Polls Find Chinese Concerned About Income Gap

Ninety percent of Chinese think that the income gap between rich and poor has widened to an alarming extent, according to polls taken by the China Youth Daily and Sina.com electronic news and published Dec. 26. These 90% of Chinese think that the split between the rich and poor is "serious," and over 80% said something must be done about the problem. Only 14% said that nothing needed to be done about it. Those surveyed were themselves among the well off.

A small percent of wealthy in Beijing are travelling abroad, while others fear the rising costs of food and medicine, China Youth Daily reported. The wealthy in China, only 10% of the population, control 45% of total wealth, and the poorest, also 10% of the population, have only 1.4%, the National Bureau of Statistics reported in June. There are 130 million such impoverished Chinese. The poverty line in China is set at under the equivalent of US$100 per year.

The survey was of 10,250 people, aged 20-30, college educated and having a monthly salary between 1,000-3,000 yuan (US$120-US$360). This group did not blame the urban-rural disparity for the problem. Over 70% said that corruption, and control by "the group of special interests" is the prime reason for the gap. The group surveyed asserted that education by no means led to personal economic well-being in China.

Xinhua cited Tang Min, chief economist of the Asian Development Bank Resident Mission in China, warning that if the income gap gets any wider, public support for the government's "reform and opening-up" policy will fall, and the crisis could even lead to social turmoil.

China To Build First Its First HTGR

China will soon begin to build its first high-temperature gas-cooled reactor (HTGR), Xinhua reported Dec. 26. The previous day, China Huaneng Group, China Nuclear Engineering and Construction Corp., and Tsinghua University signed an agreement to set up a nuclear power company in Shidaowan, Shandong Province. This will fund the project, build, and operate the reactor. Seventy percent of the technology used in the project will be developed in China.

The reactor will have a capacity of 200,000 kw, and cost US$375 million.

Thailand To Tighten Laws on Foreign Ownership

Thailand plans to rewrite the law which imposes a 49% limit on foreign ownership of certain types of companies, including financial institutions and construction firms, in order to prevent the current practice of circumventing it, the Financial Times reported Dec. 28. This slight-of-hand has been carried out by purchasing preferred shares, which have a higher voting right per share than common shares, and by using nominee domestic companies, which vote with the parent company. This would give the foreign interest majority voting control, despite holding direct ownership below the limit of 49%.

The proposed new law will limit voting rights, not ownership, to less than 49%. The FT says unnamed foreign companies will take Thailand to the WTO for supposedly illegal "expropriation" if they are forced to sell down their holdings, even though the new law is one commonly used around the world. Note also: the Bank of Thailand is refusing to give in to demands that they drop the 30% reserve requirement on incoming hot money, implemented in early December. The new-found resistance in Bangkok's financial leadership is worrying the oligarchs.

U.S. Coerced Vietnam into Financial Warfare vs. N. Korea

The U.S. attack on the Bank Delta Asia in Macau in 2005 for dealing with North Korea, served to scare most of the world into cutting currency relations with North Korea. Now, according to the Financial Times Dec. 28, Vietnam's East Asia Commercial Bank, which has been the lead Vietnamese "correspondent bank" for North Korean currency exchanges, has given in to U.S. demands and closed its trading accounts with North Korea, openly acknowledging the cause in a letter to North Korea: "Recently, we have worked with American partners in strategic cooperation. Therefore, we aplology [sic] that we must close all your correspondent accounts with our bank." The bank has ties to Citibank. Treasury Secretary Hank Paulson thanked Vietnam (with a gun to its head) in September for agreeing to cooperate on the crackdown on North Korea.

N. Korea: U.S. Demands Nuclear Freeze for Ending Sanctions

Kim Kye-gwan, the North Korean representative to the Six-Party Talks, told the Korean press Dec. 26 that "The U.S. is trying to win a nuclear freeze at once just by lifting the financial sanctions, but that's not possible." The U.S., in other words, demanded at this month's Six Party Talks in Beijing, that the U.S. need not take any step-by-step measures in exchange for a North Korean nuclear take-down, as had been agreed in principle in the September 2005 deal. Rather, they argued that the U.S. need only lift the sanctions, which had been imposed by the Treasury Department after the September 2005 deal had been made. The Treasury sanctions had sabotaged the State Department's successful negotiations.

Kim said the North could only start discussions on freezing its nuclear programs if the financial restrictions are lifted, thus returning to the situation that existed when the September 2005 deal was reached. He said the one-on-one talks with the United States on the financial sanctions, which took place on the sidelines of the Six-Party Talks, were "perfunctory," and that the United States didn't even present evidence that the North engaged in illegal activities. Financial specialists from North Korea and the United States are likely to resume talks at the end of January in New York, according to South Korean sources.

Divisions in U.S. Over Korea Policy Outlined

South Korean President Roh Moo-hyun last week described the role of the U.S. Treasury sanctions against North Korea as an internal Bush Administration move against the State Department's successful negotiation of an agreement with North Korea in September 2005, AFP reported Dec. 28. Roh told the National Unification Advisory Council on Dec. 21 that the September 2005 agreement was a major step forward, but then the U.S. Treasury imposed severe sanctions on North Korea, by freezing North Korean accounts at Bank Delta Asia (BDA), a Macao bank, which facilitated North Korean external financial relations. Said Roh: "This is incomprehensible to me. As the statement was being signed in China, the U.S. Treasury Department already froze the BDA accounts a few days earlier. Looking back, I don't know whether the State Department knew about it or not. With a conspiracy view, you may say [the two U.S. departments] were playing games." He added: "The Sept. 19 declaration was buried the moment it was born."

Also, on Dec. 28, the newly appointed Reunification Minister for South Korea, Lee Jae-joung, said that the "U.S. government should be more flexible in finding a solution to this issue."