From: gaojeng@durras.anu.edu.au (J. Gao)
Subject: CND-Global, Mon, September 14, 1992
Summary: CND
Keywords: CND
Organization: Computer Services Centre, Australian National University
Date: 14 Sep 92 05:34:55 GMT

              * * *  C h i n a   N e w s   D i g e s t  * * *

                              (News Global)

                        Monday, September 14, 1992

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1. News Brief (2 Items) .................................................18
2. Last Minute U.S.-China Trade Deal Tipped .............................52
3. U.S.-China Trade War Said to End Beijing GATT Hope ...................25
4. U.S. Senate to Set Conditions for Extending China's MFN Status .......26
5. France Warns China over Mirage Sales to Taiwan .......................15
6. China Sees Faster Retail Prices Rise in 1993 .........................30
7. Study: India May Surpass China as Most Populous Nation ...............25
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1. News Brief (2 Items) .................................................18
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[REUTER, 9/09/92] WASHINGTON -- China may have to settle for a smaller share
of the low-cost financing handed out by a World Bank affiliate in the years
ahead, a senior World Bank official said. While Beijing has a "strong" case
for obtaining loans from the International Development Association, demand
for the limited pool of money from other developing countries is growing as
well, World Bank vice president Gautam Kaji said. "The issue becomes one of
rationing," he told reporters. China has traditionally received about 15 pct
of the money IDA hands out in the form of loans that carry no interest.
In the fiscal year that ended on June 30, China was promised close to $950
million in loans from IDA. (From: A CND Reader)
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[SOUTH CHINA MORNING POST, 9/10/92] AMERICAN fast food chain Kentucky Fried
Chicken is hoping for the same response to its new store at the Great Wall
that it enjoys at Nanjing Road in Shanghai. The Beijing-area store - its
seventh on the mainland - had its soft opening last week and will hold its
grand opening on October 1 at the famous landmark. "This region represents
a great future potential for the KFC brand name and we foresee a total of
2,500 KFCs operating in the Asia-Pacific region in the next five years,"
said Mr Timothy Lane, president of Kentucky Fried Chicken for the region.
(From: A CND Reader)

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2. Last Minute U.S.-China Trade Deal Tipped .............................52
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From: A CND Reader
Source: SOUTH CHINA MORNING POST, 9/10/92
By: Lucinda Horne

Former senior US trade official Joe Massey yesterday forecast a last minute
settlement of the US-China dispute over market access, but warned that trade
tensions between the two countries were unlikely to ease.

"I think there is going to be a chronic continuing crisis between the US and
China until the economic and political issues sort themselves out," he said.
Maintaining China's unconditional Most Favoured Nation trade status would
become more difficult in the immediate future, especially if Mr Bill Clinton
were to win the US presidential election, he said.

Even with a satisfactory settlement of the Section 301 market access dispute,
there would be many unsettled issues, including those of tariffs and trade-
related investment.

But Mr Massey, who as assistant US Trade Representative helped initiate the
latest Section 301 probe into trade barriers in China, said he fully expected
the US and China to resolve the market access dispute just before midnight on
October 10 - the deadline.

Speaking before news broke yesterday of a possible Chinese counter to the US
list of goods targeted for sanctions, he said the path to a final settlement
was likely to be "bumpy and difficult".

However, he said: "I think there will be some sort of agreement - one that
China can live with, can implement and that will be in their interests because
it will help promote reform, help promote their relationship with the US and
help them in their case for membership to the GATT (the General Agreement on
Tariffs and Trade).

"China cannot afford a failed trade relationship with the US: its exports to
the US fuel a lot of the growth seen in southern China."

Mr Massey said he believed China would eventually agree to meet most of the
US demands, which include greater transparency of its trade laws and an
appeals mechanism to allow re-examination of government denials of licence
applications.

If the Section 301 talks failed it would affect China's application to join
GATT - a step vital for China to win back international acceptance.

While Mr Massey is no longer spearheading the Section 301 negotiations with
China, he said that if the US decided to press ahead with retaliation, the hit
list of goods affected would be "big".

"I would assume certainly more than US$2 billion. My assumption is based on
long experience, not any inside information," he said.

But while Hongkong was the "innocent bystander" in the US-China trade
conflict, local businessmen should focus on the substance of the
negotiations - the removal of market barriers - and not just the hit list,
he said.

"I can understand how businessmen can get wrapped up in the issue of lost
business. When you see your own dollars and cents on the bottom line it has
got to produce anxiety.

"But some of that (anxiety) needs to funnelled to Beijing to remind them they
have the ability to make sure it doesn't become reality."

Mr Massey left the US Trade Representative's office earlier this year and
recently joined the board of Hongkong consultancy Warren Williams
International.

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3. U.S.-China Trade War Said to End Beijing GATT Hope ...................23
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From: A CND Reader
Source: REUTER, 9/10/92

BEIJING -- China will forfeit its chance of becoming a member of the General
Agreement on Tariffs and Trade if it does not agree to U.S. market access
demands by Oct 10, according to a background paper released by the U.S.
embassy.

"If they fail to settle this case, then they are not getting into the GATT.
Period," the paper quoted Assistant U.S. Trade Representative Ira Wolf as
saying. "If they are not willing to make these concessions, there is no way
in the world the United States can allow China into the GATT. And there is
no way in the world China can get into the GATT unless the United States
goes along with it."

Wolf and other officials are scheduled to arrive in Beijing this weekend for
talks to try to resolve the market access dispute. He made clear China's
attitude in the talks would determine its future world trade role.

"If we end up in a trade war, they are telling the world that they are not
interested in being a part of the international trading system....that would
send a very serious, damaging signal to the rest of the world," the embassy
background paper quoted Wolf as saying. "China would be throwing GATT out
the window, with no possibility of coming into it....They would not be part
of the world community," he said.

"That would be the message that failure in this negotiation and a trade war
with the United States would send," Wolf said.

Beijing has one month from Thursday to agree to open its market to more U.S.
goods before Washington begins its broadest trade retaliation in history,
taking action against up to $3.9 billion in Chinese exports.

Beijing said on Wednesday it would take retaliatory action against $4
billion in U.S. imports if Washington followed through on its threat.

Washington, which says neither side wants a trade war, is convinced any
dispute would harm China the most.

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4. U.S. Senate to Set Conditions for Extending China's MFN Status .......26
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From: Jian Liu; A CND Reader
Source: DJ, 9/11/92; SOUTH CHINA MORNING POST, 9/10/92

WASHINGTON -- The Senate has agreed to pass a bill that would condition
the extension of Most Favored Nation tariff treatment to China in 1993 on
China making certain reforms in the areas of human rights, trade and weapons
proliferation.

The Senate, in an unusual move, agreed to pass the legislation prior to
debating it.

Under a so-called unanimous consent request made by Senate Majority Leader
George Mitchell, D-Maine, late yesterday, the Senate agreed to take up the
China Most Favored Nation bill Sept. 14, and debate the measure for no longer
than one hour.

But the Senate further agreed to pass the bill by voice vote at the
conclusion of the period of debate.  The House passed a similar bill earlier
this year.

President Bush is expected to veto the measure when it reaches the White
House.

A leading American senator who crossed party lines to give President George
Bush a much-needed vote in support of Most Favoured Nation (MFN) trade
benefits for China has died as Congress prepares to vote again on the issue.

The death of 84-year old Senator Quentin Burdick, a Democrat from North
Dakota, has further shrunk Mr Bush's Senate support.

In March, the Senate failed by a mere six votes to overturn the president's
veto of legislation imposing tough conditions on the renewal of China's MFN
trade status.

Mr Burdick, who died of a heart ailment, was a member of a small bipartisan
coalition of senators, led by Democrat Max Baucus, who agreed to support MFN
renewal on condition that the president toughened his stance towards China.

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5. France Warns China over Mirage Sales to Taiwan .......................15
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From: A CND Reader
Source: REUTER, 9/10/92

PARIS -- France said on Thursday it could cancel development projects in
China if Beijing retaliated commercially against the sale of French warplanes
to Taiwan.

Industry Minister Dominique Strauss-Kahn told a news conference the
government had not yet formally authorised the sale of 60 Dassault Aviation
Mirage 2000 fighters to Taiwan because the company had still to apply for
an export licence.

Asked how France would react if China took trade measures to protest against
the sale, Strauss-Kahn said: "If there was retaliation, the commercial
consequences could lead us to do away with projects which we are currently
financing."

Taiwanese media have reported that the Taipei government will soon sign a
$2.6 billion contract to buy 60 Mirage fighters as well as purchasing 150
U.S. F-16 combat aircraft.

Dassault has refused comment on the reported deal, which would be its first
fighter export contract since 1988 after a string of disappointments.

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6. China Sees Faster Retail Prices Rise in 1993 .........................28
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From: A CND Reader
Source: REUTER, 9/10/92

BEIJING -- China's retail prices are expected to rise faster in 1993,
pushed higher by the surging demand for raw production materials that
has accompanied this year's economic boom, a local economist predicted.

Zhang Xuhong, an analyst at the China Market Development Institute, told the
official China Daily that retail prices should remain steady through the end
of the year, and then begin their rise.

"Dramatic production price rises will push production costs up and in the
near future will lead to an increase in retail sales prices," Zhang was
quoted as saying.

Zhang said retail prices had risen this year, but that they remained
"comparably steady and within the state's planned six pct rise quota for
this year".

He said that retail sales prices rose by 4.8 pct nationwide during the first
six months of 1992, while "cost of living" for residents in large and medium-
sized cities rose by about 7.8 pct.

He did not make a prediction for how much retail prices would rise next year.
Zhang said, however, that appreciable increases could be expected due to a
tightening market for raw materials.

China's domestic production material prices rose by 6.4 pct during the first
six months of 1992. Average growth was 4.5 pct in the first quarter, but by
June had risen to eight pct -- the highest level in two years, Zhang said.
State price increases for coal, electricity, crude oil, grain, rolled steel,
some types of heavy-duty trucks and explosives for civilian use were also
behind rising production costs, he said.

"Producers of production materials stockpile goods, causing a run on goods,
which causes further price rises," he said. Economic planners have said
inflation will remain steady despite estimated economic growth of 12 pct in
the first half of 1992.

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7. Study: India May Surpass China as Most Populous Nation ...............25
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From: Jian Liu
Source: DJ, 9/13/92

NEW DELHI - India hasn't been able to contain its population explosion by
encouraging sterilization and may displace China as the most populous
nation early in the next century, says a new study.

India is adding more people to the world's population than any other
country, accounting for one of every five births, according to the report,
being released Monday.

Although discredited by experts, sterilization remains the most widely
used form of birth control in India. Government officials are rewarded
or penalized only if they meet or fall short of sterilization targets, so
many don't bother to promote reversible contraception like condoms and birth
control pills.

As a result, birth control hasn't really caught on, especially among
younger women, said the 60-page report by the Population Crisis Committee,
a nonprofit organization in Washington.

It said about 45% of Indian couples use contraception, far below the 72%
of China and 74% in the U.S. "From a demographic perspective, India may be
the world's most critical country," the report said. "With its young age
profile and continuing increase in women of childbearing age, its population
could exceed 2 billion before stabilizing."

India was one of the first countries to begin trying to lower its
birth rate, but a culture that values big families has been resistant.

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