China Reform Monitor: No. 705

Related Categories: China; Taiwan

July 10:

China’s trade surplus fell 20 percent in June over the same month last year, suggesting the weaker global economy is hurting the country’s export sector. In response, the deputy head of the Communist party’s policy research office, Zheng Xinli, called for a slower appreciation of the Chinese currency, reports the Financial Times. For years, the U.S. and EU have been urging China to let its renminbi appreciate in order to reduce China’s massive trade surplus with the West. The policy is finally bearing fruit: the renminbi appreciated by more than six percent against the U.S. dollar in the first six months of 2008 – the fastest rate yet – while export growth to the U.S. slowed to eight percent in June, according to customs data. Over the same time exports to the European Union grew by 25 percent.

In comments carried by the official Xinhua news agency and picked up by the Agence France-Presse, Lhasa Executive Vice Chairman of the Tibet autonomous regional government Baima Chilin said: “So far, 42 illegal elements, who participated in the ‘14 March’ incident, have been sentenced to prison terms; and 116 criminal suspects are still standing trial.”


July 11:


More than a thousand angry pensioners protested after the Guiyang Refractory Factory in Guizhou Province closed down and the government failed to issue minimum subsistence payments. Protesters blocked the main roads shouting anti-corruption slogans but dispersed peacefully after the authorities promised to investigate their case, the Ming Pao reports. Built in 1958, the factory used to be one of China's four major refractory factories and supported 1,871 workers and 1,384 retirees.

Gregg Bergersen, a navy veteran and analyst at the Defense Department, was sentenced to up to five years in prison on espionage charges linked to his passing information to China. According to court papers and interviews conducted by The New York Times, Bergersen was duped by Tai Shen Kuo, a native of Taiwan and longtime New Orleans resident, into thinking the information he was providing was going to Taipei not Beijing. The operation, called a ''false flag,'' also included a promise to eventually take Bergersen in as a partner in a defense consulting firm after he retired from the Pentagon and pay him up to $400,000 a year.

[Editor’s note: Over the last year U.S. prosecutors have brought roughly a dozen cases involving Chinese spying efforts targeting military-grade accelerometers (used to make smart bombs), defense information about Taiwan, U.S. warship technology, night-vision technology and refinements to make missiles more difficult to detect, the New York Times reports. David Szady, who as an assistant director of the FBI ran its counterintelligence division before retiring in 2006, said the Chinese had ''mastered the use of multiple redundant collection platforms'' by looking for students, delegates to conferences, relatives and researchers to gather information. Chinese government and state-sponsored industries have relied on the Chinese diaspora - using immigrants, students and people of second- and third-generation Chinese heritage - and regular commercial relations to operate a system in which some people wittingly or unwittingly participate. Joel Brenner, the intelligence community's top counterintelligence official, described China's information-gathering efforts as ''a full-court press” and “relentless,'' calling them “an orchestrated, deeply thought-out, strategic campaign.'' Chinese visitors to the United States number about 600,000 a year, in addition to 60,000 students in the country at any one time.]


July 12:


The first-ever Thai-Chinese joint military exercise aimed at combating terrorism are underway in rural northwestern Thailand, the Bangkok Post reports. The three weeks of exercises coded-named ''Strike 2008” involve special forces from Thailand’s Chaing Mai region and China’s Guangzhou province. It marks the first time China’s Guangzhou forces have taken part in joint training outside China, said Maj-Gen Zheng Qin, deputy commander of the Guangzhou army. China's armed forces have gradually stepped up military cooperation with neighboring governments in recent years, resulting in 25 joint drills and two combined training exercises with 21 countries.