American Foreign Policy Council

China Reform Monitor: No. 883

March 7, 2011 Joshua Eisenman
Related Categories: China

February 18:

U.S. authorities are assisting Taiwan with an investigation into the activities of General Lo Hsien-che, who was arrested last month on suspicion of spying for China, the American Institute in Taiwan (AIT) has confirmed to the Taipei Times. Washington informed Taipei of Lo’s activities after U.S. intelligence officials operating in Asia reportedly intercepted communications between him and his handlers in Chinese intelligence. Lo’s espionage activity, perhaps the worst spy case to hit Taiwan in fifty years, began in 2004 when he was recruited by Beijing’s intelligence agents while posted in Thailand. News of the general’s arrest has sparked fears that Taiwan's military may be severely compromised, especially its command, control, communications, computers, intelligence, surveillance and reconnaissance systems, to which Lo is believed to have had access.

February 20:

China’s Vice-Commerce Minister, Fu Ziying, will arrive in Nepal this week to sign a $100 million loan agreement with the Nepalese government for the 60 MW Upper Trishuli 3A hydropower project. The soft loan from the China Exim Bank has a 1.75 percent interest rate and a 20 year repayment period and a grace period. During Fu’s visit, both sides will also sign an agreement to upgrade Kathmandu's 27.4 km-long ring road to eight lanes, Republic reports. Kathmandu is still hoping Beijing will commit to a loan package totaling over $1 billion that will support projects including the construction of an inland container depot at Tatopani in Sindhupalchok and $600 million for the 400 MW Nalsyagugad hydropower project, which also requires a 30 km access road to link the powerhouse and district headquarters. On Nepalese official told the The Kathmandu Post: “The Chinese side has told us that first they will observe how Nepal uses this $100 million in assistance before giving nod to the 1bn dollars loan."

[Editor’s Note: This is first high profile Chinese delegation to arrive Nepal since pro-China leader Jhal Nath Khanal took over charge, replacing the pro-India leader Madhav Kumar Nepal. India’s media and leadership are increasingly concerned about China’s increasing influence in Nepal.]

February 23:

According to a notice posted this week on China’s environment ministry website The State Council has approved a new five year plan to tackle heavy metal pollution in 14 of the worst effected provinces, but has called the plan a national secret and not released details. Premier Wen Jiabao and Environment Minister Zhou Shengxian have both have said heavy metal poisoning has become one of the worst pollution problems facing China and promised clean-up campaigns. Official figures show at least nine lead poisoning outbreaks occurred last year and 12 emerged in 2009. China Economic Weekly, a magazine controlled by the official People's Daily, reported that millions of hectares of farmland and more than 12 million tons of grain have been contaminated. Citing researchers from the Chinese Academy of Sciences, the article said metal poisoning has claimed many lives in resource-rich Yunnan, Hunan, Guangdong and Guangxi provinces. Potential economic losses in contaminated rice, enough to feed more than 40 million people, hit 20 billion yuan a year in 2007, it said. Up to 10 percent of rice grown in China was contaminated with toxic metals such as cancer-causing cadmium, the Beijing-based Century Weekly Magazine also reported last week. Xinhua quoted the former land minister Sun Wensheng, as warning that land pollution problems had reached an alarming level, with at least 10 percent of China's 120 million hectares of farmland contaminated.

February 24:

In April 2010, at Ruili, Yunnan just across the border with Burma, senior officers of Public Security Bureau (PSB) of China reportedly met with separatist rebel leaders from India’s Northeast and offered “to extend all kinds of support to northeast separatist groups if they form an alliance for a coordinated fight against India,” India’s The Asian Age reports. National Socialist Council of Nagaland leader S.S. Khaplang, Ulfa chief Paresh Baruah, United National Liberation Front chairman Rajkumar Meghen and the leaders of smaller militant separatists from Manipur were present at the April 2010 meeting. Meghen, who returned to Bangladesh after the meeting, was arrested and deported to India and is now held in Guwahati Central Jail.

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