Guanxi for Sale

A manager of a state-owned enterprise in Guizhou province named Lu Guiming was caught together with prostitutes in a surprise police raid. To avoid prosecution, he called upon his guanxi wang or "network of connections." The police chiefs Deng and Liu from his hometown went to the police station where Lu Guiming was arrested, and used their relations with the police chiefs Sun and Wang in that station to obtain the release of Lu. As soon as Sun and Wang spoke with Deng and Liu, because of their relations, the decision was made to release Lu Guiming. However, in exchange for his speedy release, Lu Guiming was required to donate rmb20,000 as a charity gift to the police station where he was incarcerated. The excuse was that the police station needed some physical repairs.

The following day, Lu Guiming paid an additional rmb20,000, giving rmb10,000 each to police chiefs Sun and Wang, explaining, "This is in honor of our new relationship." As for his two "old friends" Deng and Liu, Lu Guiming gave them rmb5,000 each for their "help" in introducing him to "new friends."
Beijing Daily
www.chinawatcher.net

Fixing to Die

In the Zhejiang province town of Jiaowu there are many marvelous stone tombs being built resembling great statues and towering monuments. Have the Ming emperors made a comeback? Not quite. The local Party Secretary Comrade Wang has become a trend-setter in his own right. Comrade Wang was very interested in preserving his legacy for posterity. So the party secretary began to construct a massive mausoleum for himself. This marvelous construction project was more than 140 square meters in diameter and more than six meters high. The two-storey edifice was "made of the finest stone" featuring "carvings of dragons, phoenixes and swans." The entrance to the tomb also had "carved statutes of lions and elephants."

Following Party Secretary Comrade Wang's model mausoleum, many other nouveau-riche cadres have joined in this new trend, building horrific-looking monuments and tombs for themselves. Upon hearing about this trend journalists went to interview Comrade Wang and investigate. During the interview Comrade Wang was very defensive, arguing "All of this construction is legal. I have all the planning approvals to build this tomb. Moreover, I even bought the land-use rights for rmb125."

Qianjiang Evening News
www.chinawatcher.net

Stolen Secrets

U.S. intelligence experts admit they have obtained Chinese high tech secrets through international exchanges, the China Market Economy Times reports. A former CIA Director says "We got a lot more from visiting Chinese scientists than they got from us." At the beginning of the 1980s, the U.S. knew almost nothing about Chinese nuclear weapons and guided missile development. Yet after several hundred exchanges between Chinese and American scientists, the U.S. was able to make up for its ignorance in this area. This included detailed information about the Dongfeng 31 guided missile. The Dongfeng 31 was the first Chinese solid fuel missile. The missile was mounted on a truck and is capable of hitting targets 5000 km away in Hawaii and Alaska.

In 1996, after a failed Long March rocket launch, Chinese scientists gave a report on the accident to the Loral Space and Communications Co. Today that company is being investigated for suspicion of helping China improve its rocket technology and giving sensitive material to the Chinese. In analyzing the report the CIA and Pentagon stated that the accident report revealed important information about the Long March rocket, and how the rocket launch was monitored and controlled. The report also provided valuable telemetry information related to the Long March launch.

Sina.Com Secures US$60 Million

Chinese Internet portal Sina.com says it has secured USD60 million in funding from Dell Computer Corporation, Pacific Century CyberWorks and other investors. Strategic investors in Sina.com's Series C or third round financing also include Creative Technology Ltd. and various venture funds affiliated with Softbank Corp., Sumitomo, Trend Micro Inc. and United Overseas Bank Ltd. of Singapore.

Separately, Sina said Softbank's chief financial officer, Yoshitaka Kitao, has joined the Chinese portal company's board of directors. Sina.com president and chief executive Wang Zhidong says he is "delighted" to have attracted leading companies in several strategic industries as strategic investors.

"The proceeds from the Series C funding will support activities that further our mission to provide the highest quality Internet content and services to Chinese language users globally," Wang says. In a June survey by the China Internet Network Information Centre (CNNIC), which provides Internet statistics in China, Sina.com was ranked as the most popular site on the Chinese mainland. Rival China.com was ranked 39th in the same survey. "Dell believes in solutions that improve the customer experience, and Sina. com is making great strides in this area with technology that localizes and simplifies the Internet experience for Chinese computer users," Dell president David Chan says in a statement.

Let's Make a Deal

Sporadic negotiations with China over a major market-opening trade agreement suddenly are under way again, and supporters in Congress say a deal appears to be close.

President Clinton ordered a high-level negotiating team to head to Beijing for two days of talks this week to try and reach a deal clearing the way for China to become a member of the World Trade Organization. U.S. Trade Representative Charlene Barshefsky and Gene Sperling, the president's chief economic adviser, are heading a U.S. delegation that also includes officials from the departments of Treasury, State and Commerce. The team met with Chinese officials Wednesday and Thursday.

"Ambassador Barshefsky and Mr. Sperling have gone over there to work on it, and we are doing our best," the president told reporters at the White House. The fact that Clinton is sending a high-level delegation to Beijing with little notice raises hopes of supporters in Congress for a market-opening agreement long sought by U.S. manufacturers and farmers, who currently face high barriers trying to export to China.

"This is spectacular news," says House Rules Committee Chairman David Dreier, R-Calif. "I can only surmise that for both Gene Sperling and Charlene Barshefsky to quickly go to China, there is a good offer on the table."

China must reach market opening agreements with the United States and other major countries to gain membership in the 134-nation WTO, which sets the rules of trade worldwide. It hopes to achieve that goal before a new round of global trade talks are launched in Seattle Nov. 30-Dec. 3.

Greg Mastel, director of the global economic project at the New America Foundation, a Washington think tank, says a trade deal is "the administration's most important priority with China right now, given that there are few other signs that the administration's engagement policy is working."

Clinton was heavily criticized for failing to get an agreement when Chinese Premier Zhu Rongji visited Washington last April. Zhu made a market-opening offer that many U.S. corporations and farm groups viewed as a sizable dismantling of Chinese trade barriers they have long complained about. However, steel and textile industries said the pact did not go far enough. Sen. Max Baucus of Montana, top Democrat on the Senate Finance trade subcommittee, says he believes any new agreement will stick very closely to the April proposal.

"It will be substantially the April offer, and I think Congress will pass it next year," Baucus says.

The Clinton administration made Zhu's April package public in hopes of building support for a deal in the U.S., but the move backfired when it triggered heavy criticism in China from forces opposing Zhu's aggressive economic reform program.

Then talks were suspended by the Chinese for five months to protest NATO's bombing of the Chinese Embassy in Yugoslavia.

Clinton and Chinese President Jiang Zemin agreed to restart the WTO talks in September, but the two sides have so far been sparring about whether all China's April offer remains on the table. Chinese negotiators have been seeking to scale back some of them, which the administration considers unacceptable. Congress must approve any market opening offers made by the Chinese in a bid for WTO membership because it would have to vote to end the current requirement that tariffs on Chinese imports to the United States are subject to annual review by Congress. The WTO requires its members to grant other members permanently low tariffs that are not subject to review.

The annual debate on China's trade status has been used by opponents in Congress to attack China for its record on such issues as human rights, Taiwan and allegations of nuclear espionage.