Drudge report on Chinese bombing...

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Top China Paper - "...'mistaken bombing' or 'accident' can never be accepted. "

www.drudgereport.com 5-11-99

BEIJING (XINHUA) - China's leading newspaper, the People's Daily, has accused the U.S.-led NATO strikes against the Chinese Embassy in Belgrade as brutal infringement upon China's sovereignty and national dignity, and a serious threat to world peace and security.

In a commentary entitled "Serious Threat to World Peace" to be published Wednesday, the paper pointed out that U.S.- led NATO strikes against the Chinese Embassy have shocked the whole world and ignited wide-spread condemnation and indignation among the world people.

Quoting Chinese President Jiang Zemin as saying, "The U.S.-led NATO must bear full responsibility for the atrocity, or the Chinese people will not leave the matter at that," the paper pointed out that any prevarication such accident" can never be accepted.

Development and peace have become the irresistible trend of the world since the end of the cold war. As a cold-war-time military organization, NATO, manipulated by the U.S., did not disband with the end of the cold war, but kept growing larger to the contrary of the expectation of the world people, said the paper.

According to its so-called "new strategic concept" made public late April, NATO has developed from a defensive organization to an offensive military and political one, which can extend its military actions to areas beyond the north Atlantic and wage war against any country without authorization from the United Nations.

Obviously, this is a new strategic concept of hegemonism inflated, and NATO's military attack against Yugoslavia the United Nations is a practice of this concept, said the paper.

The paper added the U.S.-led NATO military strike against Yugoslavia is a downright gunboat policy. In history, the Western powers ran wild by relying on advanced cannons and boats. Today, the U.S.-led NATO uses high-tech weapons to wantonly bomb a smallnation and even wantonly raided the embassy of a permanent member of the U.N. Security Council in flagrant defiance of the U.N. Charter and basic principles governing international relations.

Such new gunboat policy is more fierce and more dangerous, and poses greater threat to world peace, the paper warned, calling on all the peace-loving people in the world and responsible politicians of various countries to be highly vigilant against this dangerous tendency of U.S.-led NATO.

The paper stressed that major powers bear unshirkable responsibilities for safeguarding world peace and security. In their telephone conversation on May 10, President Jiang Zemin and Russian President Boris Yeltsin agreed that, as Security Council permanent members and countries with vital influence in the world, China and Russia bear strong responsibilities for maintaining justice and defending peace. They noted that China and Russia have cooperated well on the Kosovo and other important international issues and will continue to keep in close contact to make their efforts for the maintaining of world peace and security.

The paper finally urged all the peace-loving countries to work together to immediately halt the extremely barbaric military actions against Yugoslavia by the U.S.-led NATO in defense of world peace.

-- Andy (2000EOD@prodigy.net), May 12, 1999


Just caught this on the ap wire

China: NATO bombs, U.S. missile defense system threaten arms

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UNITED NATIONS (AP) - Amid anger over the U.S. bombing of the Chinese Embassy, China renewed its attack on U.S. plans for a nuclear missile defense system, saying they threatened the nuclear test ban treaty and could spark a renewed arms race. The warning, delivered in Geneva and New York by senior Chinese diplomats, was apparently triggered by the bombing of the Chinese Embassy in Yugoslavia and came a day after Beijing suspended diplomatic contacts with Washington on arms control and weapons proliferation.

Following Friday's embassy bombing, China's delegation walked out of a meeting with the other nuclear powers in New York - including the United States, Britain and France, all NATO members, diplomats said.

The meeting on Saturday had been scheduled to discuss joint initiatives for a meeting that started here on Monday to prepare for next year's review of the Nuclear Non-Proliferation Treaty.

At the world's disarmament forum in Geneva, China's Ambassador Li Changhe and Russia's Ambassador Vasily S. Sidorov Tuesday condemned the NATO airstrikes and denounced plans by ``a certain country'' to develop new missile defenses and revise the 1972 U.S.-Soviet Anti- Ballistic Missile treaty.

It was a clear reference to the United States, where members of the House and Senate passed separate bills in March setting as a priority the deployment of a national missile defense as soon as possible.

Li, head of China's delegation to the 61-nation Conference on Disarmament, said the U.S. plans would ``trigger a new round of the arms race.''

In New York, his deputy, Wang Xiaoyu, told a briefing on the Comprehensive Nuclear Test Ban Treaty that the NATO bombing and the U.S. missile defense system have made the treaty's quick entry into force ``impossible.''

Not only do the bombing and proposed missile system represent ``a basic threat,'' but they are pushing agreements on arms control and disarmament ``to the brink of collapse,'' he said.

Copyright 1999 Associated Press

-- R. Wright (blaklodg@aol.com), May 12, 1999.


Yeltsin fires Primokov. He's up on impeachment charges. He just may dissolve their parliment. Their about to go full blown comunists again.

Holding my breath and just watchin....

-- R. Wright (blaklodg@aol.com), May 12, 1999.

As was stated in earlier threads on Russia: they need to demonize America (not hard right now) if they plan to nuke us. Now China seems to be going to extremes to do the same thing even if you're only modeately paranoid, it don't look good. Although as someone stated also earlier, bombing a countries embassy is AN ACT OF WAR.

Either way --- the problem of what to do with or great "surplus" has been solved.

-- Jon Johnson (narnia4@usa.net), May 12, 1999.

Now the other (Chinese) shoe is dropping, for those who wonder if we were suckered into bombing the Chinese embassy -- Drudge is now reporting that the Chinese want serious and major American policy changes as payback for the bombing -- including dropping all charges against the Los Alamos spy. I expect they'll also want certain assurances regarding Taiwan.

-- Cash (cash@andcarry.com), May 12, 1999.

And, by the way, China has a few other problems--- even before Y2K and their pirated software (this is from New republic:

Busted China by James Harding

The story of China's economic miracle has become a media and political cliche. While the rest of Asia remains mired in regional recession, the Chinese last year boasted an audacious growth rate of nearly eight percent; and, while other Asian governments have allowed their currencies to plummet, China's leaders have steadfastly stood by theirs. This pleases economists, and it particularly pleases the Clinton administration, which touts a vast, booming China market as at least one reason for its policy of "engagement."

But what if this success story isn't exactly true? China's external sector (exports and foreign direct investment), which in 1997 was the main engine of economic expansion, has moved sharply into reverse. Export growth was flat in 1998 and fell by nearly eight percent in the first three months of this year. Foreign investment shrank by almost 15 percent. This year, for the first time in more than a decade, both overseas sales and inward investment look set to drop.

Here, on the ground, the picture is less heartening still. In central Shanxi province, the heart of China's coal-mining country, big state coal mines have not been paid by the bankrupt state enterprises they supply; in some cases, the coal mines cannot pay their workers' salaries and pensions.

In Taiyuan, the provincial capital, people laugh at the official estimate of 3.5 percent unemployment--and speculate that the actual rate is closer to 30 or even 40 percent. Protests outside provincial government buildings are a regular occurrence, as is violent crime-- from highway robbery and armed burglary to kidnapping and murder. As one Taiyuan man told me, "Decent people don't go out after eleven p.m."

In the coastal city of Ningbo, exports have been falling by more than one percent a month since early last year. The local planning commission says a number of big foreign investments, such as the proposed construction of a South Korean-bankrolled shipyard, have been suspended. A bribery and fraud scandal swept away the top tier of the city's government. The city's flagship infrastructure project, a 1.5-mile long, $52 million bridge, has a crack in the middle, thanks to a design flaw, shoddy construction, and, allegedly, misappropriation of funds. Now, the government will have to dismantle the bridge and rebuild it.

Indeed, things have gotten so bad that even the Panglossian Chinese leadership has shown some candor. Premier Zhu Rongji recently made the most bleak state-of-the-nation address to the country's so-called parliament in years: "Demand in the market is feeble ... there is overcapacity in most industries ... financial discipline is lax ... economic order is somewhat in disarray ... the pressure of providing employment for people is fairly great ... and public order in some areas is not good"--not exactly what you hear from China's boosters in the West.

Unfortunately for the Chinese citizenry, the government does not seem to have the tools to fix the problem--or is unwilling to use them. Although the government is loosening consumer credit to revive flagging demand, Beijing has only limited funds. Last year, China's government spending program, in effect, enabled Beijing to buy a few extra percentage points in growth. It cannot keep doing that for long. Meanwhile, Beijing is pressing ahead with state-enterprise reform, which may be in the nation's long-term interests but will, at least in the short term, mean more layoffs, more insecurity, and less consumer confidence.

There is, of course, one other avenue for reviving growth: devaluing the currency. In 1997, Chinese exports grew by around 20 percent, buoying confidence, easing the pain of state-enterprise reform, and inducing foreign direct investment. Last year, by contrast, overseas sales increased by just 0.3 percent, thanks in no small part to high currency values, which keep Chinese exports expensive. Confidence in the non-state sector has shrunk accordingly: investment by private and collective enterprises, which together accounted for 56 percent of industrial output in 1997, has collapsed. Falling consumer demand and industrial overcapacity, in turn, have driven down retail prices by roughly three percent.

Within the domestic market, a strong Chinese currency has also taken its toll on national enterprises. Some large shipyards in China have not won a single export order since the beginning of last year; even Chinese ship buyers are placing orders with cheaper ship makers from Japan or South Korea. South Korean steel producers off-loading cheaper steel into China have pushed down domestic prices by roughly 15 percent in some product areas, depressing earnings at China's largest steel mills.

Devaluation, of course, would not resolve everything. But it would remedy the pain felt at some of the most acute pressure points of the Chinese economy. Exporters would profit from a small boost in competitiveness; higher import costs would drive off some of the overseas competition and offer a dose of imported inflation to counter the deflationary trend. At least some foreign companies already expect devaluation; if the Chinese government finally takes the currency down, it would end the uncertainty and pave the way for a renewal of investment funds. Chinese individuals holding off on purchases in an uncertain economic environment and spiriting funds out of the country might return to more normal economic behavior.

Even a modest devaluation might do the trick, and, for that matter, it doesn't have to be called a "devaluation." The central bank could simply broaden the bands within which the currency is traded to allow for, say, a ten percent movement either up or down. This would allow the currency to depreciate but also, in time, appreciate. It would be in keeping with the central bank's commitment to currency stability, while moving gradually toward a fully convertible currency. And, given the problems pegged currencies have caused, Beijing could argue, quite rightly, that a stable exchange rate is not, ultimately, a fixed one.

Still, the Chinese government can find reasons aplenty not to adjust the exchange rate. A currency devaluation of more than ten percent could spur other emerging market economies to follow suit. While Asia is in better shape to handle a Chinese devaluation than it was a year ago--given the choice, Asian economies in the early stages of recovery might rather see strong, quality growth from China than an externally fixed exchange rate--there are still fears that a Chinese devaluation could spark another round of Asian and Latin American currency turmoil. That would cause fresh, possibly deeper pain and, perhaps, puncture U.S. confidence, too. Beijing would also have to consider the potential impact on the economy of Hong Kong. It's not written in stone that the territory's currency must depreciate if China devalues, but the downward pressure might well become irresistible.

Indeed, the bottom line is political. Not only would devaluation make life difficult for the United States and other pro-China governments abroad. For some in the upper echelons of China's government, devaluation would also be a kind of defeat--just as China marks the fiftieth anniversary of Communist rule. But, then, so is an economy running out of steam.

James Harding is the Shanghai correspondent of the Financial Times.

-- Jon Johnson (narnia4@usa.net), May 12, 1999.

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