AIDS in China Was Up 50 Percent Over Last Year

[VOA, November 28, 2005] Vice Minister of Ministry of Health Wang Longde reveals on November 28, 2005, that up to the end of September 2005, China has found 135,000 people with HIV, a 50 percent increase over a year ago. Yunan, Henan, Xinjiang, Guangxi, and Guangdong are the top five provinces with high HIV positive patients. The total numbers of AIDS in these five provinces are 77 percent of the total AIDS population in China. Among them, 40 percent are transmitted via drug use, 23 percent through illegal blood sales, and 9 percent from unprotected sex.

Group AIDS Infection in a Fujian Province Drug Rehab Center

[Radio Free Asia, November 11, 2005] Due to an oversight in monitoring drug abusers at a rehab center in Fujian Province, 54 people in the center were infected with AIDS. Trying to hide the truth, authorities ordered those infected with AIDS locked up as a punishment. Attempts by the victims’ families to appeal to the authorities to cover medical expenses and damages for the victims have been in vain.

Schistosomiasis Returns to Hubei and Jiangxi Provinces

[Xinhuanet, November 11, 2005] Schistosomiasis, a disease that was once declared annihilated in China, has returned in some parts of China. According to statistics from the Ministry of Health, schistosomiasis has been found in seven regions in Hubei, Jiangxi, Anhui, and Sichuan provinces. Snails are hosts for the oncomelania parasites that cause schistosomiasis. The wide spread of snails in China has created over 800,000 schistosomiasis patients, and is threatening 65 million people.

Thousands of Ex-Servicemen In Shenzhen Protest Unjust Compensations

[VOA, November 8, 2005] Thousands of ex-servicemen held a protest in Shenzhen, demanding the authorities solve their financial problems due to the reform of state-owned enterprises and the loss of state-owned assets. At one point, the protesters once blocked the mayor’s car, but were dispersed by anti-riot police.

Chinese Authorities Arrest AIDS Patients & Civil Rights Supporters

[The Epoch Times, November 10, 2005] Authorities in Henan Province reportedly dispatched thousands of police officers to arrest AIDS patients and block people from appealing for their rights during the National Conference on AIDS Prevention on November 7. The conference was held at Yellow River Hotel of Zhenzhou City, Henan Province, and sponsored by the Office of AIDS Prevention and Treatment of the State Council.

Mr. Hu Jia, a well-known civil rights activist who has been actively calling for protecting the rights of AIDS patients, was about to deliver his appeal letter to the authorities when the police arrested him. The police took him out of Zhenzhou City and put him under house arrest. Hu finally returned home in Beijing at 10 p.m. on November 9.

Canada’s Ministry of Health Warns Against Using Chinese-Made Weight-Loss Drugs

[Central News Agency, November 9, 2005] Several weight-loss products made in China contain the harmful substance sibutramine and therefore should not be taken, Canada’s Ministry of Health warns. The drugs on the warning list include Xianting Qianzhisu, Menze Qianweisu, Shou ShenDan-Xiao Nan Wan, RS Slim & Fit, Kartien Slimming Capsules, and Kartien Trimming Formula.

Almost 80 Percent of Reporters in China Want to Change Careers

[Legal Evening News, November 8, 2005] Chinese journalists today are facing increased levels of stress and anxiety, in part due to the highly scrutinized nature of their work, according to a survey conducted by the Legal Evening News at the Journalist Festival on November 8. The survey indicates that almost 80 percent of journalists have thought of changing their career.

According to the survey, the primary factors that cause journalists stress are: (1) deep anxiety for being unable to use the press to expose evil-doers or to encourage people to do good (23.7 percent of those surveyed); (2) the inability to fight back when their news reports are blocked (18.3 percent); (3) Less and less substantive source material for news reports (16.3 percent); (4) corrupt journalists damaging the reputation of journalists as a whole (10.8 percent); (5) fear of physical attacks and revenge as a result of their truthful reporting (9.7 percent); and (6) discrimination from the public (5.4 percent).

In addition, many felt that the routine travel and overnight work in the career have caused journalists prolonged stress, and that an excessive number of journalists throughout China is only exacerbating the problems all journalists face.

Shenzhen Legal Daily Ordered to Stop the Presses

[Boxun.com, November 7, 2005] The Shenzhen Legal Daily, an influential newspaper in China, was stopped from publishing on November 8. The authorities stated that the reason behind the stoppage is long-term financial losses. But according to people familiar with the matter, it is the frequent exposure of China’s negative side that angered authorities and became an important reason for its closure. The sudden closure brought some employees of the newspaper to tears in public.

China Is Short 20 Billion Kilograms of Grain This Year

[Central News Agency, November 7, 2005] China’s grain supply and demand will be in a state of "tight balance" for an extensive period of time with a shortage of 20 billion kilograms (20 million tons) this year, according to an official from China’s Grain Bureau.

Media in Hunan Province Choose the Top Ten People Who Dare to Speak The Truth

[Sina.com, November 6, 2005] Media in Hunan Province have recently become well-known for their audacious pioneering work on programs such as the "Super Girls" singing competition on Hunan Satellite TV. Recently, People in Focus Weekly in Hunan launched a selection process for the "Top Ten People who Dare to Speak the Truth." Among the people nominated were Zhang Baoqing, who harshly criticized corruption in the educational system; Li Jinhua, who launched the "auditing storm"; and Yi Xianrong, who criticized the real estate bubble. The editor of the weekly paper highly praised those who are brave enough to speak the truth, while lamenting how difficult it is for people to do so.

20 Billion Yuan Flows into Shenzhen Real Estate

[Central News Agency, November 5, 2005] Shenzhen, the first special economic zone in China, has witnessed a surge in real estate prices. The estimated overall increase in real estate prices will reach as high as 20 percent, as compared to the same period last year. A significant change in Shanghai’s real estate market has reportedly resulted in the shift of 20 billion yuan (approximately US$2.5 billion) to Shenzhen and is another reason for the surge in Shenzhen’s real estate prices.

Substitute Teachers in Northwestern China Earn 40 Yuan (US$5) a Month

[Nanfang Weekend, November 4, 2005] Over 600 substitute teachers in Weiyuan County, Gansu Province, earn a monthly salary of only 40 to 80 yuan (approximately US$5 to US$10). Seventy percent of the substitutes earn only 40 yuan. These findings were reported to the Gansu provincial government and to the Ministry of Education by the Associate Secretary of the CCP Committee of Weiyuan County, after a personal investigation. "Payday is the most painful day," many substitutes say.

Underground Clinics Swamped In Beijing

[The Epoch Times, November 4, 2005] With surging medical costs and drug prices, the lower-income class in China is seeking medical treatments from private clinics, and has become an enormous source of demand for many underground clinics. Medical practices without licenses, poor medical equipment, and poor hygiene in these clinics, among other things, have frequently caused malpractice deaths in recent years. Some of the accidents are resolved privately. The flood of people using underground clinics has become a serious social problem in China.

Veteran Plans to Sue PLA

[Central News Agency, November 4, 2005] Injured during his service in the Hong Kong-based troops of the People’s Liberation Army (PLA), an ex-serviceman plans to file a lawsuit in a Hong Kong court against the Hong Kong-based PLA troops for compensation. After his injury, the veteran allegedly did not receive proper treatment, causing his injury to deteriorate. When retiring from the service, he received only 200 yuan (about US$25) from the PLA to cover his medical expenses. If the case is accepted, it will be the first one in Hong Kong’s history in which a veteran sues the Hong Kong-based PLA troops.

Wife of Attorney Zhen Enchong Files Lawsuit Against CCP Mouthpieces in Shanghai

[The Epoch Times, November 3, 2005] On Oct. 29, 2003, one day after the authorities in China sentenced attorney Zhen Enchong to three years in prison for allegedly providing foreigners with "state secrets," both the Jiefang Daily and Wenhui Bao in Shanghai published an article titled, "The Truth behind the Crowns: About Zhen Enchong." Zhen’s wife Jiang Meili accused the newspapers of distorting the facts, defaming Zhen, and bringing mental damage to Zhen himself and to his family. Jiang recently hired Pu Zhiqiang, an attorney in Beijing, to demand apologies and compensation for damages from the two newspaper publishers.

China and the United States Battle Over Renting Vietnam’s Military Base

[Oriental Daily, Hong Kong, November 1, 2005] During his visit to Vietnam, Chinese leader Hu Jintao requested that Vietnam rent the Ranh Bay Military Base to China, to reinforce its influence in Southeastern Asia. Ranh Bay is the best natural deep-water bay in Asia. If the information is confirmed, the billion-dollar rental plan proposed by the United States will likely be denied by Vietnam. Vietnam once reportedly held discussions with the United States regarding the latter’s proposed rental. Due to a warm-up in the Sino-Vietnam relationship, however, Vietnam has been deferring the decision in order to avoid offending China or becoming a "frontline" for the United States.

China Quietly Changes Western Borders in Xinjiang

[The Epoch Times, November 2, 2005] Compared with its January 2002 version, the new "Xinjiang Map" published in January 2005 by the China Map Publishing House has some major differences in China’s borders in Xinjiang Province. Despite the "Undetermined Border" near the Pamir Mountains, China’s borders with Kazakhstan, Kyrgyzstan, and Tajikistan have been changed quietly. These changes can be viewed as new agreements with China’s neighbors. On the Sino-Kazakhstan border, there are at least two areas that have moved further back into China’s territory. Despite the changes, both the 2002 and 2005 versions are printed with the words, "The national borders are drawn based on the Map of China published by the China Map Publishing House in 1989."

A Large Poverty Zone Within 60 Miles Of Beijing

[Central News Agency, November 3, 2005] Surrounding Beijing and Tianjin is a "poverty zone," which includes 3,798 poor villages and 32 poor counties, with a population of 3.72 million in poverty, said Asian Development Bank in its recently published report "Study On Strategic Economic Development in Hebei Province." It is very uncommon for a large poverty area to exist within 60 miles of a state capital.

Nu River Project Underway Despite Environmentalists’ Anger

[The Epoch Times, October 28, 2005] Which one is more important to the Chinese people: a new source of electric energy or the environment? In the past three years, there has been intense, ongoing debate between the environmentalists and developers with regard to the hydroelectric project on the Nu River (Roaring River). To protest the secrecy in the decision-making process by the central government regarding the hydroelectric project, environmentalists in China tried to stop an official engineering conference for the Nu River project over the October 22 weekend. The developers, however, continue to launch the project, regardless.

The Nu River originates from the Thanghla Pass in Qinghai Province in the Qinghai-Tibet Plateau. As the canyon of the river is 3,000 meters (~1.86 miles) above sea level, the river literally roars as water flows through the steep rocky landscape, thus the name Nu (or Roaring) River. With its geological uniqueness, the great gorge of Nu River naturally becomes a haven for many species. With one of the most abundant varieties of biological species in the world, the Nu River region boasts over 25 percent of China’s species of rare plants and animals, including those on the brink of extinction.

Former Iraq President Saddam Formally Tried (first trial)

Saddam Entered into the Courtroom with Smile, Prayed for Peace and Scolded the Chief Judge

The hearing officially started at 10:27 am on November 28. Chief Judge Amin announced that the second trial for Saddam and other seven co-defendants had begun. This trial was still held within the heavily protected "Green Zone." Same as in the previous hearing, the broadcasting was delayed for 20 minutes although the trial was broadcast to the public. [detail report]

Former Iraq President Saddam Stood Trial Again

Fourty days after his first court appearance on October 19, 2005, former Iraq President Saddam appeared in the courtroom again for the second stage trial in the heavily guarded "Green Zone" in Baghdad. [detail report]

Related Topics

Serious stampede incident happened in Baghdad

U.S. troops in Iraq shot a female Italian reporter

Serious explosion happened in Hilla (Iraq)

Paying attention to Iraqi reconstruction

The turbulence common in Iraq; Foreign hostages killed continuously

U.S. military bases in Iraq under most serious attack

"Chemical Ali" was put on trial

More…

Prosecutor’s Position

+ Saddam faces six charges
{mospagebreak}
The six charges Saddam faces: Dujail massacre, Kuwait invasion, persecution against Marsh Arabs, the Kurds Massacre and ethnic cleansing, and political assassinations. If Saddam is convicted of those charges, the leader of former Iraqi regime will be sentenced to death.

Defendant’s Position

+ Saddam should have immunity from prosecution

Defendants believed that as head of state, Saddam should be immune from being prosecution and punishment and should be protected under sovereign immunity for the acts committed during his duty. "The Special Tribunal" was arranged and organized by the occupier. According to international law, the occupier has no right to change the legal system in the occupied territory.

Reactions from All Sides

Saddam states that he has been treated inhumanely during the second hearing; First witness provides videotaped testimony

Kidnappings and explosions accompany the trial of Saddam; Some Iraqis take Saddam’s trial as a "show"

Saddam trial resumes; Militias start bombing; Two Britons lose their lives.

Former Iraq Prime Minister rebukes the government: violating human rights like old Saddam

Saddam on second trial; Former U.S. attorney general comes to "protect Saddam"

Saddam’s attorneys requested for delay of the trial; Allawi says today’s situation is worse than before

Chief Prosecutor for the Dujail Village case: Saddam is unlikely to be executed immediately

In the last couple of years, the Chinese communist regime increased its efforts to exert influence on overseas Chinese media. One example is to invite those influential overseas journalists to mainland China to attend media forums. The First Global Chinese Media Forum and the Second Global Chinese Media Forum were held in Nanjing City, Jiangsu Province, in September 2001 and Changsha City in Hunan Province in September 2003, respectively. Each time, local government authorities were the main sponsors.

The Third Global Chinese Media Forum was held at Wuhan City, Hubei Province, from September 11-13, 2005. The China News Agency and Wuhan City authorities jointly sponsored the forum. The forum invited more than 200 high-level journalists of overseas Chinese media from 46 different countries, all of them being presidents, CEO, directors, or chief editors in their organizations. The media included newspapers, magazines, radio stations, TV stations, as well as Internet media. According to the Chief Editor of China News Agency, Guo Zhaojin, the forum was meant to provide a platform for promoting the exchange and cooperation of overseas Chinese media with mainland China media.

Below are excerpts from a few articles published on Xinhuanet reporting about the Third Global Chinese Media Forum.

Overseas Chinese Media Have a Special Mission, State Council Official Claims

In an article published on September 14, 2005, Liu Zepeng, Deputy Director of Overseas Chinese Office of the State Council and President of China News Agency, says that overseas Chinese media have the responsibility to dissipate the "China Threat Theory" at the Third Global Chinese Media Forum held in Wuhan. Below are a few paragraphs from the article.

"For the last nine consecutive years, China has suffered the largest number of Antidumping Duty Investigations in the world, which covers almost every category of export products. The technical trade measurement has now become the number one non-tariff barrier instead of antidumping. Each year over 25 percent of exports are affected by the technical trade measurements.

"On this subject, Liu Zepeng, Deputy Director of Overseas Chinese Office of the State Council and President of China News Agency, expressed at the Third Global Chinese Media Forum that, facing the current ‘China fever,’ overseas Chinese media should have the responsibility to dissolving ‘the China threat theory’ in order to reduce the conflicts (of other countries) with China, to expand space for China’s development and to enhance the ‘soft power’ of China on the world stage.
{mospagebreak}
"’China needs a long-term stable international environment to develop and China needs to establish mutual trust in cooperation with neighboring countries,’ said Guo Zhaojin, the Chief Editor of the China News Agency, ‘the international Chinese media should become an important platform to pass the messages of peaceful Chinese development to other countries in the world.’"

http://news.xinhuanet.com/overseas/2005-09/14/content_3488263.htm

Chinese Media—An Important Platform to Showcase a "True China" to the World, Xinhua Reports in Its News Wire

Below are two pieces of news reported by the Xinhua News Agency about the Third Global Chinese Media Forum. It exemplifies how the Chinese communist regime pays special attention to the overseas Chinese media market and strategies that it employs to fulfill its goal.

"Xinhuanet Hubei Channel, September 14, 2005—Over 200 of Chinese media’s leaders from 46 countries and regions attended the Third Global Chinese Media Forum that just ended.

"The representatives present at the Forum all agreed that the Chinese media is now in a period of development and many opportunities. The direction for the development of Chinese media in the new century is to run the newspaper with freedom of ownership, and to influence mainstream society with positive and healthy ideologies.

"China’s development has brought unprecedented space for growth and development for overseas Chinese media. In the past two years, the number of Chinese media in the world has doubled. Nowadays, there are more than 470 active Chinese media in over 100 countries and regions.

"’With China’s continued development and growth, the influence of Chinese media will be more far reaching,’ said Jiang Tianlong, Chairman of the American Asian Culture and Communications Group. While the Chinese media in the world are providing better services to Chinese people and communities, they, through their efforts, should let the world hear a stronger and more powerful voice from China."

http://news.xinhuanet.com/overseas/2005-09/14/content_3487993.htm

In a separate news item titled "Domestic and Overseas Chinese Media Makes Waves of Cooperation and Interaction," it reported that overseas Chinese media were widely seeking cooperative partnership with mainland Chinese media firms.
{mospagebreak}
"Xinhuanet Hubei Channel, September 14, 2005—The Chairman of Taiwan’s Eastern Multimedia Group and Wuhan Broadcasting Television Group formally signed an agreement in Wuhan to establish a strategic partnership. At the Third Global Chinese Media Forum that has just ended, domestic and overseas Chinese media have started to make new strides in cooperation and interaction.

"At this Forum, over 200 global Chinese media leaders from 46 countries and regions were seeking strategic partners. During a short period of two days, the Yangtze River Daily News Group alone signed cooperation and partnership agreements with America’s China Press (Eastern U.S. edition), Canada’s Global Chinese Press, Australia’s Melbourne Daily, Thailand’s World Journal, Japan’s Chinese Leader, France’s European Times and New Zealand’s Xin Bao. Wuhan Broadcasting Television and Yangtze River Interactive Media Net have become the center of attention of broadcast and television media from Singapore, New Zealand, and Canada.

"Wang Linglin, Chairman of Taiwan’s Eastern Multimedia Group who formally signed an agreement with Wuhan Broadcasting Television Group to establish a strategic partnership, said that on the premises of mutual respect of intellectual property rights, both sides will provide news information and programs to each other and exchanges of news page (or time slots), and establish exchange mechanism for senior management, news reporters, editors and broadcasting staff. Earlier, Eastern Multimedia Group had established interactive relations with over 10 of mainland China’s media.

"As reported, Chinese media with the Chinese language as the carrier has not yet become a mainstream media in Western countries. However the burgeoning ‘China fever’ has made China a worldwide topic. Work on enhancing the dynamics of current event reporting on China has become a means of survival and expansion for overseas Chinese media.

"’To broadcast a correct ‘concept of China’ and to create an environment favorable for worldwide Chinese to survive and grow has become a consensus among Chinese media throughout the world. Domestic and overseas Chinese media will eventually be united and become a one body effort,’ said Ren Chuangong, host of Mandarin Chinese programs of 2CR Australian Chinese Radio Station in Australia.

"Zhang Yan, head of Canada’s Global Chinese Press who was nominated for a local mainstream news award for two consecutive years and has long dedicated herself to the cooperation with the mainland’s media, said that thanks to China’s rise, overseas Chinese media has gained an unprecedented historical opportunity of growth while entering the 21st century. This opportunity has expedited the birth of powerful overseas Chinese media and has motivated overseas Chinese media to interact and cooperate with inland media in China."

http://news.xinhuanet.com/overseas/2005-09/14/content_3487993.htm

Translated by SCHINASCOPE

Liu Binyan, the fearless Chinese journalist who openly challenged the Chinese communist regime by exposing official corruption, died of colon cancer on December 5, 2005, at Robert Wood Johnson University Hospital in New Brunswick, New Jersey. He was 80.

Liu was just a common man in China, yet he led an uncommon life. Twice he was admitted to the Chinese Communist Party, and twice the Party expelled him. His early and undaunted efforts to make the Communist Party right its wrongs led him to the conclusion that the Chinese Communist Party would soon collapse.

Liu Binyan was born in 1925 in Changchun, Jilin Province. Like many in Changchun, his father was a railroad worker, too poor to send him beyond the ninth grade. At 15, he went to live with his sister in occupied Beijing and studied Marxist theory and foreign languages. Later, he moved to Tianjin and joined an anti-Japanese student group.

In 1943, when China was at war with Japan, Liu became a member of the underground Communist Party on a secret visit to the countryside, where the communists were organizing farmer resistance.

After the 1949 communist victory, Liu worked as an investigative reporter, editor, and Communist Party Secretary at the China Youth Daily, the leading Communist Youth League newspaper.

In the 1950s his writings were mostly critiques of the bureaucracy and corruption of the Chinese communist regime. In 1956 he published two works of thinly disguised fiction—one, At the Bridge Site, exposing corruption at a construction site and the other, Inside Story, showing how censorship worked at a newspaper.

In 1957, the Chinese communist regime started the "Anti-Rightists" campaign to purge outspoken intellectuals who criticized the system. After endless denunciations at the China Youth Daily, Liu was sent to the countryside to be reformed-through-labor in forced labor camps and "reeducation" facilities, along with hundreds of thousands of fellow "rightist" intellectuals. His family, which he did not see for years at a time, was forced to denounce him. He carted sewage from inner cities to farmers, made bricks, and raised pigs in the countryside. At times, labor camp officials tried to coerce him into recanting his controversial work.

After almost 10 years Liu was finally "rehabilitated" in 1966, only to be denounced again within months as Mao Zedong launched the Cultural Revolution against China’s "class enemies." In 1969 Liu, still officially viewed as a "rightist," was sent to a forced labor camp for eight years.

In 1978, after Deng Xiaoping came to power, the once downtrodden "rightists" were rehabilitated and given government jobs. Liu was re-admitted to the Communist Party and assigned a job as a special reporter for the People’s Daily, the mouthpiece of the Communist Party.
{mospagebreak}
Soon he resumed writing articles critical of the communist regime. In 1979 he published his most famous work, Between Men and Monsters. It is the story of a Party secretary in Heilongjiang Province who makes a fortune from bribery. A Second Kind of Loyalty, published in the summer of 1985, praised a former political prisoner who openly challenged a decision by the authorities to shoot a fellow inmate. For a while he was one of the most admired writers on the mainland and was considered to be "China’s conscience."

In late fall 1986, college students in several cities staged demonstrations to demand political reform. In January 1987, the then General Secretary of the Communist Party, Hu Yaobang, was accused of being soft on the student protests and on "bourgeois liberalism" and was forced to resign. Liu was singled out by Deng Xiaoping for "advocating bourgeois liberalism" and expelled again from the Communist Party. Liu was denounced by the People’s Daily, his former newspaper, as "the scum of the nation." Deng’s ensuing campaign against Liu and other reformers paved the way for the tragedy of Tiananmen Square two years later.

In the spring of 1988, Liu was allowed to travel to the United States to teach and write at the University of California at Los Angeles and at Harvard. After the 1989 Tiananmen Square Massacre in Beijing, he lashed out at the Chinese regime on U.S. national television and predicted that the Communist Party would soon collapse.

After that, the Chinese government refused to allow Mr. Liu to return home.

In the United States, Liu continued writing and speaking out about corruption and greed in China. Among other books, he wrote a memoir, A Higher Kind of Loyalty, in 1990.

Liu was a famous writer. From his earlier writings up to his last, he was very popular, particularly among those who grew up in the People’s Republic. Liu’s works touched the hearts of the Chinese and made them think. That was the power of his writing that the Communist Party feared most. Of the 63 years he lived in China, he was allowed to write as a journalist for only about nine years. Yet, in those nine short years, Liu’s writings inspired many Chinese.

Liu had reportedly asked for the following words to be included on any memorial to his life and work: "Here lies a Chinese who said what had to be said and did what had to be done."
Stephen Tian is a correspondent for Chinascope.

Martial Arts. Kung Fu. Wu Shu. The names have varied but the origins lie unchanged, deep in the temple of Shaolin. But, have you ever wondered why a tranquil Buddhist temple would be famous for fierce martial arts? The Shaolin Temple is historically famous for its Shaolin Kung Fu and the popular belief of Zen Buddhism.

Situated in the Songshan Mountain 50 miles southwest of Zhengzhou, at the capital of Henan Province, Shaolin Temple was built in 495 A.D. for one initial reason: to house Batuo. Batuo, an Indian monk, came to China to spread Buddhism. A strong believer in Buddhism, Emperor Xiaowen made orders to build the temple as a sanctuary for Batuo and a few hundred followers to translate the Buddhist works. The temple was built on land that was previously burned, near Shaoshi Mountain. Here, the builders planted new trees. Thus, the name Shaolin comes from Shao, meaning "young," and Lin, meaning "forest."

Batuo had a great interest in martial arts. Conveniently, two of his disciples were already skilled in the art. These two disciples taught the art form to others and soon it spread through Shaolin. The centralized location of the temple attracted other Kung Fu masters who passed by, and served as a refuge for counter militant leaders who were being chased by local armies. As a way of expressing their gratitude for housing, they often passed on battalion tactics and martial art techniques to the Buddhist monks. As Shaolin Temple grew in recognition and prominence, the Buddhist emperors supported the temple by presenting gifts of gold and land. Its growth in wealth has made Shaolin Temple a target for burglars and foreign bandits. During the Tang Dynasty (618-907), 13 Shaolin monks saved Emperor Li Shimin from invaders. From that point on, Shaolin was allowed to have soldier-monks to protect the temple’s assets. By the start of the Qing Dynasty (1644-1911), Shaolin Temple housed over 1,000 soldier-monks.

The significance of the Shaolin Temple lies beyond its extraordinary reputation for the martial arts. Thirty- five years after the completion of the temple, another Indian monk arrived, following Batuo. This monk was the legendary Bodhidharma (Da Mo in Chinese). Bodhidharma introduced a new type of Buddhism to the Chinese people—Chan, or more widely known as Zen. Zen Buddhism was less strict and more adapted to the Chinese way of life. Zen spread quickly and widely throughout China and is the prevailing form of Buddhism today.

It is said that Bodhidharma hiked through Tibet’s Himalayan Mountains, surviving both the treacherous weather and bandit attacks. Upon reaching China, Bodhidharma met with the Emperor Wu Di. A Buddhist himself, the emperor asked the Indian monk what good deeds he had accomplished, but Bodhidharma could not respond with an answer. He was then rejected from Shaolin Temple and sought out a nearby cave in which he meditated for nine years. Over the nine years, the shadow of his image discolored the far wall of the cave (this site is now a tourist attraction: Bodhidharma’s cave). When Shaolin monks discovered Bodhidharma, they believed that he had proven himself worthy and accepted him into the temple. Bodhidharma spread a new style of meditation and physical training, benefiting both the monks and the soldier-monks.
{mospagebreak}
Today, the Shaolin Temple continues to symbolize the birthplace of Chinese Buddhism. The Shaolin Temple, over 1,000 years old, comprises 230 separate ancient towers. Sadly, 28 of the 230 ancient towers are currently in critical condition and on the verge of collapse due to deterioration and instability of the foundation. Shaolin Temple’s abbot, Shi Yongxin, says that they are currently conducting a well-rounded analysis of each ancient tower and will take all necessary steps to preserve the traditional essence of each structure. As long as the magnificent structures of the temples are kept alive, the world will be able to witness these Chinese traditional beauties that have endured the destruction caused by the Chinese Cultural Revolution.

It is tempting to shrug off the ongoing crackdown against prominent lawyer Gao Zhisheng, who boldly supported China’s underprivileged economic classes, as yet another tantrum typically thrown by the Chinese government against its own people stepping outside the lines. It is equally plausible that the killings in Shanwei, a prosperous town abutting Hong Kong, were almost inevitable due to the brewing tensions between the haves and have-nots in China. Larger questions, however, remain, as to the foreboding significance of the two events, especially when they coincided with another familiar announcement of impressive growth in China’s GDP, which put the country on course to pass France to become the world’s fifth largest economy.

In any modern democracy, rule of law and economic freedom forge a symbiotic relationship that sustains its prosperity and growth. Mr. Gao and casualties in Shanwei highlight the glaring absence of such infrastructures in China, notwithstanding its glowing GDP and unusual absorption of foreign capital. If Chinese lawyers had been given a free hand to operate like Mr. Gao, their mediation would ensure tragedies in Shanwei never happen. On the other hand, if the governance in China had improved so much as to rule out a repeat of a Tiananmen-Square-style killing by the military, Mr. Gao and his colleagues would have been free to go about their business—and China would be a better place for investment opportunities.

Wang Jian, a senior economist affiliated with a premier think tank of the Chinese government, found that up to 54 percent of China’s GDP is derived from investment in fixed assets, a percentage that has never been reached by any other country in history before, not even Japan, which, at 46 percent, was the second highest during its go-go years in the 1960s. Mr. Wang forecast a depression in three years, ahead of the Beijing Olympics, triggered by serious overcapacity and overcompetition when the current excessive investments translate into real productive capabilities. Andy Xie, Morgan Stanley’s top China economist, recently argued that China should choose over GDP to use NDP, which stands for Net Domestic Product—calculated by deducting from GDP such social costs as environmental damages and human lives lost due to unsafe production methods—in measuring its economic development. He believes the GDP has misguided local governments to chase unwarranted economic targets, in a manner reminiscent of meeting the quota for rightists or class enemies in past political movements. These targets decide the officials’ promotion and give them the boasting right at Party meetings. Unfortunately, they are also the reason behind the land dispute that led to 20 killings in Shanwei and fatal accidents that occurred to miners represented by Mr. Gao.

Up until now, cheap labor has attracted foreign capital and has been the engine that drives the juggernaut of the Chinese economy. It is, however, dangerously unknown how long this superiority will last. The Chinese population has shown signs of aging due to the success of the family planning policy, and the foreign capital in search of a higher rate of return could go elsewhere, to places such as India, where the social system is more Westernized. In the longer term, sustainable economic development in China will only be possible when transparency and accountability, as has happened in countries with whom China is trying to catch up, are firmly established to govern its economic activities.

Lack of Domestic Demand — A Potential Threat to Economic Growth

Since the beginning of this year, the national economy has stabilized at an average quarterly economic growth rate of 9.5 percent, with a 23 to 24 percent monthly growth rate of fixed asset investment. Export growth is above 30 percent, and the trade surplus has continued to enlarge, with the growth of the residential consumer price index (CPI) down to 2.4 percent. All of these are signs of both high growth and low inflation.

However, there is a huge structural imbalance hidden behind the surface stability, and the situation is getting worse. The imbalance is reflected in the fact that, since 1990, there has been a continuous slide of the ratio of residential final consumption to GDP. In 2004, the ratio was at a record low, even substantially lower than the period from 1960 to 1962, the worst time of the planned economy. A conclusion can be drawn that since the late 1980s, income distribution has undergone a gradual change, resulting in a drop in residential consumption demand. The situation has deteriorated despite the year 2004’s overheating of the economy. A few observations can be offered.

Observation 1: Although the economy overheated in 2004 (the January/February growth rate of fixed asset investment was as high as 53 percent), the monthly produce product index (PPI) growth was never higher than 9 percent, and the monthly CPI growth was never higher than 5 percent. Starting from July 2004, the CPI has been declining month by month, with the CPI growth in January 2005 down to 1.8 percent. The retail price index (RPI) growth rate was down to 0.6 percent, with prices of many consumer goods actually dropping. At present, the positive growth rate has been sustained by the prices of housing, recreation and education, and food. High-income households drove the rise in price of the former two items, while the prices of most consumer goods have been falling. The price of food has been affected by fluctuations in the supply and demand of agriculture products.

Observation 2: High savings ratio. At the end of 2004, the residential savings deposited in financial institutions amounted to 120 trillion yuan (US$15 trillion), the equivalent of one year’s GDP. This was double the number at the end of 1999. However the nominal GDP only grew 66.8 percent from 1999 to 2004, while residential savings doubled. There is over saving in comparison with GDP. With the rapid rise of deposits, the ratio of total loans of financial institutions to total deposits was 74 percent in 2004, lower than the 86 percent in 1999, a troubling phenomenon indicating that the utilization of capital was less efficient. At present, the growth in savings deposits is gaining momentum. By the end of May 2005, the total amount of residential saving deposits in all financial institutions was over 130 trillion yuan (US$16.2 trillion), and it will certainly surpass 140 trillion by the end of the year.
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Observation 3: A lack of domestic demand puts pressure on exports. Since 2004, the monthly growth rate of total exports has never been lower than 33 percent. By contrast, from January to May 2005, the import growth rate dropped to 13.7 percent. The trade surplus for the first five months of 2005 was as high as US$30 billion, equaling the annual total for all of 2004. At the end of the first quarter, the foreign reserves amounted to a record high of US$659 billion, about US$50 billion more than the 2004 year-end figure. In the second quarter, that number was still climbing. The rapid growth of foreign reserves is posing a serious challenge to the effective use of resources.

Exports have been one of the pillars of economic growth. However, unrestricted export growth will lead to friction between China and other developed and developing countries, and intensified international pressure for appreciation of the Chinese currency RMB. Finally, exports have to slow down in the face of restrictions from the world market, and they have.

Observation 4: Because of the lack of consumer demand, economic growth is more and more dependent on investment. From January of 2000 to May of 2005, the annual growth rate of fixed asset investment (in constant price) is 9.1, 12.5, 16.7, 25, 19.1, and 24.2 percent, respectively. The expanded capacity induced by rapid investment has been assimilated by the low consumer demand. The conflict between drastic expansion of production capacity and slow growth of personal consumption will lead to periodic depression.

Currently, the key elements of high investment are real estate development, public debts and local metropolitan construction projects, and energy and raw material industrial investment. The above are important driving forces for economic growth in the long run. However, without a corresponding growth in personal consumption, those investment projects are not sustainable.

Reasons for the Drop in Personal Consumption

Major reasons for the drop in personal consumption are as follows:

Ever since the late 1980s, with structural change in income distribution, the gap between the incomes of urban and rural residents has been widening. In 1984 the Gini coefficient for residential income was 25.7. That figure climbed to 35.5 in 1990, and was up to 44.7 in 2001. In the 2005 World Development Report published by the World Bank, ranked by the Gini coefficient from lowest to highest, China is 85th out of the 120 countries and regions so ranked. That is, China’s inequality is the 35th lowest (32 of the lowest are Latin American and African countries) of the socially polarized countries.
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With such a large income inequality, the consumption level of middle and lower income families is restricted. High-income families have already reached a high level of consumption and are less likely to put more of their income into consumption. The Chinese people have a tradition of high savings. Savings will only increase as the income gap widens.

The high risks during the economic transition have also put a brake on personal consumption. For many years, the rapid increase in the cost of health care, education, and housing expenditures has far surpassed the affordability of many rural and urban residents. Urban employees who face an immediate threat of unemployment, and farmers who have lost their normal income source when they lost their land have no choice but to save more and consume less.

The urban system of lowest living standard security and unemployment insurance, to some extent, has alleviated the burdens of the people mentioned above. However, the other parts of the social security system may not help as they should. Investigations have revealed that the portion of health expenditures that are covered by health insurance for middle and high-income families is higher than for low-income families, who still need to pay for the majority of their own health care costs. The pension system should cover poor and low-income families. However, the current social security system is not hedging against income uncertainty for low-income families, and even widens the gap to a certain extent. Most rural families are not even covered by the social security system.

Unemployment or under employment is still a major reason for the depressed personal consumption of low-income families. Historically, most nonagricultural job opportunities are provided by small enterprises. Because of the poor economic environment, they are creating fewer and fewer jobs. Firstly, the current system of "big banks" is not geared to enable small enterprises to obtain loans; secondly, the policy implementation is usually in favor of middle-size enterprises instead of the small ones; thirdly, the unhealthy legal and institutional environment, causes small enterprises to be faced with trivial, unnecessary, and nontransparent administration; finally, there are few services to provide management, technology, and legal and financial training for small enterprises. The current statistical system does not cover the enterprises that are under a certain size. Thus the government finds no reason to care about the development of small enterprises.

The ongoing gradual consumption drop is leading to an internal balance of the economy, which will not only lead to serious economic slides, but will threaten the sustainability of economic growth. It’s vital to correct the income inequality and increase the percentage of personal consumption in GDP.
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Possible strategies can include the following:

• Further reform the taxation system and strengthen the taxation on the high income class

• Advance governmental reform so as to establish a systematic, standardized, and transparent administration

• Improve the operation environment of small enterprises so as to facilitate job creation

• Strengthen the social security system and provide a basic guarantee for low income people

• Introduce a competition mechanism into important sectors such as health care, education and housing, and strengthen the supervision of the public service sector to protect the public’s interests

Wang Xiaolu is the Vice Director of National Economic Research Institute, China Reform Foundation.

Translation by CHINASCOPE from Internal Reference for Reform, Issue 22 , 2005