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From the Editor

Finally handed the reins of China’s leadership, Hu Jintao has inherited a country with great potential but also with unprecedented problems. Just one month after he gained control over the military, a string of large-scale riots erupted in Central and Southwest China. Judging from government buildings in Chongqing being looted, ethnic clashes in Henan, and tens of thousands of farmers’ resistance to land seizures in Sichuan-social discontent, mainly towards corruption and suppression through the use of force, is seething and bubbling up to the surface. In each of the cases mentioned above, armed forces were called in to quell the riots.

These incidents pose a real threat to the Communist government, but the root causes behind them didn’t start overnight. In the recent years, Beijing has dealt with a record volume of petitioners coming to the appeals offices from all over the country, most of them with complaints against government officials that could not be resolved locally. In fact, at the local level most of them were suppressed and even retaliated against, serving to aggravate the problem. As the droplets of unrest and discontent gather up into a trickle, and then a stream, and finally a tsunami of petitioners, they threaten to engulf the nation in a maelstrom of turmoil. According to a report from Party magazine Outlook, there were more than 58,000 major incidents of social unrest in the country last year, about 160 per day on average.

We will delve into this important topic in this issue, as well as other topics of interest.

Doing business in China is not all about numbers. The "Do’s and Don’ts" is an entertaining piece anyone concerned about Chinese etiquette should read. If you are thinking about investing in China, this is a good read before your first trip.

When was the last time you came home from a shopping trip with a trunk free of merchandise not made in China? "Milking China for Products" is a revealing piece regarding the alarming quality control of Chinese products, some of which have been spotted on the streets of New York.

Is retail giant Gap Inc. setting a new trend by opting to shift the majority of its operations away from Mainland China? Perhaps the unique guide map to China in this edition will help you fill in the gaps.

Show Contempt for U.S. Pressure

On December 24, 2007, Xinhua published an article under the title "Let’s Learn to Show Contempt for U.S. Pressure." It stated that China can hardly breathe because of the pressure in international trade. The pressure relates to such issues as RMB currency depreciation, product recalls, over 50 anti-China bills presently in the U.S. Congress and escalating demands on China to open up its financial market.

Spotlight on Taiwan

We Do Not Welcome "Green" [1] Taiwanese Businessmen

Source: People’s Daily, May 24, 2004

On May 24th, Zhang Mingqing, the spokesperson for the State Council Taiwan Affairs Office clearly stated, "Pushing for more economics, trade or other interactions has been our constant position. That shall not affect Taiwanese businessmen. But the point is, for those Taiwanese businessmen who have profited in Mainland China but supported ‘Taiwan’s Independence,’ we do not welcome them here". Those he pointed out are the so-called "Green Taiwanese Businessmen."

For the Past 10 Years, Taiwanese Business-men have been the Driving Force for Taiwan’s Economic Development

Since 1987, from analyzing public records, there have been more than thirty thousand Taiwanese businesses investing in approximately sixty thousand projects. The contracts were worth sixty billion U.S. dollars in total. The actual cash brought in was about thirty billion dollars. This accounts for more than 40% of the island’s export business. In the past 20 years, Taiwan to Mainland China’s trade surplus has been over one hundred fifty billion dollars, which was more than 80% of the total surplus during that period of time. According to statistics by Taiwan’s export department, this figure has been increasing by 54.8% each year since accepting routed wired funds in 1993. As of the end of 2002, 557.23 billion dollars have been wired from Mainland China to Taiwan.

So Taiwanese businessmen have played a very important role for both sides. For the past 10 years, they have been the driving force for the development of Taiwan’s economy. It is also the main channel for Taiwan’s increasing surplus. Mainland China, among other places around the world, became an important strategic choice for their business plans. They have kept Taiwan as their base for research and development, or main component production location, while putting the assembly lines in Mainland China. Taiwanese businessmen take orders from Taiwan, but ship the products from China. Because China has relatively cheaper costs of land, factory facilities, labor, raw materials and the most favorable trade status, the cost of production is very low and profits are high.

During an interview, an officer from the Economic Section of the Taiwan Affairs Office of the State Council said, "Most of the Taiwanese businessmen love their motherland (China). They have focused on their business affairs. Therefore, the Chinese Government welcomes them to do business, to invest money in China. The government will also continue to provide them with the most favorable status. But there are a few Taiwanese businessmen supporting ‘Taiwan Independence’ with the money they made from China. The Chinese Government has already stated that we do not welcome this kind of Taiwanese businessmen."
The Chinese market has helped the "Chi Mei Corporation" to continue to expand. When mentioning "Green Taiwanese Businessmen", Xu Wenlong is the first to be considered. His Chi Mei Corporation has made a big fortune in China. In Taiwan’s business world, he is openly considered to be the mover and shaker for Taiwan independence. In both the 2000 and 2004 Taiwan Presidential elections, he openly and vigorously supported President Chen Shuibian. In 2004, ten Taiwanese citizens made the Forbes’ (Magazine) list of people who acquired personal worth of over 10 billion dollars. Xu Wenlong was number six. Currently, Chi Mei Corporation’s business consists of two major categories: petro-chemical products and electronic products. The scope of Xu Wenlong’s Chi Mei Corporation is about the same as Wang Yunqing’s Formosa Petrochemical Corporation. Chi Mei Corporation’s main product is ABS (a copolymer of Acrylonitrile, Butadiene, and Styrene), which is the main source for producing the shell for computers, home electrical appliances and communication products. Its production scale ranks number one around the world. People have called Xu the “ABS King of the World”. He said that if it weren’t for its investment in Mainland China, the Chi Mei Corporation wouldn’t have reached this stage. Currently, Xu Wenlong has petro-chemical factories in both Canton and Jiangsu province. He is also planning to build more facilities in Shanghai and Ningbo. Its electronic products will also be sold in China.

Xu Wenlong has Openly Supported Li Denghui (former Taiwan President) and Chen Shuibian’s "Taiwan Independence"

With profit gained from doing business in China, Xu Wenlong openly and directly said, "China is like Taiwan’s economic colony, to invest in China is a way to survive for a business. It has nothing to do with whether one loves Taiwan or not." Xue Wenlong usually does not like to speak in Mandarin Chinese. He prefers to communicate with people in Taiwanese or Japanese. During the period under the National Party, he didn’t like to socialize with the officials, but he was very close to Li Denghui. Their common goal of "Taiwan Independence" made them wish they had met with each other earlier. Li made Xu a cabinet member during his presidency.

Besides supporting the political power of "Taiwan Independence," Xu has vigorously spread the idea. He declared that Zhen Chengong, a Ming Dynasty naval general, was nothing but an invader, who went in with weapons and occupied aborigines’ land forcefully. More shameful is his supporting a book called "Theory of Taiwan" written by a Japanese, who claimed that the "Camp Prostitutes" were volunteers, not forced by the Japanese Army. This made people in Taiwan very angry. He was denounced as "Trash of the Country".

During the critical time of the 2000 Presidential Election, Xu Wenlong openly announced that only Chen Shuibian could carry out Li Denghui’s path. This helped Chen gain a lot of support from native Taiwanese. After being elected, Chen naturally was grateful for Xu’s support. In the name of going back to his hometown, President Chen paid Xu a visit and then hired him as a presidential adviser. The close relationship between the two was quite obvious.
For a long time, Xu Wenlong has been the Democratic Progressive Party’s "rich Dad behind the curtains." He did not deny it either. On December 30, 2001, a strongly pro-Chen non-profit "Taiwan Think Tank" was established. Xue Wenlong was the major donor. The estimated assets of this think tank total about 60 million NTD (1.8 million U.S. dollars). During the presidential election this year, Xu and Chen were "sharing the same odor" even more. After the 3/19 shooting incident, Chen chose to go directly to the Chi Mei Hospital instead of to closer ones. Because it was Xu’s territory, after the door closed, they could arrange anything they wanted.

Clearly knowing that his behavior is damaging his investment in China, Xu Wenlong resigned from the Chi Mei Corporation. The acting CEO Liao Jingxiang assumed Xu’s role and became the CEO. Xu also plans to leave his Board of Directors position during a board meeting on June 15. Although people from Chi Mei said that Xu has planned to retire for a long time, people with keen eyes know that this "retirement" is only a ploy, and Xu will remain as the boss. In fact, those "Green Businessmen" often use this tactic. They hire someone to be the front man and hide behind the curtains. At the same time, he not only supported "Taiwan Independence" but also took advantage of doing business on both sides of the Taiwan Strait.

Most Taiwanese Businessmen Understand the China Policy

China’s policy of not welcoming "Green Businessmen" is well understood by most of the businessmen from Taiwan. A Taiwan businessman in Beijing said, "We have discussed these issues together. We think China needs to do so. Would China let you come here and make money, but then turn to be against China later? Why should China tolerate it? Since we are here to do business, we should concentrate on making money, we should not get involved with politics." Some people who really support the "One China Policy" indicated that, for people like Xu Wenlong, China should have showed its unhappiness or even taken some actions already. A Taiwanese businessman in Shanghai who opened a restaurant said, "It is too ridiculous that he is making money in China and supporting ‘Taiwan Independence’ at the same time."

1 Taiwan’s political groups are divided into two camps, the Green and the Blue. Green represents the Taiwan’s current government and its political party: Democratic Progressive Party and other groups who support Taiwan’s Independence. Blue camp is headed by the National Party.

The Key to Safeguarding Peace And Stability across the Taiwan Strait: Refuting the Unreasonable Criticism by a High Level U.S. Official

Source: People’ s Daily, May 31, 2004
A senior U.S. official recently made remarks concerning U.S. policy and attitudes toward the Taiwan issue at a hearing in the U.S. congress. On the one hand, the official said that U.S. firmly fulfilled the one-China policy, that it will abide by the three China-U.S. Joint Communiqués, that it won’t support "Taiwan independence" and that it opposed Taiwan changing its status unilaterally by its authority, and that one of the U.S.’s primary concerns on the Taiwan issue is to maintain peace and stability across the Taiwan Strait. However, on the other hand, he accused China of refusing to renounce the use of force toward Taiwan and continuing to deploy missiles targeting Taiwan, alleged that the Chinese stance harms peace and stability across the Strait and requested that China renounce the use of force and intimidation using force. He reiterated that the U.S. would deal with U.S.-China relations based on the Taiwan Relations Act, the three China-U.S. Joint Communiqués and the one-China policy. It would also continue to sell weapons to Taiwan under the Taiwan Relations Act and support Taiwan in its efforts to join international organizations, say, to become an observer of the World Health Organization. Moreover, he even suggested that the United States "defined" Taiwan’s legal status. His remark is not only in violation of the one-China principle and the three China-U.S. Joint Communiqués, but it also constitutes interference in China’s internal affairs.

The greatest threat to peace is "Taiwan Independence"

First of all, the US official’s accusations are totally unreasonable. Maintaining peace and stability across the Taiwan Strait is a common aspiration of the international community, including China. But the question is, who is jeopardizing peace and stability in the region, and how should peace and stability be safeguarded there? It is known to all that the biggest threat to cross-Strait peace and stability is the activities by the pro-independence Taiwan authorities to split Taiwan from China. Since Lee Tenghui and Chen Shuibian took office, the Taiwan authorities have launched activities of "the gradual mode of Taiwan independence" and "removing China from Taiwan" and have wantonly made such claims as "one country on each side" and "two Chinas", and have repeatedly put up obstacles and created crises in the cross-Strait relations.

Now Chen’s administration is walking on the path of splitting China farther and farther, and clamoring to declare the crusade to realize "one country on each side" against "one China". He has even proposed a "Taiwan independence" timetable, holding a referendum on writing a new constitution in 2006 and enacting the constitution in 2008 to make Taiwan a "normal and complete nation." All the moves have brought the cross-Strait relations to the brink of danger. Is there any bigger threat than this to the peace and stability across the Taiwan Strait? Chen, under the strong anti-"Taiwan independence" pressure from both sides of the Strait and from the international community, delicately packaged his May 20 speech and changed the term in this speech. However, he refused to recognize the principle of one-China and the position of stubbornly insisting on "Taiwan independence" remained unchanged. The fundamental cause of the cross-Strait tension or even possible crisis hasn’t been dispelled.
U.S. Arms Sales has Connived with the Force of Taiwan Separatists

China has, as always, upheld solving the Taiwan issue through peaceful means and has repeatedly reiterated that it will never give up the efforts for peace negotiations. Just because a handful of people inside and outside the island are still seeking "Taiwan independence," China cannot make a commitment to renouncing the use of force for realizing national reunification and has had to make necessary and limited military deployments. If the United States really wants to help maintain peace and stability across the Taiwan Strait, it should not have made irresponsible remarks about China’s military deployment and used it as an excuse to keep selling advanced weapons to Taiwan. Instead, it should see the separatist nature of Chen Shuibian, abide by the three China-U.S. Joint Communiqués, honor its commitment against "Taiwan independence," persist in the one-China principle and send no misleading signals to the "Taiwan independence" force. This is the key to maintaining peace and stability in the Taiwan Strait region and the top priority, and the only correct choice by the U.S. Otherwise, it is to mistake the means for the end and get exactly the opposite result. 

For a long time, the United States has used the "Taiwan Relations Act" as an excuse to keep selling advanced weapons to Taiwan and having quasi-official relations with it. This is totally unreasonable. The "Taiwan Relations Act" is but a domestic law unilaterally enacted by the United States. It can never be placed on a par with the three China-U.S. Joint Communiqués. China has expressed its firm opposition to the enactment of the Taiwan Relations Act from the very beginning. How can a U.S. unilaterally-enacted domestic act be the basis in dealing with China-U.S. relations? Only the three China-U.S. Joint Communiqués worked out jointly by China and the United States can be the sole principle that the two sides should abide by in dealing with bilateral ties. This is a simplest rationale. The United States repeatedly expressed its intent of firmly abiding by the three China-U.S. Joint Communiqués, but in fact it has put the Taiwan Relations Act above the three China-U.S. Joint Communiqués. Among other things, in a communiqué signed on Aug. 17, 1982, the United States promised that its arms sales to Taiwan "will not exceed, either in qualitative or in quantitative terms, the level of those supplied in the years following the establishment of diplomatic relations between the two countries, and intends to gradually reduce the arms sales, over a period of time, to a final resolution of the issue." 22 years have passed since then, but how has the United States done? When will be the end for the United States arms sale to Taiwan? How long will the term "over a period of time" in this communiqué be?

The United States argued that the arms sale to Taiwan is to make Taiwan authorities feel that a dialogue with the Mainland will be engaged in a secure environment. This argument is really nonsense. On the contrary, it is exactly because the United States supported and connived with Taiwan that activities of splitting up China by Taiwan authorities became wilder and wilder, and they, with such backup, feel no fear when walking on the path toward Taiwan independence. Today, the situation across the Taiwan Strait has developed to this extent; the United States cannot shirk its responsibilities. If the United States really wants to maintain peace and stability across the Taiwan Strait, it should stop arms sales to and end official-style exchanges with the island in any form immediately, thus avoiding sending wrong signals to Taiwan.
U.S. not Supported in Dragging Taiwan into WHO

The United States is also eager to drag Taiwan into some international organizations such as the World Health Organization (WHO), which is unacceptable to China because the reason is very simple: Taiwan, as an inalienable part of China, has no right to join the WHO in any name since the members of WHO are all sovereign states. The United States promised under China-U.S. Joint Communiqués to recognize China’s position, i.e. there is only one China in the world and Taiwan is a part of China. On the other hand, the United States is eager to drag Taiwan into international organizations where only sovereign states are qualified to be members. Aren’t these moves in contradiction to each other? The consequence of these acts by the United States is the same as arms sales to Taiwan, to send wrong signals to the Taiwan authorities, to add fuel to the flame of Taiwan independence and to jeopardize peace and stability across the Taiwan Strait. On May 17, the 57th World Health Assembly (WHA) in Geneva, the supreme decision-making body of the WHO, rejected a proposal to invite Taiwan to participate as an observer in the organization, marking the eighth time since 1997 that such a proposal has been rejected. Taiwan’s attempt supported by the United States to join the WHO has failed again. The result just indicates again that the U.S. move is unpopular and gets little support. Shouldn’t the United States make a self-examination?

In recent years, thanks to concerted efforts by both sides, China-U.S. relations have developed smoothly. The U.S. official’s remarks obviously go against the development trend of bilateral relations and will only contribute to harming China-U.S. ties. The Taiwan issue has always been the most important and sensitive issue in China-U.S. relations. An appropriate handling of the issue is key to guaranteeing the sound and stable development of China-U.S. relations. Under the circumstances where the cross-Strait situation is extremely sensitive and tough due to Chen Shuibian’s adherence to his "Taiwan independence" policy, the United States should keep in mind the overall development of the China-U.S. relations and honor its commitment when it comes to the Taiwan issue. In particular, the United States should take concrete actions to stick to its one-China policy and abide by the three China-U.S. Joint Communiqués. The United States must keep its promise against Taiwan independence, handle the Taiwan issue cautiously and properly, and in particular, avoid any remark or action that might fuel the Chen Shuibian authorities’ intention to split Taiwan from China. Only by doing so can China-U.S. relations develop in a sound and stable way and can peace and stability be maintained across the Taiwan Strait.

U.S. Reports on "the Military Power of the PRC" with Ulterior Motives

Source: People’s Daily, June 2, 2004

Recently, the United States Department of Defense (DOD) released its 2004 Annual Report, “The Military Power of the People’s Republic of China.” “The report contains ulterior motives, because China’s military power and expenditure was exaggerated," said Liu Jianchao, spokesman of the Foreign Ministry, when answering questions during a press briefing on June 1.
Liu said that the Pentagon Report was full of a Cold War mentality and the hackneyed theory of the "China threat," purposefully exaggerating China’s military power and expenditure.

Liu commented that China will neither tolerate Taiwan independence nor allow anyone to separate Taiwan from China by any means. "Nowadays the secession activities of the ‘‘Taiwan independence’ forces are the biggest threat to the peace and stability across the Taiwan Strait. We urge the U.S. to take concrete actions to keep its commitments to the one China policy, to abide by the three China-U.S. joint communiqués, to oppose "Taiwan independence", to stop selling advanced weapons to Taiwan under any excuse and to refrain from sending wrong signals to Taiwan."

China Alleges Anti-China Provisions in the "National Defense Authorization Act for Fiscal Year 2005"

Source: People’ s Daily, May 25, 2004

BEIJING, May 25 (Xinhuanet) – “China firmly opposes the U.S. House of Representatives’ passage of the Defense Authorization Bill for Fiscal Year 2005, which contains anti-China provisions, and has made a solemn representation to the U.S.," said Liu Jianchao, Chinese Foreign Ministry spokesman, during the press briefing on May 25.

The anti-China items, which require sales of landing vessels to Taiwan and high-level military educational exchanges between the United States and Taiwan, together with similar amendments put forward by some people of the U.S. Senate, pose a severe violation of the three China-U.S. joint communiqués and the one-China policy, which the U.S. government has reiterated many times that it will abide by," said Liu.

 "China urges the U.S. Administration to clearly oppose these provisions and amendments, and to adopt effective measures to prevent them from being made into law, in order to prevent possible harm to China-U.S. relations,” he said.

Viewing China as an Enemy, U.S. Arms Taiwan and Exaggerates China’s Military Power

Source: Xinhuanet, June 16, 2004

Exaggerating China’s military power is to "add substance" to the "China threat theory" and to expose a "presumed enemy," using the out-dated "Cold War" mentality.
The report by the U.S. Department of Defense over-exaggerates the military superiority of China over Taiwan, stating that Taiwan’s military knowledge and technological progress are being undermined, and that the concept of alliance warfare has not been established. Such arguments are not new: the essence is to provide an excuse for the U.S. to arm Taiwan, paving the way for its arm sales to Taiwan.

Xinhua News Agency June 16 from Beijing (by Reporter Zijian Qi):

Recently, the U.S. Defense Department issued the "2004 Annual Report on China’s Military Power," deliberately exaggerating China’s military power and military budget.

The Pentagon Report claims that Beijing has boosted the development of its offensive military power; invented more advanced missiles and anti-satellite lasers, and has improved underground facilities. All such development is to insure victory over Taiwan in the event of a war, and apply pressure to Taiwan. The report even lied that Beijing’s defense expenditure is about 500 to 700 billion U.S. dollars, which ranks third in the world, just behind the U.S. and Russia.

China adheres to its foreign policies of peace and independence and implements defensive strategies for national defense. As a sovereign state, it is natural for China to develop its defense in an effort to maintain national security and territorial integrity. In reality, China’s defense expenditure for 2004, at most, amounts to 20 billion U.S. dollars. In contrast, the U.S. defense expenditure for 2004 reached 400.5 billion U.S. dollars. President Bush, in his proposal to the U.S. Congress, has recommended an increase to the Department of Defense’s 2005 budget of up to 401.7 billion U.S. dollars. The total world military budget spending equals about 900 billion U.S. dollars, about 50% of which is incurred by the U.S., with its advanced weaponry being far superior to any other country. As a nation with astronomical military spending, it is so absurd that the U.S. accuses others of having "excessive military budgets."

In fact, it is not that the authors of the Report in the Pentagon do not know the truth behind the numbers. The Report deliberately over-exaggerates China’s military power, just to "add substance" to the "China threat theory," and search for a "presumed enemy," with the outdated "Cold War" mentality. This shows that a group of people in Washington always wants to defame China, using fabricated lies and impeding cooperation and exchange between our two countries. No wonder the development of U.S.-China relations is often hindered, and cooperation between the two countries frequently faces interference.

The U.S. Report also exaggerates the disparity in military power between China and Taiwan, stating that Taiwan’s progress in military knowledge and technology has been hindered, and the concept of combined military operations has not been developed. This statement is certainly not new. In essence, it is to justify the U.S. motion to "arm" Taiwan, and provide an excuse for arms sales to Taiwan. Recently, the U.S. has been encouraging Taiwan to massively expand its military budget, to enable Taiwan to purchase a U.S. "Patriot" anti-missile system, submarines and anti-submarine surveillance aircrafts. It is precisely with the support of the U.S. that on the 2nd of this month, the Taiwan "Executive Office" passed a special military budget of up to 18.2 billion U.S. dollars for the acquisition of advanced weaponry.
It is well known that separatists for "Taiwan Independence" are the greatest threat to the peace and stability of the Taiwan Strait. By "arming" Taiwan, the U.S. will inevitably have the effect of supporting and encouraging these separatists, thus it will only intensify the already tense situation across the strait. In the statement opposing the European Union’s relief of the arms embargo to China by the State Department, it stated that "lifting the ban" will "send a wrong message" to China. However, seeing the recent actions by the U.S., people will ask: "Who on earth is sending the wrong signal?" These U.S. actions were not coincidental, but direct consequences of U.S. Cold War mentality and the propagation of the "China threat theory." Such actions will not prove beneficial to U.S.-China relations, nor will they prove beneficial to stability across the Taiwan Strait.

The public is aware that President Bush and other high-ranking U.S. officials have recently reiterated, on multiple occasions, the "one China" policy, reaffirming the China-U.S. three unified communiqués, opposing "Taiwan independence." As the proverb goes, "a person who does not honor his own words will not stand." How much more would this apply to a great nation?! People expect the U.S. to keep its word, take actions to exercise its promise, and desist with any more excuses for selling advanced munitions to Taiwan.

Liu Jianchao: The US Defense Department Had Evil Intentions in Suggesting that Taiwan Attack the Three Gorges Dam

Source: Xinhuanet, June 10, 2004

Recently, the U.S. Department of Defense released its Annual Report for 2004,"The Military Power of the People’s Republic of China," which is full of a Cold War mentality harboring evil intentions, said Liu Jianchao, spokesman of the Chinese Foreign Ministry in response to a question during a press briefing on June 10.

During the Foreign Ministry’s regular press conference, a reporter asked: "At the end of May, the U.S. Department of Defense released its Annual Report for 2004, ‘‘The Military Power of the People’s Republic of China,’ in which the U.S. suggested Taiwan use the Three Gorges Dam as a military target. What is China’s reply to this?"

"If what you say is true, it would clearly indicate that this report was filled with a Cold War mentality harboring evil intentions," said Liu Jianchao.

Liu continued: "The Chinese government’s policy on the Taiwan issue is unshakable. We will try our best, with the utmost sincerity, to effect a peaceful reunification. China will never tolerate ‘Taiwan’s independence,’ nor will China allow anyone to split Taiwan from the Motherland through any means. Nothing can shake the will and determination of the Chinese people to reunify its Motherland."
Liu said that China urges the United States to take concrete steps to fulfill the commitments reiterated repeatedly by President Bush, to the one-China policy, abiding by the three China-U.S. joint communiqués, and opposing Taiwan’s independence. The spokesman also asked the United States to refrain from sending wrong signals to Taiwan, so as not to harm the peace and stability across the Taiwan Strait and the interests of the United States itself. 

Chinese Military: Taiwan’s Attack Of the Three Gorges Dam Would Be a Crime Against Humanity that Would Bring about Destructive Retaliation

Source: Xinhuanet, June 11, 2004

A member of the Chinese military personnel pointed out in our interview that targeting basic civilian facilities, such as a dam, would seriously violate basic protocol of contemporary warfare. The Three Gorges Dam is not an ordinary facility. If the dam were destroyed, it would cause serious death, injury and significant property loss to civilians. Should Taiwan’s military attack civilian targets, it would be out of an insane mindset and would be a crime against humanity. If Taiwan’s military would really instigate an attack on the Dam, it would bring about destructive retaliation.

The United States gets to the point with a clear purpose

According to the U.S. "Defense News" (June 7 issue,) the Annual Report to Congress by the U.S. Department of Defense, "The Military Power of the People’s Republic of China," published May 28, points out that to deter an attack from China, Taiwan might consider targeting Mainland infrastructure such as the Three Gorges Dam. The U.S. and Taiwan were immediately shocked by this suggestion. Mr. John Tkacik Jr., a U.S. expert on issues of both sides of the Taiwan Straits, remarked that it is important that Pentagon openly discuss how Taiwan would launch the attack of the Mainland, and to attack the Three Gorges Dam is a perfectly good idea. However, during a seminar held on June 9, many scholars of U.S. think tanks strongly opposed this suggestion. Ms. Bonnie Glaser, an expert on military affairs at the Center for Strategic and International Studies, warned that Taiwan’s targeting of the Three Gorges Dam could have destructive consequences. Some generals of Taiwan’s military stated on June 8 that there indeed have been similar studies by the "Department of National Defense." According to "The Liberty Times" of Taiwan, Taiwan’s Defense Minister Li Jie privately discussed the issue of attacking the Three Gorges Dam with so-called "legislators of national defense" at a dinner party on June 8. On June 9, Taiwan’s Deputy Defense Minister Tsai Ming-shian remarked amidst vociferous comments, if China attacks Taiwan, we would take countermeasures, but the Three Gorges Dam would not be our military target.
Some analysts point out that the U.S. report on the possibilities of attacking the Three Gorges Dam by Taiwan is not a reminder, nor a suggestion, because the U.S. already knew that Taiwan has made plans in secret. The U.S. disclosed it to remind Mainland China that Taiwan still has strong and powerful countermeasures. However, Taiwan’s authorities are not willing to expose it, for the following three reasons: First, it would attract strong pressure from the public. Second, military development would be impeded. (After this issue was exposed, there were many experts of U.S. think tanks who asked the Bush administration to stop selling offensive weapons to Taiwan.) Third, once the Three Gorges Dam were compromised by military attack, the water level could diminish to the level of 145 meters in 7 days. While the structure of the dam would be completely destroyed, the damage would also encompass 100 kilometers in the downstream region.

U.S. should stop dropping the wrong hint

Chinese military personnel pointed out during the interview on June 10 that full consideration of the factor of war went into designing important civilian infrastructures such as the Three Gorges Dam. In addition, the PLA possesses strong and powerful defense capabilities. The infrastructure would be far from being vulnerable to destruction by Taiwan’s air force, with only a few airplanes and missiles. In recent years, Taiwan’s authorities have leaked out several so-called reports, "the operational projects of the attack on Mainland’s civilian targets" during sensitive periods between the Taiwan Strait. Their intent was sheer political intimidation. But at that time, the U.S. openly discussing Taiwan’s military attack on the Three Gorges Dam in their military report would lead separatists to make a wrong judgment. In the event of such an attack, the consequences would be dire, because the war between the two sides of the Taiwan Strait could never be an ordinary one, but a large-scale one. The peace and stability of the whole Asia-Pacific region would be greatly affected. U.S. strategic interests in this region would also be damaged. Therefore, the U.S. should stop dropping the wrong hints to Taiwan to avoid leading Taiwan any further down a dangerous path.

U.S. Ignites Internet Users’ Indignation by Suggesting that Taiwan Target Three Gorges Dam

Source: Xinhuanet, June 11, 2004

[Editor’s note: Xinhua Net opened a Forum under the above title for readers to post their comments. Below are the first 10 messages posted.]
1. Attacking civilian targets is a crime against humanity.

2. An Internet user’s remark: Whoever acts against the law of heaven shall be killed by heaven. The public shall betray whoever violates the ethics of human beings. Thus Chen Shuibian will "sink into water" and be destroyed by his own actions.
3. "Zhonghua 2003": Some bloody fools of the U.S. Defense Department first proposed the plan. This demonstrates once again that the U.S. is the biggest supporter of Taiwan’s independence. If activists of Taiwan’s independence dare to attack the Three Gorges Dam and urban population, we shall not show any mercy in return. What awaits them would be a thorough and destructive attack.

4. "Tiger tiger tiger": The plan to attack our Three Gorges Dam and urban population was first proposed by the U.S. Defense Department. This thought of Americans to commit a crime against humanity revealed how they are such a vicious and barbaric people. Americans talking about democracy is really a joke.

5. "Web surfer 61.235.179. *": Fellow Countrymen [of China] in Taiwan, leave immediately! Activists for Taiwan’s independence will not allow you to stay in Taiwan [once they declare independence].

6. "Web surfer lydgxl": The U.S. instigates Taiwan to bomb the Three Gorges Dam: How is that different from terrorists? The U.S. is just a terrorist country that is like a "wolf" covered with the coat of democracy and human rights.

7. The possibility for Taiwan to attack the interior of the Mainland is small?

8. "202.98.46.*" Don’t be afraid, everyone! This is a psychological warfare tactic by separatists, whose purpose supports the election campaign of their master behind the scenes. A Pekingese will always wag its tail. The reasons are as follows: First, how does Taiwan have such a capability to attack inland targets? Second, whoever attacks the Three Gorges Dam is a corrupt person toward the Chinese people, and will be punished by Heaven. Sons and daughters of Chinese ancestors will smash such a person. How dare Chen Shuibian do so? Third, in case a war should occur, it is highly possible that the Three Gorges Dam would be fine, while Chen Shuibian would already be dead. Will he take the road to his doom? Fourth, the sword of justice has been prepared, and the Motherland has taken the initiative. Such wild words by separatists of Taiwan’s independence are providing an excuse for punishing themselves. If they had learned the tactic from their master, of making up false intelligence reports as an excuse to attack Iraq, they would have already been killed several times.

9. "A Half-Internet Guest": Generally speaking, Chen Shuibian dares not to do so, but we still need to be alert.

10. "The fairy of mountains and oceans": One will not be afraid as long as one stays calm. Chinese people have their own spirit. Remember those early years: "700 million people are 700 millions soldiers; ten thousand miles’ land are ten thousand miles’ military camps." What kind of spirit is that? What kinds of people in the world would not be scared of it?

Freedom of Speech and Ruling by Law in the P.R.C.

[Editor’s Note: The Constitution of the People’s Republic of China (P.R.C.) guarantees the basic rights of its citizens, including the freedom of speech. However, these rights can be easily taken away. Provided on next page is the translation of an official Information submitted by the Office of People’s Prosecutor, Chengdu City, Sichuan Province to the Intermediate People’s Court of Chengdu, Sichuan Province against a pro-democracy activist in China for subversion charges. Mr. Ouyang was a high school teacher in a village in Sichuan Province before he lost his job because of his participation in the June 4 1989 pro-democracy movement. Prior to his arrest last December, this former high school teacher had been making a living as a temporary worker. He is known by his friends as a mild dissident advocating for political reform in China.]
[Translator’s Note:

Criminal Law of the People’s Republic of China, Article 105 amended as of 1997 reads as follows:

Article 105 Among those who organize, plot or carry out the scheme of subverting the State power or overthrowing the socialist system, the ringleaders and the others who commit major crimes shall be sentenced to life imprisonment or fixed-term imprisonment of not less than 10 years; the ones who take an active part in it shall be sentenced to fixed-term imprisonment of not less than three years but not more than 10 years; and the other participants shall be sentenced to fixed-term imprisonment of not more than three years, criminal detention, public surveillance or deprivation of political rights.

Whoever incites others by spreading rumors or slanders or any other means to subvert the State power or overthrow the socialist system shall be sentenced to fixed-term imprisonment of not more than five years, criminal detention, public surveillance or deprivation of political rights; and the ringleaders and the others who commit major crimes shall be sentenced to fixed-term imprisonment of not less than five years. ]

Information by the Office of People’s Prosecutor, Chengdu City, Sichuan Province Chengdu Criminal Prosecution – Case Number (2003) 152

Defendant, Ouyang Yi, male, was born on June 28, 1968, Identification Card No. 10902680628467, a Han Chinese, native of Suining City of Sichuan Province. Defendant has college education and is currently unemployed. Defendant’s legal residence is 37-11 Baoshi Street, Baoshi Township, Suining City. His temporary residence is 8th Floor, Unit 5, Building One, 9 Petroleum Road, Chengdu City.

Defendant was arrested and detained on criminal offense by Chengdu Public Security Bureau on December 5, 2002. This Office officially signed the arrest warrant of the defendant for subversion charges on January 6, 2003. Chengdu Public Security Bureau executed the arrest warrant the following day. Defendant is now detained at the Chengdu Detention Center.
The Chengdu Public Security Bureau completed its investigation on the subversion charges against Ouyang Yi on March 26, 2003 and transferred the case to this Office for prosecution. After agreeing to process the case, this Office interrogated Defendant and informed Defendant of his right to legal counsel. This Office have reviewed all the case documents. This case has been twice returned to the Chengdu Public Security for further investigation. It was last resubmitted to this Office on August 4. This Office hereby makes the following findings:

During the "June 4" political turmoil in 1989, Defendant Ouyang Yi was arrested and detained by local police in Suining City for two months for posting flyers that jeopardized national security. After that, the defendant was not at all repentant, but continued attempt to overthrow the State power and the socialist system. After Defendant fled to Chengdu in 1999, he ganged up with Hu Mingjun and Wang Sen (both sentenced to imprisonment for crimes of subversion) and others, and continued to engage in activities that undermined national security. In 2000, Defendant produced and distributed many anti-Communist Party and anti-socialism articles to insult and slander the Chinese Communist Party and our State power.

In October 2002 before the opening of the 16th National Congress of the Chinese Communist Party, Defendant Ouyang Yi, at the request of a Lin (prosecuted separately), wrote an article that slandered our State power and the political system, entitled “Welcome a Ruling Party’s 16th National Congress that Will ‘Progress With Times’ Promoting Democratic Politics." Defendant emailed the article to Zhao Changqing in Xian City (sentenced on charges of instigating subversion) who revised and sent the article to a hostile overseas organization—Human Rights in China. On November 6, 2002, Human Rights in China published this article online at under the title of "A Joint Petition to the Chinese Government from Two Hundred Chinese Dissidents in Seventeen Provinces in China."

On December 5, 2002, Defendant Ouyang Yi was arrested and detained by public security.

The aforementioned findings of facts were supported by evidence on record that include physical evidence, writings, affidavits from witnesses, inspection reports, and etc.

It is the conclusion of this Office that Defendant Ouyang Yi produced and distributed articles that insulted and slandered our State power and socialist system; that his activities have violated Criminal Law of the People’s Republic of China, Article 105, Section 2, and have committed the crime of instigating the subversion of the State power. In this case, the facts are clear, the evidence is reliable and ample, thus Defendant should be prosecuted according to the law. To maintain social order and safeguard national security, this Office hereby submits this Information for public prosecution in accordance with Criminal Procedure Law of the People’s Republic of China, Article 141, and requests for conviction under the law.
Respectfully Submitted to Intermediate People’s Court of Chengdu, Sichuan Province By the Office of People’s Prosecutor of Chengdu, Sichuan Province

September 4, 2003

Attachments: 1. One copy of Evidence Index and one set of prosecution files. 2. One copy of major evidence, 4 pages.

Translated from original texts posted at Boxun on October 3, 2003

Remembrance of Reagan

Ronald Reagan’s 8-year presidency ended shortly before theemergence of the pro-democracy movement in China in 1989. His demise coincideswith the 15th anniversary of the crushed movement, as people are rethinking themeaning of democracy and human rights to an economically robust China.Amidst an outpouring of sorrow and affection in the week following his death,Mr. Reagan was finally given credit for winning the Cold War without firing ashot. Many in China,meanwhile, would remember the bloodstains on Tiananmen Square, and how theywere instrumental in bringing together the forces that tore down the Berlin Wall severalmonths later and thousands of miles away.

During the 15 years since that tragic June 4thin 1989, I have wondered many times what would have happened in China had Mr.Reagan’s presidency been extended for another term. Would China have become another Poland? Or,would there have been a Chinese Gorbachev that gave people real hope for thecountry’s democracy? More than anything else, would June 4th havebecome a day for celebration rather than candlelight vigils—and confusion overhow to make the deaths in Tiananmen worthy in their own country?

Without Reagan, a true believer andnon-compromising champion for human rights and democracy, we saw China sadly spared from the fire that swept awaycommunism in Eastern Europe—although Tiananmenwas the torch that ignited that fire. It would take another hero from that era,Lech Walesa of Poland’s Solidarity Movement, to remind us of the true meaningof June 4, 1989. In his article in memory of Reagan in the Wall Street Journalon June 11, 2004, he wrote, “I have often been asked in the United Statesto sign a poster that many Americans consider very significant. Prepared forthe first almost-free parliamentary elections in Poland in 1989, the poster showsGary Cooper as the lonely sheriff in the American Western, ‘High Noon.’ Underthe headline ‘At High Noon’ runs the red Solidarity banner and the date — June4, 1989.” And who is the real-world embodiment of the sheriff with the resolveto rid not only the Wild West but the whole world of evil? Of course, it is theperson the article is eulogizing – Ronald Reagan.

Reagan imposed economic sanctions against Polandwhen the Communist government there cracked down on the solidarity movement. Itwas likely that some people in Polandwere hurt by the sanctions, but today the Polish people are thankful to him becausein the words of Mr. Walesa, “We owe him our liberty.” Similar sentiments wereechoed in Grenada,a country Reagan “invaded” in 1988 to free it from a pro-Cuban dictator. When aNew York Times journalist took a trip there to report the negative feelings hefelt people in Grenadawould have against the “aggressor” following his death, none could be found—onlyeffusive gratitude and grief. This is a lesson for those opposing the economicsanctions against China inthe wake of June 4th: Like Americans fighting at Gettysburgand Omaha Beach, and Chinese chanting fordemocracy in the hail of bullets at Tiananmen, the world’s people steadfastlyyearn for freedom and clearly understand that it comes with a price. Now, afterthe lifting of all the conditions attached to Sino-US trade, and themarginalizing and ridiculing of Wei Jingsheng and Harry Wu, the twolong-imprisoned democracy stalwarts, for still harboring such ludicrous ideas,China is slipping further and further from its embryonic quest for democracy inthe 1980s, and its human rights record has steadily worsened.
I once visited the editor of a prominentpolitical journal in Washington, D.C. to raise my concerns over China’sheightened persecution of the Falun Gong spiritual movement, undergroundchurches, and democracy activists, and to seek his advice on how Washington could beleveraged to aid those groups. He didn’t answer my question directly, but justsaid that it would be laughable for a country to build its foreign policy onthe promotion of human rights. I was quick to add, “although they may createthe appearance of doing so,” and he nodded. Reagan, however, believed in anddefended such basic values, which might sound simple-minded in the eyes ofthose sophisticates who have a penchant for tactical games such as détente,which have only served to perpetuate the existence of communism. People werealso amazed that Reagan’s simple definition of the SovietUnion as an “evil empire” could have the magical power of forcingit to change, and eventually, collapse. When I think about it, it was as simpleas that proverbial Danish boy – or cowboy –who saw that the emperor was wearingno clothes, and just told the plain truth to the mesmerized audience who hadall seen the same thing but refused to believe their eyes.

In the first few days after his departure I was shocked to see TV commentators in my town attemptingto reduce the significance of his shining presidency to a winsome smile, or thefading image of a “great communicator.” But later in the week, pictures of thelong queue leading up to the Capitol Rotunda where the body of the greatpresident lay in state testified to the failure of their attempts.

Throughout human history, people have battledfor goodness against the forces that opposed it. This is a simple truth thatmakes every man that fights for it great, including President Reagan.

On June 4, 1989, China’s Prague Spring was nipped inthe bud, and since then the government’s grip on the Chinese people’s lives hasbecome tighter and tighter. Beneath the veneer of an economic boom driven byforeign investment and wasteful exploitation of natural resources lies the trueChina,which seems to be forgetting the date of June 4th. The government’siron-fisted approach has all but wiped out the democracy movement, and supporthas been dwindling in the west under the tremendous influence of the appeasementof China—referredto now as “engagement.”

In July 1999, theChinese government, under the direct supervision of its then president JiangZemin, started a relentless campaign against the apolitical spiritual groupFalun Gong. Since then, tens of thousands of people have been illegallydetained, and thousands have died in police custody. The persecution wasbrought to life by journalistic reports and acknowledged around the world asyet another affront to human rights by the Chinese government. Many of thoseso-called Chinascholars, of course, would not humble themselves to agree with what wasobviously the case. Blindly neglecting the salient moral component of themovement and its consistently non-violent behavior, those Chinese experts havein the past five years tried to rationalize the persecution as a cataclysmicTaiping- or Yellow turban-like uprising against the government. Their messagecould have been a godsend to a Chinese government struggling to convince itsown people of the necessity for the crackdown, but oddly enough, those pundits’words were never quoted in China, because even small schoolchildren thereunderstand the history of Taiping and Yellow turban revolt—and their differencefrom Falun Gong. As a result, every time I hear or read a comparison betweenFalun Gong and those armed uprisings, I’m not sure whether the commentators’true purpose is to seriously examine the issue, or to show off their textbookknowledge of Chinese history.
Like his wordsand personality, Reagan’s values were simple and powerful, and they left alegacy the pundits can never diminish. History will remember that Ronald WilsonReagan, the greatest American President of the 20th century, won themost crucial war for mankind, and died on June 5, 2004, 15 years from the dateof a massacre at Tiananmen Square that helpedbring victory in a great battle against tyranny.

John Li is a New-York-based freelance writer on Sino-US relations. His articles have beenpublished in newspapers such as the Asian Wall Street Journal and theInternational Herald Tribune.

The Price of the Economic Miracle

Recently, we heard some rarely spoken truths from Hu Jintao andWen Jiabao, the new Chinese leaders.  They revealed to the world theeconomic crisis facing China. "Our economy has shown signs of a bubble economy, and possibility ofcrisis and severe inflation. The Chinese government must take forceful measuresin order to save the economy."  The source of the problem, they havedetermined, "Is more than an issue of economic reform. The problems arerooted in the social structure and political system." Their words wereright on target, but are they too late?

Onthe surface the overheating Chinese economy is taking center stage, but beneathit lays the secret of Chinese leaders trying to survive politically. The speedof the economy’s growth itself should have raised questions.  It had longbeen concluded within the circle of Chinese economists that gains from thistype of "fast growth" cannot make up for its losses. China’sscience, research, technology, and economic efficiency are all inferior whencompared with other developed countries.  How could China createthe "miracle" of continued rapid growth? It was nothing butinjections of large amounts of basic materials, funds, and labor, disregardingthe high costs associated with them.

Eventhough the Chinese government always likes to boast about its economic growthand is eager to bill itself as a future economic giant, it is clear to theadministrators in the State Council and their economists that this kind of lowefficiency growth is fatal and catastrophic to a country. In private, thedecision makers in the State Council seek controlled growth, not the currenthigh growth rate, but controlling economic growth rate has proven to be very difficult.As observed by some Chinese economists, "We encourage higher economicefficiency every year, but fail every year. We talk about controlling thegrowth rate everywhere, but lose control everywhere."

Theprimary reason for this loss of control can be attributed to the state of thecurrent political system and the interests of the ruling Party. It has longbeen the policy of the central government to develop the economy at a fastrate. When it comes to evaluating local officials and managers of largestate-owned enterprises, their performance is directly measured by the amountof raw growth numbers they can produce. These officials are able to increasegrowth levels because they have direct influence over local branches ofstate-owned banks, keeping bank funds in easy reach. These funds are inevitablytapped to fuel the overheating local economy in loans approved by high rankinglocal officials or even guaranteed by the local government.  For thisreason, local officials chase after these high numbers at any cost and thegrowth rate remains uncontrollable.

Whydoes the central government doggedly pursue such rapid growth? It does so inorder to ensure the Party’s survival. Based on years of experience, the centralgovernment and its economists determined early on that a minimum growth rate of8% was necessary in order to ease the pressure of the growing labor force andto sustain a prosperous social appearance. The Chinese government was not bornout of a general popular election or power passed down by virtue of ancestry,increasing the need for maintaining prosperity and high incomes. It is called"buying social stability." Economists are actually quite familiarwith this phenomenon. As said by Yang Fan, a Chinese scholar, "Why atleast 8%? Economists say it is to ensure employment rate and sustainconfidence… (In fact,) economic growth has long been the main justification ofpolitical power in our nation." As a result, 8% has become the magicnumber that the Party would struggle to reach at any costs.
Ifwe try to calculate the cost of China’seconomic miracle, the staggering price of the accelerated growth is shocking. Afew years ago, in my book China’sEcological Winter, I calculated the grand total of the cost to theenvironment. At the end of the last century, in order to pursue high economicgrowth rates, China’snatural resources consumption, combined with the ecological damage associatedwith the economical development, amounted to 20 trillion yuan (~ $2.4 trillion)per year. China’sGNP is less than one-third of this total cost. No other country in the world ispursuing such suicidal development.

Aren’twe paying a prohibitive price to maintain political power?  In recenthistory, we have paid a high price for the nation’s survival and for dictators’desire for power. To put the current price in context, I provide you below alist of some recent costs, excluding those that were incurred during the civilwar in the late 40s and the War against Japanese invasion, which are hard toestimate:

Decisionto fight for North Koreain the early 1950’s: 100 billion yuan (~$12 billion)Direct economic loss fromGreat Leap Forward [1]: 120 billion yuan (~$14 billion)Ten years of directeconomic loss during the Cultural Revolution: 500 billion yuan (~$60billion)More than ten years of "Three-Line Construction" [2]: 600billion yuan (~ $72 billion) 

Noneof these calamities comes close to matching the ecological price or the amountof resources that we are paying today during peace time.  We have keptpaying such a staggering price for more than a decade for this fast-rateeconomic development, all to maintain the ruling political power of a verysmall number of people.  Sadly, we are not paying the price with China yuan,U.S. dollars, or bars of gold; we are paying the price by destroying ournatural environment and the future of our nation.


[1]China’sGreat Leap Forward campaign of 1958-1960 was a campaign by the ChineseGovernment from 1958 to early 1960 aimed at using Mainland China’splentiful supply of cheap labor to rapidly industrialize the country.  Itwas thought that through establishment of collective farms and through masslabor, China’s steelproduction would surpass that of the United Kingdom only 15 years afterthe start of the "Leap." The Great Leap Forward is now widely seenboth within Chinaand outside as a major economic disaster.
[2] "Three-LineConstruction" refers to the extremely difficult and high cost defenseprojects in the Western in-land of China during the 1960’s. Those projects aimed to ensure survival from U.S. air bombardment in case ofwar.

About the Author:
Zheng Yi was born in 1947 in Chongqing, Sichuan province. He became a renownedwriter in Chinain the late 70s and early 80s after publishing several award-wining novels,which were later turned into popular films. After the June 4th pro-democracystudent movement in 1989, Zheng Yi became a fugitive and moved around in safehouses for three years in Chinabefore he had to flee overseas. In recent years, Zheng Yi turned his fullattention onto the ecological crisis that China is facing. He spent three andhalf years researching and writing a book titled China’s Ecological Winter. Thebook, published by Hong Kong publisher, Mirror Books, provided an in-depthanalysis of the coming ecological catastrophe in China, the first book of this kindever written in Chinese.