover of Time magazine’s September issue as one of "Asia’s Heroes" in 2005.

Super Girl owes its popularity to the public’s desire for free participation, a fair contest, and democratic voting. For "the girl next door," being on a televised show is no longer merely a far-fetched dream. The contest promotes free expression, as conveyed by the show’s logo-"If you want to sing, sing."

The contest took off in a country where the people don’t even have the right to elect their president. As one person put it in an online posting, "I don’t think that I will ever get to vote for a president in this lifetime, so I will choose a girl that I like." Moreover, the contest has sparked the desire for popular entertainment rather than the dull programs characteristic of the Party-controlled media.

Along with the success of Super Girl, Hunan Satellite Television bought the broadcasting rights for Dae Jang Geum (Jewel in the Palace), a 70-episode South Korean television drama. Dae Jang Geum was a runaway hit in China in 2005 following its success in Korea, Hong Kong, and Japan. On October 2, the Central News Agency reported that since the show’s broadcast in the mainland, it has reached an 18 percent rating, with close to 18 million viewers.{mospagebreak}

Dae Jang Geum focuses on the life of Jang Geum, the first female royal physician in Korean history. Chinese fans are fascinated by the slow-paced Korean show. Besides the appeal of the exquisite Korean court food and fashions, and the beauty of Lee Yong Ae, the actress who plays the title role, fans attribute the success of Dae Jang Geum to its rich cultural content.

Freelance writer Shan He has pointed out that the popularity of Dae Jang Geum is not simply due to the story of Jang Geum’s suffering, endurance, and triumph over hardship, but rather her purity, kind nature, feminine character, and especially her compassionate way of resolving conflicts. The show highlights the true nature of humankind and reawakens in viewers the inherent longing for truth, compassion, and tolerance.

Dae Jang Geum‘s success drew criticism from China’s television industry, fearful of "cultural infiltration" that threatens its market share of domestic television dramas. Based on the Report of China’s TV Drama Market (2005-2006), China produces 40,000 episodes of TV drama series each year, with 7,000 eventually making it to living rooms across China. But none has come close to the success of Dae Jang Geum.

Many have criticized China’s television industry for its formulaic programs and lack of refined taste. Fans indicate that even though Chinese television drama has matured over the years, with grand historical scenes, complex story lines, top-quality productions, elaborate costumes and stage settings, productions still lack the most important ingredient—uplifting cultural content—which Dae Jang Geum amply provides.

3. The Fate of the CCP: Will It Survive or Fall Apart?

The Chinese Communist Party (CCP) turned 84 years old in 2005, its fate in serious question. This was evidenced by two dramatic events that marked 2005: The ongoing drive to "Resign from the CCP" movement and the CCP’s "Maintaining the Advanced Nature of the Party" movement.

The "Resign from the CCP" phenomenon started in late 2004 with the publication of the Nine Commentaries on the Communist Party, which triggered this tidal wave. The Nine Commentaries is a compilation of a series of nine editorials first published between November 19 and December 4, 2004, by the overseas media group The Epoch Times. This book presents the untold, uncensored history of the CCP and lays out in detail the massive crimes of the CCP. It calls on the Chinese for self-introspection and moral purification, and predicts the disintegration of the Communist Party when the majority of Chinese make a conscious choice to distance themselves from it.

In responding to the call, many Chinese started to resign from the Party in late 2004 after reading the Nine Commentaries. They included some well-known figures such as Mr. Meng Weizai, who is a retired artist and former director of the Party’s Propaganda Department Art Bureau, and Ms. Huang Xiaomin, who is China’s swimming medal winner in the Seoul Olympics.{mospagebreak}

The wave of resignations picked up momentum in 2005, when the "Global Service Center for Resignations from the CCP" was established. The Service Center has set up websites; hotlines; and systems for receiving faxes, voicemail, and emails so that Chinese people can safely, anonymously (using pseudonyms), and publicly renounce their affiliations with the Chinese Communist Party. By end of the 2005, over 6.7 million Chinese had used the service to declare their resignations from the Party.

Of the 6.7 million resignations, a portion of them were from people who were not Party members but wanted to renounce any affiliation they had ever had with the Communist Party. Under the reign of the CCP, almost every Chinese has had some affiliation with the Party, beginning with the Red Pioneers in elementary school, the Communist Youth League as teenagers and young adults, and on to the workers’ unions that pledge loyalty to the Party. It’s understandable that even non-Party members also feel strongly and have chosen to publicly "resign from the Party."

The 6.7 million resignations might have only represented those who could access modern communications. Others in China chose to register their conscious choice by posting their resignation declarations in public places.

By contrast, the CCP followed tradition by launching a political movement. In January 2005, the CCP Politburo gathered three times to discuss the upcoming campaign to "Maintain the Advanced Nature" of the Party. Hu Jintao told the senior CCP leaders that this campaign "concerned the fundamental survival of the Communist Party." His warning underlined the critical challenges that the CCP was facing: the death of communist ideology, severe corruption inside the Party, and increasing tensions between the people and the Party.

The CCP campaign set out to reclaim its "superiority" and "legitimacy" by relying on its tried and true methods of propaganda, brainwashing, and internal purges. In the months that followed, Party Committees in the cities organized their members to attend a total of 40 hours of study sessions devoted to Marxist theory and CCP documents. At the end of the sessions, the members were required to write their own reports and to pledge loyalty to the Party before they could be "re-certified." June 2005 began the second phase of this campaign involving 1.8 million grassroots Party organizations all over the country.

Both movements attempted to win people over, but each used a very different approach. The official CCP campaign inundated the Chinese media, "Advanced Nature" became a common theme in Chinese editorials, and the red hammer and sickle flag was visible on most official websites. Party members were compelled to participate in order to be "re-certified." Nevertheless, this was a hard sell to the Chinese people. Soon after the campaign started, in private conversations the meaning of the phrase "xian-jin-xing" for "advanced nature" turned into "advanced sex," because the combination of those three Chinese characters could be interpreted either way.{mospagebreak}

The Nine Commentaries, on the other hand, was suppressed by the CCP at every opportunity. Nevertheless, it found its way to the Chinese people, who were very receptive. Modern technology certainly helped: from proxy Internet servers to encrypted emails, from shortwave radio broadcasts to satellite television, from CD discs in regular mail to overseas faxes and telephone calls, many Chinese people received the Nine Commentaries and started to spread the idea of resigning from the Party.

How long can the CCP survive and how soon before it disintegrates? The year 2006 may provide us a more definitive answer to this question.

4. China Comes Down Hard on Citizens Who Stand Up for Their Rights

The Chinese Communist Party (CCP) failed to control social unrest in 2005. The country saw a record number 87,000 social disturbances last year, topping the previous record of 74,000 in 2004. It marked a continued trend of people rising up in their efforts to weiquan (Chinese phrase for "guard the rights") against encroachment by corrupt communist government officials.

Two events should be recorded in the Chinese weiquan history of 2005: In Dongzhou Village the CCP ordered its paramilitary police to fire upon and kill farmer protesters, while in Taishi Village the CCP suppressed by force the citizens’ attempt to replace their village chief. Both villages are within a short distance of Guangzhou, the capital of Guangdong Province not far from Hong Kong.

The villagers in Dongzhou lost their means of livelihood after a power plant was built over their farmlands. When they did not receive fair compensation for their loss, they accused the government officials of corruption. The villagers staged peaceful protests in front of the plant for seven months until the regime authorities finally sent in paramilitary troops to crack down on them.

On December 6, while the villagers were mounting a sit-in demonstration, the police made a number of arrests and ordered the protesters to leave. When this had no effect, they detonated teargas bombs, but even this failed to drive people away. Then, at dusk, the police started to fire on the protestors, killing between 10 and 20 farmers.

The regime sealed off the Dongzhou area with tanks and troops, arrested more people, and tried to prevent the news of the killings from spreading. While the Chinese communist regime downplayed the number of deaths and laid blame on "a handful of plotters with ulterior motives who incited the masses into a confrontation with authorities," the shocking facts about the slaughter of peaceful protesters by the Chinese police still found their way out of the village. It was the first time since the Tiananmen Square Massacre that people again saw the CCP using troops and tanks against peaceful protesters.{mospagebreak}

The crackdown in Taishi Village occurred two months earlier. Although it was less bloody than the Douzhou tragedy, it touched upon a sensitive issue—village elections. For many years the experimental village elections in China have excited certain Western experts, who like to predict that someday, based on successes at the village level, the CCP will allow free elections at the national level.

Taishi is a small village of 2,000 people. The village chief, Chen Jinsheng, was also the Party secretary. Villagers began to suspect Chen of embezzlement in 2005. In accordance with Chinese election law, they drew up a recall petition and collected more than 400 villagers’ signatures. Their legitimate request, however, was met with resistance and opposition on the part of the communist authorities. The officials eventually sent in riot police to break up protests and made sure that the village’s Party secretary remained unchallenged as Taishi’s "elected" chief.

The Taishi story attracted worldwide attention on October 8, when the Chinese rights activist Lu Banglie was severely beaten after he attempted to take The Guardian‘s Shanghai correspondent Benjamin Joffe-Walt into Taishi. The attack was staged by a group of gangsters at the entrance to Taishi. They were hired by the authorities to "secure" Taishi. When Lu and Joffe-Walt arrived by car in Taishi, the mob dragged Lu to the curb where they kicked and punched him until he passed out. Lu did not die as believed earlier by his companions. The news of this violent incident alerted the world to the events in Taishi and revealed the limits set by the CCP in their experimental village elections.

These two events from late 2005 seem to indicate that the CCP is taking a tougher stance toward social uprisings. The Chinese people who are now choosing to rise up and "guard their rights," however, may not be so easily deterred by this CCP crackdown.

The Chinese rights movement benefited from several factors in 2005. Frequent reports by the overseas free Chinese media helped to spread important news and to connect Chinese people in the rights movement. An emerging wave of "resignations from CCP" provided moral strength to the Chinese who stood up for people’s rights against the regime. The involvement of Chinese scholars in some of the weiquan activities helped the participants to organize and to stick with legally sound and nonviolent strategies. It will no doubt be even harder in 2006 for the CCP to keep a tight lid on this boiling kettle, no matter how harsh the crackdown becomes.

5. Chinese Attorney Fighting for Rights

On November 24, 2005, the Beijing Justice Bureau ordered Mr. Gao Zhisheng’s law firm shut down for one year.{mospagebreak}

Mr. Gao has become the latest in a group of outspoken and fearless lawyers facing persecution because of their efforts in seeking justice in cases of religious freedom, official corruption, land seizures, and police abuses. Their opponent is usually the Chinese Communist Party.

The year 2005 was an eventful year in the Chinese legal community. It all started with Mr. Guo Guoting, a prominent Shanghai attorney with over 20 years of experience in international law and regarded as "The Conscience of Chinese attorneys" for his pro bono practice representing rights advocates and victims of Communist Party persecution.

On February 22, 2005, Mr. Guo was barred from a scheduled visit to his client Mr. Zhang Lin, a dissident writer imprisoned for articles he posted on overseas online news sites related to Falun Gong. The authorities in Shanghai searched Attorney Guo’s offices on February 23, 2005; seized his law license; and confiscated his computer and client files. On March 4, the authorities issued an order suspending his right to practice law for one year for "anti-constitutional speeches and acts." After over two months of house arrest and interrogations, Mr. Guo was let out of China in late May, with no permission to return.

Attorney Guo’s struggle might be viewed as a test to determine just how far China’s legal system has evolved into an independent force that can protect the rights of individuals against the Communist Party.

What happened to Mr. Gao Zhisheng, however, has much broader implications and the potential to eventually bring the Communist Party to its knees.

Mr. Gao was born to a farming family in Shanxi Province. Their home was a cave dug out of a hillside, and his family was so poor that neither he nor his six siblings were able to go to school. Later, with the help of a relative, he learned to read and write and joined the People’s Liberation Army in Xinjiang where he became a Communist Party member.

After he left the service, he took a self-study course in law and became a lawyer in Xinjiang. Throughout his career, he represented victims of official corruption and abuse, dissidents, and fellow rights lawyers.

It was his advocacy and representation of Falun Gong that brought about the shutdown of his law firm. Beginning on December 4, 2004, Mr. Gao wrote several open letters to the Communist Party leadership in which he described in detail how Falun Gong practitioners were tortured, raped, and brainwashed, all based on his interviews of these victims. "These calamitous deeds did not begin with the two of you," he wrote in a letter addressed to President Hu Jintao and Premier Wen Jiabao, "but they have continued under your political watch, and it is a crime that you have not stopped them."{mospagebreak}

On December 13, 2005, Mr. Gao published his announcement on The Epoch Times website that he had quit the Communist Party. Later he was baptized and became a Christian in an underground church.

As police surveillance of Mr. Gao and his family has intensified, support from people throughout China and from all walks of life has poured in. Everyday Mr. Gao receives numerous phone calls from individuals expressing their support. The public is watching, and Attorney Gao has now become a symbol of a widespread social movement that could bring down the Communist Party.

"In China, nothing can stop the momentum of the democratic mainstream nor can it delay the Chinese people’s pursuit of freedom, democracy, and rule of law," wrote Mr. Gao on December 31, 2005.

6. Harbin Water Crisis Following Chemical Plant Explosion Exposes China’s Hidden Environmental Foes

The toxic chemical spill into the Songhua River in Jilin Province was the largest industrial pollution accident in China in 2005. It is considered "probably one of the largest transboundary chemical spill incidents in a river system in recent years" by the United Nations Environment Programme (UNEP) in its Songhua River Spill Field Mission Report.

It all started on November 13, 2005, when an explosion occurred at a petrochemical plant located a few hundred meters north of the Songhua River in Jilin City, Jilin Province. The China National Petroleum Corporation, which is state-owned and reports directly to the central government, owns the facility.

The explosion led to five deaths and one person missing. One hundred tons of toxins, specifically benzene, aniline and nitrobenzene, spilled into the Songhua River. These toxic chemicals are known to cause cancer.

The spill posed a health threat to over six million people whose water supplies come directly or indirectly from the Songhua. The polluted water flowed about 1,000 kilometers (625 miles) from Jilin City, passing two major cities (Harbin and Jiamusi) and nine county-level cities before it merged into the Heilongjing River at the China-Russia border.

The regime tried to cover up this disastrous incident and did not want to alert the population of the pollution threat.

Three days after the explosion, Xinhua, the state news agency, quoted the Jilin City Environmental Protection Bureau as saying that all tests proved negative for toxic substances in the air. It did not mention the disastrous river pollution that had already moved downstream.{mospagebreak}

Harbin City, with 3.5 million residents, is the largest city along the Songhua downstream from Jilin City. After the Jilin Petrochemical explosion on November 13, the residents in Harbin were kept in the dark for 10 days. By the time the public was finally informed of the occurrence of the incident, the polluted water had almost arrived at Harbin.

The Harbin water crisis brought the issue of China’s serious environmental pollution to the surface. In a nationwide investigation by the National Environmental Protection Bureau following the chemical plant explosion in Jilin City, it was revealed that serious hidden dangers of massive environmental pollution existed across the entire chemical and petrochemical industry due to inappropriate geographic distribution and structure. Among the 78 randomly inspected chemical and petrochemical companies, 30 of them are improperly located. Some highly pollutant plants under development are even located in densely populated areas or along the banks upstream of rivers, lakes, and seas that are sources for drinking water. Once a pollution incident happens, it will bring about severe consequences.

Such problems are not limited to the chemical industry. For instance, the rapid development of highways has also greatly damaged China’s ecological system.

The toxic spill of chemical pollutants into the Songhua River from the chemical plant explosion in Jilin City only further exacerbates the problem of the country’s water pollution. Water pollution in China is already at an alarming level. According to information from the First National Inland Lakes Symposium in east China’s Jiangxi Province on November 23, 2005, 70 percent of the country’s rivers were contaminated and 75 percent over-enriched. Currently, most of China’s rivers are menaced by shrinkage, disfunction, contamination, and other problems such as the decrease of swamp lands.

7. Growing Discontent with the Chinese Education and Healthcare Reforms

Exorbitant tuition and healthcare costs have become the major problems in people’s lives, and have caused widespread discontent, according to a 2005 research report by the Chinese Academy of Social Sciences.

The seriousness of these problems is reflected in two Chinese news events.

Xinhua News Agency reported on September 21, 2005, that an 18-year-old girl, Deng Xin, was admitted to Medical School in Kunming, Yunnan Province. However, the good news soon turned to tragedy when Deng Min’s mother committed suicide by hanging herself. The mother was in despair after exhausting all her resources and not being able to raise the funds for her daughter’s tuition.{mospagebreak}

Yahoo Chinese news reported on August 8, 2005, that 42-year-old Chinese farmer Huang Maojin blew up a bus in Fuzhou, the capital city of Fujian Province. Huang was diagnosed with late-stage lung cancer but had no money to pay for treatment. The desperate man prepared explosives and carried out a reckless deed that killed himself and another person and injured 30 others.

The Chinese are known worldwide for their emphasis on the education of their children. Funding from the communist government for education, however, amount to a mere 3.26 percent of the GDP in China—a level far below the world average. Schools and colleges are encouraged by a central government policy to "create income." This policy has led to increased college admissions costs and steep increases in tuition and fees that are far outpacing the growth in income of average Chinese families.

Even in the richest Chinese city of Shanghai, people are complaining. On February 28, 2005, Chinese News Weekly published a report summarizing a sample survey done by the Shanghai Academy of Social Science on households in the Xuhui District of Shanghai. For all the surveyed households with children in middle school, high school, and/or college, school costs accounted for 39 percent to 52 percent of the total family income. A quarter of the surveyed families spent more than half of their annual income on their school-age children.

In poor and rural areas, many farmers cannot afford to have their children finish middle school.

In December 2005, the Chinese communist regime announced it would spend an additional 200 billion yuan (US$25 billion) on rural education. Premier Wen Jiabao in November promised to remove all tuition and fees in rural areas within two years. However, people are casting doubts on whether the central government’s policy will be carried out in the poor regions. At the end of 2005, the regime still owed more than 10 billion yuan (US$1.25 billion) in unpaid salaries to rural teachers.

Healthcare has also suffered from the regime’s negligent policies. After abandoning the old socialist healthcare system, the regime adopted a policy of allowing the Chinese hospitals to "make money." Government funding amounts to less than 13 percent of the budget of all publicly funded hospitals. The commercialization of the healthcare system has been accompanied by the moral corruption of the whole system. Hospitals routinely set up various unnecessary tests and examinations, and physicians intentionally prescribe the more expensive medicines, costs to be borne by the patients. It has become a common practice in the recent decade that doctors expect to receive "hong-bao" (cash in envelope) from their patients’ families. In 2005, Auditor General Li Jinhua disclosed a shocking set of data: In 2004 and 2005, 10 hospitals under the Ministry of Health in Beijing over-charged 11.27 million yuan (US$1.4 million), 27 percent on prescription medications and 73 percent on medical exams.{mospagebreak}

Hospitals shut out the poor and less-privileged citizens. Media reports of patients dying in front of hospital emergency rooms because they could not pay cash up front and therefore were denied emergency care are not uncommon. They have appeared in different cities all over the country.

China Youth Daily reported the results of a survey of 733 interviewees that showed 90 percent were discontent with the changes in the healthcare system over the past 10 years. Another survey conducted by the private Horizon Group in 2005 showed that 66 percent of the urban population and 80 percent in rural areas were not covered by any health insurance. Published data from the Ministry of Health revealed that 48.9 percent of Chinese citizens had chosen not to go to a hospital when they were sick, and 29.6 percent had decided not to be hospitalized when they should have been.

A report published by the Development Research Center under the State Council and World Health Organization in 2005 admitted that China’s most recent medical and health system reform has been a failure.

8. The Growth of Economic Disparity

China had another year of high GDP growth: 9.9 percent increase from 2004. At the same time, however, the gap between the rich and the poor in China further widened.

A report by the United Nations Development Planning Commission (UNDPC) revealed that the Gini coefficient has reached 0.45 in China. The Gini coefficient is a statistical measure of inequality in which 0 expresses complete equality while 1 expresses complete inequality. Scholars generally regard a Gini reading of 0.4 as a warning sign of social disparity.

China’s Ministry of Labor and Social Security pointed out in a report that the income gap in China has now reached the second most serious "yellow-light" alert level, and unless effective measures are taken in the next five years, it will fall into the "red-light" danger zone.

The large gap is due to the disparity between the Chinese coastal cities and the vast rural inland. Official statistics provided by the Central Policy Research Office show that the current income gap between urban and rural residents may be as high as 3.3 to 1, which is the highest since 1978. Scholars say the gap could be much wider if subsidies and benefits for urban residents are taken into account.

The UNDPC said that the income gap between urban and rural communities in China is among the highest in the world and is already threatening social stability.{mospagebreak}

Income disparity in China is not just a story of the great urban-rural divide. The trend is also present within Chinese cities, even in the flashy showcase metropolises. According to the Chinese Academy of Social Sciences, the income gap among residents in Beijing is widening and has significantly surpassed the warning limit. The city has registered a Gini coefficient of 0.5—higher than the national average.

Why has this fast economic development of around 10 percent annual GDP growth for the last 15 years not fairly benefited the population at large? It has to be that the system is not working. Of the 155 countries ranked by the World Bank’s Investment Climate Department, China’s rank is 100. The Chinese system, which lacks transparency, provides far too many opportunities for the privileged to rip off the average citizens.

For example, the Chinese stock market in 2005 saw its fifth consecutive bad year, and the Shanghai Index sank to its eight-year low in the midst of long-term economic growth. The companies were profitable, but the minority shareholders lost their money. Beijing controls two-thirds of the shares of China’s 1,400 listed companies. Its regulations seemed only to help the companies defraud its Chinese investors. For the 70 million individual Chinese investors, 2005 was a year full of bitterness and disbelief.

In another example, the revenue from state land sales failed to benefit the farmers on the land. According to the Ministry of Land Resources, Chinese cities earned more than 200 billion yuan (US$25 billion) in land sales in the past two decades, but most of that money did not benefit the farmers who lost their lands to the development of the cities. While the farmers are the actual land users, the state claims to own the land. By the most conservative Ministry estimations, at least 20 billion yuan (US$2.5 billion) from land sales were lost to corruption and embezzlement.

Those who have gotten rich easily and sometimes illegally are living in luxury and laundering their money by sending it to overseas safe havens. According to a survey conducted by China’s Ministry of Commerce, in recent years as many as 4,000 Chinese officials have fled overseas, taking with them approximately US$50 billion. The real figure is believed to be much higher.

Those who have not fled often send their children abroad in a bid to establish a foothold in the West in preparation for their own eventual flight. As a result, a whole new breed of Chinese students has become a dazzling phenomenon in the United States, Canada, the United Kingdom and other countries, where these youngsters can afford to pay cash for new cars and big houses.

The Chinese communist leaders are eager to invest for GDP growth but unwilling to fund education and healthcare. As a result, the ordinary citizens have to shoulder the burden. The steep increase in tuition and healthcare costs is another factor contributing to poor Chinese families’ hardships.{mospagebreak}

9. Sino-U.S. Relations in Hindsight: The Peace of 2005

To many people, 2005 was halcyon by any definition with regard to relations between the United States and China. Absent any event resembling the bombing of Yugoslavia’s embassy in China or the collision of jet planes, there was no attention-grabbing incident that would have compelled commentators to quickly announce a "nadir" in the relationship. Equally disappointing, however, was the absence of any great "progress" in the relationship and therefore the opportunity for a celebration that could have invoked an outpouring of goodwill. A quiet year, you may call it. But uneventful it wasn’t.

All the old problems, if not amplified, persisted during 2005. To the frustration of many Americans, outspoken dissidents in China continued to be nabbed by the police without any qualms over legal proceedings. The police were sometimes helped by the information and technology offered up by U.S. technology firms, such as Microsoft and Yahoo!, which had chosen to curry favor with the authoritarian regime at the expense of the values upheld by their home country. People in China continued to protest various grievances, but the buzz of China’s economy drowned out the voices of protest. Out of more than 87,000 public protests in China last year, Americans might remember one, a tragedy in Dongzhou in Guangdong Province. It featured the Chinese police on a gory killing spree of its own people, reminiscent of the Tiananmen Massacre 17 years earlier.

China remains a communist totalitarian regime. After decades of generous supplies of foreign capital and technology, the Chinese economy boom has not led to its transition to a democracy. Rather, it has made the communist regime more powerful and more able to confront America.

"If Americans train their missiles and position-guided ammunition onto China’s territory, I think we will have to respond with nuclear weapons," Maj. Gen. Zhu Chenghu said at an official briefing in Hong Kong last July.

While Zhu’s statement drew loud protests in America, he drew equally loud applause in China, where the communist regime has convinced the population that America is the greatest obstacle to China’s growth.

However anxious the PLA generals may be to talk about or prepare for war, the communist leaders are biding their time. When Hu Jintao was in New York for the U.N. summit last September, "peaceful growth and development" were the words out of his month. After all, the regime needed the investment capital, the modern technology, and the vast market for goods made-in-China, which all have to come from the West in a time of peace.

Time does not seem to be in America’s favor, though. After "engagement" for more than a quarter of a century, the Communist tiger is stronger—and becoming harder than ever to contain.{mospagebreak}

President Bush redefined China as a "strategic competitor" not long after he arrived in the White House. He might have had a vision of China’s future and the role of the U.S. in shaping it, but that plan has not been actively pursued until recently.

During his visit to Asia last November, President Bush made several notable speeches that appeared to have Chinese listeners in mind. Before arriving in Beijing, Bush discussed freedom and democracy in Kyoto, Japan, "In the 21st century, freedom is an Asian value—because it is a universal value." After his visit to China, Bush spoke in Ulaanbaatar, Mongolia, "Mongolia has made the transition from communism to freedom, and in just 15 years, you’ve established a vibrant democracy and opened up your economy. You’re an example of success for this region and for the world."

It’s obvious that Bush wants China to follow its neighbors in embracing freedom and democracy, but he chose to promote those values only outside of China. If America’s long-term strategy is to bring freedom and democracy to China, 2005 did not find China ready to implement such values. While the U.S. has been obsessed with the wars in Afghanistan and Iraq and other anti-terrorist initiatives, China’s duplicity in the unfruitful six-party talks and its closeness to North Korea, a party to those negotiations and a member of the "axis of evil," might have alerted some already-strained nerves in the U.S.

Indeed, as long as the fundamental differences between the two giants exist, there is little hope that frictions will fade away by themselves.

Ann Lee, Steven Tian, and Victor Gu are correspondents for Chinascope