China This Week: China-Japan Economic Dialogue; Move on North Korea Talks; Partnership with South Africa and Vietnam

Third China-Japan Economic Dialogue: Chinese Vice Premier Wang Qishan said Saturday that bilateral trade between China and Japan has recovered and exceeded the level before the global financial crisis.

Wang made the remarks at the opening of the third China-Japan high-level economic dialogue, which he chaired with Japanese Foreign Minister Okada Katsuya.

The two countries had maintained sound cooperation in energy-saving, environment protection, food safety, product quality and the construction of China-Japan-ROK Free Trade Area, Wang said.

China, South Africa “Strategic Partnership”: President Hu Jintao and his South African counterpart Jacob Zuma on Tuesday raised bilateral ties to a "comprehensive strategic partnership", opening more avenues to expand trade and strengthen relations between Beijing and the largest African economy.

In the Beijing Declaration, the two sides based a comprehensive strategic partnership  on equality, mutual benefit, and common development. They agreed to provide mutual technical support in the areas of the green economy, skills development, and industrial financing.

Chinese, S Korean Nuclear Envoys Meet: China's special representative for Korean Peninsula affairs Wu Dawei on Thursday met with South Korea's top nuclear envoy Wi Sung-lac for talks on restarting the long- stalled six-party discussions on denuclearisation of the Korean Peninsula.

Wu visited North Korea from 16 to 18 August, meeting Foreign Minister Pak Ui Chun and Vice Foreign Ministers Kim Kye-gwan and Kim Song Gi.

Beijing hosts the multilateral talks that include both Koreas, the US, Japan, and Russia. Pyongyang unilaterally pulled out of the discussions in April 2009.

China Aid to Flood-hit Pakistan: More relief supplies, worth 20 million yuan ($2.94 million), have been sent from China to flood-hit Pakistan, the Ministry of Commerce said in a statement Wednesday.

China was one of the first countries to respond delivering 10 million yuan on 4  August. Beijing indicated it will offer an additional 60 million yuan of supplies to Pakistan, Ministry of Commerce official Chong Quan announced while meeting with Masood Khan, Pakistani ambassador to China.

Chinese Defense Minister meets Greek Air Force Chief: Chinese Defense Minister Liang Guanglie on Monday met with Vasileios Klokozas, chief of the General Staff of the Greek Air Force, as the two sides pledged to boost military exchange and cooperation.

Vietnam, China Vow to Enhance Trade: Vietnamese Minister of Industry and Trade Vu Huy Hoang and Chinese Minister of Commerce Chen Deming and China declared Monday that the two countries would enhance trade and investment cooperation

Hoang asked China to encourage more imports and to create favorable conditions for Vietnamese companies. He also encouraged big Chinese firms to invest in Vietnam. Chen offered agreement and said Beijing will help Vietnam in training officials,

Trade between Vietnam and China was more than $20 billion in 2009 and has exceeded $13 billion in the first seven months this year.

Vietnam welcomes China's Military Development: Vice Defense Minister Nguyen Chi Vinh said Wednesday Vietnam welcomes China's military development. The Chinese military can contribute to disaster relief efforts in the region, he said.

Vinh is in Beijing for consultations with Chinese defense ministry officials ahead of the first ASEAN Defense Ministers' Meeting Plus to be held in the Vietnamese capital Hanoi  in October.

China, Japan Support Climate Talks: China and Japan are willing to push forward international climate change talks, said Zhang Ping, minister of the National Development and Reform Commission, on the sidelines of the third China-Japan high-level economic dialogue.

He said China and Japan regard energy-saving and environmental protection as important areas, linked to the growth of economic cooperation between both countries.

The two countries agreed to hold the fifth China-Japan forum on energy-saving and environmental protection in late October in Tokyo to promote green economy and cooperation on low-carbon technologies.

Enquiry into Deadly Plane Crash: Chinese Vice Premier Zhang Dejiang has ordered a thorough probe into Tuesday night's plane crash in Northeast China's Heilongjiang province.

At least 42 people died while 54 others survived when the Brazilian-made Embraer E-190 jet crashed as it approached Lindu Airport in Yichun city.

Amendments to Hong Kong's Basic Law: China's top legislature on Saturday approved an amendment to the Basic Law of the Hong Kong Special Administrative Region regarding the method of selecting Hong Kong's Chief Executive.

Hong Kong, Philippines to Exchange Hostage Probe Info: Hong Kong Police will investigate the deaths of Hong Kong tourists slain in Monday's hostage tragedy in Manila and will exchange information with the Philippine authorities through Interpol when necessary, Under Secretary for Security Lai Tung-kwok said Saturday.

Hong Kong has sent two Police officers to Manila to assist in the investigation, and Lai said more officers will be sent if necessary.

Deaths Up in Industrial Accidents: The death toll from major industrial accidents jumped 50 percent in the first seven months of this year, the State Administration of Work Safety said on Friday.

From January to July, 53 major incidents in the country killed 904 people. In a hot and rain-plagued August, there have been 13 major incidents and 210 people killed or missing.

The accidents included the deadly explosion in a firecracker factory and this week's plane crash that ended Chinese civil aviation's 2,000-plus days of flight safety. Both incidents occurred in Yichun City in northeast China's Heilongjiang province.

China's Crackdown on Illegal Labour Export: Chinese authorities are intensifying their crackdown on the illegal outsourcing of labour in a bid to protect the legal rights of overseas workers.

The Ministry of Commerce and the Ministry of Foreign Affairs issued an emergency circular prohibiting illegal labuor agencies from dispatching labourers abroad.

The circular also bans the subcontracting of overseas labour service by domestic contract engineering firms.

China has been exporting labourers as fishermen, construction workers, or farmhands. More than 340,000 Chinese people worked abroad in 2009, according to statistics from the Ministry of Commerce.

China to Spend Millions on Disaster Prevention: China plans to spend 2.23 billion yuan ($328 million) to improve disaster prevention systems in a mountainous northwest China town devastated by a landslide earlier this month.

The plan is scheduled to be carried out in three phases from 2010 to 2012..

China Green Belt to stop Deserts merging: China has started an ambitious project to plant a green belt between the country's third and fourth largest deserts to stop them converging, said Wang Xiaodong, a forestry official in northern Inner Mongolia autonomous region.

"It is the first time in China that a green belt is being planted between two deserts. The project is expected to take five years to plant a 202-km (125 miles) long and 5 to 15-km wide stripe of vegetation between Badain Jaran Desert and Tengger Desert," said Wang.

China Economy Weekly: Rail Projects, Inflation, International Trade Links

China Clears Inter-city Rail Projects: The National Development and Reform Commission on Friday approved inter-city rail transit networks covering more than 2,000 kilometres to accelerate regional integration.‬

The network runs across central China, mainly in Henan province, and is expected to link nine cities with its 496 kilometres.‬ It also includes alterations to railways across the Pearl River Delta region, with a length of 1,478 kilometres, and to metro lines in Xi'an, the capital city of northwest China's Shaanxi province.

China This Week: Deadly Mudslides, Pollution Crackdown, Nuclear Weapons Promise

China, Switzerland to Ztart Free Trade Talks: China and Switzerland agreed on Friday to start discussions on a free trade agreement, as the two states celebrate their 60th anniversary of diplomatic ties.‬

‬ Chinese President Hu Jintao and his Swiss counterpart, Doris Leuthard, witnessed the signing of the memorandum of understanding. Switzerland has become China's major trade partner in Europe, and Leuthard said the two states should boost cooperation in finance, education, culture, environmental protection, tourism, and international affairs.

China's July Inflation: China's consumer price index (CPI), one of the main gauges of inflation, rose in July to its highest level since October 2008, boosted by rising food prices after widespread floods.

The CPI was up 3.3% in July from a year earlier, 0.4% higher than the rise in June. It has now exceeded the 3-percent full-year target ceiling the government set in March. However, economists said the acceleration in CPI growth was a temporary result of the floods.

The Producer Price Index, a major measure of inflation at the wholesale level, grew 4.8% year on year in July, 1.6% lower than June and 2.3% lower than May.

China's Consumer Confidence Edges Up : China's Consumer Confidence Index stood at 109 in the second quarter, up one point from the first quarter.The reading in the second quarter was the fifth consecutive quarterly rise.

China calls for more investment with ASEAN: Bilateral investment between China and the Association of Southeast Asian Nations (ASEAN) is low compared with trade, Yi Xiaozhun, vice minister of China's Ministry of Commerce, said Friday.

In 2009, bilateral investment between China and ASEAN nations totaled $10 billion, a sharp contrast with the $213 billion of bilateral trade, said Yi, attributing the low investment to the fragmented infrastructure within the China-ASEAN region.

Sri Lanka Co-operation China: Visiting Sri Lankan Foreign Minister G.L. Peiris, on his first official visit to China since taking office in April, pledged Thursday to boost economic and trade cooperation with China.

Sri Lanka appreciates China's support in constructing education and medical facilities, he said.

Sri Lanka's civil war ended in May 2009 after the the rebel Liberation Tigers of Tamil Eelam was defeated by government troops.

Zimbabwe Seeks Economic Links in East China: Zimbabwe hopes to further its economic and trade co-operation with east China's Anhui Province, said visiting Zimbabwean President Robert Mugabe on Thursday.

Zhang Baoshun, secretary of the Anhui Provincial Committee of the Communist Party of China, said that Anhui and Zimbabwe, which were economically complementary, had reached consensus on co-operation in agriculture, mining and infrastructure.

China Investment in Chile: China attaches great importance to economic cooperation with Chile and is committed to boosting mutual investment between the two countries, Lu Fan, the Chinese ambassador to Chile has said.

In the first half of this year, bilateral trade reached $10.9 billion, an increase of 58.9 percent compared with the same period of 2009, and Chilean exports amounted to $7.65 billion.

The Supplementary Agreement on Trade in Services of the Free Trade Agreement between China and Chile took effect on 1 August, and negotiations are underway on a supplementary agreement on investment.

Brazil Agricultural trade with China: Brazil wants to boost trade with China in agricultural products, and will export more pork to and import more fish from China in the next few years, Brazilian Agriculture Minister Wagner Rossi said Thursday.

Automobiles, Home Appliance Subsidies Spur Chinese Spending: Chinese government subsidies for purchases of automobiles and home appliances have boosted consumer spending and bolstered the national economy, the Ministry of Commerce said Thursday.

China rolled out the subsidy policies for rural consumers last year. In the first seven months of 2010, the government paid out 9.57 billion yuan ($1.41 billion), lifting sales in rural regions to 83.82 billion yuan (about $12.5 billion), up 240% from a year ago.

China State Enterprises Grow: The assets in China's centrally-administered state-owned enterprises (SOE) reached 2.01 trillion yuan ($297.40 billion) by the end of June, up 10.71% from 2008, China's state-owned assets regulator said on Thursday.

Nearly a quarter of the SOEs have state-owned assets over 10 billion yuan each, while six have state-owned assets over 100 billion yuan.

Housing Market Regulation to Continue: Chinese Vice Premier Li Keqiang said Friday that the government would continue to regulate the housing market and resolutely crack down on speculative property investment.

He said the government would continue to increase the supply of affordable housing for low-income families to consolidate the effects of the regulation over the past months.

Housing prices in major Chinese cities rose 10.3% year-on-year in July, slower than the 11.4% growth in June.

China Special: Beijing's Diplomatic Offensive for Economic Growth

In the past few months, Chinese leaders have been paying more official visits around the world (see list at end of article). Besides the sightseeing, "maintaining stable economic growth and promoting development are the main goals of China's diplomacy in 2010”.

China has historically tried to strengthen bilateral and multilateral relationships with other countries and organizations through economic cooperation and development rather than military alliances such as NATO. As Yang Jiechi, the Chinese Foreign Minister, asserts,“China's development has been made possible by our dedicated efforts on the economic and social fronts, not by armed expansion abroad."

Examples?

*At the APEC (Asia-Pacific Economic Cooperation) Summit in 2009, Chinese President Hu Jintao called for greater efforts to promote trade and investment liberalisation and to oppose protectionism in dealing with the economic crisis/

*On 1 January 2010, the China-ASEAN (Association of Southeast Asian Nations) Free Trade Area, the world's largest FTA embracing developing countries, was created, with the average tariff on goods from ASEAN countries to China cut to 0.1%, and the six original ASEAN members slashing the average tariff on Chinese goods from 12.8% to 0.6%.

*On May 2010, China and the United States held the second round of the Strategic and Economic Dialogues in Beijing, discussing key issues including trade, investment, global economy recovery, and climate change.

*In July 2010, German Chancellor Angela Merkel paid an official visit to China. The two countries pledged to strengthen dialogue and cooperation in a wide range of areas including politics, economy,and culture.

*China, Japan, and South Korea are researching the establishment of a free trade area among the three nations. This research will be completed before 2010.

While many countries have yet to escape the aftereffects of the global economic downturn, China achieved the fastest growth worldwide in 2009, becoming the second-largest importing country and the largest exporter. At the same time, China still faces many challenges and difficulties. For example, China's per capita GDP is still lower than that of at least 100 countries. With the shrinking of overseas markets, China’s exports are suffering a sharp decrease. China is “at the lower end of the global industrial chain and lacks competitiveness in scientific research and development and high-end manufacturing”. Inside the country, the wealth gap between rich and poor, and the unevenness of development between east and west is increasing.

The international financial and economic crisis has been the catalyst for China to accelerate its economic restructuring and transformation of growth patterns. In June, Chongqing, the biggest municipality of China, won government approval to set up a special economic zone --- Liangjiang New Area --- the nation's third of its kind after Shanghai Pudong and Tianjin Binhai. Liangjiang New Area is set to become a modern manufacturing base and the premier financial center in western China, driven by pillar industries including IT, automobile, and equipment and machinery manufacturing.

In July, the Chinese central government unveiled an ambitious plan to boost growth and development in its western region --- more than 70 percent of the Chinese mainland's area and habitat of 75 percent of the country's ethnic minority population, involving six provinces, five autonomous regions, and the Chongqing municipality.

On the one hand, China endeavours to promote economic and trade cooperations, introducing more foreign investments and importing more energy resources and high technology. According to a report of the United Nations Conference on Trade and Development, China became the second-largest recipient of foreign investment in 2009, attracting $95 billion of foreign capital.

On the other hand, China seeks to expand exports and overseas investment. Statistics from the Ministry of Commerce show that China's outbound direct investment surged by 24 percent to $55.18 billion during the first six months of 2010, mainly in the sectors of mining, commercial services, manufacturing, wholesale, and retail.

This is the context for China's diplomacy “maintaining stable economic growth and promoting development”. Expanding economic influence support China's effort to amplify its voice on global affairs, defending its interests and strengthening the country's image as a responsible international power. Economic diplomacy is linked in particular to peace and development in the Asia-Pacific Region.

The Major Official Visits of Chinese Leaders in 2010

Jan 5-14: Foreign Minister Yang Jiechi visited Kenya, Nigeria, Sierra Leone, Algeria, Morocco, Saudi Arabia and Maldives;

Mar 17-28: Vice Premier Hui Liangyu visited Cambodia, Laos, Palestine, Israel and India;

Mar 20-30: Vice President Xi Jinping visited Russia, Belarus, Finland and Sweden;

Mar 21-Apr 1: Jia Qinglin, chairman of the National Committee of the Chinese People's Political Consultative Conference, visited Cameroon, Namibia and South Africa;

Apr 12-17: President Hu Jintao attended the Nuclear Security Summit in Washington and the Second BRIC (Brazil, Russia, India and China) Summit in Brasilia, and visited Brazil.

(From April 17-18, President Hu should have visited Venezuela and Chile, but the trip was deferred because of the earthquake in Qinghai Province. On April 22-25, Premier Wen Jiabao was scheduled to visit Brunei, Indonesia and Myanmar, but it was postponed because of the earthquake.)

May 8-9: President Hu Jintao attended the ceremony marking the 65th anniversary of Victory in the Great Patriotic War of 1941-1945 in Moscow, Russia;

May 28-Jun 3, Premier Wen Jiabao paid a formal visit to South Korea, Japan, Mongolia, and Myanmar and attended the third China-Japan-South Korea Summit in Jeju Island, South Korea;

Jun 5-19: He Guoqiang, a member of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee and head of the Central Commission for Discipline Inspection of the CPC, visited Italy, Iceland, Norway, Lithuania and Turkmenistan;

Jun 8: State Councilor Dai Bingguo took part in the third summit of the Conference on Interaction and Confidence-building Measures in Asia, which was held in Istanbul, Turkey;

Jun 9-11: President Hu Jintao visited Uzbekistan and attended the 10th Meeting of the Council of Heads of States of Shanghai Cooperation Organization was held in Tashkent, Uzbekistan;

Jun 9-21: Vice Premier Zhang Dejiang visited Pakistan, Sri Lanka, Greece and Austria;

Jun 14-24: Vice President Xi Jinping visited Bangladesh, Laos, New Zealand and Australia;

Jun 23-27: President Hu Jintao visited Canada and took part in the fourth summit of Group of Twenty (G20) in Toronto;

Jul7-2:, Wu Bangguo, chairman of the Standing Committee of China's National People's Congress, visited France, Serbia and Switzerland and also attended the third World Conference of Speakers of Parliament in Geneva, Switzerland;

Jul 20-27: State Councilor Dai Bingguo visited Ethiopia, Algeria, Equatorial Guinea, the Democratic Republic of Congo, and Zambia;

Jul 25-Aug 4: Foreign Minister Yang Jiechi visits Austria, Mexico, Cuba and Costa Rica.