China Reform Monitor: No. 1062

October 6:

While representing Taiwan at the leaders’ summit of the Asia-Pacific Economic Cooperation (APEC) forum, former Vice President Vincent Siew met with China’s president Xi Jinping in a 30-minute closed door meeting. He reaffirmed the importance of the 1992 Consensus; a tacit understanding that there is only “one China,” though each side is free to interpret its meaning in its own way. Focus Taiwan News reports that Siew called for a “virtuous cycle to consolidate ties and create favorable results in bilateral interaction and joint participation in international affairs.” He also advocated “reinforcing institutionalization and deepening of trade and economic cooperation along with joint participation in regional economic integration.” Siew voiced hopes that Taiwan could establish a representative office in China whose staff could visit Taiwanese prisoners in Chinese jails. Siew served as President Ma Ying-jeou’s proxy because China objects to Taiwan’s president attending the annual APEC summit.
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October 8:

On August 2, twenty customs officials from Taiwan’s port Kaohsiung were charged with taking bribes for “facilitating inspection documents.” Components needed to operate nuclear reactors were designated as auto and machinery parts and then illegally exported to Iran and North Korea. Corruption in Taiwan’s customs service has led smugglers to target the island as a transit point for technologies under international sanctions, Kyodo news reports. Since 2006, the year Taipei designated Iran and North Korea as restricted destinations, more than 200 violations have been recorded each year, with most headed to Iran. Taiwanese trading firms set up front companies to import the components – ball bearings and vacuum pumps – from Japan using false invoices and packing lists. After arriving at Kaohsiung, customs agents were paid to ignore the false documents and skip the inspection. Another scheme, uncovered in 2009, used a Taiwan-based company to obtain pressure transducers for producing enriched uranium from Switzerland for a Chinese company, with Iran being the actual final buyer. That incident caught the attention of U.S. authorities, prompting Washington to warn Taipei.

“China’s military is working towards completing its tactical capability to launch an all-out attack on Taiwan by the year 2020,” according to Taipei’s latest National Defense Report. It warns of a serious cross-strait military imbalance and that China already far exceeds Taiwan in terms of military budget, troop strength and equipment. Beijing’s defense budget in 2013 reached 720 billion renminbi, 11 times Taiwan’s, and China has nine times more men under arms than Taiwan. China has launched its Liaoning aircraft carrier and has begun construction of two large amphibious assault ships and a hovercraft that will significantly increase its ability to invade Taiwan, Formosa Television Cable News Channel in Taipei reports.

October 9:

In 2012, Hong Kong jumped from North Korea’s thirteenth largest trading partner to its second largest, with two-way trade reaching $111 million, and rising 457 percent over 2011 levels. Last year alone, the DPRK exported $58 million worth of goods to Hong Kong and imported items worth $53 million. “The upward trend may be part of China’s broader agenda for its relations with North Korea,” the South China Morning Post reports. Beijing wants to maintain trade relations with Pyongyang through Hong Kong because it is under international pressure to distance itself from the rogue state. In June 2011, China began supporting the China-North Korea Two Islands Economic Zone on Hwanggumpyong and Wihwa Islands near the border city of Dandong, Liaoning. Beijing has encouraged Hong Kong firms to join in the joint venture, which may help account for the increase in trade.
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October 10:

China’s Sinopec, Huaneng Xinjiang Energy Development Co., and “other energy companies in Xinjiang and eastern Zhejiang Province” are building the country’s largest coal gasification project in Changji Hui, Xinjiang. The project will cost 183 billion yuan or just under $30 billion. The area is home to China’s largest coalfield with an estimated 390 billion metric tons of coal reserves and 213.6 billion tons of proven reserves. The project will produce 30 billion cubic meters of gas and will need 90 million tons of coal per year. “The coal gas will be transported to booming provinces of Zhejiang in east China and Guangdong in the south through pipelines,” The China Daily reports. Several other large coal gasification projects have been approved for construction.